HomeMy WebLinkAboutCity of Huntington Beach Community Facilities Districts - CF '° -� - p_ UvU Nm-,Vie
Council/Agency Meeting Held:
Deferred/Continued to:
A proved ❑ Condit onally Approved ❑ Denied �LM'h Cler 's ignature
Council Meeting Date: October 15, 2001 Department ID Number: AS 01- 36
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CITY OF HUNTINGTON BEACH
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REQUEST FOR COUNCIL ACTION C--)
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SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS air=
SUBMITTED BY: RAY SILVER, City Administrator ano ac
PREPARED BY: CLAY MARTIN, Director of Administrative Services n
SUBJECT: REFUNDING BONDS FOR COMMUNITY FACILITIES ISTRICTS
1990-1 (Goldenwest and Ellis),/jc) ,,7O0/_ i7
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachments)
Statement of Issue: Should the City Council adopt a resolution authorizing the issuance of
special refunding bonds due to favorable interest rates?
Funding Source: Special revenue refunding Bond proceeds.
Recommended Action: Adopt Resolution! #,?00/- 7y approving proceeding with the
issuance of 2001 special tax refunding bonds on behalf of the City of Huntington Beach
Community Facilities District No. 1990-1 and approving related documents and actions.
Alternative Action(s): Do not issue refunding bonds and let the existing bonds remain to
maturity.
Analysis: The proposed special tax refunding bonds are to take advantage of the present
favorable interest rates. The resulting debt service savings will be applied to reduce the
special taxes paid by the affected homeowners.
The City issued the original Community Facilities District Bonds on August 9, 1990. The
original bonds will fully mature in October of 2020. The refunding bonds will maintain the
same maturity date, but the reduction in interest rates will provide an annual special tax
payment savings of approximately seven percent (7%) for each property owner within the
district.
AUEST FOR COUNCIL ACTT` A
MEETING DATE: October 15, 2001 DEPARTMENT ID NUMBER: AS 01-036
Environmental Status: Does not apply.
Attachment(s):
City Clerk's
Page Number ',No. Description
1. City Resolution No.0?00/.74
2. Official Statement
RCA Author: Dan T.Villella
Refunding Bonds for Community Facilities District -2- 10/2/01 11:37 AM
RESOLUTION NO. 2001-74
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF HUNTINGTON BEACH
AUTHORIZING THE ISSUANCE OF 2001 SPECIAL TAX REFUNDING BONDS
OF THE CITY FOR AND ON BEHALF OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1 (GOLDENWEST/ELLIS
AREA), APPROVING AND DIRECTING THE EXECUTION OF A FISCAL AGENT
AGREEMENT AND AN ESCROW AGREEMENT, APPROVING THE SALE OF
SUCH BONDS,AND APPROVING OTHER RELATED DOCUMENTS AND
ACTIONS
WHEREAS, the City Council has conducted proceedings under and pursuant to the
Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to form the City of
Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis. Area) (the
"District"), to authorize the levy of special taxes upon the land within the District, and to issue
bonds secured by said special taxes to finance certain facilities; and
The City Council, as legislative body of the District, authorized the issuance of bonds of
the City for the District in the original principal amount of S2,400,000 designated City of
Huntington Beach Community Facilities District No. 1990-1 (Goldenvest/Ellis Area) 1990
Special Tax Bonds (the "Prior Bonds"), the Prior Bonds having been issued on August 9, 1990,
pursuant to the Act and Resolution 6174 of the City Council; and
The City Council has determined that due to favorable interest rates, it is in the best
interests of the City and the District that the Prior Bonds be refunded, with the resulting savings
to be applied to reduce the special taxes paid by the affected homeowners; and
There has been submitted to the City Council a fiscal agent agreement (the "Fiscal Agent
Agreement") providing for the issuance of special tax refunding bonds of the City (the "Bonds"),
for and on behalf of the District, and the City Council,with the aid of its staff, has reviewed the
Fiscal Agent Agreement and found it to be in proper order, and now desires to approve the Fiscal
Agent Agreement and the issuance of the Bonds; and
There has been presented to the City Council an escrow agreement (the "Escrow
Agreement"), providing for the creation of an escrow fund which will be used to refund and
redeem the Prior Bonds and the City Council now desires to approve such agreement in
connection with the refunding of the Prior Bonds; and
The City proposes to sell the Bonds to O'Connor SWS Securities (the "Underwriter")
pursuant to the terms of a bond purchase agreement (the "Bond Purchase Agreement") by and
between the City and the Underwriter, and the Underwriter proposes to offer the Bonds to the
investing public by means a preliminary official statement (the "Preliminary Official
Statement"); and
SF:2001 Resol:2001 Special Tar Refunding Bonds
Res. No. 2001-74
City staff has caused to be prepared a draft of goals and policies for community facilities
districts of the City (the "Goals and Policies"), the form of which is on file with the City Clerk,
and this City Council has duly considered said Goals and Policies and desires to approve them at
this time so that the terms of any refunding bonds can be structured to comply with such Goals
and Policies; and
It appears that each of said documents and instruments which are now before this meeting
is in appropriate form and is an appropriate document or instrument to be executed and delivered
for the purpose intended; and
All conditions, things and acts required to exist, to have happened and to have been
performed precedent to and in the issuance of the Bonds as contemplated by this Resolution and
the documents referred to herein exist, have happened and have been performed in due time,
form and manner as required by the laws of the State of California, including the Act.
NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows:
SECTION 1. Adoption of Goals and Policies. The Goals and Policies, in the form on
file with the City Clerk, are hereby adopted as the local goals and policies of the City for
community facilities districts, and are intended to satisfy the requirements of section 53312.7(a)
of the Act.
SECTON 2. Issuance of Bonds; Approval of Fiscal Agent Agreement and Escrow
Agreement.. Pursuant to the Act, this Resolution and the Fiscal Agent Agreement, special tax
refunding bonds of the City for the District designated as "City of Huntington Beach Community
Facilities District No. 1990-1 2001 Special Tax Refunding Bonds" in an aggregate principal
amount not to exceed $2,400,000, are hereby authorized to be issued. The Bonds shall be
executed in the form set forth in and otherwise as provided in the Fiscal Agent Agreement.
In furtherance of the issuance of the Bonds, the City Council hereby makes the following
findings and determinations: (a) it is prudent in the management of the fiscal affairs of the City,
the City Council and the District to issue the Bonds for the purpose of refunding the Prior Bonds,
(ii) the total net interest cost to maturity on the Bonds plus the principal amount of the Bonds will
not exceed the total net interest cost to maturity on the Prior Bonds plus the principal amount of
the Prior Bonds, and (ill) the Bonds are in compliance with the Goals and Policies.
The City Council hereby approves the Fiscal Agent Agreement in the forn on file with
the City Clerk. The Mayor, the City Administrator, the City Treasurer, the Administrative
Services Director or the Finance Officer (the "Designated Officers") is hereby authorized and
directed to execute the Fiscal Agent Agreement, for and in the name and on behalf of the City
and the District, in such form, together with any additions thereto or changes therein deemed
necessary or advisable by the a Designated Officer upon consultation with Bond Counsel. The
proceeds of the Bonds shall be applied by the City for the purposes and in the amounts as set
forth in the Fiscal Agent Agreement. The City Council hereby authorizes the delivery and
performance by the City of the Fiscal Agent Agreement. For purposes of section 53363.2 of the
Act, (i) it is expected that the purchase of the Bonds will occur on or after November 14, 2001,
(ii) the date, denomination, maturity dates, places of payment and form of the Bonds shall be as
Res. No. 2001-74
set forth in the Fiscal Agent Agreement, (iii) the maximum rate of interest to be paid on the
Bonds shall be seven percent (7%) with the actual rate or rates to be set forth in the Fiscal Agent
Agreement as executed, (iv) the place of payment for the Prior Bonds shall be as set forth in the
fiscal agent agreement for the Prior Bonds; and (v) the designated costs of issuing the Bonds
shall be as described in section 53363.8(a) of the Act, and as otherwise described in the Fiscal
Agent Agreement, in the Official Statement for the Bonds and the closing certificates for the
Bonds, including Bond Counsel and Disclosure Counsel fees and expenses, Underwriter's
discount, financial advisor fees and expenses, printing costs for the Official Statement, escrow
verification costs, initial fiscal agent fees and costs of City staff incurred in connection with the
sale and issuance of the Bonds.
The City Council hereby approves the refunding of the Prior Bonds with the proceeds of
the Bonds, in accordance with the provisions of the documents pursuant to which such Prior
Bonds were sold and delivered, and the Escrow Agreement, between the City and the fiscal agent
for the Prior Bonds. The City Council hereby approves the Escrow Agreement in the form on file
with the City Clerk. The City Council hereby authorizes and directs a Designated Officer to
execute and deliver the final form of the Escrow Agreement for and in the name and on behalf of
the City, in such form, together with any changes therein or additions thereto deemed advisable
by the Finance Officer upon consultation with Bond Counsel. The City Council hereby
authorizes the delivery and performance by the City of the Escrow Agreement.
SECTION 3. Delivery of the Bonds. The Bonds, when executed, shall be delivered to
U.S. Bank Trust National Association (the "Fiscal Agent") for authentication. The Fiscal Agent
is hereby requested and directed to authenticate the Bonds by executing the Fiscal_Agent's
certificate of authentication and registration appearing thereon, and to deliver the Bonds, when
duly executed and authenticated, to the Underwriter or its order in accordance with written
instructions executed on behalf of the City by the a Designated Officer, which instructions such
officer is hereby authorized and directed, for and in the name and on behalf of the City, to
execute and deliver to the Fiscal Agent. Such instructions shall provide for the delivery of the
Bonds to the Underwriter or its order in accordance with the Bond Purchase Contract, upon
payment of the purchase price therefor.
SECTION 4. Sale of the Bonds. The City Council hereby approves the sale of the Bonds
to the Underwriter. The Bond Purchase Contract, in the form on file with the City Clerk, be and
the same is hereby approved, and a Designated Officer is hereby authorized and directed to
execute the Bond Purchase Contract in said form, with such changes, insertions and omissions as
may be approved by such official, provided that the aggregate principal amount of the Bonds
does not exceed the amount set forth in Section 1, the Underwriter's discount on the Bonds does
not exceed 1.1% and the requirements of clause (ii) of the second paragraph of Section 1 are met.
The City Council hereby finds and determines that the sale of the Bonds at negotiated sale
as contemplated by the Bond Purchase Contract will result in a lower overall cost.
SECTION 5. Official Statement. The City Council hereby approves the Preliminary
Official Statement in the form on file with the City Clerk, together with any changes therein or
additions thereto deemed advisable by a Designated Officer. The City Council authorizes and
directs a Designated Officer, on behalf of the City and the District, to deem "final" pursuant to
-3-
Res. No. 2001-74
Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule") the Preliminary Official
Statement prior to their distribution by the Underwriter.
The Underwriter, on behalf of the City and the District, is authorized and directed to
cause the Preliminary Official Statement to be distributed to such municipal bond broker-dealers,
to such banking institutions and to such other persons as may be interested in purchasing the
Bonds.
Any Designated Officer is authorized and directed to assist the Underwriter in causing the
Preliminary Official Statement to be brought into the form of final official statement (the "Final
Official Statement"), and any Designated Officer is hereby authorized and directed to execute
said Final Official Statement and .a statement that the facts contained in the Final Official
Statement, and any supplement or amendment thereto (which shall be deemed.an original part
thereof for the purpose of such statement) were, at the time of sale of the Bonds, true and correct
in all material respects and that the Final Official Statement did not, on.the date of sale of the
Bonds, and do not, as of the date of delivery of the Bonds, contain any untrue statement of
material fact or omit to state material facts required to be stated where necessary to make any
statement made therein not misleading in the light of the circumstances under which it was made.
The execution and delivery by the City of the Final Official Statement, which shall include such
changes and additions thereto deemed advisable by the Finance Officer and such information
permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, shall be
conclusive evidence of the approval of the Final Official Statement by the City.
The Final Official Statement, when prepared, is approved for distribution in connection
with the offering and sale of the Bonds.
SECTION 6. Official Actions. All actions heretofore taken by the officers and agents of
the City with respect to the establishment of the District and the sale and issuance of the Bonds
are hereby approved, confirmed and ratified, and the proper officers of the City are hereby
authorized and directed to do any and all things and take any and all actions and execute any and
all certificates, agreements and other documents, which they, or any of them, may deem
necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds and
the refunding of the Prior Bonds, in accordance with this resolution, and any certificate,
agreement, and other document described in the documents herein approved.
-4-
Res. No. 2001-74
SECTION 7. Effective Date. This resolution shall take effect from and after its
adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 15th day of October , 2001.
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk City Attomey
REVIEWED AND APPROVED: INITIATE ND APP VED:
Ci dministrator Directo of Administrative Services
-5-
Res. No. 2001-74
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of
the City of Huntington Beach, and ex-officio Clerk of the City Council of said
City, do hereby certify that the whole number of members of the City Council
of the City of Huntington Beach is seven; that the foregoing resolution was
passed and adopted by the affirmative vote of at least a majority of all the
members of said City Council at a regular meeting thereof held on the 15th
day of October, 2001 by the following vote:
AYES: Green, Boardman, Cook, Julien Houchen, Garofalo, Dettloff,
Bauer
NOES: None
ABSENT: None
ABSTAIN: None
City Clerk and ex-officio Clerk of the
City Council of the City of
Huntington Beach, California
DRAFT AS OF OCTOBER 2,2001
° = NEW ISSUE NOT RATED
a
L L c In the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, subject, however to certain qualifications
described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes
'd, y and such interest is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and
corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations,such interest
L r is taken into account in determining certain income and earnings. In the further opinion of Bond Counsel, such interest is
�& exempt from California personal income taxes. See"LEGAL MATTERS-Tax Exemption"herein.
o' e
° ORANGE COUNTY STATE OF CALIFORNIA
L p y $2,2109000*
R = CITY OF HUNTINGTON BEACH
° y L
E °
y COMMUNITY FACILITIES DISTRICT NO. 1990-1
u. u
c w 2001 SPECIAL TAX REFUNDING BONDS C
s Dated:Date of Delivery Due:October 1,as shown below
•u`-_ The 2001 Special Tax Refunding Bonds(the"Bonds")are being issued under the Mello-Roos Community Facilities Act of 1982
(the"Act") and a Fiscal Agent Agreement, dated as of November 1, 2001 (the"Fiscal Agent Agreement"), by and between the
° s City of Huntington Beach (the"City") and U.S. Bank Trust National Association, as fiscal agent (the"Fiscal Agent"), and are
2 c payable from Special Tax Revenues (as defined herein) levied on property within the City of Huntington Beach Community
o Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the "District") according to the rate and method of apportionment of
c L special tax for the District.
dThe Bonds are being issued to(i)refund on an advanced basis the outstanding City of Huntington Beach Community Facilities
L District No. 1990-1 (Goldenwest/Ellis Area) 1990 Special Tax Bonds(the"1990 Bonds"),(ii)fund a reserve fund for the Bonds.
E i and (iii) pay the costs of issuing the Bonds. See"REFUNDING PLAN" and "ESTIMATED SOURCES AND USES OF FUNDS"
•° herein.
a
Interest on the Bonds is payable April 1, 2002 and semiannually thereafter on each October 1 and April 1. The Bonds will be
E W issued in denominations of$5,000 or integral multiplies thereof The Bonds,when delivered, will be initially registered in the
O C name of Cede&Co.,as nominee of The Depository.Trust Company("DTC"),New York,New York. DTC will act as securities
depository for the Bonds as described herein under"THE BONDS-Book-Entry System."
e t
o E v_ The Bonds are subject to optional and mandatory redemption as described herein.
- o
a THE BONDS,AND THE INTEREST THEREON,ARE NOT AN INDEBTEDNESS OF THE STATE OF CALIFORNIA(THE
c ''STATE") OR ANY OF ITS POLITICAL SUBDIVISIONS, AND NONE OF THE CITY (EXCEPT TO THE LIMITED
c = c EXTENT DESCRIBED HEREIN), THE STATE OR ANY OF ITS POLITICAL SUBDIVISIONS IS LIABLE ON THE
s ° BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY OR THE DISTRICT(EXCEPT
° TO THE LIMITED EXTENT DESCRIBED HEREIN) OR THE STATE OR ANY OTHER POLITICAL SUBDIVISION
THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. OTHER THAN THE SPECIAL TAXES,NO TAXES ARE
c PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT A GENERAL OBLIGATION OF THE CITY,
F BUT ARE LIMITED OBLIGATIONS OF THE CITY ON BEHALF OF THE DISTRICT, PAYABLE SOLEY FROM THE
•� AMOUNTS PLEDGED UNDER THE FISCAL AGENT AGREEMENT AS MORE FULLY DESCRIBED HEREIN.
9 r MATURITY SCHEDULE
s Maturity Date Principal Interest Reoffering Maturity Date Principal Interest Reoffering
C = (October 1) Amount Rate Yield (October 1) Amount Rate Yield
o E °
- L
E
L L0 •V
C �
i d This cover page contains certain information for quick reference only. It is not a summary of the issue. Potential investors must
C read the entire Official Statement to obtain information essential to the making of an informed investment decision with respect
to the Bonds. Investment in the Bonds involves risks which may not be appropriate for some investors. See"BONDOWNERS'
? .y RISKS"herein for a discussion of special risk factors that should be considered in evaluating the investment quality of the Bonds.
1 The Bonds are offered when, as and if issued and delivered to the Underwriter, subject to the approval as to their legality by
v 8 Quint&Thimmig LLP, San Francisco,Bond Counsel and Disclosure Counsel to the City. Certain legal matters will be passed
5 y upon for the City and the District by the City Attorney. It is anticipated that the Bonds will be available for delivery in book-
E s 7E entry form through the Facilities of DTC on or about November 14,2001.
6.
O
The date of the Official Statement is 2001
o ..
E Y O'Connor SWS Securities
CW 4,
a E_
m L
s *Preliminary, subject to change.
t
No dealer,broker, salesperson or other person has been authorized to give any information or to make any
representation with respect to the Bonds other than as contained in this Official Statement in connection
with the offering described herein, and if given or made, such other information or representation must
not be relied upon as having been authorized. This Official Statement does not constitute an offer to sell
or the solicitation of an offer to buy any securities other than the Bonds offered hereby, nor shall there be
any offer or solicitation of such offer or sale of the Bonds in any jurisdiction in which it is unlawful for
such person to make such offer, solicitation or sale. Neither the delivery of this Official Statement nor the
sale of any of the Bonds implies that the information herein is correct as of any time subsequent to the
date hereof.
This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Statements
contained in this Official Statement that involve estimates, forecasts or matters of opinion, whether or not
expressly so described herein, are intended solely as such and are not to be construed as a representation
of fact.
The information set forth herein has been obtained from the City and other sources believed to be reliable,
but the accuracy or completeness of such information is not guaranteed by, and should not be construed as
a representation by, the Underwriter or the City. The Underwriter has provided the following sentence for
inclusion in this Official Statement. The Underwriter has reviewed the information in this Official
Statement in accordance with, and as part of, its responsibilities to investors under the federal securities
laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee
the accuracy or completeness of such information. The information and expressions of opinions herein
are subject to change without notice and neither delivery of this Official Statement nor any sale made
hereunder shall, under any circumstances, create any implication that there has been no change in the
affairs of the City or the District since the date hereof. All summaries contained herein of the Fiscal
Agent Agreement or other documents are made subject to the provisions of such documents and do not
purport to be complete statements of any or all of such provisions.
IN CONNECTION WITH THE OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
ii
i
CITY OF HUNTINGTON BEACH
CITY COUNCIL
Pam Julien Houchen,Mayor
Debbie Cook,Mayor Pro Tem
Ralph Bauer,Member
Connie Boardman,Member
Shirley Detloff,Member
David Garofola,Member
Peter Green,Member
CITY STAFF
Ray Silver, City Administrator
Clay Martin,Director ofAdministrative Services
Daniel Villella,Director of Finance
Shari L. Freidenrich, City Treasurer
Gail Hutton, City Attorney
Connie Brockway, City Clerk
PROFESSIONAL SERVICES
Bond Counsel and Disclosure Counsel
Quint&Thimmig LLP
San Francisco, California
Financing Consultant
Harrell&Company Advisors
Orange, California
Fiscal Agent and Escrow Bank
U.S. Bank Trust National Association
Los Angeles, California
Underwriter
O'Connor SWS Securities
Newport Beach, California
Verifications
Grant Thornton LLP
Minneapolis,Minnesota
iii
TABLE OF CONTENTS
INTRODUCTION......................................................I Payment of Special Tax Not a Personal
The Issuer...................................................................1 Obligation of the Property Owners.......................23
Purpose......................................................................1 Factors Affecting Parcel Values and
Security and Sources of Payment...............................2 Aggregate Value...................................................23
Refunding Plan..........................................................3 No Acceleration Provisions.....................................24
Estimated Sources and Uses of Funds.......................3 Loss of Tax Exemption.............................................24
THE BONDS...............................................................4
Limited Obligation of the City to Pay Debt
General Provisions.....................................................4 Service ..................................................................24
Debt Service Schedule...............................................5 Proposition 218........................................................24
Redemption................................................................6
Impact of FDIC Interests.........................................26
SECURITY FOR THE BONDS 11 LEGAL MATTERS..................................................27
.............................. . .
General.....................................................................11
Legal Opinion..........................................................27
Special Taxes...........................................................11
Tax Exemption.........................................................27
NoLitigation............................................................27
Proceeds of Foreclosure Sales..................................11 Special Tax Fund.....................................................12 No-General Obligation of City or District................28Escrow Verification.................................................28
THEDISTRICT........................................................14 Ratings.....................................................................28
Assessed Values.......................................................14 Underwriting............................................................28
Property Ownership in the District..........................14 The Financing Consultant........................................28
Development............................................................15 Execution.................................................................29
Value of Taxable Property in The District...............16 CITY OF HUNTINGTON BEACH
Direct and Overlapping Debt...................................18 INFORMATION STATEMENT.......................A-1
THE CITY OF HUNTINGTON BEACH...............19 RATE AND METHOD OF
BONDOWNERS' RISKS.........................................19 APPORTIONMENT OF SPECIAL TAX.........B-1
Factors Affecting Parcel Values ..............................19 SUMMARY OF THE FISCAL AGENT
Other Possible Claims Upon the Value of
Taxable Property 19 AGREEMENT....................................................C-1
Disclosure to Future Purchasers...............................20 FORM OF CONTINUING DISCLOSURE
Hazardous Substances..............................................20 CERTIFICATE...................................................D-1
Levy and Collection of the Special Tax...................20 FORM OF OPINION OF BOND COUNSEL......E-1
Exempt Properties....................................................21
Depletion of Reserve Fund......................................22 PROPERTY VALUES AND VALUE-TO-
Bankruptcy Proceedings..........................................22 BURDEN LIEN RATIOS....................................F-1
iv
I
OFFICIAL STATEMENT
$292109000*
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
2001 SPECIAL TAX REFUNDING BONDS
INTRODUCTION
This Official Statement, including the cover page and appendices hereto, is provided to furnish
information regarding the $2,210,000* principal amount of City of Huntington Beach Community
Facilities District No. 1990-1 2001 Special Tax Refunding Bonds(the"Bonds").
This introduction is not a summary of this Official Statement. It is only a brief description of and guide
to, and is qualified by, more complete and detailed information contained in the entire Official Statement,
including the cover page and appendices hereto, and the documents summarized or described herein. A
full review should be made of the entire Official Statement. The offering of the Bonds to potential
investors is made only by means of the entire Official Statement.
The Issuer
The City. The City of Huntington Beach (the "City") was incorporated as a charter city in 1909. It is
located in coastal Orange County, California along the Pacific Ocean. The City is situated approximately
28 miles southeast of Los Angeles and 90 miles northwest of San Diego. See °APPENDIX A—CITY OF
HUNTINGTON BEACH INFORMATION STATEMENT" attached hereto.
The District. The Mello-Roos Community Facilities Act of 1982, as amended, constituting Sections
53311, et seq. of the Government Code of the State(the "Act"),was enacted by the California Legislature
to provide an alternative method of financing certain public facilities, improvements and services. The
Act authorizes local governmental entities to establish community facilities districts as legally constituted
governmental entities within defined boundaries, with the legislative body of the local applicable
governmental entity acting on behalf of the district. Subject to approval by at least a two-thirds vote of
the votes cast by qualified electors within the district and compliance with the provisions of the Act, the
legislative body may issue bonds for the community facilities district established by it and may levy and
collect a special tax (the "Special Tax") within such district to repay such bonds (see °APPENDIX B —
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX" herein). On June 25, 1990, the City
established Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) by the adoption of
Resolution No. 6174. See"THE DISTRICT" herein.
On August 9, 1990, the City of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) 1990 Special Tax Bonds (the"1990 Bonds")were issued in the principal amount
of$2,400,000. Proceeds of the 1990 Bonds were used to finance the design, construction and acquisition
of certain street, sewer, water, storm drain, utility, landscaping, police and fire improvements and other
public improvements to serve the area within the District see"THE DISTRICT"herein.
Purpose
The Bonds are being issued for the purpose of providing funds to redeem the 1990 Bonds on April 1,
2002, to fund a reserve fund for the Bonds and pay the costs of issuing the Bonds. See "THE
REFUNDING PLAN"herein.
*Preliminary, subject to change.
1
Security and Sources of Payment
Authority for Issuance of the Bonds. The Bonds are issued pursuant to the Act and a Fiscal Agent
Agreement, dated as of November 1, 2001 (the "Fiscal Agent Agreement"), by and between the City and
U.S. Bank Trust National Association, Los Angeles, California as fiscal agent (the "Fiscal Agent"). See
"THE BONDS-Authority for Issuance"herein.
Sources of Payment for the Bonds
The Bonds are secured by and payable from a first pledge of the proceeds of the Special Taxes received
by the City (the "Special Tax Revenues"). The City has covenanted in the Fiscal Agent Agreement, so
long as any Bonds are outstanding, to annually levy the Special Tax against all land within the District
taxable under the Act in accordance with the proceedings for the authorization and issuance of the Bonds
("Taxable Property") and to make provision for the collection of the Special Tax in amounts which will
be sufficient to pay interest on and, principal of on the Bonds as such becomes due and payable and to
replenish the Reserve Fund (as defined herein) as necessary, subject to any maximum on the amount of
Special Taxes that may be levied in any year. See"SECURITY FOR THE BONDS-Special Taxes"herein.
The City has also covenanted to cause foreclosure proceedings to be commenced and prosecuted against
certain parcels with delinquent installments of the Special Tax. (For a more detailed description of the
foreclosure covenant see"SECURITY FOR THE BONDS-Proceeds of Foreclosure Sales".
Professionals Involved in the Offering
U.S. Bank Trust National Association, Los Angeles, California, will serve as the paying agent, registrar,
authentication and transfer agent for the Bonds and perform the functions required of it under the Fiscal
Agent Agreement for the payment of the principal of and interest and any premium on the Bonds and all
activities related to the redemption of the Bonds. Quint&Thimmig LLP, San Francisco, California, will
act as Bond Counsel and as Disclosure Counsel. Escrow verification was performed by Grant Thornton
LLP, Minneapolis, Minnesota. Harrell & Company Advisors, LLC, Orange, California, Financing
Consultant, advised the City as to the financial structure and certain other financial matters relating to the
Bonds.
Payment of the fees of Bond Counsel and Disclosure Counsel are contingent on the sale and delivery of
the Bonds.
Continuing Disclosure. The City has covenanted for the benefit of holders and beneficial owners of the
Bonds to provide certain financial information and operating data relating to the District and the Bonds by
not later than the last day of February in each year commencing February 28, 2002 (the "City Annual
Report"),and to provide notices of the occurrence of certain enumerated events, if material.
The City Annual Report and any notice of a material event will be filed by the Fiscal Agent, acting as
dissemination agent, with each Nationally Recognized Municipal Securities Information Repository, and
with the appropriate State depository, if any (the "Repositories"). The specific nature of the information
to be contained in the City Annual Report or any notice of a material event is set forth in the City
Continuing Disclosure Certificate, the form of which is set forth in "APPENDIX D — FORM OF
CONTINUING DISCLOSURE CERTIFICATE" (the "Continuing Disclosure Certificate"). The covenants of
the City in the City Continuing Disclosure Certificate have been made in order to assist the Underwriter
in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the "Rule"); provided
however a default under the City Continuing Disclosure Certificate will not, in itself, constitute a default
under the Fiscal Agent Agreement, and the sole remedy under the City Continuing Disclosure Certificate
in the event of any failure of the City or the Dissemination Agent to comply with the City Continuing
Disclosure Certificate will be an action to compel specific performance. The City has never failed to
comply, in all material respects,with an undertaking under the Rule.
2
Refunding Plan
On August 9, 1990, the City of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) 1990 Special Tax Bonds (the"1990 Bonds")were issued in the principal amount
of$2,400,000. The Bonds are being issued for the primary purpose of refunding the 1990 Bonds on an
advanced basis by providing for their redemption on April 1, 2002. Proceeds of the Bonds, along with
certain other moneys held by the Fiscal Agent with respect to the 1990 Bonds, will be deposited into an
irrevocable escrow account (the "Refunding Fund") established pursuant to that certain Escrow
Agreement, dated as of November 14, 2001 (the"Escrow Agreement"),by and between the City and U.S.
Bank Trust National Association, as escrow agent. Moneys in the Refunding Fund will be invested in
Federal Securities (as defined in the Fiscal Agent Agreement) or held uninvested in cash. Grant
Thornton,Minneapolis,Minnesota, will verify that moneys held in the Refunding Fund, together with any
investment earnings thereon, are sufficient to redeem the 1990 Bonds on April 1,2002.
Moneys on deposit in the Refunding Fund will not be available for payment of principal of or interest on
the Bonds.
Estimated Sources and Uses of Funds
The proceeds from the sale of the Bonds, along with moneys held in funds and accounts relating to the
1990 Bonds, will be deposited in the following respective accounts and funds established by the City
under the Fiscal Agent Agreement, as follows:
Sources*
Principal Amount of Bonds
Other Sources of Funds
Total Sources:
Uses*
Reserve Fund(l)
Underwriter's Discount
Costs of Issuance Fund
Refunding Fund
Total Uses:
(1) Equal to the initial Reserve Requirement with respect to the Bonds.
*Preliminary, subject to change.
3
THE BONDS
General Provisions
The Bonds will be dated their date of delivery, and will bear interest at the rates per annum set forth on
the cover page hereof, payable semiannually on each April 1 and October 1, commencing on April 1,
2002 (each, an "Interest Payment Date"), and will mature in the amounts and on the dates set forth on the
cover page hereof. The Bonds will be issued in fully registered form in denominations of$5,000 each or
any integral multiple thereof.
Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months. Each
Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof
unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such
date of authentication, or (ii) it is authenticated prior to an Interest Payment Date and after the close of
business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest
from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first
Interest Payment Date, in which event it shall bear interest from the original date of issuance; provided,
however,that if at the time of authentication of a Bond,interest is in default thereon, such Bond shall bear
interest from the Interest Payment Date to which interest has previously been paid or made available for
payment thereon.
Interest on the Bonds(including the final interest payment upon maturity or earlier redemption) is payable
by check of the Fiscal Agent mailed on the Interest Payment Dates by first class mail to the registered
Owner thereof at such registered Owner's address as it appears on the registration books maintained by
the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date, or by
wire transfer (i) to the Depository (so long as the Bonds are in book-entry form, or (ii) to an account
within the United States made on such Interest Payment Date upon written instructions of any Owner of
$1,000,000 or more in aggregate principal amount of Bonds, which instructions shall continue in effect
until revoked in writing, or until such Bonds are transferred to a new Owner. The principal of the Bonds
and any premium on the Bonds are payable by check in lawful money of the United States of America
upon surrender of the Bonds at the Principal Office of the Fiscal Agent in St. Paul,Minnesota.
Authority for Issuance
The Bonds are issued pursuant to the Act, the Fiscal Agent Agreement and a resolution adopted on
October 15, 2001. The Bonds are issued pursuant to particular provisions of the Act which permit their
issuance without repeating any of the procedures required for approval of the 1990 Bonds if the
legislative body determines that it would be prudent in the management of its fiscal affairs to issue
refunding bonds and if the total net interest cost to maturity on the refunding bonds plus the principal
amount of the refunding bonds does not exceed the net interest cost to maturity on the bonds to be
refunded plus the principal amount of the bonds to be refunded.
With respect to the 1990 Bonds, the District was established and bonded indebtedness was authorized
pursuant to provisions of the.Act. In accordance with such provisions, qualified electors within the
District were entitled to cast one vote for each acre, or portion of an acre, of land they owned within the
District. The property owners within the District at the time of the election cast all 36 votes at the
election held on June 25, 1990 in favor of the levy of the Special Taxes and the issuance of the 1990
Bonds.
4
Debt Service Schedule
The following table presents the annual debt service on the Bonds, assuming that there are no optional
redemptions.
Year Ending Total
October 1 Principal Interest Debt Service
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Total
5
Redemption
Optional Redemption. The Bonds are subject to redemption prior to their stated maturity on any Interest
Payment Date on or after October 1, 2011, as a whole or in part, upon payment from any source of funds
available for that purpose, at a redemption price equal to the principal amount of Bonds to be redeemed
together with accrued interest thereon to the date fixed for redemption,without premium.
If less than all of the outstanding Bonds are to be redeemed at any one time, the Bonds shall be redeemed
by lot.
Mandatory Redemption. The Bonds maturing on October 1, are subject to mandatory sinking
payment redemption in part on October 1, and on each October 1 thereafter to maturity, by lot, at a
redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to
the date fixed for redemption,without premium, from sinking fund payments as follows:
Term Bonds Maturing on October 1,
The amounts in the foregoing table shall be reduced pro rata, in order to maintain substantially level debt
service, as a result of any prior partial redemption of the Bonds as described under "Optional
Redemption"above.
Purchase In Lieu of Redemption. In lieu of redemption as described above, moneys in the Bond Fund
may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with
the Fiscal Agent of an Officer's Certificate executed by the Director of Finance of the City (the "Finance
Officer") requesting such purchase, at public or private sale as and when, and at such prices (including
brokerage and other charges) as such Officer's Certificate may provide, but in no event may Bonds be
purchased at a price in excess of the principal amount thereof, any redemption premium due thereon,plus
interest accrued to the date of purchase.
6
Notice of Redemption. The Fiscal Agent shall cause notice of any redemption to be mailed by first class
mail, postage prepaid, at least thirty (30) days but not more than sixty(60) days prior to the date fixed for
redemption, to the Securities Depositories and to one or more Information Services, and to the respective
registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond
registration books in the Principal Office of the Fiscal Agent; but such mailing shall not be a condition
precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall
not affect the validity of the proceedings for the redemption of such Bonds.
Such notice shall state the redemption date and the redemption price and, if less than all of the then
Outstanding Bonds are to be called for redemption, shall state as to any Bond called in part the principal
amount thereof to be redeemed, and shall require that such Bonds be then surrendered at the Principal
Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest
on such Bonds will not accrue from and after the redemption date.
Partial Redemption. Whenever less than all of the Bonds or any given portion thereof are to be
redeemed, the Fiscal Agent shall select the Bonds to be redeemed, from all Bonds or such given portion
thereof not previously called for redemption, among maturities as directed in writing by the City (who
shall specify Bonds to be redeemed so as to maintain, as much as practicable, the same debt service
profile for the Bonds as in effect prior to such redemption); and by lot within a maturity, such selection
within a maturity to be done in any manner which the Fiscal Agent deems appropriate.
Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment
of the principal of, and interest and any premium on, the Bonds so called for redemption shall have been
deposited in the Bond Fund, such Bonds so called shall cease to be entitled to any benefit under the Fiscal
Agent Agreement other than the right to receive payment of the redemption price, and no interest shall
accrue thereon from and after the redemption date specified in the notice of redemption.
Registration,Transfer and Exchange
Registration. The Bonds will be registered as fully registered bonds,without coupons. The Fiscal Agent
will keep, or cause to be kept, at its Principal Office sufficient books for the registration and transfer of
the Bonds(the "Bond Register")which books shall show the series number, date, amount, rate of interest
and last known owner of each Bond and shall at all times be open to inspection by the City during regular
business hours upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall,
under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred, on said books, the ownership of the Bonds. The City and the Fiscal Agent will treat the
Owner of any Bond whose name appears on the Bond register as the absolute Owner of such Bond for
any and all purposes, and the City and the Fiscal Agent shall not be affected by any notice to the contrary.
The City and the Fiscal Agent may rely on the address of the Bondowner as it appears in the Bond
register for any and all purposes.
Transfer. Any Bond may, in accordance with its terms, be transferred by the person in whose name it is
registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation,
accompanied by delivery of a duly written instrument of transfer in a form acceptable to the Fiscal Agent.
The Fiscal Agent shall collect from the Owner requesting such transfer any tax or other governmental
charge required to be paid with respect to such transfer. Whenever any Bond or Bonds shall be
surrendered for transfer, the City shall execute and the Fiscal Agent shall authenticate and deliver a new
Bond or Bonds, for a like aggregate principal amount of authorized denominations.
No transfers of Bonds may be made (i) fifteen days prior to the date established by the Fiscal Agent for
selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has been selected for
redemption.
7
Exchange. Bonds may be exchanged at the Principal Office of the Fiscal Agent solely for a like
aggregate principal amount of Bonds of authorized denominations and of the same maturity. The cost for
any services rendered or any expenses incurred by the Fiscal Agent in connection with any such exchange
shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting such exchange any
tax or other governmental charge required to be paid with respect to such exchange.
No exchanges of Bonds may be made (i) fifteen days prior to the date established by the Fiscal Agent for
selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has been selected for
redemption.
No Additional Bonds. The City has covenanted in the Fiscal Agent Agreement not to issue any
additional bonds or incur any additional indebtedness (other than certain administrative expenses)secured
by a pledge of Special Taxes or any amounts in any funds or accounts established under the Fiscal Agent
Agreement.
Book-Entry Only System. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in
the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully registered Bond will be issued for each maturity of the
Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York.Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers,
Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks,
and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on
file with the Securities and Exchange Commission.
Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which
will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of
each Bond (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial
Owners are expected to receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial
Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished
by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interests in the Bonds, except in the event that
use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the
name of DTC's partnership nominee, Cede & Co. or such other name as requested by an authorized
representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede &Co.
or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners.
8
The Participants will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct Participants,by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being
redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in
such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to Bonds.
Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record
date. The Omnibus Proxy assigns Cede&Co.'s consenting or voting rights to those Direct Participants to
whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Principal,redemption price and interest payments on the Bonds will be made to Cede&Co. or such other
nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct
Participants' accounts upon DTC's receipt of funds and corresponding detail information from Issuer or
Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments
by Participants to Beneficial Owners will be governed by standing instructions and customary practices,
as is the case with securities held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC (nor its nominee), Agent, or
Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment
of principal, redemption price and interest to Cede & Co. (or such other nominee as may be requested by
an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such
payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to
Beneficial Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the Bonds at any time
by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor
securities depository is not obtained,Bonds are required to be printed and delivered.
The City may decide to discontinue use of the system of book-entry transfers through DTC (or a
successor securities depository). In that event,the Bonds will be printed and delivered.
The information in this section concerning DTC.and DTC's book-entry system has been obtained from
sources the City believes to be reliable,but the City takes no responsibility for the accuracy thereof.
Discontinuance of DTC Services. In the event that (a) DTC determines not to continue to act as
securities depository for the Bonds, or (b) the City determines that DTC shall no longer so act and
delivers a written certificate to the Fiscal Agent to that effect, then the City will discontinue the Book-
Entry System with DTC for the Bonds. If the City determines to replace DTC with another qualified
securities depository, the City will prepare or direct the preparation of a new single separate, fully
registered Bond for each maturity of the Bonds registered in the name of such successor or substitute
securities depository as are not inconsistent with the terms of the Fiscal Agent Agreement. If the City
fails to identify another qualified securities depository to replace the incumbent securities depository for
the Bonds, then the Bonds shall no longer be restricted to being registered in the Bond registration books
in the name of the incumbent securities depository or its nominee, but shall be registered in whatever
name or names the incumbent securities depository or its nominee transferring or exchanging the Bonds
shall designate.
9
In the event that the Book-Entry System is discontinued, the following provisions would also apply: (i)
the Bonds will be made available in physical form, (ii)principal of, and redemption premiums,if any, on,
the Bonds will be payable upon surrender thereof at the corporate trust office of the Fiscal Agent in St.
Paul, Minnesota, (iii) interest on the Bonds will be payable by check mailed by first-class mail or, upon
the written request of any Owner of$1,000,000 or more in aggregate principal amount of Bonds received
by the Fiscal Agent on or prior to the 15th day of the calendar month immediately preceding the interest
payment date, by wire transfer in immediately available funds to an account with a financial institution
within the United States of America designated by such Owner, and (iv) the Bonds will be transferable
and exchangeable as provided in the Fiscal Agent Agreement.
10
SECURITY FOR THE BONDS
General
The Bonds are secured by and payable from a first pledge of the proceeds of the Special Taxes received
by the City, subject to the provisions of the Fiscal Agent Agreement. The City has covenanted in the
Fiscal Agent Agreement to annually levy the Special Taxes in an amount sufficient to pay the principal of
and interest on the Bonds, subject to the limitation on the maximum special taxes that may be levied
under the Special Tax Formula described below. The Bonds are further secured by a first pledge on all
moneys deposited in the Bond Fund and the Reserve Fund, and, until disbursed as provided in the Fiscal
Agent Agreement, in the Special Tax Fund. The Special Tax Revenues and all moneys deposited into said
funds are pledged to the payment of the principal of, and interest and any premium on, the Bonds as
provided in the Fiscal Agent Agreement and in the Act until all of the Bonds have been paid and retired or
until moneys or Federal Securities have been set aside irrevocably for that purpose.
Amounts in the Administrative Expense Fund and the Costs of Issuance Fund established under the Fiscal
Agent Agreement are not pledged to the repayment of the Bonds. The Facilities acquired or constructed
with the proceeds of the 1990 Bonds are not in any way pledged to pay the Debt Service on the Bonds.
Any proceeds of condemnation, destruction or other disposition of any Facilities financed with the
proceeds of the 1990 Bonds are not pledged to pay the debt service on the Bonds and are free and clear of
any lien or obligation imposed hereunder.
Special Taxes
The Special Tax is levied and collected according to the rate and method of apportionment set forth in
"APPENDIX B - RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX" (the "Special Tax
Formula"). The Special Tax is to be levied by the City on behalf of the District each Fiscal Year on all
parcels within the District in an amount equal to maximum Special Tax, less any Services Credit, as such
terms are defined in Appendix B. On March 1 of each year all Taxable Parcels within the District shall be
categorized either as Developed Parcels or Undeveloped Parcels, and shall be subject to a Special Tax in
accordance with the Rate and Method of Apportionment described in Appendix B. Currently all Taxable
Parcels are categorized as Developed Parcels. The City has covenanted in the Fiscal Agent Agreement to
levy (subject to the Maximum Annual Special Tax for the District) in each Fiscal Year the Special Taxes
in an amount sufficient to pay the debt service on the Bonds and the cost of providing certain
administrative expenses of the City and certain City Services.
Proceeds of Foreclosure Sales
Pursuant to the Act, in the event of any delinquency in the payment of the Special Tax, the City may order
the institution of a Superior Court action to foreclose the lien therefor within specified time limits. In
such an action, the real property subject to the unpaid amount may be sold at judicial foreclosure sale.
Such judicial foreclosure action is not mandatory.
The City has covenanted for the benefit of the owners of the Bonds that it will order, and cause to be
commenced as provided below, and thereafter diligently prosecute to judgment (unless such delinquency
is theretofore brought current), an action in the superior court to foreclose the lien of any Special Tax or
installment thereof not paid when due, but only as provided in the following two paragraphs. The
Finance Officer shall notify the City Attorney of any such delinquency of which it is aware, and the City
Attorney shall commence, or cause to be commenced, such proceedings.
On or about August 31 st of each Fiscal Year, the Finance Officer will compare the amount of Special
Taxes levied to date in the District to the amount of Special Tax Revenues received to date by the City,
and:
11
A. Individual Delinquencies. If the Finance Officer determines that any single parcel subject to the
Special Tax in the District.is delinquent in the payment of Special Taxes in the aggregate amount
of$5,000 or more, then the Finance Officer will send or cause to be sent a notice of delinquency
(and a demand for immediate payment thereof) to the property owner within 45 days of such
determination, and (if the delinquency remains uncured) foreclosure proceedings will be
commenced by the City within 90 days of such determination.
B. Aggregate Delinquencies. If the Finance Officer determines that (i) the total amount of
delinquent Special Tax for the prior Fiscal Year for the entire District, (including the total of
delinquencies under paragraph (A) above), exceeds 5% of the total Special Tax due and payable
for the prior Fiscal Year, or (ii) there are ten (10) or fewer owners of real property within the
District, determined by reference to the latest available secured property tax roll of the County,
the City will notify or cause to be notified property owners who are then delinquent in the
payment of Special Taxes (and demand immediate payment of the delinquency)within 45 days of
such determination, and will commence foreclosure proceedings within 90 days of such
determination against each parcel of land in the District with a Special Tax delinquency.
In the event that foreclosure proceedings are commenced, such foreclosure proceedings could be stayed
by the commencement of bankruptcy proceedings by or against the owner of the property being
foreclosed.
Special Tax Fund
There is established pursuant to the Fiscal Agent Agreement, as a separate account (which may be
maintained on the City's books as an account within the Administrative Expense Fund)to be held by the
Finance Officer, a Special Tax Fund. The Finance Officer is required to deposit into the Special Tax
Fund, immediately upon receipt, all Special Tax Revenues received by the City and certain other moneys
transferred from the Administrative Expense Fund. "Special Tax Revenues" is defined in the Fiscal
Agent Agreement to mean "the proceeds of the Special Taxes received by the City, including any
scheduled payments thereof, interest and proceeds of the redemption or sale of property sold as a result of
foreclosure of the lien of the Special Taxes to the amount of said interest, but shall not include any
interest or penalties in excess of the interest due on the Bonds collected in connection with any such
foreclosure." Moneys in the Special Tax Fund will be held by the Finance Officer for the benefit of the
City and the Owners of the Bonds and, pending any disbursement, will be subject to a lien in favor of the
Owners of the Bonds.
The Finance Officer will withdraw from the Special Tax Fund and transfer: (i) to the Administrative
Expense Fund, whenever required for the purposes of such fund, an amount equal to that portion of any
Special Tax Revenues received which are attributable to the levy of Special Taxes for Administrative
Expenses(determined by multiplying the aggregate Special Taxes received by a fraction the numerator of
which is the percentage of the aggregate Special Tax levy, to which such Special Taxes received pertain,
constituting Administrative Expenses and the denominator of which is one hundred), (ii) to the Fiscal
Agent for deposit in the Bond Fund, (a) within thirty (30) days of receipt of any Special Tax Revenue
during any period that principal and/or interest is past due on the Bonds, an amount equal to any principal
or interest on the Bonds not paid when due, together with interest thereon at the interest rate on the Bonds
from the date such payment was due to the date of transfer, and (b) on or before each Interest Payment
Date,an amount, taking into account any amounts then on deposit in the Bond Fund, such that the amount
in the Bond Fund equals the principal, premium, if any, and interest due on the Bonds on the Interest
Payment Date; and (iii) on or before each Interest Payment Date, and following any transfers referred to
in the preceding clauses (i) and (ii) above, to the Reserve Fund an amount, taking into account amounts
then on deposit in the Reserve Fund, such that the amount in the Reserve Fund equals the Reserve
Requirement; provided that no such transfers shall exceed the amount then available to be transferred
from the Special Tax Fund. See"APPENDIX C-SUMMARY OF THE FISCAL AGENT AGREEMENT."
12
Reserve Fund
In order to further secure the payment of principal of and interest on the Bonds, the Fiscal Agent
Agreement provides that, from the proceeds of the sale of the Bonds, an amount will be deposited into the
Reserve Fund equal to the Reserve Requirement. Reserve Requirement is defined in the Fiscal Agent
Agreement to mean, as of any date of calculation an amount equal to the lesser of(i) the then Maximum
Annual Debt Service (as defined in the Fiscal Agent Agreement), or (h) eight percent (8%) of the initial
principal amount of the Bonds. Amounts in the Reserve Fund may be used to pay Debt Service on the
Bonds to the extent that other moneys are not available for that purpose. Amounts in the Reserve Fund
may also be used to make rebate payments, if any, required under the Code. See "APPENDIX C -
SUMMARY OF THE FISCAL AGENT AGREEMENT."
13
THE DISTRICT
The information set forth herein has been included because it is considered relevant to an informed
evaluation of the District. The information should not be construed to suggest that the Bonds or the
Special Taxes that will be used to pay the Special Tax Bonds are personal obligations of the property
owners within the District.
The information set forth herein regarding property owners within the District was provided by others
and has not been independently verified. The City makes no representation as to the accuracy or
completeness of any such information. This information has been included because it is considered
relevant to an informed evaluation of the District. The information should not be construed to suggest
that the Bonds or the Special Taxes that will be used to pay the Special Tax Bonds are personal
obligations of the property owners within the District.
The owners ofproperty within the District will not be personally liable for payments of the Special Taxes
to be applied to pay the principal of and interest on the Special Tax Bonds. Accordingly, no property
owner's financial statements have been included in this Official Statement. Furthermore, no
representation is made that the property owners will have funds available to complete development within
the District.
General
The District is located generally at the junction of Ellis Avenue and Goldenwest Street. The District
consists of approximately 30 net developable acres.
Assessed Values
For all parcels, the County-determined assessed valuation is provided as an estimate for purposes of
valuation. The County assessed valuation is derived from the fiscal year 2000/01 County Assessor's
assessed valuation of land and improvements. The County's assessed valuation of land and
improvements is based on the base year assessed value (which may or may not be reflective of the fair
market value of the land and improvements) increased by a maximum of 2% a year each year thereafter,
as allowed under Article XIIIA of the Constitution of the State of California. Therefore, the assessor's
value typically does not accurately reflect the fair market value of the land and improvements which may
be higher or lower than the Assessors value. The fair market value can only be established through the
sale of the property or an M.A.I. appraisal of the property within the District. The City has not undertaken
to obtain an M.A.I. appraisal of the property within the District.
Potential purchasers of the Bonds should be aware that if a parcel bears a special tax in excess of its
market value, then there may be little incentive for the owner of the parcel to pay the special tax on such
parcel and little likelihood that such property would be purchased in a foreclosure sale. See
"BONDOWNERS'RISKS" describing risks relating to market values of parcels.
Property Ownership in the District
The property owners in the District will not be personally liable for payments of the special tax to be
applied to pay the principal of and interest on the Bonds. No assurance can be given that the property
owners will continue to hold an interest in the parcels in the District. All property in the District is
currently developed with single family homes. The 2000/01 assessed values for single family residences
in the District range from $525,000 to $1,200,000 with the average assessed valuation for a single family
residence being$660,000.
14
TABLE NO.1
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
LARGEST TAXPAYER
Percent of Number 2000/01
Property Special of Assessed Special
Owner Tax(1) Parcels Value Tax Land Use
Goldenwest Partners,LLC 13.04% 15 $4,049,228 $34,435.00 SFR
t�1 As of August 24,2000,all parcels owned by Goldenwest Partners have been sold,however,the sales are not yet
reflected on the 2000/2001 tax roll.
All other parcels in the District are owned by separate individuals. See "APPENDIX F — PROPERTY
VALUES AND VALUE-TO-LIEN RATIOS."
Development
The majority of the development in the District was completed by David Dahl (the "Developer"). As a
condition of development, the Developer agreed to install certain subdivision improvements to the extent
that the proceeds of the 1990 Bonds were insufficient for that purpose. The Developer installed all of the
subdivision improvements required, with the exception of the final asphalt lift for Ellis Avenue and
installing a particular water main. The failure to complete these remaining improvements resulted in the
City filing suit against the Developer, which delayed the final development of the remaining vacant
property in the District. In May, 1999, the City entered into a settlement agreement with the Developer
for the completion of the required improvements and used the funds in the Improvement Fund established
for the 1990 Bonds together with funds received already from the Developer to complete the necessary
improvements,
TABLE NO.2
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
Property Owners,
Share of 2000/01 Special Tax and the Bonds,
Assessed Value and Value-to-Burden Ratio
Number Share of Estimated
of 2000/01 Share of Assessed Value-to-
Property Parcels Special Tax Bonds Value(l) Burden Ratio
Goldenwest Partners,LLC 15 13.04% $ 288,261 $ 4,049,228 14.01
All Others 100 81.74 1,921,739 77,127,005 40.10
Total 115 100.00% $2,210,000 $81,176,233 36.73
(1) Goldenwest Partners had developed and sold all 15 parcels as of August 24, 2000 however the sale is not yet
reflected in the tax roll.
Source: City of Huntington Beach.
15
Value of Taxable Property in The District
Land and Improvement Values. If a property owner defaults in the payment of the Special Tax, the
City's only remedy is to commence foreclosure proceedings against the defaulting property owner's real
property within the District for which the Special Tax has not been paid, in an attempt to obtain funds to
pay the delinquent Special Tax. Therefore, the respective values of the land and improvements within the
District are critical factors in determining the investment quality of the Bonds.
Prospective purchasers of the Bonds should not assume that the land could be sold for its assessed value
or its fair market value at a foreclosure sale for delinquent Special Taxes. In particular, the values of
individual properties in the District will vary in some cases significantly. The actual value of the land is
subject to future events. The future value of the land can be-expected to fluctuate due to many different,
not fully predictable, real estate related investment risk factors, including but not limited to: general tax
law changes related to real estate, changes in competition, general area employment base changes,
population changes, changes in real estate related interest rates affecting general purchasing power,
advertising, changes in allowed zoning uses and density, natural disasters such as floods, earthquakes and
landslides,and similar factors.
Assessed Value of Improvements. The values shown in "APPENDIX F - PROPERTY VALUES AND
VALUE-TO-BURDEN RATIOS" are based on the County-determined assessed values of property in the
District derived from the 2000/01 County Assessor's assessed valuation of land and improvements, which
may or may not be reflective of such property's fair market value or what a property could be sold for at
judicial foreclosure. Note particularly in this regard the subsections under this caption "BONDOWNER'S
RISKS" which discuss matters relating to value of a parcel and the discussions under the caption "THE
DISTRICT" with respect to assessed valuation appeals and development of vacant parcels within the
District. The City has not undertaken to provide an appraisal of properties within the District.
Article XIIIA of the California Constitution (Proposition 13) defines "full cash value" to mean "the
county assessor's valuation of real property as shown on the 1975/76 bill under `full cash value', or,
thereafter, the appraised value of real property when purchased or newly constructed or when a change in
ownership has occurred after the 1975 assessment," subject to exemptions in certain circumstances of
property transfer or reconstruction. The "full cash value" is subject to annual adjustment to reflect
increases, not to exceed 2% for any year, or decreases in the consumer price index or comparable local
data,or to reflect reductions in property value caused by damage, destruction or other factors.
Because of the general limitation to 2%per year in increases in full cash value of properties which remain
in the same ownership the county tax roll does not reflect values uniformly proportional to actual market
values. No assurance can be given that should a parcel with delinquent installments be foreclosed and
sold for the amount of the delinquency, that any bid will be received for such property, or if a bid is
received that such bid will be sufficient to pay such delinquent installments.
Property Values and Value-to-Burden Ratios. "APPENDIX F - PROPERTY VALUES AND VALUE-TO-
BURDEN RATIOS" lists the estimated share of the principal amount of the Bonds for each parcel, the value
of that property using the 2000/01 assessed value of the improvements, and the value-to-burden ratios
(with respect to the Bonds) for the Taxable Property in the District on a parcel by parcel basis.
On this basis, the aggregate value-to-burden ratio for the District based upon a $2,210,000 principal
amount of Bonds, is 36.73. Parcel-by-parcel value-to-burden ratios are set forth in Appendix F. No
assurance can be given, however, that the aggregate value-to-burden ratio or that any of the individual
parcels' value-to-burden ratios listed in Appendix F can or will be maintained during the period of time
that the Bonds are outstanding. The City has no control over the amount of additional indebtedness that
may be issued in the future by other public agencies, the payment of which, through the levy of a tax or
an assessment, is on a parity with the Special Taxes. However, the City has covenanted not to issue
additional bonds payable on parity from Special Taxes.
16
Historical Tax Status; Delinquencies.
The following table illustrates historical Special Tax delinquencies for property located in the District for
the five most recent fiscal years. See "BONDOWNERS' RISKS - Levy and Collection of the Special Tax"
and"Bankruptcy Proceedings"herein.
TABLE NO.3
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
Historical Special Tax Delinquencies
Fiscal Years 1996/97 through 2000/O1
Number of Total Special Amount Percent
Fiscal Year Delinquencies Tax Lew Delinquent Delinquent
1996/97 4 $264,001 $13,058 4.95%
1997/98 5 264,000 7,754 2.94
1998/99 4 264,000 7,945 3.01
1999/00 3 264,000 4,550 1.72
2000/01 2 263,999 4,591 1.74
Source City of Huntington Beach.
17
Direct and Overlapping Debt
Overlapping local agencies provide public services within the District, and such agencies have issued
general obligation bonds and other types of indebtedness. Direct and overlapping bonded indebtedness
(including the 1990 Bonds but not including the Bonds being issued to refund the 1990 Bonds) is shown
in the following table.
TABLE NO.4
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
DIRECT AND OVERLAPPING DEBT
[TO BE COMPLETED].
Source:California Municipal Statistics,Inc.
18
THE CITY OF HUNTINGTON BEACH
For additional information on the City of Huntington Beach, see "APPENDIX A—CITY OF HUNTINGTON
BEACH INFORMATION STATEMENT." The information in Appendix A is provided for reference purposes
only. THE BONDS AND THE INTEREST THEREON ARE NOT AN INDEBTEDNESS OF THE STATE OF
CALIFORNIA (THE "STATE") OR ANY OF ITS POLITICAL SUBDIVISIONS, AND NONE OF THE CITY
(EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN), THE STATE OR ANY OF ITS POLITICAL
SUBDIVISIONS IS LIABLE ON THE BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING
POWER OF THE CITY OR THE DISTRICT(EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN)
OR THE STATE OR ANY OTHER POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE
PAYMENT OF THE.BONDS. OTHER THAN THE SPECIAL TAXES, NO TAXES ARE PLEDGED TO THE
PAYMENT OF THE BONDS. THE BONDS ARE NOT A GENERAL OBLIGATION OF THE CITY,BUT ARE
LIMITED OBLIGATIONS OF THE CITY ON BEHALF OF THE DISTRICT, PAYABLE SOLELY FROM
THE AMOUNTS PLEDGED UNDER THE FISCAL AGENT AGREEMENT AS MORE FULLY DESCRIBED
HEREIN.
BONDOWNERS' RISKS
The purchase of the Bonds described herein involves a degree of risk. The following includes a
discussion of some of the risks which should be considered prior to making an investment decision. The
discussion below does not purport to identify all possible risks, and the risks so described are not shown
in any particular order.
Factors Affecting Parcel Values
Assessed Values. Set forth in "APPENDIX F- PROPERTY VALUES AND VALUE-TO-BURDEN RATIOS" are
the assessed values of improvements on improved parcels in the District as shown on the Orange County
tax roll for fiscal year 2000/01. The County's assessed value for improvements reflects the value of
substantial improvements as of the time the improvements were made. Annual increases in value, in the
absence of substantial improvements, cannot exceed 2 percent. The County's assessed values for
property tax purposes do not, therefore,necessarily reflect current actual market value nor do they assume
the completion of future improvements, public or private.
Other Possible Claims Upon the Value of Taxable Property
While the Special Taxes are secured by the Taxable Property, the security only extends to the value of
such Taxable Property that is not subject to priority and parity liens and similar claims.
The table in "THE DISTRICT — Direct and Overlapping Debt" states the presently outstanding amount of
governmental obligations (with stated exclusions) the tax or assessment for which is or may become an
obligation of one or more of the parcels of Taxable Property and furthermore states the additional amount
of general obligation bonds the tax for which, if and when issued, may become an obligation of one or
more of the parcels of Taxable Property. The table does not specifically identify which of the
governmental obligations are secured by liens on one or more of the parcels of Taxable Property.
In addition, other governmental obligations may be authorized and undertaken or issued in the future, the
tax, assessment or charge for which may become an obligation of one or more of the parcels of Taxable
Property and may be secured by a lien on a parity with the lien of the Special Tax securing the Bonds.
In general, as long as the Special Tax is collected on the county tax roll, the Special Tax and all other
taxes, assessments and charges also collected on the tax roll are on a parity. Questions of priority become
significant when collection of one or more of the taxes, assessments or charges is sought by some other
procedure, such as foreclosure and sale. In the event of proceedings to foreclose for delinquency of
19
Special Taxes securing the Bonds, the Special Tax will be subordinate only to existing prior governmental
liens, if any. Otherwise, in the event of such foreclosure proceedings, the Special Taxes will generally be
on a parity with the other taxes, assessments and charges. Although the Special Taxes will generally have
priority over non-governmental liens on a parcel of Taxable Property, regardless of whether the non-
governmental liens were in existence at the time of the levy of the Special Tax or not, this result may not
apply in the case of bankruptcy.
While governmental taxes, assessments and charges are a common claim against the value of a parcel of
Taxable Property, other less common claims may be relevant. One of the most serious in terms of the
potential reduction in the value that may be realized to pay the Special Tax is a claim with regard to a
hazardous substance. See "BONDOWNERS' RISKS-Hazardous Substances" herein.
Disclosure to Future Purchasers
The City has recorded a notice of the Special Tax lien in the Office of the County Recorder. While title
companies normally refer to such notices in title reports, there can be no guarantee that such reference
will be made or, if made, that a prospective purchaser or lender will consider such Special Tax obligation
in the purchase of a parcel of land or a home in the District or the lending of money thereon. The Act
requires the subdivider(or its agent or representative)of a subdivision to notify a prospective purchaser or
long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax of the existence and
maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section
1102.6b requires that in the case of transfers other than those covered by the above requirement, the seller
must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format
prescribed by statute. Failure by an owner of the property to comply with the above requirements, or
failure by a purchaser or lessor to consider or understand the nature and existence of the Special Tax,
could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when
due.
Hazardous Substances
While governmental taxes, assessments, and charges are a common claim against the value of a taxed
parcel, other less common claims may be relevant. One of the most serious in terms of the potential
reduction in the value that may be realized to pay the Special Tax is a claim with regard to hazardous
substances. In general, the owners and operators of parcels within the District may be required by law to
remedy conditions of the parcels related to the releases or threatened releases of hazardous substances.
The federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
sometimes referred-to as "CERCLA" or the "Superfund Act," is the most well-known and widely
applicable of these laws, but California laws with regard to hazardous substances are also stringent and
similar. Under many of these laws, the owner(or operator)is obligated to remedy a hazardous substances
condition of a property whether or not the owner (or operator) has anything to do with creating or
handling the hazardous substance. The effect, therefore, should any parcel within the District be affected
by a hazardous substance, would be to reduce the marketability and value of the parcel by the costs of
remedying the condition,because the owner is obligated to remedy the condition. Further, such liabilities
may arise not simply from the existence of a hazardous substance but from the method of handling it. All
of these possibilities could significantly affect the financial and legal ability of a property owner to
develop the affected parcel or other parcels, as well as the value of the property that is realizable upon a
delinquency and foreclosure.
Levy and Collection of the Special Tax
The principal source of payment of principal of and interest on the Bonds is the proceeds of the annual
levy and collection of the Special Tax against property within the District. The annual levy of the Special
Tax is subject to the maximum tax rates authorized. The levy cannot be made at a higher rate even if the
failure to do so means that the estimated proceeds of the levy and collection of the Special Tax,together
20
with other available funds, will not be sufficient to pay debt service on the Bonds. Other funds which
might be available include funds derived from the payment of delinquent special taxes and funds derived
from the tax sale or foreclosure and sale of parcels on which levies of the Special Tax are delinquent.
The levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of
particular taxed parcels and the amount of the levy of the Special Tax against such parcels. Thus, there
will rarely, if ever, be a uniform relationship between the value of such parcels and the proportionate
share of Debt Service on the Bonds, and certainly not a direct relationship.
The Special Tax levied in any particular tax year on a taxed parcel is based upon the revenue needs and
application of the Special Tax Formula. In addition to annual variations of the revenue needs from the
Special Tax, the following are some of the factors which might cause the levy of the Special Tax on any
particular taxed parcel to vary from the Special Tax that might otherwise be expected:
(1) Reduction in the number of taxed parcels, for such reasons as acquisition of taxed parcels by a
government and failure of the government to pay the Special Tax based upon a claim of
exemption or, in the case of the federal government or an agency thereof, immunity from
taxation, thereby resulting in an increased tax burden on the remaining taxed parcels.
(2) Failure of the owners of taxed parcels to pay the Special Tax and delays in the collection of or
inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels,
thereby resulting in an increased tax burden on the remaining parcels.
Except as set forth above under "SECURITY FOR THE BONDS - Special Taxes" herein, the Fiscal
Agreement provides that the Special Tax is to be collected in the same manner as ordinary ad valorem
property taxes are collected and, except as provided in the special covenant for foreclosure described
below and in the Act, is to be subject to the same penalties and the same procedure, sale and lien priority
in case of delinquency as is provided for ad valorem property taxes. Pursuant to these procedures,if taxes
are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale
by the County.
In the event that sales or foreclosures of property are necessary, there could be a delay in payments to
Holders of the Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the
City of the proceeds of sale if the Reserve Fund is depleted. (See "SECURITY FOR THE BONDS-Proceeds
of Foreclosure Sales.")
Exempt Properties
Certain properties are exempt from the Special Tax in accordance with the Special Tax Formula. In
addition, the Act provides that properties or entities of the state, federal or local government are exempt
from the Special Tax; provided, however, that property within the District acquired by a public entity
through a negotiated transaction or by gift or devise, which is not otherwise exempt from the Special Tax,
will continue to be subject to the Special Tax. It is possible that property acquired by a public entity
following a tax sale or foreclosure based upon failure to pay taxes could become exempt from the Special
Tax. In addition, the Act provides that if property subject to the Special Tax is acquired by a public entity
through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property
is to be treated as if it were a special assessment. The constitutionality and operation of these provisions
of the Act have not been tested. In the event that additional property is dedicated to the City or other
public entities,this additional property might become exempt from the Special Tax.
Pursuant to the Special Tax Formula, property conveyed or dedicated to a public agency for use as a park
and land acreage which is a public right of way are not considered "Taxable Property," and, thus, are
exempt from the Special Tax. (See "APPENDIX B—Rate and Method of Apportionment of Special Tax.")
21
The Act further provides that no other properties or entities are exempt from the Special Tax unless the
properties or entities are expressly exempted in a resolution of consideration to levy a new special tax or
to alter the rate or method of apportionment of an existing special tax.
Depletion of Reserve Fund
The Reserve Fund is to be maintained at an amount equal to the Reserve Requirement, which, upon the
issuance of additional Bonds, will be set at the maximum annual debt service on all Bonds then
outstanding. Funds in the Reserve Fund may be used to pay principal of and interest on the Bonds in the
event the proceeds of the levy and collection of the Special Tax against property within the District are
insufficient. If funds in the Reserve Fund for the Bonds are depleted, the funds can be replenished from
the proceeds of the levy and collection of the Special Tax that are in excess of the amount required to pay
all amounts to be paid pursuant to the Fiscal Agent Agreement. However, no replenishment from the
proceeds of a Special Tax levy can occur as long as the proceeds that are collected from the levy of the
Special Tax against property within the District at the maximum tax rates, together with other available
funds, remains insufficient to pay all such amounts. Thus it is possible that the Reserve Fund will be
depleted and not be replenished by the levy of the Special Tax.
Bankruptcy Proceedings
The payment of the Special Tax and the ability of the City to foreclose the lien of a delinquent unpaid tax,
as discussed in "SECURITY FOR THE BONDS," may be limited by bankruptcy, insolvency or other laws
generally affecting creditors' rights or by the laws of the State of California relating to judicial
foreclosure. The various legal opinions to be delivered concurrently with the delivery of the Bonds
(including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the
various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights, by the application of equitable principles and by the exercise of judicial
discretion in appropriate cases.
Although bankruptcy proceedings would not cause the Special Taxes to become extinguished,bankruptcy
of a property owner could result in a delay in prosecuting superior court foreclosure proceedings and
could result in the possibility of delinquent Special Tax installments not being paid in full. Such a delay
would increase the likelihood of a delay or default in payment of the principal of and interest on the
Bonds. To the extent that property in the District continues to be owned by a limited number of property
owners,the chances are increased that the Reserve Fund established for the Bonds could be fully depleted
during any such delay in obtaining payment of delinquent Special Taxes. As a result, sufficient moneys
would not be available in the Reserve Fund for transfer to the Bond Fund to make up shortfalls resulting
from delinquent payments of the Special Tax and thereby to pay principal of and interest on the Bonds on
a timely basis.
On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued an opinion in a
bankruptcy case entitled In re Glasply Marine Industries holding that ad valorem property taxes levied by
a county in the State of Washington after the date that the property owner filed a petition for bankruptcy
would not be entitled to priority over the claims of a secured creditor with a prior lien on the property.
Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid
taxes imposed subsequent to the filing of the bankruptcy petition were declared to be "administrative
expenses" of the bankruptcy estate, payable after the claims of all secured creditors. As a result, the
secured creditor was able to foreclose on the subject property and retain all the proceeds from the sale
thereof except the amount of the pre-petition taxes. Pursuant to this holding,post-petition taxes would be
paid only as administrative expenses and only if a bankruptcy estate has sufficient assets to do so. In
certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the
property is transferred out of the bankruptcy estate (through foreclosure or otherwise) it would be subject
only to current ad valorem taxes (i.e.,not those accruing during the bankruptcy proceeding).
22
The Glasply decision is controlling precedent in bankruptcy court in the State of California. If Glasply
were held to be applicable to Special Taxes, a bankruptcy petition filing would prevent the lien for
Special Taxes levied in subsequent fiscal years from attaching so long as the property was part of the
estate in bankruptcy, which could reduce the amount of Special Taxes available to pay debt service on the
Bonds. However, Glasply speaks as to ad valorem taxes, and not Special Taxes and no case law exists
with respect to how a bankruptcy court would treat the lien for Special Taxes levied after the filing of a
petition in bankruptcy.
It should also be noted that on October 22, 1994, Congress enacted 11 U.S.C. §362(b)(18), which added a
new exception to the automatic stay for ad valorem property taxes imposed by a political subdivision after
the filing of a bankruptcy petition. Pursuant to this new provision of law, in the event of a bankruptcy
petition filed on or after October 22, 1994, the lien for ad valorem taxes in subsequent fiscal years will
attach even if the property is part of the bankruptcy estate. Bondowners should be aware that the
potential effect of 11 U.S.C. §362(b)(18) on the Special Taxes also depends upon whether a court were to
determine that the Special Taxes should be treated like ad valorem taxes for this purpose.
Payment of Special Tax Not a Personal Obligation of the Property Owners
An owner of Taxable Property is not personally obligated to pay the Special Tax. Rather, the Special Tax
is an obligation only against the parcels of Taxable Property. If the value of the parcels of Taxable
Property is not sufficient, taking into account other obligations also payable thereby to fully secure the
Special Tax,the City has no recourse against the owner.
Factors Affecting Parcel Values and Aggregate Value
Geologic, Topographic and Climatic Conditions. The value of the Taxable Property in the District in
the future can be adversely affected by a variety of additional factors,particularly those which may affect
infrastructure and other public improvements and private improvements on the parcels of Taxable
Property and the continued habitability and enjoyment of such private improvements. Such additional
factors include, without limitation, geologic conditions such as earthquakes and volcanic eruptions,
topographic conditions such as earth movements, landslides and floods and climatic conditions such as
droughts and tornadoes. It can be expected that one or more of such conditions may occur and may result
in damage to improvements of varying seriousness, that the damage may entail significant repair or
replacement costs and that repair or replacement may never occur either because of the cost or because
repair or replacement will not facilitate habitability or other use, or because other considerations preclude
such repair or replacement. Under any of these circumstances, the value of the taxed Parcels may well
depreciate or disappear.
Seismic Conditions. The District, like all California communities, may be subject to unpredictable
seismic activity. The occurrence of seismic activity in the District could result in substantial damage to
properties in the District which, in turn, could substantially reduce the value of such properties and could
affect the ability or willingness of the property owners to pay their Special Taxes. Any major damage to
structures as a result of seismic activity could result in greater reliance on undeveloped property in the
payment of Special Taxes.
Climatic Conditions. The District may be subject to unpredictable climatic conditions, such as flood,
droughts and destructive storms. The occurrence of climatic activity of this type in the District could
result in substantial damage to properties in the District which, in turn, could substantially reduce the
value of such properties and could affect the ability or willingness of the property owners to pay their
Special Taxes.
23
Legal Requirements. Other events which may affect the value of a parcel of Taxable Property in the
District include changes in the law or application of the law. Such changes may include, without
limitation, local growth control initiatives, local utility connection moratoriums and local application of
statewide tax and governmental spending limitation measures.
No Acceleration Provisions
The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment
default or other default under the terms of the Bonds or the Fiscal Agent Agreement. Pursuant to the
Fiscal Agent Agreement, a bondholder is given the right for the equal benefit and protection of all
Bondholders similarly situated to pursue certain remedies described under °APPENDIX C — SUMMARY
OF THE FISCAL AGENT AGREEMENT." So long as the Bonds are in book-entry form, DTC will be the
sole bondholder and will be entitled to exercise all rights and remedies of bondholders.
Loss of Tax Exemption
As discussed under the caption"TAX MATTERS," interest on the Bonds might become includable in gross
income for purposes of federal income taxation retroactive to the date the Bonds were issued, as a result
of future acts or omissions of the City in violation of its covenants in the Fiscal Agent Agreement. The
Fiscal Agent Agreement does not contain a special redemption feature triggered by the occurrence of an
event of taxability. As a result, if interest on the Bonds were to be includable in gross income for
purposes of federal income taxation, the Bonds would continue to remain outstanding until maturity
unless earlier redeemed pursuant to optional or mandatory redemption. See"THE BONDS-Redemption."
Limited Obligation of the City to Pay Debt Service
The City has no obligation to pay principal of and interest on the Bonds in the event Special Tax
collections are delinquent, other than from amounts, if any, on deposit in the Reserve Fund or funds
derived from the tax sale or foreclosure and sale of parcels on which levies of the Special Tax are
delinquent, nor is the City obligated to advance funds to pay such debt service on the Bonds.
Proposition 218
Under the California Constitution, the power of initiative is reserved to the voters for the purpose of
enacting statutes and constitutional amendments. Over the past 18 years, the voters have exercised this
power through the adoption of Proposition 13 and similar measures, the most recent of which was
approved as Proposition 218 in the general election held on November 5, 1996.
Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies
such as the City. Subject to overriding federal constitutional principles,such collection may be materially
and adversely affected by voter-approved initiatives,possibly to the extent of creating cash flow problems
in the payment of outstanding obligations such as the Bonds.
Proposition 218—Voter Approval for Local Government Taxes—Limitation on Fees, Assessments, and
Charges—Initiative Constitutional Amendment, added Articles XIIIC and XIIID to the California
Constitution, imposing certain vote requirements and other limitations on the imposition of new or
increased taxes, assessments and property-related fees and charges. Proposition 218 states that all taxes
imposed by local governments shall be deemed to be either general taxes or special taxes. Special
purpose districts, including assessment districts, have no power to levy general taxes. No local
government may impose, extend or increase any general tax unless and until such tax is submitted to the
electorate and approved by a majority vote. No local government may impose, extend or increase any
special tax unless and until such tax is submitted to the electorate and approved by a two-thirds vote.
24
Proposition 218 also provides that no tax, assessment, fee or charge shall be assessed by any agency upon
any parcel of property or upon any person as an incident of property ownership except: (i)the ad valorem
property tax imposed pursuant to Article XIII and Article XIIIA of the California Constitution, (ii) any
special tax receiving a two-thirds vote pursuant to the California Constitution, and (iii) assessments, fees
and charges for property related services as provided in Proposition 218. Proposition 218 then goes on to
add voter requirements for assessments and fees and charges imposed as an incident of property
ownership, other than fees and charges for sewer, water, and refuse collection services. In addition, all
assessments and fees and charges imposed as an incident of property ownership, including sewer, water,
and refuse collection services, are subjected to various additional procedures, such as hearings and stricter
and more individualized benefit requirements and findings. The effect of such new provisions will
presumably be to increase the difficulty a local agency will have in imposing, increasing or extending
such assessments, fees and charges.
Proposition 218 also provides that the constitutional initiative power shall not be prohibited or otherwise
limited in matters of reducing or repealing any local taxes, assessments, fees and charges. This provision
with respect to the initiative power is not limited to taxes imposed on or after November 6, 1996, the
effective date of Proposition 218. However, on July 1, 1997, a bill was signed into law by the Governor
of the State enacting Government Code 5854, which states:
Section 3 of Article XIIIC of the California Constitution, as adopted at the
November 5, 1996 general election, shall not be construed to mean that any
owner or beneficial owner of a municipal security, purchased before or after that
date, assumes the risk of, or in any way consents to, any action by initiative
measure that constitutes an impairment of contractual rights protection by
Section 10 of Article I of the United States Constitution.
As a result, although no court has yet considered the relationship between Section 5854 and Article
XIIIC, it is likely that Proposition 218 has not conferred on the voters the power to repeal or reduce the
Special Taxes if such reduction would interfere with the timely retirement of the Bonds.
The Special Taxes and the 1990 Bonds were each authorized by not less than a two-thirds vote of the
landowners within the District who constituted the qualified electors of the District at the time of such
voted authorization. The Special Taxes levied against the parcels within the District and the 1990 Bonds
were authorized and issued, respectively, prior to the passage of Proposition 218. The City believes that
the issuance of the Bonds does not require the conduct of proceedings under the Act or Proposition 218
other than the Resolution authorizing the issuance of the Bonds, which has already been adopted.
Like its antecedents, Proposition 218 is likely to undergo both judicial and legislative scrutiny before its
impact on the City and its obligations can be determined. Certain provisions of Proposition 218 may be
examined by the courts for their constitutionality under both State and federal constitutional law. The
City is not able to predict the outcome of any such examination.
The foregoing discussion of Proposition 218 should not be considered an exhaustive or authoritative
treatment of the issues. The City does not expect to be in a position to control the consideration or
disposition of these issues and cannot predict the timing or outcome of any judicial or legislative activity
in this regard. Interim rulings, final decisions, legislative proposals and legislative enactments may all
affect the impact of Proposition 218 on the Bonds as well as the market for the Bonds. Legislative and
court calendar delays and other factors may prolong any uncertainty regarding the effects of Proposition
218.
25
Impact of FDIC Interests
The ability of the City to collect interest and penalties specified by State law and to foreclose against
properties having delinquent Special Tax installments may be limited in certain respects with regard to
properties in which the Federal Deposit Insurance Corporation (the "FDIC") has or obtains an interest.
The FDIC would obtain such an interest by taking over a financial institution which has made a loan
which is secured by property within the District.
The FDIC has adopted a policy statement regarding the payment of state and local real property taxes(the
"Policy Statement") which provides that the FDIC intends to pay valid real property taxes, interest and
penalties, in accordance with state law, on property which at the time of the tax levy is owned by a
financial institution in an FDIC receivership, unless abandonment of the FDIC interest is determined to be
appropriate. However, the Policy Statement is unclear as to whether the FDIC considers special taxes
such as the Special Taxes to be "real property taxes" which it intends to pay. Furthermore, the Policy
Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, it will not
permit its lien to be foreclosed by a taxing authority without its specific consent,and that it will not pay or
recognize liens for any penalties, fines, or similar claims imposed for the non-payment of taxes.
The City is unable to predict what effect the application of the Policy Statement would have in the event
of a delinquency on a parcel within the District in which the FDIC has or obtains an interest, although
prohibiting the lien of the FDIC to be foreclosed at a judicial foreclosure sale would likely reduce or
eliminate the persons willing to purchase a parcel at a foreclosure sale. Such an outcome could cause a
draw on the Reserve Fund and perhaps, ultimately, a default in payment on the Bonds.
26
LEGAL MATTERS
Legal Opinion
The legal opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, approving the
validity of the Bonds will be made available to purchasers at the time of original delivery and is attached
hereto as Appendix E. Certain legal matters will be passed upon for the City and the District by Quint&
Thimmig LLP, San Francisco, California, as Disclosure Counsel. The City Attorney will pass upon
certain legal matters for the City and the District. Payment of the fees and expenses of Bond Counsel and
Disclosure Counsel is contingent upon the sale and delivery of the Bonds.
Tax Exemption
In the opinion of Quint & Thimmig LLP, San Francisco, California, Bond Counsel, subject, however to
the qualifications set forth below, under existing law, the interest on the Bonds is excluded from gross
income for federal income tax purposes and such interest is not an item of tax preference for purposes of
the federal alternative minimum tax imposed on individuals and corporations,provided,however,that, for
the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal
income tax purposes), such interest is taken into account in determining certain income and earnings.
The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all
requirements of the Internal Revenue Code of 1986 (the "Code")that must be satisfied subsequent to the
issuance of the Bonds in order that such interest be, or continue to be, excluded from gross income for
federal income tax purposes. The City has covenanted to comply with each such requirement. Failure to
comply with certain of such requirements may cause the inclusion of such interest in gross income for
federal income tax purposes to be retroactive to the date of issuance of the Bonds.
In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income
taxes.
Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt
of interest on, the Bonds may have federal or state tax consequences other than as described above. Bond
Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the
Bonds other than as expressly described above.
No Litigation
At the time of delivery of the Bonds, the City will certify that there is no action, suit,proceeding, inquiry
or investigation, at law or in equity, before or by any court or regulatory agency, public board or body
pending with respect to which the City has received service of process or threatened against the City or
the District affecting their existence, or the titles of their respective officers, or seeking to restrain or to
enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance
with the Resolution, or the collection or application of the Special Tax to pay the principal of and interest
on the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Fiscal
Agent Agreement, the agreement entered into between the City and the Underwriter for the purchase of
the Bonds(the"Bond Purchase Agreement"), or any other applicable agreements or any action of the City
or the District contemplated by any of said documents, or in any way contesting the completeness or
accuracy of this Official Statement or any amendment or supplement thereto, or contesting the powers of
the City or the District or their authority with respect to the Bonds or any action of the City or the District
contemplated by any of said documents, nor, to the knowledge of the City, is there any basis therefor.
27
No General Obligation of City or District
The Bonds are not general obligations of the City or the District, but are limited obligations of the City
payable solely from proceeds of the Special Tax and proceeds of the Bonds, including amounts in the
Reserve Fund and investment income on funds held pursuant to the Fiscal Agent Agreement (other than
as necessary to be rebated to the United States of America pursuant to Section 148(f) of the Code and any
applicable regulations promulgated pursuant thereto). Any tax for the payment of the Bonds shall be
limited to the Special Taxes to be collected within the jurisdiction of the District.
Escrow Verification
Grant Thornton LLP, Minneapolis,Minnesota, independent accountants, upon issuance of the Bonds, will
deliver a report on the mathematical accuracy of certain computations, contained in schedules provided to
them which were prepared by the City, relating to the sufficiency of the anticipated receipts from the
Federal Securities (along with uninvested cash held in the Refunding Fund) to pay, when due, the
principal, whether at maturity or upon prior redemption, interest and redemption premium requirements
of the 1990 Bonds.
The report of Grant Thornton will include the statement that the scope of its engagement is limited to
verifying the mathematical accuracy of the computations contained in such schedules provided to them,
and that they have no obligation to update their report because of events occurring, or data or information
coming to their attention, subsequent to the date of their report.
Ratings
The Bonds have not been rated by any securities rating agency.
Underwriting
O'Connor SWS Securities, Newport Beach, California (the "Underwriter") is offering the Bonds at the
prices set forth on the cover page hereof. The initial offering prices may be changed from time to time
and concessions from the offering prices may be allowed to dealers, banks and others. The Underwriter
has purchased the Bonds at a price equal to $ of the aggregate principal amount of the
Bonds, which amount represents the principal amount of the Bonds, less an original issue discount of
$ , and an Underwriter's discount of$ , together with accrued interest to
the delivery date of the Bonds. The Underwriter will pay certain of its expenses relating to the offering.
The Financing Consultant
The material contained in this Official Statement was prepared by the City with the assistance of Harrell
& Company Advisors, LLC, Orange, California, an independent financial consulting firm, who advised
the City as to the financial structure and certain other financial matters relating to the Bonds. The
information set forth herein has been obtained from sources which are believed to be reliable, but such
information is not guaranteed by Harrell & Company Advisors, LLC, as to accuracy or completeness, nor
has it been independently verified. Fees paid to Harrell & Company Advisors, LLC, are contingent upon
the sale and delivery of the Bonds.
28
Execution
The execution and delivery of the Official Statement by the City has been duly authorized by the City-of
Huntington Beach on behalf of the District.
CITY OF HUNTINGTON BEACH
By: Ray Silver
City Administrator
29
APPENDIX A
CITY OF HUNTINGTON BEACH INFORMATION STATEMENT
General Information
The City of Huntington Beach encompasses 27.2 square miles in the southern coastal area of Orange
County, California, adjacent to the Cities of Costa Mesa, Sunset Beach and Westminster, along 3.4 miles
of the Pacific Ocean. The City is approximately 28 miles southeast of Los Angeles and 90 miles
northwest of San Diego. Huntington Beach holds the title of Surf City, USA and is host to the
International Surfing Museum and many professional surfing competitions.
Government Organization
The City of Huntington Beach was incorporated 'as a charter city in 1909. The City has a
council/administrator form of government. The City Council is comprised of seven members elected bi-
annually at large to four-year terms and the Mayor is selected by the Council Members to a one-year
term. The City Council appoints the City Administrator who is responsible for the day-to-day
administration of City business and the coordination of all departments of the City. Huntington Beach
employs full-time employees.
The members of the City Council, the expiration dates of their terms and key administrative personnel are
set forth in the charts below.
CITY COUNCIL
Council Member Term Expires
Pam Julien Houchen,Mayor November 2004
Debbie Cook, Mayor Pro Tern November 2004
Ralph Bauer, Council Member November 2002
Connie Boardman, Council Member November 2004
Shirley Detloff, Council Member November 2002
David Garofalo, Council Member November 2002
Peter Green, Council Member November 2002
KEY ADMINISTRATIVE PERSONNEL
Ray Silver City Administrator
Clay Martin Director of Administrative Services
Daniel Villella Director of Finance
Shari L. Freidenrich, CPA City Treasurer
Gail Hutton City Attorney
Connie Brockway City Clerk
A-1
Governmental Services
Public Safety and Welfare
Law enforcement and fife protection services are provided by the City. The Huntington Beach Police
Department currently employs_sworn officers. The Huntington Beach Fire Department employs
sworn fire fighters operating out of seven fire stations and maintains a Hazardous Materials Response
Unit operating as a part of a county-wide response team. Other services provided by the City include
emergency medical aid,traffic safety maintenance, and building safety regulation and inspection.
Public Services
Water service is provided to City residents through the City's municipal water department.
Public Works
Additional services include parkway and median maintenance and improvements, refuse management,
sewer and storm drain maintenance, zoning and development administration, environmental review, code
enforcement and street tree maintenance.
Leisure and Community Services
The City operates the Huntington Beach Library which includes the central library and four branches.
The City's Community Services Department provides citizens with a variety of park and recreational and
marine safety (lifeguard) services on a year round basis. Facilities include the Huntington Beach Art
Center, fifty-six park sites, 3.4 miles of public beach, a public golf course, an Equestrian Center and two
senior centers.
Community Information
Public school education is available through one elementary school district and one high school district.
There are 26 elementary schools, 4 middle schools and 4 high schools. Students are also served by 10
parochial and private schools. Area colleges and universities include Orange Coast College, Goldenwest
College and the University of California at Irvine.
Health Care services available within the immediate area are provided by Huntington Beach Hospital in
Huntington Beach, Hoag Memorial Hospital in Newport Beach and Children's Hospital of Orange
County(CHOC) in Orange.
Area attractions include Disneyland, Knott's Berry Farm, the Aquarium of the Pacific and Wild Rivers
Aquatic Park. Locally, the City's public beaches are the site of the Men's and Women's Professional
Beach Volleyball Tour and the International Surfing and World Cup event. Other attractions include the
Bolsa Chica Ecological Reserve, a_restored wetlands area known for winter bird watching, and the
International Surf Museum.
A-2
Population
The following charts provide a comparison of population growth for Huntington Beach surrounding
Cities and Orange County between 1997 and 2001.
TABLE NO.A-1
CHANGE IN POPULATION
CITY OF HUNTINGTON BEACH,SURROUNDING CITIES AND ORANGE COUNTY
1997-2001
HUNTINGTON BEACH SURROUNDING CITIES ORANGE COUNTY
Percentage Percentage Percentage
Year Population Change Population Change Population Change
1997 189,800 229,000 2,677,500
1998 193,300 1.8% 233,600 2.0% 2,734,500 2.1%
1999 197,600 2.2% 237,100 1.5% 2,788,800 2.0%
2000 190,300 (3.7)% 234,200 (1.2)% 2,867,700 2.8%
2001 193,700 1.8% 238,800 2.0% 2,925,700 2.0%
%Increase Between
1997-2001 2.1% 4.3% 9.3%
Surrounding cities include Costa Mesa,Fountain Valley and Newport Beach.
Source: State of California Department of Finance,Population Research Unit,"Population Estimates for California
Cities and Counties."
A-3
Personal Income
Personal income information for Huntington Beach, Orange County, the State of California and the
United States are summarized in the following charts.
TABLE NO.A-2
PERSONAL INCOME
CITY OF HUNTINGTON BEACH,ORANGE COUNTY,
STATE OF CALIFORNIA AND UNITED STATES
1996-2000
Year Huntington Beach Orange County State of California United States
1996 46,622 42,747 35,216 33,482
1997 48,659 42,715 36,483 34,618
1998 49,480 45,176 37,091 35,377
1999 50,939 48,773 39,492 37,233
2000 56,629 55,262 44,464 39,129
Source: Sales and Marketing Management, "Survey of Buying Power."
A-4
Employment and Industry
The City is located in the Orange County labor market area. Four major job categories constitute 82% of
the work force. They are services (31.7%), wholesale and retail trade (24.1%), manufacturing (16.3%)
and government (9.9%). The July, 2001 unemployment rate in the Orange County area was 3.1%. The
State of California July, 2001 unemployment rate (unadjusted) was 5.0%. The distribution of
employment in the County of Orange is presented in the following tables:
TABLE NO.A-3
ORANGE COUNTY MSA
WAGE AND SALARY WORKERS BY INDUSTRY
(in Thousands)
Industry 1997 1998 1999 2000 2001
Government 125.5 127.1 133.8 138.1 142.8
Services 377.4 399.6 420.6 439.8 455.7
Finance,Insurance&Real Estate 94.3 100.9 104.4 105.7 108.5
Wholesale&Retail Trade 309.8 323.6 331.6 340.2 346.1
Transportation&Public Utilities 44.4 46.4 48.6 51.9 53.1
Manufacturing:
Nondurable goods 73.4 74.1 75.2 77.2 77.9
Durable goods 149.7 158.3 154.3 155.3 156.3
Construction and Mining 59.7 68.7 76.4 82.8 86.9
Total Nonagricultural 1,234.2 1,298.7 1,344.9 1,391.0 1,427.3
Agriculture, forestry&fisheries 6.9 7.1 6.9 7.6 8.2
Total(all industries) 1,241.1 1,305.8 1,351.8 1,398.6 1,435.5
% OF TOTAL WORKERS
Industry 1997 1998 1999 2000 2001
Government 10.1% 9.7% 9.9% 9.9% 9.9%
Services 30.4% 30.6% 31.1% 31.4% 31.7%
Finance, Insurance&Real Estate 7.6% 7.7% 7.7% 7.6% 7.6%
Wholesale&Retail Trade 25.0% 24.8% 24.5% 24.3% 24.1%
Transportation&Public Utilities 3.6% 3.6% 3.6% 3.7% 3.7%
Manufacturing:
Nondurable goods 5.9% 5.7% 5.6% 5.5% 5.4%
Durable goods 12.1% 12.1% 11.4% 11.1% 10.9%
Construction and Mining 4.8% 5.3% 5.7% 5.9% 6.1%
Total Nonagricultural 99.4% 99.5% 99.5% 99.5% 99.4%
Agriculture, forestry&fisheries 0.6% 0.5% 0.5% 0.5% 0.6%
Total(all industries) 100.0% 100.0% 100.0% 100.0% 100.0%
Annually,as of July.
Source: State of California Employment Development Department, "Annual Planning Information" and
"California Labor Market Bulletin".
A-5
The major employers operating within the City and their respective number of employees as of September
30, are as follows: [TO BE UPDATED]
TABLE NO.A-4
CITY OF HUNTINGTON BEACH
LARGEST EMPLOYERS
Name of Company Number of Employees Product/Service
Boeing Company 6,193 Aerospace
Huntington Beach Union High School District 1,200 Education
City of Huntington Beach 1,027 City Administration
Oceanview School District 1,000 Education
GTE California 646 Communications
C&D Plastics 617 Manufacturing
Columbia Huntington Beach Hospital 500 Health Care
Huntington Beach City School District 500 Education
Rainbow Disposal 497 Utilities
Golden West College 425 Education
Source: City of Huntington Beach.
A-6
Commercial Activity
The following charts summarize the volume of retail sales and taxable transactions for the City of
Huntington Beach for 1995 through 1999.
TABLE NO.A-5
CITY OF HUNTINGTON BEACH
TOTAL TAXABLE TRANSACTIONS
(in Thousands)
1995-1999
Total Taxable
Retail Sales Retail Sales Transactions Issued Sales
Year ($000's) % Change Permits ($000's) % Change Permits
1995 1,156,396 1,795 1,465,238 6,787
1996 1,214,347 5.0% 1,865 1,582,927 8.0% 6,910
1997 1,262,807 4.0% 1,851 1,675,185 5.8% 6,847
1998 1,341,259 6.2% 1,893 1,813,622 8.3% 6,730
1999 1,531,561 14.2% 2,004 2,043,221 12.7% 6,690
Source: State Board of Equalization, "Taxable Sales in California", published annually in November for prior year.
The following charts compare taxable transactions for the City of Huntington Beach and surrounding
cities.
TABLE NO.A-6
CHANGE IN TOTAL TAXABLE TRANSACTIONS
CITY OF HUNTINGTON BEACH AND SURROUNDING CITIES
1995- 1999
%Change from
City 1995 1996 1997 1998 1999 1995-1999
HUNTINGTON BEACH $ 1,465,238 $ 1,582,927 $ 1,675,185 $ 1,813,622 $ 2,043,221 39.4%
Fountain Valley 728,698 741,413 747,375 779,984 801,623 10.0%
Costa Mesa 2,210,537 2,357,142 2,528,479 2,656,273 2,825,793 27.8%
Newport Beach 1,073,186 1,187,127 1,372,867 1,490,995 1,641,782 53.0%
Source: State Board of Equalization,"Taxable Sales in California", published annually in November for prior year.
A-7
Taxable Transactions by type of business for the City of Huntington Beach for 1995 through 1999 are
summarized in Table No.A-7.
TABLE NO.A-7
CITY OF HUNTINGTON BEACH
TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
1995- 1999
1995 1996 1997 1998 1999
Retail Stores
Apparel Stores $ 64,566 $ 69,614 $ 71,679 $ 72,084 $ 76,093
General Merchandise Stores 123,521 113,840 140,723 144,168 152,810
Drug Stores 26,632 29,697
Food Stores 90,851 94,204 98,774 101,447 106,630
Packaged Liquor Stores 12,174 12,504
Eating/Drinking Places 147,227 156,626 167,671 178,565 189,740
Home Furnishings and
Appliances 97,189 85,184 81,197 89,553 94,848
Building Materials and
Farm Implements 89,495 96,661 122,239 121,506 165,281
Auto Dealers/Suppliers 238,872 263,422 258,289 303,496 349,601
Service Stations 99,801 112,867 113,232 103,220 121,357
Other Retail Stores 166,068 179,728 209,003 227,220 275,201
Total Retail Stores $ 1,156,396 $ 1,214,347 $ 1,262,807 $ 1,341,259 $ 1,531,561
All Other Outlets 308,842 368,580 412,378 472,363 511,660
Total All Outlets $ 1,465,238 $ 1,582,927 $ 1,675,185 $ 1,813,622 $ 2,043,221
Source: State Board of Equalization,"Taxable Sales in California", published annually in November for prior year.
A-8
Building Activity
The following charts summarize building activity valuations for the City of Huntington Beach for the
five-year period from 1996 through 2000. [TO BE COMPLETED]
TABLE NO.A-8
CITY OF HUNTINGTON BEACH
BUILDING ACTIVITY AND VALUATION
(Valuation in Thousands of Dollars)
1996 1997 1998 1999 2000
Residential:
New Single-Family $ 43,245 $ 186,843 $ 93,178
New Multi-Family 0' 2,214 4,043
Total Residential $ 43,245 $ 189,057 $ 97,221 $ - $ -
Commercial:
New Commercial $ 4,133 $ 8,001 $ 17,233
New Industrial 13,800 8,057 13,464
Other 17,936 23,401 36,638
Additions,alterations 13,809 11,084 14,359
Total Nonresidential $ 49,678 $ 50,543 $ 81,694 $ - $ -
Total Valuation $ 92,923 $ 239,600 $ 178,915 $ - $ -
No.of New Dwelling Units:
Single-Dwelling 195 800 421
Multi-Dwelling 0 20 32
Total New Units 195 820 453 - -
Source: City of Huntington Beach.
A-9
APPENDIX B
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
The Special Tax is to be levied by the City on behalf of the District each Fiscal Year on all parcels within
the District in an amount equal to the maximum Special Tax, less any Services Credit, as such terms are
defined below. On March 1 of each year all taxable Parcels within the District shall be categorized either
as Developed Parcels or Undeveloped Parcels, and shall be subject to a Special Tax in accordance with
the Rate and Method of Apportionment specified below
Undeveloped Parcels
A Special Tax shall be levied on each Undeveloped Parcel as follows:
(Taxable Sq. Ft. of Parcel X Maximum) — Services = Special
(Taxable Sq. Ft. of District Special Tax) Credit Tax
Developed Parcels
A Special Tax shall be levied on each Developed Parcel as follows:
1 )
(Maximum — Total Special Tax Levied X Total Number of) — Services = Special
(Special Tax on Undeveloped Parcels Developed Parcels) Credit Tax
Definitions
Developed Parcel (1) is any Parcel that is within the boundaries of the District based on the latest
available equalized rolls of the County of Orange as of March 1 of the applicable year which is not
exempt from the Special Tax pursuant to Section 53311, et seq. of the California Government Code, (2)is
not greater than 50,000 square feet in total square footage and (3) with respect to which a building permit
for a single family dwelling has been issued'as of March 1 of the current year.
Fiscal Year means the period starting on July 1 and ending the following June 30.
Maximum Special Tax is an amount for any Fiscal Year equal to$264,000.
Services Credit is an amount equal to any proceeds of the Special Tax levied within the District which
has been allocated by the City to the payment of police and fire protection services and/or paramedic
services authorized under the Act which have not been expended for such purpose by the last day of the
prior Fiscal Year.
Taxable Square Footage of Parcels is all of the area within any Parcel within the District which is not
exempt from the Special Tax pursuant to Section 53311, et. seq. of the California Government Code.
Total Taxable Square Footage of the District means the aggregate Taxable Square Footage for all
Parcels within the District.
Undeveloped Parcel is any Parcel within the boundaries of the District (based on the latest equalized
rolls of the County of Orange as of March 1 of each year) which is not a Developed Parcel, and is not
exempt from the Special Tax under the provisions of the Act.
B-1
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
ASSESSMENT PARCEL LISTING
2000/01 Assessed Values Estimated Value to
APN Owner Sale Date(1) Improvements Land Total Share of Bonds Burden Ratio
159-391-43 AGAJANIAN DANIEL A 138,940 705,300 844,240 19,217 43.93
159-403-10 AHLUWALIA RANJIT SINGH&MARI 465,866 419,434 885,300 19,217 46.07
159-391-14 AMARAL TRUST 317,234 297,379 614,613 19,217 31.98
159-351-27 ANDERSEN KENDALL BERNARD 410,365 444,635 855,000 19,217 44.49
159-411-25 ARMSTRONG TRUST 365,167 272,273 637,440 19,217 33.17
159-403-07 BERGMAN JEFFREY K&KRISTINE 454,267 861,533 1,315,800 19,217 68.47
159-402-03 BOOKOUT JOSEPH&JUDY 330,720 346,073 676,793 19,217 35.22
159-391-38 13OSS RONALD&STEPHANIE JOAN 383,430 402,564 785,994 19,217 40.90
159-411-10 BRENDER ARNOLD&THERESE 360,240 371,981 732,221 19,217 38.10
159-351-24 BRIGHAM WILLIAM D&SHARON L 375,085 489,915 865,000 19,217 45.01
159-391-36 BRINDLE RONALD IRVING&EMIL 346,371 475,119 821,490 19,217 42.75
159-391-30 BUI TIMOTHY THIEN 322,329 401,854 724,183 19,217 37.68
159-351-21 BULLET DISTRIBUTION INC 536,083 452,861 988,944 19,217 51.46
159-351-25 CAMPBELL J A 426,902 438,098 865,000 19,217 45.01
159-402-01 CHABAREK MAHA 333,811 382,016 715,827 19,217 37.25
159-411-16 CHANG JUNG-CHOU 367,987 295,479 663,466 19,217 34.52
159-351-26 CHEMITIGANTI PUNDARI K&SUNDAR 706,283 586,524 1,292,807 19,217 67.27
159-351-29 CHIVERS CURTIS J&JOANNE M 422,689 399,009 821,698 19,217 42.76
159-411-19 CHRISTIANO JAMES J 815,413 275,517 1,090,930 19,217 56.77
159-391-13 CONLISK KEVIN P 326,719 353,760 680,479 19,217 35.41
159-411-06 COURT DOROTHY T 437,431 638,669 1,076,100 19,217 56.00
159-391-12 DAMBRA DENNIS F&KATHLEEN D 328,648 471,352 800,000 19,217 41.63
159-402-12 DAMRON JEFFREY A&LAUREN L 339,920 459,080 799,000 19,217 41.58
159-411-11 DAVIS JAY B&LYNNE B 491,780 358,220 850,000 19,217 44.23
159-391-53 DAVIS RICHARD C 374,510 422,175 796,685 19,217 41.46
159-351-30 DI-SON LC 386,538 454,962 841,500 19,217 43.79
F-2
159-391-41 FALFAS JACK&BARBARA 353,988 497,909 851,897 19,217 44.33
159-391-08 FARAHMAND SHIRMARD&SHIRIN 334,509 450,891 785,400 19,217 40.87
159-391-57 FENDER 313,194 559,306 872,500 19,217 45.40
159-391-56 FISLER BARBARA M 341,191 469,151 810,342 19,217 42.17
159-351-22 FLORES RICHARD S 362,286 487,714 850,000 19,217 44.23
159-391-09 FOLGMEN CARL V 343,534 350,178 693,712 19,217 36.10
159-412-01 FUHRMAN DWAYNE&CRYSTAL 731,474 218,169 949,643 19,217 49.42
159-403-11 FUJII CHIKAU RICK 391,857 473,143 865,000 19,217 45.01
159-391-40 GERLACH CLINTON G 346,364 396,193 742,557 19,217 38.64
110-210-50 GOLDENWEST PARTNERS LLC 6/7/00 178,326 178,326 19,217 9.28
110-210-47 GOLDENWEST PARTNERS LLC 7/28/00 178,327 178,327 19,217 9.28
1 10-210-39 GOLDENWEST PARTNERS LLC 6/5/00 60,045 178,327 238,372 19,217 12.40
110-210-45 GOLDENWEST PARTNERS LLC 6/14/00 61,820 178,327 240,147 19,217 12.50
1 10-210-41 GOLDENWEST PARTNERS LLC 5/24/00 62,474 178,327 240,801 19,217 12.53
110-210-42 GOLDENWEST PARTNERS LLC 8/10/00 65,909 178,327 244,236 19,217 12.71
110-210-33 GOLDENWEST PARTNERS LLC 6/26/00 66,092 178,327 244,419 19,217 12.72
110-210-40 GOLDENWEST PARTNERS LLC 5/26/00 67,258 178,327 245,585 19,217 12.78
1 10-210-31 GOLDENWEST PARTNERS LLC 7/7/00 132,090 178,326 310,416 19,217 16.15
110-210-51 GOLDENWEST PARTNERS LLC 4/7/00 138,853 178,326 317,179 19,217 16.50
110-210-43 GOLDENWEST PARTNERS LLC 6/14/00 139,854 178,326 318,180 19,217 16.56
110-210-53 GOLDENWEST PARTNERS LLC 4/14/00 139,854 178,326 318,180 19,217 16.56
110-210-30 GOLDENWEST PARTNERS LLC 8/24/00 145,010 178,326 323,336 19,217 16.83
110-210-32 GOLDENWEST PARTNERS LLC 6/26/00 147,194 178,326 325,520 19,217 16.94
110-210-52 GOLDENWEST PARTNERS LLC 147,878 178,326 326,204 19,217 16.97
159-403-09 HAMAMOTO TRUST 412,552 452,448 865,000 19,217 45.01
159-411-22 HARTMAN TRUST 401,181 324,714 725,895 19,217 37.77
159-403-14 HATHERLEY JOHN A&LISA A 367,867 363,635 731,502 19,217 38.06
159-402-02 HEATH DAVID A&CONNIE L 344,753 385,247 730,000 19,217 37.99
159-391-55 HEKIMIAN WALTER J JR&CYNTHIA 333,808 4811,192 815,000 19,217 42.41
159-403-05 HOLLOWAY DENNIS A&DE ANNA 349,244 352,013 701,257 19,217 36.49
159-411-04 HYBL GARY A&ROBIN A 380,749 268,017 648,766 19,217 33.76
F-3
159-403-06 JEN HORACE P 301,670 423,330 725,000 19,217 37.73
110-210-44 KAHN TRUST 132,090 178,327 310,417 19,217 16.15
159-411-07 KANNOW WILLIAM P&LINDA A 421,101 467,523 888,624 19,217 46.24
159-402-19 KAO MIKE&SHIRLEY L 368,730 291,593 660,323 19,217 34.36
159-411-18 KEYVANAZAR MAHVASH 430,619 323,201 753,820 19,217 39.23
159-411-02 KIM JUNG W 358,782 343,784 702,566 19,217 36.56
159-403-12 KNIGHT CHRISTOPHER L&KELLY J 363,221 376,779 740,000 19,217 38.51
159-411-03 KONSTANTINIDIS BYRON&KAITE 351,580 254,960 606,540 19,217 31.56
159-351-31 KUTINSKY LAURENCE 381,516 381,895 763,411 19,217 39.73
159-391-10 LASKER THEODORE G&CHERYL L 350,599 401,772 752,371 19,217 39.15
159-411-13 LEADER WAYNE&RACHEL 322,935 310,794 633,729 19,217 32.98
159-391-45 LEO JAMES D&KATHRYN M 332,073 467,927 800,000 19,217 41.63
159-391-34 LOSCHIAVO STEVEN J&LAURA D 332,025 482,975 815,000 19,217 42.41
159-391-54 MAHDAD LISA A 309,127 490,873 800,000 19,217 41.63
159-402-07 MAI DAVID T&MICHELLE T 317,723 407,277 725,000 19,217 37.73
159-401-01 MALKENHORST BRUCE V&VIVIAN 413,051 678,792 1,091,843 19,217 56.82
159-411-09 MARKS RONALD K 572,152 292,848 865,000 19,217 45.01
159-411-20 MELIN DAVID R&CANDACE J 513,070 262,288 775,358 19,217 40.35
159-391-32 MENICHIELLO MARTIN A 351,861 480,989 832,850 19,217 43.34
159-391-42 MEREDITH CORY&KATHERINE 323,537 491,463 815,000 19,217 42.41
159-401-01 MIKHAEL MEDHAT&MONA 367,080 370,306 737,386 19,217 38.37
159-403-17 MOORE DOUGLAS M&JEAN A 334,133 404,867 739,000 19,217 38.45
159-402-04 MORROW GLENN C&MARTHA A 381,372 325,434 706,806 19,217 36.78
110-210-48 NGUYEN A&K TRUST 384,388 178,326 562,714 19,217 29.28
159-402-18 NGUYEN JOHN CHIEN 356,395 282,788 639,183 19,217 33.26
159-411-24 PABBRUWEE JERRY H 405,710 258,840 664,550 19,217 34.58
159-403-02 PAPPOFF ROBERT P&LINDA T 338,199 357,882 696,081 19,217 36.22
159403-04 PARNES MARC&JANE 329,269 403,155 732,424 19,217 38.11
159411-08 PASCOE ANTHONY W 623,166 376,187 999,353 19,217 52.00
159-351-28 PATEL GOVINDBHAI M&GAJRABEN 462,240 345,165 807,405 19,217 42.01
159403-15 PETERSON MARTIN E&KARIN 383,733 427,267 811,000 19,217 42.20
F-4
110-210-49 PHAM TRUST 400,502 178,326 578,828 19,217 30.12
159-403-13 PINERO PACITA 409,484 435,983 845,467 19,217 43.99
159-402-06 PUST MICHAEL P 373,697 339,677 713,374 19,217 37.12
159-403-16 REDNOUR LARRY D&LAUREN 352,978 390,560 743,538 19,217 38.69
159-391-11 RESCIGNO ERIC 344,602 381,000 725,602 19,217 37.76
159-402-16 RHEE EDWARD S&MARGARET H 378,356 376,644 755,000 19,217 39.29
159-391-33 ROCCANOVA GERARD 318,737 402,554 721,291 19,217 37.53
159-411-21 ROCHE PATRICK B&JOYCE CAROL 397,378 397,378 19,217 20.68
159-39146 ROSEN 337,909 462,091 800,000 19,217 41.63
159-41 1-15 RYE JAMES D&IN R 542,566 273,460 816,026 19,217 42.46
159-351-32 SHON SAMUEL F&WANDA L 445,268 419,732 865,000 19,217 45.01
159-403-03 SKRATT JOHN P 337,079 306,934 644,013 19,217 33.51
159-411-12 SMITH WAYNE M&VICKI L 489,860 333,540 823,400 19,217 42.85
159-351-23 STRAYER GREGORY LIND&REBEC 381,023 483,977 865,000 19,217 45.01
159-402-17 THOMAS JOHN A& LINDA L 383,148 512,280 895,428 19,217 46.59
159-402-05 TRAN CUONG VIET&QUYNH HUON 396,156 403,844 800,000 19,217 41.63
159-411-27 VAN TRAN THANH 350,536 250,540 601,076 19,217 31.28
159-411-23 WANG RAYMOND CHUNG 366,998 281,878 648,876 19,217 33.77
159-411-26 WATKINSON THOMAS J&J 380,486 254,195 634,681 19,217 33.03
159-411-01 WIGNEY DAVE&JILL 369,120 246,439 615,559 19,217 32.03
159-391-31 WILLIAMS ANDREW M&LISA P 340,808 378,475 719,283 19,217 37.43
110-210-46 WOLZINGER KEITH TRUST 62,135 178,327 240,462 19,217 12.51
159-411-17 YATA H 365,167 339,322 704,489 19,217 36.66
159-411-05 YOUNG JOSEPH B&F Y 363,571 273,218 636,789 19,217 33.14
5,911,830 41,616,936 81,176,233 2,210,000 36.73
(1) The parcels owned by Goldenwest Partners have been sold,however the sales are not yet reflected on the 2000/01 Tax Roll.
F-5
_ IN V�b C CMAIC,
r ��w WC f
I, the undersigned City Clerk of the City of Huntington Beach, hereby certify that the
foregoi is a full, true and correct copy of a resolution duly adopted by the City Council of the
City at a eeting thereof on the 15th day of October, 2001, by the following vote of the members
thereof:
AYES, a d in favor thereof: Council Members
NOES: Court '1 Members
ABSENT: Counc Members
City Clerk
-6-
RCA tOUTING ?HEET
INITIATING DEPARTMENT: Administrative Services
SUBJECT: REFUNDING BONDS FOR COMMUNITY FACILITIES
DISTRICTS 1990-1 Goldenwest and Ellis
COUNCIL MEETING DATE: October 15, 2001
RCA ATTACHMENTS STATUS
Ordinance (w/exhibits & legislative draft if applicable) Not Applicable
Resolution (w/exhibits & legislative draft if applicable) Attached
Tract Map, Location Map and/or other Exhibits Not Applicable
Contract/Agreement (w/exhibits if applicable)
(Signed in full by the City Attorney) Attached
Subleases, Third Party Agreements, etc.
Approved as to form by City Attome ) Not Applicable
Certificates of Insurance (Approved by the City Attorney) Not Applicable
Financial Impact Statement (Unbudget, over $5,000) Not Applicable
Bonds (If applicable) Not Applicable
Staff Report (If applicable) Not Applicable
Commission, Board or Committee Report (If applicable) Not Applicable
Findings/Conditions for Approval and/or Denial Not Applicable
EXPLANATION: FOR MISSING ATTACHMENTS
REVIEWED RETURNED FORWARDED-
Administrative Staff p >
Assistant City Administrator Initial
-City Administrator (Initial) ,arO
City Clerk ( )
EXPLANATION FOR.RETURN OF ITEM:
SpaceOnly)
RCA Author: Dan T.Villella
;, CITY OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
CONNIE BROCKWAY
CITY CLERK
LETTER OF TRANSMITTAL OF ITEM APPROVED BY THE CITY COUNCIL/
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH
DATE: October 26, 2001
TO: Quint & Thimmig, LLP ATTENTION: Christine Tolentino
Name
1 Embarcadero Center, Suite 2420 DEPARTMENT:
Street
San Francisco, CA 94111 REGARDING: Res. No. 2001-74
City,State,Zip
See Attached Action Agenda Item E-2 Date of Approval 10/15/01
Enclosed For Your Records Is An Executed Copy Of The Above Referenced Agenda Item.
Remarks:
Connie Brockway
City Clerk
Attachments: Action Agenda Page X Agreement Bonds Insurance
RCA Deed Other .Res. (6)
CC:
Name Department RCA Ageement Insurance Other
Name Department RCA Agreement Insurance Other
Name Department RCA Agreement Insurance Other
Name Department RCA Agreement Insurance Other
Name Department RCA Insurance
(Telephone:714-536-5227)
r.-
CITY CLERK ,
CI1'Y OF
HUNTINGTON BEACH, CA
2001 NOV - P
9 3 05
eo �
INCUMBENCY AND SIGNATURE
CERTIFICATE-CITY
Clay Martin,Director of Administrative Services(turice)
Connie Brockway,City Clerk(twice)
Pam Julien Hochen,Mayor
Daniel Villella,Director of Finance
Shari Freidenrich,City Treasurer
-CITY SEAL (Pg. 2)-
PLEASE SIGN 6 TIMES
Name and Title Signature
Daniel T.Villella, Director of Finance
Shari Freidenrich,City Treasurer
. - tiltli 111 ilil7!!�!
,
Connie Brockway,City Clerk
(iv) that the bonds issued by the City designated "City of Huntington Beacli•:
Community Facilities District No. 1990-1 2001 Special Tax Refunding Bonds," in the aggregate
principal amount of $2,155,000 and dated the date hereof (the "Bonds"), have been executed
by the facsimile signature of the within-named Mayor,and attested to by the facsimile signature
of the within-named City Clerk and that the seal of the City is impressed hereon and on the
Bonds;
(v) that for and on behalf of the City, the within-named Director of Administrative
Services has executed the following:
(a) Fiscal Agent Agreement, dated as of November 1, 2001, by and between
the City and U.S. Bank Trust National Association, as fiscal agent, .
(b) Escrow Agreement, dated as of November 1, 2001, by and between the
City and U.S. Bank Trust National Association, as escrow bank,
(c) Continuing Disclosure Certificate, dated as of November 1, 2001, by the
City, as accepted by U.S. Bank Trust National Association, as
dissemination agent,and
(d) Official Statement, dated October 29, 2001, relating to the Bonds;
-2-
11/8/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
2001 SPECIAL TAX REFUNDING BONDS
INCUMBENCY AND SIGNATURE CERTIFICATE - CITY
The undersigned hereby state and certify:
W that the undersigned are the duly appointed or elected, qualified and acting
Director of Administrative Services and City Clerk, respectively, of the City of Huntington
Beach, a chartered city and municipal corporation duly organized and existing under the laws
of the State of California (the "City"), and as such, are familiar with the facts herein certified
and are authorized and qualified to certify the same on behalf of the City;
(ii) that the following are now, and have continuously been since the dates of
beginning of their respective current terms of office set forth below, the duly elected. or
appointed, qualified and acting members of the City Council of the City, and the dates of the
beginning and ending of their respective current terms of office are hereunder correctly
designated opposite their names:
Beginning Date Ending Date
Council Members of Current Term of Current Term
Pam Julien Houchen, Mayor December, 2000 November,2004
Debbie Cook,Mayor Pro Tem December,2000 November,2004
Ralph Bauer December,1998 November,2002
Connie Boardman December,2000 November,2004
Shirley Dettloff December,1998 November, 2002
David Garofalo December,1998 November,2002
Peter Green December,1998 November,2002
(iii) that the signatures set forth- opposite the names and titles of the following
persons are the true and correct specimen, or are the genuine, signatures of such persons, each
of whom holds the position designated below:
Name and Title Signature
Pam Julien Houchen,Mayor l C!47i
F
Clay Martin, Director of Administrative Services
12007.01
r
(vi) and, that for and on behalf of the City, the within-named Director of Finance has
executed the Bond Purchase Agreement, dated October 29, 2001, by and between O'Connor
SWS Securities, as underwriter, and the City.
Dated: November-14, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS A )
By.
lay Martin,
Director Administrative Services
[SEAtj..'
B c4.
Y
Connie Brockway,
City Clerk
-3-
CERTIFICATE REGARDING
INVESTMENTS
Shari Freidenrich,City Treasurer
PLEASE SIGN 6 TIMES
Y
11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
OMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE REGARDING INVESTMENTS
The undersigned hereby states and certifies:
(i) that she is the duly elected or appointed, qualified and acting City Treasurer of
the City of Huntington Beach, a chartered city and municipal corporation duly organized and
existing under the Constitution and laws of the State of California (the "City"), and as such, is
familiar with the facts herein certified and is authorized to certify the same;
(ii) that she is an "Authorized Officer" of the City, as such term is defined in that
certain Fiscal Agent Agreement, dated as of November 1, 2001 (the "Fiscal Agent Agreement"),
by and between the City and U.S. Bank Trust National Association, as fiscal agent (the "Fiscal
Agent");
(iii) that she has read Article V and Section 6.01 of the Fiscal Agent Agreement and
the definitions contained in the Fiscal Agent Agreement of the capitalized terms used in said
Article and Section;
(iv) that, of that portion of the net proceeds of the City of Huntington Beach
Community Facilities District No. 1990-1 2001 Special Tax Refunding Bonds," in the aggregate
principal amount of $2,155,000 and dated the date hereof (the 'Bonds), received by the Fiscal
Agent on the date hereof, the City hereby authorizes and directs the Fiscal Agent to invest the
amounts deposited into the funds and accounts established pursuant to the Fiscal Agent
Agreement, as set forth on Exhibit A attached hereto and by this reference incorporated herein,
in the Permitted Investments set forth on said Exhibit A;
(v) that the investments set forth on said Exhibit A are traded on established
markets and are to be purchased by the Fiscal Agent in arms length transactions for their Fair
Market Value without regard to the relationship of the yield of such investments to the yield of .
the Bonds; and
(vi) that capitalized terms used herein•and not otherwise defined shall have the
meanings ascribed thereto in the Fiscal Agent Agreement.
Dated: November 14, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
B
ari Freidenrich,
City Treasurer
12007.01
IRS FORM 8038-G
Daniel Villella,Director of Finance .
PLEASE SIGN I TIME
Form 8038-G Information Return for Tax-Exempt Governmental Obligations
(Rev.November 2000)
►Under Internal Revenue Code section 149(e) OMB No. 1545-0720
Department of the Treasury ► See separate Instructions
Internal Revenue service Caution:i1 the issue price is underS100,000,use Form 8038-GC.
Reporting Authority If Amended Return,check here ► ❑
1 tssuees name 2 Issuer's employer identification number
CITY OF HUNTINGTON BEACH 95-6000732
3 Number and street(or P.O.Box If mail is not delivered to street address) Room/suite Report number
2000 Main Street 3 1
5 City,town,or post office,state,and ZIP code 6 Date of issue
Huntington Beach, CA 92648 November 14,2001
7 Name of issue 8 CUSIP number
City of Huntington Beach Community Facilities District No.1990-01 Special Tax Refunding Bonds 446188AQ7
9 Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone number of officer or legal representative
Daniel T.Villella, Director of Finance 1 714/536-5225
T e of Issue check applicable box es and enter the issue rice See instructions and attach schedule
11 ❑ Education 11
12 ❑ Health and hospital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13 ❑ Transportation . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14 ❑ Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15 ❑ Environment(including sewage bonds) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 ❑ Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17 ❑ Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18 ® Other. Describe ► providing funds for redemption of outstanding bonds 18 2,155i000.00
19 If obligations are TANS or RANs,check box ► ❑ If obligations are BANS,check box ► ❑
20 If obligations are in the form of a lease or installment sale,check box . . . . . . . . . . . . . . . . ► ❑ � � _
Description of Obligations. Complete for the entire issue for which this form is being filed.
(a)Final maturity date (b)Issue price (c)Stated redemption (d)Weighted (a)Yield
price at maturity average maturity
21710/01/20 $ 2,155,000.00 $ 2,155,000.00 11.2319 years 5.1408%
Uses of Proceeds of Bond Issue (including underwriters' discount)
22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 0.00
23 Issue price of entire issue(enter amount from line 21,column(b)) • . • . . . . . . . . . . . . . . . . . 23 2,155,000.00
24 Proceeds used for bond issuance costs(including underwriters'discount) . . . . . . . 24 101,130.00 _=
25 Proceeds used for credit enhancement . . . . . . . . . . . . . . . . . . . . . . 25 0.00
26 Proceeds allocated to reasonably required reserve or replacement fund , , , , , , , _ 26 172,400 00`¢1
27 Proceeds used to currently refund prior issues• , , , , , , , , , , , , , , , , , , ,
27 000 f
28 Proceeds used to advance refund prior issues . . . . . . . . . . . . • , . . . , , • • 28 1,881,470 00
29 Total(add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 2 155 000.00
30 Nonrefunding proceeds of the issue subtract line 29 from line 23 and enter amount here 30 0.00
Descri tion of Refunded Bonds (Complete this part only for refunding bonds.
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . . . . . . . . . . ► n/a years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . . . . . . . . . . . . ► 12.0411 years
33 Enter the last date on which the refunded bonds will be called . . . . . . . . . . . . . . . . . . . . . ► 04/01/02
34 Enter the date(s)the refunded bonds were issued ►. 10/1/1997
Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) , , . . , • , . , . . . , 35
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract(see instructions) 36a
b Enter the final maturity date of the guaranteed investment contract ► m
37 Pooled financings:a Proceeds of this issue that are to be used to make loans to other govemmental units 37a
b If this issue is a loan made from the proceeds of another tax-exempt issue,check box ► ❑ and enter the name of the
issuer ► and the date of the issue ►
38 If the issuer has designated the issue under section 265(b)(3)(13)(i)(111)(small issuer exception),check box • • , • • • • • • • , , , • r ❑
39 . If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box. . . . . . . . . . . . . . . . . . . . ;•;►L;�'•'•'•'
40 If the issuer has identified a hedge, check box •)• _
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and staterrd m
to the best of knowledge and belief, they are true, correct, and complete. •,
Sign
Here Daniel T.Villella
1 V14/01 'Director of Finance
Si t r of s aut zed resentattve Date Type or print name and title
For Paperwork Reduction Act Notice, see page 2 of the Instructions. cat.No.63773S Form 8038-G (Rev. 11-2000)
:.a
REQUISITION NO.1 FOR
DISBURSEMENT FROM COSTS
OF ISSUANCE
Daniel Villella,Director of Finance
PLEASE SIGN 6 TIMES
f
wir
Quint&Thimmi 11/6/01
$2,155,000
OF HUNTINGTON BEACH
FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
REQUISITION NO.1 FOR
DISBURSEMENT FROM COSTS OF ISSUANCE FUND
The undersigned hereby states and certifies:
(i) that he is the duly appointed, qualified and acting Director of Finance of the City
of Huntington Beach, a chartered city and municipal corporation duly organized and existing
under the Constitution and laws of the State of California (the "City"), and as such, are
familiar with the facts herein certified and are authorized to certify the same on behalf of the
City;
(ii) that he is an "Authorized Officer" of the City, as such term is defined in that
certain Fiscal Agent Agreement,dated as of November 1, 2001 (the "Fiscal Agent Agreement"),
by and between the City and U.S. Bank Trust National Association, as fiscal agent (the "Fiscal
Agent");
(iii) that pursuant to Section 3.05(B) of the Fiscal Agent Agreement, the undersigned
hereby request the Fiscal Agent to disburse from the Costs of Issuance Fund established under
the Fiscal Agent Agreement to each payee designated on Exhibit A attached.hereto and by this
reference incorporated herein, an amount not to exceed the amount set forth opposite such
payee, for payment or reimbursement of previous payment of Costs of Issuance as described on
attached Exhibit A, upon receipt by the Fiscal Agent of an invoice from such payee which
requests payment in an amount which is less than or equal to the amounts set forth on said
Exhibit A;
(iv) that the disbursements described on the attached Exhibit A constitute Costs of
Issuance and are properly chargeable to the Costs of Issuance Fund; and
(v) that capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Fiscal Agent Agreement.
Dated: November 14, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
Y
l�
Daniel T. Villel a,
Director of Finance
12007.01
EXHIBIT A
REQUISITION NO.1
COSTS OF ISSUANCE FUND
Payee Name and Address Purpose of Obligation Amount
Quint&Thimmig LLP Bond and Disclosure Counsel Fees $ 32,000.00
c/o: Comerica Bank and Reimbursable Expenses
ABA No. 121137522
For Credit: Quint&Thimmig LLP
A/C No. 16169838
U.S. Bank Trust National Fiscal Agent Fee,Escrow Bank Fee, $ 7,000.00
Association Fiscal Agent Counsel Fee and
550 South Hope Street, Suite 500 Dissemination Agent Fee
Los Angeles, CA 90071
Grant Thornton LLP Verification Agent Fee $ 2,500.00
500 Pillsbury Center North
200 South Sixth Street, Suite 500
Minneapolis, MN 55402-1459
Harrell&Company Financial Advisor Fees $ 21,000.00
333 City Boulevard West,Suite 1430 and Expenses
Orange, CA 92868
Standard &Poor's Credit Market Services Rating Agency Fees $ 2,300.00
55 Water Street,38th Floor
New York,NY 10041-0003
Merrill Corporation $ 8,700.00
Exhibit A-1
CERTIFICATE AS TO ARBITRAGE
Daniel Villella,Director of Finance
PLEASE SIGN 6 TIMES
knhe basis of the foregoing, it is not expected that the proceeds of the Bonds will be
used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of
section 148 of the Code and applicable regulations. To the best of my knowledge, information
and belief, the expectations herein, expressed are reasonable and there are no facts, estimates or
circumstances, other than those expressed herein, that would materially affect the expectations
herein expressed.
IN WITNESS WHEREOF, I have hereunto set my hand this 14th day of November,
2001.
Y
Daniel T. Villella,
Director of Finance
I
-5-
i
Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE AS TO ARBITRAGE
I, the undersigned Director of Finance of the City of Huntington Beach, California (the
"City"),being one of the officers of the City duly charged (by resolution of the City Council of
the City), with others, with the responsibility of issuing the City's $2,155,000 City of
Huntington Beach Community Facilities District No. 1990-1 2001 Special Tax Refunding Bonds
(the "Bonds"), dated the date hereof and being issued this date,hereby certify as follows:
(1) Purpose of Bonds. The Bonds are being issued by the City, for and on behalf of the
City of Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area)
(the "District") pursuant to a Fiscal Agent Agreement, dated as of November 1, 2001 (the
"Fiscal Agent Agreement"),between the City, for and on behalf of the District, and U.S. Bank
Trust National Association, as fiscal agent (the "Fiscal Agent"), for the purpose of providing
funds for the refunding on an advance basis of the City's outstanding City of Huntington Beach,
California, Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) Special Tax
Bonds (the "Prior Bonds") issued on August 9, 1990 in the original principal amount of
$2,400,000 (of which $2,055,000 principal amount is outstanding and is being refunded on the
date hereof). The Prior Bonds were issued for the purpose of financing the acquisition and
construction of various public improvements (the "Project"), more particularly described in the
Certificate Regarding Use of Proceeds, dated the date hereof, and on file elsewhere in the
transcript for the Bonds.
(2) Statement of Expectations. On the basis of the facts, estimates and circumstances in
existence on the date hereof, I reasonably expect the following with respect to the proceeds of
the Bonds:
(a) Sale Proceeds of Bonds, No Aggregate Issues. The Bonds were sold to O'Connor
SWS Securities (the "Underwriter"), at their face amount ($2,155,000), less
Underwriter's discount of$23,705.00, for total sale proceeds of $2,131,295.00. Of said
amount, $77,425.00 will be deposited in the Costs of Issuance Fund, $172,400.00 will be
deposited in the Reserve Fund, and the remaining $1,881,470.00 will be transferred to
U.S. Bank Trust National Association, as escrow bank (the "Escrow Bank") for deposit
in the Escrow Fund held by the Escrow bank pursuant to an Escrow Agreement, dated
the date hereof, by and between the City and the Escrow Bank. The Reserve Fund and
the Costs of Issuance Fund are held by the Fiscal Agent,and the Escrow Fund is held by
the Escrow Bank. The sale proceeds of the Bonds, together with interest earnings
thereon, except to the extent that such interest earnings are subject to requirements for
rebate to the federal government, will not exceed the amount necessary for the
governmental purposes of the Bonds, namely, the purposes set forth in paragraph (1)
above. No tax-exempt debt has been sold within fifteen (15) days before or after the
date the Bonds were sold that will be paid from substantially the same source of funds
as the Bonds (excluding guarantees from unrelated parties).
(b) Refunding Schedules. At the request of the City, the schedules included
elsewhere in the transcript for the Bonds (the "Schedules") have been prepared by the
Harrell & Company Advisors, LLC, financial advisor to the City, and verified by Grant
Thornton LLP,independent certified public accountants, for the purpose of detailing all
relevant aspects of the refunding program with respect to the Prior Bonds. The
Schedules are incorporated herein by this reference.
(c) Costs of Issuance Ftind. The proceeds of the Bonds deposited in the Costs of
Issuance Fund will be used for the payment of legal fees, printing costs and other costs
of issuance of the Bonds and will be fully expended within approximately 180 days of
the date hereof. Amounts deposited in the Costs of Issuance Fund, if invested, will be
invested without yield restrictions. Interest earnings and profits resulting from said
investment will be retained in the Costs of Issuance Fund and used for the purposes
thereof. Amounts, if any, remaining in the Costs of Issuance Fund after the earlier of
May 1, 2002, or the date that all costs of issuance have been paid will be transferred to
the Bond Fund and used for the payment of debt service on the Bonds.
(d) Escrow Ftind; Deposits and Investment. Pursuant to the Escrow Agreement,
concurrent with the deposit of proceeds of the Bonds in the amount of $1,881,470.00
into the Escrow Fund, the City will transfer or cause to be transferred to the Escrow
Bank for deposit in the Escrow Fund $52,328.00 from the improvement fund created for
the Prior Bonds and $192,487.00 from the reserve fund created for the Prior Bonds,
being a total deposit into the Escrow Fund of $2,126,285.00. Of the total amount
deposited into the Escrow Fund, $2,126,284.00 will be invested in United States
Treasury Securities, State and Local Government Series ("Federal Securities") with a
yield that is less than the yield on.the Bonds and the remaining $1.00 will be retained in
cash and not invested. Except as described above, no proceeds of the Prior Bonds will
remain following the deposits to the Escrow Fund referenced above, except for amounts
transferred from the bond fund for the Prior Bonds to the services fund created under
the Fiscal Agent Agreement ($668,403.00), which amounts will be transferred to the
services fund created under the Fiscal Agent Agreement and used to reimburse the City
for services rendered in connection with the District, amounts transferred from the
improvement fund created under the Fiscal Agent Agreement ($32,250.00), which
amounts will be transferred to the City and used to complete the Project, and amounts
transferred from the administrative expense fund created under the Fiscal Agent
Agreement ($10,969.00), which amounts will be transferred to the administrative
expense fund created under the Fiscal Agent Agreement and used for the purposes of
such fund.
(e) Escrow Ftind, Use and Allocation of Amounts Deposited. Amounts deposited in
the Escrow Fund will be used to pay principal and interest on the Prior Bonds through
April 1,2002,which date is the first date upon which the Prior Bonds may be redeemed
on an optional basis, and on said date will be used to redeem the then outstanding
principal amount of the Prior Bonds of $2,055,000 and to pay the redemption premium
of $10,275.00 (being one-half of one percent (.5%) of the principal amount redeemed).
Amounts,if any,remaining in the Escrow Fund following redemption of the Prior Bonds
will be transferred to the Bond Fund and used for the payment of debt service on the
Bonds.
(f) Reserve Ftind. The proceeds of the Bonds ($172,400.00) deposited in the
Reserve Fund equals the initial "Reserve Requirement", being an amount equal to eight
percent (8%) of the initial principal of the Bonds,which is less than ten percent (10%) of
the initial principal of the Bonds, less than an amount equal to maximum annual debt
service on the Bonds,and less than one hundred twenty-five percent (125%) of average
annual debt service on the Bonds. The Underwriter has represented that the
establishment of the Reserve Fund in the amount of the Reserve Requirement was vital to
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the marketing of the Bonds and reasonably required to assure payment of the Bonds.
Amounts deposited in the Reserve Fund will be invested without yield restrictions.
Interest earnings and profits resulting from said investment will be retained in the
Reserve Fund. in the event that the amount on deposit in such Fund is less than the
Reserve Requirement and otherwise will be used for the payment of excess investment
earnings to the federal government (see subparagraph (i) below) or, if not required for
such purpose, deposited in the Bond Fund and used for the payment of interest on the
Bonds.
(g) Pledge of Tar Reventces; Payment of Debt Service. The City has pledged certain
special tax revenues (the "Tax Revenues") to the payment of debt service on the Bonds.
Upon receipt, the Tax Revenues will be deposited in the Special Tax Fund and, on or
before each interest payment date on the Bonds, the amount, if any, necessary to
increase the amount in the Reserve Fund to the Reserve Requirement will be transferred
from the Special Tax Fund to the Reserve Fund and the amount necessary to pay debt
service on the Bonds on the interest payment date will be transferred from the Special
Tax Fund to the Bond Fund. The Special Tax Fund and the Bond Fund have been
established primarily to achieve a proper matching of revenues (consisting primarily of
Tax Revenues and certain interest earnings) and debt service due on the Bonds during
each year that the Bonds are outstanding. Amounts deposited in the Special Tax Fund
and in the Bond Fund (will be expended within thirteen (13) months of the date of
deposit, and the Special Tax Fund and the Bond Fund will be depleted at least once a
year except for a reasonable carryover amount not in excess of the greater of one year's
earnings on said Funds or one-twelfth (1/12th) of annual debt service on the Bonds.
Amounts in the Special Tax Fund and the Bond Fund will be invested without yield
restrictions.Interest earnings and profits resulting from investment of said Funds will be
retained in the Fund in which investment was made and used for the purposes thereof.
(h) Current Tax Revenues. Transfers from the Special Tax Fund of Tax Revenues
to the Bond Fund will be made from current Tax Revenues and surplus Tax Revenues
will be deposited in the Administrative Expense Fund and the Services Fund. The
Administrative Expense Fund and the Services Fund are not available for payment of
debt service on the Bonds. Excess Tax Revenues are not expected to be available for
payment of debt service on the Bonds in the event of financial difficulties of the City,
and do not constitute a sinking fund for payment of debt service on the Bonds.
(i)Rebate Requirement.The City has covenanted in the Fiscal Agent Agreement to
comply with requirements for rebate of excess investment earnings to the federal
government.
(j) Exclusion of Certain Ftinds for Purposes of Rebate Requirement. No portion of the
Bonds will constitute a private activity bond within the meaning of section 141(a) .of the
Internal Revenue Code of 1986 (the "Code"), the average maturity of the Bonds is
greater than five (5) years and none of the interest rates on the Bonds vary during the
term of the Bonds.As a consequence of the foregoing,investment earnings on the Special
Tax Fund and the Bond Fund will be excluded for the purposes of computation of the
amount required to rebated to the federal government as referenced in subparagraph (i)
above without regard to the total amount of said earnings.
(k) Yield of the Bonds. The yield of the Bonds is 5.141068%, determined on the
basis of regularly scheduled principal and interest payments on the Bonds discounted to
the issue price of the Bonds (being the face amount of the Bonds of $2,155,000). The
Underwriter has represented that (i) based upon reasonable expectations and actual
facts which existed on October 29, 2001, being the date upon which the City sold the
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Bonds to the Underwriter, the initial offering price of each maturity of the Bonds to the
public(excluding bondhouses, brokers, or similar persons or organizations acting in the
capacity of underwriters or wholesalers) at which a substantial amount of each maturity
of the Bonds was to be sold to the public on the date hereof is par; and (ii) the Bonds of
each maturity were actually offered for the price of par.
(1) No Other Pledged Fainds; No Szuaps. Except as described herein, no funds have
been pledged to are,or will be,available for payment of debt service on the Bonds which
have been, or will be, invested directly, or indirectly, in securities, obligations, annuity
contracts or other investment-type property producing a yield in excess of the yield on
the Bonds and no transaction has been, or will be, entered into directly, or indirectly, in
connection with the Bonds involving the swap of fixed rate obligations for variable rate
obligations or vice versa.
(m) No Replacement. No portion of the proceeds of the Bonds will be used as a
substitute for other funds (replacement funds) which are otherwise expected to be
available to be used as a source of financing for any part of the Prior Bonds being
refunded or for payment of debt service on the Bonds and which have been, or will be,
used to acquire direct, or indirect, securities, obligations, annuity contracts or other
investment-type property producing a yield in excess of the yield of the Bonds. No
amounts, other than amounts described above, are reasonably expected to be used or
are pledged to be used to pay debt service on the Bonds. The Bonds will not remain
outstanding longer than necessary to accomplish the purpose for which the Bonds are
issued. All investments in the funds described herein will be purchased in arms-length
transaction or in State and Local Government Securities.
(n) No Improper Financial Advantage. The transaction contemplated herein does
not represent an exploitation of the difference between tax-exempt and taxable interest
rates to gain a material financial advantage and will not increase the burden on the
market for tax-exempt obligations in that the Bonds are not being issued in an amount
greater than otherwise necessary nor are they being issued sooner, or to be outstanding
longer,than otherwise necessary.
(o) Picrpose of Refunding. The refunding of the Prior Bonds will enable a present
value debt service savings. The issuance of the Bonds and the refunding of the Prior
Bonds will not enable the City to obtain a material financial advantage (based on
arbitrage) apart from savings attributable to lower interest rates.
(p) No Excess Proceeds. Excess proceeds, if any, of the Bonds allocable to the
refunding of the Prior Bonds will not exceed one percent (1%) of the net proceeds of the
Bonds allocable to the refunding of the Prior Bonds.
(q) No Hedge Bonds. The Bonds do not constitute "hedge bonds" because the
Prior Bonds were not"hedge bonds."The Prior Bonds were not "hedge bonds" because
on the date of issuance of each of the Prior Bonds, the issuer thereof reasonably
expected that not less than eighty-five percent (85%) of the proceeds of the Prior Bonds
would be expended within three (3) years of that date of issuance and not more than
fifty percent (50%), if any, of the proceeds of the Prior Bonds was invested in
investments having a substantially guaranteed yield for four(4) or more years.
(3) No Adverse Ruling. The City has not received notice that its Certificate as to
Arbitrage may not be relied upon with respect to its own issues nor has it been advised that any
adverse action by the Commissioner of Internal Revenue is contemplated.
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FISCAL AGENT AGREEMENT
Clay Martin,Director of Administrative Services
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14PNWITNESSrVWHEREOF, the City has caused this Agreement to be executed in its name
and the Fiscal Agent, in token of its acceptance of the duties of the Fiscal Agent hereunder,has
caused this Agreement to be executed in its name,all as of November 1,2001.
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
By
Director o dministrative Services
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Fiscal Agent
By:
Authorized Officer
Quint&Thimmig LLP 09/24/01
10/18/01
FINAL 10/25/01
REVISED FINAL 10/29/01
FISCAL AGENT AGREEMENT
by and between the
CITY OF HUNTINGTON BEACH
and
U.S.BANK TRUST NATIONAL ASSOCIATION,as Fiscal Agent
Dated as of November 1,2001
Relating to:
$2,155,000
City of Huntington Beach
Community Facilities District No.1990-1
2001 Special Tax Refunding Bonds
08003.05
TABLE OF CONTENTS
ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement...........................................................................:...:......3
Section 1.02. Agreement for Benefit of Bondowners.........................................................................3
Section1.03. Definitions.................................................................................................................3
ARTICLE II .
THE BONDS
Section•2.01. Principal Amount; Designation................................................................................. 12
Section 2.02. Terms of Bonds......................................................................................................... 12
Section 2.03. Redemption.........................................................: ................. 13
..................................
Section 2.04. Form of Bonds.......................................................................................................... 15
Section 2.05. Execution of Bonds.................................................................................................... 15
Section2.06. Transfer of Bonds...................................................................................................... 15
Section 2.07. Exchange of Bonds....................................................................................................16
Section2.08. Bond Register........................................................................................................... 16
Section 2.09. Temporary Bonds..................................................................................................... 16
Section 2.10. Bonds Mutilated,Lost,Destroyed or Stolen................................................................16
Section 2.11. Limited Obligation................................................................................................... 17
Section2.12. No Acceleration........................................................................................................17
Section 2.13. Book-Entry System...................................................................................................17
ARTICLE.III
ISSUANCE OF BONDS
Section 3.01. Issuance and Delivery of Bonds................................................................................. 19
Section 3.02. Application of Proceeds of Sale of Bonds and Other Moneys....................................... 19
Section 3.03. Special Tax Fund......................................................................................................20
Section 3.04. Administrative Expense Fund....................................................................................20
Section 3.05. Costs of Issuance Fund..............................................................................................21
Section3.06. Services Fund...........................................................................................................21
Section 3.07. Validity of Bonds......................................................................................................22
ARTICLE IV
SPECIAL TAX REVENUES; BOND.FUND AND RESERVE FUND '
Section 4.01. Pledge of Special Tax Revenues................................................................................23
Section 4.02. Bond Fund.. .....................................................23
Section4.03. Reserve Fund...........................................................................................................24
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ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment 26
Section 5.02. Limited Obligation................................................................................................... 26
Section 5.03. Extension of Time for Payment.................................................................................... 26
Section 5.04. Against Encumbrances.............................................................................................26
Section 5.05. Books and Accounts..................................................................................................26
Section 5.06. Protection of Security and Rights of Owners............................................................... 26
Section 5.07. Compliance with Law,Completion of Project.............................................................27
Section 5.08. Private Activity Bond Limitation...............................................................................27
Section 5.09. Federal Guarantee Prohibition.................................................................................. 27
Section 5.10. Collection of Special Tax Revenues............................................................................27
Section 5.11. Further Assurances................................................................................................... 28
Section5.12. No Arbitrage............................................................................................................ 28
Section 5.13. Maintenance of Tax-Exemption.................................................................................. 28
Section 5.14. Annual State Reports................................................................................................ 28
Section 5.15. Covenant to Foreclose...............................................................................................29
Section 5.16. Continuing Disclosure to Owners..............................................................................29
Section 5.17. No Additional Bonds................................................................................................29
Section 5.18. Yield of the Bonds....................................................................................................29
Section 5.19. Reduction of Special Taxes........................................................................................30
ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS;LIABILITY OF THE CITY'
Section 6.01. Deposit and Investment of Moneys in Funds.............................................................31
Section 6.02. Rebate of Excess Investment Earnings to the United States..............................:.......... 32
Section 6.03. Limited Obligation...................................................................................................32
Section 6.04. Liability of City........................................................................................................32
Section 6.05. Employment of Agents by City.................................................................................33
ARTICLE VII
THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent....................................................................................34
Section 7.02. Liability of Fiscal Agent............................................................................................34
Section7.03. Information..............................................................................................................35
Section 7.04. Notice to Fiscal Agent...............................................................................................36
Section 7.05. Compensation,Indemnification.................................................................................36
ARTICLE VIII
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted............................................................................................37.
Section 8.02. Owners'Meetings................................ ..........37
..........................................................
Section 8.03. Procedure for Amendment with Written Consent of Owners......................................37
Section 8.04. Disqualified Bonds...................................................................................................38
Section 8.05. Effect of Supplemental Agreement............................................................................38
Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments..............................38
Section 8.07. Amendatory Endorsement of Bonds..........................................................................39
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ARTICLE IX
MISCELLANEOUS
Section 9.01. Benefits of Agreement Limited to Parties...................................................................40
Section 9.02. Successor is Deemed Included in All References to Predecessor..................................40
Section 9.03. Discharge of Agreement...............................................................:...........................40
Section 9.04. Execution of Documents and Proof of Ownership by Owners......................................41
Section 9.05. Waiver of Personal Liability......................................................................................41
Section 9.06. Notices to and Demands on City and Fiscal Agent.....................................................41
Section 9.07. Partial Invalidity......................................................................................................41
Section 9.08. Unclaimed Moneys...................................................................................................42
Section9.09. Applicable Law.........................................................................................................42
Section9.10. Conflict with Act.......................................................................................................42
Section 9.11. Conclusive Evidence of Regularity............................................................................42
Section 9.12. Payment on Business Day.........................................................................................42
Section9.13. Counterparts............................................................................................................42
EXHIBIT A: FORM OF BOND
EXHIBIT B: OFFICER'S CERTIFICATE REQUESTING DISBURSEMENT FROM
ADMINISTRATIVE EXPENSE FUND
EXHIBIT C: OFFICER'S CERTIFICATE REQUESTING DISBURSEMENT FROM
COSTS OF ISSUANCE FUND
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FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (the "Agreement") is dated as of November 1,
2001, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation and
public body, corporate and politic, organized and existing under and by virtue of the
Constitution and laws of the State of California (the "City"), for and on behalf of the City of
Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the
"District"), and U.S BANK TRUST NATIONAL ASSOCIATION, a national banking
association duly organized and existing under the laws of the United States of America with a
corporate trust office located in Los Angeles, California as fiscal agent (the "Fiscal Agent").
WITNESSETH:
WHEREAS, the City Council of the City has formed the District under the provisions of
the Mello-Roos Community Facilities Act of 1982, as amended (section 53311 et seq. of the
California Government Code) (the "Act") and Resolution 6161 of the City Council adopted on
June 18, 1990;
WHEREAS, the City Council, as the legislative body with respect to the District, is
authorized under the Act to levy special taxes to pay for the costs of facilities within the
District and to authorize the issuance of bonds secured by said special taxes under the Act;
WHEREAS,under the provisions of the Act, on July 2, 1990, the City Council of the City
adopted its Resolution 6174,which resolution, among other matters, authorized the issuance of
the City of Huntington Beach, California Community. Facilities District No. 1990-1
(Goldenwest%Ellis Area) 1990 Special Tax Bonds (the "Prior Bonds");
WHEREAS, due to favorable interest rates in the financial markets, the City Council has
determined to refund the Prior Bonds in full;
WHEREAS, under the provisions of the Act, on October 15, 2001, the City Council of
the City adopted its Resolution No. 2001-74 (the "Resolution"), which resolution, among other
matters, authorized the issuance of the City of Huntington Beach Community Facilities District
No. 1990-1 2001 Special Tax Refunding Bonds (the 'Bonds") to provide moneys to refund the
Prior Bonds and provided that said issuance would be in accordance with the Act and this
Agreement,and authorized the execution hereof;
WHEREAS, it is in the public interest and for the benefit of the City, the District, the
property owners responsible for the payment of special taxes and the Owners of the Bonds that
the City enter into this Agreement to provide for the issuance of the Bonds, the disbursement of
proceeds of the Bonds, the disposition of the special taxes securing the Bonds and the
administration and payment of the Bonds; and
WHEREAS, all things necessary to cause the Bonds, when issued by the City for the
District and authenticated by the Fiscal Agent and issued as in the Act, the Resolution and this
Agreement provided, to be legal, valid and binding and limited obligations in accordance with
their terms,and all things necessary to cause the creation, authorization, execution and delivery
of this Agreement and the creation,authorization,execution and issuance of the Bonds, subject
to the terms hereof,have in all respects been duly authorized.
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NOW, THEREFORE, in consideration of the covenants and provisions herein set forth
and for other valuable consideration the receipt and sufficiency of which is hereby
acknowledged,the parties hereto do hereby agree as follows:
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ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement. This Agreement is entered into pursuant to
the provisions of the Act and the Resolution.
Section 1.02. Agreement for Benefit of Bondowners. The provisions, covenants and
agreements herein set forth to be performed by or on behalf of the City shall be for the equal
benefit,protection and security of the Owners. In consideration of the acceptance of the Bonds
by the Owners thereof, this Agreement shall be deemed to be and shall constitute a contract
between the City, for and on behalf of the District, and the Owners; and the covenants and
agreements herein set forth to be performed by the City shall be for the equal and proportionate
benefit, security and protection of all Owners of the Bonds without preference, priority or
distinction as to security or otherwise of any of the Bonds over any of the others by reason of
the number or date thereof or the time of sale,execution or delivery thereof,or otherwise for any
cause whatsoever, except as expressly provided therein or herein. All of the Bonds, without
regard to the time or times of their issuance or maturity, shall be of equal rank without
preference, priority or distinction of any of the Bonds over any other thereof, except as
expressly provided in or permitted by this Agreement.Any action by any Owner to enforce the
provisions of this Agreement shall be for the equal benefit and protection of all Owners of the
Bonds.
The Fiscal Agent may become the owner of any of the Bonds in its own or any other
capacity with the same rights it would have if it were not Fiscal Agent.
Section 1.03. Definitions. Unless the context otherwise requires, the terms'defined in this
Section 1.03 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of
any certificate,opinion or other document herein mentioned,have the meanings herein specified.
All references herein to "Articles," "Sections" and other subdivisions are to the corresponding
Articles, Sections or subdivisions of this Agreement, and the words "herein," "hereof,"
"hereunder" and other words of similar import refer to this Agreement as a whole and not to
any particular Article,Section or subdivision hereof.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being
sections 53311 et seq. of the California Government Code.
"Administrative Expenses" means any or all of the following: the fees and expenses of the
Fiscal Agent(including any indemnification payment or any fees or expenses of its counsel), the
expenses of the City in carrying out its duties hereunder or under the Escrow Agreement
(including,but not limited to,the levying and collection of the Special Taxes,and the foreclosure
of the liens of delinquent Special Taxes) including the fees and expenses of its counsel, an
allocable share of the salaries of City staff directly related thereto and a proportionate amount
of City general administrative overhead related thereto, any amounts paid by the City from its
general funds pursuant to Section 6.02 hereof, any costs of the City in employing consultants
and/or attorneys in connection with the discharge of any of the City's obligations hereunder or
under the Escrow Agreement (including, but not limited to, the calculation of the levy of the
Special Taxes, foreclosures with respect to delinquent taxes, and the calculation of amounts
subject to rebate to the United States) and all other costs and expenses of the City or the Fiscal
Agent incurred in connection with the discharge of their respective duties hereunder or in
connection with the refunding of the Prior Bonds and,in the case of the City,in any way related
to the administration of the District. Administrative Expenses shall include any such expenses
incurred in prior years but not yet paid, and any advances of funds by the City under Section
6.02 hereof.
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"Administrative Expense Fund" means the fund by that name established by Section
3.04(a) hereof.
"Agreement" means this Fiscal Agent Agreement, as it may be amended or supplemented
from time to time by any Supplemental Agreement adopted pursuant to the provisions hereof.
"Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the
Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as
scheduled, and (ii) the principal amount of the Outstanding Bonds due in such Bond Year.
"Auditor" means the auditor/controller of the County, or such other official at the
County who is responsible for preparing property tax bills.
"Authorized Officer" means the Finance Officer, the City Manager, the City Clerk or any
other officer or employee authorized by the City Council of the City or by an Authorized Officer
to undertake the action referenced in this Agreement as required to be undertaken by an
Authorized Officer.
"Bond Counsel"means (i) Quint&Thimmig LLP, or (ii) any attorney or firm of attorneys
acceptable to the City and nationally recognized for expertise in rendering opinions as to the
legality and tax-exempt status of securities issued by public entities.
"Bond Fund" means the fund by that name established by Section 4.02(a) hereof.
"Bond Register" means_the books maintained by the Fiscal Agent for the registration of
Bonds under Section 2.08.
"Bond Year" means the one-year period beginning on October 2 in each year and ending
on October 1 in the following year, except that the first Bond Year shall begin on the Closing
Date and shall end on October 1, 2002.
"Bonds" means the City of Huntington Beach.Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds at any time Outstanding under this Agreement or any
Supplemental Agreement.
"Business Day" means any day other than (i) a Saturday or a Sunday or (ii) a day on
which banking institutions in the state in which the Fiscal Agent has its principal corporate trust
office are authorized or obligated by law or executive order to be closed.
"CDIAC" means the California Debt and Investment Advisory Commission of the office
of the State Treasurer of the State or any successor agency or bureau thereto.
"City" means the City of Huntington Beach,California,and any successor thereto.
"City Attorney" means the City Attorney of the City, or his designee.
"Closing Date"means November 14,2001,being the date upon which there is a physical
delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds
by the Original Purchaser.
"Code"means the Internal Revenue Code of 1986 as in effect on the date of issuance of
the Bonds or (except as otherwise referenced herein) as it may be amended to apply to
obligations issued on the date of issuance of the Bonds, together with applicable temporary and
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final regulations promulgated, and applicable official public guidance published, under the
Code.
"Continuing Disclosure Certificate" shall mean that certain Continuing Disclosure
Certificate executed by the City, dated the Closing Date, as originally executed and as it may be
amended from time to time in accordance with the terms thereof.
"Costs of Issuance" means items of expense payable or reimbursable directly or indirectly
by the City and related to the authorization, sale, delivery and issuance of the Bonds and the
refunding of the Prior Bonds, which items of expense shall include, but not be limited to,
printing costs,costs of reproducing and binding documents, closing costs, appraisal costs, filing
and recording fees, fees and expenses of counsel to the City, initial fees and charges of the
Fiscal Agent including its first annual administration fees and its legal fees and charges,
expenses incurred by the City in connection with the issuance of the Bonds and the refunding of
the Prior Bonds, Bond (underwriter's) discount, legal fees and charges, including bond counsel
and the City Attorney,charges for execution, transportation and safekeeping of the Bonds and
other costs,charges and fees in connection with the foregoing.
"Costs of Issuance Fund" means the fund by that name established by Section 3.05(a)
hereof.
"County" means the County of Orange, California.
"DTC" means the Depository Trust Company,New York,New York, and its successors
and assigns.
"Debt Service" means the scheduled amount of interest and amortization of, principal
payable on the Bonds during the period of computation, excluding amounts scheduled during
such period which relate to principal which has been retired before the beginning of such period.
"Depository" means (a) initially, DTC, and (b) any other Securities Depository acting as
Depository pursuant to Section 2.13.
"District"means the City of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) formed pursuant to the Resolution of Formation.
"Escrow Agreement" means the Escrow Agreement, dated the Closing Date, by and
between the City and the Escrow Bank, as amended from time to time.
"Escrow Bank" means U.S. Bank Trust National Association, and its successor and
assigns,acting as escrow bank under the Escrow Agreement.
"Escrow Fund" means the fund of that name created and maintained under the Escrow
Agreement.
"Fair Market Value" means the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm's length transaction (determined as of the
date the contract to purchase or sell the investment becomes binding)if the investment is traded
on an established securities market (within the meaning of section 1273 of the Code) and,
otherwise,the term"Fair Market Value" means the acquisition price in a bona fide arm's length
transaction (as referenced above) if(i) the investment is a certificate of deposit that is acquired
in accordance with applicable regulations under the Code, (ii) the investment is an agreement
with specifically negotiated withdrawal or reinvestment provisions and a specifically
negotiated interest rate (for example, a guaranteed investment contract, a forward supply
contract or other investment agreement) that is acquired in accordance with applicable
regulations under the Code, (E6 the investment is a United States Treasury Security—State and
Local Government Series that is acquired in accordance with applicable regulations of the
United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment
Fund of the State, but only if at all times during which the investment is held its yield is
reasonably expected to be equal to or greater than the yield on a reasonably comparable direct
obligation of the United States.
"Federal Securities" means any of the following which at the time of investment are legal
investments under the laws of the State for funds held by the Fiscal Agent (the Fiscal Agent
entitled to rely on any direction from the City as a certification that such investments constitute
such legal investments):
(i) direct general obligations of the United States of America (including
obligations issued or held in book entry form on the books of the United States
Department of the Treasury) and obligations, the payment of principal of and interest
on which are directly or indirectly guaranteed by the United States of America,
including, without limitation, such of the foregoing which are commonly referred to as
"stripped" obligations and coupons; or
(ii) any of the following obligations of the following agencies of the United States
of America: (a) direct obligations of the Export-Import Bank, (b) certificates of beneficial
ownership issued by the Farmers Home Administration, (c) participation certificates
issued by the General Services Administration, (d) mortgage-backed bonds or pass-
through obligations issued and guaranteed by the Government National Mortgage
Association, (e) project notes issued by the United States Department of Housing and
Urban Development, and (f) public housing notes and bonds guaranteed by the United
States of America.
"Finance Officer"means the Finance Director of the City,or his designee.
"Fiscal Agent" means U.S. Bank Trust National Association, the Fiscal Agent appointed
by the City and acting as an independent fiscal agent with the duties and powers herein
provided, its successors and assigns, and any other corporation or association which may at
any time be substituted in its place,as provided in Section 7.01 hereof.
"Fiscal Year" means the twelve-month period extending from July 1 in a calendar year to
June 30 of the succeeding year,both dates inclusive.
"Information Services" means Financial Information, Inc.'s "Daily Called Bond Service",
30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny
Information Services' "Called Bond Service",55 Broad Street, 28th Floor, New York, New York
10004; Moody's Investors Service "Municipal and Government", 99 Church Street, New York,
New York 10007,Attention:Municipal News Reports; Standard & Poor's Corporation "Called
Bond Record", 25 Broadway, 3rd Floor, New York, New York 10004; and, in accordance with
then current guidelines of the Securities and Exchange:Commission, such other addresses
and/or such services providing information with respect to called bonds as the City may
designate in an Officer's Certificate delivered to the Fiscal Agent.
"Interest Payment Date" means April 1 and October 1 of each year, commencing with
April 1, 2002.
"Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond
Year after the calculation is made through the final maturity date of any Outstanding Bonds.
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"Moody's" means Moody's Investors Service, and its successors.
"Officer's Certificate" means a written certificate of the City signed by an Authorized
Officer of the City.
"Ordinance Leznjing Taxes" means any ordinance of the City Council of the City levying
the Special Taxes.
"Original Purchaser" means the first purchaser of the Bonds from the City, being
O'Connor SWS Securities.
"Outstanding," when used as of any particular time with reference to Bonds, means
(subject to the provisions of Section 8.04 hereof) all Bonds except (i) Bonds theretofore canceled
by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) Bonds paid or
deemed to have been paid within the meaning of Section 9.03 hereof; and (iii) Bonds in lieu of or
in substitution for which other Bonds shall have been authorized, executed, issued and
delivered by the City pursuant to this Agreement or any Supplemental Agreement.
"Ozvner"means any person who shall be the registered owner of any Outstanding Bond.
"Participating Underzvriter" shall have the meaning ascribed thereto in the Continuing
Disclosure Certificate.
"Permitted Investments" means any of the following which at the time of investment are
determined by the City to be legal investments under the laws of the State for the moneys
proposed to be invested therein:
(a) Federal Securities.
(b)The following obligations of government-sponsored agencies which are not backed by
the full faith and credit of the United States of America:
(i) Participation certificates (excluded are stripped mortgage securities which are
purchased at prices exceeding their principal amounts) and Senior Debt obligations of
the Federal Home Loan Mortgage Corporation(FHLMC).
(ii) Consolidated system-wide bonds and notes of the Farm Credit Banks
(formerly Federal Land Banks, Federal Intermediate Credit Banks and Banks for
Cooperatives).
(iii) Consolidated. debt obligations of the Federal Home Loan Banks (FHL
Banks).
(iv) Senior debt obligations and mortgage-backed securities (excluded are
stripped mortgage securities which are purchased at priced exceeding their principal
amounts) of Federal National Mortgage Association (FNMA).
(v)Senior debt obligations (excluded are securities that do not have a fixed par
value and/or whose terms do not promise a fixed dollar amount at maturity or call
date) of the Student Lout Marketing Association (SLMA).
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(c) Unsecured certificates of deposit, time deposits, and bankers' acceptances having
maturities of not more than 30 days) of any bank the short-term obligations of which are rated
"A-1" or better by S&P.
(d) Deposits the aggregate amount of which are fully insured by the Federal Deposit
Insurance Corporation (FDIC), in banks which have a capital and surplus of at least$5 million.
(e) Commercial paper having original maturities of not more than' 180 days) rated
"A-1+"by S&P and "Prime-1" by Moody's issued by a domestic corporation having assets in
excess of$500 million.
(f) Money market funds rated "Aam" or "Aam-G" or better by S&P, with a minimum of
$500 million in assets under management, including funds for which the Fiscal Agent or its
affiliates provide investment or other advisory services.
(g) "State Obligations" which means (a) direct general obligations of any state of the
United States of America or any subdivision or agency thereof to which is pledged the full faith
and credit of a state the unsecured general obligation debt of which is rated "AY or better by
Moody's and "A" or better by S&P, or any obligation fully and unconditionally guaranteed by
any state, subdivision or agency which unsecured general obligation debt is so rated, and (b)
direct general short-term obligations of any state agency or subdivision or agency thereof
described in (a) above and rated "A-1+" by S&P.
(h) Repurchase agreements which satisfy the following criteria:
(i).Repurchase agreements must be between the City or the Fiscal Agent and.a
dealer bank or securities firm which is:
(A)A primary dealer on the Federal Reserve reporting dealer list which is
rated "A" or better by Standard &Poor's and Moody's, or
(B) A bank rated "A" or above by Standard & Poor's and Moody's; or
(C) Corporations the long-term debt or claims paying ability of which, or
in the case of a guaranteed corporation, the long-term debt of the guarantor, or,
in the case of a monoline financial guaranty insurance company, claims paying
ability or financial strength, is rated in at least the double A category by
Standard &Poor's and Moody's.
(ii)The written agreement must include the following:
(A)Securities which are acceptable for transfer are:
(1) direct obligations of the United States government, or
(2) obligations of federal agencies backed by the full faith and
credit of the United States of America (or the Federal National Mortgage
Association (FNMA) or the Federal Home Loan Mortgage Corporation
(FHLMC)),
(B)The collateral must be delivered to the City or the Fiscal Agent (if the
Fiscal Agent is not supplying the collateral) or a third party acting as agent for
the Fiscal Agent (if the Fiscal Agent is supplying the collateral) before or
simultaneous with payment(perfection by possession of certificated securities),
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(C) (1) The securities must be valued weekly, marked-to-market at
current market price plus accrued interest, and
(2) The value of the collateral must be at least equal to one
hundred four percent (104%) of the amount of money transferred by the
Fiscal Agent to the dealer,bank or security firm under the agreement plus
accrued interest. If the value of the securities held as collateral is reduced
below one hundred four percent (104%) of the value of the amount of
money transferred by the Fiscal Agent, then additional acceptable
securities and/or cash must be provided as collateral to bring the value of
the collateral to one hundred four percent (104%); provided, however,
that if the securities used as collateral are those of FNMA or FHLMC,
then the value of the collateral must equal to one hundred five percent
(105%) of the amount of money transferred by the Fiscal Agent; and
(3) A legal opinion must be delivered to the City and the Fiscal Agent
that the repurchase agreement meets the requirements of California law with
respect to the investment of public funds; and
(i) Investment agreements with domestic or foreign banks, insurance companies or
corporations the long-term debt or claims paying ability of which or,in the case of a guaranteed
corporation,the long-term debt of the guarantor, or,in the case of a monoline financial guaranty
insurance company, claims paying ability or financial strength, of the guarantor is rated in at
least the double A category by Standard & Poor's and Moody's; provided that, by the terms of
the investment agreement:
(i) interest payments are to be made to the Fiscal Agent at times and in amounts
as necessary to pay debt service on the Bonds (if the funds invested pursuant to the
investment agreement are from the Reserve Fund);
(ii) the invested funds are available for withdrawal without penalty or premium,
upon not-more than seven (7) days' prior notice;
(iii) the investment agreement shall provide that it is the unconditional and
general obligation of, and is not subordinated to any other obligation of, the provider
thereof;
(iv) the City and the Fiscal Agent receive the opinion of domestic counsel (which
opinion shall be addressed to the City) that such investment agreement is legal, valid,
binding and enforceable upon the provider in accordance with its terms and of foreign
counsel (if applicable) in form and substance acceptable, and addressed to, the City;
(v) the investment agreement shall provide that if during its term
(A) the provider's rating by either Standard & Poor's or Moody's falls
below "AA-" or "AaY, respectively, the provider shall, at its option, within ten
(10) days of receipt of publication of such downgrade, either (i) collateralize the
investment agreement by delivering or transferring in accordance with the
applicable state and federal laws (other than by means of entries on the
provider's books) to the City, the Fiscal Agent or a third party acting solely as
agent therefor (the "Holder of the Collateral") collateral free and clear of any
third-party liens or claims, the market value of which collateral is maintained at
one hundred four percent(104%) of securities identified in clauses (i) and (ii) of
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this definition; or (ii) assign the investment agreement and all of its obligations
thereunder to a financial institution mutually acceptable to the Provider, the City
and the Fiscal Agent which is rated either in the first or second highest category
by Standard & Poor's and Moody's; and
(B) the provider's rating by either Standard &.Poor's or Moody's is
withdrawn or suspended or falls below "A-" or "AY, respectively, the provider
must, at the direction of the City or the Fiscal Agent, within ten (10) days of
receipt of such direction, repay the principal of and accrued but unpaid interest
on the invested funds, in either case with no penalty or premium to the City or
the Fiscal Agent; and
(vi) the investment agreement shall provide and an opinion of counsel shall be
rendered, in the event collateral is required to be pledged by the provider under the
terms of the investment agreement at the time such collateral is delivered, that the
Holder of the Collateral has a perfected first priority security interest in the collateral,
any substituted collateral and all proceeds thereof (in the case of bearer securities, this
shall mean the Holder of the Collateral is in possession of such collateral); and
(vii) the investment agreement shall provide that if during its term
(A) the provider shall default in its payment obligations, the provider's
obligations under the investment agreement shall, at the direction of the City or
the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid
interest thereon shall be paid to the City or the Fiscal Agent, as appropriate; and
(B) the provider shall become insolvent,not pay its debts as they become
due, be declared or petition to be declared bankrupt, etc., the provider's
obligations shall automatically be accelerated and amounts invested and accrued
but unpaid interest thereon shall be paid to the City or the Fiscal Agent, as
appropriate;
(j)The Local Agency Investment Fund of the State.
(k) Forward Delivery Agreements (FDA) or Forward Purchase and Sale Agreements
(FPSA), having as the underlying investment property those investments which are in (a) and
(b) above.
"Principal Office" means the principal corporate trust office of the Fiscal Agent set forth
in Section 9.06 (except for payment, surrender and exchanges of the Bonds which shall be the
office of U.S. Bank Trust National Association in St. Paul, Minnesota), or such other or .
additional offices as may be designated by the Fiscal Agent.
"Prior Bond Resolution" means Resolution 6174,adopted by the City Council of the City
on July 2,1990, authorizing the issuance of the Prior Bonds.
"Prior Bonds" means the City of Huntington Beach Community Facilities District No.
1990-1 '(Goldenwest/Ellis Area) 1990 Special Tax Bonds, issued on August 9, 1990, in the
original principal amount of$2,400,000.
"Proceeds"when used with reference to the Bonds,means the face amount of the Bonds,
plus accrued interest and premium,if any,less any original issue discount.
"Project"means the facilities described in the Resolution of Formation.
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"Record Date" means the fifteenth day of the month next preceding the month of the
applicable Interest Payment Date,whether or not such day is a Business Day.
"Regulations"means temporary and permanent regulations promulgated under the Code.
"Reserve Fund" means the fund by that name established pursuant to.Section 4.03(a) .
hereof.
"Reserve Requirement" means, as of any date of calculation an amount equal to the lesser
of (i) the then Maximum Annual Debt Service, or (ii) eight percent (8%) of the initial principal
amount of the Bonds issued hereunder.
"Resolution" means Resolution No. 2001-74, adopted by the City Council of the City on
October 15, 2001, authorizing the issuance of the Bonds.
"Resolution of Formation" means Resolution 6161, adopted by the City Council of the
City on June 18, 1990, forming the District.
"Resolution of Intention" means, collectively, Resolution 6142 and Resolution 6143,
adopted by the City Council of the City on May 7, 1990 respectively, indicating the intention of
the City to form the District.
"S&P" means Standard & Poor's Credit Market Services, a division of McGraw-Hill,
and its successors and assigns.
"Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue,
Garden City, New York 11530, Fax-(516) 227-4039 or 4190; and, in accordance with then
current guidelines of the Securities and Exchange Commission, such other addresses and/or
such other securities depositories as the City may designate in an Officer's Certificate delivered
to the Fiscal Agent.
"Services" means the services more particularly described as such in Exhibit A to the
Resolution of Formation.
"Services Fund" means the fund by that name established by Section 3.06 hereof.
"Special Tax Fund" means the fund by that name established by Section 3.03(a) hereof.
"Special Tax Revenues" means the proceeds'of the Special Taxes received by the City,
including any scheduled payments thereof, interest and proceeds of the redemption or sale of
property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said
interest,but shall not include any interest or penalties in excess of the interest due on the Bonds
collected in connection with any such foreclosure.
"Special Taxes" means the special taxes levied by the City Council within the District
pursuant to the Act and this Agreement.
"State" means the State of California.
"Supplemental Agreement"means an agreement the execution of which is authorized by a
resolution which has been duly adopted by the City under the Act and which agreement is
amendatory of or supplemental to this Agreement, but only if and to the extent that such
agreement is specifically authorized hereunder.
. -11-
ARTICLE II:
THE BONDS
Section 2.01. Principal Amount;DesigLnation. Bonds in the aggregate principal amount of
two million one hundred fifty-five thousand dollars ($2,155,000) are hereby authorized to be .
issued by the City for the District under and subject to the terms of the Resolution and this
Agreement, the Act and other applicable laws of the State. The Bonds shall be designated "City
of Huntington Beach Community Facilities District No. 1990-1 2001 Special Tax Refunding
Bonds". No additional bonds are authorized to be issued hereunder.
Section 2.02. Terms of Bonds.
(a) Form; Denominations. The Bonds shall be issued as fully registered Bonds without
coupons in denominations of $5,000 or any integral multiple thereof. Bonds shall'be lettered
and numbered in a customary manner as determined by the Fiscal Agent.
(b) Date of Bonds. The Bonds shall be dated the Closing Date.
(c) CUSIP Identification Numbers. "CUSIP': identification numbers shall be imprinted on
the Bonds,but such numbers shall not constitute a part of the contract evidenced by the Bonds
and any error or omission with respect thereto shall not constitute cause for refusal of any
purchaser to accept delivery of and pay for the Bonds. In addition, failure on the part of the
City or the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute
an event of default or any violation of the City s contract with such Owners and shall not
impair the effectiveness of any such notice.
(d)Maticrities, Interest Rates. The Bonds shall mature on October 1, in the years and shall
bear interest at the interest rates per annum.set forth in the following table:
Maturity Principal Interest
(October 1) Amount Rate
2007 $ 500,000 4.00%
2012 510,000 4.75
2020 1,145,000 5.40
(e) Interest. The Bonds shall bear interest at the rates set forth above payable on the
Interest Payment Dates in each year.Interest shall be calculated on the basis of a 360-day year
composed of twelve 30-day months. Each Bond shall bear interest from the Interest Payment
Date next preceding the date of authentication thereof unless (i) it is authenticated on an
Interest Payment Date,in which event it shall bear interest from such date of authentication, or
(ii) it is authenticated prior to an Interest Payment Date and after the close of business on the
Record Date preceding such Interest Payment Date, in which event it shall bear interest from
such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the
first Interest Payment Date, in which event it shall bear interest from the Closing Date;
provided, however, that if at the time of authentication of a Bond,interest is in default thereon,
such Bond shall bear interest from the Interest Payment Date to which interest has previously
been paid or made available for payment thereon.
(f) Method of Payment. Interest on the Bonds (including the final interest payment upon
maturity or earlier redemption) is payable by check of the Fiscal Agent mailed on the Interest
Payment Dates by first class mail to the registered Owner thereof at such registered Owner's
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address as it appears on the registration books maintained by the Fiscal Agent at the close of
business on the Record Date preceding the Interest Payment Date, or by wire transfer (i) to the
Depository (so long as the Bonds are in book-entry form pursuant to Section 2.13), or (ii) to an.
account within the United States made on such Interest Payment Date upon written instructions
of any Owner of$1,000,000 or more in aggregate principal amount of Bonds, which instructions
shall continue in effect until revoked in writing, or until such Bonds are transferred to a new
Owner. The principal of the Bonds and any premium on the Bonds are payable by check in
lawful money of the United States of America upon surrender of the Bonds at the Principal
Office of the Fiscal Agent. All Bonds paid by the Fiscal Agent pursuant to this Section shall be
canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds and issue a
certificate of destruction thereof to the City upon the City's request.
Section 2.03. Redemption.
(a) Redemption Dates.
(i) Optional Redemption. The Bonds are subject to redemption prior to their
stated maturity on any date on or after October 1, 2011, as a whole or in part, upon
payment from any source of funds available for that purpose, at a redemption price
equal to the principal amount of Bonds to be redeemed, together with accrued interest
thereon to the date fixed for redemption,without premium.
(ii)Mandatory Sinking Payment Redemption.
(A) Bonds Maturing on October 1, 2007. The Bonds maturing on October
1, 2007, are. subject to mandatory sinking payment_ redemption in part on
October L 2002, and .on each October 1 thereafter to and including October 1,
2007, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption,
without premium,from sinking payments as follows:
Redemption Date Redemption Date
October 1 Amount (October 1) Amount
2002 $85,000 2005 $85,000
2003 75,000 2006 85,000
2004 80,000 2007(maturity) 90,000
The amounts in the foregoing table shall be reduced pro rata,in order to maintain
substantially level debt service, as a result of any prior partial redemption of the Bonds
pursuant to Section 2.03(a)(i) above.
(B) Bonds Maturing on October 1, 2012. The Bonds maturing on October
1, 2012, are subject to mandatory sinking payment redemption in part on
October 1, 2008, and on each October 1 thereafter to and including October 1,
2012, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest:to the date fixed for redemption,
without premium,from sinking payments as follows:
Redemption Date Redemption Date
October 1 Amount (October 1) Amount
2008 $95,000 2011 $110,000
2009 95,000 2012(maturity) 110,000
2010 100,000
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The amounts in the foregoing table shall be reduced pro rata,in order to maintain
substantially level debt service, as a result of any prior partial redemption of the Bonds
pursuant to Section 2.03(a)(i) above.
(c) Bonds Maturing on October 1, 2020. The Bonds maturing on October
1, 2020, are subject to mandatory sinking payment redemption in part on
October 1, 2013, and on each October 1 thereafter to and including October 1,
2020, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption, .
without premium, from sinking payments as follows:
Redemption Date Redemption Date
(October 1) Amount (October 1) Amount
2013 $120,000 2017 $145,000
2014 125,000 2018 155,000
2015 130,000 2019 160,000
2016 140,000 2020(maturity) 170,000
The amounts in the foregoing table shall be reduced pro rata,in order to maintain
substantially level debt service, as a result of any prior partial redemption of the Bonds
pursuant to Section 2.03(a)(i) above.
(iii) Purchase In Lieu of Redemption. In lieu of redemption under this Section
2.03(a), moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for
purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer's
Certificate executed by the Finance Officer requesting such purchase, at public or private
sale as and when, and at such prices (including brokerage and other charges) as such
Officer's Certificate may provide,but in no event may Bonds be purchased at a price in
excess of the principal amount thereof, any redemption premium due thereon, plus
interest accrued to the date of purchase. The Fiscal Agent shall be absolutely protected
and shall incur no liability in relying on such Officer's Certificate.
(b) Notice to Fiscal Agent. The City, by Officer's Certificate executed by the Finance
Officer, shall give the Fiscal Agent written notice of its intention to redeem Bonds pursuant to
subsection (a)(i) (including the maturities of Bonds to be redeemed) not less than sixty (60)
days prior to the applicable redemption date, unless the Fiscal Agent shall agree to a shorter
notice period in its sole discretion.
(c) Redemption Procedicre by Fiscal Agent. The Fiscal Agent shall cause notice of any
redemption to be mailed by first class mail, postage prepaid, at least thirty (30) days but not
more than sixty (60) days prior to the date fixed for redemption, to the Securities Depositories
and to one or more Information Services, and to the respective registered Owners.of any Bonds
designated for redemption, at their addresses appearing on the Bond registration books in the
Principal Office of the Fiscal Agent;but such mailing shall not be a condition precedent•to such
redemption and failure to mail or to receive any such notice, or any defect therein, shall not
affect the validity of the proceedings for the redemption of such Bonds.
Such notice shall state the redemption date and the redemption price and, if less than all
of the then Outstanding Bonds are to be called for redemption shall state as to any Bond called
in part the principal amount thereof to be redeemed, and shall require that such Bonds be then
surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption
price, and shall state that further interest on such Bonds will not accrue from and after the
redemption date.The cost of mailing any such redemption notice and any expenses incurred by
the Fiscal Agent in connection therewith shall be paid by the City.
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Whenever provision is made in this Agreement for the redemption of less than all of the
Bonds or any given portion thereof,the Fiscal Agent shall select the Bonds to be redeemed, from
all Bonds or such given portion thereof not previously called for redemption, by lot in any
manner which the Fiscal Agent deems appropriate.
Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal .
Agent shall authenticate and deliver to the registered Owner, at the expense of the City, a new
Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate
principal amount equal to the unredeemed portion of the Bond or Bonds.
(d) Effect of Redemption. From and after the date fixed for redemption, if funds available
for the payment of the principal of, and interest and any premium on, the Bonds so called for
redemption shall have been deposited in the Bond Fund, such Bonds so called shall cease to be
entitled to any benefit under this Agreement other than the right to receive payment of the
redemption price, and no interest shall accrue thereon from and after the redemption date
specified in the notice of redemption.
All Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section 2.03
shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds in
accordance with the Fiscal Agent's retention policy then in effect.
Section 2.04. Form of Bonds. The Bonds, the Fiscal Agent's certificate of authentication
and the assignment, to appear thereon, shall be substantially in the forms,respectively, set forth
in Exhibit A attached hereto and by this reference incorporated herein, with necessary or
appropriate variations, omissions and insertions, as permitted or required by this Agreement,
the Resolution and the Act.
Section 2.05. Execution of Bonds. The Bonds shall be executed on behalf of the City by
the manual or facsimile signatures of its Mayor and its City Clerk who are in office on the date
of adoption of this Agreement or at any time thereafter, and the seal of the City shall be
impressed,imprinted or reproduced by facsimile thereon. If any officer whose signature appears
on any Bond ceases to be such officer before delivery of the Bonds to the Owner, such signature
shall nevertheless be as effective as if the officer had remained in office until the delivery of the
Bonds to the Owner. Any Bond may be signed and attested on behalf of the City by such
persons as at the actual date of the execution of such Bond shall be the proper officers of the
City although at the nominal date of such Bond any such person shall not have been such officer
of the City.
Only such Bonds as shall bear thereon a certificate of authentication in substantially the
form set forth in Exhibit A,manually executed and dated by the Fiscal:Agent, shall be valid or
obligatory for any purpose or entitled to the benefits.of this Agreement, and such certificate of
authentication of the Fiscal Agent shall be conclusive evidence that the Bonds registered
hereunder have been duly authenticated, registered and delivered hereunder and are entitled to
the benefits of this Agreement.
Section 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred, upon the books required to be kept pursuant to the provisions of Section 2.08 by
the person in whose name it is registered, in person or by his duly authorized attorney, upon
surrender of such Bond for cancellation, accompanied by delivery of a duly written instrument
of transfer in a acceptable to the Fiscal Agent. The cost for any services rendered or any
expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the
City. The Fiscal Agent shall collect from the Owner requesting such transfer any tax or other
governmental charge required to be paid with respect to such transfer. Whenever any Bond or
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Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall
authenticate and deliver a new Bond or Bonds, for a like aggregate principal amount of
authorized denominations.
No transfers of Bonds shall be required to be made (i) fifteen days prior to the date
established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a
Bond after such Bond has been selected for redemption.
Section 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Office of the
Fiscal Agent solely for a like aggregate principal amount of Bonds of authorized denominations
and of the same maturity. The cost for any services rendered or any expenses incurred by the
Fiscal Agent in connection with any such exchange shall be paid by the City. The Fiscal Agent
shall collect from the Owner requesting such exchange any tax or other governmental charge
required to be paid with respect to such exchange.
No exchanges of Bonds shall be required to be made (i) fifteen days prior to the date
established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a
Bond after such Bond has been selected for redemption.
Section 2.08. Bond Register. The Fiscal Agent will keep, or cause to be kept, at its
Principal Office sufficient books-for the registration and transfer of the Bonds (the 'Bond
Register") which books shall show the series number, date, amount, rate of interest and last
known owner of each Bond and shall at all times be open to inspection by the City during
regular business hours upon reasonable notice; and, upon presentation for such purpose, the
Fiscal Agent shall,under such reasonable regulations as it may prescribe, register or transfer or
cause to be registered or transferred, on said books,the ownership of the Bonds as hereinbefore
provided.
The City and the Fiscal Agent will treat the Owner of any Bond whose name appears on
the Bond register as the absolute Owner of such Bond for any and all purposes, and the City
and the Fiscal Agent shall not be affected by any notice to the contrary. The City and the Fiscal
Agent may rely on the address of the Bondowner as it appears in the Bond register for any and
all purposes.
Section 2.09. Temporary Bonds. The Bonds may be initially issued in temporary form
exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be
printed, lithographed or typewritten, shall be of such authorized denominations as may be
determined by the City, and may contain such reference to any of the provisions of this
Agreement as may be appropriate. Every temporary Bond shall be executed by the City upon
the same conditions and in substantially the same manner as the definitive Bonds. If the City
issues temporary Bonds, it will execute and furnish definitive Bonds without delay and
thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the
definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the
Fiscal Agent shall designate,and the Fiscal Agent shall authenticate and deliver in exchange for
such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized
denominations.Until so exchanged,the temporary Bonds-shall be entitled to the same benefits
under this Agreement as definitive Bonds authenticated and delivered hereunder.
Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, at the expense of the Owner of said Bond, the City shall execute and the Fiscal
Agent shall authenticate and deliver a replacement Bond of like tenor and principal amount in
exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal
Agent of the Bond so mutilated.Every mutilated Bond so surrendered to the Fiscal Agent shall
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be canceled by it and destroyed by the Fiscal Agent, in accordance with the Fiscal Agent's
retention policy then in effect.
If any Bond shall be lost, destroyed or stolen, the City shall execute and the Fiscal Agent
shall authenticate and deliver a replacement Bond of like tenor and principal amount in lieu of
and in substitution for the Bond so lost, destroyed or stolen, at the expense of the Owner, but
only following provision by the Owner to the Fiscal Agent of indemnity for the City. and the
Fiscal Agent satisfactory to the Fiscal Agent. The City may require payment of a sum not
exceeding the actual cost of preparing each a replacement Bond delivered under this Section
2.10 and the City and the Fiscal Agent may require payment of the expenses which may be
incurred by the City and the Fiscal Agent for the preparation, execution, authentication and
delivery thereof. Any Bond delivered under the provisions of this Section 2.10 in lieu of any
Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual
obligation on the part of the City whether or not the Bond so alleged to be lost, destroyed or
stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to
the benefits of this Agreement with all other Bonds issued pursuant to this Agreement.
Section 2.11. Limited Obligation. All obligations of the City under this Agreement and
the Bonds shall not.be general obligations of the City, but shall be limited obligations, payable
solely from the Special Tax Revenues and the funds pledged therefore hereunder. Neither the
faith and credit of the City nor of the State or any political subdivision thereof is pledged to the
payment of the Bonds.
Section 2.12. No Acceleration. The principal of the Bonds shall not be subject to
acceleration hereunder.Nothing in this Section 2.12 shall in any way prohibit the redemption of
Bonds under Section 2.03 hereof, or the defeasance of the Bonds and discharge of this
Agreement under Section 9.03 hereof.
Section 2.13. Book-Entry System. DTC shall act as the initial Depository for the Bonds.
One Bond for each maturity of the Bonds shall be initially executed, authenticated, and
delivered as set forth herein with a separate fully registered certificate (in print or typewritten
form).Upon initial execution,authentication,and delivery,the ownership of the Bonds shall be
registered in the Bond Register kept by the Fiscal Agent for the Bonds in the name of Cede &
Co., as nominee of DTC or such nominee as DTC shall appoint in writing.
The representatives of the City and the Fiscal Agent are hereby authorized to take any
and all actions as may be necessary and not inconsistent with this Agreement to qualify the
Bonds for the Depository's book-entry system, including the execution of the Depository's
required representation letter.
With respect to Bonds registered in the Bond Register in the name of Cede & Co., as
nominee of DTC,neither the City nor.the Fiscal Agent shall have any responsibility or obligation
to any broker-dealer, bank, or other financial institution for which DTC holds Bonds as
Depository from time to time (the "DTC Participants") or to any person for which a DTC
Participant acquires an interest in the Bonds (the "Beneficial Owners"). Without limiting the
immediately preceding sentence, neither the City nor the Fiscal Agent shall have any
responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co.,
or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to
any DTC Participant, any Beneficial Owner, or any other person, other than DTC, of any notice
with respect to the Bonds, including any notice of redemption, (iii) the selection by the
Depository of the beneficial interests in the Bonds to be redeemed in the event the City elects to
redeem the Bonds in part, (iv) the payment to any DTC Participant, any Beneficial Owner, or
any other person, other than DTC, of any amount with respect to the principal of or interest on
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the Bonds, or (v) any consent given or other action taken by the Depository as Owner of the
Bonds.
Except as set forth above, the Fiscal Agent may treat as and deem DTC to be the
absolute Owner of each Bond for which DTC is acting as Depository for the purpose of
payment of the principal of and interest on such Bonds, for the purpose of giving notices. of
redemption and other matters with respect to such Bonds, for the purpose of. registering
transfers with respect to such Bonds, and for all purposes whatsoever. The Fiscal Agent shall
pay all principal of and interest on the Bonds only to or upon the order of the Owners as shown
on the Bond Register, and all such payments shall be valid and effective to fully satisfy and
discharge all obligations with respect to the principal of and interest on the Bonds to the extent
of the sums or sums so paid.
No person other than an Owner, as shown on the Bond Register, shall. receive a physical
Bond. Upon delivery by DTC to the Fiscal Agent of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and subject to the transfer
provisions in Section 2.06 hereof, references to "Cede & Co." in this Section 2.13 shall refer to
such new nominee of DTC.
DTC may determine to discontinue providing its services with respect to the Bonds at
any time by giving written notice to the Fiscal Agent during any time that the Bonds are
Outstanding, and discharging its responsibilities with respect thereto under applicable law. The
City may terminate the services of DTC with respect to the Bonds if it determines that DTC is
unable to discharge its responsibilities with respect to the Bonds or that continuation of the
system of book-entry transfers through DTC is not in the best interest of the Beneficial Owners,
and the City shall mail notice of such termination to the Fiscal Agent.
Upon the termination of the services of DTC as provided in the previous paragraph,
and if no substitute Depository willing to undertake the functions hereunder can be found which
is willing and able to undertake such functions upon reasonable or customary terms, or if the
City determines that it is in the best interest of the Beneficial Owners of the Bonds that they be
able to obtain certificated Bonds, the Bonds shall no longer be restricted to being registered in
the Bond Register of the Fiscal Agent in the name of Cede & Co., as nominee of DTC, but may
be registered in whatever name or name the Owners shall designate at that time, in accordance
with Section 2.06.
To the extent that the Beneficial Owners are designated as the transferee by the Owners,
in accordance with Section 2.06, the Bonds will be delivered to such Beneficial Owners as soon
as practicable.
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ARTICLE III
ISSUANCE OF BONDS
Section 3.01. Issuance and Delivery of Bonds. At any time after the execution of this
Agreement,the City may issue the Bonds for the District in the aggregate principal amount set
forth in Section 2.01 and deliver the Bonds to the Original Purchaser. The Authorized Officers
of the City are hereby authorized and directed to deliver any and all documents and
instruments necessary to cause the issuance of the Bonds in accordance with the provisions of
the Act, the Resolution and this Agreement, to authorize the payment of Costs of Issuance and
costs of the Project by the Fiscal Agent from the proceeds of the Bonds and to do and cause to
be done any and all acts and things necessary or convenient for delivery of the Bonds to the
Original Purchaser. The Fiscal Agent is hereby authorized and directed to authenticate the
Bonds and deliver them to the Original Purchaser, upon receipt of the purchase price for the
Bonds.
Section 3.02. Application of Proceeds of Sale of Bonds and Other Moneys.
(a) The Proceeds of the purchase of the Bonds by the Original Purchaser shall be paid to
the Fiscal Agent, who shall forthwith set aside, pay over and deposit such Proceeds on the
Closing Date as follows:
(i) Deposit in the Costs of Issuance Fund an amount equal to $77,425.00;
(ii) Deposit in the Reserve Fund an amount equal to $172,400; and
(iii) Transfer to the Escrow Bank for deposit by the Escrow Bank in the Escrow
Fund, an amount equal to $1,881,470.00.
(b)In addition to the foregoing,on the Closing Date the Finance Officer shall transfer or
cause to be transferred certain moneys held with respect to the Prior Bonds as follows:
(i) Transfer from the administrative expense fund held with respect to the Prior
Bonds to the Finance Officer for deposit by the Finance Officer in the Administrative
Expense Fund,all amounts on deposit in such administrative expense fund;
(ii) Transfer from the reserve fund held with respect to the Prior Bonds to the
Escrow Bank for deposit by the Escrow Bank in the Escrow Fund; an amount equal to
$192,487.00; and
(iii) Transfer $52,328.00 from the improvement fund held with respect to the
Prior Bonds, to the Escrow Bank for deposit by the Escrow Bank in the Escrow Fund;
and
(iv) Transfer from the bond fund held with respect to the Prior Bonds, to the
Services Fund then remitted to the City as reimbursement for prior Services;and
(v)Transfer from the special tax fund held with respect to the Prior Bonds to the
Finance Officer for deposit by the Finance Officer in the Special Tax Fund, an amount
equal to all amounts on deposit in said special tax fund.
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Section 3.03. Special Tax Fund.
(a) Establishment of Special Tax Fund. There is hereby established as a separate account
to be held by the Finance Officer, the Community Facilities District No. 1990-1 2001 Special
Tax Refunding Bonds Special Tax Fund (which account may be maintained on the City's books
as an account within the Administrative Expense Fund) to the credit of which the Finance
Officer shall deposit, immediately upon receipt; all Special Tax Revenue received by the City
and any amounts required by Sections 3.04(b) or 3.06(b) to be deposited therein. Moneys in the
Special Tax Fund shall be held by the Finance Officer for the benefit of the City and the Owners
of the Bonds, shall be disbursed as provided below and, pending any disbursement, shall be
subject to a lien in favor of the Owners of the Bonds.
(b) Disbursements. The Finance Officer shall withdraw from the Special Tax Fund and
transfer: (i) to the Administrative Expense Fund, whenever required for the purposes of such
fund, an amount equal to that portion of any Special Tax Revenues received which are
attributable to the levy of Special Taxes for Administrative Expenses (determined by
multiplying the aggregate Special Taxes received by a fraction the numerator of which is the
percentage of the aggregate Special Tax levy, to which such Special Taxes received pertain,
constituting Administrative Expenses and the denominator of which is one hundred), (ii) to the
Fiscal Agent for deposit in the Bond Fund, (a) within thirty (30) days of receipt of any Special
Tax Revenue during any period that principal and/or interest is past due on the Bonds, an
amount equal to any principal or interest on the Bonds not paid when due, together with
interest thereon at the interest rate on the Bonds from the date such payment was due to the
date of transfer, and (b)before each Interest Payment Date, an amount, taking into account any
amounts then on deposit in the Bond Fund, such that the amount in the Bond Fund equals the
principal, premium, if any, and interest due on the Bonds on the Interest Payment Date; (iii).
before each Interest Payment Date, and following any transfers referred to in the preceding
clauses (i) and (ii) above, to the Reserve Fund an amount, taking into account amounts then on
deposit in the Reserve Fund, such that the amount in the Reserve Fund equals the Reserve
Requirement, and (iv) to the Services Fund, on October 2 of each year, all then remaining
amounts; provided that no such transfers shall exceed the amount then available to be
transferred from the Special Tax Fund.
(c) Investment. Moneys in the Special Tax Fund shall be invested and deposited by the
Finance Officer in accordance with Section 6.01 hereof. Interest earnings and profits resulting
from such investment and deposit shall be retained in the Special Tax Fund to be used for the
purposes thereof.
Section 3.04. Administrative Expense Fund.
(a) Establishment of Administrative Expense Fund. There is hereby established as a
separate account to be held.by the Finance Officer, the Community Facilities District No..1990-
1 2001 Special Tax Refunding Bonds Administrative Expense Fund to the credit of which
deposits shall be made as required by Section 3.03(b). Moneys in the Administrative Expense
Fund shall be held by the Finance Officer. for the benefit of the City, and shall be disbursed as
provided below.
(b) Disbursement. Amounts in the Administrative Expense Fund shall be withdrawn by
the Finance Officer and paid to the City or its order upon receipt by the Finance Officer of an
Officer's Certificate executed by the Finance Officer substantially in the form of Exhibit B hereto
stating the amount to be withdrawn, that such amount is to be used to pay an Administrative
Expense and the nature of such Administrative Expense.
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Annually, on the last day of each Fiscal Year, the Finance Officer shall withdraw from
the Administrative Expense Fund and transfer to the Special Tax Fund an amount equal to the
amount, if any, then on deposit in the Administrative Expense Fund which is in excess of an
amount necessary to pay any Administrative Expenses incurred but not yet paid.
(c) Investment. Moneys in the Administrative Expense Fund shall be invested and
deposited by the Finance Officer in accordance with Section 6.01 hereof. Interest earnings and
profits resulting from said investment shall be retained by the Finance Officer in the
Administrative Expense Fund to be used for the purposes of such fund.
Section 3.05. Costs of Issuance Fund.
(a) .Establishment of Costs of Issuance Fund. There is hereby established as a separate
account to be held by the Fiscal Agent, the Community Facilities District No. 1990-1 2001
Special Tax Refunding Bonds Costs of Issuance Fund, to the credit of which a deposit shall be
made as required by Section 3.02(a)(i). Moneys in the Costs of Issuance Fund shall be held by
the Fiscal Agent for the benefit of the City and shall be disbursed as provided in subsection (b)
of this Section 3.05 for the payment or reimbursement of Costs of Issuance.
(b) Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed from time to
time to pay Costs of Issuance, as set forth in a requisition substantially in the form of Exhibit C
hereto executed by the Finance Officer containing respective amounts to be paid to the
designated payees, and delivered to the Fiscal Agent.
(c) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited by
the Fiscal Agent in accordance with Section 6.01 hereof. Interest earnings and profits resulting
from said investment shall be retained by the Fiscal Agent in the. Costs of Issuance Fund to be
used for the purposes of such fund.
(d) Closing of Fund.The Fiscal Agent shall maintain the Costs of Issuance Fund until the
earlier of (i)May 1,2002, or (ii) the date on which the Finance Officer has certified to the Fiscal
Agent in writing that all known Costs of Issuance have been paid, and then the Fiscal Agent
shall transfer any moneys remaining therein, including any investment earnings thereon, to the
Bond Fund to be used for purposes of the Bond Fund.
Section 3.06. Services Fund.
(a) Establishment of Services Fund. There is hereby established as a separate account to be
held by the Finance Officer, the Community Facilities District No. 1990-1 2001 Special Tax
Refunding Bonds Services Fund, to the credit of which deposits shall be made as required by
Section 3.03(b).Moneys in the Services Fund shall be held in trust by the Finance Officer for the
benefit of the City,and shall be disbursed as provided below.
(b) Disbursement. Amounts in the Services Fund shall be withdrawn by the Finance
Officer and paid to the City or its order upon receipt by the Finance Officer of an Officer's
Certificate stating the amount to be withdrawn, that such amount is used to pay for a Service
and the nature of such Service.
(c) Investment. Moneys in the Services Fund shall be invested and deposited in
accordance with Section 6.01 hereof.Interest earnings and profits resulting from said investment
shall be retained by the Finance Officer in the Services Fund to be used for the purposes of such
fund.
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Section 3.07. Validity of Bonds. The validity of the authorization and issuance of the
Bonds shall not be dependent upon the completion of the acquisition of the Project or upon the
performance by any person of his obligation with respect to the Project.
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ARTICLE IV
SPECIAL TAX REVENUES; BOND FUND AND RESERVE FUND
Section 4.01. Pledge of Special Tax Revenues. The Bonds shall .be secured by a first
pledge(which pledge shall be effected in the manner and to the extent herein provided) of all of
the Special Tax Revenues and all moneys deposited in the Bond Fund and the Reserve Fund,
and, until disbursed as provided herein, in the Special Tax Fund. The Special Tax Revenues and
all moneys deposited into said funds (except as otherwise provided herein) are hereby
dedicated to the payment of the principal of, and interest and any premium on, the Bonds as
provided herein and in the Act until all of the Bonds have been paid and retired or until moneys
or Federal Securities have been set aside irrevocably for that purpose in accordance with Section
9.03.
Amounts in the Administrative Expense Fund, the Services Fund and the Costs of
Issuance Fund are not pledged to the repayment of the Bonds. Any proceeds of condemnation,
destruction or other disposition of any facilities financed with the proceeds of the Bonds are
not pledged to pay the Debt Service on the Bonds and are free and clear of any lien or
obligation imposed hereunder.
Section 4.02. Bond Fund.
(a) Establishment of Bond Ftind. There is hereby established as a separate account to be
held by the Fiscal Agent the "Community Facilities District No. 1990-1 2001 Special Tax
Refunding Bonds Bond Fund" to the credit of which deposits shall be made as required by
Section 3.03(b), Section 4.03 and any other amounts required to be deposited therein by this
Agreement. Moneys in the Bond Fund shall be held by the Fiscal Agent for the benefit of the
City and the Owners of the Bonds, shall be disbursed for the payment of the principal of, and
interest and any premium on,the Bonds as provided below.
(b) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from
the Bond Fund and pay to the Owners of the Bonds the principal of, and interest and any
premium;due and payable on such Interest Payment Date on the Bonds, including any amounts
due on the Bonds by reason of the sinking payments set forth in Section 2.03(a)(ii).
Ten (10) Business Days prior to each Interest Payment Date, the Fiscal Agent shall
determine if the amounts then on deposit in the Bond Fund are sufficient to pay the debt service
due on the Bonds on the next Interest Payment Date. In the event that amounts in the Bond
Fund are insufficient for such purpose, the Fiscal Agent. promptly shall notify the Finance
Officer by telephone(and confirm in writing)of the amount of the insufficiency.
In the event that amounts in the Bond Fund are insufficient for the purpose set forth in
the preceding paragraph with respect to any Interest Payment Date, the Fiscal Agent shall
withdraw from the Reserve Fund, to the extent of any funds therein, an amount sufficient to .
cover the amount of such Bond Fund insufficiency. Amounts so withdrawn from the Reserve
Fund shall be deposited in the Bond Fund.
If,after the foregoing transfer,there are insufficient funds in the Bond Fund to make the
payments provided for in the first sentence of the first paragraph of this Section 4.02(b), the
Fiscal Agent shall apply the available funds first to the payment of interest on the Bonds, then
to the payment of principal due on the Bonds other than by reason of sinking payments, and
then to payment of principal due on the Bonds by reason of sinking payments. Any sinking
payment not made in full as scheduled shall continue to bear interest at the interest rate on the
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Bonds until paid, and shall be paid from the first available amounts in the Bond Fund
described in clause (i) of the second sentence of the first paragraph of this Section 4.02(b).
(c) Investment.Moneys in the Bond Fund shall be invested and deposited in accordance
with Section 6.01.Interest earnings and profits resulting from such investment and deposit shall
be retained in the Bond Fund.
(d) Deficiency. If at any time it appears to the Fiscal Agent that there is a danger of
deficiency in the Bond Fund and that the Fiscal Agent may be unable to pay debt service on the
Bonds in a timely manner, the Fiscal Agent shall report to the Finance Officer such fact. The
City covenants to increase the levy of the Special Taxes in the next Fiscal Year (subject to the
maximum amount authorized by the Resolution of Formation) in accordance with the
procedures set forth in the Act for the purpose of curing Bond Fund deficiencies.
If at any time the Fiscal Agent is unable to pay principal, interest and premium, if any,
due on any Interest Payment Date for the Bonds due to insufficient funds in the Bond Fund, or
if funds are withdrawn from the Reserve Fund to pay principal and/or interest on the Bonds,
the Fiscal Agent shall notify the Finance Officer in writing of such fact, and the Finance Officer
shall notify the California Debt and Investment Advisory Commission of such fact within 10
days of such Interest Payment Date.
Section 4.03. Reserve Fund.
(a) Establishment of Ftind. There is hereby established as a separate account to be held by
the Fiscal Agent the "Community Facilities District No. 1990-1, 2001 Special Tax Refunding
Bonds Reserve Fund" to the credit of which a deposit shall be made as required by Section
3.02(a)(ii), which deposit, as of the Closing Date, is equal to (or in excess of) the initial Reserve
Requirement, and deposits shall be made as provided in Section 3.03(b). Moneys in the Reserve
Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds as a
reserve for the payment of the principal of, and interest and any premium on, the Bonds and
shall be subject to a lien in favor of the Owners of the Bonds.
(b) Use of Reserve Fttnd. Except as otherwise provided in this Section, all amounts
deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the
purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the
Bond Fund of the amount then required for payment of the principal of, and interest and any
premium on,the Bonds or,in accordance with the provisions of this Section, for the purpose of
redeeming Bonds from the Bond Fund.
(c) Transfer of Excess of Reserve Regtirement. Whenever, on or before any Interest Payment
Date, or on any other date at the request of the Finance Officer, the amount in the Reserve Fund
exceeds the Reserve Requirement, the Fiscal Agent shall provide written notice to the Finance
Officer of the amount of the excess and shall transfer an amount equal to the excess from the
Reserve Fund to the Bond Fund, to be applied to the payment of interest on the Bonds on the
next Interest Payment Date.
(d) Transfer for Rebate Ptirposes: Amounts in the Reserve Fund shall be withdrawn for
purposes of making payment to the federal government to comply with Section 6.02, upon
receipt by the Fiscal Agent of an Officer's Certificate specifying the amount to be withdrawn
and to the effect that such amount is needed for rebate purposes.
(e) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve
Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest
accrued to the date of payment or redemption and premium, if any, due upon redemption, the
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Fiscal Agent shall, upon the written request of the Finance Officer, transfer any cash or
Permitted Investments in the Reserve Fund to the Bond Fund to be applied, on the next
succeeding Interest Payment Date to the payment and redemption, in accordance with Section
4.02 or 2.03, as applicable, of all of the Outstanding Bonds. In the event that the amount so
transferred from the Reserve Fund to the Bond Fund exceeds the amount required to pay and
redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred to the
Finance Officer to be used by the City for any lawful purpose.
Notwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund
pursuant to this Section 4.03(e) until after the calculation, pursuant to Section 6.02, of any
amounts due to the federal government following payment of the Bonds and withdrawal of any
such amount under Section 4.03(d) for purposes of making such payment to the federal
government, and payment of any fees and expenses due to the Fiscal Agent.
(f) Investment.Moneys in the Reserve Fund shall be invested in accordance with Section .
6.01. On or before each Interest Payment Date, if the amount on deposit in the Reserve Fund,
equals the then Reserve Requirement, interest earnings .and profits resulting from said
investment shall be transferred by the Fiscal Agent to the Bond Fund, to be applied to the
payment of interest on the Bonds on the next Interest Payment Date.
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ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment. The City will punctually pay or cause to be paid the
principal of, and interest and any premium on, the Bonds when and as due in strict conformity
with the terms of this Agreement and any Supplemental Agreement, and it will faithfully
observe and perform all of the conditions, covenants and requirements of this Agreement and
all Supplemental Agreements and of the Bonds.
Section 5.02. Limited Obli ag tion. The Bonds are limited obligations payable solely from
and secured solely by the Special Tax Revenues and the amounts in the Bond Fund, the Reserve
Fund and the Special Tax Fund created hereunder.
Section 5.03. Extension of Time for Payment. In order to prevent any accumulation of
claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to
the extension of the time for the payment of any claim for interest on any of the Bonds and shall
not, directly or indirectly,be a party to the approval of any such arrangement by purchasing or
funding said claims for interest or in any other manner. In case any such claim for interest shall
be extended or funded, whether or not with the consent of the City, such claim for interest so
extended or funded shall not be entitled, in case of default hereunder, to the benefits of this
Agreement,except subject to the prior payment in full of the principal and premium, if any, of
all of the Bonds then Outstanding and of all claims for interest which shall not have so
extended or funded.
Section 5.04. Against Encumbrances. The.City will not encumber, pledge or place any
charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds
superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds,
except as permitted by this Agreement.
Section 5.05. Books and Accounts. The City will keep, or cause to be kept, proper books
of record and accounts, separate from all other records and accounts of the City, in which
complete and correct entries shall be made of all transactions relating to the expenditure of
amounts disbursed from the Administrative Expense Fund, the Services Fund and the Special
Tax Fund and to the Special Tax Revenues. Such books of record and accounts shall during
business hours and under reasonable conditions be subject to the inspection of the Fiscal Agent
(who shall have no duty to inspect) and the Owners of not less than ten percent (10%) of the
principal amount of the Bonds then Outstanding, or their representatives duly authorized in
writing.
The Fiscal Agent will keep, or cause to be kept, proper books of record and accounts,
separate from all other records and accounts of the Fiscal Agent, in which complete and correct
entries shall be made of all transactions made by the Fiscal Agent relating to the expenditure of
amounts disbursed from the Bond Fund,the Reserve Fund and the Cost of Issuance Fund. Such
books of record and accounts shall,upon reasonable notice, during business hours be subject to
the inspection of the City and the Owners of not less than ten percent (10%) of the principal
amount of the Bonds then Outstanding,or their representatives duly authorized in writing.
Section 5.06. Protection of Security and Rights of Owners. The City will preserve and
protect the security for the Bonds and the rights of the Owners thereto, and will warrant and
defend their rights to such security against all claims and demands of all persons. From and
after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City.
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Section 5.07. Compliance with Law, Completion of Project. The City will comply with
all applicable provisions of the Act and law in completing the acquisition of the Project.
Section 5.08. Private Activity Bond Limitation. The City shall assure that the proceeds
of the Bonds are not so used as- to cause the Bonds to satisfy the private business tests of
section 141(b) of the Code or the private loan financing test of section 141(c) of the Code. .
SECTION 5.09. Federal Guarantee Prohibition. The City shall not take any action or
permit or suffer any action to be taken if the result of the same would be to cause any of the
Bonds to be "federally guaranteed"within the meaning of section 149(b) of the Code.
Section 5.10. Collection of Special Tax Revenues. The City shall comply with all
requirements of the Act so as to assure the timely collection of Special Tax Revenues, including
without limitation, the enforcement of delinquent Special Taxes.
On or within five (5) Business Days of each June 1, the Fiscal Agent shall provide a
written notice to the Finance Officer stating the amount then on deposit in the Bond Fund and
the Reserve Fund. The receipt of such notice by the Finance Officer shall in no way affect the
obligations of the Finance Officer under the following two paragraphs. Upon receipt of a copy
of such notice, the Finance Officer shall communicate with the Auditor or other appropriate
official of the County to ascertain the relevant parcels on which the Special Taxes are to be
levied,taking into account any parcel splits during the preceding and then current year.
The Finance Officer shall effect the levy of the Special Taxes each Fiscal Year, in
accordance with the Ordinance Levying Taxes by each August 1 that the Bonds are
Outstanding,but in any event such that the computation of the levy is complete before the final
date on which the Auditor will accept the transmission of. the Special Tax amounts for the
parcels within the District for inclusion on the next tax roll. Upon the completion of the
computation of the amounts of the levy, the Finance Officer shall prepare or cause to be
prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the
levy of the Special Taxes on the next secured tax roll.
The Finance Officer shall fix and levy the amount of Special Taxes within the District
required for the payment of principal of, premium, if any, and interest on any outstanding
bonds of the District becoming due and payable during the ensuing fiscal year, including any
necessary replenishment or expenditure of the Reserve Fund for the Bonds, an amount
estimated to be sufficient to pay the Administrative Expenses during such Fiscal Year, and for
the payment of Services. The Special Taxes so levied shall not exceed the authorized amounts
as provided in the proceedings pursuant to the Resolution of Formation.
The Special Taxes shall be payable and be collected in the same manner and at the same
time and in the same installment as the general taxes on real property are payable,and have the
same priority,become delinquent at the same times and in the same proportionate amounts and
bear the same proportionate penalties and interest after delinquency as do the general taxes on
real property.
Notwithstanding the foregoing, the Finance Officer may in his discretion cause the
collection of any Special Taxes by direct, first class mail billing to the then owner of each parcel
so owned in lieu of billing for such Special Taxes in the same manner as general taxes as
aforesaid. Any such Special Taxes so billed shall have the same priority and bear the same
proportionate penalties and interest after delinquency as do the ad valorem taxes on real
property.
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The Finance Officer is hereby authorized to employ consultants to assist in computing
the levy of the Special Taxes hereunder and any reconciliation of amounts levied to amounts
received.The fees and expenses of such consultants and the costs and expenses of the Finance
Officer (including a charge for City staff time) in conducting its duties hereunder shall be an
Administrative Expense hereunder.
Section 5.11. Further Assurances. The City will adopt, make, execute and deliver any
and all such further resolutions,instruments and assurances as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance of this Agreement, and for the
better assuring and confinning unto the Owners of the rights and benefits provided in this
Agreement.
Section 5.12. No Arbitrage. The City shall not take, or permit or suffer to be taken by the
Fiscal Agent or otherwise, any action with respect to the proceeds of the Bonds which, if such
action had been reasonably expected to have been taken, or had been deliberately and
intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be
"arbitrage bonds"within the meaning of section 148 of the Code.
SECTION 5.13. Maintenance of Tax-Exemption. The City shall take all actions
necessary to assure the exclusion of interest on the Bonds from the gross income of the owners
of the Bonds to the same extent as'such interest is permitted to be excluded from gross income
under the Code as in effect on the date of issuance of the Bonds.
SECTION 5.14. Annual State Reports. The following requirements shall apply to the
Bonds:
(a)Annual Reporting.Not later than October 30 of each calendar year,beginning with the
October 30 first succeeding the Closing date, and in each calendar year thereafter until the
October 30 following the final maturity of the Bonds, the Finance Officer shall cause the
following information to be supplied to CDIAC: (i) the principal amount of the Bonds
Outstanding; (ii) the balance in the Reserve Fund; (iii) that no capitalized interest was funded
for the Bonds; (iv)the number of parcels in the District which are delinquent in the payment of
Special Taxes, the amount of each delinquency, the length of time delinquent and when
foreclosure was commenced for each delinquent parcel;and (v) the assessed value of all parcels
in the District subject to the levy of the Special Taxes as shown in the most recent equalized
roll. The annual reporting shall be made using such form or forms as may .be prescribed by
CDIAC.
(b) Other Reporting. If at any time the Fiscal Agent fails to pay principal and,interest due
on any scheduled payment date for the. Bonds, or if funds are withdrawn from the Reserve
Fund to pay principal and.interest on the Bonds, the Fiscal Agent shall notify the Finance
Officer of such failure or withdrawal in writing.The Finance Officer shall notify CDIAC and the
Original.Purchasers of such failure or withdrawal within 10 days of such failure or withdrawal.
(c) Amendment. The reporting requirements of this Section 5.14 shall be amended from
time to time, without action by the City or the Fiscal Agent, to reflect any amendments to
Section 53359.5(b) or Section 53359.5(c) of the Act. Notwithstanding the foregoing, any such
amendment shall not, in itself, affect the City's obligations under the Continuing Disclosure
Certificate.
(d) No Liability. None of the City and its officers, agents and employees, the Finance
Officer or the Fiscal Agent shall be liable for any inadvertent error in reporting the information
required by this Section 5.14.
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Section 5.15. Covenant to Foreclose. Pursuant to Section 53356.1 of the Act, the City
hereby covenants with and for the benefit of the owners of the Bonds that it will order, and
cause to be commenced as hereinafter provided, and thereafter diligently prosecute to judgment
(unless such delinquency is theretofore brought current), an action in the superior court to
foreclose the lien of any Special Tax or installment thereof not paid when due as provided in
the following two paragraphs. The Finance Officer shall notify the City Attorney of any such
delinquency of which it is aware, and the.City Attorney shall commence, or cause to be
commenced,such proceedings.
On or about August 31st of each Fiscal Year, the Finance Officer shall compare the
amount of Special Taxes theretofore levied in the District to the amount of Special Tax
Revenues theretofore received by the City, and:
(a) Individual Delinquencies. If the Finance Officer determines that any single parcel
subject to the Special Tax in the District is delinquent in the payment of Special Taxes in the
aggregate amount of $5,000 or more, then the Finance Officer shall send or cause to be sent a
notice of delinquency (and a demand for immediate payment thereof) to the property owner
within 45 days of such determination, and (if the delinquency remains uncured) foreclosure
proceedings shall be commenced by the City within 90 days of such determination.
(b)Aggregate Delinquencies. If the Finance Officer determines that (i) the total amount of
delinquent Special Tax for the prior Fiscal Year for the entire District, (including the total of
delinquencies under subsection (a) above),exceeds 5%of the total Special Tax due and payable
for the prior Fiscal Year, or (ii) there are ten (10) or fewer owners of real property within the
District,determined by reference to the latest available secured property tax roll of the County,
the City shall notify or cause to be notified property owners who are then delinquent in the
payment of Special Taxes (and demand immediate payment of the delinquency)within 45 days
'of such determination, and shall commence foreclosure proceedings within 90 days of such
determination against each parcel of land in the District with a Special Tax delinquency.
The City Attorney is hereby authorized to employ counsel to conduct any such
foreclosure proceedings.The fees and expenses of any such counsel and costs and expenses of
the City Attorney(including a charge for City staff time) in conducting foreclosure proceedings
shall be an Administrative Expense hereunder.
Section 5.16. Continuing Disclosure to Owners. The City hereby.covenants and agrees
that it will comply with and carry out all of the provisions of the Continuing Disclosure
Certificate. Notwithstanding any other provision of this Agreement, failure of the City to
comply with the Continuing Disclosure Certificate shall not be considered a default hereunder;
however, any Participating Underwriter or any holder or beneficial owner of the Bonds may
take such actions as may be necessary and appropriate to compel performance by the City of
its obligations thereunder,including seeking mandate or specific performance by court order.
Section 5.17. No Additional Bonds. The City shall not issue any additional bonds or
incur any additional indebtedness (other than Administrative Expenses) secured by a pledge of
Special Taxes or any amounts in any funds or accounts established hereunder.
Section 5.18. Yield of the Bonds. In determining the yield of the Bonds to comply with
Section 5.13 and 6.02 hereof, the City will take into account redemption (including premium, if
any) in advance of maturity based on the reasonable expectations of the City, as of the Closing
Date, regarding prepayments of Special Taxes and use of prepayments for redemption of the
Bonds,without regard to whether or not prepayments are received or Bonds redeemed.
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Section 5.19. Reduction of Special Taxes. The City covenants and agrees to not consent
or conduct proceedings with respect to a reduction in the maximum Special Taxes that may be
levied in the District below an amount, for any Fiscal Year, equal to 110% of Maximum Annual
Debt Service. It is hereby acknowledged that Bondowners are purchasing the Bonds in reliance
on the foregoing covenant, and that said covenant is necessary to assure the full and timely
payment of the Bonds.
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ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS; LIABILITY OF THE CITY
Section 6.01. Deposit and Investment of Moneys in Funds. Moneys in any fund or
account created or established by this Agreement and held by the Fiscal Agent shall be invested
by the Fiscal Agent in Permitted Investments, as directed pursuant to written instructions of the
Finance Officer filed with the Fiscal Agent at least two (2) Business Day in advance of the
making of such investments. Upon receipt of such written instructions, the Fiscal Agent is
authorized to act thereon without further inquiry and shall be absolutely protected and shall
incur no liability in so acting in accordance with such instructions. In the absence of any such
written instructions, the Fiscal Agent shall invest any such moneys in Permitted Investments
described in clause (0 of the definition thereof. The Fiscal Agent shall be deemed to have
conclusively complied with the Fair Market Value requirement if it invests such moneys in
Permitted Investments described in clause (f) of the definition thereof in the absence of written
instructions from the City. Moneys in any fund or account created or established by this
Agreement and held by the Finance Officer shall be invested by the Finance Officer in Permitted
Investments,which by their terms mature prior to the date on which such moneys are required
to be paid out hereunder. Obligations purchased as an investment of moneys in any fund shall
be deemed to be part of such fund or account, subject, however, to the requirements of this
Agreement for transfer of interest earnings and profits resulting from investment of amounts in
funds and accounts.Whenever in this Agreement any moneys are required to be transferred by
the City to the Fiscal Agent,such transfer may be accomplished by transferring a like amount of
Permitted Investments.
The Fiscal Agent or the Finance Officer may act as principal or agent in the acquisition
or disposition of any investment. Neither the Fiscal Agent nor the Finance Officer shall incur
any liability for losses arising from any investments made pursuant to this Section 6.01.
Except as otherwise provided in the next sentence, all investments of amounts
deposited in any fund or account created by or pursuant to this Agreement, or otherwise
containing gross proceeds of the Bonds (within the meaning of section 148 of the Code), shall be
acquired, disposed of, and valued (as of the date that valuation is required by this Agreement
or the Code) at Fair Market Value. For purposes of any Fair Market Value determination
hereunder,the Fiscal Agent shall be entitled to conclusively rely on a Written Certificate of the
City and shall be fully protected in relying thereon. Investments in funds or accounts (or
portions thereof) that are subject to a yield restriction under applicable provisions of the Code
and (unless valuation is undertaken at least annually) investments in the Reserve Fund shall be
valued at their present value (within the meaning of section 148 of the Code).
Investments in any and all funds and accounts may be commingled in a separate fund or
funds for purposes of making, holding and. disposing of investments, notwithstanding
provisions herein for transfer to or holding in or to the credit of particular funds or accounts of
amounts received or held by the Fiscal Agent or the Finance Officer hereunder.
The Fiscal Agent or the Finance Officer, as applicable, shall sell or present for
redemption,any investment security whenever it shall be necessary to provide moneys to meet
any required payment,transfer,withdrawal or disbursement from the fund or account to which
such investment security is credited and neither the Fiscal Agent nor the Finance Officer shall be
liable or responsible for any loss resulting from the acquisition or disposition of such investment
security in accordance herewith.
The City acknowledges that to the extent regulations of the Comptroller of the Currency
or other applicable regulatory entity grant the City the right to receive brokerage confirmations
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of security transactions as they occur, the City specifically waives receipt of such confirmations
to the extent permitted by law. The Fiscal Agent will furnish the City periodic cash transaction
statements which include detail for all investment transactions made by the Fiscal Agent
hereunder.
Section 6.02. Rebate of Excess Investment Earnings to the United States. The City shall
take any and all actions necessary to assure compliance with section 148(f) of the Code,
relating to the rebate of excess investment earnings, if any, to the federal government, to the
extent that such section is applicable to the Bonds.
The City shall withdraw such amounts from the Administrative Expense Fund as
necessary to make any required rebate payments on the Bonds, and pay such amounts to the
federal government as required by the Code and the Regulations. In the event of any shortfall in
amounts available for such purpose in the Administrative Expense Fund to make such
payments, the Finance Officer shall make such payment from any amounts available in the
Reserve Fund pursuant to Section 4.03 or from any other lawfully available funds of the City.
Any fees or expenses incurred by the City under or pursuant to this Section 6.02 shall be
Administrative Expenses.
In order to provide for the administration of this Section 6.02, the Finance Officer may
provide for the employment of independent attorneys, accountants and consultants
compensated on such reasonable basis as the Finance Officer may deem appropriate and in
addition, and without limitation of the provisions of Sections 7.01 and 7.02 hereof, the Finance
Officer may rely conclusively upon and be fully protected from all liability in relying upon the
opinions, determinations, calculations and advice of such agents, attorneys and consultants
employed hereunder.
Section 6.03. Limited Obligation.The City's obligations hereunder are limited obligations
payable solely from and secured solely by the Special Tax Revenues and the amounts in the
Special Tax Fund,the Reserve Fund and the Bond Fund created hereunder.
Section 6.04. Liability of City. The City shall not incur any responsibility in respect of
the Bonds or this Agreement other than in connection with the duties or obligations explicitly
herein or in the Bonds assigned to or imposed upon it.The City shall not be liable in connection
with the performance of its duties hereunder, except for its own negligence or willful default.
The City shall not be bound to ascertain or inquire as to the performance or observance of any
of the terms, conditions, covenants or agreements of the Fiscal Agent herein or of any of the
documents executed by the Fiscal Agent in connection with the Bonds, or as to the existence of
a default or event of default thereunder.
In the absence of bad faith,the City,including the Finance Officer,may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the City and conforming to the requirements of this
Agreement.The City,including the Finance Officer,shall not be liable for any error of judgment
made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent
facts.
No provision of this Agreement shall require the City to expend or risk its own general
funds or otherwise incur any financial liability (other than with respect to the Special Tax
Revenues)in the performance of any of its obligations hereunder, or in the exercise of any of its
rights or powers,if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured to it.
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The City may rely and shall be protected in acting or refraining from acting upon any
notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or
document believed by it to be genuine and to have been signed or presented by the proper party
or proper parties. The City may consult with counsel, who may be the City Attorney, with
regard to legal questions, and the opinion of such counsel shall be full and complete
authorization and protection in respect of.any action taken or suffered by it hereunder in good
faith and in accordance therewith.
The City shall not be bound to recognize any person as the Owner of a Bond unless and
until such Bond is submitted for inspection, if required, and his title thereto satisfactorily
established, if disputed.
Whenever in the administration of its duties under this Agreement the City or the
Finance Officer shall deem it necessary or desirable that a matter be.proved or established prior
to taking or suffering any action hereunder,such matter(unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of willful misconduct on the part of the
City, be deemed to be conclusively proved and established by a certificate of the Fiscal Agent
and such certificate shall be full warrant to the City and the Finance Officer for any action
taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon
the faith thereof,but in its discretion the City or the Finance Officer may, in lieu thereof, accept
other evidence of such matter or may require such additional evidence as to it may seem
reasonable.
Section 6.05. Employment of Agents by City. In order to perform its duties and
obligations hereunder, the City may employ such persons or entities as it deems necessary or
advisable. The City shall not be liable for any of the acts or omissions of such persons or
entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully
protected in doing so, upon the opinions, calculations, determinations and directions of such
persons or entities.
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ARTICLE VII
THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent. U.S. Bank Trust National Association is
hereby appointed Fiscal Agent and paying agent for the Bonds. The Fiscal Agent undertakes to
perform such duties, and only such duties, as are specifically set forth in this Agreement, and
no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent.
Any company into which the Fiscal Agent may be merged or converted or with which it
may be consolidated or any company resulting from any merger, conversion or consolidation to
which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or
substantially all of its corporate trust business, provided such company shall be eligible under
the following paragraph of this Section 7.01 shall be the successor to such Fiscal Agent without
the execution or filing of any paper or any further act, anything herein to the contrary
notwithstanding.The Fiscal Agent shall give the Finance Officer and the Finance Officer written
notice of any such succession hereunder. .
The City may remove the Fiscal Agent initially appointed, and any successor thereto,
and may appoint a successor or successors thereto, but any such successor shall be a bank or
trust company having a combined capital (exclusive of borrowed capital) and surplus of at
least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or
state authority. If such bank or trust company publishes a report of condition at least annually,
pursuant to law or to the requirements of any supervising or examining authority above referred
to, then for the purposes of this Section 7.01, combined. capital and surplus of such bank or
trust company shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
The Fiscal Agent may at any time resign by giving written notice to the City by certified
mail return receipt requested, and by giving to the Owners notice by mail of such resignation.
Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal
Agent by an instrument in writing.Any resignation or removal of the Fiscal Agent shall become
effective only upon acceptance of appointment by the successor Fiscal Agent.
If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing
provisions of this Section 7.01 within forty-five (45) days after the Fiscal Agent shall have given
to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred
by reason of its inability to act, the Fiscal Agent, at the expense of the City, or any Owner may
apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court
may thereupon, after such notice, if any, as such court may deem proper, appoint a successor
Fiscal Agent.
If,by reason of the judgment of any court,the Fiscal Agent is rendered unable to perform
its duties hereunder, all such duties and all of the rights and powers of the Fiscal Agent
hereunder shall be assumed by and vest in.the Finance Officer of the City in trust for the benefit
of the Owners.The City covenants for the direct benefit of the Owners that its Finance Officer
in such case shall be vested with all of the rights and powers of the Fiscal Agent hereunder, and
shall assume all of the responsibilities and perform all of the duties of the Fiscal Agent
hereunder,in trust for the benefit of the Owners of the Bonds.
Section 7.02. Liability of Fiscal Agent. The recitals of facts, covenants and agreements
herein and in the Bonds contained shall be taken as statements, covenants and agreements of
the City, and the Fiscal Agent assumes no responsibility for the correctness of the same, nor
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makes any representations as to the validity or sufficiency of this Agreement or of the Bonds,
nor shall the Fiscal Agent incur any responsibility in respect thereof, other than in connection
with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Fiscal
Agent shall not be liable in connection with the performance of its duties hereunder, except for
its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability
for any information, statement or recital in any offering memorandum or other disclosure
material prepared or distributed with respect to the'issuance of the Bonds.
The,/Fiscal Agent may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates, documents, written instructions
or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement;
but in the case of any such certificates, documents, written instructions or opinions by which
any provision hereof are specifically required to be furnished to the Fiscal Agent, the Fiscal
Agent shall be under a duty to examine the same to determine whether or not they conform to
the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal
Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or
not proceeding, in accordance with the terms of this Agreement, upon any resolution, order,
notice,request,consent or waiver, certificate, statement, affidavit, or other paper or document
which it shall reasonably believe to be genuine and to have been adopted or signed by the
proper person or to have been prepared and furnished pursuant to any provision of this
Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or
inquiry as to any statements contained or matters referred to in any such instrument.
The Fiscal Agent shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements of the City or the District
herein or of any of the documents executed by the City or the District in connection with the
Bonds,.or_as to the existence of a default or event of default thereunder.
The Fiscal Agent shall not be liable for any error of judgment made in good faith by a
responsible officer of the Fiscal Agent unless it shall be proved that the Fiscal Agent was
negligent in ascertaining the pertinent facts.
No provision of this Agreement shall require the Fiscal Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers.
The Fiscal Agent shall be under no obligation to exercise any of the rights or powers
vested in it by this Agreement at the request or direction of any of the Owners pursuant to this
Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or
indemnity satisfactory to the Fiscal Agent against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
The Fiscal Agent may become the owner of the Bonds with the same rights it would have
if it were not the Fiscal Agent.
All indemnifications and releases from liability granted to the Fiscal Agent hereunder
shall extend to the directors,officers and employees of the Fiscal Agent.
Section 7.03. Information. The Fiscal Agent shall provide to the City such information
relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as
the City shall reasonably request, including but not limited to monthly statements reporting
funds held and transactions by the Fiscal Agent,including the value of any investments held by
the Fiscal Agent.
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Section 7.04. Notice to Fiscal Agent, The Fiscal Agent may rely and shall be protected in
acting or refraining from acting upon any notice, resolution, request, consent, order, certificate,
.written instructions, report, warrant, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or proper parties. The Fiscal
Agent may consult with counsel,who may be counsel to the City,with regard to legal questions,
and the opinion of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in accordance therewith.
The Fiscal Agent shall not be bound to recognize any person as the Owner of a Bond
unless and until such Bond is submitted for inspection, if required, and his title thereto
satisfactorily established, if disputed.
Whenever in the administration of its duties under this Agreement the Fiscal Agent shall
deem it necessary or desirable that a matter be proved or established prior to taking or suffering
any action hereunder,such matter(unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent,be deemed
to be conclusively proved and established by an Officer's Certificate of the City, and such
certificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the
provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its
discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may
require such additional evidence as to it may seem reasonable.
Section 7.05. Compensation, Indemnification. The City shall pay to the Fiscal Agent
from time to time reasonable compensation for all services rendered as Fiscal Agent under this
Agreement, and also all reasonable expenses, charges, counsel fees and other disbursements,
including those of its attorneys (including the allocated costs of in-house attorneys), agents and
employees, incurred in and about the performance of their powers and duties under this
Agreement,but the Fiscal Agent shall not have a lien therefor on any funds at any time held by
it under this Agreement. The City further agrees, to the extent permitted by applicable law, to
indemnify and save the Fiscal Agent, its officers, employees, directors and agents harmless
against any costs, expenses, claims or liabilities of any kind whatsoever, including those of its
attorneys which it may incur in the exercise and performance of its powers and duties
hereunder which are not due to its negligence or willful misconduct.
The obligations of the City under this Section 7.05 shall survive resignation or removal of
the Fiscal Agent under this Agreement, but any monetary obligation of the City arising under
this Section 7.05 shall be limited solely to amounts on deposit in the Administrative Expense
Fund.
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ARTICLE VIII
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted. This Agreement and the rights and obligations of
the City and of the Owners of the Bonds may be modified or amended at any .time by a
Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the
written consent without a meeting, of the Owners of at least sixty percent (60%) in aggregate
principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided
in Section 8.04. No such modification or amendment shall (i) extend the maturity of any Bond
or reduce the interest rate thereon, or otherwise alter or impair the obligation of the City to pay
the principal of, and the interest and any premium on, any Bond, without the express consent
of the Owner of such Bond, or (ii) permit the creation by the City of any pledge or lien upon the
Special Taxes superior to or on a parity with the pledge and lien created for the benefit of the
Bonds (except as otherwise permitted by the Act, the laws of the State or this Agreement), or
(iii)reduce the percentage of Bonds required for the amendment hereof.
This Agreement and the rights and obligations of the City and of the Owners may also
be modified or amended at any time by a Supplemental Agreement, without the consent of any
Owners, only to the extent permitted by law and only for any one or more of the following
purposes
(a) to add to the covenants and agreements of the City in this Agreement contained,
other covenants and agreements thereafter to be observed, or to limit or surrender any right or
power herein reserved to or conferred upon the City;
(b) to make modifications not adversely affecting any Outstanding Bonds of the City in
any material respect;
(c) to make such provisions for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective provision contained in this Agreement, or in regard to
questions arising under this Agreement,as the City and the Fiscal Agent may deem necessary or
desirable and not inconsistent with this Agreement, and which shall not adversely affect the
rights of the Owners of the Bonds;or
(d) to make such additions, deletions or modifications as may be necessary or desirable
to assure exclusion from gross income for federal income tax purposes of interest on the Bonds.
Any amendment of this Agreement may not modify any of the rights or obligations of
the Fiscal Agent without its written consent. The Fiscal Agent shall be furnished an opinion of
counsel that any such Supplemental Agreement entered into by the City and the Fiscal Agent
complies with the provisions of this Section 8.01 and the Fiscal Agent may conclusively rely on
such opinion and shall be absolutely protected in so relying.
Section 8.02. Owners'Meetings.The City may at any time call a meeting of the Owners.
In such event the City is authorized to fix the time and place of said meeting and to provide for
the giving of notice thereof and to fix and adopt rules and regulations for the conduct of said
meeting.
Section 8.03.Procedure for Amendment with Written Consent of Owners. The City and
the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of
the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such
amendment is permitted by Section 8.01, to take effect when and as provided in this Section
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8.03. A copy of such Supplemental Agreement, together with a request to Owners for their
consent thereto, shall be mailed by first class mail, by the Fiscal Agent, at the expense of the
City), to each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental
Agreement and request shall not affect the validity of the Supplemental Agreement when
assented to as in this Section 8.03 provided.
Such Supplemental Agreement shall not become effective unless there shall be filed with
the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate
principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided
in Section 8.04) and a notice shall have been mailed as hereinafter in this Section 8.03 provided.
Each such consent shall be effective only if accompanied by proof of ownership of the Bonds
for which such consent is given, which proof shall be such as is permitted .by Section 9.04
hereof.Any such consent shall be binding upon the Owner of the Bonds giving such consent and
on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless
such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by
filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this
Section 8.03 provided for has been mailed.
After the Owners of the required percentage of Bonds shall have filed their consents to
the Supplemental Agreement, the City shall mail a notice to the Owners in the manner
hereinbefore provided in this Section 8.03 for the mailing of the Supplemental Agreement,
stating in substance that the Supplemental Agreement has been consented to by the Owners of
the required percentage of Bonds and will be effective as provided in this Section 8.03 (but
failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement
or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A
record,consisting of the papers required by this Section 8.03 to be filed with the Fiscal Agent,
shall be proof of the matters therein stated until the contrary is proved. The Supplemental.
Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of
such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as
otherwise hereinabove specifically provided in this Article) upon the City and the Owners of all
Bonds at the expiration of sixty (60) days after such filing, except in the event of a final decree
of a court of competent jurisdiction setting aside such consent in a legal action or equitable
proceeding for such purpose commenced within such sixty-day period.
Section 8.04. Disqualified Bonds. Bonds owned or held for the account of the City,
excepting any pension or retirement fund, shall not be deemed Outstanding for the.purpose of
any vote,consent or other action or any calculation of Outstanding Bonds provided for in this
Article VIII, and shall not be entitled to vote upon,consent to,or take any other action provided
for in this Article VIII.
Section 8.05.. Effect of Supplemental Agreement. From and after the time any
Supplemental Agreement becomes effective pursuant to this Article VIII,this Agreement shall be
deemed to be modified and amended in accordance therewith, the respective rights, duties and
obligations under this Agreement of the City, the Fiscal Agent and all Owners of Bonds
Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions of any such
Supplemental Agreement shall be deemed to be part of the terms and conditions of this
Agreement for any and all purposes.
Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments. The
City may determine that Bonds issued and delivered after the effective date of any action taken
as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form
approved by the City, as to such action. In that case, upon demand of the Owner of any Bond
Outstanding at such effective date and upon presentation of his Bond for that purpose at the
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Principal Office of the Fiscal Agent or at such other office as the City may select and designate
for that purpose, a suitable notation shall be made on such Bond. The City may determine that
new Bonds, so modified as in the opinion of the City is necessary to conform to such Owners'
action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of
any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the
Fiscal Agent without cost to any Owner, for Bonds then Outstanding, upon surrender of such
Bonds.
Section 8.07. Amendatory Endorsement of Bonds. The provisions of this Article VM
shall not prevent any Owner from accepting any amendment as to the particular Bonds held by
him,provided that due notation thereof is made on such Bonds.
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ARTICLE IX
MISCELLANEOUS
Section 9.01; Benefits of Agreement Limited to Parties. Nothing in this. Agreement,
expressed or implied,is intended to give to any person other than the City, the Fiscal Agent and
the Owners, any right, remedy, claim under or by reason of this Agreement. Any covenants,
stipulations,promises or agreements.in this Agreement contained by and on behalf of the City
shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent.
Section 9.02. Successor is Deemed Included in All References to Predecessor. Whenever
in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named
or referred to, such reference shall be deemed to include the successors or assigns thereof, and
all the covenants and agreements in this Agreement contained by or on behalf of the City or the
Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof
whether so expressed or not.
Section 9.03. Discharge of Agreement. If the City shall pay and discharge the entire
indebtedness on all Bonds Outstanding in any one or more of the following ways:
(a)by well and truly paying or causing to be paid the principal of, and interest and any
premium on, all Bonds Outstanding,as and when the same become due and payable;
(b) by depositing with the Fiscal Agent, in trust, at or before maturity, money which,
together with the amounts then on deposit in the funds and accounts provided for in Sections
4.02 and 4.03 hereof is fully sufficient to pay all Bonds Outstanding, including all principal,
interest and redemption premiums;or
(c) by irrevocably depositing with the Fiscal Agent, in trust, cash and/or noncallable
Federal Securities in such amount as the City shall determine, as confirmed by Bond Counsel or
an independent certified public accountant,will,together with the interest to accrue thereon and
moneys then on deposit in the fund and accounts provided for in Sections 4.02 and 4.03 (to the
extent invested in Federal Securities), be fully sufficient to pay and discharge the indebtedness
on all Bonds (including all principal, interest and redemption premiums) at or before their
respective maturity dates;
and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption
shall have been given as in this Agreement provided or provision satisfactory to the Fiscal
Agent shall have been made for the giving of such notice, then, at the election of the City, and
notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the
Special Taxes and other.funds provided for in this Agreement and all other obligations-of the
City under this Agreement with respect to all Bonds Outstanding shall cease and.terminate,
except only the obligations of the City under Section 5.13 and of the City to pay or cause to be
paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, and the
obligation of the City to pay all amounts owing to the Fiscal Agent pursuant to Section 7.05
hereof; and thereafter Special Taxes shall not be payable to the Fiscal Agent. Notice of such
election shall be filed with the Fiscal Agent. The satisfaction and discharge of this Fiscal Agent
Agreement shall be without prejudice to the rights of the Fiscal Agent to charge and be
reimbursed by the City for the expenses which it shall thereafter incur in connection therewith.
Any funds thereafter held by the Fiscal Agent upon payment of all fees and expenses of
the Fiscal Agent which remain unclaimed for two (2) years after the principal of all Bonds has
become due and payable,shall be paid over to the City as provided in Section 9.08 hereof and
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the Fiscal Agent shall thereupon be released and discharged with respect thereto and the
Owners of such Bonds shall look only to the City for payment of such Bonds.
Section 9.04. Execution of Documents and Proof of Ownership by Owners. Any request,
declaration or other instrument which this Agreement may require or permit to be executed by
Owners may be in one or more instruments of similar tenor,and shall be executed by Owners in
person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by
any Owner or his attorney of such request, declaration or other instrument, or of such writing
appointing such attorney,may be proved by the certificate of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded in the state in which he purports
to act, that the person signing such request, declaration or other instrument or writing
acknowledged to him the execution thereof, or by an affidavit of a witness of such execution,
duly sworn to before such notary public or other officer.
Except as otherwise herein expressly provided, the ownership of registered Bonds and
the amount,maturity,number and date of holding the same shall be proved by the registration
books maintained by the Fiscal Agent pursuant to Section 2.08 hereof.
Any request, declaration or other instrument or writing of the Owner of any Bond shall
bind all future Owners of such Bond in respect of anything done or suffered to be done by the
City or the Fiscal Agent in good faith and in accordance therewith.
Section 9.05.Waiver of Personal Liability. No Councilmember, officer, agent or employee
of the City shall be individually or personally liable for the payment of the principal of or
interest or any premium on the Bonds; but nothing herein contained shall relieve any such
member,officer,agent or employee from the performance of any official duty provided by law.
Section 9.06. Notices to and Demands on City and Fiscal Agent. Any notice or demand
which by any provision of this Agreement is required or permitted to be given or served by the
Fiscal Agent to or on the City may be given or served by being deposited postage prepaid in a
post office letter box addressed (until another address is filed by the City with the Fiscal
Agent) as follows:
City of Huntington Beach,California
2000 Main Street
Huntington Beach,CA 92648
Attention:Finance Director
Any notice or demand which by any provision of this Agreement is required or
permitted to be given or served by the City to or on the Fiscal Agent may be given or served by
being deposited postage prepaid in a post office letter box addressed (until another address is
filed by the Fiscal Agent with the City) as follows:
U.S.Bank Trust National Association
550 South Hope Street,Suite 500
Los Angeles,CA 90071
Attention:Corporate Trust Services
Ref: City of Huntington Beach CFD 1990-1 2001 Special Tax Refunding
Bonds
Section 9.07. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of
this Agreement shall for any reason be held by a court of competent jurisdiction to be illegal or
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unenforceable, such holding shall not affect the validity of the remaining portions of this
Agreement.The City hereby declares that it would have adopted this Agreement and each and
every other Section,paragraph, sentence,clause or phrase hereof and authorized the issuance of
the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs,
sentences,clauses,or phrases of this Agreement may be held illegal,invalid or unenforceable.
Section 9.08. Unclaimed Moneys. Anything contained herein . to the contrary
notwithstanding,any moneys held by the Fiscal Agent in trust for the payment and discharge of
the principal of, and the interest and any premium on, the Bonds which remains unclaimed for
two (2) years after the date when the payment of such principal, interest and premium have
become payable,if such moneys were held by the Fiscal Agent at such date, shall be repaid by
the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent
shall thereupon be released and discharged with respect thereto and the Owners of such Bonds
shall look only to the City for the payment of the principal of, and interest and any premium
on,such Bonds. Any right of any Owner to look to the City for such payment shall survive only
so long as required under applicable law.
Section 9.09. Applicable Law. This Agreement shall be governed by and enforced in
accordance with the laws of the State applicable to contracts made and performed in the State.
Section 9.10. Conflict with Act. In the event of a conflict between any provision of this
Agreement with any provision of the Act as in effect on the Closing Date, the provision of the
Act shall prevail over the conflicting provision of this Agreement.
Section 9.11. Conclusive Evidence of Reggladjy. Bonds issued pursuant to this
Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act
relative to their issuance and the levy of the Special Taxes.
Section 9.12. Payment on Business Day,. In any case where the date of the maturity of
interest or of principal (and premium,if any) of the Bonds, or the date fixed for redemption of
any Bonds, or the date any action is to be taken pursuant to this Agreement, is other than a
Business Day,the payment of interest or principal (and premium,if any) or the action need not
be made on such date but may be made on the next succeeding day which is a Business Day
with the same force and effect as if made on the date required and no interest shall accrue for
the period from and after such date.
Section 9.13. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
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EXHIBIT A
FORM OF BOND
No. $
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
2001 SPECIAL TAX REFUNDING BOND
INTEREST RATE MATURITY DATE BOND DATE CUSIP#
October 1, November 14, 2001
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The City of Huntington Beach, .California (the "City") for and on behalf of the City's
Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the "District"), for value
received, hereby promises to pay solely from the Special Tax (as hereinafter defined) to be
collected in the District or amounts in certain funds and accounts held under the Agreement (as
hereinafter defined),to the registered owner named above,or registered assigns, on the maturity
date set forth above, unless redeemed prior thereto as hereinafter provided, the principal
amount set forth above, and to pay interest on such principal amount from the Bond Date set
forth above, or from the most recent interest payment date to which.interest has been paid or
duly provided for, semiannually on April 1 and October 1, commencing April 1, 2002, at the
interest rate set forth above, until the principal amount hereof is paid or made available for
payment. The principal of this Bond is payable to the registered owner hereof in lawful money
of the United States of America upon presentation and surrender of this Bond at the Principal
Office (as defined in the Agreement referred to below)of U.S. Bank Trust National Association
(the "Fiscal Agent"). Interest on this Bond shall be paid by check of the Fiscal Agent mailed on
each interest payment date to the registered owner hereof as of the close of business on the 15th
day of the month preceding the month in which the interest payment date occurs (the "Record
Date") at such registered owner's address as it appears on the registration books maintained by
the Fiscal Agent,or (i) if the Bonds are in book-entry-only form, or (ii) otherwise upon written
request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least
$1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available
funds to the depository for the Bonds or to an account in the United States designated by such
registered owner in such written request,respectively.
Interest on this Bond shall be payable from the interest payment date next preceding the
date of authentication hereof, unless (i) it is authorized on an interest payment date, in which
event it shall bear interest for such interest payment date, or (ii) such date of authentication is
after a.Record Date but on or prior to an interest payment date, in which event interest will be
payable from such interest payment date, or(iii)such date of authentication is prior to the first
Record Date, in which event interest will be payable from the Bond Date set forth above;
Exhibit A
Page 1
provided however, that if at the time of authentication of this Bond, interest is in default
hereon, this Bond shall bear interest from the interest payment date to which interest has
previously been paid or made available for payment hereon.
The Bonds are not general obligations of the City, but are limited obligations payable
solely from the revenues and funds pledged therefor under the Agreement. Neither the faith and
credit nor the taxing power of the City (except to the limited extent set forth in the Agreement)
or the State of California or any political subdivision thereof is pledged to the payment of the
Bonds.
This Bond is one of a duly authorized issue of bonds in the aggregate principal amount
of $2,155,000 approved by resolution of the City Council of the City on October 15, 2001 (the
"Resolution"), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended,
Sections 53311, et seq., of the California Government Code (the "Mello-Roos Act") for the
purpose of refunding outstanding bonds of the City issued for the District, and is one of the
series of bonds designated "City of Huntington Beach Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds" (the `Bonds"). The issuance of the Bonds and the terms
and conditions thereof are provided for by a Fiscal Agent Agreement, dated as of November 1,
2001,between the City and the Fiscal Agent (the "Agreement") and this reference.incorporates
the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms
and conditions. The Agreement is authorized under, this Bond is issued under and both are to
be construed in accordance with, the laws of the State of California.
Pursuant to the Mello-Roos Act,the Agreement and the Resolution, the principal of and
interest on this Bond are payable solely from the annual special tax authorized under the Mello-
Roos Act to be collected within the District (the :'Special Tax") and certain funds held under
the,Agreement.
Any tax for the payment hereof shall be limited to the Special Tax, except to the extent
that provision for payment has been made by the City,as may be permitted by law. The Bonds
do not constitute obligations of the City for which the City is obligated to levy or pledge, or has
levied or pledged,general or special taxation other than described hereinabove.
The Bonds may be redeemed prior to their stated maturities, in whole or in part, on
October 1, 2011, or on any date thereafter, at a redemption price equal to the principal amount
thereof,together with accrued interest to the date of redemption,without premium.
The Bonds maturing on October 1, 2007, are subject to mandatory sinking payment
redemption in part on the October 1, 2002, and on each October 1 thereafter to and including
October 1, 2007, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption, without premium,
from sinking payments as follows:
Redemption Date Redemption Date
October 1 Amount (October 1) Amount
2002 $85,000 2005 $85,000
2003 75,000 2006 85,000
2004 80,000 2007(maturity) 90,000
The Bonds maturing on October 1, 2012, are subject to mandatory sinking payment
redemption in part on the October 1; 2008, and on each October 1 thereafter to and including
October 1, 2012, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption, without premium,
from sinking payments as follows:
Exhibit A
Page 2
Redemption Date Redemption Date
October 1 Amount (October 1) Amount
2008 $ 95,000 2011 $110,000
2009 95,000 2012(maturity) 110,000
2010 100,000
The Bonds maturing on October 1, 2020, are subject to mandatory sinking payment
redemption in part on the October 1, 2013, and on each October 1 thereafter to and including
October 1, 2020, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption, without premium,
from sinking payments as follows:
Redemption Date Redemption Date
,(October 1) Amount (October 1) Amount
2013 $120,000. 2017 $145,000
2014 125,000 2018 155,000
2015 130,000 2019 160,000
2016 140,000 2020(maturity) 170,000
In the event of a redemption of less than all of the Bonds, the Bonds shall be redeemed
by lot within a maturity,and among maturities in the manner specified in the Agreement.
Notice of redemption with respect to the Bonds to be redeemed shall be given to the
registered owners thereof, in the manner, to the extent and subject to the provisions of the
Agreement.
This Bond shall be registered in the name of the owner hereof, as-to both principal and
interest. Each registration and transfer of registration of this Bond shall be entered by the Fiscal
Agent in books kept by it for this purpose and authenticated by its manual signature upon the
certificate of authentication endorsed hereon.
No transfer or exchange hereof shall be valid for any purpose unless made by the
registered owner,by execution of the form of assignment endorsed hereon, and authenticated as
herein provided,and the principal hereof,interest hereon and any redemption premium shall be
payable only to the registered owner or to such owner's order.The Fiscal Agent shall require the
registered owner requesting transfer or exchange to pay any tax or other governmental charge
required to be paid with respect to such transfer or exchange. No transfer or exchange hereof
shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for
selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has been
selected for redemption.
The Agreement and the rights and obligations of the City thereunder may be modified or
amended as set forth therein. The principal of the Bonds is not subject to acceleration upon a
default under the Agreement or any other document.
This Bond shall not become valid or obligatory for any purpose until the certificate of
authentication and registration hereon endorsed shall have been dated and manually signed by
the Fiscal Agent.
It is hereby certified, recited and declared by the City that all acts,conditions and things
required by law to exist, happen and be performed precedent to and in the issuance of this
Bond have existed,happened and been performed in due time,form and manner as required by
Exhibit A
Page 3
law, and that the amount of this Bond, together with all other indebtedness of the City, does
not exceed any debt limit prescribed by the laws or Constitution of the State of California.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company to the Fiscal Agent for registration of transfer, exchange or payment, and any Bond
issued is registered in the name of Cede &Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made.to Cede & Co.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
IN WITNESS WHEREOF, City of Huntington Beach, California has caused this Bond to
be dated the Bond Date set forth above, to be signed by the facsimile signature of its Mayor and
countersigned by the facsimile signature of the City Clerk.
City Clerk Mayor
[FORM OF FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the Resolution and the Agreement which has been
authenticated on
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Fiscal Agent
By:
Authorized Officer
Exhibit A
Page 4
FORM OF ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name,Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es)hereby irrevocably constitute and appoint
attorney,
to transfer.the same on the registration books of the Fiscal Agent, with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an NOTICE: The signature on this assignment must
eligible guarantor. correspond with the name(s) as written on
the face of the within Bond in every
particular without alteration or
enlargement or any change whatsoever.
Exhibit A
Page 5
E)MBIT B
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
2001 SPECIAL TAX REFUNDING BONDS
OFFICER'S CERTIFICATE REQUESTING DISBURSEMENT
FROM ADMINISTRATIVE EXPENSE FUND
CERTIFICATE NO.
The undersigned hereby states and certifies:
(i) that I am the duly appointed, qualified and acting Finance Officer of the City of
Huntington Beach, California, a municipal corporation duly organized and existing under the
laws of the State of California (the "City") and as such, am familiar with the facts herein
certified and am authorized to certify the same;
(ii) that I am an "Authorized Officer", as such term is defined in that certain Fiscal
Agent Agreement, dated as of November 1, 2001 (the "Fiscal Agent Agreement"), by and
between the City and U.S. Bank Trust National Association, as fiscal agent (the "Fiscal
Agent");
(iii) that pursuant to Section 3.04(b) of the Fiscal Agent Agreement, the undersigned
hereby requests and authorizes the City Finance Officer to disburse from the Administrative
Expense Fund established under the Fiscal Agent Agreement to each payee designated on
Schedule A attached hereto and by this reference incorporated herein, the amount set forth
opposite such payee, for payment or reimbursement of previous payment of Administrative
Expenses (as that term is defined in the Fiscal Agent Agreement) as described on attached
Schedule A;and
(iv) that the disbursements described on the attached Schedule A constitute
Administrative Expenses,and are properly chargeable to the Administrative Expense Fund.
Dated: CITY OF HUNTINGTON BEACH,
CALIFORNIA
By:
Finance Officer
Exhibit B
Page 1
SCHEDULE A
Payee Name and Address Purpose of Obligation Amount
Exhibit B
Page 2
EXHIBIT C
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
2001 SPECIAL TAX REFUNDING BONDS
OFFICER'S CERTIFICATE REQUESTING DISBURSEMENT
FROM COSTS OF ISSUANCE FUND
CERTIFICATE NO.
The undersigned hereby states and certifies:
(i) that I am the duly appointed, qualified and acting Finance Officer of the City of
Huntington Beach, California, a municipal corporation duly organized and existing under the
laws of the State of California (the "City") and as such, am familiar with the facts herein
certified and am authorized to certify the same;
(ii) that I am an "Authorized Officer", as such term is defined in that certain Fiscal
Agent Agreement, dated as of November 1, 2001 (the "Fiscal Agent Agreement"), by and
between the City and U.S. Bank Trust National Association, as fiscal agent (the "Fiscal
Agent");
(iii) that pursuant to Section 3.05(b) of the Fiscal Agent Agreement, the undersigned
hereby requests and authorizes the Fiscal Agent to disburse from the Costs of Issuance Fund
established under the Fiscal Agent Agreement to each payee designated on Schedule A attached
hereto and by this reference incorporated herein, the amount set forth opposite such payee, for
payment or reimbursement of previous payment of Costs of Issuance (as that term is defined in
the Fiscal Agent Agreement) as described on attached Schedule A; and
(iv) that the disbursements described on the attached Schedule A constitute Costs of
Issuance,and are properly chargeable to the Costs of Issuance Fund.
Dated: CITY OF HUNTINGTON BEACH,
CALIFORNIA
By:
Finance Officer
Exhibit C
Page 1
SCHEDULE A
Payee Name and Address Purpose of Obligation Amount
Exhibit C
Page 2
CERTIFICATE REGARDING
USE OF PROCEEDS
Clay Martin,Director of Administrative Services
PLEASE SIGN 6 TIMES
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assure that all material facts, estimates and circumstances relating to the above statements were
made available to the undersigned and reviewed by the undersigned;
(ix) that to the best knowledge of the undersigned the above statements are reasonable
and there are no other facts, estimates or circumstances, other than those set forth herein, that
would materially affect the statements made herein; and
(x) that the undersigned is aware that Quint&Thimmig LLP is rendering an opinion
on the date hereof substantially to the effect that the interest on the Bonds is excluded from
gross income for federal income tax purposes and in rendering such opinion is relying upon the
statements made herein and in Exhibit A hereto attached.
IN WITNESS WHEREOF, I have hereunto set my hand this 14' day of November, 2001.
CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA
By
ay Martin,
Directo of Administrative Services
-2-
+ Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE REGARDING USE OF PROCEEDS
The undersigned hereby states and certifies:
(i) that he is the duly appointed, qualified and acting Director of Administrative
Services of the City of Huntington Beach, a chartered city and municipal corporation duly
organized and existing under the Constitution and laws of the State of California (the "City"),
and as such, is familiar with the facts herein certified and is authorized to certify the same on
behalf of the City;
(ii) that,pursuant to the Fiscal Agent Agreement, dated as of November 1, 2001 (the
"Fiscal Agent Agreement"), by and between the City and U.S. Bank Trust National
Association, as fiscal agent (the "Fiscal Agent"), the City is issuing on the date hereof bonds for
and on behalf of the City of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) designated "City of Huntington Beach Community Facilities District
No. 1990-1 2001 Special Tax Refunding Bonds," in the aggregate principal amount of
$2,155,000 and dated the date hereof (the 'Bonds");
(iii) that, of the proceeds of the Bonds received by the Fiscal Agent on the date
hereof,the Fiscal Agent will,pursuant to the Fiscal Agent Agreement, transfer $1,881,470.00 to
U.S. Bank Trust National Association, as escrow bank;to be used to refund, together with other
monies, on an advanced basis the City of Huntington Beach, California, Community Facilities
District No. 1990-1 (Goldenwest%Ellis Area) 1990 Special Tax Bonds (the "Prior Bonds");
(iv) that the proceeds of the Prior Bonds were used to finance certain land and
improvements (the "Project"), as more particularly described in Part I of Exhibit A hereto
attached and by this reference herein incorporated;
(v) .that Part II of Exhibit A hereto attached describes (a) each use made of the Project
by any person in a trade or business (excluding use by the City and other non-federal
governmental units and use as a member of the public generally), and (b) payments (if any)
directly or indirectly in respect of such use which are to be made after the date hereof;
(vi) that no portion of the proceeds of the Prior Bonds were used directly or indirectly
to make or finance a loan to any person (other than a State or local government unit) or to
acquire property which was or will be sold to any person on an installment sale basis except as
referenced in Part II of Exhibit A;
(vii) that the City expects to use the Project for governmental purposes of the City
during the entire term of the Bonds;
(viii) that the above statements are made on the basis of the facts, estimates and
circumstances in existence on the date hereof and the undersigned has exercised due diligence to
12007.01
v
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EXHIBIT A
DESCRIPTION OF PROJECT
I. Describe Project,including all components,in detail:
Improvements to ' Ellis Avenue in the vicinity of the District, including road
improvements; curb,glitter, sidewalk, storm drain and signal improvements, stripping
and related improvements.
Improvements to Goldenwest Avenge in the vicinity of the District, including road
improvements, curb, glitter, sidewalk, storm drain and signal improvements, striping
and related improvements.
Improvements to Qiiarterhorse Lane in the vicinity of the District, including road
improvements, curb, gutter, sidewalk, storm drain and signal improvements, striping
and related improvements.
Improvements to Saddleback Lane in the vicinity of the District, including road
improvements, curb, gutter, sidewalk, storm drain and signal improvements, striping
and related improvements.
Improvements to Edwards Street in the vicinity of the District, including road
improvements, ctirb, gutter, sidewalk, storm drain and signal improvements, striping
and related improvements.
Water and sewer system improvements along Ellis Avenue, Quarterhorse Lane and
Saddleback Lane in the vicinity of the District, including related improvements.
Undergrozmding of utilities along one or more of the foregoing streets in the vicinity of
the District, included any related work.
Fire station improvements, including construction and related costs.
Acquisition of emergency vehicle traffic interruption devices.
If. Description of Use of Project
A. Use by any person other than governmental units or members of public generally.
None expected.
B. Payments to be made after date hereof in respect of above use.
None expected.
l
Exhibit A-1
J,
WRITTEN ORDER OF THE CITY
TO THE FISCAL AGENT
Clay Martin,Director of Administrative Services
PLEASE SIGN 6 TIMES
y Quint&ThimmiB LLP U/ 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
WRITTEN ORDER OF THE CITY TO THE FISCAL AGENT
The undersigned hereby states and certifies:
(i) that he is the duly appointed, qualified and acting Director of Administrative
Services of the City of Huntington Beach, a chartered city and municipal corporation duly
organized and existing under the Constitution and laws of the State of California (the "City"),
and as such, is familiar with the facts herein certified and is authorized to certify the same on
behalf of the City;
(ii) that he is an "Authorized Officer" of the City, as such term is defined in that
certain Fiscal Agent Agreement, dated as of November 1, 2001 (the "Fiscal Agent Agreement"),
by and between the City and U.S. Bank Trust National Association, as fiscal agent (the "Fiscal
Agent"); and
(iii) that the Fiscal Agent is hereby requested and directed to authenticate the bonds
substantially in the form attached as Exhibit A to the Fiscal Agent Agreement, designated "City
of Huntington Beach Community Facilities District No. 1990-1 2001 Special Tax Refunding
Bonds,"issued in the aggregate principal amount of $2,155,000 and dated the date hereof (the
"Bonds"), and to deliver the Bonds to O'Connor SWS Securities, as the original purchaser
thereof (the "Underwriter"), upon receipt by the Fiscal Agent of the purchase price therefor
pursuant to the terms of that certain Bond Purchase Agreement, October 29, 2001, by and
between the City and the Underwriter as follows:
$2,155,000.00 Principal Amount of Bonds
(23,705.00) Less Underwriter's Discount
$2,131,295.00 TOTAL PURCHASE PRICE
Dated: November 14, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/E IS AREA
By
Clay Martin,
Dire of Administrative Services
12007.01
OFFICER'S CERTIFICATE OF THE CITY
Clay Martin,Director of Administrative Services
PLEASE SIGN 6 TIMES
Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
OFFICER'S CERTIFICATE OF THE CITY
The undersigned hereby states and certifies:
(i) that he is the duly appointed, qualified and acting Director of Administrative
Services of the City of Huntington Beach, a chartered city and municipal corporation, duly
organized and existing under the Constitution and laws of the State of California (the "City"),
the City Council of which is the legislative body for the City of Huntington Beach Community
Facilities District No, 1990-1 (Goldenwest/Ellis Area) (the "District"), a community facilities
district duly organized and existing under the laws of the State of California, and as such, is
familiar with the facts herein certified and is authorized to certify the same on behalf of the
City;
(ii) that he is an "Authorized Officer" of the City, as such term is defined in that
certain Fiscal Agent Agreement,dated as of November 1, 2001 (the "Fiscal Agent Agreement"),
by and between the City and U.S. Bank Trust National Association, as fiscal agent;
(iii) that the City Council. of the City duly adopted the following resolutions
(collectively, the "Resolutions") which Resolutions have not been amended, modified,
supplemented, rescinded or repealed and remain in full force and effect as of the date hereof,
said date being the delivery date of the "City of Huntington Beach Community Facilities
District No. 1990-1 2001 Special Tax Refunding Bonds," in the aggregate principal amount of
$2,155,000 and dated the date hereof (the 'Bonds"):
(a) Resolution No. 6161, entitled "A Resolution of Formation of Community
Facilities District No. 1990-1 (Goldenwest/Ellis Area), Authorizing the
Levy of a Special Tax Within the District, Preliminarily Establishing an
Appropriations Limit for the District and Submitting Levy of the Special
Tax and the Establishment of the Appropriations Limit to the Qualified
Electors of the District, Community Facilities District No. 1990-1"
adopted June 18, 1990, and
(b) Resolution No. 2001-74, entitled "Resolution Authorizing The Issuance Of
2001 Special Tax Refunding Bonds Of The City For And On Behalf Of The
City Of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area), Approving And Directing The Execution Of A
Fiscal Agent Agreement And An Escrow Agreement, Approving The Sale
Of Such Bonds,And Approving Other Related Documents And Actions,"
adopted October 15, 2001,
(iv) that, by all necessary action, the City has duly authorized and approved the
execution and delivery of, and the performance by the City of the obligations on its part
contained or described (as applicable) in, the Official Statement, dated October 29, 2001 (the
"Official Statement"), relating to the Bonds, and in the following agreements (collectively
referred to herein as the"Agreements"):
12007.01
(a) Bond Purchase Agreement, dated October 29, 2001, by and between
O'Connor SWS Securities, as underwriter,and the City,
(b) Fiscal Agent Agreement,
(c) Escrow Agreement, dated as of November 1, 2001, by and between the
City and U.S. Bank Trust National Association, as escrow bank, and
(d) Continuing Disclosure Certificate, dated as of November 1, 2001, by the
City and accepted by U.S. Bank Trust National Association, as
dissemination agent;
(v) that the representations, warranties and covenants of the City contained in the
Agreements are true and correct in all material respects on and as of the date hereof with the
same effect as if made on the date hereof;
(vi) that, to the best knowledge of the City,no event affecting the City or the District
has occurred since the date of the Official Statement which either makes untrue or incorrect in
any material respect as of the date hereof the statements or information relating to the City or
the District contained in the Official Statement or is not reflected in the Official Statement but
should be reflected therein in order to make such statements and information therein not
misleading in any material respect;
. (vii) that the City, on behalf of itself and the District, has complied with all the
agreements and has satisfied all the conditions on its part to be performed or satisfied under
the Agreements at and prior to the date hereof;
(viii) that the City's employer identification number for federal tax purposes is 95-
6000732; and
(ix) that for calendar year 2001, and including the Information Return for Tax-
Exempt Governmental Bond Issues,Form 8038-G,filed with the Internal Revenue Service for the
Bonds,the City has filed one (1) Information Returns, Forms 8038-G, with the Internal Revenue
Service, Philadelphia, Pennsylvania 19255.
Dated: November 14, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST ELLIS AREA)
,,,By
lay Martin
Direc of Administrative Services
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CERTIFICATE REGARDING
PRELIMINARY OFFICIAL STATEMENT
Clay Martin,Director of Administrative Services
PLEASE SIGN 6 TIMES
I
1
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t
{
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
15c2-12 CERTIFICATE
OF THE CITY OF HUNTINGTON BEACH
The undersigned hereby certifies and represents that he is the duly appointed and acting
Director of Administrative Services of the City of Huntington Beach (the "City") and is duly
authorized to execute and deliver this Certificate and further hereby certifies and reconfirms on
behalf of the City of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) (the "District") as follows:
(1) This Certificate is delivered in connection with the offering and sale of the City of
Huntington Beach Community Facilities District No. 1990-1 2001 Special Tax Refunding Bonds
(the 'Bonds") in order to enable the underwriter of the Bonds to comply with Securities and
Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule").
(2) In connection with the offering and sale of the Bonds, there has been prepared a
Preliminary Official Statement,setting forth information concerning the Bonds, the City and the
District(the 'Preliminary Official Statement").
(3) . As used herein, 'Permitted Omissions" shall mean the offering price(s), interest
rate(s), selling compensation, aggregate principal amount, principal amount per maturity,
delivery dates,ratings and other terms of the Bonds depending on such matters,all with respect
to the Bonds.
(4) The Preliminary Official Statement is, except for the Permitted Omissions,
deemed final within the meaning of Rule 15c2-12, and the information therein is accurate and
complete except for the Permitted Omissions.
Dated: October 18, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
By
Clay ar ,
Dir?t6r of Administrative Services
i
CITY CONTINUING DISCLOSURE CERT
Clay Martin,Director of Administrative Services
1
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Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the City, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and holders
and beneficial owners from time to time of the Bonds, and shall create no rights in any other
person or entity.
Date: November 14, 2001
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA
By:
AGREED AND ACCEPTED:
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Dissemination Agent
By:
Title:
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Quint&Thimmig LLP 09/24/01
10/18/01
FINAL 10/25/01
REVISED FINAL 10/29/01
CONTINUING DISCLOSURE CERTIFICATE
This CONTINUING DISCLOSURE CERTIFICATE (the "Disclosure Certificate") is
executed and delivered by the CITY OF HUNT iNGTON BEACH, for and on behalf of the City
of Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the
"City") in connection with the issuance of $2,155,000 City of Huntington Beach Community
Facilities District No. 1990-1 2001 Special Tax Refunding Bonds (the "Bonds"). The Bonds are
being issued pursuant to the Fiscal Agent Agreement,dated as of November 1, 2001 (the "Fiscal
Agent Agreement"), by and between the City and U.S. Bank Trust National Association, as
fiscal agent(the "Fiscal Agent"). The City hereby covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the City for the benefit of the holders and beneficial owners of the
Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-
12(b)(5).
Section 2. Definitions. In addition to the definitions set forth in the Fiscal Agent
Agreement, which apply to any capitalized term used in this Disclosure Certificate unless
otherwise defined in this Section, the following capitalized terms shall have the following
meanings:
"Annatal Report" shall mean any Annual Report provided by the City pursuant to, and
as described in, Sections 3 and 4 of this Disclosure Certificate.
"Dissemination Agent" shall mean U.S. Bank Trust National Association, or any
successor Dissemination Agent designated in writing by the City and which has filed with the
City a written acceptance of such designation. The address of the initial Dissemination Agent is
550 South Hope Street, 5th Floor, Los Angeles, CA 90071, Attention: Corporate Trust
Department.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure
Certificate.
"National Repositonj" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule.Information on the National Repositories as of
a particular date is available on the Internet at www.sec.gov/consumer/nrmsir.htm.
"Participating Underwriter" shall mean O'Connor SWS Securities.
"Repository" shall mean each National Repository and each State Repository.
"Rifle" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended from time
to time.
08003.05
"State Repository" shall mean any public or private repository or entity designated by the
State of California as a state repository for the purpose of the Rule and recognized as such by
the Securities and Exchange Commission. As of the date of this Disclosure Certificate, there is
no State Repository.
Section 3. Provision of Annual Reports.
(a) The City shall, or, pursuant to written'direction, shall cause the Dissemination
Agent to, not later than the last day-of the eighth month after the end of the City's fiscal year,
commencing with the report for the 2001-2002 Fiscal Year on April 30, 2002, provide to each
Repository and the Participating Underwriter an Annual Report which is consistent with the
requirements of Section 4 of this Disclosure Certificate. Not later than fifteen (15) Business
Days prior to said date, the City shall provide the Annual Report to the Dissemination Agent
(if other than the City). The City shall provide a written certification with each Annual Report
furnished to the Dissemination Agent and the Fiscal Agent to the effect that such Annual
Report constitutes the Annual Report required to be furnished by it hereunder. The
Dissemination Agent and the Fiscal Agent may conclusively rely upon such certification of the
City and shall have no duty or obligation to review such Annual Report. The Annual Report
may be submitted as a single document or as separate documents comprising a package, and
may include by reference other information as provided in Section 4 of this Disclosure
Certificate; provided that the audited financial statements of the City may be submitted
separately from the balance of the Annual Report, and later than the date required above for
the filing of the Annual Report if not available by that date. If the City's fiscal year changes, it
shall give notice of such change in the same manner as for a Listed Event under Section 5(c).
(b) If the City is unable to provide to the Repositories an Annual Report by the date
required in subsection (a), .the City shall send a notice to the Municipal Securities Rulemaking
Board and the appropriate State Repository, if any, in substantially the form attached as
Exhibit A.
(c) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the
name and address of each National Repository and each State Repository, if any; and
(ii) to the extent the Annual Report has been furnished to it, if the
Dissemination Agent is other than the City,file a report with the City certifying that the
Annual Report has been provided pursuant to this Disclosure Certificate, stating the
date it was provided and listing all the Repositories to which it was provided.
Section 4. Content of Annual Reports. The City's Annual Report shall contain or
incorporate by reference the following:
(a) Assessed value information (per the Orange County Assessor's last equalized
tax roll prior to the September next preceding the Annual Report Date) with respect to (i) on an
aggregate basis, all parcels currently subject to the Special Tax within the District, showing the
total assessed valuation for all land and the total assessed valuation for all improvements within
the District and (ii) on a parcel-by-parcel basis, each parcel currently subject to the Special Tax
within the District,showing the assessed valuation of the real property component of the parcel
and the assessed valuation of the improvements on the parcel;
(b) In the event that the total delinquencies within the District as of August 1 in
any year exceed 5% of the Special Tax for the previous year, delinquency information,
including a list of all parcels delinquent in the payment of the Special Tax, amounts of
delinquencies,length of delinquency and status of any foreclosure for each parcel listed;
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(c) Status of any judicial foreclosure proceedings initiated by the City on behalf of
the district as a result of delinquency in the payment of Special Taxes and the summary of the
results of foreclosure sales,if available;
(d) The principal amount of Bonds Outstanding and the balance in the Reserve
Fund as of the September 30 next preceding the Annual Report Date;
(e) In addition to any of the information expressly required to be provided under
paragraphs (a) through (e) of this Section, the City shall provide such further information, if
any, as may be necessary to make the specifically required statements, in the light of the
circumstances under which they are made, not misleading.
Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the City or related public entities,
which have been submitted to each of the Repositories or the Securities and Exchange
Commission. If the document included by reference is a final official statement, it must be
available from the Municipal Securities Rulemaking Board. The City shall clearly identify each
such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause to be
.given, notice of the occurrence of any of the following events with respect to the Bonds, if
material:
(1) Principal and interest payment delinquencies..
(2) Non-payment related defaults.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers,or their failure to perform.
(6) Adverse tax opinions or events affecting the tax-exempt status of the security.
(7) Modifications to rights of security holders.
(8) Contingent or unscheduled bond calls.
(9) Defeasances.
(10) Release, substitution,or sale of property securing repayment of the securities.
(11) Rating changes.
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the
City shall as soon as possible determine if such event would be material under applicable
Federal securities law.
(c) If the City determines that knowledge of the occurrence of a Listed Event would
be material under applicable Federal securities law,the City shall promptly file a notice of such
occurrence with the Municipal Securities Rulemaking Board and each State Repository with a
copy to the Fiscal Agent. Notwithstanding the foregoing, notice of Listed Events described in
subsections (a)(8) and (9)need not be given under this subsection any earlier than the notice (if
any) of the underlying event is given to holders of affected Bonds pursuant to the Fiscal Agent
Agreement.
Section 6. Termination of Reporting Obligation. The City's obligations under this
Disclosure Certificate shall terminate upon the legal defeasance,prior redemption or payment in
full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the
City shall give notice of such termination in the same manner as for a Listed Event under
Section 5(c).
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Section 7. Dissemination Agent. The City may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate,
and may discharge any such Dissemination Agent, with or without appointing a successor
Dissemination Agent. The Dissemination Agent may resign by providing thirty days' written
notice.to the City and the Fiscal Agent.
Section 8. Amendment;Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure
Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 .or 5(a), it
may only be made in connection with a change in circumstances that arises from a change in
legal requirements, change in law, or change in the identity, nature, or status of an obligated
person with respect to the Bonds, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the
opinion of nationally recognized bond counsel,have complied with the requirements of the Rule
at the time of the primary offering of the Bonds, after taking into account any amendments or
interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in
the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent
Agreement with the consent of Bondowners, or (ii) does not, in the opinion of nationally
recognized bond counsel, materially impair the interests of the holders or beneficial owners of
the Bonds.
If the annual financial information or operating data to be provided in the Annual
Report is amended pursuant to the provisions hereof, the first annual financial information filed
pursuant hereto containing the amended operating data or financial information shall explain,
in narrative form, the reasons for the amendment and the impact of the change in the type of
operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be
followed in preparing financial statements, the annual financial information for the year in
which the change is made shall present a comparison between the financial statements or
information prepared on the basis of the new accounting principles and those prepared on the
basis of the former accounting principles.The comparison shall include a qualitative discussion
of the differences in the accounting principles and the impact of the change in the accounting
principles on the presentation of the financial information, in order to provide information to
investors to enable them to evaluate the ability of the City to meet its obligations with respect to
the District.To the extent reasonably feasible, the comparison shall be quantitative. A notice of
the change in the accounting principles shall be sent to the Repositories in the same manner as
for a Listed Event under Section 5(c).
Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed
to prevent the City from disseminating any other information, using the means of dissemination
set forth in this Disclosure Certificate or any other means of communication, or including any
other information in any Annual Report or notice of occurrence of a Listed Event, in addition to
that which is required by this Disclosure Certificate. If the City chooses to include any
information in any Annual Report or notice of occurrence of a Listed Event in addition to that
which is specifically required by this Disclosure Certificate, the City shall have no obligation
under this Disclosure Certificate to update such information or include it in any future Annual
Report or notice of occurrence of a Listed Event.
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Section 10. Default. In the event of a failure of the City to comply with any provision of
this Disclosure Certificate the Fiscal Agent shall, upon written direction and only to the extent
indemnified to its satisfaction from any liability,cost or expense,including fees and expenses of
its attorneys, and any holder or beneficial owner of the Bonds may, take such actions as may be
necessary and appropriate, including seeking mandate or specific performance by court order,
to cause the City to comply with its obligations under this Disclosure Certificate. A default
under this Disclosure Certificate shall not be deemed a default under the Fiscal Agent
Agreement,and the sole remedy under this Disclosure Certificate in the event of any failure of
the City to comply with this Disclosure Certificate shall be an action to compel performance.
Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers,
directors, employees and agents,harmless against any loss, expense and liabilities which it may
incur arising out of or in the exercise or performance of its powers and duties hereunder,
including the costs and expenses (including reasonable attorneys fees) of defending against any
claim of liability,but excluding liabilities due to the Dissemination Agent's negligence or willful
misconduct. The Dissemination Agent shall be paid compensation for its services provided
hereunder in accordance with its schedule of fees as amended from time to time, which
schedule, as amended, shall be reasonably acceptable, and all expenses, reasonable legal fees
and advances made or incurred by the Dissemination Agent in the performance of its duties
hereunder. The Dissemination Agent and the Fiscal Agent shall have no duty or obligation to
review any information provided to it hereunder and shall not be deemed to be acting in any
fiduciary capacity for the District, the City, the bond owners, or any other party. The
obligations of the City under this Section shall survive resignation or removal of the
Dissemination Agent and payment of the Bonds.
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EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Huntington Beach, for and on behalf of the City of Huntington
Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area)
Name of Bond Issue: $2,155,000 City of Huntington Beach Community Facilities District No.
1990-1 2001 Special Tax Refunding Bonds
Date of Issuance: November 14, 2001
NOTICE IS HEREBY GIVEN that the City has not provided an Annual Report with
respect to the above-named Bonds as required by Section 5.16 of the Fiscal Agent Agreement
dated as of November 1, 2001 between the City and U.S. Bank Trust National Association. The
City anticipates that the Annual Report will be filed by
Dated:
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
By
cc: U.S. Bank Trust National Association
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ESCROW AGREEMENT
Clay Martin,Director of Administrative Services
/ 1
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EXHIBIT A
SCHEDULE OF ORIGINAL FEDERAL SECURITIES
Type.of Principal Maturity Interest
Security Amount Date Rate Price.
SLGS $2,126,284.00 4/1/02 2.110% 100%
Exhibit A
EXHIBIT B
SCHEDULE OF PAYMENTS OF PRIOR BONDS
Payment Maturing Called Redemption
Date Principal Interest Principal Premium Total
4/1/02 — $77,972.50 $2,055,000 $10,275.00 $2,143,247.50
Exhibit B
Quint&Th nunig LLP 09/24/01
10/18/01
FINAL 10/25/01
REVISED FINAL 10/29/01
ESCROW AGREEMENT
by and between the
CITY OF HUNTINGTON BEACH,CALIFORNIA
and
U.S.BANK TRUST NATIONAL ASSOCIATION
Dated November 14, 2001
Relating to:
City of Huntington Beach,California
Community Facilities District No.1990-1 (Goldenwest/Ellis Area)
1990 Special Tax Bonds
08003.05
TABLE OF CONTENTS
Section 1. Definition of Federal Securities.............................................................................................I
Section 2. Establishment of Escrow Fund....................................................................................:.........1
'Section 3. Deposit into Escrow Fund;Investment of Amounts..............................................................2
Section 4.Instructions as to Application of Deposit................................................................................2
Section 5.Application of Proceeds from Prior Bond Funds....................................................................2
Section 6. Application of Certain Terms of Fiscal Agent Agreement......................................................3
Section 7. Investment of Any Remaining Moneys................................................................................3
Section 8. Substitution or Withdrawal of Federal Securities...................................................................3
Section 9.Proceedings for Redemption of Prior Bonds..........................................................................3
Section 10.Compensation to Escrow Bank............................................................................................4
Section 11.Liabilities and Obligations of Escrow Bank..........................................................................4
Section 12. Resignation of Escrow Bank................................................................................................5
Section13. Amendment......................................................................................................................5
Section 14.Unclaimed Moneys............................................................................................................5
Section 15.Execution in Counterparts...................................................................................................6
Section16. Applicable Law.................................................................................................................6
EXHIBIT A: SCHEDULE OF ORIGINAL FEDERAL SECURITIES
EXHIBIT B: SCHEDULE OF PAYMENTS ON PRIOR BONDS
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ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement"), dated November 14, 2001, by and
between the CITY OF HUNTINGTON BEACH, CALIFORNIA, a municipal corporation duly
organized and existing under the laws of the State of California (the_ "City"), for and on behalf
of the CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA) (the "District") and U.S. BANK TRUST NATIONAL
ASSOCIATION, a national banking association organized and existing under the laws of the
United States of America, acting as successor Fiscal Agent for the Prior Bonds hereinafter
referred to and acting as escrow bank hereunder(the "Escrow Bank").
WITNESSETH:
WHEREAS, the City Council of the City has conducted proceedings under and pursuant
to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to form the
District, to authorize the levy of special taxes upon the land within the District, and to issue
bonds secured by said special taxes to finance certain facilities; and
WHEREAS, the City Council of the City, as.legislative body of the District, authorized
the issuance of bonds of the City for the District in the original principal amount of $2,400,000
(the "Prior Bonds"), said Bonds having been issued on August 9, 1990, pursuant to the Act, a
resolution of the City Council and a Fiscal Agent Agreement, dated as of June 1, 1990 (the
"Fiscal Agent Agreement"),by and between the City and Bank of America National Trust and
Savings Association, as fiscal agent, as succeeded by U.S. Bank Trust National Association (the
"Fiscal Agent"); and
WHEREAS, the City has determined to issue, for on behalf of the District, special tax
refunding bonds in the aggregate principal amount of $2,155,000 (the "Refunding Bonds") at
this time for the purpose of providing funds to refund and defease the Prior Bonds; and
WHEREAS, the City and the Escrow Bank wish to enter into this Agreement for the
purpose of providing the terms and conditions relating to the deposit and application of
moneys and Federal Securities to provide for the payment and redemption of the Prior Bonds in
full, pursuant to and in accordance with the provisions of Section 10.03 of the Fiscal Agent
Agreement.
NOW,THEREFORE,in consideration of the above premises and of the mutual promises
and covenants herein contained and for other valuable consideration the receipt and sufficiency
of which are hereby acknowledged,the parties hereto do hereby agree as follows:
Section 1. Definition of Federal Securities. As used herein, the term "Federal.Securities"
has the meaning given such term in the Fiscal Agent Agreement.
Section 2. Establishment of Escrow Fund. There is hereby created an escrow fund (the
"Escrow Fund") to be held in trust by the Escrow Bank as an irrevocable escrow securing the
payment of the Prior Bonds, as hereinafter set forth. The Escrow Bank shall administer the
Escrow Fund as provided in this Agreement. All cash and securities in the Escrow Fund are
hereby irrevocably pledged as a special fund for the payment of the principal of and interest
and premium, if any, on the Prior Bonds in accordance with the provisions of this Agreement
and the Fiscal Agent Agreement. If at any time the Escrow Bank shall receive actual knowledge
that the cash and Federal Securities in the Escrow Fund will not be sufficient to make any
payment required by Section 4 hereof, the Escrow Bank shall notify the City of such fact and
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the City shall immediately cure such deficiency from any source of legally available funds. The
Escrow Bank shall have no obligation whatsoever to use its own funds to cure any such
deficiency.
Section 3. Deposit into Escrow Fund; Investment of Amounts. Concurrently with
delivery of the Refunding Bonds, the City shall cause to be transferred.to the Escrow Bank for
deposit into the Escrow Fund the amount of $2,126,285.00 in immediately available funds,
which shall be derived from (a) the proceeds of sale of the Refunding Bonds in the amount of
$1,881,470, (b) the moneys on deposit in the reserve fund established for the Prior Bonds in the
amount of$192,487.00, and (c) the moneys on deposit in the improvement fund established for
the Prior Bonds in the amount of$52,328.00.
Of the moneys deposited into the Escrow Fund pursuant to the preceding paragraph,
$2,126,284.00 shall be used by the Escrow Bank to purchase the Federal Securities identified in
Exhibit A hereto (the "Original Federal Securities") and the remaining amount $1.00 shall be
held in cash, uninvested. The Original Federal Securities, and all other Federal Securities at any
time substituted therefor in accordance with this Agreement, shall be deposited with and held
by the Escrow Bank in the Escrow Fund solely for the uses and purposes set forth herein and
therein.The Escrow Bank shall have no lien upon or right of set off against the Federal Securities
and cash at any time on deposit in the Escrow Fund.
Section 4. Instructions as to Application of Deposit. The total amount of Federal
Securities deposited in the Escrow Fund hereunder shall be applied by the Escrow Bank for the
sole purpose of paying the principal of and interest and premium, if any, on the Prior Bonds in
accordance with the schedule set forth in Exhibit B attached hereto and by this reference
incorporated herein.Following payment in.full of the principal of and interest and premium, if
any, on the Prior Bonds, all amounts remaining.on deposit in the Escrow Fund shall be
transferred by the Escrow Bank to the Fiscal Agent to be used to pay debt service on the
Refunding Bonds.
Section 5. Application of Proceeds from Prior Bond Funds. Upon receipt by the Escrow
Bank from the Fiscal Agent under the Fiscal Agent Agreement of certain amounts remaining on
deposit in the funds and accounts established under the Fiscal Agent Agreement as of the date
of delivery of the Refunding Bonds,such amount received shall be applied by the Escrow Bank
as follows:
(a) amounts on deposit in the reserve fund established for the Prior Bonds
($192,487.00) shall be deposited in the Escrow Fund; and
(b) amounts on deposit in the improvement fund established for the Prior
Bonds ($52,328.00) shall be deposited in the Escrow Fund; and
(c) any amounts on deposit in the rebate fund established for the Prior
Bonds shall be remitted to the City Finance Officer.-
After making the foregoing deposits and transfers,any amounts remaining on deposit in
or accruing to any funds and accounts established under the Fiscal Agent Agreement held by the
Escrow Bank as Fiscal Agent thereunder,shall be transferred in immediately available funds to
the fiscal agent for the.Refunding Bonds, to be deposited by such fiscal agent to bond fund of
the fiscal agent agreement for the Refunding Bonds. In addition, any investment earnings on
funds held by the Fiscal Agent under the Fiscal Agent Agreement which are posted after the
date of the foregoing transfers,shall be remitted by the Escrow Bank to the City, for transfer by
the City to the special tax fund established under the fiscal agent agreement for the Refunding
Bonds.
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Section 6. Application of Certain Terms of Fiscal Agent Agreement. All of the terms of
the Fiscal Agent Agreement relating to the making of payments of the principal of and interest
and premium on the Prior Bonds are incorporated in this Agreement as if set forth in full herein.
Section 7. Investment of Any Remaining Moneys. At the written direction of the City
provided at least two Business Days in advance, the Escrow Bank shall invest and reinvest any
proceeds received from any of the Federal Securities, and the cash originally deposited into the
Escrow Fund, for a period ending not later than the date on which such proceeds or cash are
required for the purposes specified in Section 4, in Federal Securities; provided, however, that
with respect to any such reinvestment,such written directions of the City shall be accompanied
by an opinion of nationally recognized bond counsel ('Bond Counsel") to the effect that
investment in accordance with such directions will not cause the interest on the Prior Bonds or
the Refunding Bonds to become includable in gross income for federal income tax purposes and
verified by a certified public accountant that at all times following such investment or
reinvestment, the amount in the Escrow Fund shall be sufficient to make all debt service
payments contemplated hereunder. The Escrow Bank shall be entitled to conclusively rely on
and shall be fully protected in relying on, such written directions of the City, such opinion of
Bond Counsel and such verification by a certified public accountant. In the event any such
investment or reinvestment is required to be made in United States Treasury Securities-State-
and Local Government Series, the City shall at its cost cause to be prepared all necessary
subscription forms therefor in sufficient time to enable the Escrow Bank to acquire such
securities. In the event that the City shall fail to file any such written directions with the Escrow
Bank concerning the reinvestment of any such proceeds, such proceeds shall be held uninvested
by the Escrow Bank. Any interest income resulting from investment or reinvestment of moneys
pursuant to this Section 7 shall be paid to the City promptly upon the receipt of such interest
income by the Escrow Bank.
Section 8. Substitution or Withdrawal of Federal Securities. The City may at any time
direct the Escrow Bank to substitute Federal Securities for any or all of the Original Federal
Securities then deposited in the Escrow Fund, or to withdraw and transfer to the City any
portion of the Federal Securities then deposited in the Escrow Fund, provided that any such
direction and substitution or withdrawal shall be accompanied by: (a) a certification of an
independent certified public accountant that the Federal Securities then to be so deposited in
the Escrow Fund together with interest to be derived therefrom, or in the case of withdrawal the
Federal Securities to be remaining in the Escrow Fund following such withdrawal together with
the interest to be derived therefrom,shall be in an amount at all times at least sufficient to make
the payments specified in Section 4 hereof; and (b) an opinion of Bond Counsel that the
substitution or withdrawal will not affect, for federal income tax purposes, the exclusion from
gross income for federal income tax purposes of the interest on the Prior Bonds or on the
Refunding Bonds. The Escrow Bank shall be entitled to rely on and shall be fully protected in
relying on such written directions of the City, such certification of an independent public
accountant and such opinion of Bond Counsel. In the event that,following any such substitution
of Federal Securities pursuant to this Section 8, there is an amount of moneys or Federal
Securities in excess of the amount required for the purposes of Section 4 hereof, as such excess
is identified in the certification of such independent certified public accountant and provided
that all amounts due Escrow Bank shall have been paid in full, such excess shall upon written
direction of the City be transferred to the City.
Section 9.Proceedings for Redemption of Prior Bonds.The City hereby irrevocably elects
to redeem all of the outstanding Prior Bonds in full on April 1, 2002, pursuant to the provisions
of the Fiscal Agent Agreement.Notice of such redemption shall be given by the Escrow Bank (in
its capacity as Fiscal Agent under the Fiscal Agent Agreement) in accordance with Section
2.03(C) of the Fiscal Agent Agreement, at the expense of the City.
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Section 10. Compensation to Escrow Bank. The City shall pay the Escrow Bank full
compensation for its duties under this Agreement, including out-of-pocket costs such as
publication costs, redemption expenses, legal fees (including fees of outside counsel and the
allocated costs of internal attorneys) and other costs and expenses relating hereto and, in
addition, all fees,.costs and expenses relating to the purchase of any Federal Securities after the
date hereof. Under no circumstances shall amounts deposited in or credited to the Escrow Fund
be deemed to be available for said purposes. The obligation of the City under this Section 10 to
pay compensation already earned by the Escrow Bank and to pay costs and expenses already
incurred shall survive termination of this Agreement and shall survive the resignation or removal
of the Escrow Bank.
Section 11. Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no
obligation to make any payment or disbursement of any type or incur any financial liability in
the performance of its duties under this Agreement unless the City shall have deposited
sufficient funds therefor with the Escrow Bank. The Escrow Bank may rely and shall be fully
protected in acting upon the written instructions of the City or its agents relating to any matter
or action as Escrow Bank under this Agreement.
The City covenants to indemnify, defend and hold harmless the Escrow Bank and its
officers, employees, directors, and agents, against any loss, liability or expense, including legal
fees (including the fees of outside counsel and internal attorneys), incurred in connection with
the performance of any of the duties of Escrow Bank hereunder, except the Escrow Bank shall
not be indemnified against any loss, liability or expense resulting from its negligence or willful
misconduct.
The indemnity provided in this Section 11 shall survive the termination of this
Agreement and shall survive the resignation or removal of the Escrow Bank.
The Escrow Bank shall have such duties as are expressly set forth herein and no implied
duties shall be read into this Agreement against the Escrow Bank.The Escrow Bank shall not be
liable for any act or omission of the City under this Agreement or the Fiscal Agent Agreement.
The Escrow Bank shall not be liable for the accuracy of any calculations provided as to
the sufficiency of moneys or the Federal Securities deposited with it to pay the principal,
interest or premiums,if any,on the Prior Bonds.
The Escrow Bank shall incur no liability for losses arising from any investment or other
disposition made pursuant to and in accordance with this Agreement.
Any bank, federal savings association or trust company into which the Escrow Bank
may be merged or with which it may be consolidated shall become the Escrow Bank without
any action of the City.
The Escrow Bank shall have no liability or obligation to the holders of the Prior Bonds or
the Refunding Bonds with respect to the payment of debt service by the City or with respect to
the observance or performance by the City of the other conditions, covenants and terms
contained in the Fiscal Agent Agreement, or with respect to the investment of any moneys in
any fund .or account established, held or maintained by the City pursuant to the Fiscal Agent
Agreement.
The Escrow Bank may conclusively rely, as to the trust of the statements and correctness
of the opinions expressed therein, on any certificate or opinion furnished to it in accordance
with this Agreement or the Fiscal Agent Agreement.The Escrow Bank may consult with counsel,
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whose opinion shall be full and complete authorization and protection to the Escrow Bank if it
acts in accordance with such opinion.
The Escrow Bank shall not be liable for any error of judgment made in good faith by an
authorized officer.
Nothing herein should be interpreted to require the Escrow Bank to expend or risk its
own funds or otherwise incur financial liability in the performance of any of its duties or the
exercise of any of its rights hereunder, unless it believes that repayment of such funds or
adequate indemnity against such risk or liability is assured. The Escrow Bank shall provide the
City with seven days' notice prior to making any advance of its own funds hereunder, and, if
the City does not provide moneys in the amount needed, the Escrow Bank shall be entitled to
interest on the amounts advanced at a rate equal to the then 3-month certificates of deposit rate
(by reference to the Wall Street Journal);provided that no such prior notice shall need to be given
and such interest on amounts advanced shall accrue from the date of any such advance
following the occurrence of a default by the City hereunder.
Any corporation succeeding to all or substantially all of the corporate trust business of
the Escrow Bank shall be the successor of the Escrow Bank hereunder, without the execution or
filing of any paper or any further act on the part of the any of the parties hereto.
Section 12. Resignation of Escrow Bank. The Escrow Bank may at any time resign by
giving written notice to the City,which notice shall indicate the date on which the resignation is
to be effective (the "resignation date"). The City shall promptly appoint a successor Escrow
Bank by the resignation date.Resignation of the Escrow Bank will be effective upon acceptance
of appointment by a successor Escrow Bank. If the City does not appoint a.successor Escrow
Bank by the resignation date, the Escrow Bank may, at the expense of the City, petition any
court of competent jurisdiction for the appointment of a successor Escrow Bank, which court
may thereupon, after such notice, if any, as it may deem proper and prescribe and as may be
required by law, appoint a successor Escrow Bank.
Section 13. Amendment. This Agreement may be amended or modified by the parties
hereto,but only if there shall have been filed with the City and the Escrow Bank (a) a written
opinion of Bond Counsel stating that such amendment will not materially adversely affect the
interests of the owners of the Prior Bonds, and that such amendment will not cause interest on
the Prior Bonds or the Refunding Bonds to become includable in the gross income of the owners
thereof for federal income tax purposes, and (b) a certification of an independent certified
public accountant that the Federal Securities on deposit .in the Escrow Fund together with
interest to be derived therefrom,shall be in an amount at all times at least sufficient to make the
payments specified in Section 4 hereof.
Section. 14. Unclaimed Moneys. Anything contained herein to . the contrary
notwithstanding,any moneys held by the Escrow Bank in trust for the payment and discharge
of the principal of, and the interest and any premium on, the Prior Bonds which remains
unclaimed for two (2) years after the date when the payment of such principal, interest and
premium have become payable, if such moneys were held by the Escrow Bank at such date,
shall be repaid by the Escrow Bank to the City as its absolute property free from any trust, and
the Escrow Bank shall thereupon be released and discharged with respect thereto and the
owners of such Prior Bonds shall look only to the City for the payment of the principal of, and
interest and any premium on, such Prior Bonds. Any right of any Prior Bondowner to look to
the City for such payment shall survive only so long as required under applicable law.
-5-
Section 15. Execution in Counterparts. This Agreement may be executed in several
counterparts,each of which shall be an original and all of which shall constitute but one and the
same instrument.
Section 16. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the City and the Escrow Bank have each caused this
Agreement to be executed by their duly authorized officers all as of the date first above written.
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS)
By
Administrative Services Director
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Escrow Bank
By
Authorized Officer
�a
Section 15. Execution in Counterparts. This Agreement may be executed in several
counterparts,each of which shall be an original and all of which shall constitute but one and the
same instrument.
Section 16. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the City and the Escrow Bank have each caused this
Agreement to be executed by their duly authorized officers all as of the date first above written.
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS)
By
A=TFT
a Services Director
U.S. BANATIONAL
ASSOCIATION, as Escrow Bank
By
Authorized Officer
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ii
FINAL OFFICIAL STATEMENT
Clay Martin,Director of Administrative Services
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The Financing Consultant
The material contained in this Official Statement was prepared by the City with the assistance of Harrell
& Company Advisors, LLC, Orange, California, an independent financial consulting firm, who advised
the City as to the financial structure and certain other financial matters relating to the Bonds. The
information set forth herein has been obtained from sources which are believed to be reliable, but such
information is not guaranteed by.Harrell & Company Advisors, LLC, as to accuracy or completeness, nor
has it been independently verified. Fees paid to Harrell & Company Advisors, LLC, are contingent upon
the sale and delivery of the Bonds.
Execution
The execution and delivery of the Official Statement by the City has been duly authorized by the City of
Huntington Beach on behalf of the District.
CITY OF I T B ACH
By:
Clay Me n
Director of Administrative Services
1N6/p1
OFFICE OF
Y
CITY ATTORNEY
P.O. Box 190
2000 Main Street Telephone
Gail Hutton Huntington Beach, California 92648 (714) 536-5555
City Attorney Fax (714) 374-1590
November 14, 2001
O'Connor SWS Securities
3 Civic Plaza, Suite 100
Newport Beach, CA 92660
Re: $2,155,000 City of Huntington Beach Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds
Ladies and Gentlemen:
I am the City Attorney for the City of Huntington Beach (the "City") and have acted as
such in connection with the issuance by the City, for and on behalf of the City of
Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area)
(the "District") of its "City of Huntington Beach Community Facilities District No. 1990-
1 2001 Special Tax Refunding Bonds," in the aggregate principal amount of$2,155,000
and dated the date hereof(the "Bonds"). The Bonds are being issued pursuant to that
certain Fiscal Agent Agreement, dated as of November 1, 2001 (the "Fiscal Agent
Agreement"), by and between the City and U.S. Bank Trust National Association, as
fiscal agent, and Resolution No. 2001-74, adopted by the City Council of the City on
October 15, 2001 (the "Resolution"). Capitalized terms used herein and not otherwise
identified shall have the same meanings as assigned to them in that certain Bond
Purchase Agreement, dated October 29, 2001 (the "Purchase Agreement"), by and
between O'Connor SWS Securities, as underwriter, and the City.
In rendering the opinion set forth herein, I have made no search, inquiry, investigation or
other examination concerning the records or files of any court, public board or body, or
other public records, other than the City, and my opinion as expressed herein does not
extend to any matter which might be disclosed as a result of any further search, inquiry,
investigation or other examination.
Whenever a statement herein is qualified"to the best of my knowledge,"it is intended to
indicate that, during the course of my representation of the City in connection with this
transaction, no information that would give me actual knowledge of the inaccuracy of
such statement has come to my attention. I have not undertaken any independent
investigation to determine the accuracy of such statements, and any limited inquiry
undertaken by me during the preparation of this opinion letter should not be regarded as
such investigation. No inference as to my knowledge of any matters bearing on the
J '
O'Connor SWS Securities
November 8, 2001
Page 2
accuracy of any such statements should be drawn from the fact of my representation of the
Issuer.
My opinion set forth herein does not extend to, and I express no opinion herein with respect to,
(a) any laws of any jurisdictions (including any federal law), other than the laws of the State of
California, and (b) any matters covered by the securities, usury or tax laws, decisions, rules or
regulations of any jurisdiction.
In that connection, we have examined originals, or copies certified or otherwise identified to our
satisfaction, of the documents described herein and such other documents as we have considered
necessary to render this opinion.
Based upon such examination, we are of the opinion, under existing law, that:
(A) the City is duly organized and validly existing as a municipal corporation under
and by virtue of the Constitution and laws of the State, with full legal right, power
and authority to adopt the Resolution;
(B) the District is a community facilities district duly organized and validly existing
under the laws of the State, including the Law;
(C) no action, suit,proceeding, inquiry or investigation, at law or in equity, before or
by any court, regulatory agency,public board or body is pending with respect to
-which the City has received service of process, or to the best of my knowledge,
threatened, in any way affecting the existence of the City or the titles of the City's
officials to their respective offices, or seeking to restrain or to enjoin the issuance,
sale or delivery of the Bonds or the application of the proceeds thereof in
accordance with the Fiscal Agent Agreement, or the collection or application of
the Special Taxes to pay the principal of and interest on the Bonds, or in any way
contesting or affecting the validity or enforceability of the Bonds, the City
Documents or any action of the City contemplated by any of said documents, or
in any way contesting the completeness or accuracy of the Official Statement or
the powers of the City or its authority with respect to the Bonds, the City
Documents or any action on the part of the City contemplated by and of said
documents,wherein an unfavorable decision, ruling, or finding could materially
adversely affect the validity or enforceability of the Bonds or the City Documents;
Very truly yours,
GAIL HUTTON
City Attorney
SF/s:2001 Letters:O'Connor 11-8
Quint &ThMgLLP
One Embarcadero Center,Suite 2420
San Francisco,CA 94111-3737 08003.0r-
_., Ph:(415)765-1550 Brian D.Quint,Esq •
i.
=.r Connie Brockway
CITY OF HUNTINGTON BEACH
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Quint&Thimmig L
` Attorneys at Law
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Christine L.Tolentino i
Project Manager
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One Embarcadero Center Telephone:415/765-1550 !
Suite 2420 Telecopier.415/765-1555
San Francisco,CA 94111-3737 Email:ctolentino®gtllp.com
Quint&Thimmig LLP
Attorneys at Law
Brian D.Quint
One Embarcadero Center Telephone:415/765-1550
Suite 2420 Telecopier.4151765-1555
San Francisco,CA 94111-3737 Email:bquint@gtllp.com
Quint&Thimmig LLP 12/11/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
SCHEDULE OF TRANSCRIPT DOCUMENTS
A. BASE LEGAL DOCUMENTS
1. List of Financing Participants. -
2. City of Huntington Beach (the "City") Resolution No. 6161, entitled "A
Resolution of Formation of Community Facilities District No. 1990-1
(Goldenwest/Ellis Area), Authorizing the Levy of a Special Tax Within the
District, Preliminarily Establishing an Appropriations Limit for the District and
Submitting Levy of the Special Tax and the Establishment of the Appropriations
Limit to the Qualified Electors of the District, Community Facilities District No.
1990-1" adopted June 18, 1990.
3. Notice of Special Tax Lien. (recorded in the Orange County Recorder's Office on
July 12, 1990, as instrument no. 90-368665).
4. City Resolution No. 2001-74, entitled "Resolution Authorizing The Issuance Of
2001 Special Tax Refunding Bonds Of The City For And On Behalf Of The City
Of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area), Approving And Directing The Execution Of A Fiscal
Agent Agreement And An Escrow Agreement, Approving The Sale Of Such
Bonds, And Approving Other Related Documents And Actions," adopted
October 15, 2001, together with Local Goals and Policies for Community
Facilities District.
5. Acknowledgment No. 2001-1930 of Receipt of Report of Proposed Debt Issuance
from the California Debt and Investment Advisory Commission ("CDIAC"),
together with Report.
V
6. Preliminary Official Statement, dated October 18, 2001.
-7. Bond Purchase Agreement, dated October 29, 2001, by and between O'Connor
SWS Securities,as underwriter (the "Underwriter") and the City.
8. Fiscal Agent Agreement, dated as of November 1,2001,by and between the City
and U.S. Bank Trust National Association, as fiscal agent (the "Fiscal Agent").
9. Escrow Agreement,dated November 14,2001,by and between the City and U.S.
Bank Trust National Association, as escrow bank (the "Escrow Bank").
10. Continuing Disclosure Certificate, dated as of November 1, 2001, by the City
and as accepted by the Fiscal Agent, as dissemination agent (the "Dissemination
Agent").
11. Final Official Statement, dated October 29, 2001.
12. Certificate of Mailing Report of Final Sale to CDIAC.
B. CITY DOCUMENTS
1. Incumbency and Signature Certificate.
2. Certificate as to Arbitrage.
3. Officer's Certificate pertaining to representations and warranties, no-litigation,
disclosure and other matters pursuant to Section 8(c)(vii) of the Purchase
Agreement, and attached thereto as Exhibit A.
4. Certificate Regarding Preliminary Official Statement pertaining to Rule 15c2-12
under the Securities Exchange Act of 1934.
5. Written Order to Trustee regarding the Bonds.
6. Certificate Regarding Use of Proceeds.
7. Requisition No. 1 for Disbursement from the Costs of Issuance Fund, pursuant to
Section 3.06(B) of the Fiscal Agent Agreement, and attached thereto as Exhibit
C.
8. Certificate Regarding Investments,as acknowledged by the Fiscal Agent.
9. Certificate of Mailing Information Return for Tax-Exempt Govemmental Bond
Issues,Form 8038-G,to the Internal Revenue Service,together with Form 8038-G.
10. Opinion of City Attorney, pursuant to Section 8(c)(xi) of the Purchase
Agreement.
11. Opinion of Quint & Thimmig LLP, as Disclosure Counsel, pursuant to Section
8(c)(iii)of the Purchase Agreement.
C. FISCAL AGENT AND ESCROW BANK DOCUMENTS
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1. Authentication and Incumbency Certificate, together with general signing
resolution.
2. Certificate of Fiscal Agent.
3. Fiscal Agent's Receipt of Proceeds.
4. Certificate of Escrow Bank.
5. Escrow Bank's Receipt and Application of Funds, together with Final
Subscription for Purchase and Issue of U.S. Treasury Securities - State and Local
Government Series.
6. Opinion of Dorsey&Whitney LLP,Counsel to the Fiscal Agent.
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D. UNDERWRITER AND CONSULTANT DOCUMENTS
1. Rating Letter of Standard & Poor's Credit Market Services.
2. Certificate of Underwriter pertaining to the reoffering price of the Bonds and the
establishment of the reserve fund.
3. Receipt for Bonds.
4. Specimen Bond. (one per maturity)
5. Verification Report of Grant Thornton LLP, pursuant to Section 8(c)(xvii) of the
Purchase Agreement.
6. Certificate of Financial Advisor.
7. Opinion of Fulbright&Jaworski LLP,counsel to the Underwriter. 1
E. BOND COUNSEL.DOCUMENTS
1. Final Approving Legal Opinion of Quint.&Thimmig LLP("Bond Counsel").
2. Supplemental Opinion and Defeasance Opinion of Bond Counsel, pursuant to
Section 8(c)(ii) of the Purchase Agreement.
3. Reliance Letter to Underwriter Regarding Final Approving Legal Opinion of Bond
Counsel,pursuant to Section 8(c)(ii)of the Purchase Agreement.
4. Reliance Letter to Fiscal Agent Regarding Final Approving Legal Opinion of Bond
Counsel.
-3-
Quint'&Thimmig LLP 11/13/01
CITY OF HUNTINGTON BEACH
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds
Distribution List
CITY FISCAL AGENVESCROW BANK
Mr.Clay Martin(•) Ms.Grace Yang(•)
Director of Administrative Services Ms.Tami Mawn
Mr.Daniel T.Villella U.S.Bank7rust National Association
Director of Finance Corporate Trust Administration
Scott F.Field,Esq. 550 South Hope Street,Suite 500
Deputy City Attorney Los Angeles,CA 90071
Ms.Shari L.Freidenrich (213)533-8713(Yang)
City Treasurer (213)533-8715(Mawn)
Ms.Connie Brockway(•) (213)533-8729(Telecopier)
City Clerk grace.yang@usbank.com
City of Huntington Beach tamara.mawn@usbank.com
2000 Main Street
Huntington Beach,CA 92648 FISCAL AGENT'S COUNSEL
(714)536-5236(Martin) Dennis Wong,Esq.
(714)374-1743(Martin Telecopier) Dorsey&Whitney LLP
(714)536-5225(Villella) 650 Town Center Drive,Suite 1850
(714)374-1743(Villella Telecopier) Costa Mesa,CA 92626
(714)536-5662(Field) (714)424-5559
(714)374-1590(Field Telecopier) (714)662-5576(Telecopier)
(714)536-5200(Freidenrich) wong.dennis@dorseylamcom
(714)374-1603(Freidenrich Telecopier)
(714)536-5404(Brockway) BOND COUNSEL
(714)374-1557(Brockway Telecopier)
martincw@surfcity-hb.org Brian D.Quint,Esq.(•)
villelld@surfcity-hb.org Christine Tolentino,Project Manager
fields@surfcity-hb.org Quint&Thimmig LLP
freidens@surfcity-hb.org One Embarcadero Center,Suite 2420
San Francisco,CA 94111-3737
FINANCIAL ADVISOR (415)765-1550
Ms.Suzanne Harrell • (415)765-1555(Telecopier)
Q. ( ) bquint@gtllp.com
Harrell&Company Advisors,LLC colentino@gtllp.com
333 City Boulevard West,Suite 1430
Orange,CA 92868
(714)939-1464
(714)939-1462(Telecopier)
s.harrell@harrellco.com
UNDERWRITER
Mr.Bill J.O'Connor(•)
Mr.Francis Mayers
O'Connor SWS Securities
3 Civic Plaza,Suite 100
Newport Beach,CA 92660
(949)717-2000
(949)717-2020(Telecopier)
bocconor@swst.com
forayers@swst.com
RESOLUTION NO. 6161
A RESOLUTION OF FORMATION OF COMMUNITY FACILITIES DISTRICT
NO. 1990-1 (GOLDENWEST/ELLIS AREA) , AUTHORIZING THE LEVY
OF A SPECIAL TAX WITHIN THE DISTRICT, PRELIMINARILY
ESTABLISHING AN APPROPRIATIONS LIMIT FOR THE DISTRICT
AND SUBMITTING LEVY OF THE SPECIAL TAX AND THE ESTABLISHMENT
OF THE APPROPRIATIONS LIMIT TO THE QUALIFIED ELECTORS
OF THE DISTRICT
Community Facilities District No . 1990-1
(Goldenwest/Ellis Area)
The City Council of the City of Huntington Beach hereby resolves
as follows :
WHEREAS, on. May 7, 1990 , this City Council adopted a resolution
entitled "A Resolution of Intention to Establish a Community
Facilities District and to Authorize the Levy of Special Taxes
Pursuant to the Mello-Roos Community Facilities Act of 1982" (the
"Resolution of Intention" ) , stating its intention to form Community
Facilities District No . 1990-1 (Goldenwest/Ellis Area) (The
"District") , of the City pursuant to the Mello-Roos Community
Facilities Act of 1982, as amended (the "Act" ) the provisions of
which Resolution of _Intention are incorporated herein by this
reference as if fully set forth herein, and on this date, this City
Council held a noticed public hearing as required by the Act and the
Resolution of Intention and at said hearing evidence was presented
to this City Council on said matters before it, including a report
by the Director of Public Works , or his designee (the "Report" ) as
to the facilities and services to be provided through the District
and the costs thereof, a copy of which is on file with the City
Clerk, and written protests with respect to the formation of the
District the furnishing of specified types of facilities in services
and/or the rate and method of apportionment of the special taxes
have not been filed with the City Clerk by fifty percent (50%) or
-1-
more of the registered voters residing within the territory of the
District or property owners of one-half (1/2) or more of the area of
land within the District and not exempt from the special tax; and
the special tax proposed "to be levied in the District has not been
eliminated by protest by fifty percent (50%) or more of the
registered voters residing within the territory of the District. or
the owners of one-half ( 1/2) or more of the area of land within the
District and not exempt from the special tax.
NOW, THEREFORE, IT IS HEREBY ORDERED .as follows :
SECTION 1 . The foregoing recitals are true and correct .
SECTION 2 . The proposed special tax to be levied within the
District has not been precluded by majority protest pursuant to
Section 53324 of the Act .
SECTION 3 . All prior proceedings taken by this City Council in
connection with the establishment .of the District and the levy of
the special tax have been duly considered and are hereby found and
determined to be valid and in conformity with the Act .
SECTION 4 . The community facilities district designated
"Community Facilities District No. 1990-1 (Goldenwest/Ellis Area" of
the City is hereby established pursuant to the Act .
SECTION 5 . The boundaries of the District, as set forth in the
map of the District heretofore recorded in the Orange County
Recorder ' s Office in Book 52 at page 9 of Maps of Assessment and
Community Facilities Districts , are hereby approved, are
incorporated herein by reference and shall be the boundaries of the
District .
SECTION 6 . The type of public facilities and services proposed
to be financed by the District and pursuant to. the Act shall consist
of those items listed as facilities on Exhibit A hereto and by this
-2-
reference incorporated herein (the "Facilities" ) , and those items
listed as -services on Exhibit A (the "Services" ) , respectively.
SECTION 7 . Except to the extent that funds are otherwise
available to the District to pay for the Facilities , the Services
and/or the principal and interest as it becomes due on bonds of the
District issued to finance the Facilities, a special tax sufficient
to pay the cost thereof , secured by a continuing lien against all
non-exempt real property in the District, is intended to be levied
annually within the District, and collected in the same manner as
ordinary ad valorem property taxes . The proposed rate and method of
apportionment of the special .tax among the parcels of real property
within the District, in sufficient detail to allow each landowner
within the proposed District to estimate the probable maximum amount
such owner will have to pay, are described in Exhibit B attached
hereto and by this reference incorporated herein.
SECTION -8 . It is hereby found and determined that the
Facilities and Services are necessary to meet increased demands
placed upon local agencies as the result of development occurring in
the District .
SECTION 9 . The Director of Finance of the City of Huntington
Beach, 2000 Main Street, Huntington Beach, California 92648,
telephone number (714) 536-5228 is the officer of the City which
will be responsible for preparing annually a current roll of special
tax levy obligations by assessor ' s parcel number and which will be
responsible for estimating future special tax levies pursuant to
Section 53340 . 1 of the Act .
SECTION 10 . Upon recordation of a notice of special tax lien
pursuant to Section 3114 . 5 of the California Streets and Highways
Code, a continuing lien to secure each levy of the special tax shall
-3-
attach to all nonexempt real property in the District and this lien
shall continue in force and effect until the special tax obligation
is prepaid and permanently satisfied and the lien canceled in
accordance with the law or until collection of the tax by the City
ceases .
SECTION 11 . In accordance with Section 53325 . 7 of the Act, the
annual appropriations limit, as defined by subdivision (h) of
Section 8 of Article XIII B of the California Constitution, of the
District is hereby preliminarily established at $750 , 000 . 00 and said
appropriations limit shall be submitted to the voters of the
District as hereafter provided . The proposition establishing said
annual appropriations limit shall become effective if approved by
the qualified electors voting thereon and shall be in accordance
with the applicable provision of Section 53325 . 7 of the Act .
SECTION 12 . Pursuant to the provisions of the Act, the
16]
proposition of the levy of the special tax and the proposition of
the establishment of the appropriations limit specified above shall
be submitted to the qualified electors of the District at an
election the time, place and conditions of which election shall be
as specified by a separate resolution of this City Council .
PASSED AND ADOPTED by the -City Council of the City of Huntington
a adjourned
Beach at 4 regular meeting thereof on the 25th day
of ,tune 1990 .
Mayor
A EST; APPROVED FORM:
Ciy;.Gferk 4IE
orney
i REVIEWED AND APPROVED: A OVED:
City Administrator Director f drninis at ve Services
-4-
EXHIBIT A
COMMUNITY FACILITIES DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
FACILITIES TO BE FINANCED
Improvements to Ellis Avenue in the vicinity of the District
including road improvements , curb, gutter, sidewalk, storm drain and
signal improvements, striping and related improvements .
Improvements to Goldenwest Avenue in the vicinity of the District,
including road improvements , curb, gutter, sidewalks , storm drain
and signal improvements, striping and related improvements .
Improvements to Quarterhorse Lane in the vicinity of the District,
including road improvements, curb, gutter, sidewalk, storm drain and
signal improvements , striping and related improvements .
Improvements to Saddleback Lane in the vicinity of the District,
including road improvements , curb, gutter, sidewalk, storm drain and
signal improvements , striping and related improvements .
Improvements to Edwards Street in' the vicinity of the District, .
including road improvements, curb, gutter, sidewalk, storm drain and
signal improvements, striping and related improvements .
Water and sewer system improvements along Ellis Avenue, Quarterhorse
Lane and Saddleback Lane in .the vicinity of the District, including
related improvements .
Undergrounding of utilities along one or more of the foregoing
streets in the vicinity of the District, including related
improvements .
Undergrounding of utilities along one or more of the foregoing
streets in the vicinity of the District, including any related work.
Fire station improvements, including construction and related costs .
Acquisition of emergency vehicle traffic interruption devices .
SERVICES TO BE PROVIDED
Police and Fire protection services , Paramedic services , in each
case in addition to those currently provided in the District .
OTHER
Costs of engineering, design, planning and coordination related to
the above-listed facilities .
Bond related expenses, including underwriters discount, reserve
fund, capitalized interest, bond counsel and all other incidental
expenses .
Administrative fees of the City and the Bond trustee or fiscal agent
related to the District and the Bonds .
APPENDIX A
DEBT SERVICE SCHEDULES
. :l
6161
CITY OF HUNTINGTON BEACH -
COMMUNITY FACILITIES DISTRICT 90-1
-------------------------------------------------
-------------------------------------------------
S 0 U R'C E S A N D U S E S O F F U N D S
-------------------------------------------------
DELIVERY DATE: 7/24/90
SOURCES
3--3-��
PAR AMOUNT OF BONDS................... 52,375,000.00
*PREMIUM /-DISCOUNT................... $0.00
BOND PROCEEDS........................................... 2,375,000.00
ACCRUED INTEREST........................................ 12,518.23
-------------------
52,387,518.23
USES OF FUNDS
IMPROVEMENT FUND........................................ 1.,826,480.00
UNDERWRITERS DISCOUNT (% or S)..........( 1.750000%)... 41,562.50
COST OF ISSUANCE........................................ 115,000.00
ACCRUED INTEREST........................................ 12,518.23
CAPITALIZED INTEREST.................................... 199,468.84
DEBT SERVICE RESERVE..................................... 190,000.00
CONTINGENCY............................................. 2,488.66
-------------------
52,387,518.23
Prepared by Rod Gum Associates, Inc., Seal Beach, California
RUNDATE: 06-04-1990 2 18:37:46 FILENAME: HB KEY: 90-1
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CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT 90-1
---------------------
DEBT SERVICE SCHEDULE
DATE PRINCIPAL COUPON INTEREST PERIOD TOTAL FISCAL TOTAL
-------- -------------- ---------- -------------- -------------- --------------
4/ 1/91 146,953.13 146,953.13
10/ 1/91 97,968.75 97,968.75 244,921.88
4/ 1/92 97,968.75 97,968.75
10/ 1/92 20,000.00 8.250000 97,968.75 117.968.75 215,937.50
4/ 1/93 97,143.75 97,143.75
10/ 1/93 25,000.00 8.250000 97,143.75 122,143.75 219,287.50
4/ 1/94 96,112.50 96,112.50
10/ 1/94 25,000.00 8.250000 96,112.50 121,112.50 217,225.00
4/ 1/95 95,081.25 95,081.25
10/ 1/95 30,000.00 8.250000 95,081.25 125,081.25 220,162.50
4/ 1/96 93,843.75 93,843.75
10/ 1/96 30,000.00 8.250000 93,843.75 ,123,843.75 217,687.50
4/ 1/97 92,606.25 92,606.25
10/ 1/97 35,000.00 8.250000 92,606.25 127,606.25 220,212.50
4/ 1/98 91,162.50 91,162.50
10/ 1/98 35,000.00 . 8.250000 91,162.50 126,162.50 217,325.00
4/ 1/99 89,718.75 89,718.75
10/ 1/99 40,000.00 8.250000 89,718.75 129,718.75 219,437.50
4/ 1/ 0 88,068.75 88,068.75
10/ 1/ 0 40,000.00 8.250000 88,068-75 128,068.75 216,137.50
4/ 1/ 1 86,418.75 86,418.75
10/ 1/ 1 45,000.00 8.250000 86,418.75 131,418.75 217,837.50
4/ 1/ 2 84,562.50 84,562.50
10/ 1/ 2 50,000.00 8.250000 84,562.50 134,562.50 219,125.00
4/ 1/ 3 82,500.00 82,500.00
Prepared by Rod Gum Associates, Inc., Seal Beach, California
RUNDATE: 06-04-1990 2 18:38:35 FILENAME: HB KEY: 90-1
T
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--=-- CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT 90-1
---------------------
DEBT SERVICE SCHEDULE
---------------------
DATE PRINCIPAL COUPON INTEREST PERIOD TOTAL FISCAL TOTAL
-------- -------------- ---------- -------------- -------------- --------------
4/ 1/16 35,475.00 .35,475.00
10/ 1/16 145,060.00 8.250000 35,475.00 180,475.00 215,950.00
4/ 1/17 29,493.75 29,493.75
10/ 1/17 160,000.00 8.250000 29,493.75 189,493.75 218,987.50
4/ 1/18 22,893.75 22,893.75
10/ 1/18 170,000.00 8.250000 22,893.75 192,893.75 215,787.50
4/ 1/19 15,881.25 15,881.25
10/ 1/19 185,000.00 8.250000 15,881.25 200,881.25 216,762.50
4/ 1/20 8,250.00 8,250.00
10/ 1/20 200,000.00 8.250000 8,250.00 208,250.00 216,500.00
-------------- -------------- --------------
2,375,000.00 4,177,284.38 6,552,284.38
ACCRUED 12,518.23 12,518.23
2,375,000.00 4,164,766.15 6,539,766.15
Prepared by Rod Gunn Associates, Inc., Seal Beach, California
RUNDATE: 06-04-1990 a 18:38:41 FILENAME: HB KEY: 90-1
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-._-. CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT 90-1
---------------------
DEBT SERVICE SCHEDULE
---------------------
DATE PRINCIPAL COUPON INTEREST PERIOD TOTAL FISCAL TOTAL
-------- -------------- ---------- -------------- -------------- --------------
10/ 1/ 3 55,000.00 8.250000 82,500.00 137,500.00 220,000.00
4/ 1/ 4 80,231.25 80,231.25
10/ 1/ 4 55,000.00 8.250000 80,231.25 135,231.25 215,462.50
4/ 1/ 5 77,962.50 77,962.50
10/ 1/ 5 60,000.00 8.250000 77,962.50 137,962.50 215,925.00
4/ 1/ 6 75,487.50 75,487.50
10/ 1/ 6 65,000.00 8.250000 75,487.50 140,487.50 215,975.00
4/ 1/ 7 72,806.25 72,806.25
10/ 1/ 7 70,000.00 8.250000 72,806.25 142,806.25 215,612.50
4/ 1/ 8 69,918.75 69,918.75
10/ 1/ 8 80,000.00 8.250000 69,918.75 149,918.75 219,837.50
4/ 1/ 9 66,618.75 66,618.75
10/ 1/ 9 85,000.00 8.250000 66,618.75 151,618.75 218,237.50
4/ 1/10 63,112.50 63,112.50
10/ 1/10 90,000.00 8.250000 63,112.50 153,112.50 216,225.00
4/ 1/11 59,400.00 59,400.00
10/ 1/11 100,000.00 8.250000 59,400.00 159,400.00 218,800.00
4/ 1/12 55,275.00 55,275.00
10/ 1/12 105,000.00 8.250000 55,275.00 160,275.00 215,550.00
4/ 1/13 50,943.75 50,943.75
10/ 1/13 115,000.00 8.250000 50,943.75 165,943.75 216,887.50
4/ 1/14 46,200.00 46,200.00
10/ 1/14 125,000.00 8.250000 46,200.00 171,200.00 217,400.00
4/ 1/15 41,043.75 -41,043.75
10/ 1/15 135,000.00 8.250000 41,043.75 176,043.75 217,087.50
Prepared by Rod Gum Associates, Inc., Seal Beach, California
RUNDATE: 06-04-1990 2 18:38:39 FILENAME: HS KEY: 90-1
CITY OF HUNT I NGTON-BEACH
COMMUNITY FACILITIES DISTRICT 90-1
DEBT SERVICE SCHEDULE
Dated 7/ 1/90 with Delivery of 7/24/90
Bond Years 50,633.750
Average Coupon 8.250000
Average Life 21.319474
N I C % 8.250000 % Using 100.0000000
T I C % 8.430068 % From Delivery Date
Prepared by Rod Gum Associates, Inc., Seal Beach, California
RUNDATE: 06-04-1990 8 18:38:43 FILENAME: HB KEY: 90-1
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-- CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT 90-1
-------------------------
-------------------------
CAPITALIZED INTEREST FUND
-------------------------
-------------------------
DELIVERY DATE: 7/24/90
PERIOD BEGINNING ACCRUED CONSTR. FUND DEBT SERVICE CAPITALIZED TOTAL FUNDS BOND INTEREST ENDING
ENDING BALANCE INTEREST EARNINGS RESERVE INT. EARNINGS AVAILABLE CAPITALIZED BALANCE
( 8.000000 X) ( 8.000000 %) (100.000000 %)
-------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
4/ 1/91 199,468.84 12,518.23 10,428.89 11,494.53 233,910.49 146,953.13 86,957.37
10/ 1/91 86,957.37 7,600.00 3,411.38 97,968.75 97,968.75
-------------- -------------- -------------- -------------- ..............
12,518.23 18,028.89 14,905.91 244,921.87
Note: Capitalized Interest Earnings Utilized Amual Cw pmr�dings Using a 30/360 Year Basis
Prepared by Rod Gum Associates, Inc., Seal Beach, California
RUNDATE: 06-04-1990 a 18:38:54 FILENAME: HS KEY: 90-1
M
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F�
c
C,
EXHIBIT B
CITY OF HUNTINGTON BEACH '
COMMUNITY FACILITIES DISTRICT NO. 1990-1
�o
(Goldenwest/Ellis Area)
RATE AND METHOD OF APPORTIONMENT OF
THE SPECIAL TAX
The Special Tax is to be levied by the Finance Director of the City on behalf of the District each
Fiscal Year on all parcels within the District in an amount equal to the Maximum Special Tax, less
any Services Credit, as such terms are defined below. On March 1 of each year all taxable Parcels
within the District shall be categorized by the Finance Director either as Developed Parcels or
Undeveloped Parcels, and shall be subject to a Special Tax in accordance with the Rate and Method of
Apportionment specified below.
Undeveloped Parcels
A Special Tax shall be levied on each Undeveloped Parcel as follows:
(Taxable Sq. Ft. of Parcel X Maximum) — Services = Special
i (Taxable Sq. Ft. of District Special Tax) Credit Tax
Developed Parcels
A Special Tax shall be levied on each Developed Parcel as follows:
1 )
(Maximum _ Total Special Tax Levied X Total Number of) _ Services = Special
(Special Tax on Undeveloped Parcels Developed Parcels) Credit Tax
Definitions
Act means the Mello-Roos Community Facilities Act of 1982,as amended.
The Bonds means the City of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) 1990 Special Tax Bonds, and any other bonds of the District payable from the
Special Tax.
The City means the City of Huntington Beach,California.
Developed Parcel (1) is any Parcel that is within the boundaries of the District based on the latest
available equalized rolls of the County of Orange as of March 1 of the applicable year which is not
exempt from the Special Tax pursuant to Section 53311, et seq. of the California Government Code, (2)
is not greater than 50,000 square feet in total square footage and (3) with respect to which a building
permit for a single family dwelling has been issued as of March 1 of the current year.
1 6161
The District is Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) of the City of
Huntington Beach,.California.
Fiscal Agent means the fiscal agent for the Bonds appointed under the Fiscal Agent Agreement.
Fiscal Agent Agreement . means the agreement by that name approved by the Resolution of
Issuance.
Fiscal Year means the period starting on July land ending the following June 30.
Maximum Special Tax is an amount for any Fiscal Year equal to$264,000.
Resolution of Issuance is any Resolution adopted by the City Council of the City authorizing the
issuance of Bonds.
Services Credit is an amount equal to any proceeds of the Special Tax Levied within the District
which has been allocated by the City to the payment of police and fire protection services and/or
paramedic services authorized under the Act which have not been expended for such purpose by the
last day of the prior Fiscal Year.
Special Tax is any tax authorized by Section 53340 of the California Government Code adopted by
Ordinance of the City and levied within the District.
Taxable Square Footage of Parcels is all of the area within any Parcel within the District which
is not exempt from the Special Tax pursuant to Section 53311, et. seq. of the California Government
Ar -Code.
Total Taxable Square Footage of the District means the aggregate Taxable Square Footage for
all Parcels within the District.
Undeveloped Parcel is any Parcel within the boundaries of the District (based on the latest
equalized rolls of the County of Orange as of March 1 of each year) which is not a Developed Parcel,
and is not exempt from the Special Tax under the provisions of the Act.
2
6161
Res. No. 6161
STATE OF CALIFORNIA
COUNTY OF ORANGE ss:
CITY OF HUNTINGTON BEACH )
I , CONNIE BROCKWAY, the duly elected, qualified City
Clerk of the City of Huntington Beach, and ex-officio Clerk of the
City Council of said City, do hereby certify that the whole number of
members of the City Council of the City of Huntington Beach is seven;
that the foregoing resolution was passed and adopted by the affirmative
vote of at least a majority of all the members of said City Council
at a regular adjourned meeting thereof held on the 25th day
of June 19 90 by the following vote:
AYES: Councilmembers:
MacAllister, flays, Bannister, Silva, Erskine
NOES: Councilmembers:
Winchell
ABSENT: Councilmembers:
Green
City er and ex-offif6io Clerk
of the City Council of the City
of Huntington Beach, California
SU Jbdbb OF ORANGE COUNTY,CALIFORNIA
v 2:30
!L
P.M. JUL 121990
RECORDING. REQUESTED .BY AND
Ar AFTER RECORDATION RETURN TO: Q•ct61�RECORDER
City Clerk This document is solely for the
City of Huntington Beach official business of the City
2000 Main Street of Huntington Beach, as contem—
Huntington Beach, CA 92648 plated under Government Code
EXEMPT Sao. 6103 add should be recorded
C14 free or sherge.
NOTICE OF SPECIAL TAX LIEN
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
(Goldenwest/Ellis Area)
Pursuant to the requirements of Section 3114.5 of the Streets and Highways Code of
California and the Mello-Roos Community Facilities Act of 1982, as amended, section 53311, et.
seq., of the California Government Code (the "Act"), the undersigned City Clerk of the City of
Huntington Beach (the "City"), County of Orange, State of California, hereby gives notice that a
lien to secure payment of a special tax which the City Council of the City is authorized to levy, is
hereby imposed. The special tax secured by this lien is authorized to be levied for the purpose of
paying principal and interest on bonds, the proceeds of which are being used to finance the
acquisition and construction of public facilities and services described on Exhibit A attached hereto
and hereby made a part hereof.
The special tax is authorized to be levied within the City of Huntington Beach Community
Facilities District No. 1990-1 (Goldenwest/Ellis Area) which has now been officially formed and
the lien of the special tax is a continuing lien which shall secure each annual levy of the special tax
and which shall continue in force and effect until the special tax obligation is paid, permanently
satisfied, and cancelled in accordance with law or until the special tax ceases to be levied and a
notice of cessation of special tax is recorded.
The rate,method of apportionment, and manner of collection of the authorized special tax is
as set forth in Exhibit B attached hereto and hereby made a part hereof. Conditions under which
the obligation to pay the special tax may be prepaid and permanently satisfied and the lien of the
special tax cancelled are as follows: none.
Notice is further given that upon the recording of this notice in the office of the County
Recorder of the County of Orange, the obligation to pay the special tax levy shall become a lien
upon all nonexempt real property within the City of Huntington Beach Community Facilities
District No. 1990-1 (Goldenwest/Ellis Area) in accordance with Section 3115.5 of the Streets and
Highways Code of California.
The name(s) of the owner(s)of the real property included within the area of this community
facilities district as they appear on the latest secured assessment roll as of the date of recording of
this notice or are otherwise known to the City are as set forth in Exhibit C attached hereto and
hereby made a part hereof.
Reference is made to the amended boundary map of the community facilities district
recorded at Book 52 of Maps of Assessment and Community Facilities Districts at Page 9, in the
office of the County Recorder for the County of Orange, State of California, which map is now the
final boundary map of the community facilities district.
I(rr,
1 1
The assessor's tax parcel(s) numbers of all parcels or any portion thereof which are
included within the area of this community facilities district are as set forth in Exhibit C attached
hereto.
For further information concerning the current and estimated future tax liability of owners
or purchasers of real property subject to this special tax lien, interested persons should contact the
Director of Finance of the City of Huntington Beach, 2000 Main Street, Huntington Beach,
California, 92648, telephone number(714) 536-5228.
Dated: July , 1990.
By:
City Clerk,
City of Huntington Beach
STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss:
On this 9r14 day of , 19 90 , before me,
a Notary. Public in and for said Cofilnty nd State, personally appeared
end known to me to be the City Clerk
of the City of HuntingtoF Beach, the municipal corporation that executed
the within instrument, known to me to be the person who executed the
within instrument on behalf of .said municipal corporation and acknowledged
to me that such municipal corporation executed the same.
OFFICIAL SEAL
MAYBRICE L ETCHESON '
a� NOTARY PUBLIC -CALIFORNIA
ORANGE COUNTY
My Comm. exp;res MAY 11, 1993
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EXHIBIT A
CITY OF Huntington Beach
COMMUNITY FACILITIES DISTRICT NO. 1990-1
(Goldenwest/Ellis Area)
PUBLIC FACILITIES TO BE PROVIDED BY
COMMUNITY FACILITIES DISTRICT NO. 1990-1 (GOLDENWEST/ELLIS AREA)
FACILITIES TO BE FINANCED
Improvements to Ellis Avenue in the vicinity of the District, including road improvements,
curb, gutter, sidewalk, storm drain and signal improvements, striping and related
improvements.
Improvements to Golden West Avenue in the vicinity of the District, including road
improvements, curb, gutter, sidewalk, storm drain and signal improvements, striping and
related improvements.
Improvements to Quarterhorse Lane in the vicinity of the District, including road
improvements, curb, gutter, sidewalk, storm drain and signal improvements, striping and
related improvements.
Improvements to Saddleback Lane in the vicinity of the District, including road
improvements, curb, gutter, sidewalk, storm drain and signal improvements, striping and
related improvements.
Improvements to Edwards Street in the vicinity of the District, including road
improvements, curb, gutter, sidewalk-, storm drain and signal improvements, striping and
related improvements.
Water and sewer system improvements along Ellis Avenue, Quarterhorse Lane and
Saddleback Lane in the vicinity of the District,including related improvements.
Undergrounding of utilities along one or more of the foregoing streets in the vicinity of the
District, including any related work.
Fire station improvements, including construction and related costs.
Acquisition of emergency vehicle traffic interruption devices.
SERVICES TO BE PROVIDED
Police and Fire protection services, Paramedic services, in each case in addition to those
currently provided in the District.
A-1
e
e
OTHER
Costs of engineering, design, planning and coordination related to the above-listed
facilities.
Bond related expenses, including underwriters discount,reserve fund, capitalized interest,
bond counsel and all other incidental expenses.
Administrative fees of the City and the Bond trustee or fiscal agent related to the District
and the Bonds.
t
A-2
EXHfB[T B
CITY OF HliNTINGTON BEACH
CONINTU NITY FACILITIES DISTRICT NO. 1990-1
(Goldenwest/Ellis Area)
RA'IT AND METHOD OF APPORTION``[ENT O
THE SPECIALTAX
Thr. Soecial Tax is to be levied by the Finance Director of the City on behalf of the District each
Fiscal Year on all ;parcels within the District in an amount equal to the :Maximum Special Tar, less
any Services Credit, as such terins are defined below. Or. March 1 of each year all taxable Parcels
within the District shall be cate;orized by the Finance Director either as Developed Parcels or
Undeveloped Parcels, and shall be subject to a Special Tax in accordance with the Rate and:Method of
Apportionment=pecified be!ow.
Undeveloped Rarce!s
A Special Tax shall be levied on each Undeveloped Parcel as follows:
('Taxable So. F:. of Parcel Maximum) — Services = Special
(Taxable Sq. Ft.of District Special Tax) Credit Tax
Developed Yarcels
A Special`rax shall be levied on each Developed Parcel as follows:
1 )
(Maximum _ Total Special Tax Levied X Total Number of) _ Services = Special
(Special Tax on Undeveloped Parcels Developed Parcels) Credit Tax
Definitions
Act means the;Bello-Roos Community Facilities Act of 1982,as amended.
The Bonds means the City of Huntington Beach Community Facilities District No. 1.990-1
(GoldenwestlEllis Area) 1990 Special Tax Bonds, and any other bonds of the District payable from the
Speciarrax.
The City :Weans the City of Huntington Beach,California.
Developed Parcel (1) is any Parcel that is within the boundaries of the District based on the latest
available equalized rolls of the County of Orange as of March 1 of the applicable tear which is not
exempt from the Special Tax pursuant to Section 53311,et seq.of the California Government Code,(2)
i; not greater than 50,000 square feet in total square footage and (3) with respect to which a building_ _
permit for a single family dwelling has been issued as of.larch 1 of the current year.
I
1
The District is Community Facilities Distrct 1990.1 (Goldenwest/Ellis Area) of the Cite of
Huntington Beach,California
Fiscal Agent -means the fiscal a,cr.t for the Bonds appointed under the Fiscal Agent agreement.
Fisca! Agent Agreement means the agreement by that name approved by the l.esok.:ion. or
Issuance.
Fiscal Year means the period starting oil Jule 1 and ending the foll.o:�•ing JLine 30.
.Maximum Special Tar is all amount for an}•Fiscal %'ear equal to$264,000.
Resolution of Issuance is an: llesolution adopted by the City Council of the City authorizing the
issuance of Bond;:.
Services Credit is an amount ccual to any proceeds of the Special Tax Levied within. the District
which has been allocated by the City to the payment of police and Fire protection services and,o!-
paramedic services authorized under the Act which have not been expended for such purpose by the
last day of the prior Fiscal Year.
Special Tax is any tax authorized by Section 53340 of the California Government Code adopted by
Ordinance of the City and levied within the District.
Taxable Square Footage of Parcels is all of the area within any Parcel within,the District which
is not:exempt from the Special Tax pursuant to Section 53311, et. seq. of the California Goverrinwilt
Code.
Total Taxable Square Footage of the Dist.iiet means the aggregate Taxable Square Footage ror
all Parcels within the District.
Undeveloped Parcel is anv Parcel within the boundaries of the District (based on the latest
equalized rolls of the County of Orange as of:March 1 of each year) which is not a Developed Parcel,
and is not exempt from the Special Tax under the provisions of the Act.
2
r ,
EXHIBIT C
' CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
(Goldenwest/Ellis Area)
1990 Special Tax Bonds
ASSESSOR'S PARCEL NUMBERS AND OWNERS OF LAND WITHIN
COMMUNITY FACILITIES DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
Assessor's Parcel Nos. Names of Property Owners
110-200-015 Southwest Diversified/Coscan Partners,
110-200-016 a California General Partnership
18400 Vonkerman, Suite 400
Irvine, CA 92715
110-210-02 Central Park#17,
110-210-04 a California Limited Partnership
505 Park Ave.
Balboa Island, CA 92662
i
159-391-01 Central Park#8,
A California Limited Partnership
505 Park Ave.
Balboa Island, CA 92662
159-391-02 Central Park#12,
159-391-03 A California Limited Partnership
159-391-04 505 Park Ave.
Balboa Island, CA 92662
110-200-10 Central Park#15,
110-200-11 A California Limited Partnership
505 Park Ave.
Balboa Island, CA 92662
110-200-05 Emil Walter Plegel and
110-200-04 Ruby Lucille Plegel,Trustees
7071 Thomas Street
Buena Park, CA 90621
C-1
Assessor's Parcel Nos. Names of Property Owners
110-200-23 Central Park#13,
a California Limited Partnership
505 Park Ave.
Balboa Island, CA 92662
110-210-01 William Landis
1900 Avenue of the Stars,
Suite 1060
Los Angeles, CA 90067
17375
Ar
C-2
RESOLUTION NO. 2001-74
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF HUNTINGTON BEACH
AUTHORIZING THE ISSUANCE OF 2001 SPECIAL TAX REFUNDING BONDS
OF THE CITY FOR AND ON BEHALF OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1 (GOLDENWEST/ELLIS
AREA), APPROVING AND DIRECTING THE EXECUTION OF A FISCAL AGENT
AGREEMENT AND AN ESCROW AGREEMENT, APPROVING THE SALE OF
SUCH BONDS, AND APPROVING OTHER RELATED DOCUMENTS AND
ACTIONS
WHEREAS, the City Council has conducted proceedings under and pursuant to the
Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to form the City of
Huntington. Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the
"District"), to authorize the levy of special taxes upon the land within the District, and to issue
bonds secured by said special taxes to finance certain facilities; and
The City Council, as legislative body of the District, authorized the issuance of bonds of
the City for the District in the original principal amount of $2,400,000 designated City of
Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) 1990
Special Tax Bonds (the "Prior Bonds"), the Prior Bonds having been issued on August 9, 1990,
pursuant to the Act and Resolution 6174 of the City Council; and
The City Council has determined that due to favorable interest rates, it is in the best
interests of the City and the District that the Prior Bonds be refunded, with the resulting savings
to be applied to reduce the special taxes paid by the affected homeowners; and
There has been submitted to the City Council a fiscal agent agreement (the "Fiscal Agent
Agreement") providing for the issuance of special tax refunding bonds of the City(the "Bonds"),
for and on behalf of the District, and the City Council, with the aid of its staff, has reviewed the
Fiscal Agent Agreement and found it to be in proper order, and now desires to approve the Fiscal
Agent Agreement and the issuance of the Bonds; and
There has been presented to the City Council an escrow agreement (the "Escrow
Agreement"), providing for the creation of an escrow fund which will be used to refund and
redeem the Prior Bonds and the "City Council now desires to approve such agreement in
connection with the refunding of the Prior Bonds; and
The City proposes to sell the Bonds to O'Connor SWS Securities (the "Underwriter")
pursuant to the terms of a bond purchase agreement (the "Bond Purchase Agreement") by and
between the City and the Underwriter, and the Underwriter proposes to offer the Bonds to the
investing public by means a preliminary official statement (the "Preliminary Official
Statement"); and
1
SF:2001 Resol:2001 Special Tax Refunding Bonds
Res. No. 2001-74
City staff has caused to be prepared a draft of goals and policies for community facilities
districts of the City (the "Goals and Policies"), the form of which is on file with the City Clerk,
and this City Council has duly considered said Goals and Policies and desires to approve them at
this time so that the terms of any refunding bonds can be structured to comply with such Goals
and Policies; and
It appears that each of said documents and instruments which are now before this meeting
is in appropriate form and is an appropriate document or instrument to be executed and delivered
for the purpose intended; and
All conditions, things and acts required to exist, to have happened and to have been
performed precedent to and in the issuance of the Bonds as contemplated by this Resolution and
the documents referred to herein exist, have happened and have been performed in due time,
form and manner as required by the laws of the State of California, including the Act.
NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows:
SECTION 1. Adoption of Goals and Policies. The Goals and Policies, in the form on
file with the City Clerk, are hereby adopted as the local goals and policies of the City for
community facilities districts, and are intended to satisfy the requirements of section 53312.7(a)
of the Act.
SECTON 2. Issuance of Bonds; Approval of Fiscal Agent Agreement and Escrow
Agreement. Pursuant to the Act, this Resolution and the Fiscal Agent Agreement, special tax
refunding bonds of the City for the District designated as "City of Huntington Beach Community
Facilities District No. 1990-1 2001 Special Tax Refunding Bonds" in an aggregate principal
amount not to exceed $2,400,000, are hereby authorized to be issued. The Bonds shall be
executed in the form set forth in and otherwise as provided in the Fiscal Agent Agreement.
In furtherance of the issuance of the Bonds, the City Council hereby makes the following
findings and determinations: (a) it is prudent in the management of the fiscal affairs of the City,
the City Council and the District to issue the Bonds for the purpose of refunding the Prior Bonds,
(ii) the total net interest cost to maturity on the Bonds plus the principal amount of the Bonds will
not exceed the total net interest cost to maturity on the Prior Bonds plus the principal amount of
the Prior Bonds, and (iii) the Bonds are incompliance with the Goals and Policies.
The City Council hereby approves the Fiscal Agent Agreement in the form on file with
the City Clerk. The Mayor, the City Administrator, the City Treasurer, the Administrative
Services Director or the Finance Officer (the "Designated Officers") is hereby authorized and
directed to execute the Fiscal Agent Agreement, for and in the name and on behalf of the City
and the District, in such form, together with any additions thereto or changes therein deemed
necessary or advisable by the a Designated Officer upon consultation with Bond Counsel. The
proceeds of the Bonds shall be applied by the City for the purposes and in the amounts as set
forth in the Fiscal Agent Agreement. The City Council hereby authorizes the delivery and
performance by the City of the Fiscal Agent Agreement. For purposes of section 53363.2 of the
Act, (i) it is expected that the purchase of the Bonds will occur on or after November 14, 2001,
(ii) the date, denomination, maturity dates, places of payment and form of the Bonds shall be as
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Res. No. 2001-74
set forth in the Fiscal Agent Agreement, (iii) the maximum rate of interest to be paid on the
Bonds shall be seven percent (7%) with the actual rate or rates to be set forth in the Fiscal Agent
Agreement as executed, (iv) the place of payment for the Prior Bonds shall be as set forth in the
fiscal agent agreement for the Prior Bonds; and (v) the designated costs of issuing the Bonds
shall be as described in section 53363.8(a) of the Act, and as otherwise described in the Fiscal
Agent Agreement, in the Official Statement for the Bonds and the closing certificates for the
Bonds, including Bond Counsel and Disclosure Counsel fees and expenses, Underwriter's
discount, financial advisor fees and expenses, printing costs for the Official Statement, escrow
verification costs, initial fiscal agent fees and costs of City staff incurred in connection with the
sale and issuance of the Bonds.
The City Council hereby approves the refunding of the Prior Bonds with the proceeds of
the Bonds, in accordance with the provisions of the documents pursuant to which such Prior
Bonds were sold and delivered, and the Escrow Agreement, between the City and the fiscal agent
for the Prior Bonds. The City Council hereby approves the Escrow Agreement in the form on file
with the City Clerk. The City Council hereby authorizes and directs a Designated Officer to
execute and deliver the final form of the Escrow Agreement for and in the name and on behalf of
the City, in such form, together with any changes therein or additions thereto deemed advisable
by the Finance Officer upon consultation with Bond Counsel. The City Council hereby
authorizes the delivery and performance by the City of the Escrow Agreement.
SECTION 3. Delivery of the Bonds. The Bonds, when executed, shall be delivered to
U.S. Bank Trust.National Association (the "Fiscal Agent") for authentication. The Fiscal Agent
is hereby requested and directed to authenticate the Bonds by executing the Fiscal Agent's
certificate of authentication and registration appearing thereon, and to deliver the Bonds, when
duly executed and authenticated, to the Underwriter or its order in accordance with written
instructions executed on behalf of the City by the a Designated Officer, which instructions such
officer is hereby authorized and directed, for and in the name and on behalf of the City, to
execute and deliver to the Fiscal Agent. Such instructions shall provide for the delivery of the
Bonds to the Underwriter or its order in accordance with the Bond Purchase Contract, upon
payment of the purchase price therefor.
SECTION 4. Sale of the Bonds. The City Council hereby approves the sale of the Bonds
to the Underwriter. The Bond Purchase Contract, in the form on file with the City Clerk, be and
the same is hereby approved, and a Designated Officer is hereby authorized and directed to
execute the Bond Purchase Contract in said form, with such changes, insertions and omissions as
may be approved by such official, provided that the aggregate principal amount of the Bonds
does not exceed the amount set forth in Section 1, the Underwriter's discount on the Bonds does
not exceed 1.1% and the requirements of clause (ii) of the second paragraph of Section 1 are met.
The City Council hereby finds and determines that the sale of the Bonds at negotiated sale
as contemplated by the Bond Purchase Contract will result in a lower overall cost.
SECTION 5. Official Statement. The City Council hereby approves the Preliminary
Official Statement in the form on file with the City Clerk, together with any changes therein or
additions thereto deemed advisable by a Designated Officer. The City Council authorizes and
directs a Designated Officer, on behalf of the City and the District, to deem "final" pursuant to
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Res. No. 2001-74
Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule") the Preliminary Official
Statement prior to their distribution by the Underwriter.
The Underwriter, on behalf of the City and the District, is authorized and directed to
cause the Preliminary Official Statement to be distributed to such municipal bond broker-dealers,
to such banking institutions and to such other persons as may be interested in purchasing the
Bonds.
Any Designated Officer is authorized and directed to assist the Underwriter in causing the
Preliminary Official Statement to be brought into the form of final official statement (the "Final
Official Statement"), and any Designated Officer is hereby authorized and directed to execute
said Final Official Statement and a statement that the facts contained in the Final Official
Statement, and any supplement or amendment thereto (which shall be deemed an original part
thereof for the purpose of such statement) were, at the time of sale of the Bonds, true and correct
in all material respects and that the Final Official Statement did not, on the date of sale of the
Bonds, and do not, as of the date of delivery of the Bonds, contain any untrue statement of
material fact or omit to state material facts required to be stated where necessary to make any
statement made therein not misleading in the light of the circumstances under which it xvas made.
The execution and delivery by the City of the Final Official Statement, which shall include such
changes and additions thereto deemed advisable by the Finance Officer and such information
permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, shall be
conclusive evidence of the approval of the Final Official Statement by the City.
The Final Official Statement, when prepared, is approved for distribution in connection
with the offering and sale of the Bonds.
SECTION 6. Official Actions. All actions heretofore taken by the officers and agents of
the City with respect to the establishment of the District and the sale and issuance of the Bonds
are hereby approved, confirmed and ratified, and the proper officers of the City are hereby
authorized and directed to do any and all things and take any and all actions and execute any and
All certificates, agreements and other documents, which they, or any of them, may deem
necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds and
the refunding of the Prior Bonds, in accordance with this resolution, and any certificate,
agreement, and other document described in the documents herein approved.
-4-
Res. No. 2001-74
SECTION 7. Effective Date. This resolution shall take effect from and after its
adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 15th day of October , 2001.
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk City Attorney
REVIEWED AND APPROVED: INITIATE ND APP VED:
City dministrator Dire cto of Administrative Services
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Res. No. 2001-74
STATE OF CALIFORNIA )
COUNTY OF.ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of
the City of Huntington Beach, and ex-officio Clerk of the City Council of said
City, do hereby certify that the whole number of members of the City Council
of the City of Huntington Beach is seven; that the foregoing resolution was
passed and adopted by the affirmative vote of at least a majority of all the
members of said City Council at a regular meeting thereof held on the 15th
day of October, 2001 by the following vote:
AYES: Green, Boardman, Cook, Julien Houchen, Garofalo, Dettloff,
Bauer
NOES: None
ABSENT: None
ABSTAIN: None
City Clerk and ex-officio Clerk of the
City Council of the City of
Huntington Beach, California
The foregoing inetrYfll is a correct
ovy of the original on file in this ofQoe.
Atteet 2001
`CONNIE BROCKWAY
city rk-and erk oft e
council of City f H ntington Beach,
California.
By De y
Quint&Thimmig LLP 9/21/01
CIW OF HUNTINGTON BEACH
LOCAL GOALS AND POLICIES FOR
COMMUNITY FAC 11.TM DISTRICTS
(Adopted October 15,2001)
I.INTRODUCTION. Section 53312.7(a) of the California Government Code requires
that the City of Huntington Beach (the "City") consider and adopt local goals and policies
concerning the use of the Mello-Roos Community Facilities Act of 1982 (the "Act"), (a) prior to
the initiation of proceedings on or after January 1, 1994 to establish a new community facilities
district ("CFD") under the Act, and (b) prior to the issuance of any bonds under the Act,
including any refunding bonds,on or after January 1, 1994.The following goals and policies are
intended to meet the minimum requirements of the Act, and may be amended or supplemented
by resolution of the City Council at any time.
H. GOALS.The City shall make the determination as to whether public financing is
appropriate for infrastructure and .other improvements required in connection with any
particular project or development, and whether a proposed financing district should proceed
under the provisions of the California assessment laws or the Act. The City may confer with
consultants and the applicant to learn of any unique CFD requirements such as facilities serving
the regional area prior to making any final determination.
All City and consultant costs incurred in the evaluation of new CFD applications and
the establishment of CFDs will be paid by the applicant(s)by advance deposit increments. The
City shall not incur any non-reimbursable expense for processing CFDs. Expenses not
chargeable to the CFD shall be borne by the applicant.
The City will consider the issuance of bonds to refund any outstanding CFD bonds, if it
is determined that the refunding bonds satisfy the applicable provisions of the Act. All costs
and expenses of the City related to any refunding shall be payable from the proceeds of the
refunding bonds. Refunding transactions will be initiated by the City, or may be considered
upon application by a tax payer in any existing City CFD.
M.ELIGIBLE PUBLIC FACILITIES AND SERVICES.The improvements eligible to be
financed by a CFD must be owned by a public agency or public utility, and must have a useful
life of at least five (5) years, except that up to five percent of the proceeds of an issue may be
used for facilities owned and operated by a privately-owned public utility. The development or
redevelopment proposed within a CFD must be consistent with the City's general plan and
must have received any required legislative approvals such as zoning or specific plan
approvals.A CFD shall not vest any rights to future land use on any properties,including those
which are responsible for paying special taxes.
08003.03
The list of eligible public facilities include,but are not limited to, the following:
• Streets,highways and bridges • Potable and reclaimed water facilities
• Street lighting • Elementary and secondary school sites
• Traffic signals and safety lighting and facilities
• Parks • Libraries
• Governmental facilities • Public utilities
• Sanitary sewer facilities • Police and fire protection facilities
• Storm drain facilities • Recreation facilities
• Flood control facilities
The funding of public facilities to be owned and operated by public agencies other than
the City shall be considered on a case-by-case basis.If the proposed financing is consistent with
a public facilities financing plan approved by the City, or the proposed facilities are otherwise
deemed to be appropriate for financing by a CFD and are consistent with approved land use
plans for the property, the City shall consider entering into a joint financing agreement or joint
powers authority in order to finance these facilities. A joint agreement with the public agency
that will own and operate any such facility must be entered into prior to the resolution of
intention relating.to the formation of any CFD.
The City will consider on a case-by-case basis CFDs established for the provisions of
services eligible to be funded under the Act.Eligible services are as specified in the Act.
IV.PRIORITIES FOR CFD FINANCING. Priority for CFD financing shall be given to
public facilities which: (a)are necessary for economic development,or(b)are otherwise incident_
to an economic development project. If appropriate, the City shall prepare a public facilities
financing plan as a part of the specific plan or other land use document that identifies the
public facilities required to serve a project, and the type of financing to be utilized for each
facility.
V. CREDIT QUALITY REQUIRRAENTS FOR CFD BOND ISSUES. All CFD bond
issues should have at least a three to one property value to public lien ratio after calculating the
value of the financed public improvements to be installed. Property value may be based on
either an appraisal or on assessed values as indicated on the county assessor's tax roll. Any
appraiser shall be selected by the City, and the appraisal shall be based on standards
promulgated by the State of California and otherwise determined applicable by City staff and
consultants. The appraisal must be dated within six months of the date the bonds are issued.
The public lien amount shall include the bond issue currently being sold plus any public
indebtedness secured by a lien on real property currently existing against the properties to be
taxed.
A reserve fund equal to the lesser of(i) ten percent of the original proceeds of the bond
issue, (ii) the maximum annual debt service on the bonds, or(iii) 125 percent of the average
annual debt service on the bonds shall be required for all CFD bond issues,unless the property
in the CFD is substantially developed in which event the City may allow for a reserve fund to
be funded at a lesser amount.
Less than a three to one property value to public lien ratio,excessive tax delinquencies,
or projects of poor economic viability may cause the City to disallow the sale of bonds or
require credit enhancement prior to bond sale. The City may consider exceptions to the above
policies for bond issues that do not represent an unusual credit risk, either due to credit
enhancement or other reasons specified by the City, and which otherwise provide extraordinary
public benefits.
-2-
If the City requires letters of credit or other security, the credit enhancement shall be
issued by an institution, in a form and upon terms and conditions satisfactory to the City. Any
security required to be provided by the applicant may be discharged by the City upon the
opinion of a.qualified appraiser, retained by the.City, that a value-to-lien ratio of three to one
has been attained.
As an alternative to providing other security, the applicant may request that a portion
of the bond proceeds be placed in escrow with a corporate agent in an amount sufficient to
assure a value-to-lien ratio of at least three to one on the outstanding proceeds. The proceeds
shall be released at such times and such amounts as may be necessary.to assure a value-to-lien
ratio of at least three to one on the aggregate outstanding bond proceeds and other
indebtedness secured by real property liens as required.
VI.DISCLOSURE REQUIREMENTS FOR PROSPECTIVE PROPERTY PURCHASERS.
A. Disclosure Requirements for Developers. Developers who are selling lots or parcels
that are within a CFD, to the extent required under the Act, shall provide disclosure notice to
prospective purchasers that complies with all of the requirements of Section 53341.5 of the
Government Code. The disclosure notice must be provided to prospective purchasers of
property at or prior to the time the contract or deposit receipt for the purchase of property is
executed.Developers shall keep an executed copy of each disclosure document as evidence that
disclosure has been provided to all purchasers of property within a CFD.
B. Disclosure Requirements for the Resale of Lots. The City Finance Department shall
provide a notice of special taxes, to the extent required under the Act, to sellers of property.
(other than developers)which will enable them to comply with their notice requirements under
Section 1102.6 of the Civil Code. This notice shall be provided by the City within five working
days of receiving a written request for the notice.A reasonable fee may be charged for providing
the notice,not to exceed any maximum fee specified in the Act.
C. Compliance With Federal Securities Laws.The City shall use all reasonable means to
ensure compliance with applicable federal securities laws in connection with the issuance of
debt and the provision of annual information regarding any CFD established by the City with
respect to which bonds have been issued, including requiring any developer in a CFD who is
material to the bond issue to transmit appropriate information to the City or its designee for
disclosure to bond investors.
VII. EQUITY OF SPECIAL TAX FORMULAS AND MAX[MUM SPECIAL TAXES.
Special tax formulas for new money CFDs shall provide for minimum special tax levels which
satisfy the following expenses of a CFD: (a) 110 percent gross debt service coverage for all CFD
bonded indebtedness, (b) the reasonable and necessary administrative expenses of the CFD,
and (c)amounts equal to the differences between expected earnings on any escrow fund and the
interest payments due on bonds of the CFD.Additionally, the special tax formula may provide
for the following: (a) any amounts required to establish or replenish any reserve fund
established in association with the indebtedness of the CFD, (b) the accumulation of funds
reasonably required for future debt service, (c) amounts equal to projected delinquencies of
special tax payments, (d) the costs of remarketing, credit enhancement and liquidity facility
fees, (e) the cost of acquisition, construction, furnishing or equipping of facilities, (f) lease
payments for existing or future facilities, (g)costs associated with the release of funds from an
escrow account, and (h) any other costs or payments permitted by law. Special Tax formulas
for refunding transactions will, of necessity,be in place, and refunding bonds may be issued at
rates and in amounts such that the maximum special tax levy is sufficient to pay debt service
on the refunding bonds and anticipated administrative expenses of the CFD.
-3-
The special tax formula shall be reasonable and equitable in allocating public facilities'
costs to parcels within the CFD. Exemptions from the special tax may be given to parcels which
are publicly owned, are held by a property owners' association, are used for a public purpose
such as open space, are affected by public utility easements making impractical their utilization
for other than the purposes set forth in the easements, or have insufficient value to support
bonded indebtedness.
The total projected property tax levels for any CFD shall not exceed any maximum
specified in the Act.The annual increase, if any,in the maximum special tax for any parcel shall
not exceed any maximum specified in the Act. The increase in the special tax levied on any
parcel as a consequence of delinquency or default by the owner of any other parcel shall not
exceed any maximum specified in the Act.
Special taxes will only be levied on an entire County Assessor's parcel, and any
allocation of special tax liability of a County Assessor's parcel to leasehold or possessory
interest in the fee ownership of such County Assessor's parcel shall be the responsibility of the
fee owner of such parcel and the City shall have no responsibility therefore. Failure of the owner
of any County Assessor's parcel to pay or cause to be paid any special taxes in full when due,
shall subject the entire parcel to foreclosure in accordance with the Act.
The City shall retain a special tax consultant, for any CFD for new money, to prepare a
report which: (a) recommends a special tax for the proposed CFD, and (b) evaluates the special
tax proposed to determine its ability to adequately fund identified public facilities, City
administrative costs, services(if applicable) and other related expenditures. Such analysis shall
also address the resulting aggregate tax burden of all proposed special taxes plus existing
special taxes, ad valorem taxes and assessments on the properties within the CFD. No such
report shall be required for a refunding bond issue for an existing CFD.
VIII. APPRAISALS. The definitions, standards and assumptions to be used for
appraisals shall be determined by City staff on a case-by-case basis, with input from City
consultants and CFD applicants, and by reference to relevant materials and information
promulgated by the State of California. In any event, the value-to-lien ratio shall be determined
based upon an appraisal by an independent MAI appraiser of the proposed CFD or on County
assessed values. Any appraisal shall be coordinated by and under the direction of the City. All
costs associated with the preparation of the appraisal report shall be paid by the entity
requesting the establishment of the CFD through the advance deposit mechanism.The City shall
have discretion to retain a consultant to prepare a report to verify market absorption
assumptions and projected sales prices of the properties which may be subject to the maximum
special tax in the CFD.
DC. TERMS AND CONDITIONS OF BONDS. All terms and conditions of the bonds
shall be established by the City. The City will control, manage and invest all CFD issued bond
proceeds. Each bond issue shall be structured to adequately protect bond owners and to not
negatively impact the bonding capacity or credit rating of the City through the special taxes,
credit enhancements,foreclosure covenant, and special reserve.
All statements and material related to the sale of bonds shall emphasize and state that
neither the faith, credit nor the taxing power of the City is pledged to security or repayment of
the Bonds. The sole source of pledged revenues to repay CFD bonds are special taxes, bond
proceeds and reserve funds held under the bond document, and the proceeds of foreclosure
proceedings and additional security instruments provided at the time of bond issuance.
X. CFD COST DEPOSITS AND REIMBURSEMENTS. All City and consultant costs
incurred in the evaluation of CFD applications and the establishment of CFDs will be paid by
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the entity requesting the establishment of the CFD by advance deposit increments; or, in the
case of refunding bonds, from the proceeds of the refunding bonds.The City shall not incur any
non-reimbursable expenses for processing and administering CFDs. Expenses not chargeable to
the CFD shall be directly borne by the applicant.
Each petition for formation of a CFD shall be accompanied by an initial deposit in the
amount determined by the City to fund initial staff and consultant costs associated with CFD
review and implementation. If additional funds are needed to off-set costs and expenses
incurred by the City, the City shall make written demand upon the applicant for such funds. If
the applicant fails to make any deposit of additional funds for the proceedings, the City may
suspend all proceedings until receipt of such additional deposit.
The City shall not accrue or pay any interest on any portion of the deposit refunded to
the applicant or the costs and expenses reimbursed to the applicant. Neither the City nor the
CFD shall be required to reimburse the applicant or property owner from any funds other than
the proceeds of bonds issued by the CFD.
XI. USE OF CONSULTANTS. The City shall select all consultants necessary for the
formation of the CFD and the issuance of bonds, including the underwriter(s),bond counsel,
financial advisors, appraiser, market absorption study consultant and the special tax
consultant, after reasonable consultation with the applicant.Prior consent of the applicant shall
not be required in the determination by the City of the consulting and financing team.
)M.EXCEPTIONS TO THESE POLICIES.The City may find in limited and exceptional
instances that a waiver to any of the above stated policies is reasonable given identified special.
City benefits to be derived from such waiver.Such waivers only will be granted by action of the
City Council.
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Philip Angelides
STATE OF CALIFORNIA state Treasurer and Chair
CALIFORNIA DEBT- AND INVESTMENT ADVISORY COMMISSION
915 CAPITOL MALL, ROOM 400
P.O. BOX 942809
SACRAMENTO, CA 94209-0001
TELEPHONE: (916) 653-3269
FAX: (916) 654-7440
Executive Director
October 29, 2001
TO: Brian Quint
Quint & Thimmig LLP
One Embarcadero Ctr Ste 2420
San -Francisco, CA 94111-3737
FROM: Executive Director
RE: RECEIPT OF NOTICE OF A PUBLIC DEBT ISSUE ON/AFTER THE SALE DATE
Please note that this notice was filed with the California Debt and Investment
Advisory Commission (CDIAC) on/after the sale date even though Section 8855 (g) of
the California Government Code requires that written notice be filed with the
Commission no later than 30 days prior to the proposed sale date.
The Commission acknowledges your written notice of the following proposed debt
issuance:
CDIAC Nbr: 2001-1930
Issuer: Huntington Beach CFD No 1990-1
Project: Goldenwest/Ellis Area
Proposed Amount: $1, 480, 000.00
Proposed Sale Date: October 25, 2001
Date Notice Received: October 26, 2001
Please submit the Report of Final Sale and the Official Statement (or offering
circular) on this issue within 45 days of sale date. Any questions regarding
reporting requirements may be directed to the CDIAC staff at (916) 653-3269.
Cc: Clay Martin
Director of Administrative Services
REPORT OF PROPOSED DEBT ISSUANCE For Office Use Only
California Debt and Investment Advisory Commission
915 Capitol Mall,Room 400,Sacramento,CA 95814 CDIAC NO.:
P.O.Box 942809,Sacramento,CA 94209-0001
Tel.:(916)653-3269 FAX:-(916)654-7440
Completion and timely submittal of this form to the California Debt and Investment Advisory Commission(CDIAC)at
the above address will assure your compliance with existing California State law and will assist in the maintenance of
a complete data base. Thank you for your cooperation.'
ISSUER NAME: CITY OF HUNTINGTON BEACH
ISSUE NAME: Special Tax Refuding Bonds CFD No. 1990-1 (Goldenwest/Ellis Area)
Please specify type/name of project:
PROPOSED SALE DATE: 10/25/2001 PROPOSED PRINCIPAL TO BE SOLD: $ $1,480,000
IS ANY PORTION OF THE DEBT FOR REFUNDING? 2
❑No N Yes proposed amount for refunding $19480,000
Issuer Contact:
Name: Clay Martin
Title: Director of Administrative Services
Address: 2000 Main Street, Huntington Beach , CA 92648
Phone: 714/536-5511 Issuer Located In Orange County
Filing Contact: Name of individual (representing N Bond Counsel, ❑Issuer, ❑Financial Advisor, or ❑Lead Underwriter)
who completed this form and may be contacted for information:
Name: Brian D.Ouint -
Firm/Agency: Quint&Thimmig LLP
Address: One Embarcadero Center,Suite 2420, San Francisco, CA 94111-3737
Phone: (415) 765-1550 E-mail: bquint@gtllp.com
Send acknowledgment/copies to: Brian D.Quint
FINANCING PARTIPANTS:
Bond Counsel: Quint&Thimmig LLP
Financial Advisor: Harrell&Company Advisors,LLC
Underwriter\PURCHASER: O'Connor SWS Securities
IS THE INTEREST ON THE DEBT EXEMPT FROM TAXATION?
Under State Law: ❑NO(taxable) N YES (tax-exempt)
Under Federal Law: ❑NO(taxable) N YES (tax-exempt) If the issue is federally tax-exempt, is interest a specific preference item for
the purpose of alternative minimum tax?
❑ Yes,preference item .N No, not a preference item
TYPE OF SALE: ❑Competitive N Negotiated
Section 8855(g)of the California Government Code requires the issuer of any proposed new public debt issue to give written notice of the proposed sale to
the CDIAC no later than 30 days prior to the sale.
Z Section 53583(c)(2)(B)of the California Government Code requires that any local agency selling refunding bonds at private sale of on a negotiated basis
shall send a written statement,within two weeks after the bonds are sold,to the CDIAC explaining the reasons why the local agency determined to sell the
bonds at private sale or on a negotiated basis instead of at public sale.
CDIAC: Report of Proposed Debt Issuance Page 2
TYPE OF DEBT INSTRUMENT
NOTE BOND
❑ Bond anticipation (BAN) ❑ Conduit revenue(Private obligor)(CRB)
❑ Grant obligation(GAN) ❑ General obligation (GOB)
❑ Other note(Please specify below.)(OTHN) ❑ Limited tax obligation(LTOB)
❑ Revenue anticipation(RAN) ® Other bond(please specify below)(OTHB)
❑ Tax allocation(TALN) ❑ Public lease revenue(PLRB)
❑ Tax and revenue anticipation(TRAN) ❑ Revenue(Pool)(RB)
❑ Tax anticipation(TAN) ❑ Revenue(public enterprise)(PERB)
❑ Sales tax revenue(STRB)
❑ Commercial paper(CP) ❑ Special assessment(SAB)
❑ Certificates of participation/]eases (COP/L) ❑ Tax-allocation(TAB)
❑ Other(Please specify below.)(OTH)
Please specify"Othemote/Other bond/Other"was checked: Mello-Roos
SOURCE(S) OF REPAYMENT
❑ Bond proceeds(BDPR) ❑Property tax revenues(PRTX)
❑General fund of issuing jurisdiction(GNFD) ❑Public enterprise revenues(PER)
❑Grants(GRNT) ❑Sales tax revenues(SATR)
❑ Intergovernmental transfers other than grant(ITGV) ❑Special assessments (SA)
❑ Local obligations (LOB) ® Special tax revenues(SPTR)
❑Private obligor payments (POP) ❑Tax-increment(TT)
❑Other (lease specify.) (OTHS):
PURPOSE(S) OF FINANCING
❑Cash flow, interim financing (CFIF)
❑Project, interim financing (PIF) ❑Airport(APRT)
❑Bridges and highways(BRHI)
❑College/university housing (CUH) ❑Convention center(CCTR)
❑ Multifamily housing (MFH) 3 ❑Equipment(EQUP)
❑Single-family housing (SFH)3 ❑Flood controUstorm drainage (FLDS)
❑Multiple capital improvements and public works (MCAP)
❑ Health care facilities(HCF) ®Other capital improvements and public works(OCAP)
❑ Hospital (HOSP) ❑Parking(PRKG)
❑Other/multiple health care purposes(equipment,etc.)(OMHC) ❑Parks/open space (PRKG)
❑Ports and marinas(PRTS)
❑College/university facility (CUF) ❑Power generation/transmission (PWR)
❑ K-12 school facility (KSCH) ❑Prisons/jails/correctional facilities (PRSN)
❑Other/multiple educational uses(equipment,etc.) (OMED) ❑Public building (PB)
❑ Student loans(SLC) ❑Public transit (PTR)
❑Recreation and sports facilities (RCSP)
❑Redevelopment,multiple uses (RD) ❑ Seismic safety improvements/repair (SSI)
❑Solid waste recovery facilities(SWST)
❑Commercial development(CMDV) ❑ Street construction and improvements (SCI)
❑ Industrial development(INDV) ❑Wastewater collection and treatment(WSTW) .
❑Pollution control (PC) ❑Water supply/storage/distribution (WTR)
❑ Insurance/pension funds (IPF)
Please specify type/name of project:
3 Certain local government issuers of housing bonds are required to obtain a certification from the State Treasurer attesting to their compliance with the State
housing reporting requirements prior to issuance of the bonds to finance a single-or multi-family housing.
1/97
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TH3E CIi�`Y�OF HIINTI'NGTON. BEACM
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2000 Main Street
2"a Floor — City Hall
Huntington Beach CA 92648
(714) 536-5227
Quint&Thimmig LLP 09/24/01
10/18/01
FINAL 10/29/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
BOND PURCHASE AGREEMENT
October 29, 2001
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Ladies and Gentlemen:
O'Connor SWS Securities (the "Underwriter") offers to enter into this Bond Purchase
Agreement(this "Bond Purchase Agreement") with the City of Huntington Beach (the "City"),
for and on behalf of the City of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) (the "District") which, upon your acceptance of this offer, will be
binding upon the City and the Underwriter. Terms not otherwise defined herein shall have the
same meanings as set forth in the Fiscal Agent Agreement described below.
This offer is made subject to the acceptance by the City of this Bond Purchase
Agreement on or before 5:00 p.m.on the date hereof.
1. Upon the terms and conditions and in reliance upon the respective
representations, warranties and covenants herein, the Underwriter hereby agrees to purchase
from the City,and the City hereby agrees to sell to the Underwriter,all (but not less than all) of
$2,155,000 aggregate principal amount of City of Huntington Beach Community Facilities
District No. 1990-1 2001 Special Tax Refunding Bonds (the "Bonds") at a purchase price (the
"Purchase Price") of$2,131,295.00 (equal to the par amount of the Bonds ($2,155,000) less an
Underwriter's discount of $23,705.00).
The Bonds will be issued by the City for and on behalf of the District pursuant to the
Mello-Roos Community Facilities Act of 1982 (constituting sections 53311 et seq. of the
California Government Code) (the "Act") and Resolution No. 2001-74, adopted on October 15,
2001 by the City Council (the "City Council") of the City acting as the legislative body of the
District (the "Bond Resolution"). The special taxes to provide a source of payment for the
Bonds (the "Special Taxes") will be levied pursuant to Resolution No. 6161 adopted by the
City Council on June 18, 1990, which established the District and authorized the levy of a
special tax within the District (the "Special Tax Resolution") and a two-thirds vote of the
qualified electors at an election held in the District on July 2, 1990.
08003.05
The Bonds will be issued pursuant to the terms of a Fiscal Agent Agreement (the "Fiscal
Agent Agreement'); dated as of November 1, 2001, by and between the City and U.S. Bank
Trust National Association, Los Angeles, California, as fiscal agent (the "Fiscal Agent"). The
proceeds of the sale of the Bonds will be used by the City to refund the City of Huntington
Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) 1990 Special Tax
Bonds (the "1990 Bonds"), pursuant to the provisions of that certain Escrow Agreement, dated
November 14, 2001 (the "Escrow Agreement"), by and between the City and U.S. Bank Trust
National Association, as escrow bank (the "Escrow Bank"). Proceeds of the Bonds will be used
in accordance with the Fiscal Agent Agreement.
2. The Bonds will mature on the dates and in the principal amounts, and will bear
interest at the rates, as set forth in Exhibit B hereto. The Underwriter agrees to make a bona fide
public offering of.all of the Bonds at the offering prices set forth on the cover of the final Official
Statement described below.
3. (a) The City agrees to deliver to the Underwriter as many copies of the Official
Statement dated the date hereof, relating to the Bonds (as supplemented and amended from
time to time, the "Final Official Statement") as the Underwriter shall reasonably request as
necessary to comply with paragraph (b)(4) of Rule 15c2-12 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934 (the "Rule"). The City agrees to deliver
such Final Official Statements within seven (7) business days after the execution hereof. The
Underwriter agrees to deposit the Final Official Statement with a qualified national registered
municipal securities information repository on or as soon as practicable after the Closing Date.
The Underwriter agrees to deliver a copy of the Final Official Statement to each of its customers
purchasing Bonds no later than the settlement date of the transaction.
(b) The City has authorized and approved the Preliminary Official Statement dated
October 18, 2001 (the "Preliminary Official Statement") and the Final Official Statement and
consents to their distribution and use by the Underwriter and the execution and approval of the
Final Official Statement by a duly authorized officer of the City.
4. The City represents and warrants to the Underwriter that:
(a) The City is duly organized and validly existing under the laws of the
State of California (the "State"), with the power to act as the legislative body of the
District, and has the full legal right, power and authority, among other things, (i)upon
satisfaction of-the conditions in this Bond Purchase Agreement and the Fiscal Agent
Agreement,to issue the Bonds for the purpose of refunding the 1990 Bonds, and (ii) to
secure the Bonds in the manner contemplated in the Fiscal Agent Agreement.
(b) The City has the full legal right, power and authority to adopt the Bond
Resolution and the Special Tax Resolution, and the City has the full legal right, power
and authority (i)to enter into this Bond Purchase Agreement, the Fiscal Agent
Agreement, a Continuing Disclosure Certificate to be executed by the City (the "City
Disclosure Certificate") and the Escrow Agreement, (ii) to issue, sell and deliver the
Bonds to the Underwriter as provided herein, and (iii) to carry out and consummate all
other transactions on its part contemplated by each of the aforesaid documents (such
documents together with the Final Official Statement are collectively referred to herein as
the "City Documents"), and the City and its City Council have complied with all
provisions of applicable law, including the Act, in all matters relating to such
transactions.
(c) The City has duly authorized (i)the execution and delivery by the City of
the Bonds and the execution,delivery and due performance by the City of its obligations
-2-
under the City Documents, (ii) the distribution and use of the Preliminary Official
Statement and execution, delivery and distribution of the Final Official Statement, and
(iii)the taking of any and all such action as may be required on the part of the City to
carry out, give effect to and consummate the transactions on its part contemplated by
such instruments. All consents or approvals necessary to be obtained by the City .in
connection with the foregoing have been received, and the consents or approvals so
received are still in full force and effect.
(d) The Bond Resolution and the Special Tax Resolution have been duly
adopted by the.City Council and are in full force and effect; and the Fiscal Agent
Agreement, the City Disclosure Certificate and the Escrow Agreement, when executed
and delivered by the City and the other respective parties thereto, will constitute legal,
valid and binding obligations of the City enforceable against the City in accordance with
their respective terms, except as enforceability thereof may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights generally.
(e) When delivered to the Underwriter, the Bonds will have been duly
authorized by the City Council and duly executed,issued and delivered by the City and
will constitute legal,valid and binding obligations of the City for the District enforceable
against the City in accordance with their respective terms, except as enforceability
thereof may be limited by bankruptcy,insolvency or other laws affecting creditors' rights
generally,and will be entitled to the benefit and security of the Fiscal Agent Agreement.
(f) The information relating to the City and the District contained in the
Preliminary Official Statement is, and as of the date of closing such information in the
Final Official Statement will be true and correct in all material respects, and the
Preliminary Official Statement does not as of its date and the Final Official Statement
will not as of the Closing Date contain any untrue or misleading statement of a material
fact relating to the City and the District or omit to state any material fact relating to the
City and the District necessary to make the statements therein, in the light of the
circumstances under which they were made,not misleading.
(g) If, at any time prior to the earlier of (i)receipt of notice from the
Underwriter that Final Official Statement is no longer required to be delivered under the
Rule or(ii)the Closing(as described in Section 6 below),any event known to the officers
of the City participating in the issuance of the Bonds occurs with respect to the City or
the District as a result of which the Final Official Statement as then amended or
supplemented might include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the City shall promptly notify the
Underwriter in writing of such event.Any information supplied by the City for inclusion
in any amendments or supplements to the Final Official Statement will not contain any
untrue or misleading statement of a material fact relating to the City or the District or
omit to state any material fact relating to the City or the District necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.
(h) Neither the adoption of the Bond Resolution or the Special Tax
Resolution,the execution and delivery of the City Documents, nor the consummation of
the transactions on the part of the.City contemplated herein or therein or the compliance
by the City with the provisions hereof or thereof will conflict with, or constitute on the
part of the City a violation of, or a material breach of or default under, (i) any indenture,
mortgage, commitment, note or other agreement or instrument to which the City is a
party or by which it is bound, (ii) any provision of the State Constitution or (iii) any
-3-
existing law,rule,regulation,ordinance,judgment, order or decree to which the City (or
the members of the City Council or any of its officers in their respective capacities as
such) is subject, that would have a material adverse affect on the ability of the City to
perform its obligations under the City Documents.
(i) The City has never been in default at any time, as to principal of or
interest on any obligation which it has issued, including those which it has issued as a
conduit for another entity,which default may have an adverse effect on the ability of the
City to consummate the transactions on its part under the City Documents, except as
specifically disclosed in the Final Official Statement; and other than the Fiscal Agent
Agreement and the fiscal agent agreement with respect to the 1990 Bonds, dated as of
June 1, 1990,by and between the City and Bank of America National Trust and Savings
Association (the "Prior Fiscal Agent Agreement"), the City has not entered into any
contract or arrangement of any kind which might give rise to any lien or encumbrance on
the Special Taxes.
(j) Except as is specifically disclosed in the Final Official Statement, to the
best knowledge of the City, there is no action, suit, proceeding, inquiry or investigation,
at law or in equity,before or by any court,public board or body,pending with respect to
which the City or the District has been served with process or threatened, which in any
way questions the powers of the City Council or the City referred to in paragraph (b)
above,or the validity of any proceeding taken by the City Council in connection with the
issuance of the Bonds or the refunding of the 1990 Bonds, or wherein an unfavorable
decision, ruling or finding could materially adversely affect the transactions
contemplated by this Bond Purchase Agreement, or of any other City Document, or
which, in any way, could adversely affect the validity or enforceability of the Bond
Resolution, the Special Tax Resolution, the Fiscal Agent Agreement, the City Disclosure
Certificate, the Escrow Agreement, the Bonds or this Bond Purchase Agreement or, to
the knowledge of the City, which in any way questions the exclusion from gross income
of the recipients thereof of the interest on the Bonds for federal income tax purposes or
in any other way questions the status of the Bonds under State tax laws or regulations.
(k) Any certificate signed by an official of the City authorized to execute
such certificate and delivered to the Underwriter in connection with the transactions
contemplated by the City Documents shall be deemed a representation and warranty by
the City to the Underwriter as to the truth of the statements therein contained.
(1) The City has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
(m) The Bonds will be paid from the Special Tax Revenues received by the
City.
(n) The Special Taxes may lawfully be levied in accordance with the Rate
and Method of Apportionment of Special Taxes relating to the District (the "Rate and
Method"),and,when levied,will be secured by a lien on the property on which they are
levied.
(o) The Fiscal Agent Agreement creates a valid pledge of, and first lien upon
the Special Tax Revenues deposited thereunder, and the moneys in certain funds and
accounts established pursuant to the Fiscal Agent Agreement, subject in all cases to the
provisions of the Fiscal Agent Agreement permitting the application thereof for the
purposes and on the terms and conditions set forth therein.
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(_p) The City has not failed to comply with any undertaking of the City under
Rule 15c2-12(b)(5) of the Securities and Exchange Commission.
5. The City covenants with the Underwriter that the City will cooperate with the
Underwriter (at the cost of the Underwriter), in qualifying the Bonds for offer and sale under
the securities or Blue Sky laws of such jurisdictions of the United States as the Underwriter may
reasonably request;provided,however, that the City shall not be required to consent to suit or
to service of process, or to qualify to do business, in any jurisdiction. The City consents to the
use by the Underwriter of the City Documents in the course of its compliance with the securities.
or Blue Sky laws of the various jurisdictions of the documents relating to the Bonds.
6. At 8:00 A.M. on November 14, 2001 or at such other time and/or date as shall
have been mutually agreed upon by the City and the Underwriter, the City will deliver or cause
to be delivered to the Underwriter the Bonds in definitive form duly executed and authenticated
by the Fiscal Agent together with the other documents hereinafter mentioned; and the
Underwriter will accept such delivery and pay the Purchase Price of the Bonds by delivering to
the Fiscal Agent for the account of the City a check payable in federal funds or making a wire
transfer in federal funds payable to the order of the Fiscal Agent.
The activities relating to the final execution and delivery of the Bonds and the Fiscal
Agent Agreement and the payment therefor and the delivery of the certificates, opinions and
other instruments as described in Section 8 of this Bond Purchase Agreement shall occur at the
offices of Quint & Thimmig LLP, One Embarcadero Center, Suite 2420, San Francisco,
California. The payment for the Bonds and simultaneous delivery of the Bonds to the
Underwriter is herein referred to as the "Closing." The Bonds will be delivered as fully
registered Bonds initially in denominations of$5,000 each and any integral multiple thereof. The
Bonds will be registered in the name of Cede & _Co., as nominee of The Depository Trust
Company.
7. The Underwriter shall have the right to cancel its obligations to purchase the
Bonds if between the date hereof and the date of Closing:
(a) the House of Representatives or the Senate of the Congress of the United States,
or a committee of either, shall have pending before it, or shall have passed or recommended .
favorably,legislation introduced previous to the date hereof, which legislation, if enacted in its
form as introduced or as amended, would have the purpose or effect of imposing federal
income taxation upon revenues or other income of the general character to be derived by the
City or by any similar body under the Fiscal Agent Agreement or upon interest received on
obligations of the general character of the Bonds, or of causing interest on obligations of the
general character of the Bonds,to be includable in gross income for purposes of federal income
taxation, and such.legislation, in the Underwriter's opinion, materially adversely affects the
market price of the Bonds; or
(b) a tentative decision with respect to legislation shall be reached by a committee of
the House of Representatives or the Senate of the Congress of the United States, or legislation
shall be favorably reported or re-reported by such a committee or be introduced, by amendment
or otherwise,in or be passed by the House of Representatives or the Senate, or recommended to
the Congress of the United States for passage by the President of the United States, or be
enacted or a decision by a federal court of the United States or the United States Tax Court
shall have been rendered, or a ruling, release, order, regulation or official statement by or on
behalf of the United States Treasury Department, the Internal Revenue Service or other
governmental agency shall have been made or proposed to be made having the purpose or
effect, or any other action or event shall have occurred which has the purpose or effect, directly
-5-
or indirectly, of adversely affecting the federal income tax consequences of owning the Bonds,
including causing interest on the Bonds to be included in gross income for purposes of federal
income taxation, or imposing federal income taxation upon revenues or other income of the
general character to be derived by the City under the Fiscal Agent Agreement or upon interest
received on obligations of the general character of the Bonds, or the Bonds and also including
adversely affecting the tax-exempt status of the City under the Code, which, in the opinion of
the Underwriter,materially adversely affects the market price of or market for the Bonds; or
(c) legislation shall have been enacted, or actively considered for enactment with an
effective date prior to the Closing, or a decision by a court of the United States shall have been
rendered, the effect of which is that the Bonds, including any underlying obligations, or the
Fiscal Agent Agreement, as the case may be,is not exempt from the registration, or qualification
under the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act
of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and
as then in effect; or
(d) a stop order, ruling, regulation or official statement by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the subject
matter shall have been issued or made or any other event occurs, the effect of which is that the
issuance, offering or sale of the Bonds, including any underlying obligations, or the execution
and delivery of the Fiscal Agent Agreement as contemplated hereby or by the Final Official
Statement, is or would be in violation of any provision of the federal securities laws, including
the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of
1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as
then in effect;or
(e) any event shall have occurred or any information shall have become known to the
Underwriter which causes the Underwriter to reasonably believe that the Final Official
Statement as then amended or supplemented includes an untrue statement of a material fact, or
omits to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made,not misleading;or
(f) there shall have occurred any outbreak of hostilities or any national or
international calamity or crisis, including a financial crisis, the effect of which on the financial
markets of the United States is such as, in the reasonable judgment of the Underwriter, would
materially adversely affect the market for or market price of the Bonds;or
(g) there shall be in force a general suspension of trading on the New York Stock
Exchange, the effect of which on the financial markets of the United States is such as, in the
reasonable judgment of the Underwriter, would materially adversely affect the market for or
market price of the Bonds;or
(h) a general banking moratorium shall have been declared by federal, New York or
State authorities; or
(i) any proceeding shall be pending or threatened by the Securities and Exchange
Commission against the City, the City Council or the District;or
(j) additional material restrictions not in force as of the date hereof shall have been
imposed upon trading in securities generally by any governmental authority or by any national
securities exchange which adversely affects the Underwriter's ability to sell the Bonds;or
(k) the New York Stock Exchange or other national securities exchange, or any
governmental authority,shall impose, as to the Bonds or obligations of the general character of
-6-
the Bonds, any material restrictions not now in force, or increase materially those now in force,
with respect to.the extension of credit by, or the charge to the net capital requirements of,
Underwriter;or
(1) an amendment to the federal or State constitution shall be enacted or action
taken by any federal or State court, legislative body, regulatory body or other authority
materially adversely affecting the tax status of the City, its property, income or securities (or
interest thereon), the validity or enforceability of the Special Tax or the ability of the City to
issue the Bonds and levy the Special Tax as contemplated by the Fiscal Agent Agreement, the
Rate and Method and the Official Statement; or
(m) the entry of any order by a court of competent jurisdiction which enjoins or
restrains the City from issuing permits, licenses or entitlements within the District or which
order,in the reasonable opinion of the Underwriter, otherwise materially and adversely affects
development within the District.
8. The obligations of the Underwriter to purchase the Bonds shall be subject (a) to
the performance by the City of its obligations to be performed hereunder at and prior to the
Closing, (b) to the accuracy as of the date hereof and as of the time of the Closing of the
representations and warranties of the City herein, and (c) to the following conditions, including
the delivery by the City of such documents as are enumerated herein in form and substance
satisfactory to the Underwriter:
(a) At the time of Closing, (i) the Official Statement, this Bond Purchase Agreement,
the Escrow Agreement,the City Disclosure Certificate and the Fiscal Agent Agreement shall be
in full force and effect and shall not have been amended, modified or supplemented except as
may have been agreed to in writing by the Underwriter, and (ii)the City shall have duly
adopted and there shall be in full force and effect such resolutions as,in the opinion of Quint &
Thimmig LLP, as Bond Counsel ("Bond Counsel"), shall be necessary in connection with the
transactions contemplated hereby.
(b) Receipt of the Bonds at or prior to the Closing. The terms of the Bonds,
delivered, shall in all instances be as described in Final Official Statement.
(c) At or prior to the Closing, the Underwriter shall receive the following documents
in such number of counterparts as shall be mutually agreeable to the Underwriter and the City:
(i) A final approving opinion of Bond Counsel dated the date of Closing.
(ii) A letter or letters of Bond Counsel addressed to the Underwriter, which
includes a statement to the effect that Bond Counsel's final approving opinion may be
relied upon by the Underwriter to the same extent as if such opinion were addressed to
the Underwriter,and further provides:
(A) The statements contained in the Official Statement on the cover
page and under the captions "INTRODUCTION," "THE BONDS" (other than
under the subheading"Book-Entry Only System" as to which no opinion need be
expressed), "SECURITY FOR THE BONDS," and "LEGAL MATTERS — Tax
Exemption," and in Appendix D thereto, are accurate insofar as such statements
expressly summarize certain provisions of the Bonds, the Fiscal Agent
Agreement, the Escrow Agreement, and Bond Counsel's opinion concerning
certain federal tax matters relating to the Bonds;
-7-
(B) The Bonds are not subject to the registration requirements of the
Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt
from qualification under to the Trust Indenture Act of 1939, as amended; and
(C) The Bond Purchase Agreement has been duly authorized, executed
and delivered by the City and (assuming due authorization, execution and
delivery thereof by the Underwriter) constitutes a valid and binding agreement of
the City enforceable upon the City in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium or other law
affecting the enforcement of creditors' rights generally.
(iii) A letter of Quint&Thimmig LLP,as disclosure counsel, addressed to the
City and the Underwriter, stating that, without passing upon or assuming any
responsibility for the accuracy, completeness or fairness of the statements contained in
the Official Statement and making no representation that they have independently
verified the accuracy, completeness or fairness of any such statements, based upon the
information made available to them in the course of their participation in the
preparation of the Official Statement, nothing has come to such counsel's attention
which would lead them to believe that the Official Statement, including the cover page
and all appendices thereto (but excluding therefrom financial statements and statistical
data, and information regarding The Depository Trust Company, and its book entry
system, as to which no opinion need be expressed) contains an untrue statement of a
material fact or omits to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were
made,not misleading.
(iv) The Final Official Statement executed on behalf of.the City by a duly
authorized officer.
(v) Certified copies of the Bond Resolution and the Special Tax Resolution.
(vi) Specimen Bonds.
(vii) A certificate, in form and substance as set forth in Exhibit A hereto, of
the City, dated as of the Closing Date.
(viii) Evidence that Federal Form 8038-G has been executed by the City and
will be filed with the Internal Revenue Service.
(ix) Executed copies of the Fiscal Agent Agreement, the Escrow Agreement
and the City Disclosure Certificate.
(x) A non-arbitrage certificate executed by the City in form and substance
satisfactory to Bond Counsel.
(xi) An opinion, dated the Closing Date and addressed to the Underwriter, of
the City Attorney, in form and substance acceptable to the Underwriter to the effect
that:
(A) the City is duly organized and validly existing as a municipal
corporation under and by virtue of the Constitution and laws of the State, with
full legal right,power and authority to adopt the Resolution;
-8-
(B) The District is a community facilities district duly organized and
validly existing under the laws of the State,including the Law;
(C) the City, on behalf of the District, has duly and validly executed
and delivered the Bonds and the City Documents, and the Bonds and the City
Documents constitute the legal, valid and binding obligations of the City
enforceable against the City in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
enforcement of creditors' rights in general and to the application of equitable
principles if equitable remedies are sought;
(D) no action, suit, proceeding, inquiry or investigation, at law or in
equity,before or by any court,regulatory agency,public board or body is pending
with respect to which the City has received service of process, or to the
knowledge of the City Attorney, threatened,in any way affecting the existence of
the City or the titles of the City's officials to their respective offices, or seeking to
restrain or to enjoin the issuance, sale or delivery of the Bonds or the application
of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the
collection or application of the Special Taxes to pay the principal of and interest
on the Bonds, or in any way contesting or affecting the validity or enforceability
of the Bonds, the City Documents or any action of the City contemplated by any
of said documents,or in any way contesting the completeness or accuracy of the
Official Statement or the powers of the City or its authority with respect to the
Bonds, the City Documents or any action on the part of the City contemplated
by any of said documents, wherein an unfavorable decision, ruling, or finding
could materially adversely affect the validity or enforceability of the Bonds or
the City Documents;
(F) the execution and delivery of the Bonds and the City Documents,
and compliance with the provisions of each,will not conflict with or constitute a
breach of or default under any applicable law or administrative rule or regulation
of the State of California or the United States of America, or of any department,
division, agency or instrumentality of either thereof, or under any applicable
court or administrative decree or order, or under any loan agreement, note,
ordinance,resolution,indenture,contract,agreement or other instrument of which
the City is a party or is otherwise subject or bound, a consequence of which
could be to materially and adversely affect the ability of the City to perform its
obligations under the Bonds or the City Documents;
(G) all approvals, consents, authorization, elections and orders of or
filings or registrations with any governmental authority, board, agency or
commission having jurisdiction which would constitute a condition precedent to,
or the absence of which would materially adversely affect,the ability of the City,
to perform its obligations under the Bonds or the City Documents, have been
obtained or made,as the case may be, and are in full force and effect; and
(H) based upon the information made available to the City Attorney
in the course of its participation in the transaction and without having
undertaken to determine independently or assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Official
Statement,nothing has come to the attention of the City Attorney which has led
the City Attorney to believe that the information with respect to the City and the
District in the Official Statement (excluding therefrom the financial and
statistical data included in the Official Statement, as to which no opinion need
-9-
be expressed) contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein,in light of the circumstances under which they were made, not misleading
in any material respect.
(xii) Evidence satisfactory to the Underwriter and Bond Counsel reflecting the
defeasance in whole of the 1990 Bonds, including an escrow verification report by Grant
Thornton LLP.
(xiii) A certificate of an authorized officer of the Fiscal Agent to the effect that:
(A) the Fiscal Agent is a national banking association duly organized and
in good standing under the laws of the United States of America and has all
necessary power and authority to enter into and perform its duties under the
Fiscal Agent Agreement;
(B) the duties and obligations of the Fiscal Agent under the Fiscal Agent
Agreement have been duly accepted by the Fiscal Agent;
(C) the Fiscal Agent is duly authorized to enter into the Fiscal Agent
Agreement and to authenticate and deliver the Bonds and the Fiscal Agent has
duly executed and delivered the Fiscal Agent Agreement and,when executed and
delivered by the City, the Fiscal Agent Agreement will constitute a legal, valid
and binding obligation of the Fiscal Agent enforceable in accordance with its
terms;
(D) the Fiscal Agent has duly authenticated and delivered the Bonds,
(E) to the best knowledge of the Fiscal Agent, the execution and delivery
of the Fiscal Agent Agreement and compliance with the provisions thereof, will
not conflict with, or constitute a breach of or default under-the Fiscal Agent's
duties under said document or any law, administrative regulation, court decree,
judgment; resolution, charter, by-law or other agreement to which the Fiscal
Agent is subject to or by which it is bound, and
(F) there is no litigation pending against the Fiscal Agent to restrain the
Fiscal Agent's participation in,or in any way contesting the powers of the Fiscal
Agent with respect to the transactions contemplated by the Fiscal Agent
Agreement.
(xiv) An opinion of counsel to the Fiscal Agent dated the date of Closing,
addressed to the City and the Underwriter, to the effect that:
(A) the Fiscal Agent is a national banking association duly organized and
validly existing and in good standing under the laws of-the United States of
America with all requisite power and legal right to execute and deliver the Fiscal
Agent Agreement and has taken all necessary corporate action to authorize the
execution and delivery thereof and the performance of its obligations under the
Fiscal Agent Agreement,
(B) the authorization, execution and delivery by the Fiscal Agent of the
Fiscal Agent Agreement and compliance with the provisions thereof will not
conflict with or constitute a default under or breach of the Fiscal Agent's articles
-ia
of incorporation, by-laws, or any rule or regulation, court decree judgment or
other agreement to which the Fiscal Agent is bound,
(C) the Fiscal Agent Agreement has been duly authorized, executed and
delivered by the Fiscal Agent and is a legal, valid and binding agreement of the
Fiscal Agent, and is enforceable in accordance with its terms (subject to the
enforceability of remedies to any applicable bankruptcy, reorganization,
insolvency, moratorium or other laws, decisions or equitable principles affecting
the enforcement of creditors' rights generally),
(D) the Bonds have been duly authenticated and delivered by the Fiscal
Agent in accordance with the Fiscal Agent Agreement, and
(E) there is no litigation pending against the Fiscal Agent to restrain the
Fiscal Agent's participation in, or in any way contesting the powers of the Fiscal
Agent with respect to the transactions contemplated by the Fiscal Agent
Agreement;
(xv) A certificate of an authorized officer of the Escrow Bank to the effect that:
(i) the Escrow Bank is a national banking association duly organized and
in good standing under the laws of the United States of America and has all
necessary power and authority to enter into and perform its duties under the
Escrow Agreement;
(ii) the duties and obligations of the Escrow Bank under the Escrow
Agreement have been duly accepted by the Escrow Bank;
(iii) the Escrow Bank is duly authorized to enter into the Escrow
Agreement and the Escrow -Bank has duly executed and delivered the Escrow
Agreement and, when executed and delivered by the Agency, the Escrow
Agreement will constitute a legal, valid and binding obligation of the Escrow
Bank enforceable in accordance with its terms;
(iii) to the best knowledge of the Escrow Bank, the execution and delivery
of the Escrow Agreement and compliance with the provisions thereof, will not
conflict with,or constitute a breach of or default under the Escrow Bank's duties
under said document or any law, administrative regulation, court decree,
judgment; resolution, charter, by-law or other agreement to which the Escrow
Bank is subject to or by which it is bound, and
(iv) there is no litigation pending against the Escrow Bank to restrain the
Escrow Bank's participation in, or in any way contesting the powers of the
Escrow Bank with respect to the transactions contemplated by the Escrow
Agreement;
(xvi) An opinion of counsel to the Escrow Bank dated the date of Closing,
addressed to the City and the Underwriter, to the effect that:
(i) the Escrow Bank is a national banking association duly organized and
validly existing and in good standing under the laws of the United States of
America with all requisite power and legal right to execute and deliver the
Escrow Agreement and has taken all necessary corporate action to authorize the
-11-
execution and delivery thereof and the performance of its obligations under the
Escrow Agreement,
(ii) the authorization, execution and delivery by the Escrow Bank of the
Escrow Agreement and compliance with the provisions thereof will not conflict
with or constitute a default under or breach of the Escrow Bank's articles of
incorporation,by-laws, or any rule or regulation, court decree judgment or other
agreement to which the Escrow Bank is bound,
(iii) the Escrow Agreement has been duly authorized, executed and
delivered by the Escrow Bank and is a legal, valid and binding agreement of the
Escrow Bank, and is enforceable in accordance with its terms (subject to the
enforceability of remedies to any applicable bankruptcy, reorganization,
insolvency, moratorium or other laws, decisions or equitable principles affecting
the enforcement of creditors'rights generally),and
(iv) there is no litigation pending against the Escrow Bank to restrain the
Escrow Bank's participation in, or in any way contesting the powers of the
Escrow Bank with respect to the transactions contemplated by the Escrow
Agreement;and
(xvii) Such additional legal opinions, certificates, proceedings, instruments and
other documents as the Underwriter or Bond Counsel may reasonably request to
evidence compliance by the City with legal requirements, the truth and accuracy, as of
the time of Closing, of the respective representations of the City herein contained and
the due performance or satisfaction by it at or prior to such time of all agreements then
to be performed and all conditions then to be satisfied by it.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter
contained in this Bond Purchase Agreement,or if the obligations of the Underwriter to purchase
and accept delivery of the Bonds shall be terminated for any reason permitted by this Bond
Purchase Agreement,this Bond Purchase Agreement shall terminate and neither the Underwriter
nor the City shall be under further obligation hereunder;except that the respective obligations to
pay expenses, as provided in Section 11 hereof, shall continue in full force and effect.
9. The obligations of the City hereunder are subject to the performance by the
Underwriter of its obligations hereunder.
10. All representations, warranties and agreements of the City hereunder shall
remain operative and in full force and effect; regardless of any investigations made by or on
behalf of the Underwriter,the City or the District and shall survive the Closing.
11. The City shall pay or cause to be paid, solely from the proceeds of the Bonds, all
reasonable expenses incident to the performance of its obligations under this Bond Purchase
Agreement,including,but not limited to,delivery of the Bonds, costs of printing the Bonds, the
Preliminary Official Statement and Final Official Statements, any amendment or supplement to
the Preliminary Official Statement or Final Official Statement and this Bond Purchase
Agreement,fees and disbursements of Bond Counsel, Disclosure Counsel, any financial advisor
and other consultants, including the fees and expenses of the special tax consultant, the
California Debt and Investment Advisory Commission fee, fees of the Fiscal Agent and any
paying agent fees and fees and disbursements in connection with the qualification of the Bonds
for sale under the securities or"Blue Sky' laws of the various jurisdictions and the preparation
of "Blue Sky" memoranda, California Municipal Statistics fees, and all other fees and expenses
of the Underwriter except as provided in the next sentence shall be paid by the City. The
-12-
Underwriter shall pay all advertising expenses in connection with the public offering of the
Bonds, CDIAC, DTC, MSRB, California Public Securities Association and Public Securities
Association fees,and all other expenses incurred by it in connection with its public offering and
distribution of the Bonds.
12. Any notice or other communication to be given to the City or the District under
this Bond Purchase Agreement may be given by delivering the same in writing at its address set
forth above, and any notice or other communication to be given to the Underwriter under this
Bond Purchase Agreement may be given by delivering the same in writing to O'Connor SWS
Securities,3 Civic Plaza,Suite 100,Newport Beach,CA 92660,Attention: Bill J. O'Connor.
13. This Bond Purchase Agreement is made solely for the benefit of the City and the
Underwriter (including the successors or assigns of the Underwriter) and no-other person,
including any purchaser of the Bonds, shall acquire or have any right hereunder or by virtue
hereof.
14. This Bond Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of California.
15. This Bond Purchase Agreement shall become effective upon your acceptance
hereof.
Very truly yours,
O'CONNOR SWS SECUF=S
Y
Senior Vice President
Accepted and agreed to as of
the date first above written:
CITY OF HUNTINGTON BEACH,for and
on behalf of City of Huntington Beach
Community Facilities District No. 1990-1
(Goldenwest/Ellis Area)
By
Director of Administrative Services
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Underwriter shall pay all advertising expenses in connection with the public offering of the
Bonds, CDIAC, DTC, MSRB, California Public Securities Association and Public Securities
Association fees,and all other expenses incurred by it in connection with its public offering and
distribution of the Bonds.
12. Any notice or other communication to be given to the City or the District under
this Bond Purchase Agreement may be given by delivering the same in writing at its address set
forth above, and any notice or other communication to be given to the Underwriter under this
Bond Purchase Agreement may be given by delivering the same in writing to O'Connor SWS
Securities, 3 Civic Plaza,Suite 100, Newport Beach, CA 92660, Attention: Bill J. O'Connor.
13. This Bond Purchase Agreement is made solely for the benefit of the City and the
Underwriter (including the successors or assigns of the Underwriter) and no other person,
including any purchaser of the Bonds, shall acquire or have any right hereunder or by virtue
hereof.
14. This Bond Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of California.
15. This Bond Purchase Agreement shall become effective upon your acceptance
hereof.
Very truly yours,
O'CONNOR SWS SECURITIES
By
Senior Vice President
Accepted and agreed to as of
the date first above written:
CITY OF HUNTINGTON BEACH, for and
on behalf of City of Huntington Beach
Community Facilities District No. 1990-1
(Goldenwest/Ellis Area)
By -7e
Director of ministrative Services
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EXHIBIT A
CERTIFICATE OF THE CITY OF HUNTINGTON BEACH
FOR AND ON BEHALF OF
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
I, the undersigned, hereby certify that I am the of the City of Huntington
Beach,- the City Council of which is the legislative body for the City of Huntington Beach
Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the "Community Facilities
District"), a community facilities district duly organized and existing under the laws of the
State of California (the "State") and that as such, I am authorized to execute this Certificate on
behalf of the City in connection with the issuance of its 2001 Special Tax Refunding Bonds (the
"Bonds").
I hereby further certify on behalf of the City that:
(1) the representations, warranties and covenants of the City contained in
Section 4 of that certain Bond Purchase Agreement, dated October 29, 2001 by and
between the City and O'Connor SWS Securities (the "Bond Purchase Agreement"), are
true and correct and in all material respects as of the date hereof as if made on the date
hereof;
(2) the representations and warranties of the City contained in the City
Documents are true and correct in all material respects as of the date hereof as if made
on the date hereof, and the City has complied with all agreements, covenants and
conditions-to be complied with by the City under the City Documents as of the date
hereof;and
(3) to the best knowledge of the City, no event affecting the City or the
District has occurred since the date of the Final Official Statement which either makes
untrue or incorrect in any material respect as of the date hereof the statements or
information relating to the City or the District contained in the Final Official Statement
or is not reflected in the Final Official Statement but should be reflected therein in order
to make such statements and information therein not misleading in any material respect.
Capitalized terms not defined herein shall have the same meanings as are set forth in the
Bond Purchase Agreement.
Exhibit A
Page 1
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
hereinbelow set forth.
Dated: November 14, 2001
CITY OF HUNTINGTON BEACH, for and
on behalf of the City of Huntington Beach
Community Facilities District No. 1990-1
(Goldenwest/Ellis Area)
By:
Exhibit A
Page 2
EXHIBIT B
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
Maturity Principal Interest
(October 1) Amount .Rate Price
2007 $ 500,000 4.00% 100%
2012 510,000 4.75 100
2020 1,145,000 5.40 100
Exhibit B
Quint&Thimmig LLP 09/24/01
10/18/01
FINAL 10/25/01
REVISED FINAL 10/29/01
SECOND REVISED FINAL 11/09/01
ESCROW AGREEMENT
by and between the
CITY OF HUNTINGTON BEACH,CALIFORNIA
and
U.S.BANK TRUST NATIONAL ASSOCIATION
Dated November 14,2001
Relating to:
City of Huntington Beach,California
Community Facilities District No. 1990-1 (Goldenwest/Ellis Area)
1990 Special Tax Bonds
08003.05
TABLE OF CONTENTS
Section 1. Definition of Federal Securities..........................................................................................1
Section 2. Establishment of Escrow Fund...........................................................................................1
Section 3. Deposit into Escrow Fund;Investment of Amounts............................................................2
Section 4. Instructions as to Application of Deposit.............................................................................2
Section 5. Application of Proceeds from Prior Bond Funds.................................................................2
Section 6. Application of Certain Terms of Fiscal Agent Agreement............................:......................3
Section 7. Investments of Any Remaining Moneys.............................................................................3
Section 8. Substitution or Withdrawal of Federal Securities................................................................3
Section 9. Proceedings for Redemption of Prior Bonds.......................................................................3
Section 10. Compensation to Escrow Bank...........................................................................................4
Section 11. Liabilities and Obligations of Escrow Bank........................................................................4
Section 12. Resignation of Escrow Bank..............................................................................................5
Section13. Amendment.....................................................................................................................5
Section14. Unclaimed Moneys...........................................................................................................5
Section 15. Execution in Counterparts.................................................................................................6
Section16. Applicable Law................................................................................................................6
EXHIBIT A: SCHEDULE OF ORIGINAL FEDERAL SECURITIES
EXHIBIT B: SCHEDULE OF PAYMENTS ON PRIOR BONDS
i
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement"), dated November 14, 2001, by and
between the CITY OF HUNTINGTON BEACH, CALIFORNIA, a municipal corporation duly
organized and existing under the laws of the State of California (the "City"), for and on behalf of
the CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA) (the "District") and U.S. BANK TRUST NATIONAL
ASSOCIATION, a national banking association organized and existing under the laws of the
United States of America, acting as successor Fiscal Agent for the Prior Bonds hereinafter referred
to and acting as escrow bank hereunder (the "Escrow Bank").
WITNESSETH:
WHEREAS, the City Council of the City has conducted proceedings under and pursuant to
the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to form the District, to
authorize the levy of special taxes upon the land within the District, and to issue bonds secured
by said special taxes to finance certain facilities; and
WHEREAS,the City Council of the City, as legislative body of the District, authorized the
issuance of bonds of the City for the District in the original principal amount of $2,400,000 (the
"Prior Bonds"), said Bonds having been issued on August 9, 1990, pursuant to the Act, a
resolution of the City Council and a Fiscal Agent Agreement, dated as of June 1, 1990 (the "Fiscal
Agent Agreement"), by and between the City and Bank of America National Trust and Savings
Association, as fiscal agent, as succeeded by U.S. Bank Trust National Association (the "Fiscal
Agent"); and
WHEREAS, the City has determined to issue, for on behalf of the District, special tax
refunding bonds in the aggregate principal amount of $2,155,000 (the 'Refunding Bonds") at this
time for the purpose of providing funds to refund and defease the Prior Bonds;and
WHEREAS, the City and the Escrow Bank wish to enter into this Agreement for the
purpose of providing the terms and conditions relating to the deposit and application of moneys
and Federal Securities to provide for the payment and redemption of the Prior Bonds in full,
pursuant to and in accordance with the provisions of Section 10.03 of the Fiscal Agent Agreement.
NOW, THEREFORE, in consideration of the above premises and of the mutual promises
and covenants herein contained and for other valuable consideration the receipt and sufficiency of
which are hereby acknowledged,the parties hereto do hereby agree as follows:
Section 1.Definition of Federal Securities.As used herein, the term"Federal Securities" has
the meaning given such term in the Fiscal Agent Agreement.
Section 2. Establishment of Escrow Fund. There is hereby created an escrow fund (the
"Escrow Fund") to be held in trust by the Escrow Bank as an irrevocable escrow securing the
payment of the Prior Bonds,as hereinafter set forth. The Escrow Bank shall administer the Escrow
Fund as provided in this Agreement. All cash and securities in the Escrow Fund are hereby
irrevocably pledged as a special fund for the payment of the principal of and interest and
premium,if any,on the Prior Bonds in accordance with the provisions of this Agreement and the
Fiscal Agent Agreement. If at any time the Escrow Bank shall receive actual knowledge that the
cash and Federal Securities in the Escrow Fund will not be sufficient to make any payment
required by Section 4 hereof,the Escrow Bank shall notify the City of such fact and the City shall
-1-
immediately cure such deficiency from any source of legally available funds. The Escrow Bank
shall have no obligation whatsoever to use its own funds to cure any such deficiency.
Section 3. Deposit into Escrow Fund; Investment of Amounts. Concurrently with delivery
of the Refunding Bonds,the City shall cause to be transferred to the Escrow Bank for deposit into
the Escrow Fund the amount of $2,126,285.00 in immediately available funds, which shall be
derived from (a) a portion of the proceeds of sale of the Refunding Bonds in the amount of
$1,881,470, (b) a portion of the moneys on deposit in the reserve fund established for the Prior
Bonds in the amount of $192,487.00, and (c)a portion of the moneys on deposit in the
improvement fund established for the Prior Bonds in the amount of$52,328.00.
Of the moneys deposited into the Escrow Fund pursuant to the preceding paragraph,
$2,126,284.00 shall be used by the Escrow Bank to purchase the Federal Securities identified in
Exhibit A hereto(the"Original Federal Securities") and the remaining amount $1.00 shall be held
in cash, uninvested. The Original Federal Securities, and all other Federal Securities at any time
substituted therefor in accordance with this Agreement, shall be deposited with and held by the
Escrow Bank in the Escrow Fund solely for the uses and purposes set forth herein and therein. The
Escrow Bank shall have no lien upon or right of set off against the Federal Securities and cash at
any time on deposit in the Escrow Fund.
Section 4. Instructions as to Application of Deposit. The total amount of Federal Securities
deposited in the Escrow Fund hereunder shall be applied by the Escrow Bank for the sole purpose
of paying the principal of and interest and premium,if any,on the Prior Bonds in accordance with
the schedule set forth in Exhibit B attached hereto and by this reference incorporated herein.
Following payment in full of the principal of and interest and premium,if any,on the Prior Bonds,
all amounts remaining on deposit in the Escrow Fund shall be transferred by the Escrow Bank to
the Fiscal Agent to be used to pay debt service on the Refunding Bonds.
Section 5. Application of Proceeds from Prior Bond Funds. Upon receipt by the Escrow
Bank from the Fiscal Agent under the Fiscal Agent Agreement of certain amounts remaining on
deposit in the funds and accounts established under the Fiscal Agent Agreement as of the date of
delivery of the Refunding Bonds, such amount received shall be applied by the Escrow Bank as
follows:
(a) Transfer to the Escrow Fund, $192,487.00, derived from amounts on deposit in the
reserve fund established for the Prior Bonds,and
(b) Transfer to the Escrow Fund, $52,328.00, derived from amounts on deposit in the
improvement fund established for the Prior Bonds;
(c) Transfer to the City for deposit in the services fund established under the Fiscal Agent
Agreement, $668,403.00, derived from amounts on deposit in the bond fund established for the
Prior Bonds,
(d) Transfer to the City for deposit in the administrative expense fund established under
the Fiscal Agent Agreement, $10,958.41, derived from amounts on deposit in the administrative
expense fund established for the Prior Bonds, and
(e) Transfer to the City, $32,250.00, derived from amounts on deposit in the improvement
fund established for the Prior Bonds, to be used to complete the Project.
After making the foregoing deposits and transfers,any amounts remaining on deposit in or
accruing to any funds and accounts established under the Fiscal Agent Agreement held by the
Escrow Bank as Fiscal Agent thereunder,shall be transferred in immediately available funds to the
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fiscal agent for the Refunding Bonds, to be deposited by such fiscal agent to bond fund of the
fiscal agent agreement for the Refunding Bonds. In addition, any investment earnings on funds
held by the Fiscal Agent under the Fiscal Agent Agreement which are posted after the date of the
foregoing transfers, shall be remitted by the Escrow Bank to the City, for transfer by the City to
the special tax fund established under the fiscal agent agreement for the Refunding Bonds.
Section 6. A1212lication of Certain Terms of Fiscal Agent Agreement. All of the terms of the
Fiscal Agent Agreement relating to the making of payments of the principal of and interest and
premium on the Prior Bonds are incorporated in this Agreement as if set forth in full herein.
Section 7. Investment of Any Remaining Moneys. At the written direction of the City
provided at least two Business Days in advance, the Escrow Bank shall invest and reinvest any
proceeds received from any of the Federal Securities, and the cash originally deposited into the
Escrow Fund, for a period ending not later than the date on which such proceeds or cash are
required for the purposes specified in Section 4, in Federal Securities; provided, however, that
with respect to any such reinvestment,such written directions of the City shall be accompanied by
an opinion of nationally recognized bond counsel ('Bond Counsel".) to the effect that investment
in accordance with such directions will not cause the interest on the Prior Bonds or the Refunding
Bonds to become includable in gross income for federal income tax purposes and verified by a
certified public accountant that.at all times following such investment or reinvestment, the amount
in the Escrow Fund shall be sufficient to make all debt service payments contemplated hereunder.
The Escrow Bank shall be entitled to conclusively rely on and shall be fully protected in relying on,
such written directions of the City, such opinion of Bond Counsel and such verification by a
certified public accountant. In the event any such investment or reinvestment is required to be
made in United States Treasury Securities-State and Local Government Series, the City shall at its
cost cause to be prepared all necessary subscription forms therefor in sufficient time to enable the
Escrow Bank to acquire such securities.In the event that the City shall fail to file any such written
directions with the Escrow Bank concerning the reinvestment of any such proceeds, such proceeds
shall be held uninvested by the Escrow Bank. Any interest income resulting from investment or
reinvestment of moneys pursuant to this Section 7 shall be paid to the City promptly upon the
receipt of such interest income by the Escrow Bank.
Section 8. Substitution or Withdrawal of Federal Securities. The City may at any time
direct the Escrow Bank to substitute Federal Securities for any or all of the Original Federal
Securities then deposited in the Escrow Fund, or tq withdraw and transfer to the City any portion
of the Federal Securities then deposited in the Escrow Fund,provided that any such direction and
substitution or withdrawal shall be accompanied by: (a) a certification of an independent certified
public accountant that the Federal Securities then to be so deposited in the Escrow Fund together
with interest to be derived therefrom, or in the case of withdrawal the Federal Securities to be
remaining in the Escrow Fund following such withdrawal together with the interest to be derived
therefrom,shall be in an amount at all times at least sufficient to make the payments specified in
Section 4 hereof; and (b) an opinion of Bond Counsel that the substitution or withdrawal will not
affect, for federal income tax purposes, the exclusion from gross income for federal income tax
purposes of the interest on the Prior Bonds or on the Refunding Bonds. The Escrow Bank shall be
entitled to rely on and shall be fully protected in relying on such written directions of the City,
such certification of an independent public accountant and such opinion of Bond Counsel. In the
event that,following any such substitution of Federal Securities pursuant to this Section 8, there is
an amount of moneys or Federal Securities in excess of the amount required for the purposes of
Section 4 hereof, as such excess is identified in the certification of such independent certified
public accountant and provided that all amounts due Escrow Bank shall have been paid in full,
such excess shall upon written direction of the City be transferred to the City.
Section.9. Proceedings for Redemption of Prior Bonds. The City hereby irrevocably elects to
redeem all of the outstanding Prior Bonds in full on April 1, 2002, pursuant to the provisions of
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the Fiscal Agent Agreement. Notice of such redemption shall be given by the Escrow Bank (in its
capacity as Fiscal Agent under the Fiscal Agent Agreement)in accordance with Section 2.03(C) of
the Fiscal Agent Agreement,at the expense of the City.
Section 10. Compensation to Escrow Bank. The City shall pay the Escrow Bank full
compensation for its duties under this Agreement, including out-of-pocket costs such as
publication costs, redemption expenses, legal fees (including fees of outside counsel and the
allocated costs of internal attorneys) and other costs and expenses relating hereto and, in
addition, all fees, costs and expenses relating to the purchase of any Federal Securities after the
date hereof. Under no circumstances shall amounts deposited in or credited to the Escrow Fund
be deemed to be available for said purposes. The obligation of the City under this Section 10 to
pay compensation already earned by the Escrow Bank and to pay costs and expenses already
incurred shall survive termination of this Agreement and shall survive the resignation or removal of
the Escrow Bank.
Section 11. Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no
obligation to make any payment or disbursement of any type or incur any financial liability in the
performance of its duties under this Agreement unless the City shall have deposited sufficient
funds therefor with the Escrow Bank. The Escrow Bank may rely and shall be fully protected in
acting upon the written instructions of the City or its agents relating to any matter or action as
Escrow Bank under this Agreement.
The City covenants to indemnify, defend and hold harmless the Escrow Bank and its
officers,employees,directors,and agents,against any loss,liability or expense,including legal fees
(including the fees of outside counsel and internal attorneys), incurred in connection with the
performance of any of the duties of Escrow Bank hereunder, except the Escrow Bank shall not be
indemnified against any loss, liability or expense resulting from its negligence or willful
misconduct.
The indemnity provided in this Section 11 shall survive the termination of this Agreement
and shall survive the resignation or removal of the Escrow Bank.
The Escrow Bank shall have such duties as are expressly set forth herein and no implied
duties shall be read into this Agreement against the Escrow Bank. The Escrow Bank shall not be
liable for any act or omission of the City under this Agreement or the Fiscal Agent Agreement.
The Escrow Bank shall not be liable for the accuracy of any calculations provided as to the
sufficiency of.moneys or the Federal Securities deposited with it to pay the principal, interest or
premiums,if any,on the Prior.Bonds.
The Escrow Bank shall incur no liability for losses arising from any investment or other
disposition made pursuant to and in accordance with this Agreement.
Any bank,federal savings association or trust company into which the Escrow Bank may
be merged or with which it may be consolidated shall become the Escrow Bank without any action
of the City.
The Escrow Bank shall have no liability or obligation to the holders of the Prior Bonds or
the Refunding Bonds with respect to the payment of debt service by the City or with respect to the
observance or performance by the City of the other conditions, covenants and terms contained in
the Fiscal Agent Agreement, or with respect to the investment of any moneys in any fund or
account established,held or maintained by the City pursuant to the Fiscal Agent Agreement.
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The Escrow Bank may conclusively rely, as to the trust of the statements and correctness
of the opinions expressed therein,on any certificate or opinion furnished to it in accordance with
this Agreement or the Fiscal Agent Agreement.The Escrow Bank may consult with counsel, whose
opinion shall be full and complete authorization and protection to the Escrow Bank if it acts in
accordance with such opinion.
The Escrow Bank shall not be liable for any error of judgment made in good faith by an
authorized officer.
Nothing herein should be interpreted to require the Escrow Bank to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its duties or the exercise of
any of its rights.hereunder,unless it believes that repayment of such funds or adequate indemnity
against such risk or liability is assured. The Escrow Bank shall provide the City with seven days'
notice prior to making any advance of its own funds hereunder, and, if the City does not provide
moneys in the amount needed, the Escrow Bank shall be entitled to interest on the amounts
advanced at a rate equal to the then 3-month certificates of deposit rate (by reference to the Wall
Street Journal); provided that no such prior notice shall need to be given and such interest on
amounts advanced shall accrue from the date of any such advance following the occurrence of a
default by the City hereunder.
Any corporation succeeding to all or substantially all of the corporate trust business of the
Escrow Bank shall be the successor of the Escrow Bank hereunder, without the execution or filing
of any paper or any further act on the part of the any of the parties hereto.
Section 12. Resignation of Escrow Bank.The Escrow Bank may at any time resign by giving
written notice to the City, which notice shall indicate the date on which the resignation is to be
effective (the "resignation date"). The City shall promptly appoint a successor Escrow Bank by
the resignation date. Resignation of the Escrow Bank will be effective upon acceptance of
appointment by a successor Escrow Bank. If the City does not appoint a successor Escrow Bank
by the resignation date, the Escrow Bank may, at the expense of the City, petition any court of
competent jurisdiction for the appointment of a successor Escrow Bank, which court may
thereupon,after such notice, if any, as it may deem proper and prescribe and as may be required
by law, appoint a successor Escrow Bank.
Section 13. Amendment. This Agreement may be amended or modified by the parties
hereto, but only if there shall have been filed with the City and the Escrow Bank (a) a written
opinion of Bond Counsel stating that such amendment will not materially adversely affect the
interests of the owners of the Prior Bonds,and that such amendment will not cause interest on the
Prior Bonds or the Refunding Bonds to become includable in the gross income of the owners
thereof for federal income tax purposes, and (b) a certification of an independent certified public
accountant that the Federal Securities on deposit in the Escrow Fund together with interest to be
derived therefrom, shall be in an amount at all times at least sufficient to make the payments
specified in Section 4 hereof.
Section 14. Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding,any moneys held by the Escrow Bank in trust for the payment and discharge of
the principal of, and the interest and any premium on, the Prior Bonds which remains unclaimed
for two (2) years after the date when the payment of such principal, interest and premium have
become payable,if such moneys were held by the Escrow Bank at such date,shall be repaid by the
Escrow Bank to the City as its absolute property free from any trust, and the Escrow Bank shall
thereupon be released and discharged with respect thereto and the owners of such Prior Bonds
shall look only to the City for the payment of the principal of, and interest and any premium on,
such Prior Bonds. Any right of any Prior Bondowner to look to the City for such payment shall
survive only so long as required under applicable law.
Section 15. Execution in Counterparts. This Agreement may be executed in several
counterparts,each of which shall be an original and all of which shall constitute but one and the
same instrument.
Section 16. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the City and the Escrow Bank have each caused this
Agreement to be executed by their duly authorized officers all as of the date first above written.
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS
By
Administra ' e Services Director
U.S. BANK UST NATIONAL
ASSOCIATION, as Escrow Bank
By
Authorized Officer
i
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Section 15. Execution in Counterparts. This Agreement may be executed in several
counterparts,each of.which shall be an original and all of which shall constitute but one and the
same instrument.
Section 16. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the City and the Escrow Bank have each caused this
Agreement to be executed by their duly authorized officers all as of the date first above written.
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS)
By
Administrative Services Director
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Escrow Bank
By
Authorized Officer
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EXHIBIT A
SCHEDULE OF ORIGINAL FEDERAL SECURITIES
Type of Principal Maturity Interest
SeguLijjy Amount Date Rate Price
SLGS $2,126,284.00 4/l/02 2.110% 100%
Exhibit A
EXHIBIT B
SCHEDULE OF PAYMENTS OF PRIOR BONDS
Payment Maturing Called Redemption
Date Princil2al Interest Principal Premium Total
4/1/02 — $77,972.50 $2,055,000 $10,275.00 $2,143,247.50
Exhibit B
Quint&Thimmig LLP 09/24/01
10/18/01
FINAL 10/25/01
REVISED FINAL 10/29/01
SECOND REVISED FINAL 11/09/01
FISCAL AGENT AGREEMENT
by and between the
CITY OF HUNTINGTON BEACH
and
U.S.BANK TRUST NATIONAL ASSOCIATION,as Fiscal Agent
Dated as of November 1,2001
Relating to:
$2,155,000
City of Huntington Beach
Community Facilities District No.1990-1
2001 Special Tax Refunding Bonds
08003.05
TABLE OF CONTENTS
ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement......................................................................................3
Section 1.02. Agreement for Benefit of Bondowners.........................................................................3
Section1.03. ons ti Defini .................................................................................................................3
ARTICLE II
THE BONDS
Section 2.01. Principal Amount;Designation................................................................................. 12
Section 2.02. Terms of Bonds......................................................................................................... 12
Section2.03. Redemption............................................................................................................. 13
Section2.04. Form of Bonds.......................................................................................................... 15
Section 2.05. Execution of Bonds.................................................................................................... 15
Section2.06. Transfer of Bonds......................................................................................................15
Section2.07. Exchange of Bonds.................................................................................................... 16
Section2.08. Bond Register...........................................................................................................16
Section 2.09. Temporary Bonds..................................................................................................... 16
Section 2.10. Bonds Mutilated,Lost,Destroyed or Stolen................................................................ 16
Section 2.11. Limited Obligation................................................................................................... 17
Section2.12. No Acceleration........................................................................................................17
Section 2.13. Book-Entry System................................................................................................... 17
ARTICLE III
ISSUANCE OF BONDS
Section 3.01. Issuance and Delivery of Bonds................................................................................. 19
Section 3.02. Application of Proceeds of Sale of Bonds and Other Moneys.......................................19
Section3.03. Special Tax Fund......................................................................................................20
Section 3.04. Administrative Expense Fund...................................................................................20
Section 3.05. Costs of Issuance Fund..............................................................................................21
Section3.06. Services Fund...........................................................................................................21
Section 3.07. Validity of Bonds......................................................................................................22
ARTICLE IV
SPECIAL TAX REVENUES; BOND FUND AND RESERVE FUND '
Section 4.01. Pledge of Special Tax Revenues................................................................................23
Section4.02. Bond Fund...............................................................................................................23
Section 4.03. Reserve Fund...........................................................................................................24
ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment....................................................................................................26
Section 5.02. Limited Obligation...................................................................................................26
Section 5.03. Extension of Time for Payment..................................................................................26
Section 5.04. Against Encumbrances.............................................................................................26
Section 5.05. Books and Accounts..................................................................................................26
Section 5.06. Protection of Security and Rights of Owners...............................................................26
Section 5.07. Compliance with Law,Completion of Project.............................................................27
Section 5.08. Private Activity Bond Limitation...............................................................................27
Section 5.09. Federal Guarantee Prohibition..................................................................................27
i
Section 5.10. Collection of Special Tax Revenues............................................................................27
Section 5.11. Further Assurances...................................................................................................28
Section5.12. No Arbitrage............................................................................................................28
Section 5.13. Maintenance of Tax-Exemption..................................................................................28
Section 5.14. Annual State Reports................................................................................................28
Section 5.15. Covenant to Foreclose...............................................................................................29
Section 5.16. Continuing Disclosure to Owners..............................................................................29
Section 5.17. No Additional Bonds................................................................................................29
Section5.18. Yield of the Bonds....................................................................................................29
Section 5.19. Reduction of Special Taxes........................................................................................30
ARTICLE VI
INVESTMENTS;DISPOSITION OF INVESTMENT PROCEEDS; LIABILITY OF THE CITY'
Section 6.01. Deposit and Investment of Moneys in Funds.............................................................31
Section 6.02. Rebate of Excess Investment Earnings to the United States.........................................32
Section 6.03. Limited Obligation...................................................................................................32
Section6.04. Liability of City........................................................................................................32
Section 6.05. Employment of Agents by City.................................................................................33
ARTICLE VII
THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent....................................................................................34
Section 7.02. Liability of Fiscal Agent............................................................................................34
Section7.03. Information..............................................................................................................35
Section 7.04. Notice to Fiscal Agent...............................................................................................36
Section 7.05. Compensation,Indemnification.................................................................................36
ARTICLE VIII
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted............................................................................................37
Section 8.02. Owners'Meetings....................................................................................................37
Section 8.03. Procedure for Amendment with Written Consent of Owners......................................37
Section 8.04. Disqualified Bonds...................................................................................................38
Section 8.05. Effect of Supplemental Agreement............................................................................38
Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments..............................M
Section 8.07. Amendatory Endorsement of Bonds..........................................................................39
ARTICLE IX
MISCELLANEOUS
Section 9.01. Benefits of Agreement Limited to Parties...................................................................40
Section 9.02. Successor is Deemed Included in All References to Predecessor..................................40
Section 9.03. Discharge of Agreement...........................................................................................40
Section 9.04. Execution of Documents and Proof of Ownership by Owners......................................41
Section 9.05. Waiver of Personal Liability......................................................................................41
Section 9.06. Notices to and Demands on City and Fiscal Agent.....................................................41
Section 9.07. Partial Invalidity......................................................................................................41
Section 9.08. Unclaimed Moneys...................................................................................................42
Section9.09. Applicable Law........................................................................................................42
Section9.10. Conflict with Act.......................................................................................................42
Section 9.11. Conclusive Evidence of Regularity............................................................................42
Section 9.12. Payment on Business Day.........................................................................................42
Section9.13. Counterparts............................................................................................................42
EXHIBIT A: FORM OF BOND
ii
EXHIBIT B: OFFICER'S CERTIFICATE REQUESTING DISBURSEMENT FROM
ADMINISTRATIVE EXPENSE FUND
EXHIBIT C: OFFICER'S CERTIFICATE REQUESTING DISBURSEMENT FROM
COSTS OF ISSUANCE FUND
iii
FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (the "Agreement") is dated as of November 1,
2001, by and between the CITY OF HUN'TINGTON BEACH, a municipal corporation and
public body, corporate and politic, organized and existing under and by virtue of the
Constitution and laws of the State of California (the "City"), for and on behalf of the City of
Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the
"District"), and U.S BANK TRUST NATIONAL ASSOCIATION, a national banking
association duly organized and existing under the laws of the United States of America with a
corporate trust office located in Los Angeles, California as fiscal agent(the "Fiscal Agent").
WITNESSETH:
WHEREAS, the City Council of the City has formed the District under the provisions of
the Mello-Roos Community Facilities Act of 1982, as amended (section 53311 et seq. of the
California Government Code) (the "Act") and Resolution 6161 of the City Council adopted on
June 18, 1990;
WHEREAS, the City Council, as the legislative body with respect to the District, is
authorized under the Act to levy special taxes to pay for the costs of facilities within the
District and to authorize the issuance of bonds secured by said special taxes under the Act;
WHEREAS,under the provisions of the Act, on July 2, 1990, the City Council of the City
adopted its Resolution 6174,which resolution, among other matters, authorized the issuance of
the City of Huntington Beach, California Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) 1990 Special Tax Bonds (the "Prior Bonds");
WHEREAS, due to favorable interest rates in the financial markets, the City Council has
determined to refund the Prior Bonds in full;
WHEREAS, under the provisions of the Act, on October 15, 2001, the City Council of
the City adopted its Resolution No. 2001-74 (the "Resolution"), which resolution, among other
matters, authorized the issuance of the City of Huntington Beach Community Facilities District
No. 1990-1 2001 Special Tax Refunding Bonds (the 'Bonds") to provide moneys to refund the
Prior Bonds and provided that said issuance would be in accordance with the Act and this
Agreement,and authorized the execution hereof;
WHEREAS, it is in the public interest and for the benefit of the City, the District, the
property owners responsible for the payment of special taxes and the Owners of the Bonds that
the City enter into this Agreement to provide for the issuance of the Bonds, the disbursement of
proceeds of the Bonds, the disposition of the special taxes securing the Bonds and the
administration and payment of the Bonds;and
WHEREAS, all things necessary to cause the Bonds, when issued by the City for the
District and authenticated by the Fiscal Agent and issued as in the Act, the Resolution and this
Agreement provided, to be legal, valid and binding and limited obligations in accordance with
their terms,and all things necessary to cause the creation, authorization, execution and delivery
of this Agreement and the creation,authorization,execution and issuance of the Bonds, subject
to the terms hereof,have in all respects been duly authorized.
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NOW, THEREFORE, in consideration of the covenants and provisions herein set forth
and for other valuable consideration the receipt and sufficiency of which is hereby
acknowledged,the parties hereto do hereby agree as follows:
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ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement. This Agreement is entered into pursuant to
the provisions of the Act and the Resolution.
Section 1.02. Agreement for Benefit of Bondowners. The provisions, covenants and
agreements herein set forth to be performed by or on behalf of the City shall be for the equal
benefit,protection and security of the Owners. In consideration of the acceptance of the Bonds
by the Owners thereof, this Agreement shall be deemed to be and shall constitute a contract
between the City, for and on behalf of the District, and the Owners; and the covenants and
agreements herein set forth to be performed by the City shall be for the equal and proportionate
benefit, security and protection of all Owners of the Bonds without preference, priority or
distinction as to security or otherwise of any of the Bonds over any of the others by reason of
the number or date thereof or the time of sale,execution or delivery thereof,or otherwise for any
cause whatsoever, except as expressly provided therein or herein. All of the Bonds, without
regard to the time or times of their issuance or maturity, shall be of equal rank without
preference, priority or distinction of any of the Bonds over any other thereof, except as
expressly provided in or permitted by this Agreement.Any action by any Owner to enforce the
provisions of this Agreement shall be for the equal benefit and protection of all Owners of the
Bonds.
The Fiscal Agent may become the owner of any of the Bonds in its own or any other
capacity with the same rights it would have if it were not Fiscal Agent.
Section 1.03. Definitions.Unless the context otherwise requires,the terms defined in this
Section 1.03 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of
any certificate,opinion or other document herein mentioned,have the meanings herein specified.
All references herein to "Articles," "Sections" and other subdivisions are to the corresponding
Articles, Sections or subdivisions of this Agreement, and the words "herein," "hereof,"
"hereunder" and other words of similar import refer to this Agreement as a whole and not to
any particular Article,Section or subdivision hereof.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being
sections 53311 et seq. of the California Government Code.
"Administrative Expenses" means any or all of the following: the fees and expenses of the
Fiscal Agent(including any indemnification payment or any fees or expenses of its counsel), the
expenses of the City in carrying out its duties hereunder or under the Escrow Agreement
(including,but not limited to,the levying and collection of the Special Taxes, and the foreclosure
of the liens of delinquent Special Taxes) including the fees and expenses of its counsel, an
allocable share of the salaries of City staff directly related thereto and a proportionate amount
of City general administrative overhead related thereto, any amounts paid by the City from its
general funds pursuant to Section 6.02 hereof, any costs of the City in employing consultants
and/or attorneys in connection with the discharge of any of the City's obligations hereunder or
under the Escrow Agreement (including, but not limited to, the calculation of the levy of the
Special Taxes, foreclosures with respect to delinquent taxes, and the calculation of amounts
subject to rebate to the United States) and all other costs and expenses of the City or the Fiscal
Agent incurred in connection with the discharge of their respective duties hereunder or in
connection with the refunding of the Prior Bonds and,in the case of the City,in any way related
to the administration of the District. Administrative Expenses shall include any such expenses
incurred in prior years but not yet paid, and any advances of funds by the City under Section
6.02 hereof.
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"Administrative Expense Fund" means the fund by that name established by Section
3.04(a) hereof.
"Agreement"means this Fiscal Agent Agreement,as it may be amended or supplemented
from time to time by any Supplemental Agreement adopted pursuant to the provisions hereof.
"Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the
Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as
scheduled,and (ii) the principal amount of the Outstanding Bonds due in such Bond Year.
"Auditor" means the auditor/controller of the County, or such other official at the
County who is responsible for preparing property tax bills.
"Authorized Officer" means the Finance Officer, the City Manager, the City Clerk or any
other officer or employee authorized by the City Council of the City or by an Authorized Officer
to undertake the action referenced in this Agreement as required to be undertaken by an
Authorized Officer.
"Bond Counsel"means (i) Quint&Thimmig LLP,or(ii) any attorney or firm of attorneys
acceptable to the City and nationally recognized for expertise in rendering opinions as to the
legality and tax-exempt status of securities issued by public entities.
"Bond Fund" means the fund by that name established by Section 4.02(a) hereof.
"Bond Register" means the books maintained by the Fiscal Agent for the registration of
Bonds under Section 2.08.
"Bond Year" means the one-year period beginning on October 2 in each year and ending
on October 1 in the following year, except that the first Bond Year shall begin on the Closing
Date and shall end on October 1, 2002.
"Bonds" means the City of Huntington Beach Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds at any time Outstanding under this Agreement or any
Supplemental Agreement.
"Business Day" means any day other than (i) a Saturday or a Sunday or (ii) a day on
which banking institutions in the state in which the Fiscal Agent has its principal corporate trust
office are authorized or obligated by law or executive order to be closed.
"CDIAC" means the California Debt and Investment Advisory Commission of the office
of the State Treasurer of the State or any successor agency or bureau thereto.
"City"means the City of Huntington Beach,California, and any successor thereto.
"City Attorney" means the City Attorney of the City, or his designee.
"Closing Date" means November 14,2001,being the date upon which there is a physical
delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds
by the Original Purchaser.
"Code"means the Internal Revenue Code of 1986 as in effect on the date of issuance of
the Bonds or (except as otherwise referenced herein) as it may be amended to apply to
obligations issued on the date of issuance of the Bonds, together with applicable temporary and
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final regulations promulgated, and applicable official public guidance published, under the
Code.
"Continuing Disclosure Certificate" shall mean that certain Continuing Disclosure
Certificate executed by the City,dated the Closing Date, as originally executed and as it may be
amended from time to time in accordance with the terms thereof.
"Costs of Issuance"means items of expense payable or reimbursable directly or indirectly
by the City and related to the authorization, sale, delivery and issuance of the Bonds and the
refunding of the Prior Bonds, which items of expense shall include, but not be limited to,
printing costs,costs of reproducing and binding documents,closing costs, appraisal costs, filing
and recording fees, fees and expenses of counsel to the City, initial fees and charges of the
Fiscal Agent including its first annual administration fees and its legal fees and charges,
expenses incurred by the City in connection with the issuance of the Bonds and the refunding of
the Prior Bonds, Bond (underwriter's) discount, legal fees and charges, including bond counsel
and the City Attorney,charges for execution, transportation and safekeeping of the Bonds and
other costs,charges and fees in connection with the foregoing.
"Costs of Issuance Fund" means the fund by that name established by Section 3.05(a)
hereof.
"County"means the County of Orange,California.
"DTC" means the Depository Trust Company,New York,New York, and its successors
and assigns.
"Debt Service" means the scheduled amount of interest and amortization of principal
payable on the Bonds during the period of computation, excluding amounts scheduled during
such period which relate to principal which has been retired before the beginning of such period.
"Depository" means (a) initially, DTC, and (b) any other Securities Depository acting as
Depository pursuant to Section 2.13.
"District"means the City of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) formed pursuant to the Resolution of Formation.
"Escrow Agreement" means the Escrow Agreement, dated the Closing Date, by and
between the City and the Escrow Bank, as amended from time to time.
"Escrow Bank" means U.S. Bank Trust National Association, and its successor and
assigns,acting as escrow bank under the Escrow Agreement.
"Escrow Fund" means the fund of that name created and maintained under the Escrow
Agreement.
"Fair Market Value" means the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm's length transaction (determined as of the
date the contract to purchase or sell the investment becomes binding)if the investment is.traded
on an established securities market (within the meaning of section 1273 of the Code) and,
otherwise,the term"Fair Market Value" means the acquisition price in a bona fide arm's length
transaction (as referenced above) if(i) the investment is a certificate of deposit that is acquired
in accordance with applicable regulations under the Code, (ii) the investment is an agreement
with specifically negotiated withdrawal or reinvestment provisions and a specifically
negotiated interest rate (for example, a guaranteed investment contract, a forward supply
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contract or other investment agreement) that is acquired in accordance with applicable
regulations under the Code, (iii)the investment is a United States Treasury Security—State and
Local Government Series that is acquired in accordance with applicable regulations of the
United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment
Fund of the State, but only if at all times during which the investment is held its yield is
reasonably expected to be equal to or greater than the yield on a reasonably comparable direct
obligation of the United States.
"Federal Securities"means any of the following which at the time of investment are legal
investments under the laws of the State for funds held by the Fiscal Agent (the Fiscal Agent
entitled to rely on any direction from the City as a certification that such investments constitute
such legal investments):
(i) direct general obligations of the United States of America (including
obligations issued or held in book entry form on the books of the United States
Department of the Treasury) and obligations, the payment of principal of and interest
on which are directly or indirectly guaranteed by the United States of America,
including, without limitation, such of the foregoing which are commonly referred to as
"stripped" obligations and coupons; or
(ii)any of the following obligations of the following agencies of the United States
of America: (a) direct obligations of the Export-Import Bank, (b) certificates of beneficial
ownership issued by the Farmers Home Administration, (c) participation certificates
issued by the General Services Administration, (d) mortgage-backed bonds or pass-
through obligations issued and guaranteed by the Government National Mortgage
Association, (e) project notes issued by the United States Department of Housing and
Urban Development,and (f) public housing notes and bonds guaranteed by the United
States of America.
"Finance Officer"means the Finance Director of the City,or his designee.
"Fiscal Agent" means U.S. Bank Trust National Association, the Fiscal Agent appointed
by the City and acting as an independent fiscal agent with the duties and powers herein
provided, its successors and assigns, and any other corporation or association which may at
any time be substituted in its place, as provided in Section 7.01 hereof.
"Fiscal Year"means the twelve-month period extending from July 1 in a calendar year to
June 30 of the succeeding year,both dates inclusive.
"Information Services" means Financial Information, Inc.'s "Daily Called Bond Service",
30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny
Information Services' "Called Bond Service",55 Broad Street, 28th Floor, New York, New York
10004; Moody's Investors Service "Municipal and Government", 99 Church Street, New York,
New York 10007,Attention: Municipal News Reports; Standard & Poor's Corporation "Called
Bond Record", 25 Broadway, 3rd Floor, New York, New York 10004; and, in accordance with
then current guidelines of the Securities and Exchange Commission, such other addresses
and/or such services providing information with respect to called bonds as the City may
designate in an Officer's Certificate delivered to the Fiscal Agent.
"Interest Payment Date" means April 1 and October 1 of each year, commencing with
April 1, 2002.
"Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond
Year after the calculation is made through the final maturity date of any Outstanding Bonds.
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"Moody's" means Moody's Investors Service, and its successors.
"Officer's Certificate" means a written certificate of the City signed by an Authorized
Officer of the City.
"Ordinance Levying Taxes" means any ordinance of the City Council of the City levying
the Special Taxes.
"Original Purchaser" means the first purchaser of the Bonds from the City, being
O'Connor SWS Securities.
"Outstanding," when used as of any particular time with reference to Bonds, means
(subject to the provisions of Section 8.04 hereof) all Bonds except (i) Bonds theretofore canceled
by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) Bonds paid or
deemed to have been paid within the meaning of Section 9.03 hereof;and (iii) Bonds in lieu of or
in substitution for which other Bonds shall have been authorized, executed, issued and
delivered by the City pursuant to this Agreement or any Supplemental Agreement.
"Owner" means any person who shall be the registered owner of any Outstanding Bond.
"Participating Underwriter" shall have the meaning ascribed thereto in the Continuing
Disclosure Certificate.
"Permitted Investments" means any of the following which at the time of investment are
determined by the City to be legal investments under the laws of the State for the moneys
proposed to be invested therein:
(a)Federal Securities..
(b)The following obligations of government-sponsored agencies which are not backed by
the full faith and credit of the United States of America:
(i) Participation certificates (excluded are stripped mortgage securities which are
purchased at prices exceeding their principal amounts) and Senior Debt obligations of
the Federal Home Loan Mortgage Corporation(FHLMC).
(ii) Consolidated system-wide bonds and notes of the Farm Credit Banks
(formerly Federal Land Banks, Federal Intermediate Credit Banks and Banks for
Cooperatives).
(iii) Consolidated debt obligations of the Federal Home Loan Banks (FHL
Banks).
(iv) Senior debt obligations and mortgage-backed securities (excluded are
stripped mortgage securities which are purchased at priced exceeding their principal
amounts) of Federal National Mortgage Association(FNMA).
(v) Senior debt obligations (excluded are securities that do not have a fixed par
value and/or whose terms do not promise a fixed dollar amount at maturity or call
date) of the Student Lout Marketing Association (SLMA).
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(c) Unsecured certificates of deposit, time deposits, and bankers' acceptances having
maturities of not more than 30 days) of any bank the short-term obligations of which are rated
"A-1" or better by S&P.
(d) Deposits the aggregate amount of which are fully insured by the Federal Deposit
Insurance Corporation (FDIC),in banks which have a capital and surplus of at least$5 million.
(e) Commercial paper having original maturities of not more than 180 days) rated
"A-1+"by S&P and "Prime-1" by Moody's issued by a domestic corporation having assets in
excess of$500 million.
(f) Money market funds rated "Aam" or "Aam-G" or better by S&P, with a minimum of
$500 million in assets under management, including funds for which the Fiscal Agent or its
affiliates provide investment or other advisory services.
(g) "State Obligations" which means (a) direct general obligations of any state of the
United States of America or any subdivision or agency thereof to which is pledged the full faith
and credit of a state the unsecured general obligation debt of which is rated "AY or better by
Moody's and "A" or better by S&P, or any obligation fully and unconditionally guaranteed by
any state, subdivision or agency which unsecured general obligation debt is so rated, and (b)
direct general short-term obligations of any state agency or subdivision or agency thereof
described in (a) above and rated "A-1+" by S&P.
(h)Repurchase agreements which satisfy the following criteria:
(i) Repurchase agreements must be between the City or the Fiscal Agent and a
dealer bank or securities firm which is:
(A)A primary dealer on the Federal Reserve reporting dealer list which is
rated "A" or better by Standard &Poor's and Moody's, or -
(B) A bank rated "A" or above by Standard & Poor's and Moody's; or
(C)Corporations the long-term debt or claims paying ability of which, or
in the case of a guaranteed corporation, the long-term debt of the guarantor, or,
in the case of a monoline financial guaranty insurance company, claims paying
ability or financial strength, is rated in at least the double A category by
Standard &Poor's and Moody's.
(ii)The written agreement must include the following:
(A) Securities which are acceptable for transfer are:
(1) direct obligations of the United States government, or
(2) obligations of federal agencies backed by the full faith and
credit of the United States of America (or the Federal National Mortgage
Association (FNMA) or the Federal Home Loan Mortgage Corporation
(FHLMC)),
(B) The collateral must be delivered to the City or the Fiscal Agent (if the
Fiscal Agent is not supplying the collateral) or a third party acting as agent for
the Fiscal Agent (if the Fiscal Agent is supplying the collateral) before or
simultaneous with payment(perfection by possession of certificated securities),
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(C) (1) The securities must be valued weekly, marked-to-market at
current market price plus accrued interest,and
(2) The value of the collateral must be at least equal to one
hundred four percent (104%) of the amount of money transferred by the
Fiscal Agent to the dealer,bank or security firm under the agreement plus
accrued interest. If the value of the securities held as collateral is reduced
below one hundred four percent (104%) of the value of the amount of
money transferred by the Fiscal Agent, then additional acceptable
securities and/or cash must be provided as collateral to bring the value of
the collateral to one hundred four percent (104%); provided, however,
that if the securities used as collateral are those of FNMA or FHLMC,
then the value of the collateral must equal to one hundred. five percent
(105%) of the amount of money transferred by the Fiscal Agent;and
(3) A legal opinion must be delivered to the City and the Fiscal Agent
that the repurchase agreement meets the requirements of California law with
respect to the investment of public funds; and
(i) Investment agreements with domestic or foreign banks, insurance companies or
corporations the long-term debt or claims paying ability of which or,in the case of a guaranteed
corporation,the long-term debt of the guarantor,or,in the case of a monoline financial guaranty
insurance company, claims paying ability or financial strength, of the guarantor is rated in at
least the double A category by Standard &Poor's and Moody's; provided that, by the terms of
the investment agreement:
(i)interest payments are to be made to the Fiscal Agent at times and in amounts
as necessary to pay debt service on the Bonds (if the funds invested pursuant to the
investment agreement are from the Reserve Fund);
(ii)the invested funds are available for withdrawal without penalty or premium,
upon not more than seven(7) days'prior notice;
(iii) the investment agreement shall provide that it is the unconditional and
general obligation of, and is not subordinated to any other obligation of, the provider
thereof;
(iv) the City and the Fiscal Agent receive the opinion of domestic counsel (which
opinion shall be addressed to the City) that such investment agreement is legal, valid,
binding and enforceable upon the provider in accordance with its terms and of foreign
counsel (if applicable) in form and substance acceptable, and addressed to, the City;
(v)the investment agreement shall provide that if during its term
(A)_the provider's rating by either Standard & Poor's or Moody's falls
below "AA-" or "AaY, respectively, the provider shall, at its option, within ten
(10) days of receipt of publication of such downgrade, either (i) collateralize the
investment agreement by delivering or transferring in accordance with the
applicable state and federal laws (other than by means of entries on the
provider's books) to the City, the Fiscal Agent or a third party acting solely as
agent therefor (the "Holder of the Collateral") collateral free and clear of any
third-party liens or claims, the market value of which collateral is maintained at
one hundred four percent(104%) of securities identified in clauses (i) and (ii) of
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this definition; or (ii) assign the investment agreement and all of its obligations
thereunder to a financial institution mutually acceptable to the Provider, the City
and the Fiscal Agent which is rated either in the first or second highest category
by Standard & Poor's and Moody's; and
(B) the provider's rating by either Standard & Poor's or Moody's is
withdrawn or suspended or falls below "A-" or "AY, respectively, the provider
must, at the direction of the City or the Fiscal Agent, within ten (10) days of
receipt of such direction, repay the principal of and accrued but unpaid interest
on the invested funds, in either case with no penalty or premium to the City or
the Fiscal Agent;and
(vi) the investment agreement shall provide and an opinion of counsel shall be
rendered, in the event collateral is required to be pledged by the provider under the
terms of the investment agreement at the time such collateral is delivered, that the
Holder of the Collateral has a perfected first priority security interest in the collateral,
any substituted collateral and all proceeds thereof (in the case of bearer securities, this
shall mean the Holder of the Collateral is in possession of such collateral); and
(vii)the investment agreement shall provide that if during its term
(A) the provider shall default in its payment obligations, the provider's
obligations under the investment agreement shall, at the direction of the City or
the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid
interest thereon shall be paid to the City or the Fiscal Agent, as appropriate; and
(B) the provider shall become insolvent,not pay its debts as they become
due, be declared or petition to be declared bankrupt, etc., the provider's
obligations shall automatically be accelerated and amounts invested and accrued
but unpaid interest thereon shall be paid to the City or the Fiscal Agent, as
appropriate;
(j)The Local Agency Investment Fund of the State.
(k) Forward Delivery Agreements (FDA) or Forward Purchase and Sale Agreements
(FPSA), having as the underlying investment property those investments which are in (a) and
(b) above.
"Principal Office" means the principal corporate trust office of the Fiscal Agent set forth
in Section 9.06 (except for payment, surrender and exchanges of the Bonds which shall be the
office of U.S. Bank Trust National Association in St. Paul, Minnesota), or such other or
additional offices as may be designated by the Fiscal Agent.
"Prior Bond Resolution" means Resolution 6174, adopted by the City Council of the City
on July 2, 1990,authorizing the issuance of the Prior Bonds.
"Prior Bonds" means the City of Huntington Beach Community Facilities District No.
1990-1 (Goldenwest/Ellis Area) 1990 Special Tax Bonds, issued on August 9, 1990, in the
original principal amount of$2,400,000.
"Proceeds"when used with reference to the Bonds,means the face amount of the Bonds,
plus accrued interest and premium,if any,less any original issue discount.
"Project"means the facilities described in the Resolution of Formation.
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"Record Date" means the fifteenth day of the month next preceding the month of the
applicable Interest Payment Date,whether or not such day is a Business Day.
"Regulations"means temporary and permanent regulations promulgated under the Code.
"Reserve Fund" means the fund by that name established pursuant to Section 4.03(a)
hereof.
"Reserve Requirement" means, as of any date of calculation an amount equal to the lesser
of(i) the then Maximum Annual Debt Service, or (ii) eight percent (8%) of the initial principal
amount of the Bonds issued hereunder.
"Resolution" means Resolution No. 2001-74, adopted by the City Council of the City on
October 15, 2001, authorizing the issuance of the Bonds..
"Resolution of Formation" means Resolution 6161, adopted by the City Council of the
City on June 18, 1990,forming the District.
"Resolution of Intention" means, collectively, Resolution 6142 and Resolution 6143,
adopted by the City Council of the City on May 7, 1990 respectively, indicating the intention of
the City to form the District.
"S&P" means Standard & Poor's Credit Market Services, a division of McGraw-Hill,
and its successors and assigns.
"Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue,
Garden City, New York 11530, Fax-(516) 227-4039 or 4190; and, in accordance with then
current guidelines of the Securities and Exchange Commission, such other addresses and/or
such other securities depositories as the City may designate in an Officer's Certificate delivered
to the Fiscal Agent.
"Services" means the services more particularly described as such in Exhibit A to the
Resolution of Formation.
"Services Fund" means the fund by that name established by Section 3.06 hereof.
"Special Tax Fund" means the fund by that name established by Section 3.03(a) hereof.
"Special Tax Revenues" means the proceeds of the Special Taxes received by the City,
including any scheduled payments thereof, interest and proceeds of the redemption or sale of
property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said
interest,but shall not include any interest or penalties in excess of the interest due on the Bonds
collected in connection with any such foreclosure.
"Special Taxes" means the special taxes levied by the City Council within the District
pursuant to the Act and this Agreement.
"State" means the State of California.
"Supplemental Agreement"means an agreement the execution of which is authorized by a
resolution which has been duly adopted by the City under the Act and which agreement is
amendatory of or supplemental to this Agreement, but only if and to the extent that such
agreement is specifically authorized hereunder.
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ARTICLE H:
THE BONDS
Section 2.01.Principal Amount;Designation.Bonds in the aggregate principal amount of
two million one hundred fifty-five thousand dollars ($2,155,000) are hereby authorized to be
issued by the City for the District under and subject to the terms of the Resolution and this
Agreement, the Act and other applicable laws of the State. The Bonds shall be designated "City
of Huntington Beach Community Facilities District No. 1990-1 2001 Special Tax Refunding
Bonds". No additional bonds are authorized to be issued hereunder.
Section 2.02. Terms of Bonds.
(a) Form; Denominations. The Bonds shall be issued as fully registered Bonds without
coupons in denominations of $5,000 or any integral multiple thereof. Bonds shall be lettered
and numbered in a customary manner as determined by the Fiscal Agent.
(b) Date of Bonds. The Bonds shall be dated the Closing Date.
(c) CUSIP Identification Numbers. "CUSIP" identification numbers shall be imprinted on
the Bonds,but such numbers shall not constitute a part of the contract evidenced by the Bonds
and any error or omission with respect thereto shall not constitute cause for refusal of any
purchaser to accept delivery of and pay for the Bonds. In addition, failure on the part of the
City or the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute
an event of default or any violation of the City's contract with such Owners and shall not
impair the effectiveness of any such notice.
(d)Maturities,Interest Rates. The Bonds shall mature on October 1,in the years and shall
bear interest at the interest rates per annum.set forth in the following table:
Maturity Principal Interest
(October 1) Amount Rate
2007 $ 500,000 4.00%
2012 510,000 4.75
2020 1,145,000 5.40
(e) Interest. The Bonds shall bear interest at the rates set forth above payable on the
Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360-day year
composed of twelve 30-day months. Each Bond shall bear interest from the Interest Payment
Date next preceding the date of authentication thereof unless (i) it is authenticated on an
Interest Payment Date,in which event it shall bear interest from such date of authentication, or
(ii) it is authenticated prior to an Interest Payment Date and after the close of business on the
Record Date preceding such Interest Payment Date, in which event it shall bear interest from
such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the
first Interest Payment Date, in which event it shall bear interest from the Closing Date;
provided,however, that if at the time of authentication of a Bond, interest is in default thereon,
such Bond shall bear interest from the Interest Payment Date to which interest has previously
been paid or made available for payment thereon.
(f) Method of Payment. Interest on the Bonds (including the final interest payment upon
maturity or earlier redemption) is payable by check of the Fiscal Agent mailed on the Interest
Payment Dates by first class mail to the registered Owner thereof at such registered Owner's
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address as it appears on the registration books maintained by the Fiscal Agent at the close of
business on the Record Date preceding the Interest Payment Date, or by wire transfer (i) to the
Depository(so long as the Bonds are in book-entry form pursuant to Section 2.13), or (ii) to an
account within the United States made on such Interest Payment Date upon written instructions
of any Owner of$1,000,000 or more in aggregate principal amount of Bonds, which instructions
shall continue in effect until revoked in writing, or until such Bonds are transferred to a new
Owner. The principal of the Bonds and any premium on the Bonds are payable by check in
lawful money of the United States of America upon surrender of the Bonds at the Principal
Office of the Fiscal Agent. All Bonds paid by the Fiscal Agent pursuant to this Section shall be
canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds and issue a
certificate of destruction thereof to the City upon the City's request.
Section 2.03. Redemption.
(a) Redemption Dates.
(i) Optional Redemption. The Bonds are subject to redemption prior to their
stated maturity on any date on or after October 1, 2011, as a whole or in part, upon
payment from any source of funds available for that purpose, at a redemption price
equal to the principal amount of Bonds to be redeemed, together with accrued interest
thereon to the date fixed for redemption,without premium.
(ii)Mandatory Sinking Payment Redemption.
(A) Bonds Maturing on October 1, 2007. The Bonds maturing on October
1, 2007, are subject to mandatory sinking payment redemption in part on
October 1, 2002, and on each October 1 thereafter to and including October 1,
2007, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption,
without premium,from sinking payments as follows:
Redemption Date Redemption Date
(October 1) Amount (October 1) Amount
2002 $85,000 2005 $85,000
2003 75,000 2006 85,000
2004 80,000 2007(maturity) 90,000
The amounts in the foregoing table shall be reduced pro rata,in order to maintain
substantially level debt service, as a result of any prior partial redemption of the Bonds
pursuant to Section 2.03(a)(i) above.
(B) Bonds Maturing on October 1, 2012. The Bonds maturing on October
1, 2012, are subject to mandatory sinking payment redemption in part on
October 1, 2008, and on each October 1 thereafter to and including October 1,
2012, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption,
without premium,from sinking payments as follows:
Redemption Date Redemption Date
(October 1) Amount (October 1) Amount
2008 $95,000 2011 $110,000
2009 95,000 2012(maturity) 110,000
2010 100,000
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The amounts in the foregoing table shall be reduced pro rata,in order to maintain
substantially level debt service,as a result of any prior partial redemption of the Bonds
pursuant to Section 2.03(a)(i) above.
(c) Bonds Maturing on October 1, 2020. The Bonds maturing on October
1, 2020, are subject to mandatory sinking payment redemption in part on
October 1, 2013, and on each October 1 thereafter to and including October 1,
2020, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption,
without premium,from sinking payments as follows:
Redemption Date Redemption Date
(October 1 Amount (October 1 Amount
2013 $120,000 2017 $145,000
2014 125,000 2018 155,000
2015 130,000 2019 160,000
2016 140,000 2020(maturity) 170,000
The amounts in the foregoing table shall be reduced pro rata,in order to maintain
substantially level debt service, as a result of any prior partial redemption of the Bonds
pursuant to Section 2.03(a)(i) above.
(iii) Purchase In Lieu of Redemption. In lieu of redemption under this Section
2.03(a), moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for
purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer's
Certificate executed by the Finance Officer requesting such purchase,at public or private
sale as and when, and at such prices (including brokerage and other charges) as such
Officer's Certificate may provide,but in no event may Bonds be purchased at a price in
excess of the principal amount thereof, any redemption premium due thereon, plus
interest accrued to the date of purchase. The Fiscal Agent shall be absolutely protected
and shall incur no liability in relying on such Officer's Certificate.
(b) Notice to Fiscal Agent. The City, by Officer's Certificate executed by the Finance
Officer, shall give the Fiscal Agent written notice of its intention to redeem Bonds pursuant to
subsection (a)(i) (including the maturities of Bonds to be redeemed) not less than sixty (60)
days prior to the applicable redemption date, unless the Fiscal Agent shall agree to a shorter
notice period in its sole discretion.
(c) Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any
redemption to be mailed by first class mail, postage prepaid, at least thirty (30) days but not
more than sixty (60) days prior to the date fixed for redemption, to the Securities Depositories
and to one or more Information Services,and to the respective registered Owners of any Bonds
designated for redemption, at their addresses appearing on the Bond registration books in the
Principal Office of the Fiscal Agent;but such mailing shall not be a condition precedent to such
redemption and failure to mail or to receive any such notice, or any defect therein, shall not
affect the validity of the proceedings for the redemption of such Bonds.
Such notice shall state the redemption date and the redemption price and, if less than all
of the then Outstanding Bonds are to be called for redemption shall state as to any Bond called
in part the principal amount thereof to be redeemed, and shall require that such Bonds be then
surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption
price, and shall state that further interest on such Bonds will not accrue from and after the
redemption date.The cost of mailing any such redemption notice and any expenses incurred by
the Fiscal Agent in connection therewith shall be paid by the City.
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Whenever provision is made in this Agreement for the redemption of less than all of the
Bonds or any given portion thereof,the Fiscal Agent shall select the Bonds to be redeemed, from
all Bonds or such given portion thereof not previously called for redemption, by lot in any
manner which the Fiscal Agent deems appropriate.
Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal
Agent shall authenticate and deliver to the registered Owner, at the expense of the City, a new
Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate
principal amount equal to the unredeemed portion of the Bond or Bonds.
(d) Effect of Redemption. From and after the date fixed for redemption, if funds available
for the payment of the principal of, and interest and any premium on, the Bonds so called for
redemption shall have been deposited in the Bond Fund,such Bonds so called shall cease to be
entitled to any benefit under this Agreement other than the right to receive payment of the
redemption price, and no interest shall accrue thereon from and after the redemption date
specified in the notice of redemption.
All Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section 2.03
shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled Bonds in
accordance with the Fiscal Agent's retention policy then in effect.
Section 2.04. Form of Bonds. The Bonds, the Fiscal Agent's certificate of authentication
and the assignment, to appear thereon,shall be substantially in the forms,respectively,set forth
in Exhibit A attached hereto and by this reference incorporated herein, with necessary or
appropriate variations, omissions and insertions, as permitted or required by this Agreement,
the Resolution and the Act.
Section 2.05. Execution of Bonds. The Bonds shall be executed on behalf of the City by
the manual or facsimile signatures of its Mayor and its City Clerk who are in office on the date
of adoption of this Agreement or at any time thereafter, and the seal of the City shall be
impressed,imprinted or reproduced by facsimile thereon.If any officer whose signature appears
on any Bond ceases to be such officer before delivery of the Bonds to the Owner, such signature
shall nevertheless be as effective as if the officer had remained in office until the delivery of the
Bonds to the Owner. Any Bond may be signed and attested on behalf of the City by such
persons as at the actual date of the execution of such Bond shall be the proper officers of the
City although at the nominal date of such Bond any such person shall not have been such officer
of the City.
Only such Bonds as shall bear thereon a certificate of authentication in substantially the
form set forth in Exhibit A,manually executed and dated by the Fiscal Agent, shall be valid or
obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of
authentication of the Fiscal Agent shall be conclusive evidence that the Bonds registered
hereunder have been duly authenticated, registered and delivered hereunder and are entitled to
the benefits of this Agreement.
Section 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred, upon the books required to be kept pursuant to the provisions of Section 2.08 by
the person in whose name it is registered, in person or by his duly authorized attorney, upon
surrender of such Bond for cancellation, accompanied by delivery of a duly written instrument
of transfer in a acceptable to the Fiscal Agent. The cost for any services rendered or any
expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the
City. The Fiscal Agent shall collect from the Owner requesting such transfer any tax or other
governmental charge required to be paid with respect to such transfer. Whenever any Bond or
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Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall
authenticate and deliver a new Bond or Bonds, for a like aggregate principal amount of
authorized denominations.
No transfers of Bonds shall be required to be made (i) fifteen days prior to the date
established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a
Bond after such Bond has been selected for redemption.
Section 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Office of the
Fiscal Agent solely for a like aggregate principal amount of Bonds of authorized denominations
and of the same maturity. The cost for any services rendered or any expenses incurred by the
Fiscal Agent in connection with any such exchange shall be paid by the City. The Fiscal Agent
shall collect from the Owner requesting such exchange any tax or other governmental charge
required to be paid with respect to such exchange.
No exchanges of Bonds shall be required to be made (i) fifteen days prior to the date
established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a
Bond after such Bond has been selected for redemption.
Section 2.08. Bond Register. The Fiscal Agent will keep, or cause to be kept, at its
Principal Office sufficient books for the registration and transfer of the Bonds (the 'Bond
Register") which books shall show the series. number, date, amount, rate of interest and last
known owner of each Bond and shall at all times be open to inspection by the City during
regular business hours upon reasonable notice; and, upon presentation for such purpose, the
Fiscal Agent shall,under such reasonable regulations as it may prescribe, register or transfer or
cause to be registered or transferred, on said books,the ownership of the Bonds as hereinbefore
provided.
The City and the Fiscal Agent will treat the Owner of any Bond whose name appears on
the Bond register as the absolute Owner of such Bond for any and all purposes, and the City
and the Fiscal Agent shall not be affected by any notice to the contrary. The City and the Fiscal
Agent may rely on the address of the Bondowner as it appears in the Bond register for any and
all purposes.
Section 2.09. Temporary Bonds. The Bonds may be initially issued in temporary form
exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be
printed, lithographed or typewritten, shall be of such authorized denominations as may be
determined by the City, and may contain such reference to any of the provisions of this
Agreement as may be appropriate. Every temporary Bond shall be executed by the City upon
the same conditions and in substantially the same manner as the definitive Bonds. If the City
issues temporary Bonds, it will execute and furnish definitive Bonds without delay and .
thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the
definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the
Fiscal Agent shall designate,and the Fiscal Agent shall authenticate and deliver in exchange for
such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized
denominations.Until so exchanged,the temporary Bonds shall be entitled to the same benefits
under this Agreement as definitive Bonds authenticated and delivered hereunder.
Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated; at the expense of the Owner of said Bond, the City shall execute and the Fiscal
Agent shall authenticate and deliver a replacement Bond of like tenor and principal amount in
exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal
Agent of the Bond so mutilated.Every mutilated Bond so surrendered to the Fiscal Agent shall
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be canceled by it and destroyed by the Fiscal Agent, in accordance with the Fiscal Agent's
retention policy then in effect.
If any Bond shall be lost, destroyed or stolen,the City shall execute and the Fiscal Agent
shall authenticate and deliver a replacement Bond of like tenor and principal amount in lieu of
and in substitution for the Bond so lost, destroyed or stolen, at the expense of the Owner, but
only following provision by the Owner to the Fiscal Agent of indemnity for the City and the
Fiscal Agent satisfactory to the Fiscal Agent. The City may require payment of a sum not
exceeding the actual cost of preparing each a replacement Bond delivered under this Section
2.10 and the City and the Fiscal Agent may require payment of the expenses which may be
incurred by the City and the Fiscal Agent for the preparation, execution, authentication and
delivery thereof. Any Bond delivered under the provisions of this Section 2.10 in lieu of any
Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual
obligation on the part of the City whether or not the Bond so alleged to be lost, destroyed or
stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to
the benefits of this Agreement with all other Bonds issued pursuant to this Agreement.
Section 2.11. Limited Obligation. All obligations of the City under this Agreement and
the Bonds shall not be general obligations of the City, but shall be limited obligations, payable
solely from the Special Tax Revenues and the funds pledged therefore hereunder. Neither the
faith and credit of the City nor of the State or any political subdivision thereof is pledged to the
payment of the Bonds.
Section 2.12. No Acceleration. The principal of the Bonds shall not be subject to
acceleration hereunder.Nothing in this Section 2.12 shall in any way prohibit the redemption of
Bonds under Section 2.03 hereof, or the defeasance of the Bonds and discharge of this
Agreement under Section 9.03 hereof.
Section 2.13. Book-Entry System. DTC shall act as the initial Depository for the Bonds.
One Bond for each maturity of the Bonds shall be initially executed, authenticated, and
delivered as set forth herein with a separate fully registered certificate (in print or typewritten
form).Upon initial execution,authentication,and delivery, the ownership of the Bonds shall be
registered in the Bond Register kept by the Fiscal Agent for the Bonds in the name of Cede &
Co.,as nominee of DTC or such nominee as DTC shall appoint in writing.
The representatives of the City and the Fiscal Agent are hereby authorized to take any
and all actions as may be necessary and not inconsistent with this Agreement to qualify the
Bonds for the Depository's book-entry system, including the execution of the Depository's
required representation letter.
With respect to Bonds registered in the Bond Register in the name of Cede & Co., as
nominee of DTC,neither the City nor the Fiscal Agent shall have any responsibility or obligation
to any broker-dealer, bank, or other financial institution for which DTC holds Bonds as
Depository from time to time (the "DTC Participants") or to any person for which a DTC
Participant acquires an interest in the Bonds (the "Beneficial Owners"). Without limiting the
immediately preceding sentence, neither the City nor the Fiscal Agent shall have any
responsibility or obligation with respect to(i) the accuracy of the records of DTC, Cede & Co.,
or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to
any DTC Participant, any Beneficial Owner, or any other person,other than DTC, of any notice
with respect to the Bonds, including any notice of redemption, (iii) the selection by the
Depository of the beneficial interests in the Bonds to be redeemed in the event the City elects to
redeem the Bonds in part, (iv) the payment to any DTC Participant, any Beneficial Owner, or
any other person, other than DTC, of any amount with respect to the principal of or interest on
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the Bonds, or (v) any consent given or other action taken by the Depository as Owner of the
Bonds.
Except as set forth above, the Fiscal Agent may treat as and deem DTC to be the
absolute Owner of each Bond for which DTC is acting as Depository for the purpose of
payment of the principal of and interest on such Bonds, for the purpose of giving notices of
redemption and other matters with respect to such Bonds, for the purpose of registering
transfers with respect to such Bonds, and for all purposes whatsoever. The Fiscal Agent shall
pay all principal of and interest on the Bonds only to or upon the order of the Owners as shown
on the Bond Register, and all such payments shall be valid and effective to fully satisfy and
discharge all obligations with respect to the principal of and interest on the Bonds to the extent
of the sums or sums so paid.
No person other than an Owner, as shown on the Bond Register, shall receive a physical
Bond. Upon delivery by DTC to the Fiscal Agent of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and subject to the transfer
provisions in Section 2.06 hereof, references to "Cede & Co." in this Section 2.13 shall refer to
such new nominee of DTC.
DTC may determine to discontinue providing its services with respect to the Bonds at
any time by giving written notice to the Fiscal Agent during any time that the Bonds are
Outstanding, and discharging its responsibilities with respect thereto under applicable law. The
City may terminate the services of DTC with respect to the Bonds if it determines that DTC is
unable to discharge its responsibilities with respect to the Bonds or that continuation of the
system of book-entry transfers through DTC is not in the best interest of the Beneficial Owners,
and the City shall mail notice of such termination to the Fiscal Agent.
Upon the termination of the services of DTC as provided in the previous paragraph,
and if no substitute Depository willing to undertake the functions hereunder can be found which
is willing and able to undertake such functions upon reasonable or customary terms, or if the
City determines that it is in the best interest of the Beneficial Owners of the Bonds that they be
able to obtain certificated Bonds, the Bonds shall no longer be restricted to being registered in
the Bond Register of the Fiscal Agent in the name of Cede & Co., as nominee of DTC, but may
be registered in whatever name or name the Owners shall designate at that time, in accordance
with Section 2.06.
To the extent that the Beneficial Owners are designated as the transferee by the Owners,
in accordance with Section 2.06, the Bonds will be delivered to such Beneficial Owners as soon
as practicable.
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ARTICLE III
ISSUANCE OF BONDS
Section 3.01. Issuance and Delivery of Bonds. At any time after the execution of this
Agreement,the City may issue the Bonds for the District in the aggregate principal amount set
forth in Section 2.01 and deliver the Bonds to the Original Purchaser. The Authorized Officers
of the City are hereby authorized and directed to deliver any and all documents and
instruments necessary to cause the issuance of the Bonds in accordance with the provisions of
the Act,the Resolution and this Agreement, to authorize the payment of Costs of Issuance and
costs of the Project by the Fiscal Agent from the proceeds of the Bonds and to do and cause to
be done any and all acts and things necessary or convenient for delivery of the Bonds to the
Original Purchaser. The Fiscal Agent is hereby authorized and directed to authenticate the
Bonds and deliver them to the Original Purchaser, upon receipt of the purchase price for the
Bonds.
Section 3.02. Application of Proceeds of Sale of Bonds and Other Moneys.
(a)The Proceeds of the purchase of the Bonds by the Original Purchaser shall be paid to
the Fiscal Agent, who shall forthwith set aside, pay over and deposit such Proceeds on the
Closing Date as follows:
(i) Deposit in the Costs of Issuance Fund an amount equal to$77,425.00;
(ii) Deposit in the Reserve Fund an amount equal to $172,400; and
(iii) Transfer to the Escrow Bank for deposit by the Escrow Bank in the Escrow
Fund, an amount equal to $1,881,470.00.
(b)In addition to the foregoing,on the Closing Date the Finance Officer shall transfer or
cause to be transferred certain moneys held with respect to the Prior Bonds as follows:
(i) Transfer to the Escrow Bank for deposit by the Escrow Bank in the Escrow
Fund $192,487.00, derived from amounts on deposit in the reserve fund established for
the Prior Bonds, and
(ii) Transfer to the Escrow Bank for deposit by the Escrow Bank in the Escrow
Fund$52,328.00, derived from amounts on deposit in the improvement fund established
for the Prior Bonds;
(iii) Transfer to the City for deposit in the Services Fund $668,403.00, derived
from amounts on deposit in the bond fund established for the Prior Bonds,
(iv) Transfer to the City for deposit in the Administrative Expense Fund
$10,958.41, derived from amounts on deposit in the administrative expense fund
established for the Prior Bonds, and
(v) Transfer to the City $32,250.00, derived from amounts on deposit in the
improvement fund established for the Prior Bonds, to be used to complete the Project.
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Section 3.03. Special Tax Fund.
(a) Establishment of Special Tax Fund. There is hereby established as a separate account
to be held by the Finance Officer, the Community Facilities District No. 1990-1 2001 Special
Tax Refunding Bonds Special Tax Fund (which account may be maintained on the City's books
as an account within the Administrative Expense Fund) to the credit of which the Finance
Officer shall deposit, immediately upon receipt, all Special Tax Revenue received by the City
and any amounts required by Sections 3.04(b) or 3.06(b) to be deposited therein. Moneys in the
Special Tax Fund shall be held by the Finance Officer for the benefit of the City and the Owners
of the Bonds, shall be disbursed as provided below and, pending any disbursement, shall be
subject to a lien in favor of the Owners of the Bonds.
(b) Disbursements. The Finance Officer shall withdraw from the Special Tax Fund and
transfer: (i) to the Administrative Expense Fund, whenever required for the purposes of such
fund, an amount equal to that portion of any Special Tax Revenues received which are
attributable to the levy of Special Taxes for Administrative Expenses (determined by
multiplying the aggregate Special Taxes received by a fraction the numerator of which is the
percentage of the aggregate Special Tax levy, to which such Special Taxes received pertain,
constituting Administrative Expenses and the denominator of which is one hundred), (ii) to the
Fiscal Agent for deposit in the Bond Fund, (a) within thirty (30) days of receipt of any Special
Tax Revenue during any period that principal and/or interest is past due on the Bonds, an
amount equal to any principal or interest on the Bonds not paid when due, together with
interest thereon at the interest rate on the Bonds from the date such payment was due to the
date of transfer, and (b)before each Interest Payment Date, an amount, taking into account any
amounts then on deposit in the Bond Fund, such that the amount in the Bond Fund equals the
principal, premium, if any, and interest due on the Bonds on the Interest Payment Date; (iii)
before each Interest Payment Date, and following any transfers referred to in the preceding
clauses (i) and (ii) above, to the Reserve Fund an amount, taking into account amounts then on
deposit in the Reserve Fund, such that the amount in the Reserve Fund equals the Reserve
Requirement, and (iv) to the Services Fund, on October 2 of each year, all then remaining
amounts; provided that no such transfers shall exceed the amount then available to be
transferred from the Special Tax Fund.
(c) Investment. Moneys in the Special Tax Fund shall be invested and deposited by the
Finance Officer in accordance with Section 6.01 hereof. Interest earnings and profits resulting
from such investment and deposit shall be retained in the Special Tax Fund to be used for the
purposes thereof.
Section 3.04. Administrative Expense Fund.
(a) Establishment of Administrative Expense Fund. There is hereby established as a
separate account to be held by the Finance Officer, the Community Facilities District No. 1990-
1 2001 Special Tax Refunding Bonds Administrative Expense Fund to the credit of which
deposits shall be made as required by Section 3.03(b). Moneys in the Administrative Expense
Fund shall be held by the Finance Officer for the benefit of the City, and shall be disbursed as
provided below.
(b) Disbursement. Amounts in the Administrative Expense Fund shall be withdrawn by
the Finance Officer and paid to the City or its order upon receipt by the Finance Officer of an
Officer's Certificate executed by the Finance Officer substantially in the form of Exhibit B hereto
stating the amount to be withdrawn, that such amount is to be used to pay an Administrative
Expense and the nature of such Administrative Expense.
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Annually, on the last day of each Fiscal Year, the Finance Officer shall withdraw from
the Administrative Expense Fund and transfer to the Special Tax Fund an amount equal to the
amount, if any, then on deposit in the Administrative Expense Fund which is in excess of an
amount necessary to pay any Administrative Expenses incurred but not yet paid.
(c) Investment. Moneys in the Administrative Expense Fund shall be invested and
deposited by the Finance Officer in accordance with Section 6.01 hereof. Interest earnings and
profits resulting from said investment shall be retained by the Finance Officer in the
Administrative Expense Fund to be used for the purposes of such fund.
Section 3.05. Costs of Issuance Fund.
(a) Establishment of Costs of Issuance Fund. There is hereby established as a separate
account to be held by the Fiscal Agent, the Community Facilities District No. 1990-1 2001
Special Tax Refunding Bonds Costs of Issuance Fund, to the credit of which a deposit shall be
made as required by Section 3.02(a)(i). Moneys in the Costs of Issuance Fund shall be held by
the Fiscal Agent for the benefit of the City and shall be disbursed as provided in subsection (b)
of this Section 3.05 for the payment or reimbursement of Costs of Issuance.
(b)Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed from time to
time to pay Costs of Issuance, as set forth in a requisition substantially in the form of Exhibit C
hereto executed by the Finance Officer containing respective amounts to be paid to the
designated payees, and delivered to the Fiscal Agent.
(c)Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited by
the Fiscal Agent in accordance with Section 6.01 hereof. Interest earnings and profits resulting
from said investment shall be retained by the Fiscal Agent in the Costs of Issuance Fund to be
used for the purposes of such fund.
(d) Closing of Fund.The Fiscal Agent shall maintain the Costs of Issuance Fund until the
earlier of(i) May 1,2002, or (ii) the date on which the Finance Officer has certified to the Fiscal
Agent in writing that all known Costs of Issuance have been paid, and then the Fiscal Agent
shall transfer any moneys remaining therein, including any investment earnings thereon, to the
Bond Fund to be used for purposes of the Bond Fund.
Section 3.06. Services Fund.
(a) Establishment of Services Fund. There is hereby established as a separate account to be
held by the Finance Officer, the Community Facilities District No. 1990-1 2001 Special Tax
Refunding Bonds Services Fund, to the credit of which deposits shall be made as required by
Section 3.03(b).Moneys in the Services Fund shall be held in trust by the Finance Officer for the
benefit of the City, and shall be disbursed as provided below.
(b) Disbursement. Amounts in the Services Fund shall be withdrawn by the Finance
Officer and paid to the City or its order upon receipt by the Finance Officer of an Officer's
Certificate stating the amount to be withdrawn, that such amount is used to pay for a Service
and the nature of such Service.
(c) Investment. Moneys in the Services Fund shall be invested and deposited in
accordance with Section 6.01 hereof. Interest earnings and profits resulting from said investment
shall be retained by the Finance Officer in the Services Fund to be used for the purposes of such
fund.
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Section 3.07. Validity of Bonds. The validity of the authorization and issuance of the
Bonds shall not be dependent upon the completion of the acquisition of the Project or upon the
performance by any person of his obligation with respect to the Project.
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ARTICLE IV
SPECIAL TAX REVENUES; BOND FUND AND RESERVE FUND
Section 4.01. Pledge of Special Tax Revenues. The Bonds shall be secured by a first
pledge(which pledge shall be effected in the manner and to the extent herein provided) of all of
the Special Tax Revenues and all moneys deposited in the Bond Fund and the Reserve Fund,
and,until disbursed as provided herein,in the Special Tax Fund. The Special Tax Revenues and
all moneys deposited into said funds (except as otherwise provided herein) are hereby
dedicated to the payment of the principal of, and interest and any premium on, the Bonds as
provided herein and in the Act until all of the Bonds have been paid and retired or until moneys
or Federal Securities have been set aside irrevocably for that purpose in accordance with Section
9.03.
Amounts in the Administrative Expense Fund, the Services Fund and the Costs of
Issuance Fund are not pledged to the repayment of the Bonds. Any proceeds of condemnation,
destruction or other disposition of any facilities financed with the proceeds of the Bonds are
not pledged to pay the Debt Service on the Bonds and are free and clear of any lien or
obligation imposed hereunder.
Section 4.02. Bond Fund.
(a) Establishment of Bond Fund. There is hereby established as a separate account to be
held by the Fiscal Agent the "Community Facilities District No. 1990-1 2001 Special Tax
Refunding Bonds Bond Fund" to the credit of which deposits shall be made as required by
Section 3.03(b), Section 4.03 and any other amounts required to be deposited therein by this
Agreement. Moneys in the Bond Fund shall be held by the Fiscal Agent for the benefit of the
City and the Owners of the Bonds, shall be disbursed for the payment of the principal of, and
interest and any premium on,the Bonds as provided below.
(b) Disbursements. On each Interest Payment Date,the Fiscal Agent shall withdraw from
the Bond Fund and pay to the Owners of the Bonds the principal of, and interest and any
premium,due and payable on such Interest Payment Date on the Bonds, including any amounts
due on the Bonds by reason of the sinking payments set forth in Section 2.03(a)(ii).
Ten (10) Business Days prior to each Interest Payment Date, the Fiscal Agent shall
determine if the amounts then on deposit in the Bond Fund are sufficient to pay the debt service
due on the Bonds on the next Interest Payment Date. In the event that amounts in the Bond
Fund are insufficient for such purpose, the Fiscal Agent promptly shall notify the Finance
Officer by telephone(and confirm in writing) of the amount of the insufficiency.
In the event that amounts in the Bond Fund are insufficient for the purpose set forth in
the preceding paragraph with respect to any Interest Payment Date, the Fiscal Agent shall
withdraw from the Reserve Fund, to the extent of any funds therein, an amount sufficient to
cover the amount of such Bond Fund insufficiency. Amounts so withdrawn from the Reserve
Fund shall be deposited in the Bond Fund.
If,after the foregoing transfer,there are insufficient funds in the Bond Fund to make the
payments provided for in the first sentence of the first paragraph of this Section 4.02(b), the
Fiscal Agent shall apply the available funds first to the payment of interest on the Bonds, then
to the payment of principal due on the Bonds other than by reason of sinking payments, and
then to payment of principal due on the Bonds by reason of sinking payments. Any sinking
payment not made in full as scheduled shall continue to bear interest at the interest rate on the
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Bonds until;paid, and shall be paid from the first available amounts in the Bond Fund
described in.clause (i) of the second sentence of the first paragraph of this Section 4.02(b).
(c)Investment.Moneys in the Bond Fund shall be invested and deposited in accordance
with Section 6.01'Interest earnings and profits resulting from such investment and deposit shall
be retained in the Bond Fund.
(d) Deficiency. If at any time it appears to the Fiscal Agent that there is a danger of
deficiency in the Bond Fund and that the Fiscal Agent may be unable to pay debt service on the
Bonds in a timely manner,.the Fiscal Agent shall report to the Finance Officer such fact. The
City covenants to increase the levy of the Special Taxes in the next Fiscal Year (subject to the
maximum amount authorized by the Resolution of Formation) in accordance with the
procedures set forth in the Act for the purpose of curing Bond Fund deficiencies.
If at any time the Fiscal Agent is unable to pay principal, interest and premium, if any,
due on any Interest Payment Date for the Bonds due to insufficient funds in,the Bond Fund, or
if funds are withdrawn from the Reserve Fund to pay principal and/or interest on the Bonds,
the Fiscal Agent shall notify the Finance Officer in writing of such fact, and the Finance Officer
shall notify the California Debt and Investment Advisory Commission of such fact within 10
days of such Interest Payment Date.
Section 4.03. Reserve Fund.
(a)Establishment of Fund. There is hereby established as a separate account to be held by
the Fiscal Agent the "Community Facilities District No. 1990-1, 2001 Special Tax Refunding
Bonds Reserve.Fund" to the credit of which a deposit shall be made as required by Section
3.02(a)(ii),which deposit, as of the Closing Date, is equal to (or in excess of) the initial Reserve
Requirement,and deposits shall be made as provided in Section 3.03(b). Moneys in the Reserve
Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds as a
reserve for the payment of the principal of, and interest and any premium on, the Bonds and
shall be subject to a lien in favor of the Owners of the Bonds.
(b) Use of Reserve Fund. Except as otherwise provided in this Section, all amounts
deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the
purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the
Bond Fund of the amount then required for payment of the principal of, and interest and any
premium on,the Bonds or,in accordance with the provisions of this Section, for the purpose of
redeeming Bonds from the Bond Fund.
(c) Transfer of Excess of Reserve Requirement. Whenever, on or before any Interest Payment
Date,or on any other date at the request of the Finance Officer, the amount in the Reserve Fund
exceeds the Reserve Requirement, the Fiscal Agent shall provide written notice to the Finance
Officer of the amount of the excess and shall transfer an amount equal to the excess from the
Reserve Fund to the Bond Fund, to be applied to the payment of interest on the Bonds on the
next Interest Payment Date.
(d) Transfer for Rebate Purposes. Amounts in the Reserve Fund shall be withdrawn for
purposes of making payment to the federal government to comply with Section 6.02, upon
receipt by the Fiscal Agent of an Officer's Certificate specifying the amount to be withdrawn
and to the effect that such amount is needed for rebate purposes.
(e) Transfer When Balance Exceeds Outstanding Bonds.Whenever the balance in the Reserve
Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest
accrued to the date of payment or redemption and premium, if any, due upon redemption, the
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Fiscal Agent..shall, upon the written request of the Finance Officer, transfer any cash or
Permitted Investments in the Reserve Fund Jo the Bond Fund to. be applied, on the next
succeeding Interest Payment-Date to the payment and redemption,-in accordance with Section
4.02 or 2.03, as applicable, of all of the Outstanding Bonds. In the event that the amount so
transferred from the Reserve Fund to the Bond Fund exceeds-the amount required to .pay and
redeem the Outstanding Bonds, the balance.in the Reserve Fund shall be transferred to the
Finance Officer.to be used by the City for any lawful purpose.
Notwithstanding the foregoing, no amounts shall_be transferred from the Reserve Fund
pursuant to_this Section 4.03(e)' until after the calculation, pursuant to Section 6.02, of any
amounts due to the federal government following payment of the Bonds and withdrawal of any
such amount under Section 4.03(d) for purposes of making such payment to the federal
governments and payment of any fees and expenses due to the Fiscal Agent.
(f)Investment.Moneys in the Reserve Fund shall be invested in accordance with Section
6.01. On or before each Interest Payment Date, if the amount on deposit in the Reserve Fund,
equals the then Reserve Requirement, interest earnings and profits resulting from said
investment shall be transferred by the Fiscal Agent to the Bond Fund, to be applied to the
payment of interest on the Bonds on the next Interest Payment Date.
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ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment. The City will punctually pay or cause to be paid the
principal of,.and interest and any premium on,the Bonds when and as due in strict conformity
with the terms of this Agreement and any Supplemental Agreement, and it will faithfully
observe and.perform all of the conditions, covenants and requirements of this Agreement and
all Supplemental Agreements and of the Bonds.
Section 5.02. Limited Obli ag lion. The Bonds are limited obligations payable solely from
and secured solely by the Special Tax Revenues and the amounts in the Bond Fund, the Reserve
Fund and the Special Tax Fund created hereunder.
Section 5.03. Extension of Time for Payment. In order to prevent any.accumulation of
claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to
the extension of the time for the payment of any claim for interest on any of the Bonds and shall
not, directly or indirectly,be a party to the approval of any such arrangement by purchasing or
funding said claims for interest or in any other manner. In case any such claim for interest shall
be extended or funded, whether or not with the consent of the City, such claim for interest so
extended or funded shall not be entitled, in case of default hereunder, to the benefits of this
Agreement,except subject to the prior payment in full of the principal and premium, if any, of
all of the Bonds then Outstanding and of all claims for interest which shall not have so
extended or funded.
Section 5.04. Against Encumbrances. The City will not encumber, pledge or place any
charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds
superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds,
except as permitted by this Agreement.
Section 5.05. Books and Accounts. The City will keep,or cause to be kept, proper books
of record and accounts, separate from all other records and accounts of the City, in which
complete and correct entries shall be made of all transactions relating to the expenditure of
amounts disbursed from the Administrative Expense Fund, the Services Fund and the Special
Tax Fund and to the Special Tax Revenues. Such books of record and accounts shall during
business hours and under reasonable conditions be subject to the inspection of the Fiscal Agent
(who shall have no duty to inspect) and the Owners of not less than ten percent (10%) of the
principal amount of the Bonds then Outstanding, or their representatives duly authorized in
writing.
The Fiscal Agent will keep, or cause to be kept, proper books of record and accounts,
separate from all other records and accounts of the Fiscal Agent, in which complete and correct
entries shall be made of all transactions made by the Fiscal Agent relating to the expenditure of
amounts disbursed from the Bond Fund,the Reserve Fund and the Cost of Issuance Fund. Such
books of record and accounts shall,upon reasonable notice, during business hours be subject to
the inspection of the City and the Owners of not less than ten percent (10%) of the principal
amount of the Bonds then Outstanding,or their representatives duly authorized in writing.
Section 5.06. Protection of Security and Rights of Owners. The City will preserve and
protect the security for the Bonds and the rights of the Owners thereto, and will warrant and
defend their rights to such security against all claims and demands of all persons. From and
after the delivery of any of the Bonds by the City,the Bonds shall be incontestable by the City.
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Section 5.07. Compliance with Law, Completion of Project. The City will comply with
all applicable provisions of the Act and law in completing the acquisition of the Project.
Section 5.08. Private Activity Bond Limitation. The City shall assure that the proceeds
of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of
section 141(b) of the Code or the private loan financing test of section 141(c) of the Code.
SECTION 5.09. Federal Guarantee Prohibition. The City shall not take any action or
permit or suffer any action to be taken if the result of the same would be to cause any of the
Bonds to be "federally guaranteed"within the meaning of section 149(b) of the Code.
Section 5.10. Collection of Special Tax Revenues. The City shall comply with all
requirements of the Act so as to assure the timely collection of Special Tax Revenues, including
without limitation,the enforcement of delinquent Special Taxes.
On or within five (5) Business Days of each June 1, the Fiscal Agent shall provide a
written notice to the Finance Officer stating the amount then on deposit in the Bond Fund and
the Reserve Fund. The receipt of such notice by the Finance Officer shall in no way affect the
obligations of the Finance Officer under the following two paragraphs. Upon receipt of a copy
of such notice, the Finance Officer shall communicate with the Auditor or other appropriate
official of the County to ascertain the relevant parcels on which the Special Taxes are to be
levied,taking into account any parcel splits during the preceding and then current year.
The Finance Officer shall effect the levy of the Special Taxes each Fiscal Year, in
accordance with the Ordinance Levying Taxes by each August 1 that the Bonds are
Outstanding,but in any event such that the computation of the levy is complete before the final
date on which the Auditor will accept the transmission of the Special Tax amounts for the
parcels within the District for inclusion on the next tax roll: Upon the completion of the
computation of the amounts of the levy, the Finance Officer shall prepare or cause to be
prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the
levy of the Special Taxes on the next secured tax roll.
The Finance Officer shall fix and levy the amount of Special Taxes within the District
required for the payment of principal of, premium, if any, and interest on any outstanding
bonds of the District becoming due and payable during the ensuing fiscal year, including any
necessary replenishment or expenditure of the Reserve Fund for the Bonds, an amount
estimated to be sufficient to pay the Administrative Expenses during such Fiscal Year, and for
the payment of Services. The Special Taxes so levied shall not exceed the authorized amounts
as provided in the proceedings pursuant to the Resolution of Formation.
The Special Taxes shall be payable and be collected in the same manner and at the same
time and in the same installment as the general taxes on real property are payable, and have the
same priority,become delinquent at the same times and in the same proportionate amounts and
bear the same proportionate penalties and interest after delinquency as do the general taxes on
real property.
Notwithstanding the foregoing, the Finance Officer may in his discretion cause the
collection of any Special Taxes by direct, first class mail billing to the then owner of each.parcel
so owned in lieu of billing for such Special Taxes in the same manner as general taxes as
aforesaid. Any such Special Taxes so billed shall have the same priority and bear the same
proportionate penalties and interest after delinquency as do the ad valorem taxes on real
property.
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The Finance Officer is hereby authorized to employ consultants to assist in computing
the levy of the Special Taxes hereunder and any reconciliation of amounts levied to amounts
received.The fees and expenses of such consultants and the costs and expenses of the Finance
Officer (including a charge for City staff time) in conducting its duties hereunder shall be an
Administrative Expense hereunder.
Section 5.11. Further Assurances. The City will adopt, make, execute and deliver any
and all such further resolutions,instruments and assurances as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance of this Agreement, and for the
better assuring and confirming unto the Owners of the rights and benefits provided in this
Agreement.
Section 5.12. No Arbitrage. The City shall not take,or permit or suffer to be taken by the
Fiscal Agent or otherwise, any action with respect to the proceeds of the Bonds which, if such
action had been reasonably expected to have been taken, or had been deliberately and
intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be
"arbitrage bonds"within the meaning of section 148 of the Code.
SECTION 5.13. Maintenance of Tax-Exemption. The City shall take all actions
necessary to assure the exclusion of interest on the Bonds from the gross income of the owners
of the Bonds to the same extent as such interest is permitted to be excluded from gross income
under the Code as in effect on the date of issuance of the Bonds.
SECTION 5.14. Annual State Reports. The following requirements shall apply to the
Bonds:
(a)Annual Reporting.Not later than October 30 of each calendar year,beginning with the
October 30 first succeeding the Closing date, and in each calendar year thereafter until the
October 30 following the final maturity of the Bonds, the Finance Officer shall cause the
following information to be supplied to CDIAC: (i) the principal amount of the Bonds
Outstanding; (ii) the balance in the Reserve Fund; (iii) that no capitalized interest was funded
for the Bonds; (iv) the number of parcels in the District which are delinquent in the payment of
Special Taxes, the amount of each delinquency, the length of time delinquent and when
foreclosure was commenced for each delinquent parcel;and (v) the assessed value of all parcels
in the District subject to the levy of the Special Taxes as shown in the most recent equalized
roll. The annual reporting shall be made using such form or forms as may be prescribed by
CDIAC.
(b) Other Reporting. If at any time the Fiscal Agent fails to pay principal and interest due
on any scheduled payment date for the Bonds, or if funds are withdrawn from the Reserve
Fund to pay principal and interest on the Bonds, the Fiscal Agent shall notify the Finance
Officer of such failure or withdrawal in writing.The Finance Officer shall notify CDIAC and the
Original Purchasers of such failure or withdrawal within 10 days of such failure or withdrawal.
(c) Amendment. The reporting requirements of this Section 5.14 shall be amended from
time to time, without action by the City or the Fiscal Agent, to reflect any amendments to
Section 53359.5(b) or Section 53359.5(c) of the Act. Notwithstanding the foregoing, any such
amendment shall not, in itself, affect the City's obligations under the Continuing Disclosure
Certificate.
(d) No Liability. None of the City and its officers, agents and employees, the Finance
Officer or the Fiscal Agent shall be liable for any inadvertent error in reporting the information
required by this Section 5.14.
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Sections 15.-Covenant fo Foreclose'Pursuant to Section 53356.1 of the'Act, the City.
hereby covenants with and for the benefit of ahe owners-of the Bonds that :it..will order, and.
cause to be commenced as hereinafter provided,and thereafter:diligently prosecute to..judgment
(unless such'delinquency is theretofore.:brought current), an action in the superior',court to
foreclose the_lien of.any Special:Tax or installment thereof not paid when.due as provided in
the following two paragraphs. The Finance:Officer shall notify the City Attorney of any such
delinquency of: which it is aware, and .the 'City Attorney-shall commence, or cause` to be
commenced,such proceedings.
On or about-August 31st of each=Fiscal Year, the Finance Officer `shall compare the
amount-of Special: Taxes theretofore levied in the District to the:amount of Special Tax
Revenues theretofore received by the City,and:
(a)^Individual Delinquencies. If the -Finance Officer determines that any single parcel
subject to the.Special Tax'in the District is delinquent in the payment of Special Taxes in the
aggregate amount of $5,000 or more, then the Finance Officer shall send or cause to be sent a
notice of delinquency (and a demand for immediate payment thereof) to the property owner
within 45: days of such determination, and (if the delinquency remains uncured) foreclosure
proceedings shall be commenced by the City within 90 days of such determination.
(b)Aggregate Delinquencies.If the Finance Officer determines that (i) the total amount of
delinquent Special Tax for the prior Fiscal`Year for the entire District, (including the total of
delinquencies;under subsection (a) above),exceeds 5%of the total Special Tax due and payable
for the prior iscal Year, or (ii) there are ten (10) or fewer owners of real property within the
District, determined by reference to the latest available secured property tax roll of the County,
the City shall notify or cause to be notified property owners who are then delinquent in the
payment of Special Taxes(and demand immediate payment of the delinquency)within 45 days
of such determination, and shall commence foreclosure proceedings within 90 days of such
determination against each parcel of land in the District with a Special Tax delinquency.
The City Attorney is hereby authorized to employ counsel to conduct any such
foreclosure proceedings.The fees and expenses of any such counsel and costs and expenses of
the City Attorney(including a charge for City staff time) in conducting foreclosure proceedings
shall be an Administrative Expense hereunder.
Section 5.16. Continuing Disclosure to Owners. The City hereby covenants and agrees
that it will comply with and carry out all of .the provisions of the Continuing Disclosure
Certificate. Notwithstanding any other provision of this Agreement, failure of the City to
comply with the Continuing Disclosure Certificate shall not be considered a default hereunder;
however, any Participating Underwriter or any holder or beneficial owner of the Bonds may
take such actions as may be necessary and appropriate to compel performance by the City of
its obligations thereunder,including seeking mandate or specific performance by court order.
Section 5.17. No Additional Bonds. The City shall not issue any additional bonds or
incur any additional indebtedness (other than Administrative Expenses) secured by a pledge of
Special Taxes or any amounts in any funds or accounts established hereunder.
Section 5.18. Yield of the Bonds. In determining the yield of the Bonds to comply with
Section 5.13 and 6.02 hereof, the City will take into account redemption (including premium, if
any) in advance of maturity based on the reasonable expectations of the City, as of the Closing
Date, regarding prepayments of Special Taxes and use of prepayments for redemption of the
Bonds,without regard to whether or not prepayments are received or Bonds redeemed.
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Section 5.19. Reduction of Special Taxes. The City covenants and agrees to not consent
or conduct proceedings with respect to a reduction in the maximum Special Taxes that may be
levied in the District below an amount, for any Fiscal Year, equal to 110% of Maximum Annual
Debt Service.It is hereby acknowledged that Bondowners are purchasing the Bonds in reliance
on the foregoing covenant, and that said covenant is necessary to assure the full and timely
payment of the Bonds.
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ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS; LIABILITY OF THE CITY
Section 6.01. Deposit and Investment of Moneys in Funds. Moneys in any fund or
account created or established by this Agreement and held by the Fiscal Agent shall be invested
by the Fiscal Agent in Permitted Investments,as directed pursuant to written instructions of the
Finance Officer filed with the Fiscal Agent at least two (2) Business Day in advance of the
making of such investments. Upon receipt of such written instructions, the Fiscal Agent is
authorized to act thereon without further inquiry and shall be absolutely protected and shall
incur no liability in so acting in accordance with such instructions. In the absence of any such
written instructions, the Fiscal Agent shall invest any such moneys in Permitted Investments
described in clause (f) of the definition thereof. The Fiscal Agent shall be deemed to have
conclusively complied with the Fair Market Value requirement.if it invests such moneys in
Permitted Investments described in clause (f) of the definition thereof in the absence of written
instructions from the City. Moneys in any fund or account created or established by this
Agreement and held by the Finance Officer shall be invested by the Finance Officer in Permitted
Investments,which by their terms mature prior to the date on which such moneys are required
to be paid out hereunder.Obligations purchased as an investment of moneys in any fund shall
be deemed to be part of such fund or account, subject, however, to the requirements of this
Agreement for transfer of interest earnings and profits resulting from investment of amounts in
funds and accounts.Whenever in this Agreement any moneys are required to be transferred by
the City to the Fiscal Agent,such transfer may be accomplished by transferring a like amount of
Permitted Investments.
The Fiscal Agent or the Finance Officer may act as principal or agent in the acquisition
or disposition of any investment. Neither the Fiscal Agent nor the Finance Officer shall incur
any liability for losses arising from any investments made pursuant to this Section 6.01.
Except as otherwise provided in the next sentence, all investments of amounts
deposited in any fund or account created by or pursuant to this Agreement, or otherwise
containing gross proceeds of the Bonds (within the meaning of section 148 of the Code), shall be
acquired, disposed of, and valued (as of the date that valuation is required by this Agreement
or the Code) at Fair Market Value. For purposes of any Fair Market Value determination
hereunder,the Fiscal Agent shall be entitled to conclusively rely on a Written Certificate of the
City and shall be fully protected in relying thereon. Investments in funds or accounts (or
portions thereof) that are subject to a yield restriction under applicable provisions of the Code
and (unless valuation is undertaken at least annually) investments in the Reserve Fund shall be
valued at their present value(within the meaning of section 148 of the Code).
Investments in any and all funds and accounts may be commingled in a separate fund or
funds for purposes of making, holding and disposing of investments, notwithstanding
provisions herein for transfer to or holding in or to the credit of particular funds or accounts of
amounts received or held by the Fiscal Agent or the Finance Officer hereunder.
The Fiscal Agent or the Finance Officer, as applicable, shall sell or present for
redemption,any investment security whenever it shall be necessary to provide moneys to meet
any required payment, transfer,withdrawal or disbursement from the fund or account to which
such investment security is credited and neither the Fiscal Agent nor the Finance Officer shall be
liable or responsible for any loss resulting from the acquisition or disposition of such investment
security in accordance herewith.
The City acknowledges that to the extent regulations of the Comptroller of the Currency
or other applicable regulatory entity grant the City the right to receive brokerage confirmations
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of security transactions as they occur,the City specifically waives receipt of such confirmations
to the extent permitted by law.The Fiscal Agent will furnish the City periodic cash transaction
statements which include detail for all investment transactions made by the Fiscal Agent
hereunder.
Section 6.02. Rebate of Excess Investment Earnings to the United States. The City shall
take any and all actions necessary to assure compliance with section 148(f) of the Code,
relating to the rebate of excess investment earnings, if any, to the federal government, to the
extent that such section is applicable to the Bonds.
The City shall withdraw such amounts from the Administrative Expense Fund as
necessary to make any required rebate payments on the Bonds, and pay such amounts to the
federal government as required by the Code and the Regulations.In the event of any shortfall in
amounts available for such purpose in the Administrative Expense Fund to make such
payments, the Finance Officer shall make such payment from any amounts available in the
Reserve Fund pursuant to Section 4.03 or from any other lawfully available funds of the City.
Any fees or expenses incurred by the City under or pursuant to this Section 6.02 shall be
Administrative Expenses.
In order to provide for the administration of this Section 6.02, the Finance Officer may
provide for the employment of independent attorneys, accountants and consultants
compensated on such reasonable basis as the Finance Officer may deem appropriate-and in
addition, and without limitation of the provisions of Sections 7.01 and 7.02 hereof, the Finance
Officer may rely conclusively upon and be fully protected from all liability in relying upon the
opinions, determinations, calculations and advice of such agents, attorneys and consultants
employed hereunder.
Section 6.03.Limited Obligation.The City's obligations hereunder are limited obligations
payable solely from and secured solely by the Special Tax Revenues and the amounts in the
Special Tax Fund,the Reserve Fund and the Bond Fund created hereunder.
Section 6.04. Liability of City. The City shall not incur any responsibility in respect of
the Bonds or this Agreement other than in connection with the duties or obligations explicitly
herein or in the Bonds assigned to or imposed upon it. The City shall not be liable in connection
with the performance of its duties hereunder, except for its own negligence or willful default.
The City shall not be bound to ascertain or inquire as to the performance or observance of any
of the terms, conditions, covenants or agreements of the Fiscal Agent herein or of any of the
documents executed by the Fiscal Agent in connection with the Bonds, or as to the existence of
a default or event of default thereunder.
In the absence of bad faith, the City,including the Finance Officer,may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the City and conforming to the requirements of this
Agreement.The City,including the Finance Officer,shall not be liable for any error of judgment
made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent
facts.
No provision of this Agreement shall require the City to expend or risk its own general
funds or otherwise incur any financial liability (other than with respect to the Special Tax
Revenues)in the performance of any of its obligations hereunder, or in the exercise of any of its
rights or powers,if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured to it.
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The City may rely and shall be protected in acting or refraining from acting upon any
notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or
document believed by it to be genuine and to have been signed or presented by the proper party
or proper parties. The City may consult with counsel, who may be the City Attorney, with
regard to legal questions, and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered by it hereunder in good
faith and in accordance therewith.
The City shall not be bound to recognize any.person as the Owner of a Bond unless and
until such Bond is submitted for inspection, if required, and his title thereto satisfactorily
established, if disputed.
Whenever in the administration of its duties under this Agreement the City or the
Finance Officer shall deem it necessary or desirable that a matter be proved or established prior
to taking or suffering any action hereunder,such matter(unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of willful misconduct on the part of the
City,be deemed to be conclusively proved and established by a certificate of the Fiscal Agent
and such certificate shall be full warrant to the City and the Finance Officer for any action
taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon
the faith thereof,but in its discretion the City or the Finance Officer may, in lieu thereof, accept
other evidence of such matter or may require such additional evidence as to it may seem
reasonable.
Section 6.05. Employment of Agents by City. In order to perform its duties and
obligations hereunder, the City may employ such persons or entities as it deems necessary or
advisable. The City shall not be liable for any of the acts or omissions of such persons or
entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully
protected in doing so,,upon the opinions, calculations, determinations and directions of such
persons or entities.
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ARTICLE VII
THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent. U.S. Bank Trust National Association is
hereby appointed Fiscal Agent and paying agent for the Bonds. The Fiscal Agent undertakes to
perform such duties, and only such duties, as are specifically set forth in this Agreement, and
no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent.
Any company into which the Fiscal Agent may be merged or converted or with which it
may be consolidated or any company resulting from any merger, conversion or consolidation to
which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or
substantially all of its corporate trust business, provided such company shall be eligible under
the following paragraph of this Section 7.01 shall be the successor to such Fiscal Agent without
the execution or filing of any paper or any further act, anything herein to the contrary
notwithstanding.The Fiscal Agent shall give the Finance Officer and the Finance Officer written
notice of any such succession hereunder.
The City may remove the Fiscal Agent initially-appointed, and any successor thereto,
and may appoint a successor or successors thereto, but any such successor shall be a bank or
trust company having a combined capital (exclusive of borrowed capital) and surplus of at
least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or
state authority. If such bank or trust company publishes a report of condition at least annually,
pursuant to law or to the requirements of any supervising or examining authority above referred
to, then for the purposes of this Section 7.01, combined capital and surplus of such bank or
trust company shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
The Fiscal Agent may at any time resign by giving written notice to the City by certified
mail return receipt requested, and by giving to the Owners notice by mail of such resignation.
Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal
Agent by an instrument in writing.Any resignation or removal of the Fiscal Agent shall become
effective only upon acceptance of appointment by the successor Fiscal Agent.
If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing
provisions of this Section 7.01 within forty-five (45) days after the Fiscal Agent shall have given
to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred
by reason of its inability to act, the Fiscal Agent, at the expense of the City, or any Owner may
apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court
may thereupon, after such notice, if any, as such court may deem proper, appoint a successor
Fiscal Agent.
If,by reason of the judgment of any court, the Fiscal Agent is rendered unable to perform
its duties hereunder, all such duties and all of the rights and powers of the Fiscal Agent
hereunder shall be assumed by and vest in the Finance Officer of the City in trust for the benefit
of the Owners. The City covenants for the direct benefit of the Owners that its Finance Officer
in such case shall be vested with all of the rights and powers of the Fiscal Agent hereunder, and
shall assume all of the responsibilities and perform all of the duties of the Fiscal Agent
hereunder,in trust for the benefit of the Owners of the Bonds.
Section 7.02. Liability of Fiscal Agent. The recitals of facts, covenants and agreements
herein and in the Bonds contained shall be taken as statements, covenants and agreements of
the City, and the Fiscal Agent assumes no responsibility for the correctness of the same, nor
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makes:any:representations as to the validity or::sufficiency of this Agreement or of the Bonds,
nor shall the Fiscal Agent incur any responsibility in respect thereof, other than-m' connection .
with the:duties or obligations herein or in the Bonds assigned to or imposed'upon.it. The Fiscal
Agent.shall.not be liable in connection with the performance of its duties hereunder, except for
its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability
for any information, statement or recital in any offering memorandum or other disclosure
material prepared or distributed with respect to the issuance of the Bonds.
The Fiscal Agent may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein,upon certificates documents, written instructions
or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement;
but in.the case of any such certificates, documents, written instructions or opinions by which
any provision'hereof are specifically required to be furnished to the Fiscal Agent, the Fiscal
Agent shall be under a duty to examine the same to determine whether or not they conform to
the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal
Agent shall be.protected and shall incur no liability in acting or proceeding, or in not acting or
not proceeding, in accordance with the terms of this Agreement, upon any resolution, order,
notice,request,consent or waiver, certificate, statement, affidavit, or other paper or document
which-it shall reasonably believe to be genuine and to have been adopted or signed by the
proper person or to have been prepared and furnished pursuant to any provision of this
Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or
inquiry as to any statements contained or matters referred to in any such instrument.
The Fiscal Agent shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements of the City or the District
herein or of any of the documents executed by the City or the District in connection with the
Bonds,or as to the existence of a default or event of default thereunder.
The Fiscal Agent shall not be liable for any error of judgment made in good faith by a
responsible officer of the Fiscal Agent unless it shall be proved that the Fiscal Agent was
negligent in ascertaining the pertinent facts.
No provision of this Agreement shall require the Fiscal Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers.
The Fiscal Agent shall be under no obligation to exercise any of the rights or powers
vested in it by this Agreement at the request or direction of any of the Owners pursuant to this
Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or
indemnity satisfactory to the Fiscal Agent against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
The Fiscal Agent may become the owner of the Bonds with the same rights it would have
if it were not the Fiscal Agent.
All indemnifications and releases from liability granted to the Fiscal Agent hereunder
shall extend to the directors,officers and employees of the Fiscal Agent.
Section 7.03. Information. The Fiscal Agent shall provide to the City such information
relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as
the City shall reasonably request, including but not limited to monthly statements reporting
funds held and transactions by the Fiscal Agent,including the value of any investments held by
the Fiscal Agent.
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Section 7.04. Notice to Fiscal Agent. The Fiscal Agent may rely and shall be protected in
acting or refraining from acting.upon any notice, resolution, request, consent, order, certificate,
written instructions, report, warrant,:.bond- or.other paper or document believed by it to be
genuine and to have been signed.or presented by the proper party or proper parties. The Fiscal
Agent may consult with counsel,who may be counsel to the City,with regard to legal questions,
and the opinion of such counsel shall be full and complete authorization and protection in
respect of any action taken;suffered or omitted by it hereunder in accordance therewith.
The Fiscal Agent shall not be bound to recognize any.person as the Owner of a. Bond
unless and :until such Bond is submitted for inspection, if required, and his title thereto
satisfactorily established, if disputed.
Whenever in the administration of its duties under this Agreement the Fiscal Agent shall
deem it necessary or desirable that a matter be proved or established prior to taking or suffering
any action hereunder,such matter(unless other evidence in respect thereof be herein specifically
prescribed)may,in the absence of willful misconduct on the part of the Fiscal Agent,be deemed
to be conclusively proved and established by an Officer's Certificate of the City, and such
certificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the
provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its
discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may
require such additional evidence as to it may seem reasonable.
Section 7.05. Compensation, Indemnification. The City shall pay to the Fiscal Agent
from time to time reasonable compensation for all services rendered as Fiscal Agent under this
Agreement, and also all reasonable expenses, charges, counsel fees and other disbursements,
including those of its attorneys (including the allocated costs of in-house attorneys), agents and
employees, incurred in and about the performance of their powers and duties under this
Agreement,but the Fiscal Agent shall not have a lien therefor on any funds at any time held by
it under this Agreement. The City further agrees, to the extent permitted by applicable law, to
indemnify and save the Fiscal Agent, its officers, employees, directors and agents harmless
against any costs, expenses, claims or liabilities of any kind whatsoever, including those of its
attorneys which it may incur in the exercise and performance of its powers and duties
hereunder which are not due to its negligence or willful misconduct.
The obligations of the City under this Section 7.05 shall survive resignation or removal of
the Fiscal Agent under this Agreement, but any monetary obligation of the City arising under
this Section 7.05 shall be limited solely to amounts on deposit in the Administrative Expense
Fund.
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ARTICLE VHI
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted. This Agreement and the rights and obligations of
the City and of the Owners of the Bonds may be modified or amended at any time by a
Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the
written consent without a meeting, of the Owners of at least sixty percent (60%) in aggregate
principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided
in Section 8.04. No such modification or amendment shall (i) extend the maturity of any Bond
or reduce the interest rate thereon,or otherwise alter or impair the obligation of the City to pay
the principal of, and the interest and any premium on, any Bond, without the express consent
of the Owner of such Bond,or(ii)permit the creation by the City of any pledge or lien upon the
Special Taxes superior to or on a parity with the pledge and lien created for the benefit of the
Bonds (except as otherwise permitted by the Act, the laws of the State or this Agreement), or
(iii)reduce the percentage of Bonds required for the amendment hereof.
This Agreement and the rights and obligations of the City and of the Owners may also
be modified or amended at any time by a Supplemental Agreement, without.-the consent of any
Owners, only to the extent permitted by law and only for any one or more of the following
purposes
(a) to add to the covenants and agreements of the City in this Agreement contained,
other covenants and agreements thereafter to be observed, or to limit or surrender any right or
power herein reserved to or conferred upon the City;
(b) to make modifications not adversely affecting any Outstanding Bonds of the City in
any material respect;
(c) to make such provisions for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective provision contained in this Agreement, or in regard to
questions arising under this Agreement,as the City and the Fiscal Agent may deem necessary or
desirable and not inconsistent with this Agreement, and which shall not adversely affect the
rights of the Owners of the Bonds;or
(d) to make such additions, deletions or modifications as may be necessary or desirable
to assure exclusion from gross income for federal income tax purposes of interest on the Bonds.
Any amendment of this Agreement may not modify any of the rights or obligations of
the Fiscal Agent without its written consent. The Fiscal Agent shall be furnished an opinion of
counsel that any such Supplemental Agreement entered into by the City and the Fiscal Agent
complies with the provisions of this Section 8.01 and the Fiscal Agent may conclusively rely on
such opinion and shall be absolutely protected in so relying.
Section 8.02. Owners'Meetines.The City may at any time call a meeting of the Owners.
In such event the City is authorized to fix the time and place of said meeting and to provide for
the giving of notice thereof and to fix and adopt rules and regulations for the conduct of said
meeting.
Section 8.03.Procedure for Amendment with Written Consent of Owners. The City and
the Fiscal Agent may at any time adopt a Supplemental Agreement amending the provisions of
the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such
amendment is permitted by Section 8.01, to take effect when and as provided in this Section
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8.03. A`copy:of such'.Supplemental Agreement, togetl er With a request.to Owners for .their
consent.thereto, shall be mailed by.first-class mail, by the:Fiscal Agent, at the expense of the
City), to each.Owner of Bonds Outstanding but failure to.mail copies of such Supplemental
Agreement and request shall not affect the validity of the Supplemental Agreement:when
assented to as in this Section 8.03 provided.
Such-Supplemental Agreement shall not become effective unless there shall be filed with
the Fiscal Agent the written consents of the Owners of:at..least sixty percent (60%) in.aggregate
principal amount of.the Bonds.then Outstanding (exclusive of Bonds disqualified as..provided
in Section 8.04)..and.a notice shall have been mailed as hereinafter in this Section.8.03 provided.
Each such consent:shall be.effective only if accompanied by proof of"ownership of the Bonds
for which.such consent is given, which proof.shall be such as is-permitted by Section 9.04
hereof.Any such consent shall be binding upon the Owner of the Bonds giving such consent and
on any subsequent Owner (whether or:not such subsequent Owner has notice thereof) unless
such consent=is revoked in writing by the Owner giving such.consent or a subsequent Owner by
filing such.revocation with the Fiscal Agent prior to the date when the notice hereinafter in this
Section 8.03 provided for has been mailed..
After-the Owners of the required percentage of Bonds shall have filed their consents to
the Supplemental Agreement, the City shall mail a notice to the Owners. in the manner
hereinbefore provided in this Section 8.03 for the mailing of the Supplemental Agreement,
stating in substance that the Supplemental Agreement has been consented to by the Owners of
the required.percentage of Bonds and will be effective as provided in this Section 8.03 (but
failure to mail copies of said notice shall not affect the:validity of the Supplemental Agreement
or consents thereto). Proof of the mailing:of such notice shall be filed with the Fiscal Agent. A
record,consisting of the papers required by this Section 8.03 to be filed with the Fiscal Agent,
shall be proof of the matters therein stated until the contrary is proved. The Supplemental
Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of
such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as
otherwise hereinabove specifically provided in this Article)upon the City and the Owners of all
Bonds at the expiration of sixty (60) days after such filing, except in the event of a final decree
of a court of competent jurisdiction setting aside such consent in a legal action or equitable
proceeding for such purpose commenced within such sixty-day period.
Section 8.04. Disqualified Bonds. Bonds owned or held for the account of the City,
excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of
any vote,consent or other action or any calculation of Outstanding Bonds provided for in this
Article VIII, and shall not be entitled to vote upon, consent to, or take any other action provided
for in this Article VIII.
Section 8.05. Effect of Supplemental Agreement. From and after the time any
Supplemental Agreement becomes effective pursuant to this Article VIR,this Agreement shall be
deemed to be modified and amended in accordance therewith, the respective rights, duties and
obligations under this Agreement of the City, the Fiscal Agent and all Owners of Bonds
Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions of any such
Supplemental Agreement shall be deemed to be part of the terms and conditions of this
Agreement for any and all purposes.
Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments. The
City may determine that Bonds issued and delivered after the effective date of any action taken
as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form
approved by the City, as to such action. In that case, upon demand of the Owner of any Bond
Outstanding at such effective date and upon presentation of his Bond for that purpose at the
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Principal Office of the Fiscal Agent or at such other office as the City.may select and designate
for that:purpose,a suitable notation shall be made on such Bond. The_ City may determine that
new Bonds, so.modified as in the opinion:of the City is necessary to conform to such Owners'
action,shall be prepared; executed and .delivered.,In that case, upon demand of the Owner of
any Bondsthen Outstanding,such new:Bonds shall be exchanged at the Principal Office of the
Fiscal Agerit.without cost to any Owner; for Bonds then Outstanding, upon surrender of such
Bonds.
Section 8.07. Amendatory Endorsement of Bonds. The provisions of this Article VIR
shall not prevent any Owner from accepting any amendment as to the particular Bonds held by
him,provided that due notation thereof is made on such Bonds.
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ARTICLE DC
MISCELLANEOUS
Section 9.01. Benefits of Agreement Limited to Parties. Nothing in this Agreement,
expressed or implied,is intended to give to any person other than the City,the Fiscal Agent and
the Owners, any right, remedy, claim under or by:reason of this Agreement. Any covenants,
stipulations,promises or agreements in this Agreement contained by and on behalf of the City
shall be for:the sole and exclusive benefit of the Owners and the Fiscal Agent.
Section 9.02. Successor is.Deemed Included in All References to Predecessor. Whenever
in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named
or referredto, such reference shall be deemed to include the successors or assigns thereof, and
all the covenants and agreements in this Agreement contained by or on behalf of the City or the
Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof
whether so expressed or not.
Section 9.03. Discharge of Agreement. If the City shall pay and discharge the entire
indebtedness on all Bonds Outstanding in any one or more of the following ways:
(a)by well and truly paying or causing to be paid the principal of, and interest and any
premium on,all Bonds Outstanding,as and when the same become due and payable;
(b) by depositing with the Fiscal Agent, in trust, at or before maturity, money which,
together with the amounts then on deposit in the funds and accounts provided for in Sections
4.02 and 4.03 hereof is fully sufficient to pay all Bonds Outstanding, including all principal,
interest and redemption premiums;or
(c) by irrevocably depositing with the Fiscal Agent, in trust, cash and/or noncallable
Federal Securities in such amount as the City shall determine, as confirmed by Bond Counsel or
an independent certified public accountant,will,together with the interest to accrue thereon and
moneys then on deposit in the fund and accounts provided for in Sections 4.02 and 4.03 (to the
extent invested in Federal Securities), be fully sufficient to pay and discharge the indebtedness
on all Bonds (including all principal, interest and redemption premiums) at or before their
respective maturity dates;
and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption
shall have been given as in this Agreement provided or provision satisfactory to the Fiscal
Agent shall have been made for the giving of such notice, then, at the election of the City, and
notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the
Special Taxes and other funds provided for in this Agreement and all other obligations of the
City under this Agreement with respect to all Bonds Outstanding shall cease and terminate,
except only the obligations of the City under Section 5.13 and of the City to pay or cause to be
paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, and the
obligation of the City to pay all amounts owing to the Fiscal Agent pursuant to Section 7.05
hereof; and thereafter Special Taxes shall not be payable to the Fiscal Agent. Notice of such
election shall be filed with the Fiscal Agent. The satisfaction and discharge of this Fiscal Agent
Agreement shall be without prejudice to the rights of the Fiscal Agent to charge and be
reimbursed by the City for the expenses which it shall thereafter incur in connection therewith.
Any funds thereafter held by the Fiscal Agent upon payment of all fees and expenses of
the Fiscal Agent which remain unclaimed for two (2) years after the principal of all Bonds has
become due and payable, shall be paid over to the City as provided in Section 9.08 hereof and
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the Fiscal Agent shall thereupon be 'released and discharged with; respect.'-thereto and the
Owners'of such Bonds shall look only to the City for payment of such Bonds,
Section<9.04 Execution of`Docum'ents.and Proof of Ownership by Owners. Any request,
declaration or;other instrument which this'Agreement may require or permit to-be executed by
Owners,maybe in one or more instruments of:similar tenor,and shall be executed by Owners in
person or by their attorneys appointed.in writing:
Except:as.otherwise herein.expressly provided,,the fact and -date of-the .execution by
any Owner or=:his attorney.of such'request; declaration or other instrument,br of such writing
appointing such.atforney,°may;be proved by,the certificate,of any notary.public or'other officer:..
authorized to take acknowledgments of deeds to be.recorded in the.state in which.he,purports
to act, that `the person signing such.. request, declaration`or other instrument or writing
acknowledged. to him the execution thereof,'or by an affidavit of a witness of such execution,
duly sworn to before such notary public or other officer.
Except as otherwise herein expressly provided, the ownership of registered Bonds and
the amount;:maturity,number and date.of.holding the same shall be proved by the registration
books maintained by the Fiscal Agent pursuant to Section 2.08 hereof.
Any request,declaration or other instrument or writing of the Owner of any Bond shall
bind all-future Owners of such Bond in respect of anything done or suffered to be done by the
City or the Fiscal Agent in good faith and in accordance therewith.
Section 9.05.Waiver of Personal Liability. No Councilmember,officer,agent or employee
of the City shall be individually or personally liable for the payment.of the principal of or
interest or any premium on the Bonds; but nothing herein contained shall relieve any such
member,officer,agent or employee from the performance of any official duty provided by law.
Section 9.06. Notices to and Demands on City and Fiscal Agent. Any notice or demand
which by any provision of this Agreement is required or permitted to be given or served by the
Fiscal Agent to or on the City may be given or served by being deposited postage prepaid in a
post office letter box addressed (until another address is filed by the City with the Fiscal
Agent) as follows:
City of Huntington Beach,California
2000 Main Street
Huntington Beach,CA 92648
Attention: Finance Director
Any notice or demand which by any provision of this Agreement is required or
permitted to be given or served by the City to or on the Fiscal Agent may be given or served by
being deposited postage prepaid in a post office letter box addressed (until another address is
filed by the Fiscal Agent with the City) as follows:
U.S.Bank Trust National Association
550 South Hope Street,Suite 500
Los Angeles, CA 90071
Attention:Corporate Trust Services
Ref:City of Huntington Beach CFD 1990-12001 Special Tax Refunding
Bonds
Section 9.07. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of
this Agreement shall for any reason be held by a court of competent jurisdiction to be illegal or
-41-
unenforceable, such holding shall not affect the validity of the remaining portions of this
Agreement.The City hereby declares that it would have adopted this Agreement and each and
every other Section,paragraph, sentence,clause or phrase hereof and authorized the issuance of
the Bonds pursuant thereto irrespective of the fact that any-one or more Sections, paragraphs,
sentences,clauses,or phrases of this Agreement may be held illegal,invalid or unenforceable.
Section 9.08. Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding,any moneys held by the Fiscal Agent in trust for the payment and discharge of
the principal of, and the interest and any premium on, the Bonds which remains unclaimed for
two (2) years after the date when the payment of such principal, interest and premium have
become payable,if such moneys were held by the Fiscal Agent at such date, shall be repaid by
the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent
shall thereupon be released and discharged with respect thereto and the Owners of such Bonds
shall look only to the City for the payment of the principal of, and interest and any premium
on,such Bonds.Any right of any Owner to look to the City for such payment shall survive only
so long as required under applicable law.
Section 9.09. Applicable Law. This Agreement shall be governed by and enforced in
accordance with the laws of the State applicable to contracts made and performed in the State.
Section 9.10. Conflict with Act. In the event of a conflict between any provision of this
Agreement with any provision of the Act as in effect on the Closing Date, the provision of the
Act shall prevail over the conflicting provision of this Agreement.
Section 9.11. Conclusive Evidence of Regularity. Bonds issued pursuant to this
Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act
relative to their issuance and the levy of the Special Taxes.
Section 9.12. Payment on Business Day. In any case where the date of the maturity of
interest or of principal(and premium,if any) of the Bonds, or the date fixed for redemption of
any Bonds, or the date any action is to be taken pursuant to this Agreement, is other than a
Business Day, the payment of interest or principal (and premium, if any) or the action need not
be made on such date but may be made on the next succeeding day which is a Business Day
with the same force and effect as if made on the date required and no interest shall accrue for
the period from and after such date.
Section 9.13. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
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IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name
and the Fiscal Agent, in token of its acceptance of the duties of the Fiscal Agent hereunder, has
caused this Agreement to be executed in its name, all as of November 1,2001.
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
.i
By
—�,�q
Director Administrative Services
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Fiscal Agent
By:
Authorized Officer
IN WITNESS WHEREOF,the City has caused this Agreement to be executed in its name
and the Fiscal Agent, in token of its acceptance of the duties of the Fiscal Agent hereunder, has
caused this Agreement to be executed in its name, all as of November 1,2001.
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
By
City Administrator
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Fiscal Agent
By:
Authorized Officer
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EXHIBIT A
FORM OF BOND
No. * *$
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
2001 SPECIAL TAX REFUNDING BOND
INTEREST RATE MATURITY DATE BOND DATE CUSIP#
October 1, November 14, 2001
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The City of Huntington Beach, California (the "City") for and on behalf of the City's
Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the "District"), for value
received, hereby promises to pay solely from the Special Tax (as hereinafter defined) to be
collected in the District or amounts in certain funds and accounts held under the Agreement (as
hereinafter defined),to the registered owner named above,or registered assigns, on the maturity
date set forth above, unless redeemed prior thereto as hereinafter provided, the principal
amount set forth above, and to pay interest on such principal amount from the Bond Date set
forth above, or from the most recent interest payment date to which interest has been paid or
duly provided for, semiannually on April 1 and October 1, commencing April 1, 2002, at the
interest rate set forth above, until the principal amount hereof is paid or made available for
payment.The principal of this Bond is payable to the registered owner hereof in lawful money
of the United States of America upon presentation and surrender of this Bond at the Principal
Office(as defined in the Agreement referred to below)of U.S. Bank Trust National Association
(the "Fiscal Agent"). Interest on this Bond shall be paid by check of the Fiscal Agent mailed on
each interest payment date to the registered owner hereof as of the close of business on'the 15th
day of the month preceding the month in which the interest payment date occurs (the "Record
Date") at such registered owner's address as it appears on the registration books maintained by
the Fiscal Agent,or (i) if the Bonds are in book-entry-only form, or (ii) otherwise upon written
request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least
$1,000,000 in aggregate principal.amount of Bonds, by wire transfer in immediately available
funds to the depository for the Bonds or to an account in the United States designated by such
registered owner in such written request,respectively.
Interest on this Bond shall be payable from the interest payment date next preceding the
date of authentication hereof, unless (i) it is authorized on an interest payment date, in which
event it shall bear interest for such interest payment date, or (ii) such date of authentication is
after a Record Date but on or prior to an interest payment date, in which event interest will be
payable from such interest payment date, or (iii) such date of authentication is prior to the first
Record Date, in which event interest will be payable from the Bond Date set forth above;
Exhibit A
Page 1
provided however, that if at the time of authentication of this Bond, interest is in default
hereon, this Bond shall bear interest from the interest payment date to which interest has
previously been paid or made available for payment hereon.
The Bonds are not general obligations of the City, but are limited obligations payable
solely from the revenues and funds pledged therefor under the Agreement. Neither the faith and
credit nor the taxing power of the City (except to the limited extent set forth in the Agreement)
or the State of California or any political subdivision thereof is pledged to the payment of the
Bonds.
This Bond is one of a duly authorized issue of bonds in the aggregate principal amount
of $2,155,000 approved by resolution of the City Council of the City on October 15, 2001 (the
"Resolution"), pursuant to the Mello-Roos Community Facilities Act of 1982, as. amended,
Sections 53311, et seq., of the California Government Code (the "Mello-Roos Act") for the
purpose of refunding outstanding bonds of the City issued for the District, and is one of the
series of bonds designated "City of Huntington Beach Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds" (the 'Bonds"). The issuance of the Bonds and the terms
and conditions thereof are provided for by a Fiscal Agent Agreement, dated as of November 1,
2001,between the City and the Fiscal Agent (the "Agreement") and this reference incorporates
the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms
and conditions.The Agreement is.authorized under, this Bond is issued under and both are to
be construed in accordance with,the laws of the State of California.
Pursuant to the Mello-Roos Act,the Agreement and the Resolution, the principal of and
interest on this Bond are payable solely from the annual special tax authorized under the Mello-
Roos Act to be collected within the District (the "Special Tax") and certain funds held under
the Agreement.
Any tax for the payment hereof shall be limited to the Special Tax, except to the extent
that provision for payment has been made by the City,as may be permitted by law. The Bonds
do not constitute obligations of the City for which the City is obligated to levy or pledge, or has
levied or pledged,general or special taxation other than described hereinabove.
The Bonds may be redeemed prior to their stated maturities, in whole or in part, on
October 1, 2011, or on any date thereafter, at a redemption price equal to the principal amount
thereof, together with accrued interest to the date of redemption,without premium.
The Bonds maturing on October 1, 2007, are subject to mandatory sinking payment
redemption in part on the.October 1, 2002, and on each October 1 thereafter to and including
October 1, 2007, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption, without premium,
from sinking payments as follows:
Redemption Date Redemption Date
(October 1) Amount (October 1) Amount
2002 $85,000 2005 $85,000
2003 75,000 2006 85,000
2004 80,000 2007(maturity) 90,000
The Bonds maturing on October 1, 2012, are subject to mandatory sinking payment
redemption in part on the October 1, 2008, and on each October 1 thereafter to and including
October 1, 2012, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption, without premium,
from sinking payments as follows:
Exhibit A
Page 2
Redemption Date Redemption Date
(October 1) Amount (October 1) Amount
2008 $95,000 2011 $110,000
2009 95,000 2012(maturity) 110,000
2010 100,000
The Bonds maturing on October 1, 2020, are subject to mandatory sinking payment
redemption in part.on the October 1, 2013,.and on each October 1 thereafter to and including
October 1, 2020, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption, without premium,
from sinking payments as follows:
Redemption Date Redemption Date
(October 1) Amount (October 1) Amount
2013 $120,000 2017 $145,000
2014 125,000 2018 155,000
2015 130,000 2019 160,000
2016 140,000 2020(maturity) 170,000
In the event of a redemption of less than all of the Bonds, the Bonds shall be redeemed
by lot within a maturity,and among maturities in the manner specified in the Agreement.
Notice of redemption with respect to the Bonds to be redeemed shall be given to the
registered owners thereof, in the manner, to the extent and subject to the provisions of the
Agreement.
This Bond shall be registered in the name of the owner hereof, as to both principal and
interest. Each registration and transfer of registration of this Bond shall be entered by the Fiscal
Agent in books kept by it for this purpose and authenticated by its manual signature upon the
certificate of authentication endorsed hereon.
No transfer or exchange hereof shall be valid for any purpose unless made by the
registered owner,by execution of the form of assignment endorsed hereon, and authenticated as
herein provided,and the principal hereof,interest hereon and any redemption premium shall be
payable only to the registered owner or to such owner's order.The Fiscal Agent shall require the
registered owner requesting transfer or exchange to pay any tax or other governmental charge
required to be paid with respect to such transfer or exchange. No transfer or exchange hereof
shall be required to be made(i) fifteen days prior to the date established by the Fiscal Agent for
selection of Bonds for redemption or (ii) with respect to a Bond after. such Bond has been
selected for redemption.
The Agreement and the rights and obligations of the City thereunder may be modified or
amended as set forth therein. The principal of the Bonds is not subject to acceleration upon a
default under the Agreement or any other document.
This Bond shall not become valid or obligatory for any purpose until the certificate of
authentication and registration hereon endorsed shall have been dated and manually signed by
the Fiscal Agent.
It is hereby certified,recite_d and declared by the City that all acts, conditions and things
required by law to exist, happen and be performed precedent to and in the issuance of this
Bond have existed,happened and been performed in due time,form and manner as required by
Exhibit A
Page 3
law, and that the amount of this Bond, together with all other indebtedness of the City, does
not exceed any debt limit prescribed by the laws or Constitution of the State of California.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company to the Fiscal Agent for registration of transfer, exchange or payment, and any Bond
issued is registered in the name of Cede&Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede & Co.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
IN WITNESS WHEREOF,City of Huntington Beach,California has caused this Bond to
be dated the Bond Date set forth above, to be signed by the facsimile signature of its Mayor and
countersigned by the facsimile signature of the City Clerk.
City Clerk Mayor
[FORM OF FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the Resolution and the Agreement which has been
authenticated on
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Fiscal Agent
By:
Authorized Officer
Exhibit A
Page 4
FORM OF ASSIGNMENT
For value received, the undersigned do(es)hereby sell, assign and transfer unto
(Name,Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es)hereby irrevocably constitute and appoint
, attorney,
to transfer the same on the registration books of the Fiscal Agent, with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an NOTICE: The signature on this assignment must
eligible guarantor. correspond with the name(s) as written on
the face of the within Bond in every
particular without alteration or
enlargement or any change whatsoever.
Exhibit A
Page 5
EXMBIT B
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
2001 SPECIAL TAX REFUNDING BONDS
OFFICER'S CERTIFICATE REQUESTING DISBURSEMENT
FROM ADMINISTRATIVE EXPENSE FUND
CERTIFICATE NO.
The undersigned hereby states and certifies:
(i) that I am the duly appointed, qualified and acting Finance Officer of the City of
Huntington Beach, California, a municipal corporation duly organized and existing under the
laws of the State of California (the "City") and as such, am familiar with the facts herein
certified and am authorized to certify the same;
(ii) that I am an "Authorized Officer", as such term is defined in that certain Fiscal
Agent Agreement, dated as of November 1, 2001 (the "Fiscal Agent Agreement"), by and
between the City and U.S. Bank Trust National Association, as fiscal agent (the "Fiscal
Agent");
(iii) that pursuant to Section 3.04(b) of the Fiscal Agent Agreement, the undersigned
hereby requests and authorizes the City Finance Officer to disburse from the Administrative
Expense Fund established under the Fiscal Agent Agreement to each payee designated on
Schedule A attached hereto and by this reference incorporated herein, the amount set forth
opposite such payee, for payment or reimbursement of previous payment of Administrative
Expenses (as that term is defined in the Fiscal Agent Agreement) as described on attached
Schedule A;and
(iv) that the disbursements described on the attached Schedule A constitute
Administrative Expenses, and are properly chargeable to the Administrative Expense Fund.
Dated: CITY OF HUNTINGTON BEACH,
CALIFORNIA
By:
Finance Officer
Exhibit B
Page 1
SCHEDULE A
Payee Name and Address Purpose of Obli a�; tion Amount
Exhibit B
Page 2
EXHIBIT C
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
2001 SPECIAL TAX REFUNDING BONDS
OFFICER'S CERTIFICATE REQUESTING DISBURSEMENT
FROM COSTS OF ISSUANCE FUND
CERTIFICATE NO.
The undersigned hereby states and certifies:
(i) that I am the duly appointed, qualified and acting Finance Officer of the City of
Huntington Beach, California, a municipal corporation duly organized and existing under the
laws of the State of California (the "City") and as such, am familiar with the facts herein
certified and am authorized to certify the same;
(ii) that I am an "Authorized Officer", as such term is defined in that certain Fiscal
Agent Agreement, dated as of November 1, 2001 (the "Fiscal Agent Agreement"), by and
between the City and U.S. Bank Trust National Association, as, fiscal agent (the "Fiscal
Agent");
(iii) that pursuant to Section 3.05(b) of the Fiscal Agent Agreement, the undersigned
hereby requests and authorizes the Fiscal Agent to disburse from the Costs of Issuance Fund
established under the Fiscal Agent Agreement to each payee designated on Schedule A attached
hereto and by this reference incorporated herein, the amount set forth opposite such payee, for
payment or reimbursement of previous payment of Costs of Issuance(as that term is defined in
the Fiscal Agent Agreement) as described on attached Schedule A; and
(iv) that the disbursements described on the attached Schedule.A constitute Costs of
Issuance,and are properly chargeable to the Costs of Issuance Fund.
Dated: CITY OF HUNTINGTON BEACH,
CALIFORNIA
By:
Finance Officer
Exhibit C
Page 1
SCHEDULE.A
Payee Name and Address Purpose of Obligation Amount
Exhibit C
Page 2
Quint&Thimmig LLP 09/24/01
10/18/01
FINAL 10/25/01
REVISED FINAL 10/29/01
CONTINUING DISCLOSURE CERTIFICATE
This CONTINUING DISCLOSURE CERTIFICATE (the "Disclosure Certificate") is
executed and delivered by the CITY OF HUNTINGTON BEACH, for and on behalf of the City
of Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the
"City") in connection with the issuance of $2,155,000 City of Huntington Beach Community
Facilities District No. 1990-1 2001 Special Tax Refunding Bonds (the "Bonds"). The Bonds are
being issued pursuant to the Fiscal Agent Agreement,dated as of November 1, 2001 (the "Fiscal
Agent Agreement"), by and between the City and U.S. Bank Trust National Association, as
fiscal agent(the "Fiscal Agent"). The City hereby covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the City for the benefit of the holders and beneficial owners of the
Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-
12(b)(5).
Section 2. Definitions. In addition to the definitions set forth in the Fiscal Agent
Agreement, which apply to any capitalized term used in this Disclosure Certificate unless
otherwise defined in this Section, the following capitalized terms shall have the following
meanings:
"Annual Report" shall mean any Annual Report provided by the City pursuant to, and
as described in, Sections 3 and 4 of this Disclosure Certificate.
"Dissemination Agent" shall mean U.S. Bank Trust National Association, or any
successor Dissemination Agent designated in writing by the City and which has filed with the
City a written acceptance of such designation. The address of the initial Dissemination Agent is
550 South Hope Street, 5th Floor, Los Angeles, CA 90071, Attention: Corporate Trust
Department.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure
Certificate.
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule.Information on the National Repositories as of
a particular date is available on the Internet at www.sec.gov/consumer/nrmsir.htm.
"Participating Underwriter" shall mean O'Connor SWS Securities.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended from time
to time.
08003.05
"State Repository" shall mean any public or private repository or entity designated by the
State of California as a state repository for the purpose of the Rule and recognized as such by
the Securities and Exchange Commission. As of the date of this Disclosure Certificate, there is
no State Repository.
Section 3. Provision of Annual Reports.
(a) The City shall, or, pursuant to written direction, shall cause the Dissemination
Agent to, not later than the last day of the eighth month after the end of the City's fiscal year,
commencing with the report for the 2001-2002 Fiscal Year on April 30, 2002, provide to each
Repository and the Participating Underwriter an Annual Report which is consistent with the
requirements of Section 4 of this Disclosure Certificate. Not later than fifteen (15) Business
Days prior to said date, the City shall provide the Annual Report to the Dissemination Agent
(if other than the City). The City shall provide a written certification with each Annual Report
furnished to the Dissemination Agent and the Fiscal Agent to the effect that such Annual
Report constitutes the Annual Report required to be furnished by it hereunder. The
Dissemination Agent and the Fiscal Agent may conclusively rely upon such certification of the
City and shall have no duty or obligation to review such Annual Report. The Annual Report
may be submitted as a single document or as separate documents comprising a package, and
may include by reference other information as provided in Section 4 of this Disclosure
Certificate; provided that the audited financial statements of the City may be submitted
separately from the balance of the Annual Report, and later than the date required above for
the filing of the Annual Report if not available by that date. If the City's fiscal year changes; it
shall give notice of such change in the same manner as for a Listed Event under Section 5(c).
(b) If the City is unable to provide to the Repositories an Annual Report by the date
required in subsection (a), the City shall send a notice to the Municipal Securities Rulemaking
Board and the appropriate State Repository, if any, in substantially the form attached as
Exhibit A.
(c) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the
name and address of each National Repository and each State Repository, if any; and
(ii) to the extent the Annual Report has been furnished to it, if the
Dissemination Agent is other than the City,file a report with the City certifying that the
Annual Report has been provided pursuant to this Disclosure Certificate, stating the
date it was provided and listing all the Repositories to which it was provided.
.Section 4. Content of Annual Reports. The City's Annual Report shall contain or
incorporate by reference the following:
(a) Assessed value information (per the Orange County Assessor's last equalized
tax roll prior to the September next preceding the Annual Report Date) with respect to (i) on an
aggregate basis, all parcels currently subject to the Special Tax within the District, showing the
total assessed valuation for all land and the total assessed valuation for all improvements within
the District and (ii) on a parcel-by-parcel basis, each parcel currently subject to the Special Tax
within the District,showing the assessed valuation of the real property component of the parcel
and the assessed valuation of the improvements on the parcel;
(b) In the event that the total delinquencies within the District as of August 1 in
any year exceed 5% of the Special Tax for the previous year, delinquency information,
including a list of all parcels delinquent in the payment of the Special Tax, amounts of
delinquencies,length of delinquency and status of any foreclosure for each parcel listed;
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(�) Status of any judicial foreclosure proceedings initiated by the City on behalf of
the district as a result of delinquency in the payment of Special Taxes and the summary of the
results of foreclosure sales,if available;
(d) The principal amount of Bonds Outstanding and the balance in the Reserve
Fund as of the September 30 next preceding the Annual Report Date;
(e) In addition to any of the information expressly required to be provided under
paragraphs (a) through (e) of this Section, the City shall provide such further information, if
any, as may be necessary to make the specifically required statements, in the light of the
circumstances under which they are made, not misleading.
Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the City or related public entities,
which have been submitted to each of the Repositories or the Securities and Exchange
Commission. If the document included by reference is a final official statement, it must be
available from the Municipal Securities Rulemaking Board. The City shall clearly identify each
such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause to be
given, notice of the occurrence of any of the following events with respect to the Bonds,- if
material:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers,or their failure to perform.
(6) Adverse tax opinions or events affecting the tax-exempt status of the security.
(7) Modifications to rights of security holders.
(8) Contingent or unscheduled bond calls.
(9) Defeasances.
(10) Release,substitution,or sale of property securing repayment of the securities.
(11) Rating changes.
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the
City shall as soon as possible determine if such event would be material under applicable
Federal securities law.
(c) If the City determines that knowledge of the occurrence of a Listed Event would
be material under applicable Federal securities law,the City shall promptly file a notice of such
occurrence with the Municipal Securities Rulemaking Board and each State Repository with a
copy to the Fiscal Agent. Notwithstanding the foregoing, notice of Listed Events described in
subsections(a)(8) and (9)need not be given under this subsection any earlier than the notice (if
any)of the underlying event is given to holders of affected Bonds pursuant to the Fiscal Agent
Agreement.
Section 6. Termination of Reporting Obligation. The City's obligations under this
Disclosure Certificate shall terminate upon the legal defeasance,prior redemption or payment in
full-of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the
City shall give notice of such termination in the same manner as for a Listed Event under
Section 5(c).
-3-
Section 7. Dissemination Agent. The City may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate,
and may discharge any such Dissemination Agent, with or without appointing a successor
Dissemination Agent. The Dissemination Agent may resign by providing thirty days' written
notice to the City and the Fiscal Agent.
Section 8. Amendment;Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure
Certificate may be waived,provided that the following conditions are satisfied:
(a) if the amendment or.waiver relates to the provisions of Sections 3(a), 4 or 5(a), it
may only be made in connection with a change in circumstances that arises from a change in
legal requirements, change in law, or change in the identity, nature, or status of an obligated
person with respect to the Bonds, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the
opinion of nationally recognized bond counsel,have complied with the requirements of the Rule
at the time of the primary offering of the Bonds, after taking into account any amendments or
interpretations of the Rule,as well as any change in circumstances;and
(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in
the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent
Agreement with the consent of Bondowners, or (ii) does not, in the opinion of nationally
recognized bond counsel, materially impair the interests of the holders or beneficial owners of
the Bonds.
If the annual financial information or operating data to be provided in the Annual
Report is amended pursuant to the provisions hereof, the first annual financial information filed
pursuant hereto containing the amended operating data or financial information shall explain,
in narrative form, the reasons for the amendment and the impact of the change in the type of
operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be
followed in preparing financial statements, the annual financial information for the year in
which the change is made shall present a comparison between the financial statements or
information prepared on the basis of the new accounting principles and those prepared on the
basis of the former accounting principles.The comparison shall include a qualitative discussion
of the differences in the accounting principles and the impact of the change in the accounting
principles on the presentation of the financial information, in order to provide information to
investors to enable them to evaluate the ability of the City to meet its obligations with respect to
the District. To,the extent reasonably feasible, the comparison shall be quantitative. A notice of
the change in the accounting principles shall be sent to the Repositories in the same manner as
for a Listed Event under Section 5(c).
Section 9.Additional Information.Nothing in this Disclosure Certificate shall be deemed
to prevent the City from disseminating any other information, using the means of dissemination
set forth in this Disclosure Certificate or any other means of communication, or including any
other information in any Annual Report or notice of occurrence of a Listed Event, in addition to
that which is required by this Disclosure Certificate. If the City chooses to include any
information in any Annual Report or notice of occurrence of a Listed Event in addition to that
which is specifically required by this Disclosure Certificate, the City shall have no obligation
under this Disclosure Certificate to update such information or include it in any future Annual
Report or notice of occurrence of a Listed Event.
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Section 10. Default.In the event of a failure of the City to comply with any provision of
this Disclosure Certificate the Fiscal Agent shall, upon written direction and only to the extent
indemnified to its satisfaction from any liability,cost or expense,including fees and expenses of
its attorneys,and any holder or beneficial owner of the Bonds may, take such actions as may be
necessary and appropriate, including seeking mandate or specific performance by court order,
to cause the City to comply with its obligations under this Disclosure Certificate. A default
under this Disclosure Certificate shall not be deemed a default under the Fiscal Agent
Agreement,and the sole remedy under this Disclosure Certificate in the event of any failure of
the City to comply with this Disclosure Certificate shall be an action to compel performance.
Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers,
directors, employees and agents,harmless against any loss,expense and liabilities which it may
incur arising out of or in the exercise or performance of its powers and duties hereunder,
including the costs and expenses (including reasonable attorneys fees) of defending against any
claim of liability,but excluding liabilities due to the Dissemination Agent's negligence or willful
misconduct. The Dissemination Agent shall be paid compensation for its services provided
hereunder in accordance with its schedule of fees as amended from time to time, which
schedule, as amended, shall be reasonably acceptable, and all expenses, reasonable legal fees
and advances made or incurred by the Dissemination Agent in the performance of its duties
hereunder. The Dissemination Agent and the Fiscal Agent shall have no duty or obligation to
review any information provided to it hereunder and shall not be deemed to be acting in any
fiduciary capacity for the District, the City, the bond owners, or any other party. The
obligations of the City under this Section shall survive resignation or removal of the
Dissemination Agent and payment of the Bonds.
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Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the City, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and holders
and beneficial owners from time to time of the Bonds, and shall create no rights in any other
person or entity.
Date: November 14, 2001
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS ARE
By:
AGREED AND ACCEPTED:
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Dissemination Agent
By:
Title:
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Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the City, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and holders
and beneficial owners from time to time of the Bonds, and shall create no rights in any other
person or entity.
Date: November 14, 2001
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
By:
AGREED AND ACCEPTED:
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Dissemination Agent
By:
Title:
VlOd-
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EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Huntington Beach,for and on behalf of the City of Huntington
Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area)
Name of Bond Issue: $2,155,000 City of Huntington Beach Community Facilities District No.
1990-1 2001 Special Tax Refunding Bonds
Date of Issuance: November 14, 2001
NOTICE IS HEREBY GIVEN that the City has not provided an Annual Report with
respect to the above-named Bonds as required by Section 5.16 of the Fiscal Agent Agreement
dated as of November 1, 2001 between the City and U.S. Bank Trust National Association. The
City anticipates that the Annual Report will be filed by
Dated:
CITY OF HUNTINGTON BEACH, for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
By
cc: U.S. Bank Trust National Association
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TH1E CITY OF HIINTt'NGTON BEACH
The document you are viewing
contains additional information
that is not possible to produce
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how to locate this document for
viewing , please contact or visit the
City Clerk's Office for assistance.
2000 Main Street
2"a Floor — City Hall
Huntington Beach CA 92648
(714) 536-5227
Quint&Thimmig LLP 11/13/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE OF MAILING TO CDIAC
I, Christine Tolentino, hereby state and certify that for and on behalf of the City of
Huntington Beach,on the date hereof,I caused to be mailed a Report of Final Sale pertaining to
the captioned financing, postage prepaid, to the California Debt Investment and Advisory
Commission at P.O. Box 942809, Sacramento, California 94209-0001, a true copy of which
Report is hereto attached.
Dated: November 14, 2001
By
Christine Tolentino,
Project Manager
Quint & Thimmig LLP
12007.01
REPORT OF FINAL SALE
California Debt and Investment Advisory Commission For Office Use Only
915 Capitol Mall,Room 400,Sacramento,CA 95814
P.O.Box 942809,Sacramento,CA 94209-0001
Tel.:(916)653-3269 FAX:(916)654-7440 CDIAC#: 2 0 01-19 3 0
Under California Government Code Section 8855(i),"The issuer of any new public debt issue shall,
not later than 45 days after signing of the bond purchase contract in a negotiated or private financing,
or after the acceptance of a bid in a competitive offering,submit a report of final sale and official
statement to the Commission.The Commission may require information to be submitted in the report
of final sale that is considered appropriate."
ISSUER NAME: CITY OF HUNTINGTON BEACH
(If pool bond, list participants)
ISSUE NAME: Special Tax Refuding Bonds CFD No. 1990-1(Goldenwest/Ellis Area)
IF THIS A POOLED FINANCING,WHICH ISSUANCE STATUTE IS IT AUTHORIZED UNDER?
1) Marks-Roos local Bond Pooling Act 2) JPA Law 3) Installment Sales Agreement,Lease... 4) Housing Revenue Bond Law&Industrial
Development Bond Law 5) Other
WILL VALIDATION ACTION BE PURSUED: ❑ No ❑Yes ® Unknown
ACTUAL SALE DATE: October 29, 2001 PRINCIPAL SOLD: $2,155,000.00
IS ANY PORTION OF THE DEBT FOR REFUNDING?t
❑No 0 Yes, refunding amount(including costs)$ 1,881,470.00
Issuer Contact:
Name: Clay Martin
Title: Director of Administrative Services
Address: 2000 Main Street Huntington Beach, CA 92648
Phone: 714/536-551 1 ISSUER LOCATED IN Orange COUNTY
Filing Contact:Name of individual(representing ®Bond Counsel, ❑Issuer, ❑Financial Advisor,or ❑Lead Underwriter) who completed this
form and may be contacted for information:
Name: Brian D.Ouint
Firm/Agency: Quint&Thimmig LLP
Address: One Embarcadero Center, Suite 2420 , San Francisco, CA 941 1 1-3737
Phone: (415) 765-1550 E-mail: bquint@qtllp.com
Send acknowledgment/copies to:Candace Queiser c/o (hint&Thimmig I.I.P
Name of individual to whom an invoice for the CDIAC issue fee should be sent:Z
Name: Bill J. O'Connor
Title:
Address: 3 Civic Plaza, Ste. 100, Newport Beach,CA 92660
Phone: 949.717.2000
Section 53583(c)(2)(B)of the California Government Code requires that any local agency selling refunding bonds at.private sale or on a negotiated basis shall
send a written statement,within two weeks after the bonds are sold,to the CDIAC explaining the reasons why the local agency determined to sell the bonds at
a private sale or on a negotiated basis instead of at public sale.
'- This fee is authorized by Section 8856 of the California Government Code and is charged to the lead underwriter or purchaser of the issue. The fee is
administratively set by the Commission. The current fee schedule may be obtained from CD/AC.
CDIAC:Report of Final Sale Page 2
FINANCING PARTICIPANTS (Firm name) OFFICE LOCATION (City/State)
FINANCIAL ADVISOR: Harrell&Company Advisors, LLC Orange,CA
LEAD UNDERWRrMR/PURCHASER:O'Connor SWS Securities Newport Beach,CA
BOND COUNSEL: Quint&Thimmig LLP San Francisco,CA
TRUSTEE(PAYINGAGENT:U.S. Bank Trust National Association Los Angeles.CA
MATURITY SCHEDULE IS THE INTEREST ON THE DEBT EXEMPT FROM
TAXATION?
❑Attached N Included in Official Statement
Under State Law: ❑No (taxable) N Yes (tax-exempt)
MATURITY STRUCTURE Under Federal law: ❑No(taxable) N Yes (tax-exempt)
❑ Serial(S) ❑Term(T) If the issue is federally tax-exempt, is interest a specific preference
N Serial and term bonds or two or more term(B) item for the purpose of alternative minimum tax? ❑ Yes ❑No
FINAL MATURITY DATE: 10/1/2020
INTEREST TYPE: ❑NIC ❑TIC ❑ Variable
FIRST OPTIONAL CALL DATE:
INTEREST COST: %
SENIOR/SUBORDINATE STRUCTURE ❑ Yes N No
CAPITAL APPRECIATION BOND: ❑ Yes N No
OFFICIAL STATEMENT/OFFERING MEMORANDUM:
N Enclosed ❑None prepared ISSUANCE COSTS AND FEES:
WAS THE ISSUE INSURED OR GUARANTEED?
A)Management Fee $
N No B)Total Takedown $
❑Bond Insurance(I)
El Letter of Credit(L) C) Underwriter Expenses $
❑State Intercept Program(T)
❑Other(0) Underwriter Spread or Discount $ 23,705.00
GUARANTOR: D) Bond Counsel $ 32,000.00
E) Disclosure Counsel $
ENHANCEMENT EXPIRATION DATE:
F) Financial Advisor $ 20,829.50
INDICATE CREDIT RATING:
G) Rating Agency $ 2,300.00
(For example,"AAA"or"Aaa")
H)Credit Enhancement $
❑Not Rated
N Rated $ 7.000.00
Standard & Poor's: BBB I)Trustee Fee
Fitch: J) Other Expenses $ 2,500.00
Moody's: $ 64,629.50
Other: Total Issuance Costs
REASON FOR NEGOTIATED REFUNDINGS K)ORIGINAL ISSUE PREMIUM $
If the issue is a negotiated refunding, indicate the reason(s) L)ORIGINAL ISSUE DISCOUNT $
why the bonds were issued at a private or negotiated versus a NET ORIGINAL ISSUE
competitive sale. $
❑(1)Timing of the sale provided more flexibility than a public sale DISCOUNT/PREMIUM
❑(2)More cost savings were expected to be realized than a public sale
❑(3)More flexibility in debt structure was available than a public sale
❑(4)Issuer able to work with participants familiar with issue/r than a
public sale FOR OFFICE USE ONLY
N(5)All of the above
❑(6)Other(please specify)
FEE S
Quint&Thimmig LLP 11/8/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 1990-1
2001 SPECIAL TAX REFUNDING BONDS
INCUMBENCY AND SIGNATURE CERTIFICATE - CITY
The undersigned hereby state and certify:
(i) that the undersigned are the duly appointed or elected, qualified and acting
Director of Administrative Services and City Clerk, respectively, of the City of Huntington
Beach, a chartered city and municipal corporation duly organized and existing under the laws
of the State of California (the "City"), and as such, are familiar with the facts herein certified
and are authorized and qualified to certify the same on behalf of the City;
(ii) that the following are now, and have continuously been since the dates of
beginning of their respective current terms of office set forth below, the duly elected or
appointed, qualified and acting members of the City Council of the City, and the dates of the
beginning and ending of their respective current terms of office are hereunder correctly
designated opposite their names:
Beginning Date Ending Date
Council Members of Current Term of Current Term
Pam Julien Houchen,Mayor December, 2000 November,2004
Debbie Cook,Mayor Pro Tem December, 2000 November, 2004
Ralph Bauer December, 1998 November, 2002
Connie Boardman December, 2000 November,2004
Shirley Dettloff December, 1998 November,2002
David Garofalo December, 1998 November,2002
Peter Green December, 1998 November,2002
(iii) that the signatures set forth opposite the names and titles of the following
persons are the true and correct specimen, or are the genuine, signatures of such persons, each
of whom holds the position designated below:
Name and Title Signature
Pam Julien Houchen,Mayor
Clay Martin, Director of Administrative Services
12007.01
Name and Title Signature
C
Daniel T. Villella,Director of Finance
Shari Freidenrich,City Treasurer
Connie Brockway,City Clerk
(iv) that the bonds issued by the City designated "City of Huntington Beach
Community Facilities District No. 1990-1 2001 Special Tax Refunding Bonds," in the aggregate
principal amount of $2,155,000 and dated the date hereof (the 'Bonds"), have been executed
by the facsimile signature of the within-named Mayor,and attested to by the facsimile signature
of the within-named City Clerk and that the seal of the City is impressed hereon and on the
Bonds;
(v) that for and on behalf of the City, the within-named Director of Administrative
Services has executed the following:
(a) Fiscal Agent Agreement, dated as of November 1, 2001, by and between
the City and U.S. Bank Trust National Association, as fiscal agent,
(b) Escrow Agreement, dated as of November 1, 2001, by and between the
City and U.S. Bank Trust National Association, as escrow bank,
(c) Continuing Disclosure Certificate, dated as of November 1, 2001, by the
City, as accepted by U.S. Bank Trust National Association, as
dissemination agent,and
(d) Official Statement, dated October 29, 2001, relating to the Bonds;
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(vi) and, that for and on behalf of the City, the within-named Director of Finance has
executed the Bond Purchase Agreement, dated October 29, 2001, by and between O'Connor
SWS Securities, as underwriter, and the City.
Dated: November 14, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
By
lay Martin,
Director o Administrative Services
[SEAL]
By
Connie Brockway,
City Clerk -
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Quint&nuj mgLLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE AS TO ARBITRAGE
I, the undersigned Director of Finance of the City of Huntington Beach, California (the
"City"),being one of the officers of the City duly charged (by resolution of the City Council of
the City), with others, with the responsibility of issuing the City's $2,155,000 City of
Huntington Beach Community Facilities District No. 1990-1 2001 Special Tax Refunding Bonds
(the "Bonds"), dated the date hereof and being issued this date,hereby certify as follows:
(1) Purpose of Bonds. The Bonds are being issued by the City, for and on behalf of the
City of Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area)
(the "District") pursuant to a Fiscal Agent Agreement, dated as of November 1, 2001 (the
"Fiscal Agent Agreement"),between the City, for and on behalf of the District, and U.S. Bank
Trust National Association, as fiscal agent (the "Fiscal Agent"), for the purpose of providing
funds for the refunding on an advance basis of the City's outstanding City of Huntington Beach,
California, Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) Special Tax
Bonds (the "Prior Bonds") issued on August 9, 1990 in the original principal amount of
$2,400,000 (of which $2,055,000 principal amount is outstanding and is being refunded on the
date hereof). The Prior Bonds were issued for the purpose of financing the acquisition and
construction of various public improvements (the "Project"), more particularly described in the
Certificate Regarding Use of Proceeds, dated the date hereof, and on file elsewhere in the
transcript for the Bonds.
(2) Statement of Expectations. On the basis of the facts, estimates and circumstances in
existence on the date hereof, I reasonably expect the following with respect to the proceeds of
the Bonds:
(a) Sale Proceeds of Bonds, No Aggregate Issues. The Bonds were sold to O'Connor
SWS Securities (the "Underwriter"), at their face amount ($2,155,000), less
Underwriter's discount of $23,705.00, for total sale proceeds of $2,131,295.00. Of said
amount, $77,425.00 will be deposited in the Costs of Issuance Fund, $172,400.00 will be
deposited in the Reserve Fund, and the remaining $1,881,470.00 will be transferred to
U.S. Bank Trust National Association, as escrow bank (the "Escrow Bank") for deposit
in the Escrow Fund held by the Escrow bank pursuant to an Escrow Agreement, dated
the date hereof, by and between the City and the Escrow Bank. The Reserve Fund and
the Costs of Issuance Fund are held by the Fiscal Agent,and the Escrow Fund is held by
the Escrow Bank. The sale proceeds of the Bonds, together with interest earnings
thereon, except to the extent that such interest earnings are subject to requirements for
rebate to the federal government, will not exceed the amount necessary for the
governmental purposes of the Bonds, namely, the purposes set forth in paragraph (1)
above. No tax-exempt debt has been sold within fifteen (15) days before or after the
date the Bonds were sold that will be paid from substantially the same source of funds
as the Bonds(excluding guarantees from unrelated parties).
(b) Refunding Schedules. At the request of the City, the schedules included
elsewhere in the transcript for the Bonds (the "Schedules") have been prepared by the
Harrell & Company Advisors, LLC, financial advisor to the City, and verified by Grant
Thornton LLP, independent certified public accountants, for the purpose of detailing all
relevant aspects of the refunding program with respect to the Prior Bonds. The
Schedules are incorporated herein by this reference.
(c) Costs of Issuance Fund. The proceeds of the Bonds deposited in the Costs of
Issuance Fund will be used for the payment of legal fees, printing costs and other costs
of issuance of the Bonds and will be fully expended within approximately 180 days of
the date hereof. Amounts deposited in the Costs of Issuance Fund, if invested, will be
invested without yield restrictions. Interest earnings and profits resulting from said
investment will be retained in the Costs of Issuance Fund and used for the purposes
thereof. Amounts, if any, remaining in the Costs of Issuance Fund after the earlier of
May 1, 2002, or the date that all costs of issuance have been paid will be transferred to
the Bond Fund and used for the payment of debt service on the Bonds.
(d) Escrow Fund; Deposits and Investment. Pursuant to the Escrow Agreement,
concurrent with the deposit of proceeds of the Bonds in the amount of $1,881,470.00
into the Escrow Fund, the City will transfer or cause to be transferred to the Escrow
Bank for deposit in the Escrow Fund $52,328.00 from the improvement fund created for
the Prior Bonds and $192,487.00 from the reserve fund created for the Prior Bonds,
being a total deposit into the Escrow Fund of $2,126,285.00. Of the total amount
deposited into the Escrow Fund, $2,126,284.00 will be invested in United States
Treasury Securities, State and Local Government Series ("Federal Securities") with-a
yield that is less than the yield on the Bonds and the remaining $1.00 will be retained in
cash and not invested. Except as described above, no proceeds of the Prior Bonds will
remain following the deposits to the Escrow Fund referenced above, except for amounts
transferred from the bond fund for the Prior Bonds to the services fund created under
the Fiscal Agent Agreement ($668,403.00), which amounts will be transferred to the
services fund created under the Fiscal Agent Agreement and used to reimburse the City
for services rendered in connection with the District, amounts transferred from the
improvement fund created under the Fiscal Agent Agreement ($32,250.00), which
amounts will be transferred to the City and used to complete the Project, and amounts
transferred from the administrative expense fund created under the Fiscal Agent
Agreement ($10,969.00), which amounts will be transferred to the administrative
expense fund created under the Fiscal Agent Agreement and used for the purposes of
such fund.
(e) Escrow Fund; Use and Allocation of Amounts Deposited. Amounts deposited in
the Escrow Fund will be used to pay principal and interest on the Prior Bonds through
April 1, 2002, which date is the first date upon which the Prior Bonds may be redeemed
on an optional basis, and on said date will be used to redeem the then outstanding
principal amount of the Prior Bonds of $2,055,000 and to pay the redemption premium
of $10,275.00 (being one-half of one percent (.5%) of the principal amount redeemed).
Amounts,if any,remaining in the Escrow Fund following redemption of the Prior Bonds
will be transferred to the Bond Fund and used for the payment of debt service on the
Bonds.
(f) Reserve Fund.- The proceeds of the Bonds ($172,400.00) deposited in the
Reserve Fund equals the initial "Reserve Requirement', being an amount equal to eight
percent(8%) of the initial principal of the Bonds,which is less than ten percent (10%) of
the initial principal of the Bonds, less than an amount equal to maximum annual debt
service on the Bonds, and less than one hundred twenty-five percent (125%) of average
annual debt service on the Bonds. The Underwriter has represented that the
establishment of the Reserve Fund in the amount of the Reserve Requirement was vital to
-2-
the marketing of the Bonds and reasonably required to assure payment of the Bonds.
Amounts-deposited in the Reserve Fund will be invested without yield restrictions.
Interest earnings and profits resulting from said investment will be retained in the
Reserve Fund in the event that the amount on deposit in such Fund is less than the
Reserve Requirement and otherwise will be used for the payment of excess investment
earnings to the federal government (see subparagraph (i) below) or, if not required for
such purpose, deposited in the Bond Fund and used for the payment of interest on the
Bonds.
(g) Pledge of Tax Revenues, Payment of Debt Service. The City has pledged certain
special tax revenues (the "Tax Revenues") to the payment of debt service on the Bonds.
Upon receipt, the Tax Revenues will be deposited in the Special Tax Fund and, on or
before each interest payment date on the Bonds, the amount, if any, necessary to
increase the amount in the Reserve Fund to the Reserve Requirement will be transferred
from the Special Tax Fund to the Reserve Fund and the amount necessary to pay debt
service on the Bonds on the interest payment date will be transferred from the Special
Tax Fund to the Bond Fund. The Special Tax Fund and the Bond Fund have been
established primarily to achieve a proper matching of revenues (consisting primarily of
Tax Revenues and certain interest earnings) and debt service due on the Bonds during
each year that the Bonds are outstanding. Amounts deposited in the Special Tax Fund
and in the Bond Fund (will be expended within thirteen (13) months of the date of
deposit, and the Special Tax Fund and the Bond Fund will be depleted at least once a
year except for a reasonable carryover amount not in excess of the greater of one year's
earnings on said Funds or one-twelfth (1/12th) of annual debt service on the Bonds.
Amounts in the Special Tax Fund and the Bond Fund will be invested without yield
restrictions.Interest earnings and profits resulting from investment of said Funds will be
retained in the Fund in which investment was made and used for the purposes thereof.
(h) Current Tax Revenues. Transfers from the Special Tax Fund of Tax Revenues
to the Bond Fund will be made from current Tax Revenues and surplus Tax Revenues
will be deposited in the Administrative Expense Fund and the Services Fund. The
Administrative Expense Fund and the Services Fund are not available for payment of
debt service on the Bonds. Excess Tax Revenues are not expected to be available for
payment of debt service on the Bonds in the event of financial difficulties of the City,
and do not constitute a sinking fund for payment of debt service on the Bonds.
(i) Rebate Requirement.The City has covenanted in the Fiscal Agent Agreement to
comply with requirements for rebate of excess investment earnings to the federal
government.
(j) Exclusion of Certain Funds for Purposes of Rebate Requirement. No portion of the
Bonds will constitute a private activity bond within the meaning of section 141(a) of the
Internal Revenue Code of 1986 (the "Code"), the average maturity of the Bonds is
greater than five (5) years and none of the interest rates on the Bonds vary during the
term of the Bonds.As a consequence of the foregoing,investment earnings on the Special
Tax Fund and the Bond Fund will be excluded for the purposes of computation of the
amount required to rebated to the federal government as referenced in subparagraph (i)
above without regard to the total amount of said earnings.
(k) Yield of the Bonds. The yield of the Bonds is 5.141068%, determined on the
basis of regularly scheduled principal and interest payments on the Bonds discounted to
the issue price of the Bonds (being the face amount of the Bonds of $2,155,000). The
Underwriter has represented that (i) based upon reasonable expectations and actual
facts which existed on October 29, 2001, being the date upon which the City sold the
-3-
Bonds to the Underwriter,the initial offering price of each maturity of the Bonds to the
public(excluding bondhouses, brokers, or similar persons or organizations acting in the
capacity of underwriters or wholesalers) at which a substantial amount of each maturity
of the Bonds was to be sold to the public on the date hereof is par; and (ii) the Bonds of
each maturity were actually offered for the price of par.
(1) No Other Pledged Funds; No Swaps. Except as described herein, no funds have
been pledged to are,or will be,available for payment of debt service on the Bonds which
have been, or will be, invested directly, or indirectly, in securities, obligations, annuity
contracts or other investment-type property producing a yield in excess of the yield on
the Bonds and no transaction has-been, or will be, entered into directly, or indirectly, in
connection with the Bonds involving the swap of fixed rate obligations for variable rate
obligations or vice versa.
(m) No Replacement. No portion of the proceeds of the Bonds will be used as a
substitute for other funds (replacement funds) which are otherwise expected to be
available to be used as a source of financing for any part of the Prior Bonds being
refunded or for payment of debt service on the Bonds and which have been, or will be,
used to acquire direct, or indirect, securities, obligations, annuity contracts or other
investment-type property producing a yield in excess of the yield of the Bonds. No
amounts, other than amounts described above, are reasonably expected to be used or
are pledged to be used to pay debt service on the Bonds. The Bonds will not remain
outstanding longer than necessary to accomplish the purpose for which the Bonds are
issued. All investments in the funds described herein will be purchased in arms-length
transaction or in State and Local Government Securities.
(n) No Improper Financial Advantage. The transaction contemplated herein does
not represent an exploitation of the difference between tax-exempt and taxable interest
rates to gain a material financial advantage and will not increase the burden on the
market for tax-exempt obligations in that the Bonds are not being issued in an amount
greater than otherwise necessary nor are they being issued sooner, or to be outstanding
longer,than otherwise necessary.
(o) Purpose of Refunding. The refunding of the Prior Bonds will enable a present
value debt service savings. The issuance of the Bonds and the refunding of the Prior
Bonds will not enable the City to obtain a material financial advantage (based on
arbitrage) apart from savings attributable to lower interest rates.
(p) No Excess Proceeds. Excess proceeds, if any, of the Bonds allocable to the
refunding of the Prior Bonds will not exceed one percent (1%) of the net proceeds of the
Bonds allocable'to the refunding of the Prior Bonds.
(q) No Hedge Bonds. The Bonds do not constitute "hedge bonds" because the
Prior Bonds were not"hedge bonds."The Prior Bonds were not "hedge bonds" because
on the date of issuance of each of the Prior Bonds, the issuer thereof reasonably
expected that not less than eighty-five percent (85%) of the proceeds of the Prior Bonds
would be expended within three (3) years of that date of issuance and not more than
fifty percent (50%), if any, of the proceeds of the Prior Bonds was invested in
investments having a substantially guaranteed yield for four(4) or more years.
(3) No Adverse Ruline. The City has not received notice that its Certificate as to
Arbitrage may not be relied upon with respect to its own issues nor has it been advised that any
adverse action by the Commissioner of Internal Revenue is contemplated.
-4-
On the basis of the foregoing, it is not expected that the proceeds of the Bonds will be
used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of
section 148 of the Code and applicable regulations. To the best of my knowledge, information
and belief,the expectations herein,expressed are reasonable and there are no facts, estimates or
circumstances, other than those expressed herein, that would materially affect the expectations
herein expressed.
IN WITNESS WHEREOF, I have hereunto set my hand this 14th day of November,
2001.
"u�
Daniel T. Villella,
Director of Finance
-5-
Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
OFFICER'S CERTIFICATE OF THE CITY
The undersigned hereby states and certifies:
(i) that he is the duly appointed, qualified and acting Director of Administrative
Services of the City of Huntington Beach, a chartered city and municipal corporation, duly
organized and existing under the Constitution and laws of the State of California (the "City"),
the City Council of which is the legislative body for the City of Huntington Beach Community
Facilities District No, 1990-1 (Goldenwest/Ellis Area) (the "District"), a community facilities
district duly organized and existing under the laws of the State of California, and as such, is
familiar with the facts herein certified and is authorized to certify the same on behalf of the
City;
(ii) that he is an "Authorized Officer" of the City, as such term is defined in that
certain Fiscal Agent Agreement,dated as of November 1, 2001 (the "Fiscal Agent Agreement"),
by and between the City and U.S. Bank Trust National Association, as fiscal agent;
(iii) that the City Council of the City duly adopted the following resolutions
(collectively, the "Resolutions") which Resolutions have not been amended, modified,
supplemented, rescinded or repealed and remain in full force and effect as of the date hereof,
said date being the delivery date of the "City of Huntington Beach Community Facilities
District No. 1990-1 2001 Special Tax Refunding Bonds," in the aggregate principal amount of
$2,155,000 and dated the date hereof (the "Bonds"):
(a) Resolution No. 6161, entitled "A Resolution of Formation of Community
Facilities District No. 1990-1 (Goldenwest/Ellis Area), Authorizing the
Levy of a Special Tax Within the District, Preliminarily Establishing an
Appropriations Limit for the District and Submitting Levy of the Special
Tax and the Establishment of the Appropriations Limit to the Qualified
Electors of the District, Community Facilities District No. 1990-1"
adopted June 18, 1990, and
(b) Resolution No. 2001-74, entitled "Resolution Authorizing The Issuance Of
2001 Special Tax Refunding Bonds Of The City For And On Behalf Of The
City Of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area), Approving And Directing The Execution Of A
Fiscal Agent Agreement And An Escrow Agreement, Approving The Sale
Of Such Bonds,And Approving Other Related Documents And Actions,"
adopted October 15, 2001,
(iv) that, by all necessary action, the City has duly authorized and approved the
execution and delivery of, and the performance by the City of the obligations on its part
contained or described (as applicable) in, the Official Statement, dated October 29, 2001 (the
"Official Statement"), relating to the Bonds, and in the following agreements (collectively
referred to herein as the"Agreements"):
12007.01
(a) Bond Purchase Agreement, dated October 29, 2001, by and between
O'Connor SWS Securities, as underwriter,and the City,
(b) Fiscal Agent Agreement,
(c) Escrow Agreement, dated as of November 1, 2001, by and between the
City and U.S. Bank Trust National Association, as escrow bank, and
(d) Continuing Disclosure Certificate, dated as of November 1, 2001, by the
City and accepted by U.S. Bank Trust National Association, as
dissemination agent;
(v) that the representations, warranties and covenants of the City contained in the
Agreements are true and correct in all material respects on and as of the date hereof with the
same effect as if made on the date hereof;
(vi) that, to the best knowledge of the City,no event affecting the City or the District
has occurred since the date of the Official Statement which either makes untrue or incorrect in
any material respect as of the date hereof the statements or information relating to the City or
the District contained in the Official Statement or is not reflected in the Official Statement but
should be reflected therein in order to make such statements and information therein not
misleading in any material respect;
(vii) that the City, on behalf of itself and the District, has complied with all the
agreements and has satisfied all the conditions on its part to be performed or satisfied under
the Agreements at and prior to the date hereof;
(viii) that the City's employer identification number for federal tax purposes is 95-
6000732; and
(ix) that for calendar year 2001, and including the Information Return for Tax-
Exempt Governmental Bond Issues,Form 8038-G,filed with the Internal Revenue Service for the
Bonds, the City has filed one(1) Information Returns, Forms 8038-G, with the Internal Revenue
Service, Philadelphia, Pennsylvania 19255,
Dated: November 14, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENEST/EL AREA
By Clay Martin
Dire r of Administrative Services
-2-
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
15c2-12 CERTIFICATE
OF THE CITY OF HUNTINGTON BEACH
The undersigned hereby certifies and represents that he is the duly appointed and acting
Director of Administrative Services of the City of Huntington Beach (the "City") and is duly
authorized to execute and deliver this Certificate and further hereby certifies and reconfirms on
behalf of the City of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) (the "District") as follows:
(1) This Certificate is delivered in connection with the offering and sale of the City of
Huntington Beach Community Facilities District No. 1990-1 2001 Special Tax Refunding Bonds
(the 'Bonds") in order to enable the underwriter of the Bonds to comply with Securities and
Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934 (the 'Rule").
(2) In connection with the offering and sale of the Bonds, there has been prepared a
Preliminary Official Statement,setting forth information concerning the Bonds, the City and the
District(the 'Preliminary Official Statement").
(3) As used herein, 'Permitted Omissions" shall mean the offering price(s), interest
rate(s), selling compensation, aggregate principal amount, principal amount per maturity,
delivery dates, ratings and other terms of the Bonds depending on such matters, all with respect
to the Bonds.
(4) The Preliminary Official Statement is, except for the Permitted Omissions,
deemed final within the meaning of Rule 15c2-12, and the information therein is accurate and
complete except for the Permitted Omissions.
Dated: October 18, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
By
Nf-lay Martin,
Direc9polAdministrative Services
Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
WRITTEN ORDER OF THE CITY TO THE FISCAL AGENT
The undersigned hereby states and certifies:
(i) that he is the duly appointed, qualified and acting Director of Administrative
Services of the City of Huntington Beach, a chartered city and municipal corporation duly
organized and existing under the Constitution and laws of the State of California (the "City"),
and as such, is familiar with the facts herein certified and is authorized to certify the same on
behalf of the City;
(ii) that he is an "Authorized Officer" of the City, as such term is defined in that
certain Fiscal Agent Agreement,dated as of November 1, 2001 (the "Fiscal Agent Agreement"),
by and between the City and U.S. Bank Trust National Association, as fiscal agent (the "Fiscal
Agent"); and
(iii) that the Fiscal Agent is hereby requested and directed to authenticate the bonds
substantially in the form attached as Exhibit A to the Fiscal Agent Agreement, designated "City
of Huntington Beach Community Facilities District No. 1990-1 2001 Special Tax Refunding
Bonds,"issued in the aggregate principal amount of $2,155,000 and dated the date hereof (the
"Bonds"), and to deliver the Bonds to O'Connor SWS Securities, as the original purchaser
thereof (the "Underwriter"), upon receipt by the Fiscal Agent of the purchase price therefor
pursuant to the terms of that certain Bond Purchase Agreement, October 29, 2001, by and
between the City and the Underwriter as follows:
$2,155,000.00 Principal Amount of Bonds
(23,705.00) Less Underwriter's Discount
$2,131,295.00 TOTAL PURCHASE PRICE
Dated: November 14, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
By
lay Martin,
Director Administrative Services
12007.01
Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE REGARDING USE OF PROCEEDS
The undersigned hereby states and certifies:
(i) that he is the duly appointed, qualified and acting Director of Administrative
Services of the City of Huntington Beach, a chartered city and municipal corporation duly
organized and existing under the Constitution and laws of the State of California (the "City"),
and as suchJs familiar with the facts herein certified and is authorized to certify the same on
behalf of the City;
(ii) that,pursuant to the Fiscal Agent Agreement,dated as of November 1, 2001 (the
"Fiscal Agent Agreement"), by and between the City and U.S. Bank Trust National
Association, as fiscal agent (the "Fiscal Agent"), the City is issuing on the date hereof bonds for
and on behalf of the City of Huntington Beach Community Facilities District No. 1990-1
(Goldenwest/Ellis Area) designated "City of Huntington Beach Community Facilities District
No. 1990-1 2001 Special Tax Refunding Bonds," in the aggregate principal amount of
$2,155,000 and dated the date hereof (the 'Bonds");
(iii) that, of the proceeds of the Bonds received by the Fiscal Agent on the date
hereof,the Fiscal Agent will,pursuant to the Fiscal Agent Agreement, transfer $1,881,470.00 to
U.S. Bank Trust National Association, as escrow bank, to be used to refund, together with other
monies, on an advanced basis the City of Huntington Beach, California, Community Facilities
District No. 1990-1 (Goldenwest/Ellis Area) 1990 Special Tax Bonds (the "Prior Bonds");
(iv) that the proceeds of the Prior Bonds were used to finance certain land and
improvements (the "Project"), as more particularly described in Part I of Exhibit A hereto
attached and by this reference herein incorporated;
(v) that Part H of Exhibit A hereto attached describes (a) each use made of the Project
by any person in a trade or business (excluding use by the City and other non-federal
governmental units and use as a member of the public generally), and (b) payments (if any)
directly or indirectly in respect of such use which are to be made after the date hereof;
(vi) that no portion of the proceeds of the Prior Bonds were used directly or indirectly
to make or finance a loan to any person (other than a State or local government unit) or to
acquire property which was or will be sold to any person on an installment sale basis except as
referenced in Part II of Exhibit A;
(vii) that the City expects to use the Project for governmental purposes of the City
during the entire term of the Bonds;
(viii) that the above statements are made on the basis of the facts, estimates and
circumstances in existence on the date hereof and the undersigned has exercised due diligence to
12007.01
assure that all material facts, estimates and circumstances relating to the above statements were
made available to the undersigned and reviewed by the undersigned;
(ix) that to the best knowledge of the undersigned the above statements are reasonable
and there are no other facts, estimates or circumstances, other than those set forth herein, that
would materially affect the statements made herein;and
(x) that the undersigned is aware that Quint&Thimmig LLP is rendering an opinion
on the date hereof substantially to the effect that the interest on the Bonds is excluded from
gross income for federal income tax purposes and in rendering such opinion is relying upon the
statements made herein and in Exhibit A hereto attached.
IN WITNESS WHEREOF,I have hereunto set my hand this 14'day of November,2001.
CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
By
y Martin,
Director Administrative Services
-2-
EXHIBTF A
DESCRIPTION OF PROJECT
I. Describe Project,including all components, in detail:
Improvements to Ellis Avenue in the vicinity of the District, including road
improvements, curb,gutter, sidewalk, storm drain and signal improvements, stripping
and related improvements.
Improvements to Goldenwest Avenue in the vicinity of the District, including road
improvements, curb, gutter, sidewalk, storm drain and signal improvements, striping
and related improvements.
Improvements to Quarterhorse Lane in the vicinity of the District, including road
improvements, curb, gutter, sidewalk, storm drain and signal improvements, striping
and related improvements.
Improvements to Saddleback Lane in the vicinity of the District, including road
improvements, curb, gutter, sidewalk, storm drain and signal improvements, striping
and related improvements.
Improvements to Edwards Street in the vicinity of the District, including road
improvements, curb, gutter, sidewalk, storm drain and signal improvements, striping
and related improvements.
Water and sewer system improvements along Ellis Avenue, Quarterhorse Lane and
Saddleback Lane in the vicinity of the District, including related improvements.
Undergrounding of utilities along one or more of the foregoing streets in the vicinity of
the District, included any related work.
Fire station improvements, including construction and related costs.
Acquisition of emergency vehicle traffic interruption devices.
IL Description of Use of Project
A. Use by any person other than governmental units or members of public generally.
None expected.
B. Payments to be made after date hereof in respect of above use.
None expected.
Exhibit A-1
Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
REQUISITION NO.1 FOR
DISBURSEMENT FROM COSTS OF ISSUANCE FUND
The undersigned hereby states and certifies:
(i) that he is the duly appointed, qualified and acting Director of Finance of the City
of Huntington Beach, a chartered city and municipal corporation duly organized and existing
under the Constitution and laws of the State of California (the "City"), and as such, are
familiar with the facts herein certified and are authorized to certify the same on behalf of the
City;
(ii) that he is an "Authorized Officer" of the City, as such term is defined in that
certain Fiscal Agent Agreement,dated as of November 1, 2001 (the "Fiscal Agent Agreement"),
by and between the City and U.S. Bank Trust National Association, as fiscal agent (the "Fiscal
Agent");
(iii) that pursuant to Section 3.05(B) of the Fiscal Agent Agreement, the undersigned
hereby request the Fiscal Agent to disburse from the Costs of Issuance Fund established under
the Fiscal Agent Agreement to each payee designated on Exhibit A attached hereto and by this
reference incorporated herein, an amount not to exceed the amount set forth opposite such
payee, for payment or reimbursement of previous payment of Costs of Issuance as described on
attached Exhibit A, upon receipt by the Fiscal Agent of an invoice from such payee which
requests payment in an amount which is less than or equal to the amounts set forth on said
Exhibit A;
(iv) that the disbursements described on the attached Exhibit A constitute Costs of
Issuance and are properly chargeable to the Costs of Issuance Fund; and
(v) that capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Fiscal Agent Agreement.
Dated: November 14, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
'1��t2- aniel T. Villella,
Director of Finance
12007.01
EXHIBIT A
REQUISITION NO.1
COSTS OF ISSUANCE FUND
Payee Name and Address Purl2ose of Obligation Amount
Quint&Thimmig LLP Bond and Disclosure Counsel Fees $ 32,000.00
c/o: Comerica Bank and Reimbursable Expenses
ABA No. 121137522
For Credit: Quint&Thimmig LLP
A/C No. 16169838
U.S. Bank Trust National Fiscal Agent Fee,Escrow Bank Fee, $ 7,000.00
Association Fiscal Agent Counsel Fee and
550 South Hope Street, Suite 500 Dissemination Agent Fee
Los Angeles, CA 90071
Grant Thornton LLP Verification Agent Fee $ 2,500.00
c/o: Harris Trust and Savings Bank
ABA #071 000 288
A/C #2750602
Reference No. 0156104.00006
Harrell&Company Financial Advisor Fees $ 20,829.50
333 City Boulevard West, Suite 1430 and Expenses
Orange, CA 92868
Standard&Poor's Credit Market Services Rating Agency Fees $ 2,300.00
55 Water Street, 38th Floor
New York, NY 10041-0003
Exhibit A-1
One Embarcadero Center,Suite 2420
QuW & T-h•m*g
San Francisco, CA 94111-3737
Telephone: 415/765-1550
Attorneys at Law Telecopier: 415/765-1555
November 14, 2001
City of Huntington Beach
2000 Main Street
Huntington.Beach, California 92648
Re: $2,155,000 City of Huntington Beach Community Facilities District No. 1990-1 2001 Special
Tax Refunding Bonds
INVOICE
For Legal Services Rendered as Bond Counsel and
Disclosure Counsel $32,000.00
Please remit to:
By mail:
Quint&Thimmig LLP
One Embarcadero Center,Suite 2420
San Francisco, CA 94111-3737
By wire:
Comerica Bank
ABA No. 121137522
275 Battery Street,Suite 1100
San Francisco, CA 94111-3305
For Credit: Quint&Thimmig LLP
Acct No. 189-153-1061
Our Tax I.D. Number is 94-3263256
November 14, 2001
Dan Villella
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
RE: $2,155,000 City of Huntington Beach
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds
INVOICE
For Financial Consulting Services Rendered: $20,000.00
For Reimbursable Expenditures: 829.50
$20,829.50
Instructions for Wire Transfer:
Union Bank of California,N.A. Tustin Ranch#619
Bank ABA No.: 122000496
For Credit: Harrell &Company Advisors, LLC
Account Number: 6190008728
The City Tower,333 City Boulevard West,Suite 1430,Orange,California 92868
Tel: 714.939. 1464 Fax:714. 939. 1462
Grant Thornton LLP
The US Member Firm of
Grant Thomton International
500 Pillsbury Center
200 South Sixth Street
Minneapolis,MN 55402
612 332 0001 Direct
612 332 8361 Fax
www.grantihomton.com
To: Quoit&Thinunig LLP
At= Mr.Brian D.Quint
One Embarcadero Center, Suite 2420
San Francisco,CA 94111
Date.• November 12,2001
Client-Assignment Code: 0156104.00006
Invoice for cash flow and yield verification services relating to the issuance of$2,155,000
2001 Special Tax Refunding Bonds and preparation of report dated November 14,2001 on
behalf of the City of Huntington Beach,Community Facilities District No. 1990-1 ,
Total Amount of Bill $2,500.00
Tema.- As agreed upon -
Federal ID No. 36-6055558
Wire Information:
Harris Trust and Savings Bank
111 West Monroe Street
Chicago,II. 60690
Routing ABA: 071000 288
Account No.: 2750602
Reference No.: 0156104.00006
Grant Thornton LLP
The US Member Firm of
Grant Thornton International
500 Pillsbury Center
200 South Sixth Street
Minneapolis,MN 55402
612 332 0001 Direct
612 332 8361 Fax
www.grantthomton.com
To. Quoit&Thimmig LLP
Attn.• Mr.Brian D.Quint
One Embarcadero Center,Suite 2420
San Francisco,CA 94111
Date November 12,2001
Remittance Copy
Client Code: 0156104
Assignment Code: 00006
Bill Amount-
Please remit payment to:
Grant Thornton LLP
33847 Treasury Center
Chicago,IL 60694-3800
Standard & Poor's Standard& Poor's Ratings Services Invoice No.: 202865
Federal I.D.:13-1026995 Acct. No.: 1000036184
A Division o/7heMcC,raw•Ht71C rnrgwnies Date: 10/24/01
Page: 1
Purchase Order:
Services Provided To:
Ms. Suzanne Q. Harrell Ms. Suzanne Q. Harrell
Harrell &Co. Advisors, LLC Harrell &Co. Advisors, LLC
333 City Boulevard West 333 City Boulevard West
The City Tower The City Tower
Orange CA 92868 Orange CA 92868
101012 ANALYTICAL SERVICES RENDERED IN CONNECTION WITH: $2,300.00
USD $2,210,000 Huntington Beach Community
Facilities District #1990-1, California, Special
Tax Refunding Bonds (Huntington Beach), Series
2001, due: October 1, 2020
[Fee Discounted For Frequent Issuance]
PLEASE NOTE NEW REMITTANCE ADDRESS BELOW
FOR INQUIRIES CONTACT:
EL RODRIGUEZ
.cL:1-800-767-1896 EXT #5
FAX:1-212-438-5178
MABEL—RODRIGUEZ@sandp.com
Special Instructions TOTAL
AMOUNT DUE $2,300.00
This Invoice Due and Payable As Of: 10/24/01
Make Checks payable To.. To insure Proper Credit DETACH HERE A;and RETURN THIS PORTION-With Your Remittance
�'£ �. d Involve No : 202865-
Standard'& Poor s �+� '" act No.:: l 00003s l sa
A 1 of IheM F3iftcnn>pi sob :Standard'&'Poor's Radnis Services Date:. 10/24/01
Federal I D -13=1026995
O CHECK IF ADDRESS HAS CHANGED - _
AND:INDICATE CHANGE ON REVERSE SIDE
BIU EO T0: REMIT TO. -
�. - _ __
Ms. Suzanne Q. Harrell STANDARD AND POOR'S
Harrell &Co. Advisors, LLC 2542 COLLECTION CENTER DRIVE
333 City Boulevard West CHICAGO, IL 60693
The City Tower
Orange CA 92868
TOTAL
AMOUNT DUE
AMOUNT $2,300.00
10000361844 0202865 00230000 1 700 10 07 1001 0
ENCLOSED
PLEASE NOTE WIRE PAYMENT INSTRUCTIONS ON REVERSE SIDE.
Please See Reverse Side for Subscription Agreement and Other Important Information
Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE REGARDING INVESTMENTS
The undersigned hereby states and certifies:
(i) that she is the duly elected or appointed, qualified and acting City Treasurer of
the City of Huntington Beach, a chartered city and municipal corporation duly organized and
existing under the Constitution and laws of the State of California (the "City"), and as such, is
familiar with the facts herein certified and is authorized to certify the same;
(ii) that she is an "Authorized Officer" of the City, as such term is defined in that
certain Fiscal Agent Agreement, dated as of November 1, 2001 (the "Fiscal Agent Agreement"),
by and between the City and U.S. Bank Trust National Association, as fiscal agent (the "Fiscal
Agent");
(iii) that she has read Article V and Section 6.01 of the Fiscal Agent Agreement and
the definitions contained in the Fiscal Agent Agreement of the capitalized terms used in said
Article and Section;
(iv) that, of that portion of the net proceeds of the City of Huntington Beach
Community Facilities District No. 1990-1 2001 Special Tax Refunding Bonds," in the aggregate
principal amount of $2,155,000 and dated the date hereof (the 'Bonds), received by the Fiscal
Agent on the date hereof, the City hereby authorizes and directs the Fiscal Agent to invest the
amounts deposited into the funds and accounts established pursuant to the Fiscal Agent
Agreement, as set forth on Exhibit A attached hereto and by this reference incorporated herein,
in the Permitted Investments set forth on said Exhibit A;
(v) that the investments set forth on said Exhibit A are traded on established
markets and are to be purchased by the Fiscal Agent in arms length transactions for their Fair
Market Value without regard to the relationship of the yield of such investments to the yield of
the Bonds; and
(vi) that capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Fiscal Agent Agreement.
Dated: November 14, 2001 CITY OF HUNTINGTON BEACH,for and
on behalf of the CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES
DISTRICT NO. 1990-1
(GOLDENWEST/ELLIS AREA)
B
ri Freidenrich,
City Treasurer
12007.01
EXHIBIT A
Principal Deposit Description Interest Purchase
Account Amount Amount by Name Maturity Rate Price
Reserve Fund $ 172,000.00 $ 172,000.00 Local Agency Investment Fund 10-01-2020 Variable Par
$ 400.00 $ 400.00 AIM Treasury Private Class Fund Daily Variable Par
Costs of Issuance Fund $ 77,425.00 $ 12,795.50* AIM Treasury Private Class Fund Daily Variable Par
* This amount is equals the initial deposit into the Costs of Issuance Fund ($77,425.00), less disbursements made on the date hereof in the amount of
$64,629.50.
The undersigned hereby acknowledges that the foregoing investment instructions have been complied with.
Dated: November 14,2001 U.S. BANK TRUST NATIONAL ASSOCIATION
as Fiscal Agent
By
Authorized Officer
Exhibit A-1
Quint&Thimmig LLP 11/13/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE OF MAILING FORM 8038-G
I, Christine Tolentino, hereby state and certify that for and on behalf of the City of
Huntington Beach, on the date hereof, I caused to be mailed an Information Return for Tax-
Exempt Governmental Obligations, Form 8038-G, relating to the captioned financing, postage
prepaid, by first class certified mail, return-receipt requested, to the Internal Revenue Service
Center, Philadelphia, Pennsylvania 19255, a true copy of which Information Return is hereto
attached.
Dated: November 14, 2001
By
Christine Tolentino,
Project Manager,
Quint & Thimmig LLP
12007.01
Form 8038-G Information Return for Tax-Exempt Governmental Obligations
►Under Internal Revenue Code section 149(s) OMB No.1545-0720
(Rev.November 2000) ► See separate Instructions
Department
eRevenue Service Caution:if Me issue price is under$100,000,use Fort 8038-GC.
Reporting Authority If Amended Return,check here ► ❑
ssuers name 2 Issuer's employer Identification number
CITY OF HUNTINGTON BEACH 95-6000732
3 Number and street(or P.O.Box t mall is not delivered to street address) Room/suite 4 Report number
2000 Main Street
3 1
5 City,town,or post office,state,and ZIP code 6 Date of issue
Huntington Beach CA 92648 November 14,2001
7.NameofMw 8 CUSIP number
City of Huntington Beach Community Facilities District No.1990-01 Special Tax Refunding Bonds 446188A07
9 Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone number of officer or legal representative
Daniel T.Villella,Director of Finance ( 714/536-5225
IUMMIlType of Issue check applicable box es and enter the issue rice See instructions and attach schedule
11 ❑ Education 11
12 ❑ Health and hospital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13 ❑ Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14 ❑ .Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15 ❑ Environment(including sewage bonds) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 ❑ Housing 16
17 ❑ Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18 ® Other. Describe ► providing funds for redemption of outstanding bonds 181 2,155,000.00
19 If obligations are TANS or RANs,check box ► ❑ If obligations are BANS,check box ► ❑ ROM
20 If obligations are in the form of a lease or installment sale,check box . . . . . . . . . . . . . . . . : ► ❑
Description of Obligations. Complete for the entire issue for which this form is being filed.
(a)Final maturity date (b)Issue price (c)Stated redemption (d)Weighted N)Yield
price at maturity average maturity
.1 10/01/20 $ 2,155,000.00 $ 2,155,000.00 11.11 Years 5.1408
Uses of Proceeds of Bond Issue (including underwriters' discount)
Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . . . 22 0.00
23 Issue price of entire issue(enter amount from line 21,column(b)) . . . . . . . . . . . . . . • • . . , • • • 23 2,155,000.00
24 Proceeds used for bond issuance costs(including underwriters'discount) . . . . . . . 24 101,130.00 ,;;
25 Proceeds used for as&enhancement . . . . . . . . . . . . . . . . . . . . . 25 0.00
26 Proceeds allocated to reasonably required reserve or replacement fund , . . , 26 172,400.00
27 Proceeds used to currently refund prior issues. . . . . . . . . . . . . . . . . . . . 27 0.00 .
28 Proceeds used to advance refund prior Issues . . . . . . . . . . . . . . . . . . . . . 28 1,881,470.00
29 Total(add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 2,155,000.00
30 Nonrefunding proceeds of the issue subtract line 29 from line 23 and enter amount here 30 0.00
Descri tion of Refunded Bonds (Complete this part only for refunding bonds.
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . . . . . . . . . . . . ► n/a years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . . . . . . . . . . . ► 12.0411 years
33 Enter the last date on which the refunded bonds wig be called . . . . . . . . . . . . . . . . . . . . . . . . . ► 04/01/02
34 Enter the date(s)the refunded bonds were issued ► 10/1/1997
Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35
36a Enter the amount of gross proceeds invested or to be invested In a guaranteed investment oolmact(see instructions) 36a
b Enter the final maturity date of the guaranteed investment contract ► W.
37 Pooled financings:a Proceeds of this issue that are to be used to make bans to other governmental units 37a
b If this issue is a loan made from the proceeds of another tax-exempt issue,check box ► ❑ and enter the name of the
issuer ► and the date of the issue ►
38 If the issuer has designated the issue under section 265(b)(3)(B)0)(III)(small issuer exception),check box ► ❑
. . . . . . . . . . . . . .
39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box. . . . . . . . . . . . . . . . . . . . ► ❑
40 If the issuer has identified a hedge, check box , ► ❑
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and
;;ifY9Tzftrs
beatknowledge and belief, they are true, correct, and complete.
sign
Here Daniel T.Villella
11/14/01 Director of Finance
auth6rfzed resentattve Date ' Type or print name and title
For Paperwork Reduction Act Notice, see page 2 of the Instructions. Cat.No.63773S Farm 8038-G (Rev. 11-20M)
�y INS
'g OFFICE OF
Y
CITY ATTORNEY
I P.O. BOX 190
2000 Main Street Telephone
Gail Hutton Huntington Beach, California 92648 (714) 536-5555
City Attorney Fax (714) 374-1590
November 14, 2001
O'Connor SWS Securities
3 Civic Plaza, Suite 100
Newport Beach, CA 92660
Re: $2,155,000 City of Huntington Beach Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds
Ladies and Gentlemen:
I am the City Attorney for the City of Huntington Beach (the "City") and have acted as
such in connection with the issuance by the City, for and on behalf of the City of
Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area)
(the "District") of its "City of Huntington Beach Community Facilities District No. 1990-
1 2001 Special Tax Refunding Bonds," in the aggregate principal amount of$2,155,000
and dated the date hereof(the "Bonds"). The Bonds are being issued pursuant to that
certain Fiscal Agent Agreement, dated as of November 1, 2001 (the "Fiscal Agent
Agreement"), by and between the City and U.S. Bank Trust National Association, as
fiscal agent, and Resolution No. 2001-74, adopted by the City Council of the City on
October 15, 2001 (the"Resolution"). Capitalized terms used herein and not otherwise
identified shall have the same meanings as assigned to them in that certain Bond
Purchase Agreement,dated October 29, 2001 (the "Purchase Agreement"), by and
between O'Connor SWS Securities, as underwriter, and the City.
In rendering the opinion set forth herein, I have made no search, inquiry, investigation or
other examination concerning the records or files of any court,public board or body, or
other public records, other than the City, and my opinion as expressed herein does not
extend to any matter which might be disclosed as a result of any further search, inquiry,
investigation or other examination.
Whenever a statement herein is qualified "to the best of my knowledge," it is intended to
indicate that,during the course of my representation of the City in connection with this
transaction, no information that would give me actual knowledge of the inaccuracy of
such statement has come to my attention. I have not undertaken any independent
investigation to determine the accuracy of such statements, and any limited inquiry
undertaken by me during the preparation of this opinion letter should not be regarded as
such investigation. No inference as to my knowledge of any matters bearing on the
O'Connor SWS Securities
November 8, 2001
Page 2
accuracy of any such statements should be drawn from the fact of my representation of the
Issuer.
My opinion set forth herein does not extend to, and I express no opinion herein with respect to,
(a) any laws of any jurisdictions (including any federal law), other than the laws of the State of
California, and (b) any matters covered by the securities, usury or tax laws, decisions, rules or
regulations of any jurisdiction.
In that connection, we have examined originals, or copies certified or otherwise identified to our
satisfaction, of the documents described herein and such other documents as we have considered
necessary to render this opinion.
Based upon such examination, we are of the opinion, under existing law, that:
(A) the City is duly organized and validly existing as a municipal corporation under
and by virtue of the Constitution and laws of the State,with full legal right, power
and authority to adopt the Resolution;
(B) the District is a community facilities district duly organized and validly existing
under the laws of the State, including the Law;
(C) no action, suit,proceeding, inquiry or investigation, at law or in equity,before or
by any court, regulatory agency,public board or body is pending with respect to
which the City has received service of process, or to the best of my knowledge,
threatened, in any way affecting the existence of the City or the titles of the City's
officials to their respective offices, or seeking to restrain or to enjoin the issuance,
sale or delivery of the Bonds or the application of the proceeds thereof in
accordance with the Fiscal Agent Agreement, or the collection or application of
the Special Taxes to pay the principal of and interest on the Bonds, or in any way
contesting or affecting the validity or enforceability of the Bonds,the City
Documents or any action of the City contemplated by any of said documents, or
in any way contesting the completeness or accuracy of the Official Statement or
the powers of the City or its authority with respect to the Bonds, the City
Documents or any action on the part of the City contemplated by and of said
documents, wherein an unfavorable decision,ruling, or finding could materially
adversely affect the validity or enforceability of the Bonds or the City Documents;
Very truly yours,
GAIL HUTTON
City Attorney
SF/s:2001 Letters:O'Connor 11-8
1
UIUt � Thimmigup One Embarcadero Center,Suite 2420
San Francisco, CA 94111-3737
Telephone: 415/765-1550
Attorneys at Law Telecopier: 415/765-1555
November 14, 2001
City of Huntington Beach
2000 Main Street
Huntington Beach, California 92648
O'Connor SWS Securities
3 Civic Plaza, Suite 100
Newport Beach, California 92660
Harrell & Company Advisors, LLC
333 City Boulevard West, Suite 1430
Orange, California 92868
OPINION: $2,155,000 City of Huntington Beach Community Facilities District No.
1990-1 2001 Special Tax Refunding Bonds
Ladies and Gentlemen:
We have acted as disclosure counsel in connection with the issuance by the City of
Huntington Beach (the "City") of $2,155,000 aggregate principal amount of the bonds of the
City designated the "City of Huntington Beach Community Facilities District No. 1990-1 2001
Special Tax Refunding Bonds" (the "Bonds"),pursuant to the Mello-Roos Community Facilities
Act of 1982, as amended (Section 53311 et seq., of the California Government Code) (the
"Act"), a Fiscal Agent Agreement, dated as of November 1, 2001 (the "Fiscal Agent
Agreement"), by and between the City for and on behalf of the City of Huntington Beach
Community Facilities District No. 1990-1 (Goldenwest/Ellis Area), and U.S. Bank Trust
National Association, as fiscal agent, and Resolution No. 2001-74, adopted by the City Council
of the City on October 15, 2001 (the "Resolution"). The Bonds are being sold by the City to
O'Connor SWS Securities, as underwriter (the "Underwriter"), pursuant to that certain Bond
Purchase Agreement, dated October 29, 2001, by and between the Underwriter and the City.
This firm is acting as disclosure counsel to the City in connection with the issuance of the
Bonds, and this letter is being delivered in our capacity as disclosure counsel to the City and
not as counsel to the City or the Underwriter.
In our capacity as disclosure counsel, we have examined the Official Statement of the
City, dated October 29, 2001, relating to the Bonds (the "Official Statement"), the Continuing
Disclosure Certificate of the City, dated as of November 1, 2001 (the "Continuing Disclosure
Certificate") and originals, or copies certified or otherwise identified to our satisfaction as being
true copies of the originals, of such proceedings of the City, certificates of the City, the Fiscal
Agent and others and such other documents as we have deemed necessary for the purposes of
this letter.
City of Huntington Beach November 14, 2001
O'Connor SWS Securities Page 2
Harrell & Company Advisors, LLC
As to questions of fact material to our opinion, we have relied upon representations of
the City contained in the Fiscal Agent Agreement and in the certified proceedings and other
certifications of public officials furnished to us, without undertaking to verify the same by
independent investigation.
Based upon our examination we are of the opinion,under existing law, that:
1. The provisions of the Continuing Disclosure Certificate comply with the
requirements of Rule 15c2-12 promulgated under the Securities Act of 1934.
2. The Bonds are exempt from registration under Section (3)(a)(2) of the
Securities Act of 1933, as amended.
3. The Fiscal Agent Agreement is exempt from qualification under the Trust
Indenture Act of 1939, as amended.
We have not undertaken to determine independently or assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the Official Statement.
However, in the course of our participation in the preparation of the Official Statement, as
disclosure counsel and bond counsel to the City, we have been in contact with representatives
of the City's Financial Advisors, the Underwriter, and others, concerning the contents of the
Official Statement and related matters. Based upon the foregoing, nothing has come to our
attention to lead us to believe that the Official Statement, including the cover page and all
appendices thereto (but excluding therefrom financial statements and statistical data, and
information regarding The Depository Trust Company, and its book entry system, as to which
no opinion need be expressed) contains an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made,not misleading.
This letter is intended for the information solely of the addressees hereof and solely for
the purposes of the transactions contemplated by the Fiscal Agent Agreement and is not to be
relied upon by any other person or entity, or for any other purpose, or quoted in whole or in
part, or otherwise referred to, in any document, or to be filed with any governmental or other
administrative agency or other person or entity for any purpose without our prior written
consent.
We do not undertake to advise you of matters which may come to our attention
subsequent to the date hereof which may affect our conclusions expressed herein.
Respectfully ubmitted,440
U.S. BANK TRUST NATIONAL ASSOCIATION
AUTHORIZED SIGNER(S)
I hereby certify that the following is a true and exact extract from Section 7.1 of Article VII of
the Bylaws presently in effect for U.S.Bank Trust National Association, an association organized
and existing under the laws of the United States:
Section 7.1" Execution of Instruments. All agreements, checks, drafts, orders,
indentures, notes, mortgages, deeds, conveyances, transfers, endorsements,
assignments, certificates, declarations, receipts, discharges, releases,
satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds,
undertakings, guarantees, proxies and other instruments or documents may be
signed, countersigned, executed, acknowledged, endorsed, verified, delivered or
accepted on behalf of the Association, whether in a fiduciary capacity or
otherwise, by any officer of the Association, or such employee or agent as may
be designated from time to time by the board by resolution, or by the Chairman
or the President by written instrument, which resolution or instrument shall be
certified as in effect by the Secretary or an Assistant Secretary of the
Association. The provisions of this section are supplementary to any other
provision of the Articles of Association or Bylaws.
I further certify that Tamara Mawn, Vice President of U.S. Bank Trust National Association,
has been duly elected and qualified and now holds the office listed herein, and that the signature
of such officer is authentic:
Tamara Mawn
Vice President WILL SIGN:
IN WITNESS WHEREOF, I have hereunto set my hand to be affixed hereto this 14th day of
November 2001.
U.S.Bank Trust National Association
By: Alicia Estrada
Assistant Secretary
Quint&Thimmig LLP 11/13/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE OF FISCAL AGENT
The undersigned hereby states and certifies:
(i) that the undersigned is an authorized officer of U.S. Bank Trust National
Association, as fiscal agent (the "Fiscal Agent") under that certain Fiscal Agent Agreement,
dated as of November 1, 2001 (the "Fiscal Agent Agreement"), by and between the City of
Huntington Beach (the "City") and the Fiscal Agent, and as such, is familiar with the facts
herein certified and is authorized to certify the same on behalf of the Fiscal Agent;
(ii) that the Fiscal Agent is a national banking association, is organized and existing
under and by virtue of the laws of the United States of America, and has the full power and
authority to accept and perform its duties under the Fiscal Agent Agreement and the Continuing
Disclosure Certificate, dated as of November 1, 2001, by the City and as accepted by the
Fiscal Agent, as dissemination agent (the "Dissemination Agent") (the foregoing agreement are
collectively referred to herein as the"Agreements");
(iii) that subject to the provisions of the Fiscal Agent Agreement,the Fiscal Agent will
apply the proceeds from the above-captioned bonds (the 'Bonds") to the purposes specified in
the Fiscal Agent Agreement;
(iv) that the Bonds have been duly authenticated on behalf of Fiscal Agent;
(v) that there is no action, suit, proceeding, inquiry or investigation, at law or in
equity,before or by any court, regulatory agency, public board or body pending or, to the best
knowledge of the undersigned,threatened in any way affecting the existence of the Fiscal Agent,
or seeking to restrain or to enjoin the execution and delivery of the Agreements or the
authentication of the Bonds, by the Fiscal Agent, or in any way contesting or affecting the
validity or enforceability, as against the Fiscal Agent, of the Agreements or any action of the
Fiscal Agent contemplated by any of the Agreements, or in which an adverse outcome would
materially and adversely affect the ability of the Fiscal Agent to perform its obligations under
the Agreements;
(vi) that the Fiscal Agent is not in breach of or in default under any applicable law or
administrative rule or regulation of the State of California or the United States of America, or of
any department, division, agency or instrumentality of either thereof, or under any applicable
court or administrative decree or order,or under any loan agreement,note,resolution, indenture,
contract, agreement or other instrument to which the Fiscal Agent is a party or is otherwise
subject or bound,a consequence of which could be to materially and adversely affect the ability
of the Fiscal Agent to perform its obligations under the Agreements;and
(vii) that the authentication of the Bonds, and the execution and delivery of the
Agreements by the Fiscal Agent, and compliance with the provisions of each, will not conflict
with or constitute a breach of or default under any applicable law. or administrative rule or
regulation of the State of California or the United States of America, or of any department,
12007.01
division, agency or instrumentality of either thereof, or under any applicable court or
administrative decree or order, or under any loan agreement, note, ordinance, resolution,
indenture, contract, agreement or other instrument to which the Fiscal Agent is a party or is
otherwise subject or bound, a consequence of which could be to materially and adversely affect
the ability of the Fiscal Agent to perform its obligations under the Agreements.
Dated: November 14, 2001 U.S. BANK TRUST NATIONAL ASSOCIATION,
as Fiscal Agent
By
Authorized Offic
4.
-2-
Quint&Thimmig LLP 11/13/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
FISCAL AGENT'S RECEIPT OF PROCEEDS
The undersigned hereby states and certifies:
(i) that the undersigned is an authorized officer of U.S. Bank Trust National
Association, as fiscal agent (the "Fiscal Agent") under that certain Fiscal Agent Agreement,
dated as of November 1, 2001 (the "Fiscal Agent Agreement"), by and between the City of
Huntington Beach (the "City") and the Fiscal Agent, and as such, is familiar with the facts
herein certified and is authorized to certify the same on behalf of the Fiscal Agent;
(ii) that,on the date hereof, the Fiscal Agent received from O'Connor SWS Securities,
as underwriter(the "Underwriter"), the amount of $2,131,295, representing the purchase price
of the captioned bonds designated "City of Huntington Beach Community Facilities District
No. 1990-1 2001 Special Tax Refunding Bonds," in the aggregate principal amount of
$2,155,000 and dated the date hereof (the "Bonds"), and has deposited such amount this date
pursuant to Section 3.02 of the Fiscal Agent Agreement as follows:
$ 172,400.00 Deposited into the Reserve Fund
77,425.00 Deposited into the Costs of Issuance Fund
1,881,470.00 Transferred on the date hereof to U.S. Bank Trust
National Association, as escrow bank, for deposit
into the Refunding Fund
$2,131,295.00 TOTAL DEPOSITED OR TRANSFERRED THIS
DATE
(iii) that the purchase price for the Bonds has been calculated by the Underwriter and
represented to the Fiscal Agent by the City to be as follows:
$2,155,000.00 Principal Amount of Bonds
(23,705.00) Less Underwriter's Discount
$2,131,295.00 TOTAL PURCHASE PRICE RECEIVED THIS DATE
12007.01
(v) and, that capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Fiscal Agent Agreement.
Dated: November 14, 2001 U.S. BANK TRUST NATIONAL ASSOCIATION,
as Fiscal Agent
By
Authorized Officer
-2-
Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE OF ESCROW BANK
The undersigned hereby states and certifies:
(i) that the undersigned is an authorized officer of U.S. Bank Trust National
Association, as escrow bank (the "Escrow Bank") under that certain Escrow Agreement, dated
November 14, 2001 (the "Escrow Agreement"), by and between the City of Huntington Beach
and the Escrow Bank, and as such, is familiar with the facts herein certified and is authorized
to certify the same on behalf of the Escrow Bank;
(ii) that the Escrow Bank is a national banking association, duly organized and
existing under and by virtue of the laws of the United States of America, and has the full power
and authority to accept and perform its duties under the Escrow Agreement;
(iii) that there is no action, suit, proceeding, inquiry or investigation, at law or in
equity,before or by any court, regulatory agency, public board or body pending or, to the best
knowledge of the undersigned, threatened in any way affecting the existence of the Escrow
Bank, or seeking to restrain or to enjoin the execution and delivery of the Escrow Agreement or
in any way contesting or affecting the validity or enforceability, as against the Escrow Bank, of
the Escrow Agreement or any action of the Escrow Bank contemplated by the Escrow
Agreement,or in which an adverse outcome would materially and adversely affect the ability of
the Escrow Bank to perform its obligations under the Escrow Agreement;
(iv) that the Escrow Bank is not in breach of or in default under any applicable law
or administrative rule or regulation of the State of California or the United States of America, or
of any department,division, agency or instrumentality of either thereof,or under any applicable
court or administrative decree or order,or under any loan agreement,note,resolution, indenture,
contract, agreement or other instrument to which the Escrow Bank is a party or is otherwise
subject or bound,a consequence of which could be to materially and adversely affect the ability
of the Escrow Bank to perform its obligations under the Escrow Agreement;and
(v) that the execution and delivery of the Escrow Agreement by the Escrow Bank,
and compliance with the provisions thereof, will not conflict with or constitute a breach of or
default under any applicable law or administrative rule or regulation of the State of California
or the United States of America, or of any department, division, agency or instrumentality of
either thereof, or under any applicable court or administrative decree or order, or under any
loan agreement, note, ordinance, resolution, indenture, contract, agreement or other instrument
to which the Escrow Bank is a party or is otherwise subject or bound, a consequence of which
could be to materially and adversely affect the ability of the Escrow Bank to perform its
obligations under the Escrow Agreement.
Dated: November 14, 2001 U.S. BANK TRUST NATIONAL ASSOCIATION,
as Escrow Bank
By
Authorized Officer
12007.01
Quint&Thimmig LLP 11/13/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
ESCROW BANKS RECEIPT AND APPLICATION OF FUNDS
The undersigned hereby states and certifies:
(i) that the undersigned is an authorized officer of U.S. Bank Trust National
Association, as escrow bank (the "Escrow Bank") under that certain Escrow Agreement, dated
as of November 1, 2001 (the "Escrow Agreement"), by and between the City of Huntington
Beach (the "City") and the Escrow Bank, and as successor fiscal agent (the "Prior Fiscal
Agent") under that certain Fiscal Agent Agreement, dated as of June 1, 1990, by and between
the City and the Prior Fiscal Agent, and as such, is familiar with the facts herein certified and is
authorized to certify the same on behalf of the Escrow Bank and the Prior Fiscal Agent;
(ii) that the Escrow Bank has established an escrow fund created pursuant to Section
2 of the Escrow Agreement(the"Escrow Fund");
(iii) that, pursuant to Section 3 of the Escrow Agreement, the Escrow Bank has
received on the date hereof the total sum of $2,126,285.00 for deposit in the Escrow Fund, as
follows:
(a) $1,881,470.00, derived from the proceeds of the sale of the Refunding Bonds,
(b) $192,487.00, derived from amounts on deposit in the reserve fund
established for the Prior Bonds, and
(c) $52,328.00, derived from amounts on deposit in the improvement fund
established for the Prior Bonds;
(iv) that, pursuant to Section 3 of the Escrow Agreement, the Escrow Bank has
invested on the date hereof the amount of $2,126,284.00 deposited into the Escrow Fund for
the purchase of the Original Federal Securities set forth on Exhibit A attached to the Escrow
Agreement,and holds the remaining$1.00,in cash,uninvested;
(v) that, pursuant to Section 5 of the Escrow Agreement, upon receipt by the Escrow
Bank from the Fiscal Agent under the Fiscal Agent Agreement of certain amounts remaining on
deposit in the funds and accounts established under the Fiscal Agent Agreement as of the date
of delivery of the Bonds,such amount received shall be applied by the Escrow Bank as follows:
(a) $668,403.00, derived from amounts on deposit in the bond fund established
for the Prior Bonds,shall be transferred to the City for deposit in the Services
Fund established in,and held by the City under,the Fiscal Agent Agreement,
(b) $10,958.41, derived from amounts on deposit in the administrative expense
fund established for the Prior Bonds, shall be transferred to the City for
deposit in the Administrative Expense Fund established in, and held by the
City under,the Fiscal Agent Agreement,and
(c) $32,250.00, derived from amounts on deposit in the improvement fund
established for the Prior Bonds,shall be transferred to the City to be used to
complete the Project;
(viii) and, that capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Escrow Agreement.
Dated: November 14, 2001 U.S. BANK TRUST NATIONAL ASSOCIATION,
as Escrow Bank and as Prior Fiscal Agent
By
Authorized Officer
-2-
DORSEY & WHITNEY LLP
MINNEAPOLIS CENTER TOWER BILLINGS
NEW YORK 650 TOWN CENTER DRIVE, SUITE 1850 GREAT FALLS
SEATTLE P.O.Box 5066 MISSOULA
DENVER COSTA MESA, CALIFORNIA 92626-1925 BRUSSELS
WASHINGTON,D.C. TELEPHONE: (714) 662-7300 FARGO
DES MOINES FAX: (714) 662-5576 HONG KONG
ANCHORAGE November 14, 2001 ROCHESTER
LONDON SALT LAKE CITY
COSTA MESA VANCOUVER
City of Huntington Beach
Huntington Beach, California
O'Connor SWS Securities
Newport Beach, California
Re: City of Huntington Beach
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds
Ladies and Gentlemen:
We are counsel for U.S. Bank Trust National Association, a national banking
association(the "Fiscal Agent") in connection with the execution by the Fiscal Agent of the
Fiscal Agent Agreement, dated as of November 1, 2001 (the"Agreement"), by and between the
City of Huntington Beach and the Fiscal Agent, as Fiscal Agent, relating to the above-captioned
Bonds, and are generally familiar with the Articles of Association and the Bylaws of the Fiscal
Agent and are also familiar with the corporate proceedings of the Fiscal Agent with regard to its
authorization, execution and delivery of the Agreement and the Escrow Agreement. Capitalized
terms used herein shall have the respective meanings ascribed to them in the Agreement, except
as otherwise defined herein.
We have examined such documents and reviewed such questions of law as we
have considered necessary and appropriate for purposes of this opinion. In such review, we have
assumed the genuineness of all signatures,the authenticity of all documents submitted to us as
originals, and the conformity with originals of all documents submitted to us as copies. Where
questions of fact material to our opinions expressed below were not established independently,
we have relied upon statements of officers of the Fiscal Agent as contained in their certificates.
References to the Fiscal Agent herein shall be deemed to include references to the Fiscal Agent
in its capacity as Escrow Bank under the Escrow Agreement.
Based upon the foregoing, we are of the opinion that:
1. The Fiscal Agent is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of America.
DORSEY & WHITNEY LLP
2. The Fiscal Agent has all requisite corporate power, authority and legal
right to execute and deliver the Agreement and the Escrow Agreement, and to perform its
obligations thereunder, and has taken all necessary corporate action to authorize the execution
and delivery thereof and the performance of its obligations thereunder.
3. The Fiscal Agent has duly authorized, executed and delivered the
Agreement and the Escrow Agreement. Assuming the due authorization, execution and delivery
thereof by the other parties thereto,the Agreement and the Escrow Agreement are the legal, valid
and binding agreements of the Fiscal Agent, enforceable in accordance with their terms against
the Fiscal Agent.
The opinions set forth above are subject to the following qualifications and
exceptions:
(a) The opinions are subject to the effect of any applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar laws of
general application affecting creditors' rights; and
(b) The opinions are subject to the effect of general principles of equity,
including(without limitation) concepts of materiality,reasonableness, good faith and fair
dealing, and other similar doctrines affecting the enforceability of agreements generally
(regardless of whether considered in a proceeding in equity or at law).
Our opinions expressed above are limited to the laws of the State of California
and the federal laws of the United States of America.
The foregoing opinions are being furnished to you solely for your benefit and may
not be relied upon by, nor may copies be delivered to, any other person without our prior written
consent.
Very truly yours,
4
Ratings Services Steven J Murphy
55 Water Street,38th Floor Managing Director
New York,NY 10041-0003 Public Finance Ratings
Tel 212 438.2066
Reference No.:993445
Standard & Poor's
A Division o%111eMcGraw•Hill Companies
October 16, 2001
Ms. Suzanne Q. Harrell
Managing Director
Harrell & Company Advisors, LLC
333 City Boulevard West, Suite 1430
Orange, CA 92868
Re: $2,210,000 Huntington Beach Community Facilities District No. 1990-1, California, Special
Tax Refunding Bonds(Huntington Beach), Series 2001, dated:Date of Delivery, due:
October 1, 2020
Dear Ms. Harrell:
Pursuant to your request for a Standard&Poor's rating on the above debt obligations, we have reviewed
the information furnished to us and,subject to the terms and conditions of the MEMORANDUM OF
AGREEMENT on the reverse side hereof,have assigned a rating of`BBB' to the obligations. S&P
views the outlook for this rating over the intermediate to longer term as stable.
Please note thatthe ongoing information required includes annual audits and budgets and,for revenue
bond ratings in connection with construction financing,progress reports,not less often than quarterly,
covering the project being financed and should be forwarded to:
Standard&Poor's Ratings Services
Public Finance
SS Water Street, Muni Drop Box No. 1, 38-3-10-New York, NY 10041-0003
S&P relies on the issuer and its counsel,accountants and other experts for the accuracy and
completeness of the information submitted in connection with the rating. In addition,it should be
understood that the rating is not a "market"rating nor a recommendation to buy,hold or sell these
securities. Please note that the rating,as is the case with all of S&P's municipal ratings,does not
address the likelihood that interest payable on the Bonds may be deemed or declared includable in the
gross income of Bondholders by the relevant authorities at any time.
In the event that you decide to include this rating in an Official Statement,prospectus or other offering
literature,we request that you include S&P's definition of the rating together with a statement that the
rating may be changed, suspended or withdrawn as a result of changes in, or unavailability of,
information.
We are pleased to have been of service to you. Thank you for choosing Standard& Poor's Ratings
Services. If you have any questions,please contact us.
Very truly yours,
ed
cc: Mr. Dan Villella, Director of Finance
City of Huntington Beach
Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT'NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
CERTIFICATE OF UNDERWRITER
The undersigned hereby states and certifies:
(i) that s/he is the authorized representative of O'Connor SWS Securities, as
underwriter (the "Underwriter") of the above-captioned bonds (the "Bonds") and as such, is
familiar with the facts herein certified and is authorized to certify the same on behalf of the
Underwriter;
(ii) that based upon reasonable expectations and actual facts which existed on
October 29,2001,being the date upon which the City of Huntington Beach (the "City") sold the
Bonds to the Underwriter, the initial offering price of each maturity of the Bonds to the public
(excluding bondhouses, brokers or similar persons or organizations acting in the capacity of
underwriters or wholesalers) at which a substantial amount of each maturity of the Bonds was
to be sold to the public on the date hereof is par;
(iii) that the Bonds of each maturity were actually offered for the price of par;
(iv) that the establishment of the Reserve Fund in the amount of the Reserve
Requirement was vital to the marketing of the Bonds and reasonably required to assure the
payment of debt service on the Bonds; and
(v) that capitalized terms used herein and not otherwise defined shall have the same
meanings ascribed to them as in that certain Fiscal Agent Agreement, dated as of November 1,
2001, by and between the City and.U.S. Bank Trust National Association, as fiscal agent.
Dated: November 14, 2001 O'CONNOR SWS SECURITIES
By
utho ' ed resentative
u7
EXHIBIT A
Maturity
(October 1) Principal Amount Interest Rate Price*
2007 $ 500,000 4.000% 100.000%
2012 510,000 4.750 100.000
2020 1,145,000 5.400 100.000
* Stated as a percentage of par.
Exhibit A-1
Quint&Thimmig LLP 11/6/01
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.1990-1
2001 SPECIAL TAX REFUNDING BONDS
RECEIPT FOR BONDS
The undersigned, on behalf of O'Connor SWS Securities, as underwriter (the
"Underwriter"),hereby acknowledges receipt this date of the following described bonds issued
by the City of Huntington Beach for and on behalf of the City of Huntington Beach Community
Facilities District No. 1990-1 (Goldenwest/Ellis Area):
"City of Huntington Beach Community Facilities District No. 1990-1 2001
Special Tax Refunding Bonds," in the aggregate principal amount of $2,155,000
and dated November 14, 2001, issued as fully registered book-entry only bonds,
without coupons, and duly authenticated by U.S. Bank Trust National Association,
as fiscal agent.
Dated: November 14, 2001 O'CONNOR SWS SECURITIES,
as Underwriter
By _
Auto z epresentative
12007.01
No. R-1 ***$500,000***
United States of America
State of California
County of Orange
CITY OF HUNTINGTON BEACH
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bond
INTEREST RATE MATURITY DATE BOND DATE CUSIP#
4.00% October 1,2007 November 14,2001 446188 AR5
REGISTERED OWNER: CEDE&CO.
PRINCIPAL AMOUNT: FIVE HUNDRED THOUSAND DOLLARS
The City.of Huntington Beach, California (the "City") for and on behalf of the City's
Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the "District"), for value
received, hereby promises to pay solely from the Special Tax (as hereinafter defined) to be
collected in the District or amounts in certain funds and accounts held under the Agreement (as
hereinafter defined), to the registered owner named above, or registered assigns, on the
maturity date set forth above, unless redeemed prior thereto as hereinafter provided, the
principal amount set forth above, and to ay interest on such principal amount from the Bond
Date set f o o ec ere aym inte s has been
paid or d rovi d f , s a ly on p 1 Oct 1, en ' Ap 1 1, 2002,at
the interest t r ab e, n the prin ' 1 e o f p d m vailable for
payment. a al oft Bo a a le r to d o ner a of in ful money
of the Uni a tates of America upon p senta on and surren er o s and at a Principal
Office (as defined in the Agreement referred to below) of U.S. Bank Trust National Association
(the "Fiscal Agent"). Interest on this Bond shall be paid by check of the Fiscal Agent mailed on
each interest payment date to the registered owner hereof as of the close of business on the 15th
day of the month preceding the month in which the interest payment date occurs (the "Record
Date") at such registered owner's address as it appears on the registration books maintained by
the Fiscal Agent, or (i) if the Bonds are in book-entry-only form, or (ii) otherwise upon written
request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least
$1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available
funds to the depository for the Bonds or to an account in the United States designated by such
registered owner in such written request,respectively.
Interest on this Bond shall be payable from the interest payment date next preceding the
date of authentication hereof, unless (i) it is authorized on an interest payment date, in which
event it shall bear interest for such interest payment date, or (ii) such date of authentication is
after a Record Date but on or prior to an interest payment date, in which event interest will be
payable from such interest payment date, or (iii) such date of authentication is prior to the first
Record Date, in which event interest will be payable from the Bond Date set forth above;
provided however, that if at the time of authentication of this Bond, interest is in default hereon,
this Bond shall bear interest from the interest payment date to which interest has previously
been paid or made available for payment hereon.
CITY OF HUNTINGTON BEACH
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bond
Page 1 of 5
No. R-2 ***$5101000***
United States of America
State of California
County of Orange
CITY OF HUNTINGTON BEACH
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bond
INTEREST RATE MATURITY DATE BOND DATE CUSIP#
4.75% October 1,2012 November 14,2001 446188 AP9
REGISTERED OWNER: CEDE&CO.
PRINCIPAL AMOUNT: FIVE HUNDRED TEN THOUSAND DOLLARS
The City of Huntington Beach, California (the "City") for and on behalf of the City's
Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the "District"), for value
received, hereby promises to pay solely from the Special Tax (as hereinafter defined) to be
collected in the District or amounts in certain funds and accounts held under the Agreement (as
hereinafter defined), to the registered owner named above, or registered assigns, on the
maturity date set forth above, unless redeemed prior thereto as hereinafter provided, the
principal amount set forth above, and to pay interest on such principal amount from the Bond
Date set fo b mos t payIn h in t has been
paid or d y p vi d y on 1 1 Oct r 1 om e A it 1,2002,at
the intere se a the prin al u eo id r de vailable for
payment. The i pal of s n is payabl o t e t d ne he eof wful money
of the U f A po d ur nd a he Principal
Office (as defined in the Agreement referred to below) of U.S. Bank Trust National Association
(the "Fiscal Agent"). Interest on this Bond shall be paid by check of the Fiscal Agent mailed on
each interest payment date to the registered owner hereof as of the close of business on the 15th
day of the month preceding the month in which the interest payment date occurs (the "Record
Date") at such registered owner's address as it appears on the registration books maintained by
the Fiscal Agent, or (i) if the Bonds are in book-entry-only form, or (ii) otherwise upon written
request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least
$1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available
funds to the depository for the Bonds or to an account in the United States designated by such
registered owner in such-written request,respectively.
Interest on this Bond shall be payable from the interest payment date next preceding the
date of authentication hereof, unless (i) it is authorized on an interest payment date, in which
event it shall bear interest for such interest payment date, or (ii) such date of authentication is
after a Record Date but on or prior to an interest payment date, in which event interest will be
payable from such interest payment date, or (iii) such date of authentication is prior to the first
Record Date, in which event interest will be payable from the Bond Date set forth above;
provided however, that if at the time of authentication of this Bond, interest is in default hereon,
this Bond shall bear interest from the interest payment date to which interest has previously
been paid or made available for payment hereon.
CITY OF HUNTINGTON BEACH
Community Facilities District No.1990-1
2001 Special Tax Refunding Bond
Page 1 of 5
No. R-3 ***$1,145,000***
United States of America
State of California
County of Orange
CITY OF HUNTINGTON BEACH
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bond
INTEREST RATE MATURITY DATE BOND DATE CUSIP#
5.40% October 1,2020 November 14,2001 446188 A07
REGISTERED OWNER: CEDE&CO.
PRINCIPAL AMOUNT: ONE MILLION ONE HUNDRED FORTY-FIVE THOUSAND DOLLARS
The City of Huntington Beach, California (the "City") for and on behalf of the City's
Community Facilities District No. 1990-1 (Goldenwest/Ellis Area) (the "District"), for value
received, hereby promises to pay solely from the Special Tax (as hereinafter defined) to be
collected in the District or amounts in certain funds and accounts held under the Agreement (as
hereinafter defined), to the registered owner named above, or registered assigns, on the
maturity date set forth above, unless redeemed prior thereto as hereinafter provided, the
principal amount set forth.above, and to ay interest on such principal amount from the Bond
Date set f o m re er pa inte st has been
paid or d rovi d lly on A 1 1 Oc r 1 o e A 1 1,2002, at
the interes a or a ve, the prin al eo s p id r e vailable for
payment. a al of is B a t o t e st d ner a eof ' wful money
of the Uni Sta es of America upon p sen a on and surren er o s and at he Principal
Office (as defined in the Agreement referred to below) of U.S. Bank Trust National Association
(the "Fiscal Agent"). Interest on this Bond shall be paid by check of the Fiscal Agent mailed on
each interest payment date to the registered owner hereof as of the close of business on the 15th
day of the month preceding the month in which the interest payment date occurs (the "Record
Date") at such registered owner's address as it appears on the registration books maintained by
the Fiscal Agent, or (i) if the Bonds are in book-entry-only form, or (ii) otherwise upon written
request filed with the Fiscal Agent prior to any Record Date by a registered owner of at least
$1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available
funds to the depository for the Bonds or to an account in the United States designated by such
registered owner in such written request,respectively.
Interest on this Bond shall be payable from the interest payment date next preceding the
date of authentication hereof, unless (i) it is authorized on an interest payment date, in which
event it shall bear interest for such interest payment date, or (ii) such date of authentication is
after a Record Date but on or prior to an interest payment date, in which event interest will be
payable from such interest payment date, or (iii) such date of authentication is prior to the first
Record Date, in which event interest will be payable from the Bond Date set forth above;
provided however, that if at the time of authentication of this Bond, interest is in default hereon,
this Bond shall bear interest from the interest payment date to which interest has previously
been paid or made available for payment hereon.
CITY OF HUN'TINGTON BEACH
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bond
Page 1 of 5
The Bonds are not general obligations of the City, but are limited obligations payable
solely from the revenues and funds pledged therefor under the Agreement. Neither the faith
and credit nor the taxing power of the City (except to the limited extent set forth in the
Agreement) or the State of California or any political subdivision thereof is pledged to the
payment of the Bonds.
This Bond is one of a duly authorized issue of bonds in the aggregate principal amount
of $2,155,000 approved by resolution of the City Council of the City on October 15, 2001 (the
"Resolution"), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended,
Sections 53311, et seq., of the California Government Code (the "Mello-Roos Act") for the
purpose of refunding outstanding bonds of the City issued for the District, and is one of the
series of bonds designated "City of Huntington Beach Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds" (the 'Bonds"). The issuance of the Bonds and the terms and
conditions thereof are provided for by a Fiscal Agent Agreement, dated as of November 1, 2001,
between the City and the Fiscal Agent (the "Agreement") and this reference incorporates the
Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and
conditions. The Agreement is authorized under, this Bond is issued under and both are to be
construed in accordance with,the laws of the State of California.
Pursuant to the Mello-Roos Act, the Agreement and the Resolution, the principal of and
interest on this Bond are payable solely from the annual special tax authorized under the Mello-
Roos Act to be collected within the District (the "Special Tax") and certain funds held under the
Agreement.
Any tax for the payment hereof shall be limited to the Special Tax, except to the extent
that provis' r n , as m by la a Bonds
do not co titut rog n f thfor ity i h ed 1 r p dge, or has
levied or po al xation o th n e dh boTh de a L ole in part, on
October 1, 2011, or on any date thereafter, at a redemption price equal to the principal amount
thereof,together with accrued interest to the date of redemption,without premium.
The Bonds maturing on October 1, 2007, are subject to mandatory sinking payment
redemption in part on October 1, 2002, and on each October 1 thereafter to and including
October.1, 2007, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption, without premium,
from sinking payments as follows:
Redemption Date Redemption Date
(October 1) Amount (October 1) Amount
2002 $85,000 2005 $85,000
2003 75,000 2006 85,000
2004 80,000 2007(maturity) 90,000
The Bonds maturing on October 1, 2012, are subject to mandatory sinking payment
redemption in part on October 1, 2008, and on each October 1 thereafter to and including
October 1, 2012, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption, without premium,
from sinking payments as follows:
CITY OF HUNTINGTON BEACH
Community Facilities District No.1990-1
2001 Special Tax Refunding Bond
Page 2 of 5
Redemption Date Redemption Date
(October 1) Amount (October 1) Amount
2008 $95,000 2011 $110,000
2009 95,000 2012(maturity). 110,000
2010 100,000
The Bonds maturing on October 1, 2020, are subject to mandatory sinking payment
redemption in part on October 1, 2013, and on each October 1 thereafter to and including
October 1, 2020, by lot, at a redemption price equal to the principal amount thereof to be
redeemed, together with accrued interest to the date fixed for redemption, without premium,
from sinking payments as follows:
Redemption Date Redemption Date
(October 1) Amount (October 1) Amount
2013 $120,000 2017 $145,000
2014 125,000 2018 155,000
2015 130,000 2019 160,000
2016 140,000 2020(maturity) 170,000
In the event of a redemption of less than all of the Bonds, the Bonds shall be redeemed
by lot within a maturity,and among maturities in the manner specified in the Agreement.
Notice of redemption with respect to the Bonds to be redeemed shall be given to the
registered owners thereof, in the manner, to the extent and subject to the provisions of the
Agreement.
o r s e e a o e o F-
No t oth p incipal and
interest. E egis ti a tr of regis do thi ne ed y the Fiscal
Agent in boo a by it f p ose and n a d ya si a upon the
certificate a e ation or d on
transfer or exchange hereof shall be valid for any purpose unless made by the
registered owner, by execution of the form of assignment endorsed hereon, and authenticated
as herein provided, and the principal hereof, interest hereon and any redemption premium
shall be payable only to the registered owner or to such owner's order. The Fiscal Agent shall
require the registered owner requesting transfer or exchange to pay any tax or other
governmental charge required to be paid with respect to such transfer or exchange. No transfer
or exchange hereof shall be required to be made (i) fifteen days prior to the date established by
the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a Bond after such
Bond has been selected for redemption.
The Agreement and the rights and obligations of the City thereunder may be modified
or amended as set forth therein. The principal of the Bonds is not subject to acceleration upon a
default under the Agreement or any other document.
This Bond shall not become valid or obligatory for any purpose until the certificate of
authentication and registration hereon endorsed shall have been dated and manually signed by
the Fiscal Agent.
It is hereby certified, recited and declared by the City that all acts, conditions and things
required by law to exist, happen and be performed precedent to and in the issuance of this
Bond have existed,happened and been performed in due time, form and manner as required by
CITY OF HUNTINGTON BEACH
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bond
Page 3 of 5
law, and that the amount of this Bond, together with all other indebtedness of the City, does not
exceed any debt limit prescribed by the laws or Constitution of the State of California.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company to the Fiscal Agent for registration of transfer, exchange or payment, and any Bond
issued is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is made to Cede
& Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has
an interest herein.
IN WITNESS WHEREOF, City of Huntington Beach, California has caused this Bond to
be dated the Bond Date set forth above, to be signed by the facsimile signature of its Mayor and
countersigned by the facsimile signature of the City Clerk.
City Clerk Mayor
FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described in the Resolution and the Agreement which has been
authentica
ECI ..
SP
S. N TR T N ON
gen
By
Authorized Officer
CITY OF HUNTINGTON BEACH
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bond
Page 4 of 5
ASSIGNMENT
For value received,the undersigned do(es)hereby sell,assign and transfer unto
(Name,Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es)hereby irrevocably constitute and appoint
attorney,
to transfer the same on the registration books of the Fiscal Agent, with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an NOTICE: The signature on this assignment must
eligible guarantor. correspond with the name(s)as written on
the face of the within Bond in every
particular without alteration or.
enlargement or any change whatsoever.
SPECIMEN
CITY OF HUNTINGTON BEACH
Community Facilities District No.1990-1
2001 Special Tax Refunding Bond
Page 5 of 5
Cash Flow and Yield Verification Report
'ity of Huntington Beach
Community Facilities District No. 1990.1
November 14, 2001
INDEX
Letter
Exhibit A Schedule of Sources and Uses of Funds
Exhibit B Escrow Account Cash Flow
Exhibit B-1 Cash Receipt From and Yield on the SLGS
Purchased with Bond Proceeds
Exhibit B-2 Cash Receipt From the SLGS Purchased
with Improvement Funds
Exhibit B-3 Cash Receipt From the SLGS Purchased
with Reserve Funds
Exhibit B-4 Debt Service Payment on the Refunded Bonds
Exhibit C Debt Service Payments and Yield on the Bonds
Appendix I Applicable schedules provided by Harrell & Company
Advisors, LLC
Grant Thornton T
,intents and Management Consultants
Report of Independent Certified Public Accountants
On Applying Agreed-Upon Procedures
City of Huntington Beach
2000 Main Street
Huntington Beach, California
Quint & Thimmig LLP
One Embarcadero Center, Suite 2420
San Francisco, California
U.S. Bank Trust National Association
550 South Hope Street, Suite 500
Los Angeles, California
Harrell & Company Advisors, LLC
333 City Boulevard West, Suite 1430
Orange, California
$2,155,000
City of Huntington Beach
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds
Dated November 14, 2001
We have performed the procedures described in this report, which were agreed to by the City
of Huntington Beach (the "City") and Harrell & Company Advisors, LLC (the "Financing
Consultant"), to verify the mathematical accuracy of certain computations contained in the
schedules attached in Appendix I provided by the Financing Consultant. The Financing
Consultant is responsible for these schedules. These procedures were performed solely to
assist you in the issuance of the above-captioned bond issue (the "Bonds") for the purpose of
refunding the City's outstanding Community Facilities District No. 1990-1 (Goldenwest/Ellis
Area) 1990 Special Tax Bonds (the "Refunded Bonds") as summarized on the next page. This
engagement was performed in accordance with attestation standards established by the
American Institute of Certified Public Accountants. The sufficiency of these procedures is
solely the responsibility of the addressees of this report who are the specified parties.
Consequently, we make no representation regarding the sufficiency of the procedures
described in this report either for the purpose for which this report has been requested or for
any other purpose.
Suite 500
200 South Sixth Street
Minneapolis,MN 55402-9961
Grant Thornton LLP
US Member of Grant Thornton International
Page 2
Principal Principal Maturities Redemption Redemption
Issue Issued Dated Refunded Refunded Date Price
10-1-02, 10-1-03
1990 $2,400,000 August 1, 1990 $2,055,000 and 10-1-20 4-1-02 100.5%
VERIFICATION OF ESCROW ACCOUNT CASH FLOW SUFFICIENCY
The Financing Consultant provided us with schedules (Appendix I) summarizing the future
escrow account cash receipt and disbursement. These schedules indicate that there will be
sufficient cash available in the escrow account to pay the principal, interest and redemption
premium on the Refunded Bonds assuming the Refunded Bonds will be redeemed on April 1,
2002 at 100.5 percent of par plus accrued interest.
The attached Exhibit A (Schedule of Sources and Uses of Funds) was compiled based upon
information provided by the Financing Consultant.
As part of our engagement to recalculate the schedules attached as Appendix I we prepared
schedules attached hereto as Exhibits B through B-4 independently calculating the future
escrow account cash receipt and disbursement and compared the information used in our
calculations to the information listed below contained in applicable pages of the following
documents:
• Subscription confirmation, dated October 25, 2001, and Schedule of U.S. Treasury
Securities provided by the Financing Consultant used to acquire certain United States
Treasury Securities - State and Local Government Series (the "SLGS") insofar as the
SLGS are described as to the principal amount, interest rate, maturity date and issuance
date; and
• Official Statement and Fiscal Agent Agreement for the Refunded Bonds provided by
the Financing Consultant insofar as the Refunded Bonds are described as to the
maturity and interest payment dates, principal amounts, interest rates and optional
redemption date and price.
In addition, we compared the interest rate for the maturity of the SLGS, as shown on the
Schedule of U.S. Treasury Securities, with the maximum allowable interest rate shown on the
Department of Treasury, Bureau of Public Debt, SLGS Table (Form PD 4262) for use on
October 25, 2001 and found that the interest rate was equal to the maximum allowable
interest rate for that maturity.
Page 3
Our procedures, as summarized in Exhibits B through B-4, prove the mathematical accuracy
of the schedules provided by the Financing Consultant summarizing the future escrow
account cash receipt and disbursement. The schedules provided by the Financing Consultant
and those prepared by us reflect that the anticipated receipt from the SLGS, together with an
initial cash deposit of $1.00 to be deposited into the escrow account on November 14, 2001,
will be sufficient to pay, when due, the principal, interest and redemption premium related to
the Refunded Bonds assuming the Refunded Bonds will be redeemed on April 1, 2002 at 100.5
percent of par plus accrued interest.
VERIFICATION OF YIELDS
The Financing Consultant provided us with schedules (Appendix I which indicate that the
yield on the cash receipt from the SLGS purchased with Bond proceeds is less than the yield
on the Bonds. These schedules were prepared based on the assumed settlement date of
November 14, 2001 using a 360-day year with interest compounded semi-annually. The term
"yield", as used herein, means that yield which, when used in computing the present value of
all payments of principal and interest to be paid or received on an obligation produces an
amount equal to, in the case of the cash receipt from the SLGS purchased with Bond proceeds,
the purchase price, and in the case of the Bonds, the issue price.
As part of our engagement to recalculate the schedules attached as Appendix I we prepared
schedules attached hereto as Exhibits B-1 and C independently calculating the yields on (i) the
cash receipt from the SLGS purchased with Bond proceeds calculated on Exhibit B-1 and (ii)
the Bonds using the Official Statement provided by the Financing Consultant insofar as the
Bonds are described as to the maturity and interest payment dates, dated date, principal
amounts, interest rates and issue price to the public. The results of our calculations, based on
the aforementioned assumptions, are summarized below:
Yield Exhibit
• Yield on the cash receipt from the SLGS
purchased with Bond proceeds 2.098905% B-1
• Yield on the Bonds 5.141068% C
Our procedures, as summarized in Exhibits B-1 and C, prove the mathematical accuracy of the
schedules provided by the Financing Consultant summarizing the yields. The schedules
provided by the Financing Consultant and those prepared by us reflect that the yield on the
cash receipt from the SLGS purchased with Bond proceeds is less than the yield on the Bonds.
Page 4
We were not engaged to, and did not, perform an examination, the objective of which would
be the expression of an opinion on the items referred to above. 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 those to whom this letter is
addressed and is not intended to be and should not be used by anyone other than these
specified parties.
."A� 7),j,- 1�P
Minneapolis, Minnesota
November 14, 2001
Exhibit A
City of Huntington Beach
Community Facilities District No. 1990-1
SCHEDULE OF SOURCES AND USES OF FUNDS
November 14, 2001
SOURCES:
Principal amount of the Bonds $2,155,000.00
1990 Improvement Fund 52,328.00
1990 Reserve Fund 192,487.00
$2,399,815.00
USES:
Purchase price of the SLGS:
- Purchased with Bond proceeds $1,881,469.13
- Purchased with Improvement Funds 52,327.97
- Purchased with Reserve Funds 192,486.90
Beginning cash deposit to the escrow account 1.00
Deposit to Reserve Fund 172,400.00
Costs of issuance 77,425.00
Underwriter's discount 23,705.00
$2,399,815.00
Exhibit B
City of Huntington Beach
Community Facilities District No. 1990-1
ESCROW ACCOUNT CASH FLOW
Cash receipts from SLGS:
Purchased with Debt service
Purchased with Improvement Purchased with payment on
Bond proceeds Funds Reserve Funds Refunded Bonds Cash
Dates (Exhibit B-1) (Exhibit B-2) (Exhibit B-3) (Exhibit B-4) balance
Cash deposit on
November 14, 2001 $1.00
04-01-02 $1,896,478.61 $52,745.42 $194,022.47 $2,143,247.50 0.00
$1,896,478.61 $52,745.42 $194,022.47 $2,143,247.50
Exhibit B-1
City of Huntington Beach
Community Facilities District No. 1990-1
CASH RECEIPT FROM AND YIELD ON THE SLGS
PURCHASED WITH BOND PROCEEDS
Cash receipt Present value on
from SLGS November 14, 2001
Receipt Interest purchased with using a yield of
date Principal rate Interest Bond proceeds 2.098905%
04-01-02 $1,881,469.13 2.110% $15,009.48 $1,896,478.61 $1,881,469.13
Purchase price of the SLGS purchased with Bond proceeds $1,881,469.13
The present value of the cash receipt from the SLGS purchased with Bond proceeds on
November 14, 2001, using a yield of 2.098905%, is equal to the purchase price of the SLGS
purchased with Bond proceeds.
Exhibit B-2
City of Huntington Beach
Community Facilities District No. 1990-1
CASH RECEIPT FROM THE SLGS PURCHASED
WITH IMPROVEMENT FUNDS
Cash receipt
from SLGS
purchased with
Receipt Interest Improvement
date Principal rate Interest Funds
04-01-02 $52,327.97 2.110% $417.45 $52,745.42
Exhibit B-3
City of Huntington Beach
Community Facilities District No. 1990-1
CASH RECEIPT FROM THE SLGS PURCHASED
WITH RESERVE FUNDS
Cash receipt
from SLGS
Receipt Interest purchased with
date Principal rate Interest Reserve Funds
04-01-02 $192,486.90 2.110% $1,535.57 $194,022.47
Exhibit B-4
City of Huntington Beach
Community Facilities District No. 1990-1
DEBT SERVICE PAYMENT ON THE REFUNDED BONDS
Interest Debt service
Date Principal rate Interest Premium payment
04-01-02 $2,055,000 (1) $77,972.50 $10,275.00 $2,143,247.50
(1) Actual maturity dates, principal amounts and interest rates are as follows:
Maturity Principal Interest
date amount rate
10-01-02 $50,000 7.350%
10-01-03 55,000 7.400%
10-01-20 1,950,000 7.600%
$2,055,000
Exhibit C
Page 1 of 2
City of Huntington Beach
Community Facilities District No. 1990-1
DEBT SERVICE PAYMENTS AND YIELD ON THE BONDS
Present value on
$2,155,000 issue dated November 14, 2001 November 14, 2001
Interest Total debt using a yield of
Date Principal rate Interest service 5.141068%
04-01-02 $40,359.82 $40,359.82 $39,587.66
10-01-02 $85,000 4.000% 53,027.50 138,027.50 131,993.81
04-01-03 51,327.50 51,327.50 47,853.69
10-01-03 75,000 4.000% 51,327.50 126,327.50 114,826.10
04-01-04 49,827.50 49,827.50 44,155.95
10-01-04 80,000 4.000% 49,827.50 129,827.50 112,166.76
04-01-05 48,227.50 48,227.50 40,622.78
10-01-05 85,000 4.000% 48,227.50 133,227.50 109,407.26
04-01-06 46,527.50 46,527.50 37,251.12
10-01-06 85,000 4.000% 46,527.50 131,527.50 102,665.28
04-01-07 44,827.50 44,827.50 34,113.71
10-01-07 90,000 4.000% 44,827.50 134,827.50 100,032.30
04-01-08 43,027.50 43,027.50 31,123.27
10-01-08 95,000 4.750% 43,027.50 138,027.50 97,337.94
04-01-09 40,771.25 40,771.25 28,031.60
10-01-09 95,000 4.750% 40,771.25 135,771.25 91,007.91
04-01-10 38,515.00 38,515.00 25,169.73
10-01-10 100,000 4.750% 38,515.00 138,515.00 88,251.66
04-01-11 36,140.00 36,140.00 22,448.72
10-01-11 110,000 4.750% 36,140.00 146,140.00 88,501.36
04-01-12 33,527.50 33,527.50 19,795.18
10-01-12 110,000 4.750% 33,527.50 143,527.50 82,617.25
04-01-13 30,915.00 30,915.00 17,349.31
10-01-13 120,000 5.400% 30,915.00 150,915.00 82,570.10
04-01-14 27,675.00 27,675.00 14,762.35
10-01-14 125,000 5.400% 27,675.00 152,675.00 79,398.64
04-01-15 24,300.00 24,300.00 12,320.51
10-01-15 130,000 5.400% 24,300.00 154,300.00 76,272.12
04-01-16 20,790.00 20,790.00 10,019.17
Exhibit C
Page 2 of 2
City of Huntington Beach
Community Facilities District No. 1990-1
DEBT SERVICE PAYMENTS AND YIELD ON THE BONDS
Present value on
$2,155,000 issue dated November 14, 2001 November 14, 2001
Interest Total debt using a yield of
Date Principal rate Interest service 5.141068%
10-01-16 140,000 5.400% 20,790.00 160,790.00 75,546.39
04-01-17 17,010.00 17,010.00 7,791.77
10-01-17 145,000 5.400% 17,010.00 162,010.00 72,352.12
04-01-18 13,095.00 13,095.00 5,701.54
10-01-18 155,000 5.400% 13,095.00 168,095.00 71,354.11
04-01-19 8,910.00 8,910.00 3,687.39
10-01-19 160,000 5.400% 8,910.00 168,910.00 68,151.33
04-01-20 4,590.00 4,590.00 1,805.55
10-01-20 170,000 5.400% 4,590.00 174,590.00 66,956.56
$2,155,000 $1,253,394.82 $3,408,394.82 $2,155,000.00
The present value of the future payments is equal to:
Principal amount of the Bonds $2,155,000.00
The sum of the present values of the debt service payments of the Bonds on November 14, 2001,
using a yield of 5.141068%, is equal to the issue price of the Bonds.
APPENDIX I
Applicable schedules provided by
Harrell & Company Advisors, LLC
SOURCES AND USES OF FUNDS
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
Dated Date 11/14/200 i
Delivery Date 11/14/2001
SOLII-CCS:
Bond Proceeds:
Par A1110LInt S
Oflicr Sources of Funds:
1990 Improvement Fund 5 32 8.0 0
1990 Reserve Fund 192,487.00
244,815.00
Uses:
Refunding Escrow Deposits:
Cash Deposit 1.00
SLG Purchases 12 6.2 S4.00
126.285.00
Other Fund Deposits:
Reserve 172,400.00
Delivery Date Expenses:
Cost of Issuance 77,425.00
Underwriter's Discount 23.705.00
101,130.00
2,399,815.00
Prepared by Harrell &Company Advisors, LLC
ESCROW SUFFICIENCY
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
Escrow Net Escrow Excess Excess
Date Requirement Receipts Receipts Balance
1 I/14i2 i 1.00 1.00 1.00
04/01:2i:: 2,143,247.50 2.143 246.50 -1.00
2,143,247.50 2.141.1-47.50 0.00
Prepared by 1-larre';: Company Advisors, LLC
ESCROW COST DETAIL
CFD 90-1 Goldenvrest'Ellis
2001 Special Tat Refunding Bonds
Tyne of Maturity Par Total
Security Date Amount Rate Cost
901\q P:
SLG 04101,'2002 52.327.97 2.110% 52,327.97
90RES:
SLG 041011;2002 192,486.90 2.110% 192 486.90
PROCEEDS:
SLG 0410U2002 1,881A69.13 2.110 1,881,469.13
2,126,284.00 -1,126,284.00
Purchase Cost of Cash Total
Escrow Date Securities Deposit Escrow Cost Yield
901\1111 11114:2001 52327.97 0.03 52.325.00 2.098915'%fj
90RES II/I4,'''_001 192,486.90 0.10 192.4>7.00 2.0989051i„
PROCEEDS I1114:2001 1,881,469.13 0.8? I.SSI.470.00 2.098905':o
2,126,284.00 1.00 2,126,285.00
Prepared by Harrell & Company Advisors, LLC
PROOF OF ARBITRAGE YIELD
CFD 90-1 Golciemvest/Ellis
2001 Special Tax Refunding Bonds
Present Value
to 11/14/2001
Date . Debt Service a 5.1410681%
04/01/2002 40,359.92 39,587.66
10/01/2002 138,027.50 1317993.81
04/01/2003 5.1,327.50 47,853.69
10/01/2003 126,327.50 1 14,S26.10
04/01/2004 49,827.50 44,155.95
10/01/2004 129,827.50 112,166.76
04/01/2005 48,227.50 40,622.78
10/01 i2005 133,227.50 109,407.26
04/01/2006 46,527.50 37,251.12
10/01/2006 131,527.50 102,665.2S
04/01/2007 44,827.50 34,1 13.71
10/01/2007 134,827.50 100.032.30
04/01/2008 43,027.50 31,123.27
10/01/2008 138,027.50 97,337.94
04101/2009 40,771.25 28:031.60
10/01/2009 135,771.25 91,OU7.91
04/01/2010 38,515.00 25,169.73
10,101/2010 138,515.00 88,251.66
04/01/201 1 36,140,00 22,448.72
10/01/2011 146,140.00 88,501.36
04/01/2012 33,527.50 19,795.18
10/01/2012 143,527.50 82,617.25
04/01/2013 30,915.00 17,349.31
10/01/2013 150,915.00 82,570.10
04/01/2014 27,675.00 14,762.35
10/01/2014 152,675.00 79,398.64
04/01/2015 24,300.00 12,320.51
10/01/2015 154,300.00 76,272.12
04/01/2016 20,790.00 10,019.17
10/01/2016 160,790.00 75,546.39 = _.
04/01/2017 17,010.00 7,791.77
10/01/2017 162,010.00 72,352.12
04/01/2018 13,095.00 5,701.54
10/61/2018 168,095.00 71,354.11
04/01/2019 8,910.00 3,687.39
10/01/2019 168,910.00 68,151.33
04/01/2020 4,590.00 1,805.55
10/01/2020 174,590.00 66,956.56
3,408,394.92 2,155,000.00
Prepared by Harrell & Company Advisors, LLC
PROOF OF ARBITRAGE YIELD
CFD 90-1 Goldemvest/Ellis
2001 Special Tax Refunding Bonds
Proceeds SUMmary
Delivery date 1 1/14/2001
Par Value 2,155,000.00
Target for yield calculation 2,155,000.00
Prepared h.: :::.- 11 &Company Advisors, LLC
BOND DEBT SERVICE
CFD 90-1 GOldemvest/Ellis
2001 Special Tax Refunding Bonds
Dated Date 11/14/2001
Delivery Date 11/14/2001
Period Aruival
Ending Principal Coupon Interest Debt Service Debt Service
11/14/2001
04/01/2002 40,359.82 40,359.82
10/01/2002 85,000 4.0001Sb 53.027.50 138,02750 178,387.32
04/01/2003 51.327.50 51,327.50
10/01/2003 75,000 4.000'%, 51.327.50 126,327.50 177,655.0f)
04/01/2004 49,827.50 49,827.50
10/01/2004 80,000 4.0001;,, 49,827.50 129,827.50 179,655.00
04/01/2005 4S 227.50 49,227.50
10/01/2005 85,000 4.0001:1, 48.227.50 133,227.50 181,455.00
04/01/2006 46.527.50 46,527.50
10101/2006 85,000 4.000%, 46.527.50 131,527.50 178,055.00
04iO1/2007 44.827.50 44,827.50
10/01/2007 90,000 4.000",f, 4.4.827.50 134,827.50 179,655.00
04/01/2008 43.02T50 43,027.50
10/01/2008 95,000 4.7501,, -43.027.50 138,027.50 181,055.00
04/01/2009 40,771.25 40,771.25
10/01/2009 95,000 4.750'%, 40,771.25 135,771.25 176,542.50
04/01/2010 38,515.00 38,515.00
10/01/2010 100,000 4.750% 3S,515.00 138,515.00 177,030.00
04/01/201 1 36,140.00 36,140.00
10/01/201 1 110,000 4.750% 36,140.00 146,140.00 182,280.00
04/01/2012 33,527.50 33,527.50
10/01/2012 110,000 4.7501A 33,527.50 143,527.50 177,055.00
04/01/2013 30,915.00 30,915.00
10/01/2013 120,000 5.4000/o 30,915.00 150,915.00 181,830.00
04/01/2014 27,675.00 27,675.00
10/01/2014 125,000 5.4001%, 27,675.00 152,675.00 180;350.O0
04/01/2015 24,300.00 24,300.00
10/01/2015 130,000 5.400'%o 24,300.00 154,300.00 178,600.00
04/01/2016 20,790.00 20,790.00
10/01/2016 140,000 5.400%, 20,790.00 160,790.00 181,580.00
04/01/2017 17,010.00 17,010.00
10,10112017 145,000 5.4001%, 17,010.00 162,010.00 179,020.00
04/01/2018 13.095.00 13,095.00
10/01/2018 155,000 5.400 13,095.00 168,095.00 181,190.00
04/01/2019 8,910.00 8,910.0O
10/01/2019 160,000 5.400'% 8,910.00 168,910.00 177,820.00
04/01/2020 4,590.00 4,590.00
10/01/2020 170,000 5.4001,, 4.590.00 174,590.00 179,180.00
2,155,000 1,253,394.82 3,409,394.82 3,408,394.82
Prepared by I Jarrell S:Company Advisors, LLC
BOND MATURITY TABLE
CFD 90-1 Goldemvest/Ellis
2001 Special Tax Refunding Bonds
\laturity Term Bonds Term Bonds Term Bonds
Date Maturing 2007 Maturing 2012 Maturing 2020 Total
10 O 1 i2002 85,000 85,000
10 01'2003 75,000 75,000
10 01 2004 80,000 90,000
10 n 12005 85,000 85,000
10 u 1 "2006 85,000 85,000
10 01.2007 90,000 90,000
10 01 2008 95,000 95,000
10 (11.12009 95,000 95,000
10 01:2010 100,000 100,000
10 O 1 2011 110,000 11(),000
I O i J'. 2012 110,00() 110,000
10 a l.2()13 120,000 120,000
10(J 1 2014 125,000 125,000
10 ii1:20I5 130,000 130,000
1(1 01 It)16 140,000 140,000
10 t 1 2U 1 1 145,000 145,000
IO i1' 2018 155,000 155,000
I0 '_019 160,000 160,000
IU 1 2020 170,000 170,000
500,000 510,000 1,145,000 2,155,000
Prepared by Harrell & Company Advisors, LLC
BOND PRICING
CFD 90-1 Goidemvest/Ellis
2001 Special Tax Refunding Bonds
Maturity
Bond Component Date Amount Rate Yield Price
Term Bonds Maturing 2007:
10/01/2007 500,000 4.0009/4 4.000",14 100.000
Tenn Bonds Nlaturin,2012:
10/01/2012 510,000 4.750%, 4.750"i, 100.000
Term Bonds Maturing 2020:
10/01/2020 1,145,000 5.400%, 5.4001X) 100.000
2,155,000
Dated Date 11/14/2001
Delivery Dale 11/14/2001
First Coupon 04/01/2002
Par AmOUnC 2,155,000.00
Oriunna1 Issue Discount
Production 2,155,000.00 100.000000%,
Undcr%vritcr's Discount -23,705.00 -1.100000,y,
Purchase Price 2,131,295.00 98.900000%,
Accrued Interest
Net Proceeds 2,131,295.00
Prepared by Harrell << Company Advisors, LLC
$2,155,000
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT 1990-1
2001 SPECIAL TAX REFUNDING BONDS
In our capacity as Independent Financing Consultant for the City of Huntington Beach (the
"City' with respect to the above-captioned obligations (the "Bonds'j, we are advising the City
as follows:
1. That the undersigned is an authorized officer of Harrell & Company Advisors, LLC,
(herein, the "Financing Consultant', and as such is familiar with the facts herein
certified and is authorized and qualified to certify the same;
2. That the Financing Consultant has acted as such to the City in connection with the
issuance of the Bonds;
3. That the Financing Consultant has assisted the City in preparing the Preliminary Official
Statement, dated October 18, 2001, and the Official Statement, dated October 29, 2001
(the "Official Statement', including the preparation of tables relating to financial
information; and
4. The information set forth in the Official Statement has been obtained by the City from
sources which are believed to be reliable, but such information is not guaranteed by the
Financing Consultant as to accuracy or completeness, nor has it been independently
verified.
5. That, to the best knowledge of the Financing Consultant, as of the date of the Official
Statement and as of the date hereof, the Official Statement does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the
statements made therein, in light of the circumstances under which they were made,
not misleading.
6. We have been advised by the Purchaser of the Bonds O'Connor SWS Securities, that the
Bonds are being offered to the public at the rates set forth on the cover of the Official
Statement. We have relied upon this representation in calculating the attached
schedules.
7. We have prepared certain schedules attached hereto, and by this reference incorporated
herein, which have been verified by Grant Thornton LLP, Minneapolis Minnesota, for the
purpose of detailing certain aspects of the Refunding Program, the ordering of Federal
Securities and determining certain yields as requested by Bond Counsel.
8. Pursuant to the enclosed schedules, the yield on the Bonds is 5.141068%.
9. We understand that Bond Counsel will rely upon this certificate, among other things, in
reaching its conclusion that the Bonds do not constitute "arbitrage bonds" within the
meaning of Section 148 of the Internal Revenue Code of 1986, as amended. This
certificate may be used as an attachment to the City's Certificate as to Arbitrage for the
Bonds at closing.
Sincerely,
HARRELL & COMPANY ADVISORS, LLC
By:
Title: Managing Director
$2,155,000
CITY OF HUNTINGTON BEACH
2001 SPECIAL TAX BONDS
Settlement Memorandum
Purchaser: O'Connor SWS Securities
Bonds Dated: November 14,2001
Date of Delivery: November 14, 2001
Total
Principal Amount of Bonds $ 2,155,000.00
Underwriter's Discount (23,705.00)
Total Due at Closing $ 2,131,295.00
Fund Deposits:
Transfer to Escrow Bank $ 1,881,470.00
Costs of Issuance Fund 77,425.00
Reserve Fund 172,400.00
$ 2,131,295.00
Prepared by Harrell and Company Advisors, LLC November 7, 2001
SETTLEMENT MEMO
$2,1SS,000
CITY OF HUNTINGTON BEACH
2001 SPECIAL TAX BONDS
Escrow Fund Deposit.
Deposit with 1990 Bonds Escrow Bank:
1990 Improvement Fund $ 52,328.00
1995 Reserve Fund 192,487.00
Bond Proceeds 1,881,470.00
$ 2,126,285.00
Transfer of 1990 Trust Funds:
1990 Bond Fund Balance 668,603.00
Transfer to City for deposit in Services Fund (668,603.00)
Balance -
1990 Improvement Fund Balance 84,578.00
Transfer to 1990 Escrow Bank (52,328.00)
Transfer to City for deposit in City Improvement Fund (32,250.00)
Balance -
1990 Reserve Fund Balance 192,487.00
Transfer to 1990 Escrow Bank (192,487.00)
Balance -
1990 Administrative Expense Fund Balance 10,969.00
Transfer to 2001 Trustee for deposit in Admin Exp Fund (10,969.00)
Balance
Prepared by Harrell and Company Advisors, LLC November 7, 2001
SOURCES AND USES OF FUNDS
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
Dated Date 11/14/2001
Delivery Date 11/14/2001
Sources:
Bond Proceeds:
Par Amount 2,155,000.00
Other Sources of Funds:
1990 Improvement Fund 52,328.00
1990 Reserve Fund 192,487.00
244,815.00
2,399,815.00
Uses:
Refunding Escrow Deposits:
Cash Deposit 1.00
SLG Purchases 2,126,284.00
2,126,285.00
Other Fund Deposits:
Reserve 172,400.00
Delivery Date Expenses:
Cost of Issuance 77,425.00
Underwriter's Discount 23,705.00
101,130.00
2,399,815.00
Prepared by Harrell&Company Advisors,LLC
BOND PRICING
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
Maturity
Bond Component Date Amount Rate Yield Price
Term Bonds Maturing 2007:
10/01/2007 500,000 4.000% 4.000% 100.000
Term Bonds Maturing 2012:
10/01/2012 510,000 4.750% 4.750% 100.000
Term Bonds Maturing 2020:
10/01/2020 1,145,000 5.400% 5.400% 100.000
2,155,000
Dated Date 11/14/2001
Delivery Date 11/14/2001
First Coupon 04/01/2002
Par Amount 2,155,000.00
Original Issue Discount
Production 2,155,000.00 100.000000%
Underwriter's Discount -23,705.00 -1.100000%
Purchase Price 2,131,295.00 98.900000%
Accrued Interest
Net Proceeds 2,131,295.00
Prepared by Harrell&Company Advisors,LLC
BOND DEBT SERVICE
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
Dated Date 11/14/2001
Delivery Date 11/14/2001
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
11/14/2001
04/01/2002 40,359.82 40,359.82
10/01/2002 85,000 4.000% 53,027.50 138,027.50 178,387.32
04/01/2003 51,327.50 51,327.50
10/01/2003 75,000 4.000% 51,327.50 126,327.50 177,655.00
04/01/2004 49,827.50 49,827.50
10/01/2004 80,000 4.000% 49,827.50 129,827.50 179,655.00
04/01/2005 48,227.50 48,227.50
10/01/2005 85,000 4.000% 48,227.50 133,227.50 181,455.00
04/01/2006 46,527.50 46,527.50
10/01/2006 85,000 4.000% 46,527.50 131,527.50 178,055.00
04/01/2007 44,827.50 44,827.50
10/01/2007 90,000 4.000% 44,827.50 134,827.50 179,655.00
04/01/2008 43,027.50 43,027.50
10/01/2008 95,000 4.750% 43,027.50 138,027.50 181,055.00
04/01/2009 40,771.25 40,771.25
10/01/2009 95,000 4.750% 40,771.25 135,771.25 176,542.50
04/01/2010 38,515.00 38,515.00
10/01/2010 100,000 4.750% 38,515.00 138,515.00 177,030.00
04/01/2011 36,140.00 36,140.00
10/01/2011 110,000 4.750% 36,140.00 146,140.00 182,280.00
04/01/2012 33,527.50 33,527.50
10/01/2012 110,000 4.750% 33,527.50 143,527.50 177,055.00
04/01/2013 30,915.00 30,915.00
10/01/2013 120,000 5.400% 30,915.00 150,915.00 181,830.00
04/01/2014 27,675.00 27,675.00
10/01/2014 125,000 5.400% 27,675.00 152,675.00 180,350.00
04/01/2015 24,300.00 24,300.00
10/01/2015 130,000 5.400% 24,300.00 154,300.00 178,600.00
04/01/2016 20,790.00 20,790.00
10/01/2016 140,000 5.400% 20,790.00 160,790.00 181,580.00
04/01/2017 17,010.00 17,010.00
10/01/2017 145,000 5.400% 17,010.00 162,010.00 179,020.00
04/01/2018 13,095.00 13,095.00
10/01/2018 155,000 5.400% 13,095.00 168,095.00 181,190.00
04/01/2019 8,910.00 8,910.00
10/01/2019 160,000 5.400% 8,910.00 168,910.00 177,820.00
04/01/2020 4,590.00 4,590.00
10/01/2020 170,000 5.400% 4,590.00 174,590.00 179,180.00
21155,000 1,253,394.82 3,408,394.82 3,408,394.82
Prepared by Harrell&Company Advisors,LLC
PROOF OF ARBITRAGE YIELD
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
Present Value
to 11/14/2001
Date Debt Service @ 5.1410681%
04/01/2002 40,359.82 39,587.66
10/01/2002 13 8,027.50 131,993.81
04/01/2003 51,327.50 47,853.69
10/01/2003 126,327.50 114,826.10
04/01/2004 49,827.50 44,155.95
10/01/2004 129,827.50 112,166.76
04/01/2005 48,227.50 40,622.78
10/01/2005 133,227.50 109,407.26
04/01/2006 46,527.50 37,251.12
10/01/2006 131,527.50 102,665.28
04/01/2007 44,827.50 34,113.71
10/01/2007 134,827.50 100,032.30
04/01/2008 43,027.50 31,123.27
10/01/2008 138,027.50 97,337.94
04/01/2009 40,771.25 28,031.60
10/01/2009 135,771.25 91,007.91
04/01/2010 38,515.00 25,169.73
10/01/2010 138,515.00 88,251.66
04/01/2011 36,140.00 22,448.72
10/01/2011 146,140.00 88,501.36
04/01/2012 33,527.50 19,795.18
10/01/2012 143,527.50 82,617.25
04/01/2013 30,915.00 17,349.31
10/01/2013 150,915.00 82,570.10
04/01/2014 27,675.00 14,762.35
10/01/2014 152,675.00 79,398.64
04/01/2015 24,300.00 12,320.51
10/01/2015 154,300.00 76,272.12
04/01/2016 20,790.00 10,019.17
10/01/2016 160,790.00 75,546.39
04/01/2017 17,010.00 7,791.77
10/01/2017 162,010.00 72,352.12
04/01/2018 13,095.00 5,701.54
10/01/2018 168,095.00 71,354.11
04/01/2019 8,910.00 3,687.39
10/01/2019 168,910.00 68,151.33
04/01/2020 4,590.00 1,805.55
10/01/2020 174,590.00 66,956.56
3,408,394.82 2,155,000.00
Prepared by Harrell&Company Advisors,LLC
PROOF OF ARBITRAGE YIELD
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
Proceeds Summary
Delivery date 11/14/2001
Par Value 2,155,000.00
Target for yield calculation 2,155,000.00
Prepared by Harrell&Company Advisors,LLC
ESCROW REQUIREMENTS
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
Period Principal Redemption
Ending Interest Redeemed Premium Total
04/01/2002 77,972.50 2,055,000.00 10,275.00 2,143,247.50
77,972.50 2,055,000.00 10,275.00 2,143,247.50
Prepared by Harrell&Company Advisors,LLC
ESCROW COST
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
Type of Maturity Par Total
Security Date Amount Rate Cost
SLG 04/01/2002 2,126,284 2.110% 2,126,284.00
2,126,284 2,126,284.00
Purchase Cost of Cash Total
Date Securities Deposit Escrow Cost
11/14/2001 2,126,284 1.00 2,126,285.00
2,126,284 1.00 2,126,285.00
Prepared by Harrell&Company Advisors,LLC
ESCROW SUFFICIENCY
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
Escrow Net Escrow Excess Excess
Date Requirement Receipts Receipts Balance
11/14/2001 1.00 1.00 1.00
04/01/2002 2,143,247.50 2,143,246.50 -1.00
2,143,247.50 2,143,247.50 0.00
Prepared by Harrell&Company Advisors,LLC
PROOF OF COMPOSITE ESCROW YIELD
CFD 90-1 Goldenwest/Ellis
2001 Special Tax Refunding Bonds
All restricted escrows funded by bond proceeds
Present Value
Security to 11/14/2001
Date Receipts @ 2.0989054%
04/01/2002 1,896,478.61 1,881,469.13
1,896,478.61 1,881,469.13
Escrow Cost Summary
Purchase date 11/14/2001
Purchase cost of securities 1,881,469.13
Target for yield calculation 1,881,469.13
Prepared by Harrell&Company Advisors,LLC
FULBRIGHT & JAWORSKI L.L.P.
A REGISTERED LIMITED LIABILITY PARTNERSHIP
865 SOUTH FIGUEROA STREET. 29TH FLOOR HOUSTON
NGTTELEPHONE: 213/892-9200 Los ANGELES. CALIFORNIA 900I7-2576 WASHIAUS IN. D.C.
FACSIMILE: 213/680-4SIB SAN ANTONIO
DALLAS
NEW YORK
LOS ANGELES
MINNEAPOLIS
LONDON
HONG KONG
November 14, 2001
O'Connor SWS Secuirties
3 Civic Plaza, Suite 100
Newport Beach, California 92660
Re: $2,155,000
City of Huntington Beach
Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds
Ladies and Gentlemen:
We have acted as counsel for you as Underwriter in connection with your purchase of the
City of Huntington Beach Community Facilities District No. 1990-1 2001 Special Tax
Refunding Bonds in the aggregate principal amount of$2,155,000 (the "Bonds") pursuant to the
Bond Purchase Agreement, dated October 29, 2001 (the "Purchase Agreement"), between you
and the City of Huntington Beach (the "City"), for and on behalf of the City of Huntington
Beach Community Facilities district No. 1990-1 (Goldenwest/Ellis Area) (the "District"). The
Bonds are being issued pursuant to a Fiscal Agent Agreement (the "Fiscal Agent Agreement"),
dated as of November 1, 2001, by and between the City and U.S. Bank Trust National
Association (the "Trustee). Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Purchase Agreement.
In that connection, we have reviewed certain portions of the Indenture, the Official
Statement of the City, dated October 29, 2001, with respect to the Bonds (the "Official
Statement"), the Purchase Agreement, certificates of the City, the District, the Trustee and
others, the opinions referred to in the Purchase Agreement and such other records, opinions and
documents, and we have made such investigations of law, as we have deemed appropriate as a
basis for the conclusions hereinafter expressed.
In arriving at the conclusions hereinafter expressed, we are not expressing any opinion or
view on, and with your permission are assuming and relying on, the validity, accuracy and
sufficiency of the records, documents, certificates and opinions referenced above (including the
accuracy of all factual matters represented and legal conclusions contained therein), including
(without limitation) representations and legal conclusions regarding the due authorization,
issuance, delivery, validity and enforceability of the Bonds and the exclusion of interest with
respect to the Bonds from gross income of the owners thereof for federal income tax purposes
and the legality, validity and enforceability of the Fiscal Agent Agreement and the payments
45094409.1
O'Connor SWS Securities
November 14, 2001
Page 2
with respect to which are pledged to the Bonds. We have assumed that all records, documents,
certificates and opinions that we have reviewed, and the signatures thereto, are genuine.
Based on and subject to the foregoing, and in reliance thereon, we are of the opinion that
the Bonds are not subject to the registration requirements of the Securities Act of 1933, as
amended, and the Fiscal Agent Agreement is exempt from qualification pursuant to the Trust
Indenture Act of 1939, as amended.
We are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of any of the statements contained in the Official Statement as we have
not independently verified nor have we performed any due diligence with respect to the
accuracy, completeness or fairness of any such statements. We understand you have received an
opinion from Quint & Thimmig LLP, Disclosure Counsel, with respect thereto dated the date
hereof.
We are furnishing this letter to you solely for your benefit as Underwriter. Our
engagement with respect to this matter has terminated as of the date hereof, and we disclaim any
obligation to update this letter. This letter may not be used, circulated, quoted or otherwise
referred to or relied upon for any other purpose or by any other person or filed with any
governmental or other administrative agency or other person or entity for any purpose without
our prior written consent. This letter is not intended to, and may not, be relied upon by the
owners of the Bonds.
The foregoing represent our interpretation of applicable law to the facts as described
herein. We bring to your attention the fact that our conclusions are an expression of professional
judgment and are not a guarantee of a result.
Very truly yours,
P.
45094409.1
uid � Thimmigo One Embarcadero Center, Suite 2420
San Francisco,CA 94111-3737
Attorneys at Law Telephone:415/765-1550
Telecopier:415/765-1555
November 14, 2001
City Council
City of Huntington Beach
2000 Main Street
Huntington Beach, California 92648
OPINION: $2,155,000 City of Huntington Beach Community Facilities District No.
1990-1 2001 Special Tax Refunding Bonds
Members of the City Council:
We have acted as bond counsel in connection with the issuance by the City of
Huntington Beach, California (the "City") of its $2,155,000 City of Huntington Beach
Community Facilities District No. 1990-1 2001 Special Tax Refunding Bonds (the "Bonds"),
pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (section 53311 et
seq., of the California Government Code) (the "Act"), a Fiscal Agent Agreement, dated as of
November 1, 2001 (the "Fiscal Agent Agreement"), by and between the City on behalf of the
City of Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis Area)
and U.S. Bank Trust National Association, as fiscal agent, and Resolution No. 2001-74,
adopted by the City Council of the City on October 15, 2001 (the "Resolution"). We have
examined the law and such certified proceedings and other documents as we deem necessary to
render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of
the City contained in the Resolution and in the certified proceedings and certifications of public
officials and others furnished to us, without undertaking to verify the same by independent
investigation.
Based upon the foregoing,we are of the opinion, under existing law, as follows:
1. The City is duly created and validly existing as a municipal corporation, with the
power to adopt the Resolution, enter into the Fiscal Agent Agreement and perform the
agreements on its part contained therein and issue the Bonds.
2. The Fiscal Agent Agreement has been duly entered into by the City and constitutes a
valid and binding obligation of the City enforceable upon the City.
3. Pursuant to the Act, the Fiscal Agent Agreement creates a valid lien on the funds
pledged by the Fiscal Agent Agreement for the security of the Bonds.
08003.05
City of Huntington Beach,California November 14, 2001
Page 2
4. The Bonds have been duly authorized, executed and delivered by the City and are
valid and binding limited obligations of the City, payable solely from the sources provided
therefor in the Fiscal Agent Agreement.
5. The interest on the Bonds is excluded from gross income for federal income tax
purposes and is not an item of tax preference for purposes of the federal alternative minimum
tax imposed on individuals and corporations; it should be noted, however, that, for the
purpose of computing the alternative minimum tax imposed on corporations (as defined for
federal income tax purposes), such interest is taken into account in determining certain income
and earnings.The opinions set forth in the preceding sentence are subject to the condition that
the City comply with all requirements of the Internal Revenue Code of 1986 that must be
satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to
be, excluded from gross income for federal income tax purposes. The City has covenanted to
comply with each such requirement. Failure to comply with certain of such requirements may
cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to
be retroactive to the date of issuance of the Bonds. We express no opinion regarding other
federal tax consequences arising with respect to the Bonds.
6. The interest on the Bonds is exempt from personal income taxation imposed by the
State of California.
The rights of the owners of the Bonds and the enforceability of the Bonds, the Resolution
and the Fiscal Agent Agreement may be subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and
also may be subject to the exercise of judicial discretion in appropriate cases.
Respectfully submitted,
�J�
QSanUIUt & ThiMMi LLr One Embarcadero Center,Suite 2420
Francisco,CA 94111
Telephone: 415/765-1550
Attorneys at Law Telecopier: 415/765-1555
November 14, 2001
O'Connor SWS Securities
3 Civic Plaza, Suite 100
Newport Beach, California 92660
SUPPLEMENTAL OPINION: $2,155,000 City of Huntington Beach Community Facilities
District No. 1990-1 2001 Special Tax Refunding Bonds
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance by the City of
Huntington Beach, California (the "City") of its $2,155,000 City of Huntington Beach
Community Facilities District No. 1990-1 2001 Special Tax Refunding Bonds (the "Bonds"),
pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et
seq., of the California Government Code) (the "Act"), a Fiscal Agent Agreement, dated as of
November 1, 2001 (the "Fiscal Agent Agreement"), by and between the City for and on behalf
of the City of Huntington Beach Community Facilities District No. 1990-1 (Goldenwest/Ellis
Area), and U.S. Bank Trust National Association, as fiscal agent, and Resolution No. 2001-74,
adopted by the City Council of the City on October 15, 2001 (the "Resolution"). We have
examined the law and such certified proceedings and other documents as we deem necessary to
render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of
the City contained in the Resolution and in the certified proceedings and certifications of public
officials and others furnished to us, without undertaking to verify the same by independent
investigation. Capitalized terms not otherwise described herein shall have the meanings
ascribed thereto in the Bond Purchase Agreement, dated October 29, 2001 (the "Purchase
Agreement"), by and between O'Connor SWS Securities, as underwriter (the "Underwriter"),
and the City.
Based upon the foregoing,we are of the opinion, under existing law,as follows:
1. The District is a community facilities district duly organized and validly existing
under the Act.
2. The statements contained in the Official Statement on the cover page and under
the captions "INTRODUCTION," "REFUNDING PLAN," "THE BONDS" (other than under
the subheading "Book-Entry Only System" as to which no opinion need be expressed),
"SECURITY FOR THE BONDS," and "LEGAL MATTERS - Tax Exemption," and in
O'Connor SWS Securities
November 14, 2001
Page 2
Appendices D and G thereto, are accurate insofar as such statements expressly summarize
certain provisions of the Bonds, the Fiscal Agent Agreement, the Escrow Agreement, and Bond
Counsel's opinion concerning certain federal tax matters relating to the Bonds.
3. The Bonds are not subject to the registration requirements of the Securities Act of
1933, as amended, and the Fiscal Agent Agreement is exempt from qualification under to the
Trust Indenture Act of 1939, as amended.
4. The Bond Purchase Agreement has been duly authorized, executed and delivered
by the City and (assuming due authorization, execution and delivery thereof by the
Underwriter) constitutes a valid and binding agreement of the City enforceable upon the City in
accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency,
moratorium or other law affecting the enforcement of creditors' rights generally.
5. The pledge of the Special Taxes and other funds provided for in the Fiscal Agent
Agreement dated as of June 1, 1990 (the "Prior Fiscal Agent Agreement"), by and between the
City and U.S. Bank Trust National Association, as successor fiscal agent, and all other
obligations of the City under the Prior Fiscal Agent Agreement with respect to the outstanding
Prior Bonds (as such term is defined in the Fiscal Agent Agreement), have ceased and
terminated, except for the terms thereof relating to the making of payments of debt service
thereon and the payment of the Prior Bonds from the Refunding Fund established under the
Escrow Agreement, dated November 14, 2001 (the "Escrow Agreement"), by and between the
City and U.S. Bank Trust National Association, as escrow bank, assuming, for purposes of this
opinion, the sufficiency in said Refunding Fund to pay the principal of, interest on and
redemption price of the Prior Bonds in accordance with the terms of the Escrow Agreement.
Respectfully submitted, 4111r
UIUt & ThimmiQgLLP One Embarcadero Center,Suite 2420
San Francisco,CA 94111
Telephone: 415/765-1550
Attorneys at Law Telecopier: 415/765-1555
November 14, 2001
O'Connor SWS Securities
3 Civic Plaza, Suite 100
Newport Beach, California 92660
RELIANCE LETTER Regarding Final Approving Legal Opinion:
$2,155,000 City of Huntington Beach Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds
Ladies and Gentlemen:
We have this day released to the City of Huntington Beach our final approving legal
opinion with respect to the captioned financing.
The foregoing opinion may be relied upon by O'Connor SWS Securities, as underwriter,
to the same extent as if such opinion were addressed to it.
Respectfully submitted,
UId & ThifflMiQg
LLr One Embarcadero Center,Suite 2420
San Francisco, CA 94111
Telephone: 415/765-1550
Attorneys at Law Telecopier: 415/765-1555
November 14, 2001
U.S. Bank Trust National Association
550 South Hope Street, Suite 500
Los Angeles, California 90071
RELIANCE LETTER Regarding Final Approving Legal Opinion:
$2,155,000 City of Huntington Beach Community Facilities District No. 1990-1
2001 Special Tax Refunding Bonds
Ladies and Gentlemen:
We have this day released to the City of Huntington Beach our final approving legal
opinion with respect to the captioned financing.
The foregoing opinion may be relied upon by U.S. Bank Trust National Association, as
fiscal agent, to the same extent as if such opinion were addressed to it.
Respectfully submitted, 6444