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.................................................... .....................................................-..--... - .
$4,900,000
IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
SPECIAL TAX BONDS,SERIES 2002-A
July 17,2002
CITY OF HUNT INGTON BEACH (•)
............................................................ ......................----......................................
,
Quint&Thimmig LLI
Attorneys at Law
Paul J.Thimmig
One Embarcadero Center Telephone:415/765-1550
Suite 2420 Telecopier:415/765-1555
San Francisco,CA 94111-3737 Email:pthimmig®gtllp.com
Quint&Thimmig LLP 7/16/02
$4,900,000
IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
SPECIAL TAX BONDS,SERIES 2002-A
SCHEDULE OF TRANSCRIPT DOCUMENTS
A. CFD FORMATION AND ISSUANCE DOCUMENTS
1. List of Financing Participants.
2. Petition (Including Waiver) of McDonnell Douglas Corporation (the
"Landowner").
3. Deposit/Reimbursement Agreement, between the City of Huntington Beach (the
"City") and the Landowner.
4. Local Goals and Policies for Community Facilities Districts, in the form adopted
by the City Council of the City on October 15, 2001.
5. Chapter 3.56 of the City of Huntington Beach Municipal Code entitled "City of
Huntington Beach Special Tax Financing Improvement Code," together with
Ordinance No. 3546 entitled "An Ordinance of the City of Huntington Beach
Amending the City of Huntington Beach Special Tax Financing Improvement
Code," adopted March 18, 2002.
6. City Resolution No. 2002-26, entitled "A Resolution of the City Council of the.
City of Huntington Beach Declaring Its Intention to Establish a Community
Facilities District and to Authorize the Levy of Special Taxes Therein," adopted
April 1, 2002.
7. Proof of Publication of Notice of Public Hearing, in the Huntington Beach
Independent, as required by Resolution No. 2002-26.
8. City Resolution No. 2002-27, entitled "A Resolution of the City Council of the
City of Huntington Beach Declaring Its Intention to Incur Bonded Indebtedness of
the Proposed City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park)," adopted.April 1, 2002.
9. Proof of Publication of Notice of Public Hearing in the Huntington Beach
Independent, as required by Resolution No. 2002-27.
10. Community Facilities District Report.
11. City- Resolution No. 2002-38, entitled "A Resolution of the City Council of the
City of Huntington Beach of Formation of Improvement Area A and
Improvement Area B of the City of Huntington Beach Community Facilities
District No. 2002-1 (McDonnell Centre Business Park)," adopted June 3, 2002
(the "Resolution of Formation").
08003.07
12. City Resolution No. 2002-39, entitled "A Resolution of the City Council of the
City of Huntington Beach Determining the Necessity to Incur Bonded
Indebtedness Within Improvement Area A, and Within Improvement Area B, of
the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park)," adopted June 3,2002.
13. City Resolution No. 2002-40, entitled "A Resolution of the City Council of the
City of Huntington Beach Calling Special Election Within Improvement Area A
and Within Improvement Area B of the City of Huntington Beach Community
Facilities District No. 2002-1 (McDonnell Centre Business Park)," adopted June
3, 2002.
14. Official Ballot/Special Tax Election on June 3, 2002, including copy of the
Official.Ballot and return envelope.
15. City Resolution No. 2002-41, entitled "A Resolution of the City Council of the
City of Huntington Beach Declaring Results of Special Election and Directing
Recording of Notice of Special Tax Lien," adopted June 3, 2002, together with
Canvass and Statement of Result of Election held on June 3, 2002, as certified by
.the City Clerk.
16. Notice of Special Tax Lien. (recorded in the Orange County Recorder's Office on
June 18, 2002, as instrument number 20020509640)
17. City Ordinance No. 3557, entitled "An Ordinance of the City of Huntington
Beach Levying Special Taxes Within Improvement Area A and Improvement
Area B of the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park)," adopted on June 17, 2002.
18. City Resolution No. 2002-63, entitled "A Resolution of the City Council of the
City of Huntington Beach Authorizing the Issuance of Special Tax Bonds of the
City of Huntington Beach for Improvement Area A of the City of Huntington
Beach Community Facilities District No. 2002-1 (McDonnell Centre Business
Park), and Approving Other Related Documents and Actions," adopted June 17,
2002 (the "Authorizing Resolution").
19. Acknowledgment No. 2002-0347 of Receipt of Report of Proposed Debt Issuance
from California Debt and Investment Advisory Commission ("CDIAC"),
together with Report.
20. Preliminary Official Statement, dated June 18,2002.
21. Purchase Contract, dated June 27, 2002 (the "Purchase Contract"), between the
City and Stone&Youngberg LLC.
22. Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent
Agreement"), by and between the City and BNY Western Trust Company, as
fiscal agent(the "Fiscal Agent").
23. Acquisition Agreement, dated as of June 1, 2002, between Boeing Realty
Corporation (the "Developer") and the City.
24. Guaranty of The Boeing Company("Boeing"),in favor of the City.
-2-
• One Embarcadero Center,Suite 2420
QHiHt & ThimmigoSan Francisco, CA 94111-3737
Telephone: 415/765-1550
Attorneys at Law Telecopier: 415/765-1555
TO MEMBERS OF THE ATTACHED DISTRIBUTION LIST
September 6, 2002
Re: Improvement Area A of the City of Huntington Beach Community Facilities District
No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A
Ladies and Gentlemen:
I am very pleased to enclose a CD closing transcript for the above referenced financing.
Traditional closing binders have been prepared for the Issuer and the Trustee only. However, if
any other party requires a binder,please let me know and a transcript will be provided.
If you have any questions,please feel free to call me.
Very truly ours,
C.Blythe Fleet /
Enclosure
25. Continuing Disclosure Certificate - Issuer, dated as of June 1, 2002, by the City,
and as acknowledged by BNY Western Trust Company, as dissemination agent
(the "Dissemination Agent".).
26. Continuing Disclosure Certificate - Landowner, dated as of June 1, 2002,. by the
Landowner,and as acknowledged by the Dissemination Agent.
27. Final Official Statement, dated June 27,2002.
28. Certificate of Mailing Report of Final Sale to CDIAC,together with Report.
B. CITY DOCUMENTS
1. Incumbency and Signature Certificate.
2. Certificate as to Arbitrage.
3. Officer's Certificate,pursuant to Sections 8(c)(viii) and 8(c)(xiii) of the Purchase
Contract and attached thereto as Exhibit C.
4. Certificate of the City Clerk, pursuant to Section 8(c)(v) of the Purchase
Contract.
5. Rule 15c2-12 Certificate of the City.
6. Request of the City to Fiscal Agent to authenticate and deliver Bonds to the
Underwriter.
7. Certificate Regarding Use of Proceeds.
-- 8. Form of Officer's Certificate Requesting Disbursement from the Improvement
Fund,pursuant to Section 4.02(B) of the Fiscal Agent Agreement.
9. Officer's Certificate No. 1 Requesting Disbursement from Costs of Issuance Fund,
pursuant to Section 4.03(B)of the Fiscal Agent Agreement.
10. Form of Officer's Certificate Requesting Disbursement from the Administrative
Expense.Fund,pursuant to Section 4.07(B)of the Fiscal Agent Agreement.
11. Officer's Certificate Regarding Investments, as acknowledged by the Fiscal
Agent,pursuant to Section 6.01 of the Fiscal Agent Agreement.
12. Certificate of Mailing Information Return for Tax-Exempt Governmental
Obligations, Form 8038-G, to the Internal Revenue Service, together with Form
8038-G.
13. Opinion of the City Attorney, pursuant to Section 8(c)(xiv) of the Purchase
Contract.
-3-
C. FISCAL AGENT AND DISSEMINATION AGENT DOCUMENTS
1. Authentication and Incumbency Certificate, together with general signing
resolution.
2. Certificate of Fiscal Agent, pursuant to Section 8(c)(xv) of the Purchase
Contract.
3. Fiscal Agent's Receipt of Proceeds.
4. Opinion of Counsel to the Fiscal Agent and Dissemination Agent, pursuant to
Section 8(c)(xvi) of the Purchase Contract.
D. UNDERWRITER AND CONSULTANT DOCUMENTS
1. Certificate of Underwriter, pertaining to the reoffering price of the Bonds to the
public and the establishment of reserve fund.
2. Underwriter's Receipt for Bonds.
3. Specimen Bonds. (one per maturity)
4. Certificate of John S. Adams &Associates, Inc., as Appraiser, consenting to the
inclusion of its report in the Official Statement, pursuant to Section 8(c)(vii) of
the Purchase Contract.
5. Certificate of Michael Swan Consulting, as Special Tax Consultant, pursuant to
Section 8(c)(ix) of the Purchase Contract.
6. Appraisal of Real Property, dated April 1, 2002, by John S. Adams &
Associates, Inc.E. DEVELOPER,LANDOWNER AND BOEING DOCUMENTS
1. Certificate of Developer,pursuant to Section 8(c)(x) of the Purchase Contract.
2. Certificate of Landowner,pursuant to Section 8(c)(x) of the Purchase Contract.
3. Certificate of Boeing,pursuant to Section 8(c)(x) of the Purchase Contract.
4. Opinion of Counsel to the Developer, pursuant to Section 8(c)(xi) of the
Purchase Contract.
5. Opinion of Counsel to the Landowner, pursuant- to Section 8(c)(xi) of the
Purchase Contract.
6. Opinion of Counsel to Boeing, pursuant to Section 8(c)(xi) of the Purchase
Contract.
-4-
F. BOND COUNSEL AND DISCLOSURE COUNSEL DOCUMENTS
1. Final Approving Legal Opinion of Quint&Thimmig LLP.
2. Supplemental Opinion of Quint & Tbimmig LLP, pursuant to Section 8(c)(ii) of
the Purchase Contract and attached thereto as Exhibit A.
3. Reliance Letter to the Underwriter Regarding Final Approving Legal Opinion of
Quint&Thimmig LLP,pursuant to Section 8(c)(ii)of the Purchase Contract.
4. Reliance Letter to the Fiscal Agent Regarding Final Approving Legal Opinion of
Quint&Thimmig LLP.
5. Opinion of Quint &Thimn-dg LLP, as Disclosure Counsel, to the City and the
Underwriter,pursuant to Section 8(c)(iii) of the Purchase Contract and attached
thereto as Exhibit B.
-5-
Quint&Thimmig LLP
$4,900,000
IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(MCDONNELL CENTRE BUSINESS PARK)
SPECIAL TAX BONDS, SERIES 2002-A
INTERESTED PARTIES
ISSUER'S COUNSEL
ISSUER
-Leonie Mulvihill,Esq. (cd)
-David C.Biggs Deputy City Attorney
Director of Economic Development CITY OF HUNTINGTON BEACH
-Christy Teague(cd) 2000 Main Street
Assistant Project Manager Huntington Beach,CA 92648
-Clay Martin(cd) (714)536-5620
Director of Administrative Services (714)374-1590[FAX]
-Connie Brockway,CMC (•) Email: lmulvihill@surfcity-hb.org
City Clerk
-Dan Villella UNDERWRITER
Finance Officer
-Shari Freidenrich(cd) -Stephen E.Heaney(cd)
City Treasurer -Sara Oberlies
-Terri Elliott STONE&YOUNGBERG LLC
Principal Civil Engineer 15260 Ventura Boulevard,Suite 1520
-Robert Righetti (cd) Sherman Oaks,CA 91403
Consultant Engineer (818)528-2121 (Heaney)
CITY OF HUNTINGTON BEACH (818)528-2130(Oberlies)
2000 Main Street (818)789-1321 [FAX]
Huntington Beach,CA 92648 Email: sheaney@syllc.com
(714)536-5909(Biggs) soberlies@syllc.com
(714)375-5088(Teague)
(714)536-5236(Martin) LANDOWNER
(714)536-5228(Villella)
(714)536-5200(Freidenrich) -Jim Schulte (•,cd)
(714)536-5580(Elliott) BOEING REALTY CORPORATION
(714)374-1731 (Righetti) 3760 Kilroy Airport Way#500
(714)375-5087[FAX-Biggs;Teague] Long Beach,CA 90806
(714)374-1571 [FAX-Martin;Villella] (562)627-4807
(714)374-1603[FAX-Freidenrich] (562)627-4906[FAX]
(714)960-8881 [FAX-Elliott] Email: james.w.schulte@boeing.com
(714)374-1573[FAX-Righetti]
Email: biggsd@surfcity-hb.org
teaguec@surfcity-hb.org
martincw@surfcity-hb.org
villellad@surfcity-hb.org
freidens@surfcity-hb.org
elhottt@surfcity-hb.org
rrighetti@surfcity-hb.org
(•) Original Transcript Recipient
(cd) Compact Disc Transcript Recipient
DISTRIBUTION LIST
Page 2
LANDOWNER ADVISORS SPECIAL TAX CONSULTANT
-Steve Sandland(cd) -Michael Swan(cd)
PROJECT DIMENSIONS,INC. MICHAEL SWAN CONSULTING
3 Park Plaza,Suite 1490 22 Hickory
Irvine,CA 92614 Irvine,CA 92614
(949)476-2246 (949)786-3212
(949)476-8520[FAX] (949)552-5199[FAX]
Email:ssandland@projectdimensions.com Email:swanee7@cox.net
-Richard Harlow FISCAL AGENT
RICHARD HARLOW&ASSOCIATES
211-B Main Street -Helen McNulty(•)
Huntington Beach,CA 92648 Trust Officer
(714)960-2147 BNY WESTERN TRUST COMPANY
(714)969-7857[FAX] 700 South Flower Street,Suite 500
Email:rharipo@aol.com Los Angeles,CA 90017
(213)630-6247
LANDOWNER'S COUNSEL (213)630-6215[FAX]
Email:hmcnulty@bankofny.com
-Lewis G.Feldman,Esq.
-Robert M.Haight,Jr.,Esq. (cd) FISCAL AGENT'S COUNSEL
PILLSBURY WINTHROP LLP
10100 Santa Monica Boulevard,Suite 2300 -Judith A.Whitehouse,Esq. (cd)
Los Angeles,CA 90067-4008 BROBECK PHLEGER&HARRISON LLP
(310)203-1188(Feldman) One Market Plaza,Spear Street Tower
(310)203-1125(Haight) San Francisco,CA 94105
(310)286-6672[FAX] (415)442-1549
Email: Ifeldman@pillsburywinthrop.com (415)442-1010[FAX]
rhaight@pillsburywinthrop.com Email:jwhitehouse@brobeck.com
INVESTMENT ADVISOR APPRAISER
-Darlene Blaney(cd) -John Adams
BOND LOGISTIX JOHN ADAMS&ASSOCIATES
777 South Figueroa Street,Suite 3200 5100 Birch Street
Los Angeles,CA 90017 Newport Beach,CA 92660
(310)374-0156 (949)833-1972
(800)562-4372 (949)851-2055[FAX]
(310)374-0956[FAX] Email:jsainc@pacbell.net
Email:dblaney@bondlogistix.com
BOND COUNSEL and DISCLOSURE COUNSEL
-Amy J.Kron
Vice President -Paul J.Thimmig,Esq.(•)
BOND LOGISTIX LLC -C.Blythe Fleet
666 Fifth Avenue QUINT&THIM IIG LLP
New York,NY 10103 One Embarcadero Center,Suite 2420
(212)506-5287 San Francisco,CA 94111-3737
(212)506-5299[FAX] (415)765-1550
Email:akron@bondlogistix.com (415)765-1555[FAX]
E-mail:pthimmig@gtllp.com
bfleet@gtllp.com
.v
(•) Original Transcript Recipient
(cd) Compact Disc Transcript Recipient
Quint&Thimmig LLP 2/10/02
3/15/02
3/19/02
MARKED TO SHOW CHANGES.
PETITION
(Including Waiver)
To Create a Community Facilities District and
With Respect to Related Matters
To the City Council
City of Huntington Beach
2000 Main Street
Huntington Beach,California 92648
Dear Councilmembers:
This is a petition to create a communit�facilities district,and with respect to related
matters, under the provisions of Chapter 3.56 (commencing with Section 3.56.010) of the
Municipal Code of the City of Huntington Beach and, as applicable, Sections 53311 and
following of the California Government Code (collectively,the "Law"), and the undersigned
hereby states as follows:
1. Petitioners. This petition is. submitted by the entity identified below as the
owner of all of the parcels of land identified below (with the exception of all or a portion of
APN No. 195-111-24 which will be a water well site t(? be,owned by the City of.Huntington
Beach). By submitting this petition,we warrant to the City of Huntington Beach (the "City")
that we are the owner of such land and are authorized to execute this petition.
2. Proceedings Requested. Petitioners hereby ask that the City Council of the City
undertake proceedings under the Law to (a) create a community facilities district (the "CFD")
with two separate improvement areas,with one such area to be designated "Improvement Area
A of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre
Business Park)" ("Area A"),and with the other such area to be designated "Improvement Area
B of the City of Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre
Business Park)" ("Area B"), (b) to authorize the levy of special taxes in Area A and in Area B;
and (c) tc authorize special tax bonds for Area A in an amount of not to exceed $13,000,000
and to authorize special tax bonds for Area B in an amount of not to exceed$13,000,000.
3. Boundaries of CFD. Petitioners hereby ask that the territory within the
boundaries of Area A and in Area B include those parcels of real property identified by Orange
County Assessor Parcel numbers listed below.
4. Purpose of CFD. Petitioners hereby ask that Improvement Areas A and B of the
CFD be created, the special taxes be levied and the bonds be issued to finance all or a portion
of the costs of the public improvements identified on Exhibit A hereto, and to finance the costs
of issuing the special tax bonds.
5. Election. Petitioners hereby ask that the special election to beheld under the
Law to authorize the special taxes and the issuance of the bonds and to establish an
appropriations limit for each of the improvement areas of the CFD be consolidated into a single
election and that the election be conducted by the City and its officials, using mailed or hand-
08003.07:J6056
delivered ballots and that such ballots be opened and canvassed and the results certified at the
same meeting of the City Council of the City as the public hearings on the CFD under the Law
or as soon thereafter as possible. t
6. Waivers. To expedite the completion of the proceedings for the CFD, all notices
of hearings and all notices of election,applicable waiting periods under the Law for the election
and all ballot analysis and arguments for the election are hereby waived. We also waive any
requirement as to the specific form of the ballot to be used for the election,whether under the
Law,the California Elections Code or otherwise. -
7. Deposit. We have submitted$41,165.00 (the "Deposit") to the City to be used
by the City to pay the costs incurred by the City in connection with the formation of the CFD.
The Deposit shall be administered in accordance with that certain agreement between the City
and McDonnell Douglas Corporation,entitled Deposit/Reimbursement Agreement.
This petition is dated March 20, 2002.
The property that is the subject The name of the owner of record of such property
of this Petition is identified for and the Petitioner is:
Area A as Orange County
Assessor Parcel Nos. 195-111- MCDONNELL DOUGLAS CORPORATION
34 (portion), 195411-24, and
1.95-111-31; and for Area B is
identified as Orange County
Assessor Parcel Nos. 195-111- BY ^�
29 (portion), 195-111-34 Fts: Ste arker n I B
(portion) and 195-111-03. Auth toed Signatory
Address: '
c/o Boeing Realty Corporation
3760 Kilroy Airport Way#500
Long Beach, CA 90806
Attention: Jim Schulte
with a copy to:
Pillsbury Winthrop LLP
10100 Santa Monica Boulevard,Suite 2300
Los Angeles,CA 90067-4008 _
Attention: Robert M.Haight,Jr.,Esq.
1
-2-
EXHIMIT A
DESCRIPTION OF FACILITIES ELIGIBLE TO BE FUNDED BY
AREA A OR AREA B OF THE DISTRICT
FACILITIES
It is intended that the each of the two Improvement Areas of the District will be
authorized to finance all or a portion of the costs of any of the following:
1. The construction of sewer lines in existing Skylab Road,new Delta Lane and new
Astronautics Lane.
2. The construction of streets,curbs,and gutters from the extension of Skylab Road
from its current terminus at Astronautics Lane west to approximately-Q10.feet
west of new Delta Lane.
3. The construction of streets,curbs,and gutters from the new Delta Lane between
Skylab Road north to new Astronautics Lane.
4. The construction of streets, curbs,and gutters for the new Astronautics Lane
from its current terminus west to Rancho Road.
5. The construction of street,curbs,and gutters for the new Skylab Lane from new
Astronautics Lane sout4 approximately 200 feet.
6. The construction of the waterline in Rancho Road connecting its current terminus
east of Bolsa Chica Road to the existing%iratefline north of the Navy-Railroad.
7. The construction of onsite waterlines in extended Skylab Road,new Delta Lane
and new Astronautics Lane.
8. The construction of conduit and fixtures for new street lighting in extended
Skylab Road,new Delta Lane,and new Astronautics Lane.
9. The construction of street,curbs,and gutters for the new Delta Lane from Bolsa
Avenue north to Skylab Road.
10. The construction of a waterline in new Delta Lane from Bolsa Avenue tc Skylab
Road.
11. The construction of storm drains in new Skylab Road, new Delta Lane new
Astronautics Lane and new Skylab Lane.
12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane
including modifications to the existing traffic signal.
13. Roadway improvements at the intersection of Rancho Road and Astronautics
Lane including construction of the new traffic signal.
d 14. Roadway improvements to Rancho Road consisting of installation of new
sidewalk.
A-1
The Improvements to be financed shall include the costs of the acquisition of right-of-
way the costs of design,engineering and planning, the costs of any environmental or traffic
studies, (including right-of-way that is intended to be dedicated by the recording of a final
map), surveys or other reports, costs related to landscaping and irrigation, soils testing,
permits, plan check and inspection fees, insurance, legal and related overhead costs,
coordination and supervision and any other costs or appurtenances related to any of the
foregoing.
OTHER
The District may also finance any of the following:
1. Bond related expenses, including underwriters discount, reserve fund, capitalized
interest,letter of credit fees and expenses,bond and disclosure counsel fees and expenses, bond
remarketing costs,and all other incidental expenses. -
2. Administrative fees of the City of Huntington Beach and the Bond trustee or fiscal
agent related to the District and the Bonds.
3. Reimbursement of costs related to the formation of the District advanced by the City
of Huntington Beach, the landowner in the District,or any party related to any of the foregoing,
as well as reimbursement of any costs advanced by the City of Huntington Beach, the
landowner in the District or any party related to any of the foregoing,for facilities,fees or other
purposes or costs of the District.
t
A-2
z Quint&Thimmig LLP 2/10/02
3/15/02
3/19/02
MARKED TO SHOW CHANGES.
DEPOSIVREVIBURSEMENT AGREEMENT
City of Huntington Beach
Community Facilities District No. 2002-1
(McDonnell Centre Business Park)
THIS DEPOSIT/REIMBURSEMENT AGREEMENT (the "Agreement") is by and
between the City of Huntington Beach (the "City"), for itself and on behalf of the proposed
City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business
Park) (the "CFD"), and McDonnell Douglas Corporation, a Maryland corporation (the
"Developer").
RECITALS:
WHEREAS, the Developer has requested that the City consider the formation of the
CFD and the issuance of bonds for an improvement area of the CFD (the "Bonds") under the
provisions of Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of the
City and, as applicable, Sections 53311 et seq. of the California Government Code (collectively,
the "Law"); and
WHEREAS, the Developer is willing to deposit funds with the City to ensure payment
of the costs of the City in forming the CFD and otherwise in connection with the issuance of the
Bonds and the proposed expenditure of the proceeds thereof, provided that such funds so
advanced are reimbursed to the Developer from the proceeds of any Bonds issued by the City
to the extent provided herein:and
WHEREAS, the City and the Developer now desire to specify the terms of said deposit
and reimbursement.
AGREEMENT:
NOW,THEREFORE, in consideration of the foregoing and the mutual covenants set
forth herein, and for other consideration the receipt and sufficiency of which is hereby
acknowledged,the parties hereto agree as follows:
Section 1. The Deposit: Additional Advances. The Developer has provided to the City
$41,165.00 (the "Deposit"), to be used by the City to pay the costs in conducting proceedings
for the formation of the CFD and the issuance of the Bonds (as more fully described in Section
2(a) below,the "Initial Costs"),said amount having been heretofore delivered by the Developer
to the Director of Administrative Services of the City by means of a check made payable to the
"City of Huntington Beach." The City, by its execution hereof, acknowledges receipt by the
City of the Deposit. The Director of Administrative Services shall forward the check to the City
Treasurer for deposit to an appropriate account. The check representing the Deposit will be
cashed by the City Treasurer,and the Deposit may be commingled with other funds of the City
for purposes of investment and safekeeping,but the City Treasurer shall at all times maintain
records as to the expenditure of the Deposit.
08003.07.J6057
The Developer hereby agrees to advance any additional amounts necessary to pay any
Initial Costs incurred by the City, in excess of the amount of the Deposit, promptly. upon
written demand therefore by the Director of Administrative Services of the City;provided that
the amount of the Deposit, plus any such additional amounts (the "Additional Deposits" and,
collectively with the Deposit, the "Deposits"), shall not exceed $50,000.00 without the prior
written consent of the Developer. Notwithstanding .the foregoing, the City's Director of
Economic Development may direct City staff and consultants to cease all work related to the
formation of the CFD and the issuance of the Bonds until any additional amounts so demanded
has been received by the City.
Section 2. Use of Funds. The Deposits shall be administered as follows:
(a) The Director of Administrative Services of the City may draw upon the Deposits
(by written request to the City Treasurer) from time to time to pay the Initial Costs, including
but not limited to: (i) the fees and expenses of any consultants to the City employed in
connection with the issuance of the Bonds and the proposed expenditure of the proceeds
thereof(such as engineering, legal counsel, including the City Attorney, Bond Counsel and
financing and special tax consultants); (ii) the costs of appraisals, market absorption and
feasibility studies and other reports necessary or deemed advisable by City staff or consultants
in connection with the Bonds; (iii) costs of publication of notices, preparation and mailing of
ballots and other costs related to any election with respect to the CFD, the rate and method of
apportionment of the special taxes to be levied therein and any bonded indebtedness thereof;
(iv) a reasonable charge for City staff time, as determined by the City Director of
Administrative Services,in analyzing the CFD,the Bonds and the expenditure of the proceeds
thereof,including a reasonable allocation of City overhead expense related thereto; and (v) any
and all other actual costs and expenses incurred by the City with respect to the CFD or the
Bonds. The Developer hereby acknowledges that,at a minimum,the following amounts will or
may be charged against the Deposits, whether or not the CFD is formed and the Bonds are
issued: (i) up to $7,665.00 to Michael Swan Consulting, special tax consultant, (ii) up to
$13,500.00 for an appraisal and market absorption analysis related to the CFD, and (iii) up to
$20,000.00 to the City for City Staff time in analyzing the CFD,the Bonds and the expenditure
of the proceeds thereof, including a reasonable allocation of City overhead expense related
thereto,and any other actual costs and expenses incurred by the City related to the CFD.
(b) If the Bonds are issued under the Law by the City secured by special taxes levied
upon the land within the applicable improvement area of the CFD, the City shall provide for
reimbursement to the Developer,without interest,of all amounts charged against the Deposits,
said reimbursement to be made solely from the proceeds of the Bonds and only to the extent
otherwise permitted under the Law. On or within ten (10) business days after the date of
issuance and delivery of the Bonds, the Director of Administrative Services of the City (by
written request to the City Treasurer) shall return the then unexpended Deposits to the
Developer,without interest, less an amount equal to any costs incurred by the City or that the
City is otherwise committed to pay,which costs would be subject to payment under Section
2(a) above,but have not yet been so paid.
(c) If the Bonds are not issued or if the Developer requests in writing that the City
terminate proceedings with respect to the formation of the CFD or the issuance of the Bonds,
the Director of Administrative Services of the City (by written request to the City Treasurer)
shall, within ten (10) business days after receipt of such written request or (if no such written
request has been received) after adoption of the resolution stating the intent of the City to
terminate proceedings under the Law with respect to the issuance of the Bonds,return the then
unexpended Deposits to the Developer, without interest, less an amount equal to any costs
incurred by the City or that the City is otherwise committed to pay, which costs would be
subject to payment under Section 2(a) above but have not yet been so paid.
Section 3. Reimbursement of Other Developer Costs. Nothing contained herein shall
prohibit reimbursement of other costs and expenses of the Developer, or any other entity with
an interest in all or any portion of the land in the CFD, incurred in connection with the CFD
from the proceeds of the Bonds,including,but not limited to fees and expenses of legal counsel
to the Developer. Any such reimbursement shall be made solely from the proceeds of the Bonds
and only to the extent otherwise permitted under the Law and otherwise provided for, at the
reasonable discretion of the City,in the proceedings for the issuance of the Bonds.
Section 4. Agreement Not Debt or Liability of the City. It is hereby acknowledged and
agreed that this Agreement is not a debt or liability of the City, as provided in Section
53314.9(b) of the California Government Code. The City shall not in any event be liable
hereunder other than to return the unexpended and uncommitted portions of the Deposits as
provided in Section 2 above and provide an accounting under Section 7 below. The City shall
not be obligated to advance any of its own funds with respect to the CFD or for any of the
other purposes listed in Section 2(a) hereof. No member of the City Council or officer,employee
or agent of the City shall to any extent be personally liable hereunder.
Section 5. No Obligation to Issue Bonds. The provisions of this Agreement shall in no
way obligate the City to form the CFD,to issue any bonds,or to expend any of its own funds in
connection with the CFD.
Section 6. Severability. If any part of this Agreement is held to be illegal or
unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be
given effect to the fullest extent reasonably possible.
Section 7. Accounting. The Director of Administrative Services of the City (working
with the City Treasurer) shall provide the Developer with a written accounting of moneys
expended under this Agreement,within ten (10) business days of receipt by the Finance Officer
of the City of a written request therefore submitted by an authorized officer of the Developer
and, in any event,promptly following the issuance of the Bonds. No more than one accounting
will be provided in any calendar month and the cost of providing the accounting shall be
charged to the Deposits.
Section 8. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the parties hereto.
Section 9. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
-3-
IN WITNESS THEREOF,the parties hereto have executed this Agreement as of the day
and year written alongside their signature line below.
Executed on: DEVELOPER:
March/La 2002
MCDONNELL DOUGLAS CORPORATION
By: 1"4 b '
Its: Ste hen 1 Barker
jw1brized Signamy
Executed on: CITY:
April 2002
CITY OF HUNTINGTON BEACH,for itself
and on behalf of the proposed City of
Huntington Beach Community Facilities
District 2002-1 (McDonnell Centre Business
Park)
By:
Its: Directoirof Administrative Services
AP rr "`W�
-4- DEPUTY CITY ATTORNEY
Quint&Thimmig LLP 9/21/01
CITY OF HUNTINGTON BEACH
LOCAL GOALS AND POLICIES FOR
COMMUNITY FACILITIES 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.
1I. 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.
III. 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.
08003.05
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 REQUIREMENTS 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 CID, 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 MAXIMUM 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.
IX. 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.
-4-
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
the entity requesting the establishment of the CID 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 CID 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.
•XII. 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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FEB-15-2002 09:05 CITY OF HUNTINGTON BEACH 714 374 1590 P.02
i
Huntington Beach Municipal Code Chapter 3.561ndex
CHAPTER 3.56
(341 7-6ss)
CITY OF HUNMGTON BEACH SPECIAL TAN FINANCING IlVIFROVEMENT CODE
Article 1 —Indgx
General Provision
Sections_
3.56.010 Short title
3.56,020 Municipal and State affairs; authority conferred by Code; applicability of laws
3.56.030 Conflicting provisions; severability
3.56;040 . Actions or determinations by local agency
3,56.050 Liberal construction of chapter; error, irregularity, neglect or omission
3.56.060 Failure to receive notice, resolution, order or other matter not affecting proceedings
3.56.070 Definitions
Article 2 -Index
Purpose of District
Sections:
3.56.100 Initiation of proceedings to establish district upon adoption of certain local goals and
policies
3.56.110 Establishment of community facilities district to finance certain services
3.56.120 Additional financing powers of district; purchase, construction, expansion,
improvement, rehabilitation, or planning and design work of real or tangible property
3.56.130 Additional district financing powers
3.56.140 Revolving fund for cleanup of hazardous substances; withdrawal of funds
3.56.150 Liability; removal or remedial action; hazardous substances released or threatened to
be released
3.56.160 Ordinance;local agency contribution; purposes
3.56.170 Joint community facilities agreement or joint exercise of powers agreement
3.56.180 Special tax; property acquired by public entity through negotiated transaction or by gift
or devise
3.56.190 Special tax; special assessment on property acquired by public entity through eminent
domain
Article 3 -Index
Proceedings To Create A C mmunity Facilities District
Sections;
3.56.200 Institution of proceeding; request; petition; fee
3.56.210 Petition; contents;findings as to requisite number of signers
3.56.220 Resolution of intention to establish district;time for adoption
3.56.230 Reports and estimate of costs by responsible officers; remedial action plan for cleanup
of hazardous substance; inclusion in record of hearing
e�ss
FEB-15-2002 09:05 CITY OF HUNTINGTON BEACH 714 374 1590 P.03
chapter 3.561ndex-3.56.020 Huntington Beach Municipal Code
t
Article 4 -Index
Procedures For Levying
Sections
3.56,300 Lease or possessory interest by exempt person or entity to nonexempt person or entity;
lease provisions; collection
3.56.310 Actions or proceedings against levy of special tax or increase in special tax; time for
commencement;time for perfection of appeal from final judgment
3.56.320 Reservation of rights; tender of full or partial payment; special tax installments or
interest or penalties due or delinquent
Article 5 - Index
Sections:
3.56.400 Resolution to incur bonded indebtedness
3.56.410 Inclusion of certain costs and estimated costs in proposed bonded indebtedness
3.56.420 Sale of bonds; appraisal of real property subject to special tax for paying debt service
on bond; determination of no unusual credit risk; vote to proceed for specified public
policy reasons
3.56,430 Agreement to notify one or more parties in the event specified events occur affecting
the market value of outstanding bonds; events triggering notice
3.56.440 Action to foreclose liens; cumulative remedy;resolution to diligently pursue foreclosure _
action; collection of delinquent charges
3,56.450 Complainants;time limitations; contents of complaint
3,56.460 Judgment decree; contents; amount; attorneys' fees; application of general foreclosure
provisions
3.56.470 Price of property or possessory interests sold
3.56.480 Computation errors;validity of special tax installment, interest or penalty
3.56,490 Tender of bonds or debt; special taxes,penalties and interest; satisfaction of bid amount
3.56.500 Notice of proposed sale of bonds; contents
Article 1
General Provisions
3.56.010 Short title. This ordinance shall be known and may be cited as the"City of Huntington
Beach Special Tax Financing Improvement Code," and shall be referred to herein as the"Code".
3.56.020 Municipal and State affairs: authority conferred by Code: avolicabilily of laws.
This Code is adopted pursuant to Section 500 of Article V of the Charter of the City of
Huntington Beach. In proceedings had pursuant to this Code which are a municipal affair, any
general laws referred to in this Code are deemed a part of this Code_
In the event that any proceeding had pursuant to this Code shall be adjudged a state affair, it is
declared to be the intention that the proceedings were had pursuant to any applicable general law
or laws.
6W
FEB-15-2002 09:05 CITY OF HUNTINGTON BEACH 714 374 1590 P.04
Huntington Beach Municipal Cade 3.56.020-3W.070(a)
This Code provides an alternative method of financing certain public and private capital facilities
and municipal services. The provisions of this Code shall not affect or limit any other provisions
of law authorizing or providing for the furnishing of facilities or services, or the raising of revenue
for these purposes. The City may use the provisions of this Code in conjunction with the Mello-
Roos Community Facilities Act of 1982, as amended (commencing with Section 53311 of the
California Government Code) (the"Act"), or any other method of financing part or all of the cost
of providing the authorized kinds of public and private capital facilities and municipal services.
Actions not otherwise addressed in this Code shall be otherwise governed by the provisions of the
Act.
This Code shall be deemed to provide a complete, additional and alternative method for actions
authorized hereby and shall be regarded as a supplemental and additional to the powers conferred
by other laws, including the Act.
3.56.030 Conflicting provisions; severability. Any provision in this Code which conflicts with any
general law or act shall prevail over the other such provision in connection with any proceedings
taken pursuant to this Code.
In the event any portion of this Code shall be declared illegal, unenforceable or unconstitutional,
such provision shall be deemed severable from the rest of the provisions of this Code.
3.56.040. Actions or determinations by local agency_. The local agency may take any actions or
make any determinations which it determines are necessary or convenient to carry out the purposes
of this Code and which are not otherwise prohibited by law.
3.56.050 Liberal construction of chapter; error, irregularity,neglect or omission.
This Code shall be liberally construed in order to effectuate its purposes. No error, irregularity,
informality, and no neglect or omission of any officer, in any procedure taken under this Code,
which does not directly affect the jurisdiction of the legislative body to order the installation of the
facility or the provision of service, shall void or invalidate such proceeding or any levy for the
costs of such facility or service.
3.56.060 Failure to receive notice,,resolution, order or other matter not affecting
uroceedinas. The failure of any person to receive a notice, resolution, order, or other matter
shall not affect in any way whatsoever the validity of any proceedings taken under the Code, or
prevent the legislative body from proceeding with any hearing so noticed.
3.56.070 Definitions. Unless the context otherwise requires, the definitions contained in this
article shall govern the construction of this Code.
(a) "Act"means the Mello-Roos Community Facilities Act of 1982, as amended(commencing with
Section 53311 of the California Government Code).
srss
FEB-15-2002 09:06 CITY OF HUNTINGTON BEACH 714 374 1590 P.05
3.56.070(b—) Huntington Beach Municipal Code
(b) "City" means the City of Huntington Beach.
(c) "City Council" means the City Council of the City of Huntington Beach.
(d) "City Clerk" or"Clerk" means the City Clerk of the City of Huntington Beach.
-(e) "Community facilities district" or "district" means a legally constituted governmental entity
established pursuant to this Code and the Act for the sole purpose of financing facilities and
services-
(f) "Cost" means the expense of constructing, installing or purchasing the public facility and of
related land, right-of-way, easements, including incidental expenses, and the cost of providing
authorized services, including incidental expenses.
(g) "Debt" means any binding.obligation to pay or repay a sum of money, including obligations in
the form of bonds, certificates of participation, long-term leases, loans from government
agencies, or loans from banks, other financial institutions, private businesses, or individuals, or
long-term contracts.
(h) "Incidental expense"includes all of the following:
(1) The cost of planning and designing public facilities to be financed pursuant to this Code,
including the cost of environmental evaluations of those facilities.
(2) The costs associated with the creation of the district, issuance.of bonds, determination
of the amount of taxes,collection of taxes,payment of taxes, or costs otherwise incurred
in order to carry out the authorized purposes of the district.
(3) Any other expenses incidental to the construction, completion, and inspection of the
authorized work.
(i) "Landowner," "owner" or"owner of land" means any person shown as the owner of land on
the last equalized assessment roll or otherwise known to be the owner of the land by the city
clerk. Notwithstanding the foregoing, "landowner", "owner" or"owner of land" means, with
respect to any land which is the subject of a condemnation action, the person entitled to
possession of the land pursuant to such condemnation action, or with respect to land to which
the City or Redevelopment Agency has fee title, the person having a leasehold interest in the
land for a term exceeding 40 years. The legislative body has no obligation to obtain other
information as to the ownership of the land, and its determination of ownership shall be final
and conclusive for the purposes of this Code. A public agency is not a landowner owner or
owner of land for purposes of this Code, unless the land owned by a public agency would be
subject to a special tax pursuant to Section 3.56.040 or unless the public agency has acquired
possession to the land through a condemnation and has made the certification required in
Section 3.56.300.
s/09
FEB-15-2002 09:06 CITY OF HUNTINGTON BEACH 714 374 1590 P.06
Huntington Beach Municipal Code 3.56.0700)-3.56.100(a)(4))
G) "Legislative body" means the legislative body or governing board of any local agency, and with
respect to the City means the City Council.
(k) "Local agency" means any city or county, whether general law or chartered, special district,
school district,_}oint powers entity.created pursuant to Chapter 5 (commencing with Section
6500) of Division 7 of Title 1, or any other municipal corporation, district, or political
subdivision of the state.
(1) "Rate" means a single rate of tax or a schedule of rates.
(m) "Redevelopment Agency"means the Redevelopment Agency of the City of Huntington Beach.
(n) "Services" means the provision of categories of services identified in Section 3.56.110.
"Services"includes the performance by employees of functions, operations, maintenance, and
repair activities. "Services" does not include activities or facilities identified in Section
3,56.1.20.
Article 2
Purpose Of District
3.56.100 Initiation of proceedings to establish district uuon adoption of certain local goals
and Policies.
(a) The City may initiate proceedings to establish a district pursuant to this Code only if it has
first considered and adopted local goals and policies concerning the use of this Code, except
in the case of districts being formed pursuant to a development agreement between the City
and a qualified developer and or the Redevelopment Agency and a qualified developer. The
policies shall include at least the following:
(1) A statement of the priority that various kinds of public facilities shall have for
financing through the use of this Code, including public facilities to be owned and
operated by other public agencies, including school districts.
(2) A statement concerning the credit quality to be required of bond issues, including
criteria to be used in evaluating the credit quality.
(3) A statement concerning steps to be taken to ensure that prospective property
purchasers are fully informed about their taxpaying obligations imposed under this
Code.
(4) A statement concerning criteria for evaluating the equity of tax allocation formulas,
and concerning desirable and maximum amounts of special tax to be levied against
any parcel pursuant to this Code.
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3,56.110-3.66.120 Huntington Beach Municipal Code
3 56 110 Establishment of community facilities district to finance certain services. A
community facilities district may be established under this Code to finance any one or more of the
following types of services within an area: ,
(a) Police protection services, including, but not limited to, -criminal justice services. However,
criminal justice services shall be limited to providing services for jails,detention facilities, and
juvenile halls.
(b) Fire protection and suppression services, and ambulance and paramedic services.
(c) Recreation program services, library services, maintenance services for elementary and
secondary school sites and structures, and the operation and maintenance of museums and
cultural facilities. Bonds may not be issued pursuant to this Code to fund any of the services
specified in this subdivision. A special tax may be levied for any of the services specified in this
subdivision only upon approval of the voters as specified in subdivision(b) of Section 53328
of the Act. However, the requirement contained in subdivision(b)of Section 53328 of the Act
that a-certain number of persons have been registered to vote for each of the 90 days preceding
the close of the protest hearing does not apply to an election to enact a special tax for
recreation program services, library services, and the operation and maintenance of museums
and cultural facilities subject to subdivision(c) of Section 53326 of the Act.
(d) Maintenance of streets, landscaping, street lighting, parks, parkways, and open space.
(e) Flood and storm protection services, including, but not limited to,the operation and
maintenance of storm drainage systems, and sandstorm protection systems.
(f) Services with respect to removal or remedial action for the cleanup of any hazardous
substance released or threatened to be released into the environment. As used in this
subdivision, the terms"remedial action" and"removal" shall have the meanings set forth in
Sections 25322 and 25323, respectively, of the Health and Safety Code, and the term
"hazardous substance" shall have the meaning set forth in Section 25291 of the Health and
Safety Code. Community facilities districts shall provide the State Department of Health
Services and local health and building departments with notification of any cleanup activity
pursuant to this subdivision at least 30 days prior to commencement of the activity.
3.56.120 Additional financing powers of district; purchase,,construction. expansion.
improvement, rehabilitation, or planning and design work of real or tangible proms A
community facilities district may also finance the purchase, construction, installation expansion,
improvement, or rehabilitation of any real or other tangible property with an estimated useful life
of five years or longer or may finance planning and design work that is directly related to the
purchase, construction, expansion, or rehabilitation of any real or tangible property. The facilities
need not be physically located within the district. A district may only finance the purchase of
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FEB-15-2002 09:07 CITY OF HUNTINGTON BEACH 714 374 1590 P.08
Huntington Beach Municipal Code 3.56.120(a-9)
facilities whose construction has been completed, as determined by the legislative body, before the
resolution of formation to establish the district is adopted pursuant to Section 53 325.1 of the Act,
except that a district may finance the purchase of facilities completed after the adoption of the
resolution of formation if the facility was constructed as if it had been constructed under the
direction and supervision, or under the authority of, the local agency. For example, a community
facilities district may finance.facilities, including, but not limited to, the following:
(a) Local park, recreation, parkway, open-space facilities, beach maintenance facilities, beach
access facilities and parking facilities adjacent or accessible to such facilities.
(b) Elementary and secondary school sites and structures provided that the facilities meet the
building area and cost standards established by the State Allocation Board.
(c) Libraries.
(d) Child care facilities, including costs of insuring the facilities against loss, liability insurance in
connection with the operation of the facility, and other insurance costs relating to'the operation
of the facilities, but excluding all other operational costs. However, the proceeds of bonds
issued pursuant to this Code shall not be used to pay these insurance costs.
(e) The district may also finance the construction or undergrounding of water transmission and
distribution facilities, natural gas pipeline facilities,telephone lines, facilities for the transmission
or distribution of electrical energy, and cable television lines to provide access to those services
to customers who do not have access to those services or to mitigate existing visual blight_ The
district may enter into an agreement with a public utility to utilize those facilities to provide a
particular service and for the conveyance of those facilities-to the public utility. "Public utility"
shall include all utilities, whether public and regulated by the public Utilities Commission, or
municipal. If the facilities are conveyed to the public utility,the agreement shall provide that
the cost or a portion of-the cost ofthe facilities that are the responsibility of the utility shall be
refunded by the public utility to the district or improvement area thereof, to the extent that
refunds are applicable pursuant to (1)the public Utilities Code or rules of the Public Utilities
Commission, as to utilities regulated by the commission, or (2) other laws regulating public
utilities_ Any reimbursement made to the district shall be utilized to reduce or minimize the
special tax levied within the district or improvement area, or to construct or acquire additional
facilities within the district or improvement area, as specified in the resolution of formation.
(f) The district may also finance the acquisition, improvement, rehabilitation, or maintenance of
any real or other tangible property, whether privately or publicly owned, for the purposes
described in subdivision(e) of Section 3.56.110.
(g) The district may also pay in full all amounts necessary to eliminate any fixed special
assessment liens or to pay, repay, or defease any obligation to pay or any indebtedness
secured by any tax, fee, charge, or assessment levied within the area of a community
facilities district or may pay debt service on that indebtedness. In addition, tax revenues of a
arse district may be used to make lease or debt service payments on any lease, lease purchase
FEB-15-2002 09:07 CITY OF HUNTINGTON BEACH 714 374 1590 P.09
3-56.12fl(g}-3.56.120(q(2) Huntington Beach Municipal code
contract, or certificate of participation used to finance authorized district facilities. }
(h) Any other governmental facilities which the legislative body creating the community facilities
district is authorized by law to contribute revenue to, or construct, own, or operate. However,
the-district shall not operate or maintain or, except as otherwise provided in subdivisions (e)
and (f), have any ownership interest in any facilities for the transmission or distribution of
natural gas, telephone service, or electrical energy.
(i) (I) A district may also pay for the following:
(A) Work deemed necessary to bring buildings or real property, including privately
owned buildings or real property, into compliance with seismic safety standards or
regulations. Only work certified as necessary to comply with seismic safety
standards or regulations by local building officials may be financed. No project
involving the dismantling of an existing building and its replacement by a new
building, nor the construction of a new or substantially new building may be
financed pursuant to this subparagraph. Work on qualified historical buildings or
structures shall be done in accordance with the State Historical Building Code(Part
2.7 (commencing with Section 18950) of Division 13 of the Health and Safety
Code).
(B) In addition, within any county or area designated by the President of the United
States or by the Governor as a disaster area or for which the Governor has
proclaimed the existence of a state of emergency because of earthquake damage,
a district may also pay for any work deemed necessary to repair any damage to real
property directly or indirectly caused by the occurrence of an earthquake cited in
the President's or the Governor's designation or proclamation, or by aftershocks
associated with that earthquake, including work to reconstruct, repair, shore up, or
replace any building damaged or destroyed by the earthquake_ Work may be
financed pursuant to this subparagraph only on property or buildings identified in
a resolution of intention to establish a community facilities district adopted within
seven years of the date on which the county or area is designated as a disaster area
by the President or by the Governor or on which the Governor proclaims for the
area the existence of a state of emergency.
(2) Work on privately owned property,including reconstruction or replacement of privately
owned buildings pursuant to subparagraph(B)of paragraph(1), may only be financed by
a tax levy if all of the votes cast on the question of levying the tax, vote in favor of
levying the tax, or with the prior written consent to the tax of the owners of all property
which may be subject to the tax, in which case the prior written consent shall be deemed
to constitute a vote in favor of the tax and any associated bond issue. Any district created
to finance seismic safety work on privately owned buildings, including repair,
reconstruction, or replacement of privately owned buildings pursuant to this subdivision,
shall consist only of lots or parcels on which the legislative body finds that the buildings
to be worked on, repaired, reconstructed, or replaced, pursuant to this subdivision, are
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Huntington Beach Muntolpal Code 3.56.120(2)-3.56J40(a)(3)
located or were located before being damaged or destroyed by the earthquake cited
pursuant-to subparagraph(B) of paragraph(1) or by the aftershocks of that earthquake.
(j) (1) A district may also pay for the following:
(A) Work deemed necessary to repair and abate damage caused to privately owned
buildings and structures by soil deterioration. "Soil deterioration" means a chemical
reaction by soils that causes structural damage or defects in construction materials
including concrete, steel, and ductile or cast iron. Only work certified as necessary
by local building officials may be financed. No project involving the dismantling of
an existing building or structure and its replacement by a new building or structure,
nor the construction of a new or substantially new building or structure may be
financed pursuant to this subparagraph.
(B) Work on privately owned buildings and structures pursuant to this subdivision,
including reconstruction, repair, and abatement of damage caused by soil
deterioration, may only be financed by a tax levy if all of the votes cast on the
question of levying the tax vote in favor of levying the tax. Any district created to
finance the work on privately owned buildings or structures, including
reconstruction, repair, and abatement of damage caused by soil deterioration, shall
consist only of lots or parcels on which the legislative body finds that the buildings
or structures to be worked on pursuant to this subdivision suffer from soil
deterioration.
3.56.130 Additional district financing powers. Pursuant to Section 3.56.120, a community
facilities district may also finance the acquisition improvement, rehabilitation, or maintenance-of
any real or other tangible property, whether privately or publicly owned, for the purposes
described in subdivision (f) of Section 3.56.110.
3.56.140 Revolving Fund for cleanup of hazardous substances: withdrawal of funds.
(a) In connection with the financing of services and facilities pursuant to subdivision (f) of
Section 3.56.110 and Section 3.56.130, the legislative body may establish a revolving fund to
be kept in the treasury of the district. Except as provided in subdivision (b), moneys in the
revolving fund shall be expended solely for the payment of costs with respect to those services
and facilities. The revolving fund may be funded from time to time with moneys derived from
any of the following:
(1) Proceeds of the sale of bonds issued pursuant to Article 5 (commencing with Section 5-
1), notwithstanding any-limitation contained in Section 3.56.410.
(2) Any taxes or charges authorized under this Code-
(3) Any other lawful source.
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FEB-15-2002 09:09 CITY OF HUNTINGTON BEACH 714 374 1590 P.11
3.56.140(b)-3.56.16t1 Huntington aeach Municipal Code I�
(b) Subject to the provisions of any resolution, trust agreement or indenture providing for the
issuance of district bonds for the purposes set forth in Section 3.56.130,the legislative body
may withdraw money from the revolving fund whenever and to the extent that it finds that the
amount of money therein exceeds the amount necessary to accomplish the purposes for which
the revolving fund was established_ Any moneys withdrawn from the revolving fund shall be
used to redeem bonds of the district issued for the purposes set forth in Section 3.56.300 or
shall be paid to taxpayers in the district in amounts which the legislative body determines.
3 56 150 Liability; removal or remedial action: hazardous substances released or
threatened to be released.
(a) Any responsible party as defined by subdivision(a) of Section 25323.5 of the Health and Safety
Code shall be liable to the district for the costs incurred in the removal or remedial action for
the cleanup of any hazardous substance released or threatened to be released into the
environment. The amount of the costs shall include interest on the costs accrued from the date
of expenditure_ The interest shall be calculated based on the average annual rate of return on
the district's investment of surplus funds for the fiscal year in which the district incurred the
costs. Recovery of costs by a community facilities district under this section shall be
commenced before or immediately upon completion of the removal or remedial action, and
payments received hereunder by the district shall be deposited in the revolving fund in
accordance with.Section 3.56.140.
(b) To expedite cleanup,this section is intended to provide local jurisdictions an alternative method "
of financing the cost of removal or remedial action for the cleanup of any hazardous substance
through the issuance of voter-approved limited obligation bonds. The provisions of this section
shall not affect or limit the provisions of any other law establishing the liability of any person
for, or otherwise regulating, the generation, transportation, storage, treatment, or disposal of
hazardous substances. The scope and standard of liability for any costs recoverable pursuant
to Section 3.56.150 shall be the scope and standard of liability set forth in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Sec. 6901 et seq.),or any other provision of state or federal law establishing responsibility for
cleanup of hazardous waste sites.
3.56.160 Ordinance: local agency contribution: Purposes. At any time either before or after
the formation of the district, the legislative body may provide, by ordinance, that for a period
specified in the ordinance, the local agency may contribute, from any source of revenue not
otherwise prohibited by law, any specified amount, portion, or percentage of the revenues for the
purposes set forth in the ordinance, limited to the following: the acquisition or construction of a
facility, the acquisition of interest in real property, or the payment of debt service with respect to
the financing of either, the provision of authorized services, and the payment of expenses
incidental thereto. The contribution shall not constitute an indebtedness or liability of the local
agency.
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FEB-15-2002 09:09 CITY OF HUNTINGTON BEACH 714 374 1590 P.12
Huntington Beach Municipal Code 3.56.170.3.56.170(e)(1)
3 5b 170 Joint community facilities agreement or Joint exercise of Dowers sereement.
(a) A community facilities district may finance facilities to be owned or operated.by an entity other
than the agency that created the district, or services to be provided by an entity other than the
agency that created the district, or any combination, only pursuant to a joint community
facilities agreement or a joint exercise of powers agreement adopted pursuant to this section.
(b) At any time prior to the issuance of bonds by the district,the legislative bodies of two or more
local agencies may enter into a joint community facilities agreement pursuant to this section and
Sections 53316.4 of the Act and 53316.6 of the Act or into a joint exercise of powers
agreement pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of
the California Government Code to exercise any power authorized by this Code with respect
to the community facilities district being created or changed if the legislative body of each entity
adopts a resolution declaring that such a joint agreement would be beneficial to the residents
of that entity.
(c) Notwithstanding Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the
California Government Code, a contracting party may use the proceeds of any special tax or
charge levied pursuant to this Code or of any bonds or other indebtedness issued pursuant to
this Code to provide facilities or services which that contracting party is otherwise authorized
by law to provide, even though another contracting party does not have the power to provide
those facilities or services.
(d) Notwithstanding subdivision(b), nothing in this section shall prevent entry into or amendment
of a joint community facilities agreement or a joint exercise of powers agreement, after the
issuance of bonds by the district, if the new agreement or amendment is necessary, as
determined by the legislative body, for either of the following reasons-
(1) To allow an orderly transition of governmental facilities and finances in the case of any
change in governmental organization approved pursuant to the Cortese-Knox Local
Government Reorganization Act of 1985(Division I (commencing with Section 56000)
of Title 6).
(2) To allow participation in the agreement by a state or federal agency that could or would
not otherwise participate, including, but not limited to, the California Department of
Transportation.
(e) Notwithstanding any other provision of this Code, no local agency which is party to a joint
exercise of powers agreement or joint community facilities agreement shall have primary
responsibility for formation of a district or an improvement area within a district, or for an
extension of authorized facilities and services or a change in special taxes pursuant to Article 3,
unless that local agency is one or more of the following:
(1) A city, a county, or a city and county.
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FEB-15-2002 09:09 CITY OF HUNTINGTON BEACH 714 374 1590 P.13
3.56.170(e)(2)-3.56.200 Huntington Beach Municipl Code
(2) An agency created pursuant to a joint powers agreement that is separate from the parties
to the agreement, is responsible for the administration of the agreement, and is subject to
the notification requirement of Section 6503.5.
(3) An agency that is reasonably expected to have responsibility for providing facilities or
services to be financed by a larger share of the proceeds of special taxes and bonds of the
district or districts created or changed pursuant to the joint exercise of powers agreement
or the joint community facilities agreement than any other local agency.
3 56180 Special tax; property acquired by public enti through negotiated transaction or by
gift or devise, If property not otherwise exempt from a special tax levied pursuant to this Code is
acquired by a public entity through a negotiated transaction, or by gift or devise,the special tax shall,
notwithstanding Section 53340 of the Act, continue to be levied on the property acquired and shall
be enforceable against the public entity that acquired the property. However, even if the resolution
of formation that authorized creation of the district did not specify conditions under which the
obligation to pay a special tax may be prepaid and permanently satisfied, the legislative body of the
local agency that created the district may specify conditions under which the public agency that
acquires the property may prepay and satisfy the obligation to pay the tax. The conditions may be
specified only if the local agency that created the district finds and determines that the prepayment
arrangement will fully protect the interests of the owners of the district's bonds.
Notwithstanding any other provision of this Code, any public agency other than a city, county or
school district may subject property owned by it to the levy of special taxes, if it shall certify to
the City Council: (a) its agreement to do so, (b)that it intends to dispose of such property by
transfer to a non-governmental agency at some time in the future, and (c)that it agrees to
cooperate in the sale of property if necessary to obtain funds to pay any special taxes levied upon
such property.
3.56.190 Special tax; special assessment on Property acquired by public entity through
eminent domain.If property subject to a special tax levied pursuant to this Code.is acquired by a
public entity through eminent domain proceedings, the obligation to pay the special tax shall be
treated, pursuant to Section 1265.250 of the Code of Civil Procedure, as if it were a special -
annual assessment. For this purpose, the present value of the obligation to pay a special tax to
pay the principal and interest on any indebtedness incurred by the district prior to the date of
apportionment determined pursuant to Section 5082 of the Revenue and Taxation Code shall be
treated the same as a fixed lien special assessment.
Article 3
Proceedings To Create A Community Facilities District
3.56.200 Institution of proceedini; request; Petition; fee. Proceedings for the establishment
of a community facilities district may be instituted by the legislative body on its own initiative and
shall be instituted by the legislative body when any of the following occurs:
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FEB-15-2002 09:10 CITY OF HUNTINGTON BEACH
714 374 1590 P,14
Huntington Beach Municipal code 3.58.200(a)-3.56.220
(a). A written request for the establishment of a district, signed by two members of the legislative
body, describing the boundaries of the territory which is proposed for inclusion in the area and
specifying the type or types of facilities and services to be financed by the district, is filed with
the legislative body.
(b) A petition requesting the institution of the proceedings signed by the requisite number of
registered voters, as specified in subdivision(d)of Section 3.56.210, is filed with the clerk of
the legislative body. The petition may consist of any number of separate instruments, each of
which shall comply with all of the requirements of the petition, except as to the number of
signatures.
(c) A petition requesting the institution of the proceedings signed by landowners owning the
requisite portion of the area of the proposed district, as specified in subdivision(d)of Section
3.56.210, is filed with the clerk of the legislative body.
(d) The written request filed pursuant .to subdivision (a) and the petitions filed pursuant to
subdivisions(b) and(c) shall be accompanied by the payment of a fee in an amount which the
legislative body deternines is sufficient to compensate the legislative body for all costs incurred
in conducting proceedings to create a district pursuant to this Code.
3.56.210 Petition: coritents: findings as to requisite number of signers. A petition requesting
the institution of proceedings for the establishment of a community facilities district shall do all of
the following:
(a) Request the legislative body to institute proceedings to establish a community facilities district
pursuant to this Code.
(b) Describe the boundaries of the territory which is proposed for inclusion in the district.
(c) State the type or types of facilities and services to be financed by the district.
(d) Be signed by not less than 10 percent of the registered voters residing within the territory
proposed to be included within the district or by owners of not less than 10 percent of the area
of land proposed to be included within the district. If the legislative body finds that the petition
is signed by the requisite number of registered voters residing within the territory proposed to
be included within the district or by the requisite number of owners of land proposed to be
included within the district,that finding shall be final and conclusive.
3.56.220 Resolution of intention to establish district: time for adoption Within 90 days after
either a written request by two members of the legislative body or a petition requesting the institution
of proceedings for the establishment of a community facilities district is filed with the legislative body,
it shall adopt a resolution of intention to establish a community facilities district in the form specified
in Section 53321 of the Act.
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FEB-15-2002 09:10 CITY OF HUNTINGTON BEACH
. 714 374 1590 P.15
3.56.230-3.56.300(c) Huntington Beach Municipal Code
3.56.230 Reports and estimate of costs by responsible officers;remedial action plan for
cleanup of hazardous substance; inclusion in record of hearing. At the time of the adoption
of the resolution of intention to establish a community facilities district, the legislative body shall
direct each of its officers who is or will be responsible for providing one or more of the proposed
types of public facilities or services to be financed by the district, if it is established, to study the
proposed district and, at or before the time of the hearing, file a report with the legislative body
containing a brief description of the public facilities and services by type which will in his other
opinion be required to adequately meet the needs of the district and his or her estimate of the cost
of providing those public facilities and services. If the purchase of completed public facilities or
the payment of incidental expenses is proposed, the legislative body shall direct its appropriate
officer to estimate the fair and reasonable cost of those facilities or incidental expenses.
If removal or remedial action for the cleanup of any hazardous substance is proposed, the
legislative body shall(a) direct its responsible officer to prepare or cause to be prepared, a
remedial action plan based upon factors comparable to those described in subdivision (C) of
Section 25356.1 of the Health and Safety Code or(b) determine, on the basis of the particular
facts and circumstances, which shall be comparable to those described in subdivision(g)of
Section 25356.1 of the Health and Safety Code, that the remedial action plan is not required or
(c) condition financing of the removal or remedial action upon approval of a remedial action plan
pursuant to Section 25356.1 of the Health and Safety Code. All of those reports shall be made a
part of the record of the hearing on the resolution of intention to establish the district.
Article 4
Procedures For Levying
3.56.300 Lease or nossessory interest by exempt person or entity to nonexempt person or
entity; lease provisions: collection
(a) If a public agency owning property, including property held in trust for any beneficiary,which
is exempt from a special tax pursuant to Section 53340 of the Act grants a leasehold or other
possessory interest in the property to a-nonexempt person or entity, the special tax shall,
notwithstanding Section 53340 of the Act, be levied on the leasehold or possessory interest and
shall be payable by the owner of the leasehold or possessory interest.
(b) When entering into a lease or other written contract creating a possessory interest that may be
subject to taxation, pursuant to subdivision(a), the public agency shall include, or cause to be
included, in the contract a statement that the property interest may be subject to special taxation
pursuant to this Code, and that the party.in whom the possessory interest is vested may be
subject to the payment of special taxes levied on the interest. Failure to comply with the
requirements of this section shall not, however, invalidate the contract.
(c) If the special tax on any possessory interest levied pursuant to subdivision(a) is unpaid when
due,the tax collector may use those collection procedures which are available for the collection
of assessments on the unsecured roll.
FEB-15-2002 09:11 CITY OF HUNTINGTON BEACH 714 374 1590 P.16
Huntington Beach Municipal Code 3.56.3103.56.320(2)(A)
3.56 3I0 Actions or proceedings against ievv of special tax or increase in special tax: time
for commencement, time for perfection of awmeal from final judg aent._Amy action or
proceeding to attack, review, set aside, void, or annul the levy of a special tax or an increase in a
special tax pursuant to this Code shall be commenced within 30 days after the special tax is
approved by the voters. Any appeal from a final judgment in that action or proceeding shall be
perfected within 30 days after the entry of judgment.
3 56 320 Reservation of rights; tender of full or partial oavment., special tax installments or
interest or penalties due or delinauent._
(a) The legislative body may provide in the resolution issuing bonds and in documents setting
forth the rights of the debtholders that it shall reserve to itself;the right and authority to
allow any interested owner of property within the district, subject to the provisions of this
section and to those conditions as it may impose, and any applicable prepayment penalties as
prescribed in the bond indenture or comparable instrument or document, to tender to the
district treasurer in full payment or part payment of any installment of the special taxes or
the interest or penalties thereon which may be due or delinquent, but for which a bill has
been received, any bond or other obligation secured thereby, the bond or other obligation to
be taken at par and credit to be given for the accrued interest shown thereby computed to
the date of tender. The district treasurer shall thereupon cancel the bond debt and shall
cause proper credit therefor to be entered on the records of the district and in the office of
the auditor and tax collector. If the legislative body agrees to allow bond tenders pursuant
to this section [or to Section 3.56.490] the legislative body may, at its discretion, agree to
distribute or direct its trustee or other agent to distribute by any means an offer to purchase
bonds or other related inquiry to the holders of the bonds of the district, at the expense of
the person requesting the mailing. Neither the legislative body, nor any of its officers,
agents, or trustees shall be liable in any way for that distribution.
(b)' The provisions of this subdivision apply to any tender of bonds pursuant to this section by
an owner of property within the district who is delinquent in paying special taxes levied by
this district when due. Bonds may be tendered pursuant to this subdivision only after all of
the following conditions have been satisfied:
(1) The delinquent lot or parcel, or possessory interest in such delinquent lot or parcel, has
been offered for sale as a result of a foreclosure judgment and the minimum price required
to be paid for the lot or parcel, or possessory interest in such delinquent lot or parcel,was
not received.
(2) The bonds to be tendered to the district were obtained by the property owner, or holder
of the possessory interest, only after their prior owner was presented with a tender offer
or solicitation as defined in this subdivision.
(A) For purposes of this subdivision, a"tender offer" or"solicitation" is a
solicitation by any person or that person's agent by offering circular,
memoranda, tender, or solicitation, or any other document or written, oral, or
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FEB-15-2002 09:11 CITY OF HUNTINGTON BEACH 714 374 1590 P.17
on
3.58.320(2)(A)-3-56.320(2)(6)(vilD Huntington Beach Municipal Code
electronic communication for the purchase of the bonds from their then current
owner. A person includes a natural person, corporation, company, partnership,
limited liability company, limited liability partnership, association, or any other
entity and a"tendering party"includes any person making a tender offer for bonds.
(B) Any tender offer or solicitation shall include all material information as required
under federal and state securities laws and shall also include the following
information, to the extent applicable:
(i) The name of the tendering party.
(ii) An individual who can be contacted to provide further information with
respect to the tender.
(iii) The current holdings of bonds of the district by the tendering party and its
affiliates.
(iv) The total face amount of the bonds being solicited.
(v) The price or method of determining the price per one thousand dollars
($1,000) in bonds being offered by the tendering party-
(vi) Whether the tendering party or any person affiliated with or related to the
tendering party, or any employee, agent, or representative of the tendering
party, is a property owner within the district that issued the bonds.
(vii) Whether the present intentions of the tendering party are to use the bonds
for payment of special taxes or the purchase of property (or purchase of
possessory interest)at a foreclosure sale pursuant to this section or Section
3.56.490. This statement of present intentions shall not be construed to be
binding on the tendering party.
(viii) The status of the bond redemption fund, construction fund, reserve fund,
and any other funds of the district and the special tax delinquency rate of the
district, all of which data shall be the most recent available from the district
and, in any event, shall apply to the state of the funds after the most recent
payment of principal and interest on the bonds. The district shall provide
the necessary data to the property owner within 10 days of receiving a
written request and may charge a reasonable fee not to exceed its actual
costs of providing the data. The district shall simultaneously release the
same information to the general public. The property shall also provide the
percentage of the delinquency attributable to the tendering party or any
person afFrliated with or related to the tendering party, or any employee,
FEB-15-2002 09:11 CITY OF HUNTINGTON BEACH 714 374 1590 P.18
Huntington Beach Municipal Code 3,55,3M2)(B)(vii1)-3.56.320(c)
agent, or representative of the tendering party, for each of the three most
recent fiscal years.
(ix) if the tendering party owns or leases property in the district that issued the
bonds,the development plans for that property and an update on the current
status of development of that property and of any zoning, planning, or other
permits or approvals needed for development of the property to proceed.
(x) Any other material information available to the tendering party and not -
generally available to the public that would significantly affect the market
value of the bonds of the district.
(C) The tendering party shall notify the legislative body of his or her intent to make a
tender offer or solicitation at least simultaneously with making any offer or.
solicitation.
(D) The tendering party shall provide a copy of the solicitation to the Department of
Corporations prior to five working days after notifying the legislative body pursuant
to subparagraph(C).
(3) The tendering property owner or tendering possessory interest holder provides the
legislative body with a negative assurance from counsel representing the property owner
or tendering possessory interest holder that no misleading or other information has come
to the opining party's attention after reasonable investigation, that would lead the party
providing the negative assurance to believe that the tender was in violation of federal or
state securities laws.
(4) The tendering property owner delivers to the legislative body of the district that issued
the bonds subject to the tender, a certificate to the effect that the tender information is
accurate in all material respects and does not omit to state a material fact necessary in
order to make the statements included in the tender information not misleading, except
that the certificate need not provide any assurances as to the accuracy of the information
as to the bond fund balances and tax payment information provided by the district.
(c) The provisions of this subdivision apply to any tender of bonds pursuant to this section by any
owner of property within the district who is not delinquent in paying special taxes on any
property within the district_ A person subject to this subdivision shall be deemed to be a person
whose relationship to the issuer may give him or her access, directly or indirectly, to material
information about the issuer not generally available to the public, and the provisions of Section
25402 of the Corporations Code apply to any"purchase or sale of securities by that person in
connection with the tender transaction. For purposes of this subdivision, the"issuer" includes
the district, the local agency that created the district, and any owner of property within the
district. At any time prior to tendering bonds to the district pursuant to this section, any person
subject to this subdivision shall deliver to the legislative body of the district a certificate that he
or she has complied with this subdivision and applicable federal and state securities laws.
toss
FEB-15-2002 09:12 CITY OF HUNTINGTON BEACH
714 374 1590 P.19
3.56.400-3.56.420(a) Huntington Beach Municipal Code v
Article
3.56.400 Resolution to incur bonded indebtedness. Whenever the legislative body deems it
necessary for the community facilities district to incur a bonded indebtedness, it shall, by
resolution, set forth all of the following:
(a) A declaration of the necessity for the indebtedness.
(b) The purpose for which the proposed debt is to be incurred. -
(c) The amount of the proposed debt. The legislative body may provide for a reduction in the
amount of proposed debt in compliance with the provisions of Section 53313.9 of the Act.
(d) The time and place for a hearing by the legislative body on the proposed debt issue.
3.56.410 Inclusion of certain costs and estimated costs in groposed bonded indebtedness.
The amount of the proposed bonded indebtedness may include all costs and estimated costs
incidental to, or connected with, the accomplishment of the purpose for which the proposed debt
is to be incurred, including, but not limited to, the estimated costs of construction, improvement
or acquisition of buildings, or both; acquisition of land, rights-of-way, water, sewer, wetlands
mitigation or other capacity or connection fees; lease payments for school facilities, satisfaction of
contractual obligations relating to expenses or the advancement of funds for expenses existing at
the time the bonds are issued pursuant to this Code; architectural, engineering, inspection,legal,
fiscal, and financial consultant fees;bond and other reserve funds; discount fees; interest on any
bonds of the district estimated to be due and payable within two years of issuance of the bonds;
election costs; and all costs of issuance of the bonds, including, but not limited to, fees for bond
counsel, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, and
other credit enhancement costs, and printing costs.
3.56,420 Sale of bonds; appraisal of real Property subject to specials r paving debt
service on bond; determination of no unusual credit risk; vote to pro�for specified
public policy reasons.
(a) The legislative body may sell bonds pursuant to this Code only if it determines prior to the
award of sale of bonds that the value of the real property that would be subject to the special
tax to pay debt service on the bonds will be at least three times the principal amount of the
bonds to be sold and the principal amount of all other bonds outstanding that are secured by
a special tax levied pursuant to this Code on property within the community facilities district
or a special assessment levied on property within the community facilities district. Any
determination made pursuant to this subdivision shall be based upon the full cash value as
shown on the ad valorem assessment roll or upon an_appraisal of the subject property made in
a manner consistent with the policies adopted pursuant to paragraph(5)of subdivision(a)of
ergs
FEB-15-2002 09:12 CITY OF HUNTINGTON BEACH 714 374 1590 P.20
Huntington Beach MunWrial Code 3.66.420(a)-3.56.430(d)
Section 3.56.100 by a state certified real estate appraiser, as defined in subdivision (c) of
Section 11340 of the California Business and Professions Code. The Treasurer may
recommend definitions, standards, and assumptions to be used for these appraisals. These
definitions, standards, and assumptions are advisory only, and the definitions, standards, and
assumptions to be applied to appraisals will be those adopted by the local agency pursuant to
paragraph(5) of subdivision(a) of Section 3.56.100.
(b) Notwithstanding the provisions of subdivision(a),if the legislative body selling the bonds finds _
and determines that the proposed bonds do not present any unusual credit risk due to the
availability of credit enhancements or for other reasons specified by the legislative body, the
provisions of subdivision(a) may be disregarded.
(c) Notwithstanding the provisions of subdivision(a), if the legislative body selling the bonds finds
and determines by a vote of not less than four-fifths of all of its members that the proposed
bond issue should proceed for specified public policy reasons,the provisions of subdivision(a)
may be disregarded.
A finding and determination by the legislative body pursuant to this subdivision shall be final
and conclusive upon all persons in the absence of actual fraud, and neither the legislative body
nor the district shall have any liability of any land whatsoever out of, or in connection with, any
finding and determination.
3.56.430 Agreement to notify one or more parties in the event specified events occur
affecting the market value of outstanding bonds: events triggering notice. The bond
indenture or other bond documents may provide that the legislative body agrees to notify one or
more parties, including the underwriter or other-first purchaser of the bonds, an appropriate
national repository for bond information approved by the Securities and Exchange Commission,
or the California Debt Advisory Commission, in the event that specified events occur which may
affect the market value of outstanding bonds_ These events may include, but are not limited to, the
following, for example:
(a) Withdrawal of funds from any reserve fund for the bonds, such that the balance in the fund falls
below a specified percentage of the amount required by bond documents.
(b) Draw upon a letter of credit or other credit enhancement for the bonds.
(c) Filing for bankruptcy by a developer or other owner of more than a specified percentage of the
area or property value within the district.
(d) Unforeseen discovery of toxic materials or rare and endangered plant or animal species within
areas of the district proposed for development.
6M
.FEB-15-2002 09:13 CITY OF HUNTINGTON BEACH 714 374 1590 P.21
3-56.440-3.56.450(a) Huntington Beach Municipal Code
3 56 440 Action to foreclose liens; cumulative remedy; resolution to dilieently pursue
foreclosure action; collection of delinquent charges.
(a) As a cumulative remedy, if debt is outstanding, the legislative body may, not later than four
years after the due date of the last installment of principal thereof, order that any delinquent
special taxes levied in whole or in part for payment of the debt, together with any penalties,
interest, and costs,be collected by an action brought in the superior court to foreclose the lien
of special tax.
(b) The legislative body may, by resolution, adopted prior to the issuance of debt under this Code
covenant for the benefit of debt holders to commence and diligently pursue any foreclosure
action regarding delinquent installments of any amount levied as a special tax for the payment
of interest or principal of any bonds that are issued, and, at any time may assign the causes of
action arising from the foreclosure to a trustee or joint powers authority to do so on behalf of
the debtholders. The resolution may specify a deadline for commencement of the foreclosure
action and any other terms and conditions the legislative body determines reasonable regarding
the foreclosure action.
(c) Except as provided in Section 3.56.470, all special taxes, interest, penalties, costs, fees, and
other charges that are delinquent at the time of the ordering of a foreclosure action shall be
collected in the action. In the event that a lot or parcel of property or a possessory interest has
not been sold pursuant to judgment in the foreclosure action at the time that subsequent special
taxes become delinquent, the court may include the subsequent special taxes, interest, penalties,
costs, fees, and other charges in the judgment or modified judgment.
(d) For purposes of financing delinquent special taxes pursuant-to Section 26220 of the California
Government Code, the legislative body may act as if it were a board of supervisors.
(e) Notwithstanding any other provision of this Code, no trustee or joint powers authority shall be
obligated to accept the tender of bonds in satisfaction of any obligation arising from a
delinquent special tax, although either may do so if authorized to do so by the legislative body.
(f) An action to determine the validity of any bonds issued, any joint powers agreement entered
into, and any related agreements entered into, by a joint powers agency acting pursuant to this
section may be brought by the joint powers agency pursuant to Chapter 9 (commencing with
Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. Any appeal from a judgment
in the action shall be commenced within 3 0 days after entry of judgment.
3.56.450 Complainants: time limitations: contents of complaint. The foreclosure action sha11
be brought in the name of the local agency or trustee on behalf of the bondholders pursuant to
Section 3.56.440, and may be brought within the time specified in Section 3.56.440. The complaint
may be brief and need only include the following allegations:
(a) That on a stated date, a certain sum of special taxes, levied against the subject property or
possessory interest (describing it) pursuant to this Code, became delinquent.
ert�
FEB-15-2002 09:13 CITY OF HUNTINGTON BEACH 714 374 1590 P.22
Huntington Beach Municipal Code 3.56.450(h)-3.56.460(a)(5)
(b) On that date, bonds issued pursuant to this Code, payable in whole or in part by the subject
special taxes, were outstanding.
(c) That the legislative body or trustee has ordered the foreclosure.
3 56 460 Judement decree: contents: amount; attorneys' fees: goulication of general
foreclosure provisions.
(a) Any judgment shall decree the amount of the continuing lien against each parcel or possessory
interest to be foreclosed, and shall order the parcel to be sold on execution as in other cases of
the We of real property or possessory interests by process of the court except:
(1) Notwithstanding Section 701.545 of the Code of Civil Procedure, notice of sale of any
lot or parcel or possessory interest included in the judgment may be given pursuant to
Section 701.540 of the Code of Civil Procedure any time after the expiration of 20 days
after the date notice of levy on the interest in real property was served on the judgment
debtor or debtors, provided that the lot or parcel to be sold is not a dwelling for not more
than four families and provided that all parties whose Liens are extinguished by the
foreclosure judgment were either defendants in the foreclosure action or,for those parties
who acquired an interest in a lien on the parcel after the recording of notice of the
pending foreclosure action, received constructive notice of the action.
(2) Whenever notice of sale may be given after the expiration of 20 days after the date notice
of levy was served as provided in paragraph (1), the 30-day time period contained in
subdivision(h) of Section 701.540 of the Code of Civil Procedure shall be reduced to 10
days.
(3) Upon proof that the lot or parcel or possessory interest to be sold is not a dwelling for
not more than four families, and upon determining that all parties whose liens are
extinguished by the foreclosure judgment were either defendants in the foreclosure action
or, for those parties who acquired an interest in a lien on the parcel after the recording
of notice of the pending foreclosure action, received constructive notice of the action,
pursuant to Section 716.020 of the Code of Civil Procedure, the court shall order that
paragraphs(1)and(2) apply to any judgment previously entered-
(4) The minimum bid amount provided in Section 3.56.470 shall apply instead of subdivision
(a) of Section 701.620 of the Code of Civil Procedure.
(5) The local agency may bid at the price provided in Section 3.56.470 by giving the levying
officer a written receipt crediting all or part of the amount required to satisfy the
judgment. If the local agency becomes the purchaser pursuant to bid, the local agency
shall pay the amount of its credit bid into the redemption fund within 24 months of the
date of the foreclosure sale.
i31gs
FEB-15-2002 09:13 CITY OF HUNTINGTON BEACH 714 374 1590 P.23
3.56A6Na)(6)-356.490(3) Huntington Beach Municipal Code
(6) Notwithstanding subdivision(c)of Section 701.620 of the Code of Civil Procedure,if the
minimum price required to be paid for a lot of parcel pursuant to Section 3.56.470 is not
obtained at a foreclosure sale, upon written request of the local agency,the levying officer
shall retain the writ of sale and, provided_that the writ of We has not been returned to the
court pursuant to paragraph(1)of subdivision(a)of Section 699.560 of the Code of Civil
Procedure, give notice of sale pursuant to Section 701.540 of the Code of Civil
Procedure without relevying on the property.
(7) As provided elsewhere in this Code.
(b) The judgment amount shall include reasonable attorneys' fees to be fixed by the court,
together with interest, penalties, and other authorized charges and costs (all calculated up to
date of judgment).
(c) The foreclosure action shall be governed and regulated by the provisions of this Code, and
also where not in conflict with this Code, by other provisions of law generally applicable to
foreclosure actions.
3.56.470 Price of property or possessory interests sold.Property or possessory interests sold
hereunder may not be sold for less than the amount of the judgment plus post judgment interest
and authorized costs without the consent of the owners of 75 percent by value of the outstanding
bonds.
3.56.490 Computation errors: validity of special tax installment, interest or penalty.No
special tax installment, interest or penalties thereon, or deed shall be held invalid for any error in
computation if the error is found to be comparatively negligible, or is found to be in favor-of-the
owner of the real property affected thereby.
3.56.490 Tender of bonds or debt: special taxes: penalties and interest; satisfaction of bid
amount. Provided the legislative body permits bonds or debt to be tendered for special taxes and
the penalties and interest thereon pursuant to Section 3.56.320, if the highest bid for a lot or
parcel sold pursuant to a judgment of foreclosure and order of sale exceeds five thousand dollars
($5,000) and the highest bidder elects to treat the sale as a credit transaction pursuant to
subdivision(c) of Section 701.590 of the Code of Civil Procedure, the balance due as provided in
that section may be paid in full or in part by tender of bonds or debt, provided, however, that
bonds or debt may not be tendered for costs of foreclosure, including attorneys fees, and
administrative charges incurred by the local agency with respect to removing the special taxes
from the rolls of the treasurer or tax collector, or other administrative charges.
(a) Tender of bonds or debt shall be made to the local agency within seven days of the date of the
sale. The local agency shall be charged with authenticating the tender and shall,within 10 days
of the date of the sale, submit a written receipt to the levying officer who conducted the sale
for the amount of the bond or debt tender accepted by it.
W"
FEB-15-2002 09:14 CITY OF HUNTINGTON BEACH 714 374 1590 P.24
Huntington Beech Municipal Code 3.55.490(b)a56.5"c)
(b) Tender of cash or certified check or cashier's check shall be made to the levying officer within
10 days of the date of the sale.
(c) The levying officer shall total the cash, certified checks and cashier's checks, and any agency
written receipts for bonds or debt to determine if the amount of the bid, plus accruing costs and
interests, has been paid. In no event shall the tendering party be entitled to receive Cash or
other compensation in return for all or any part of the value of a tendered bond or bonds,
except for recognition of their value in satisfying the amount bid.
(d) The tendering party shall comply with the provisions of Section 3.56.320, as applicable as if
they were fully set out in this section.
3.56.500 Notice of proposed sale of bands; contents.
(a) The legislative body shall.no later than 30 days prior to the sale of any bonds pursuant to this
article, give written notice of the proposed sale to the California Debt and Investment Advisory
Commission by mail, postage prepaid, as required by Chapter 12 (commencing'with Section
8855) of Division 1 of Title 2 of the California Government Code
(b) Each year after the sale of any bonds, including refunding bonds, pursuant to this article, and
until the final maturity of the bonds,the legislative body shall,not later than October 30 of each
year, supply the following information to the California Debt and Investment Advisory
Commission by mail, postage prepaid:
(1) The principal amount of bonds outstanding.
(2) The balance in the bond reserve fund.
(3) The balance in the capitalized interest fund, if any.
(4) The number of parcels which are delinquent with respect to their special tax payments,
the amount that each parcel is delinquent, the length of time that each has been
delinquent, and when foreclosure was commenced for each delinquent parcel.
(5) The balance in any construction funds.
(6) The assessed value of all parcels subject to special tax to repay the bonds as shown on the
most recent equalized roll.
(c) In addition, with respect to any bonds sold pursuant to this article, regardless when sold, and
until the final maturity of the bonds, the legislative body shall notify the California Debt and
Investment Advisory Commission by mail, postage prepaid, within 10 days if any of the
following events occur:
W99
FEB-15-2002 09:14 CITY OF HUNTINGTON BEACH 714 374 1590 P.25
3.56.50o(c)(1�3.56.500(d} Huntington Beach Municipal Code
(1) The local agency or its trustee fails to pay principal and interest due on any scheduled
payment date.
(2) Funds are withdrawn from a reserve fund to pay principal and interest on the bonds
beyond levels set by the California Debt and Investment Advisory Commission-
(d) Neither the legislative body nor the California Debt and Investment Advisory Commission shall
be liable for any inadvertent error in reporting the information required by this section.
alas
TOTAL P.25
ORDINANCE NO. 3546
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING THE CITY OF
HUNTINGTON BEACH SPECIAL TAX FINANCING IMPROVEMENT CODE
WHEREAS, on May 3, 1999, the City Council of the City of Huntington Beach (the
:'City") adopted Ordinance No. 3417 providing for the City of Huntington Beach Special Tax
Financing Improvement Code (the"Code'),constituting Chapter 3.56 of the Municipal Code of
the City;and
WHEREAS,The City Council now desires to amend the Code in order to broaden those
services that may be financed under Section 3.56.110 of the Code and to add provisions to the
Code to allow the expedited formation of, and the annexation of property to, community
facilities districts under the provisions of the Code.
NOW, THEREFORE, the City Council of the City of Huntington Beach ordains as
follows:
Section 1. Section 3.56.110 of the Municipal Code of the City of Huntington Beach is
hereby amended by adding thereto,as clause (g) thereof,the following:
"(g) Maintenance of, and the provision of repair and replacement reserves for,
any other public improvement not specifically listed in the preceding clauses (a)
through (0, the construction; installation, expansion, improvement or rehabilitation of
which maybe financed under Section 3.56.120 or Section 3.56.130 of this Code."
Section 2. The Code is hereby further amended by adding thereto,as Section 3.56.240 of
the Code,the following:
"3.56.240 Expedited Hearing Procedure. If the owners of all of the land to be
subject to the levy of special taxes within a proposed district, or within the territory
proposed to be annexed to an existing district, file petitions with the City Clerk
requesting the formation of the district or the annexation of territory to an existing
district, respectively, the public hearing referred to in Section 53321(e) or 53339.3(f), as
applicable, of the California Government Code may occur not less than 14 days after
adoption of the resolution of intention to form or to annex territory to the district, as
applicable, rather than the'mi_nimum of 30 days otherwise specified in said Sections of
the California Government Code."
Section 3. This Ordinance shall be published and posted in the manner specified in
Section 500 of Article V of the City Charter,and shall become effective thirty (30) days from and
after the date of its final passage. This Ordinance shall be subject to referendum pursuant to
and as provided in Section 703 of the City Charter and the laws of the State of California.
Ord. No. 3546
PASSED AND ADOPTED at the regular meeting of the City Council of the City of
Huntington Beach,State of California,on the lsth day of March .2002.
Mayor
ATTEST: APPROVED AS TO FORM:
dv lrl.�
City Clerk �_DZ of .aziys{/' L City Attorney
REVIEWED AND APPROVED: INITIATED AND APPROVED:
C4q Administrator Director of Economic Development
OM.07:)6084
2/21/02
-2-
Ord. No. 3546
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 ordinance was read to said City Council at a regular
meeting thereof held on the 4th day of March.2002, and was again read to said City
Council at a regular meeting thereof held on the 18th day of March.2002; and was
passed and adopted by the affirmative vote of at least a majority of all the members of
said City Council.
AYES: Green,Dettloff,Bauer, Cook,Houchen, Winchell, Boardman
NOES:. None
ABSENT: None
ABSTAIN: None
I,Connie Brockway CITY CLERK of the City of
Huntington Beach and ex-officio Clerk of the City
Council,do hereby certify that.a synopsis of this
ordinance has been published in the Independent on
2002
In accordance with the City Charter of said City City Clerk and ex-officio Clerk
Connie Brockway,City Clerk of the City Council of the City
=0(4!!ti644 1.A&4WePuty Ciw Clerk of Huntington Beach, California
The fonpoft hsbrnwd lee collect
copy of On o ftinal on file In this offbe.
Attest 07— 12 20 02
CONNIE BROCKWAY
the City
Council the of unthgton Beach,
CalMomja.-
By Deputy
Res.No.2002-26
RESOLUTION NO 2002-26
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH DECLARING ITS INTENTION TO
ESTABLISH A COMMUNITY FACILITIES DISTRICT AND TO
AUTHORIZE THE LEVY OF SPECIAL TAXES THEREIN
WHEREAS,under the provisions of Chapter 3.56 (commencing with Section 3.56.010) of the
Municipal Code of the City of Huntington Beach(the"Code") and, as applicable under the
Code,the Mello-Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of
the California Government Code (the"Act,"and, together with the Code,the "Law"),this City
Council may commence proceedings for the establishment of a community facilities district; and
There has been submitted to this City Council a Petition(Including Waiver)of McDonnell
Douglas Corporation(the "Petition"),requesting the formation by this City Council of a
community facilities district under the Law to be known as the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park) (the"District")
comprised of two separate improvement areas; and
There has also been submitted to this City Council a Deposit/Reimbursement Agreement(the
"Deposit Agreement") wherein the petitioner has agreed to pay all costs of the City of
Huntington Beach (the"City")related to the formation of the District, subject to possible
reimbursement through the District as provided in the Deposit Agreement; and.
Under the Law, this City Council.is the legislative body for the proposed District and is
empowered with the authority to establish the District and levy special taxes within the District;
and
This City Council now desires to proceed with the actions necessary to consider the
establishment of the District and the designation of improvement areas therein.
NOW, THEREFORE,BE IT RESOLVED by the City Council of the City of Huntington Beach
as follows:
Section 1. This City Council proposes to begin the proceedings necessary to establish the
District pursuant to the Law. Receipt of the Petition to form the District and the Deposit
Agreement is hereby acknowledged. The City Administrator is hereby authorized to execute the
Deposit Agreement and the Director of Administrative Services of the City,working with the
City Treasurer, is hereby authorized to cash the deposit referenced therein and to expend the
deposits for costs of formation of the District, as contemplated by the Deposit Agreement.
Section 2. The name proposed for the District is City of Huntington Beach Community Facilities
District No. 2002-1 (McDonnell Centre Business Park). Pursuant to Section 53350 of the Act,
the City Council hereby designates a portion of the District as"Improvement Area A of the City
of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business
Park)" ("Area A"), and a portion of the District as "Improvement Area B of the City of
Res.No.2002-26
Huntingtori Beach Community Facilities District No. 2002-1 (McDonnell Centre Business
Park)"("Area B")
Section 3. The proposed boundaries of Area A and of Area B of the District are as shown on the
map of the District on file with the City Clerk of the City,which boundaries are hereby
preliminarily approved: The City Clerk is hereby directed to record, or cause to be recorded,the
map of the boundaries of the District in the office of the County Recorder as soon as practicable
after the adoption of this Resolution.
Section 4. The type of public facilities (the"Area A Facilities")proposed to be eligible for
funding by Area A and pursuant to the Law shall consist of those items listed on Exhibit A
hereto under the heading"Facilities,"which Exhibit is by this reference incorporated herein.
The type of public facilities(the "Area B Facilities")proposed to be eligible for funding by Area
B and pursuant to the Law shall consist of those items listed on Exhibit B hereto under the
heading"Facilities,"which Exhibit is by this reference incorporated herein.
Section 5: Except to the.extent that funds are otherwise available to Area A of the District to pay
for the Area A Facilities and/or pay the principal and interest as it becomes due on bonds of Area
A of the District issued to finance,the Area A Facilities, a special tax sufficient to pay the costs
thereof, secured by recordation of a continuing lien against all non-exempt real property in Area
A of the District,will be levied within Area A of the District and collected in the same manner as
ordinary ad valorem property taxes or in such other manner as this City Council or its designee
shall determine, including direct billing of the affected.property owners. The proposed rate and
method of apportionment of the special tax.among the parcels of real property.within Area A of
the District, in sufficient detail to allow each landowner within the proposed Area.A of the
District to estimate the maximum amount such owner will have to pay, is described in Exhibit C
attached hereto which Exhibit is by this reference incorporated herein.
Except to the extent that funds are otherwise available to Area B of the District to pay for the
Area B Facilities and/or pay the principal and interest as it becomes due on bonds of Area B of
the District issued to finance the Area B Facilities, a special tax-sufficient to pay the costs
thereof, secured by recordation of a continuing lien against all non-exempt real property in Area
B of the District,will be levied within Area B of the District and collected in the same manner as
ordinary ad valorem property taxes or in such other manner as this City Council or its designee
shall determine, including direct billing of the affected property owners. The proposed rate and
method of apportionment of the special tax among the parcels of real property within Area B of
the District,in sufficient detail to allow each landowner within the proposed Area B of District to
estimate the maximum amount such owner will have to pay,is described in Exhibit D attached
hereto which Exhibit is by this reference incorporated herein.
.This City Council finds that the provisions of Section.53313.6, 53313.7.and 53313.9 of the Act
(relating to adjustments to ad valorem property taxes and schools financed by a community
facilities district) are inapplicable to either Area A or Area B of the District.
Section 6. It is the intention of this City Council, acting as the legislative body for Area A of the
District,to cause bonds of the City to be issued for Area A of the District pursuant to the Law to
-2-
Res.No.2002-26
finance a portion of the costs of the Area A Facilities. If so issued,the bonds shall be issued in
one or more series in an aggregate principal amount of not to exceed$13,000,000, shall bear
interest payable semi-annually or in such other manner as this City Council.shall determine, at a
rate not to exceed the maximum rate of interest as may be authorized by applicable law at the
time of sale of such bonds, and shall mature not to exceed 40 years from the date of the issuance
.thereof.
It is the intention of this City Council, acting as the legislative body for Area B of the District, to
cause bonds of the City to be issued for Area B of the District pursuant to the Law to finance a
portion of the costs of the Area B Facilities. If so issued, the bonds shall be issued in one or
more series in an aggregate principal amount of not to exceed$13,000,000, shall bear interest
payable semi-annually or in such other manner as this City Council shall determine, at a rate not
to exceed the maximum rate of interest as may be authorized by applicable law at the time of sale
of such bonds, and shall mature not to exceed 40 years from the date of the issuance thereof.
Section 7. This City Council reserves to itself the right and authority to allow any interested
owner of property in either Area A or Area B of the District, subject to the provisions of Section
53344.1 of the Act and such requirements as it may otherwise impose, and any applicable
prepayment penalties as prescribed in the indenture or fiscal agent agreement for any bonds of
the City for the respective improvement area of the District,to tender to the Director of
Administrative Services of the City(who shall remit the same to the City Treasurer) in full
payment or part payment of any installment of special taxes for such improvement area of the
District or the interest or penalties thereon which may be due or delinquent,but for which a bill.
has been received, any bond or other obligation secured thereby, in the manner described in
Section 53344.1 of the Act.
Section 8. The levy of the proposed special tax in each improvement area of the District shall be
subject to the approval of the qualified electors of such improvement area at a special election.
The proposed voting procedure shall be by mailed or hand-delivered ballot among the
landowners in the proposed improvement area of the District,with each owner having one vote
for each acre or portion of an acre of land such owner owns in the respective improvement area
of the District.
Section 9. Except as may otherwise be provided by law or the rate and method of apportionment
of the special tax for the respective improvement area of the District, all lands owned by any
public entity, including the United States,the State of California and/or the City, or any
departments or political subdivisions of any thereof, shall be omitted from the levy of the special
tax to be made to cover the costs and expenses of the facilities,the issuance of bonds by the City
for such improvement area of the District and any expenses of the respective improvement area
of the District.
Section l0: The Director of Public Works of the City is hereby directed to study said proposed
facilities for each improvement area of the District and to make, or cause to be made, and file
with the City Clerk a report in writing,presenting the following:
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Res.No.2002-26
(a) A brief description of the facilities for each improvement area of the District.
(b) An estimate of the fair and reasonable cost of providing the facilities for each
improvement area of the District, including the incidental expenses in connection therewith,
including the costs of the proposed bond financing, any City administrative costs and all other
related costs.
Said report shall be made a part of the record of the public hearing provided for below.
Section 11. Monday,May 6,2002, at 7:00 p.m. or as soon thereafter as the matter may be heard,
in the regular meeting place of this City Council, City Council Chambers, City Hall,2000 Main
Street, Huntington Beach, California,be,and the same are hereby appointed and fixed as the
time and place when and where this City Council, as legislative body for the District,will
conduct a public hearing on the establishment of each improvement area of the District and
consider and finally determine whether the public interest, convenience and necessity require the
formation of each improvement area of the District and the levy of said special tax within the
respective improvement area.
Section 12. The City Clerk is hereby directed to cause notice of said public hearing to be given
by publication one time in a newspaper published in the area of the District. The publication of
said notice shall be completed at least seven days before the date herein set for said hearing.
Said notice shall be substantially in the form of Exhibit E hereto.
Section 13. The firms-of Michael Swan Consulting and Quint &Thimmig LLP are hereby
designated as special tax consultant and bond counsel and disclosure counsel,respectively, to the
City for the District. The City Director of Administrative Services and the City Attorney,
respectively, are hereby authorized to execute agreements with said firms for their services
related to the District provided that all fees and expenses of such firms are payable solely from a
deposit by the landowner in the District or the proceeds of the bonds, if any, issued by the City
for either of the improvement areas of the District.
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Res.No.2002-26
Section 14. This Resolution shall take effect upon its adoption.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Huntington
Beach on this 15t day of April,2002.
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk a4-aT-62 2�-o z City Attorney W 1211 01
REVIEWED AND APPROVED: NTIATED AND APPROVED:
f-
City dministrator Director of Economic Development
08003.07:J6058
3/19/02
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Res.No.2002-26:
Ex.A
EXHIBIT A
IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
DESCRIPTION OF FACILITIES ELIGIBLE TO BE FUNDED BY
IMPROVEMENT AREA A OF THE DISTRICT
FACILITIES
It is intended that Improvement Area A of the District will finance all or a portion of the
costs of any of the following:
1. The construction of sewer lines in existing Skylab Road,new Delta Lane and new
Astronautics Lane.
2. The construction of streets,curbs, and gutters from the extension of Skylab Road
from its current terminus at Astronautics Lane west to approximately 400 feet
west of new Delta Lane.
-3. The construction of streets,curbs,and gutters from the new Delta Lane between
Skylab Road north to new Astronautics Lane.
4. The construction of streets, curbs, and gutters for the new Astronautics Lane
from its current terminus west to Rancho Road.
5. The construction of street, curbs, and gutters for the new Skylab Lane from new
Astronautics Lane south approximately 200 feet.
6. The construction of the waterline in Rancho Road connecting its current terminus
east of Bolsa Chica Road to the existing waterline north of the Navy Railroad.
7. The construction of onsite waterlines in extended Skylab Road, new Delta Lane
and new Astronautics Lane.
8. The construction of conduit and fixtures for new street lighting in extended
Skylab Road,new Delta Lane,and new Astronautics Lane.
9. The construction of street,curbs, and gutters for the new Delta Lane from Bolsa
Avenue north to Skylab Road:
10. The construction of a waterline in new Delta Lane from Bolsa Avenue to Skylab
Road.
A-1
Res.No.2002-29
Ex.A
11. The construction of storm drains in new Skylab Road, new Delta Lane new
Astronautics Lane and new Skylab Lane.
12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane
including modifications to the existing traffic signal.
13. Roadway improvements at the intersection of Rancho Road and Astronautics
Lane including construction of the new traffic signal.
14. Roadway improvements to Rancho Road consisting of installation of new
sidewalk.
The Improvements to be financed shall include the costs of the acquisition of right-of-
way (including right-of-way that is intended to be dedicated by the recording of a final map),
the costs of design, engineering and planning, the costs of any environmental or traffic studies,
surveys or other reports, costs related to landscaping and irrigation, soils testing,permits,plan
check and inspection fees, insurance, legal and related overhead costs, coordination and
supervision and any other costs or appurtenances related to any of the foregoing.
OTHER
Improvement Area A of the District may also finance any of the following:
1. Bond related expenses, including underwriters discount, reserve fund, capitalized
interest,letter of credit fees and expenses,bond and disclosure counsel fees and expenses,bond _
remarketing costs,and all other incidental expenses.
2. Administrative fees of the City of Huntington Beach and the Bond trustee or fiscal
agent related to the District and the Bonds.
3. Reimbursement of costs related to the formation of the District advanced by the City
of Huntington Beach,the landowner in the District,or any party related to any of the foregoing,
as well as reimbursement of any costs advanced by the City of Huntington Beach, the
landowner in the District or any party related to any of the foregoing, for facilities,fees or other
purposes or costs of the District.
A-2
Res.No.2002-26
Ex.B
EXHIBIT B
IMPROVEMENT AREA B OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
DESCRIPTION OF FACILITIES ELIGIBLE TO BE FUNDED BY
IMPROVEMENT AREA B OF THE DISTRICT
FACILITIES
It is intended that Improvement Area B of the District will finance all or a portion of the
costs of any of the following:
1. The construction of sewer lines in existing Skylab Road,new Delta Lane and new
Astronautics Lane.
2. The construction of streets,curbs, and gutters from the extension of Skylab Road
from its current terminus at Astronautics Lane west to approximately 400 feet
west.of new Delta Lane.
3. The construction of streets, curbs, and gutters from.the new Delta Lane between
Skylab Road north to new,Astronautics Lane.
4. The construction of streets, curbs, and gutters for the new Astronautics Lane
from its current terminus west to Rancho Road.
5. The construction of street,curbs, and gutters for the new Skylab Lane from new
Astronautics Lane south approximately 200 feet.
6. The construction of the waterline in Rancho Road connecting its current terminus
east of Bolsa Chica Road to the existing waterline north of the Navy Railroad.
7. The construction of onsite waterlines in extended Skylab Road, new Delta Lane
and new Astronautics Lane.
8. The construction of conduit and fixtures for new street lighting in extended
Skylab Road,new Delta Lane,and new Astronautics Lane.
9. : The construction of street, curbs, and gutters for the'new Delta Lane from Bolsa y
Avenue north to Skylab Road.
10. The construction of a waterline in new Delta Lane from Bolsa Avenue to Skylab
Road.
B-1
Res.No.2002-26
Ex.B
11. The construction of storm drains in new Skylab Road, new Delta Lane new
Astronautics Lane and new Skylab Lane.
12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane
including modifications to the existing traffic signal.
13. Roadway improvements at the intersection of Rancho Road and Astronautics
Lane including construction of the new traffic signal.
14. Roadway improvements to Rancho Road consisting of installation of new
sidewalk.
The Improvements to be financed shall include the costs of the acquisition of right-of-
way (including right-of-way that is intended to be dedicated by the recording of a final map),
the costs of design,engineering and planning, the costs of any environmental or traffic studies,
surveys or other reports, costs related to landscaping and irrigation, soils testing,permits,plan
check and inspection fees, insurance, legal and related overhead costs, coordination and
supervision and any other costs or appurtenances related to any of the foregoing.
OTHER
Improvement Area B of the District may also finance any of the following:
1. Bond related expenses, including underwriters discount, reserve fund, capitalized
interest,letter of credit fees and expenses,bond and disclosure counsel fees and expenses,bond
remarketing costs,and all other incidental expenses.
2. Administrative fees of the City of Huntington Beach and the Bond trustee or fiscal
agent related to the District and the Bonds.
3. Reimbursement of costs related to the formation of the District advanced by the City
of Huntington Beach, the landowner in the District,or any party related to any of the foregoing,
as well as reimbursement of any costs advanced by the City of Huntington Beach, the
landowner in the District or any party related to any of the foregoing, for facilities,fees or other
purposes or costs of the District.
B-2
Res.No.2002-26
Ex.C
EXHIBIT C
IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY.FACILITIES DISTRICT NO. 2002-1 .
(MCDONNELL CENTRE BUSINESS PARK
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax applicable to each Assessor's Parcel of Taxable Property in the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre
Business Park) (herein"CFD No. 2002-1") shall be levied and collected according to the
special tax liability determined by the Administrator through the application of the
procedures described below. The real property in Improvement Area A of CFD No.
2002-1, unless exempted by law or by the provisions hereof, shall be specially taxed for
the purposes,to the extent, and in the manner herein provided.
A. DEFINITIONS
The capitalized terms hereinafter set forth have the following meanings when used in this
Rate and Method of Apportionment of Special Tax:
Acre or Acreage means the land area of an Assessor's Parcel as shown on the applicable
final map, parcel map, or other parcel map recorded with the County Recorder. If the
Acreage ,of a particular Parcel is unclear after reference to available maps, the
Administrator shall determine the appropriate Acreage for that Parcel.
Act means Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of
the City of Huntington Beach and, as applicable, the Mello-Roos Community Facilities
Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311), Part 1,
Division 2, of Title 5 of the Government Code of the State of California.
Administrative Expenses means any or all of the following actual or reasonably
estimated costs directly related to the administration of Improvement Area A of CFD No.
2002-1: the fees and expenses of any Fiscal Agent (including any fees and expenses of its
counsel) employed in connection. with any Bonds; any costs. associated with the y
marketing. or. remarketing of the Bonds; costs. related to credit enhancement for the
Bonds; the expenses of the Administrator and the City in carrying out their duties under
any Indenture, including, but not limited to, the levy and collection of the Special Tax,
the fees and expenses of legal counsel, Bond redemption expenses, charges levied by the
County or any division or office thereof in connection with the levy and collection of the
1
Res.No.2002-26
Ex.C
Special Tax, audits, and amounts needed to pay arbitrage rebate to the federal
government with respect to the Bonds; costs associated with complying with continuing
disclosure requirements; costs associated with responding to public inquiries regarding
Special Tax levies and appeals; attorneys' fees and other costs associated with
commencement or pursuit of foreclosure for any delinquent Special Tax; and all other
costs and expenses of City, the Administrator, the County, and any Fiscal Agent, escrow
agent or trustee related to the administration of Improvement Area A of CFD No. 2002-1
or any Bonds.
Administrator means the Director of Administrative Services of the City or such other
person or entity designated by the City Administrator or the City Council to administer
the Special Tax according to this Rate and Method of Apportionment of Special Tax.
Assessor's Parcel or Parcel means a lot, parcel or airspace parcel shown on an
Assessor's Parcel Map with an assigned Assessor's.Parcel Number that is located within
Improvement Area A of CFD No. 2002-1.
Assessor's Parcel Map means an official map of the Assessor of the County designating
Parcels by Assessor's Parcel Number.
Bonds mean any bonds or other debt(as defined in Section 53317(d) of the Act),whether
in one or more series, issued by the City for Improvement Area A of CFD No. 2002-1 >'
under the Act.
Bond Fund means the fund or account created pursuant to the-Indenture in which the
collections of the Special Tax are deposited.
Bond Year means the one year period from September 2 to the following September 1.
City means the City of Huntington Beach.
City Council means the City Council of the City of Huntington Beach, acting as the
legislative body of CFD No. 2002-1.
County means the County of Orange.
Delinquencies mean the amount, if any, equal to delinquencies in payment of the Special
Tax levied in Improvement Area A of CFD No. 2002-1 in the previous Fiscal Year.
Exempt Land means(1) any real property within the boundaries of Improvement Area A
of CFD No. 2002-1 which is owned by a governmental agency for public right of way .
purposes, including,.but not limited to, streets, water well production facilities, public
walkway corridors, and slopes as determined in each Fiscal Year by the Administrator,
and(2) any Assessor's Parcel for which the Special Tax has been paid in full.
Fiscal Agent means the fiscal agent or trustee who is a party to the Indenture.
2
Res.No.2002-29-
Ex.C
Fiscal Year means the period commencing on July 1 and ending on the following June
30, in any year in which the Bonds are outstanding.
Improvement Area A means any real property within the boundaries of CFD No. 2002-
1 as depicted on the boundary map for said CFD entitled "Proposed Boundaries of The
City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre
Business Park), County of Orange, State of California" and approved by the City
Council. Said Improvement Area A is comprised generally of Parcels 4 through 11, the
proposed public well site and adjacent portions of the following roadway right-of-way;
Skylab Road, Astronautics Road, Street `B' and Street `C'; as shown on Tentative Parcel
Map No. 2001-122 on file with the City. Said Improvement Area A is also envisioned to
include Parcels 1 through 8, the proposed public well site and adjacent portions of the
following roadway right-of-way; Skylab Road, Delta Lane and Astronautics Lane; as
shown on proposed Final Parcel Map No. 2001-226 and encompassing approximately
40.339 gross acres and 33.286 net taxable acres. In no case shall the net taxable acres in
Improvement Area A be less than 33.286.
Indenture means the indenture, fiscal agent agreement, resolution or other instrument
approved pursuant to the Resolution-of Issuance and pursuant to which Bonds are issued,
as modified, amended and/or supplemented from time to time, and any instrument
replacing or supplementing the same.
Infrastructure means the public 'improvements authorized : to be financed. by
Improvement Area A of CFD No. 2002-1 in accordance with the terms.of the Act.
Interest Payment Date means any date on which regularly scheduled principal and/or
interest payments are due on the Bonds.
Maximum Special Tax means, with respect to any Assessor's Parcel of Taxable
Property, the maximum Special Tax determined in accordance with Section C that can be
levied in any Fiscal Year on such Assessor's Parcel.
Outstanding Bonds means all Bonds that are then outstanding under the Indenture.
Property Owner means the owner of an Assessor's Parcel within the boundaries of
Improvement Area A of CFD No. 2002-1 as determined from the latest equalized tax
rolls of the County or as proved through some other acceptable manner to the
Administrator.
Reserve Fund means the fund of that name created under the Indenture.
Special Tax-means the special tax to be levied pursuant to the Act and this Rate and
Method of Apportionment of Special Tax on Taxable Property within Improvement Area .
A of CFD No. 2002-1.
3
Res.No.2002-26;=
Ex.C
Special Tax Requirement means the amount required in any Fiscal Year for
Improvement Area A of CFD No. 2002-1 necessary: (i) to pay the annual scheduled debt
service on the Outstanding Bonds due in the next succeeding Bond Year which
commences in such Fiscal Year, (ii) to pay any amounts required to establish or replenish
the Reserve Fund for all Outstanding Bonds, (iii)to pay Administrative Expenses due and
estimated by the Administrator to become due prior to the next levy of the Special Tax,
and (iv)to cure any Delinquencies in the payment of principal or interest on indebtedness
of Improvement Area A of CFD No. 2002-1. The Special Tax Requirement shall be
reduced by the following: (i) any credit from interest earnings on the Reserve Fund or
other Bond funds the earnings on which are available under the terms of the Indenture to
pay debt service on the Bonds, (ii) the collection of delinquent Special Tax since the last
Special Tax Levy, and (iii) any other funds legally available to apply against the Special
Tax Requirement as determined by the Administrator.
Taxable Property means all of the Assessor's Parcels within the boundaries of
Improvement Area A of CFD No. 2002-1, which are not Exempt Land, or otherwise
exempt from the Special Tax pursuant to the Act.
B. IDENTIFYING TAXABLE PROPERTY
On or about each July I", the Administrator shall determine which Assessor's Parcels in
Improvement Area A of CFD No. 2002-1.are Taxable Property.-. The Taxable Property
shall be subject to the Special Tax in accordance with-. the rate. and method of
apportionment described in Sections C and D below.
C. MAXIMUM SPECIAL TAX
The Maximum Special Tax for each Parcel of Taxable Property is $11,200 per Acre
commencing in Fiscal Year 2002-2003 and such Maximum Special Tax shall increase in
every Fiscal Year thereafter by two percent (2%) of the Maximum Special Tax for the
prior Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2002-2003, and during each Fiscal Year thereafter, the
City Council or its designee shall levy the Special Tax proportionally on each Assessor's
Parcel of Taxable Property at up to one hundred percent (100%) of the Maximum.Special
Tax for that Fiscal Year, as described in Section C, above, as needed to satisfy the
Special Tax.Requirement.
4
Res:No.2002-25
Ex.C
E. LIMITATIONS
No Special Tax shall be levied on an Assessor's Parcel after such Assessor's Parcel
becomes Exempt Land.
The:Special Tax may be levied and collected on Taxable Property commencing with
Fiscal Year 2002-2003, and for each Fiscal Year thereafter, and until the date on which
principal and interest on all Outstanding Bonds have been paid in full (or provision for
their payment has been made). Upon determination by the Administrator that this
requirement has been met, the Special Tax lien shall be removed from all Assessor's
Parcels in Improvement Area A of CFD No. 2002-1.
F. MANNER OF COLLECTION
The Special Tax shall be collected at the same time as ordinary ad valorem property
taxes, provided, however, that CFD No. 2002-1 may at any time directly bill the Special
Tax, may collect the Special Tax at a different time or manner if necessary to meet its
financial obligations, and may covenant to foreclose and may actually foreclose on.
delinquent Assessor's Parcels as permitted by the Act.
G. PREPAYMENT OF SPECIAL TAX
The following definitions apply solely to this Section G.:
Amount of Current Special Taxes Paid means the amount of the Special Tax levied
against the subject Assessor's Parcel that was paid to the County or the City by the owner
of the subject Assessor's Parcel and that will be applied to debt service payments on the
Redemption Date.
Outstanding Bonds means all Bonds which are deemed to be outstanding under the
Indenture the day immediately preceding the next.Interest Payment Date.
Redemption Date means the Interest Payment Date on which Bonds are proposed to be
redeemed from the prepayments of the Special Tax.
1. Prepayment in Full
The. Special Tax obligation applicable to such Assessor's Parcel in Improvement Area A
may be fully prepaid and the obligation of such Assessor's Parcel to pay the Special Tax
permanently satisfied as described herein. The owner intending to prepay the Special
Tax obligation on one or more Assessor's Parcel(s) shall provide the Administrator with .
written notice of intent to prepay. It shall be.a condition precedent to prepayment that the
owner intending to prepay the Special Tax must pay to the County all past due Special
5
Res.No.2002-26-
Ex.C
Tax on the Assessor's Parcel to be prepaid and provide proof of payment to the
Administrator. Promptly following receipt of such notice, the Administrator shall notify
the owner of such Assessor's Parcel(s) of the prepayment amount of such Assessor's
Parcel(s). . The Administrator may charge a reasonable fee for providing this figure.
Prepayment must be made not less than 90 days prior to the next occurring date that
Bonds may be redeemed from the proceeds of such prepayment pursuant to the Indenture.
The Prepayment Amount (defined below) shall be calculated as summarized below
(capitalized terms as defined above or below):
Bond Redemption Amount
Plus Redemption Premium
Plus Defeasance Amount
Plus Administrative Fees and Expenses
Less Reserve Fund Credit
Less Amount of Current Special Taxes Paid
Total: Equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be
calculated as follows:
Paragraph No.
1. For.Assessor's Parcels of Taxable Property intended to be prepaid'. compute the
Maximum Special Tax for such Assessor's Parcels for the current Fiscal Year.
2. Divide the Maximum Special Tax computed pursuant to Paragraph 1 by the total
Maximum Special Tax of all Assessor's Parcels of Taxable Property for the
current Fiscal Year. -
3. Multiply the quotient computed pursuant to Paragraph 2 by the Outstanding
Bonds as defined in this Section G to compute the amount of Outstanding Bonds
to be retired and prepaid, and round the result up to the nearest multiple of$5,000
(the Bond Redemption Amount).
4. Multiply the Bond Redemption Amount less the par amount of Bonds scheduled
to mature on the Redemption Date by the applicable redemption premium (the
Redemption Premium).
5. Compute the amount needed to pay interest on the Bond Redemption Amount
from the Interest Payment Date immediately preceding the Redemption Date to
the Redemption Date.
6. Compute the amount.the Administrator-reasonably expects. to derive from the
reinvestment of the Prepayment Amount from the date of prepayment until.the
redemption date for the Outstanding Bonds to be redeemed with-the prepayment.
7. Add the amounts computed-pursuant to Paragraph 5 and subtract the amount
computed pursuant to Paragraph 6 (the Defeasance Amount).
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Res.No.2002-26
Ex.C
8. Determine the administrative fees and expenses of Improvement Area A
associated with the costs of computation of the prepayment, the costs to invest the
prepayment proceeds, the costs of redeeming Bonds, and the costs of recording
any notices to evidence the prepayment and the redemption (the Administrative
Fees and Expenses).
9. Determine the reserve fund credit (the Reserve Fund Credit) which shall equal
the lesser of: (a) the expected reduction in the Reserve Requirement (as defined
in the Indenture), if any, associated with.the redemption of Outstanding Bonds as
a result of the prepayment, or (b) the amount derived by subtracting the new
Reserve Requirement (as defined in the Indenture) in effect after the redemption
of Outstanding Bonds as a result of'the prepayment from the balance in the
reserve fund on the prepayment date, but in no event shall such amount be less
than zero.
10. The Special Tax prepayment is equal to the sum of the amounts computed
pursuant to Paragraphs 3, 4, 7 and 8, less (i) the amounts computed pursuant to
Paragraph 9 and (ii) the Amount of Current Special Taxes Paid (the Prepayment
Amount).
11. From the Prepayment Amount, the amounts computed pursuant to Paragraphs 3,
4, 7 (if greater than zero), and 9 shall be deposited into the appropriate fund as
established under the Indenture and be used to redeem Outstanding Bonds or
make debt service payments (as appropriate). The amount computed pursuant to '
Paragraph 8 shall be retained by the Administrator.
With respect to any Assessor's Parcel that is prepaid, the City Council shall (i) cause a
suitable notice to be.recorded in compliance with the Act, to indicate the prepayment of
the Special Tax and the release of the Special Tax lien on such Assessor's Parcel, (ii)
notify the County that the Special Tax, if any, remaining on the secured tax roll for the
Assessor's Parcel has been satisfied and that the County should remove such amounts
from the secured tax roll, and (iii) refund the owner for any Special Tax payments made
on the Assessor's Parcel after the date of prepayment. From and after the prepayment,
the obligation of such Assessor's Parcel to pay the Special Tax shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the
amount of the Maximum Special Tax that may be levied on Taxable Property within
Improvement Area A of CFD No. 2002-1 after the proposed prepayment is at least. 1.1
times the maximum annual debt service on all Outstanding Bonds.
2. Prepayment in Part
The Maximum Special Tax on an Assessor's Parcel of Taxable Property.may be partially
prepaid. The amount of the prepayment shall be calculated as in Section G.1, except that
a partial prepayment shall be calculated according to the following formula:
7
Res.No.200246
Ex.C
PP=(PH xF)+G
Where these terms are defined as follows:
PP = the partial prepayment.
PH= the Prepayment Amount calculated according to Section G.1, minus the amounts
determined in Paragraph No. 8 of Section G.1.
F = the percent by which the owner of an Assessor's Parcel(s) is partially prepaying
the Maximum Special Tax.
G = the amounts determined in Paragraph No. 8 of Section G.1.
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special
Tax shall notify the Administrator of (i) such owner's intent to partially prepay the
Maximum Special Tax, and (ii) the percentage by which the Maximum Special Tax shall
be prepaid. The Administrator shall promptly provide the owner with a statement of the
amount required for the partial prepayment of the Maximum Special Tax for an
Assessor's Parcel following receipt of the request.
With respect to any Assessor's Parcel that is partially prepaid, CFD No. 2002-1 shall (i)
distribute the funds remitted to it according to Paragraph 11 of Section G.1, and (ii)
indicate in the records of Improvement Area A of CFD No. 2002-1 that there has been a
partial prepayment of the Maximum Special Tax and that a portion of the Maximum
Special Tax equal to the outstanding percentage (i.e., 100% - .F) of the remaining
Maximum Special Tax shall continue to be authorized to.be levied on such Assessor's
Parcel pursuant to Section D.
H. PROPERTY OWNER APPEALS OF SPECIAL TAX LEVIES
Any property owner claiming that the amount or application of the Special Tax is not
correct and requesting a refund may file a written notice of appeal and refund to that
effect with the Administrator not later than one calendar year after having paid the
Special Tax that is disputed. The Administrator shall promptly review the appeal, and if
necessary, meet with the property owner, consider written and oral evidence regarding
the amount of the Special Tax, and decide the appeal. If the Administrator's decision
requires that the Special Tax be modified or changed in favor of the property owner, a
cash refund shall not be made (except for the last year of the levy), but an adjustment
shall be made to the next Special Tax levy. Any dispute over the decision of the
Administrator shall,be referred to the City Council and the decision of the City Council
shall be final. This procedure shall be exclusive and its exhaustion by any property
owner shall be a condition precedent to any legal action by such owner. -
8
Res.No.2002-26
Ex.D
EXHIBIT D
IMPROVEMENT AREA B OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(MCDONNELL CENTRE BUSINESS PARK
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax applicable to each Assessor's Parcel of Taxable Property in the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre
Business Park) (herein "CFD No. 2002-1") shall be levied and collected according to the
special tax liability determined by the Administrator through the application of the
procedures described below. The real property in Improvement Area B of CFD No.
2002-1, unless exempted by law or by the provisions hereof, shall be specially taxed for
the purposes, to the extent, and in the manner herein provided.
A. DEFINITIONS
The capitalized terms hereinafter set forth have the following meanings when used in this
Rate and Method of Apportionment of Special Tax:
Acre or Acreage means the land area of an Assessor's Parcel as shown on the applicable
final map, parcel map, or other parcel map recorded with the County Recorder. If the
Acreage of a particular Parcel is unclear after reference to available maps, the
Administrator shall determine the appropriate Acreage for that Parcel.
Act means Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of
the City of Huntington Beach and, as applicable, the Mello-Roos Community Facilities
Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311), Part 1,
Division 2, of Title 5 of the Government Code of the State of California.
Administrative Expenses means any or all of the following actual or reasonably
estimated costs directly related to the administration of Improvement Area B of CFD No.
2002-1: the fees and expenses of any Fiscal Agent(including any fees and expenses of its
counsel) employed in connection with any Bonds; any :costs associated with .the
marketing or 'remarketing of the .Bonds; costs related to credit enhancement for the
Bonds; the expenses of the Administrator and the City in carrying out their duties under
any Indenture, including, but not limited to, the levy and collection of the Special Tax, .
the fees and expenses of legal counsel, Bond redemption expenses, charges levied by the
County or any division or office thereof in connection with the levy and collection of the
1
Res.No.2002-26-
Ex.D
Special Tax, audits, and amounts needed to pay arbitrage rebate to the federal
government with respect to the Bonds; costs associated with complying with continuing
disclosure requirements; costs associated with responding to public inquiries regarding
Special Tax levies and appeals; attorneys' fees and other costs associated. with
commencement or pursuit of foreclosure for any delinquent Special Tax; and all other
costs and expenses of City,the Administrator, the County, and any Fiscal Agent, escrow
agent or trustee related to the administration of Improvement Area B of CFD No. 2002-1
or any Bonds.
Administrator means the Director of Administrative Services of the City or such other
person or entity designated by the City Administrator or the City Council to administer
the Special Tax according to this Rate and Method of Apportionment of Special Tax. .
Assessor's Parcel or Parcel means a lot, parcel or airspace parcel shown on an
Assessor's Parcel Map with an assigned Assessor's Parcel Number that is located within
Improvement Area B of CFD No. 2002-1.
Assessor's Parcel Map means an official map of the Assessor of the County designating
Parcels by Assessor's Parcel Number.
Bonds mean any bonds or other debt(as defined in Section 53317(d) of the Act),whether
in one or more series, issued by the City for Improvement Area B of CFD No. 2002-1
under the Act.
Bond Fund means the fund or account created pursuant to the Indenture in which the
collections of the Special Tax are deposited.
Bond Year means the one year period from September 2 to the following September 1.
City means the City of Huntington Beach.
City Council means the City Council of the City of Huntington Beach, acting as the
legislative body of CFD No. 2002-1.
County means the County of Orange.
Delinquencies mean the amount, if any, equal to delinquencies iri payment of the Special
Tax levied in Improvement Area B of CFD No. 2002-1 in the previous Fiscal Year.
Exempt Land means (1) any real property within the boundaries of Improvement Area B
of CFD No. 2002-1 which is owned by a governmental agency.for public right.of way y.
purposes, including, but not limited to, streets, water well production facilities, public
walkway corridors, and slopes as determined in each Fiscal Year by the Administrator,
and(2)any Assessor's Parcel for which the Special Tax has been paid in full.
Fiscal Agent means the fiscal agent or trustee who is a party to the Indenture.
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Res.No.2002-26
Ex.D
Fiscal Year means the period commencing on July 1 and ending on the following June
30, in any year in which the Bonds are outstanding.
Improvement Area B means any real property within the boundaries of CFD No. 20024
as depicted on the boundary map for said CFD entitled"Proposed Boundaries of The City
of Huntington Beach Community Facilities District No. 20024 (McDonnell Centre
Business Park), County of Orange, State of California" and approved by the City
Council. Said Improvement Area B is comprised generally of Parcels 1 through 3,
Parcels 12 through 20 and adjacent portions of the following roadway right-of-way;
Skylab Road, Street `A', Street `C' and Street `D'; as shown on Tentative Parcel Map No.
2001-122 on file with the City and encompassing approximately 48.803 gross acres and
43.785 net taxable acres. In no case shall the net taxable acres in Improvement Area B be
less than 43.785.
Indenture means the indenture, fiscal agent agreement, resolution or other instrument
approved pursuant to the Resolution of Issuance and pursuant to which Bonds are issued,
as modified, amended and/or supplemented from time to time,, and any instrument
replacing or supplementing the same.
Infrastructure means the public improvements authorized to be financed by
Improvement Area B of CFD No. 2002-1 in accordance with the terms of the Act.
Interest Payment Date means any date on which regularly scheduled principal and/or
interest payments are due on the Bonds.
Maximum Special Tax means, with respect to any Assessor's Parcel of Taxable
Property, the maximum Special Tax determined in accordance with Section-C-that can be
levied in any Fiscal Year on such Assessor's Parcel.
Outstanding Bonds means all Bonds that are then outstanding under the Indenture.
Property Owner means the owner of an Assessor's Parcel within the boundaries of
Improvement Area B of CFD No. 2002-1 as determined from the latest equalized tax
rolls of the County or as proved through some other acceptable manner to the
Administrator.
Reserve Fund means the fund of that name created under the Indenture.
Special Tax means the special tax to be levied pursuant to the Act and this Rate and
Method of Apportionment.of Special Tax on Taxable Property.within Improvement Area
B of CFD.No. 2002-i.
Special Tax Requirement means the amount required in any Fiscal Year for
Improvement Area B of CFD No. 2002-1 necessary: (i) to pay the annual scheduled debt
service on the Outstanding Bonds due in the next succeeding Bond Year which
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Res.No.200249
Ex.D
commences in such Fiscal Year, (ii)to pay any amounts required to establish or replenish
the Reserve Fund for all Outstanding Bonds, (iii)to pay Administrative Expenses due and
estimated by the Administrator to become due prior to the next levy of the Special Tax,
and(iv)to cure any Delinquencies in the payment of principal or interest on indebtedness
of Improvement Area B of CFD No. 2002-1. The Special Tax Requirement shall be
reduced by the following: (i) any credit from interest earnings on the Reserve Fund or
other Bond funds the earnings on which are available under the terms of the Indenture to
pay debt service on the Bonds, (ii) the collection of delinquent Special Tax since the last
Special Tax Levy, and (iii) any other funds legally available to apply against the Special
Tax Requirement as determined by the Administrator.
Taxable Property means all of the Assessor's Parcels within the boundaries of
Improvement Area B of CFD No. 2002-1, which are not Exempt Land, or otherwise
exempt from the Special Tax pursuant to the Act.
B. IDENTIFYING TAXABLE PROPERTY
On or about each July I", the Administrator shall determine which Assessor's Parcels in
Improvement Area B of CFD No. 2002-1 are Taxable Property. The Taxable Property
shall be subject to the Special Tax in accordance with the rate and method of
apportionment described in Sections C and D-below.
C. MAXIMUM SPECIAL TAX
The Maximum Special Tax for each Parcel of Taxable Property is $11,200 per Acre
commencing in Fiscal Year 2002-2003 and such Maximum Special Tax shall increase in
every Fiscal Year thereafter by two percent (2%) of the Maximum Special Tax for the
prior Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2002-2003, and during each Fiscal Year thereafter, the
City Council or its designee shall levy the Special Tax proportionally on each Assessor's
Parcel of Taxable Property at up to one hundred percent (100%) of the Maximum Special
Tax for that Fiscal Year, as described in Section C, above, as needed to satisfy the
Special Tax Requirement.
4
Res.No.200246
Ex.D
E. LIMITATIONS
No Special Tax shall be levied on an Assessor's Parcel after such Assessor's Parcel
becomes Exempt Land.
The Special Tax may be levied and collected.on Taxable Property commencing with
Fiscal Year 2002-2003, and for each Fiscal Year thereafter, and until the date on which
principal and interest on all Outstanding Bonds have been paid in full (or provision for
their payment has been made). Upon determination by the Administrator that this
requirement has been met, the Special Tax lien shall be removed from all Assessor's
Parcels in Improvement Area B of CFD No. 2002-1.
F. MANNER OF COLLECTION
The Special Tax shall be collected at the same time as ordinary ad valorem property
taxes, provided, however, that CFD No. 2002-1 may at any time directly bill the Special
Tax, may collect the Special Tax at a different time or manner if necessary to meet its
financial obligations, and may covenant to foreclose and may actually foreclose on
delinquent Assessor's Parcels as permitted by the Act.
G. PREPAYMENT OF SPECIAL TAX
The following definitions apply solely to this Section G.:
Amount of Current Special Taxes Paid means the amount of the Special Tax levied
against the subject Assessor's Parcel that was paid to the County or the City by the owner
of the subject Assessor's Parcel and that will be applied to debt service payments on the
Redemption Date.
Outstanding Bonds means all Bonds which are deemed to be outstanding under the
Indenture the day immediately preceding the next Interest Payment Date.
Redemption Date means the Interest Payment Date on which Bonds are proposed to be
redeemed from the prepayments of the Special Tax.
1. Prepayment in Full
The Special Tax obligation applicable to such Assessor's Parcel in Improvement Area B
may be fully prepaid and the obligation of such Assessor's Parcel to pay the Special Tax
permanently satisfied as described herein. The owner intending to prepay the Special-
Tax obligation on one or more Assessor's Parcel(s) shall-provide the Administrator with
written notice of intent to prepay. It shall be a condition precedent to prepayment that the
owner intending to prepay the Special Tax must pay to the County all past due Special
5
Res.No.200246
Ex.D
Tax on the Assessor's Parcel to be prepaid and provide proof of payment to the
Administrator. Promptly following receipt of such notice, the Administrator shall notify
the owner of such Assessor's Parcel(s) of the prepayment amount of such Assessor's
Parcel(s). The Administrator may charge a reasonable fee for providing'this figure.
Prepayment must be made not less than 90 days prior to the next occurring date that
Bonds may be redeemed from the proceeds of such prepayment pursuant to the Indenture.
The Prepayment Amount (defined below) shall be calculated as summarized below
(capitalized terms as defined above or below):
Bond Redemption Amount
Plus Redemption Premium
Plus Defeasance Amount
Plus Administrative Fees and Expenses
Less Reserve Fund Credit
Less Amount of Current Special Taxes Paid
Total: Equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be
calculated as follows:
ParagraRh No.
1. For Assessor's Parcels of Taxable Property intended to be prepaid, 'compute the
Maximum Special Tax for such Assessor's Parcels for the current Fiscal Year.
2. Divide the Maximum Special Tax computed pursuant to Paragraph 1 by the total
Maximum Special Tax of all Assessor's Parcels of Taxable Property for the
current Fiscal Year.
3. Multiply the quotient computed pursuant to Paragraph 2 by the Outstanding
Bonds as defined in this Section G to compute the amount of Outstanding Bonds
to be retired and prepaid, and round the result up to the nearest multiple of$5,000
(the Bond Redemption Amount).
4. Multiply the Bond Redemption Amount less the par amount of Bonds scheduled
to mature on the Redemption Date by the applicable redemption premium (the
Redemption Premium).
5. Compute the amount needed to pay interest on the Bond Redemption Amount
from the Interest Payment Date immediately preceding the Redemption Date to
the Redemption Date.
6. Compute.the amount the Administrator reasonably expects to derive from:the
reinvestment of the Prepayment Amount from the date ,of prepayment until the
redemption date for the Outstanding Bonds to be redeemed with the prepayment.
7. Add the amounts computed pursuant to Paragraph 5 and subtract the amount
computed pursuant to Paragraph 6 (the Defeasance Amount).
6
Res.No.2002-267
Ex.D
8. Determine the administrative fees and expenses of Improvement Area B
associated with the costs of computation of the prepayment,the costs to invest the
prepayment proceeds, the costs of redeeming Bonds, and the costs of recording
any notices to evidence the prepayment and the redemption (the Administrative
Fees.and Expenses).
9. Determine the reserve fund credit (the Reserve Fund Credit) which shall equal
the lesser of. (a) the expected reduction in the Reserve Requirement (as defined
in the Indenture), if any, associated with the redemption of Outstanding Bonds as
a result of the prepayment, or (b).the amount derived by subtracting the new
Reserve Requirement (as defined in the Indenture) in effect after the redemption
of Outstanding Bonds as a result.of the prepayment from the balance in the
reserve fund on the prepayment date, but in no event shall such amount be less
than zero.
10. The Special Tax prepayment is equal to the sum of the amounts computed
pursuant to Paragraphs 3, 4, 7 and 8, less (i) the amounts computed pursuant to
Paragraph 9 and (ii) the Amount of Current Special Taxes Paid (the Prepayment
Amount).
11. From the Prepayment Amount, the amounts computed pursuant to Paragraphs 3,
4, 7 (if greater than zero), and 9 shall be deposited into the appropriate fund as
established under the Indenture and be used to redeem Outstanding Bonds or
make debt service payments (as appropriate). The amount computed pursuant to '
Paragraph 8 shall.be retained by the Administrator.
With respect to any Assessor's Parcel that is prepaid, the City Council shall (i) cause a
suitable notice to be recorded in compliance with the Act, to indicate the prepayment of
the Special Tax and the release of the Special Tax lien on such Assessor's Parcel, (ii)
notify the County that the Special Tax, if any, remaining on the secured tax roll for the
Assessor's Parcel has been satisfied and that the County should remove such amounts
from the secured tax roll, and (iii) refund the owner for any Special Tax payments made
on the Assessor's Parcel after the date of prepayment. From and after the prepayment,
the obligation of such Assessor's Parcel to pay the Special Tax shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the
amount of the Maximum Special Tax that may be levied on Taxable Property within
Improvement Area B of CFD No. 2002-1 after the proposed prepayment is at least 1.1
times the maximum annual debt service on all Outstanding Bonds.
2. Prepayment in Part
The Maximum Special Tax on an Assessor's Parcel of Taxable Propertymay be partially
prepaid. The amount of the prepayment shall be calculated as in Section G.1, except that
a partial prepayment shall be calculated according to the following formula:
7
Res.No.2002-26'
Ex.D
PP=(PH xF)+ G
Where these terms are defined as follows:
PP = the partial prepayment
PH= the Prepayment Amount calculated according to Section G.1, minus the amounts
determined in Paragraph No. 8 of Section G.1.
F = the percent by which the owner of an Assessor's Parcel(s) is partially prepaying
the Maximum Special Tax.
G = the amounts determined in Paragraph No. 8 of Section G.1.
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special
Tax shall notify the Administrator of (i) such owner's intent to partially prepay the
Maximum Special Tax, and (ii) the percentage by which the Maximum Special Tax shall
be prepaid. The Administrator shall promptly provide the owner with a statement of the
amount required for the partial prepayment of the Maximum Special Tax for an
Assessor's Parcel following receipt of the request.
With respect to any Assessor's Parcel that is partially prepaid, CFD No. 2002-1 shall (i)
distribute the funds remitted to it according to Paragraph 11 of Section G.1, and (ii)
indicate in the records of Improvement Area B of CFD No. 2002-1 that there has been a
partial prepayment of the Maximum Special Tax and that a portion of the Maximum >'
Special Tax equal to the outstanding percentage (i.e., 100% - F) of the remaining
Maximum Special Tax shall continue to be authorized to be levied on such Assessor's
Parcel pursuant to Section D.
H. PROPERTY OWNER APPEALS OF SPECIAL TAX LEVIES
Any property owner claiming that the amount or application of the Special Tax is not
correct and requesting a refund may file a written notice of appeal and refund to that
effect with the Administrator not later than one calendar year after having paid the
Special Tax that is disputed. The Administrator shall promptly review the appeal, and if
necessary, meet with the property owner, consider written and oral evidence regarding
the amount of the Special Tax, and decide the appeal. If the Administrator's decision
requires that the Special Tax be modified or changed in favor of the property owner, a
cash refund shall not be made (except for the. last year of the levy), but an adjustment
shall be made to the next Special Tax levy. Any dispute over the decision of the
Administrator shall be referred to the City Council and the decision of the City Council
shall be final. This procedure shall be exclusive and its exhaustion by any property
owner shall be a condition precedent to any legal action by such owner. -
8
Res.No.2002-26
Ex.E
EXHIBIT E
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(MCDONNELL CENTRE BUSINESS PARK)
NOTICE OF PUBLIC HEARING
Notice is hereby given that on April 1,2002,the City Council of the City of Huntington Beach
adopted a Resolution entitled"A Resolution of the City Council of the City of Huntington Beach
Declaring Its Intention To Establish A Community Facilities District And To Authorize The
Levy Of Special Taxes Therein." Pursuant to the provisions of Chapter 3.56 of the Municipal
Code of the City and, as applicable,the Mello-Roos Community Facilities Act of 1982, the City
Council of the City hereby gives notice as follows:
A. The text of said Resolution of Intention is as follows:
WHEREAS, under the provisions of Chapter 3.56 (commencing with Section
3.56.010) of the Municipal Code of the City of Huntington Beach (the "Code") and, as
applicable under the Code, the Mello-Roos Community Facilities Act of . 1982,
constituting Section 53311 et-seq. of the California Government Code (the "Act," and,
together with the Code, the "Law"),.this City Council may commence proceedings-for
the establishment of a community facilities district;and
There has been submitted to this City Council a Petition (Including Waiver) of
McDonnell Douglas Corporation (the "Petition"), requesting the-formation by this City
Council of a community facilities district under the Law to be known as the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business
Park) (the"District")comprised of two separate improvement areas; and
There has also been submitted to this City Council a Deposit/Reimbursement
Agreement(the"Deposit Agreement") wherein the petitioner has agreed to pay all costs
of the City of Huntington Beach (the"City")related to the formation of the District;and
Undei the Law, this City Council is the legislative body for the proposed District
and is empowered with the authority to establish the District and levy special-taxes
within the District;and
This City Council now desires to proceed with.the actions necessary to consider
the establishment of the District and the designation of improvement areas therein.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Huntington Beach as follows:
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Res.No.2002-26
Ex.E
Section 1. This City Council proposes to begin the proceedings necessary to
establish the District pursuant to the Law. Receipt of the Petition to form the District
and the Deposit Agreement is hereby acknowledged. The City Administrator is hereby
authorized to execute the Deposit Agreement and the Director of Administrative
Services of the City, working with the City Treasurer, is hereby authorized to cash the
deposit referenced therein and to expend the deposits for costs of formation of the
District,as contemplated by the Deposit Agreement.
Section 2. The name proposed for the District is City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park). Pursuant
to Section.53350 of the Act, the City Council hereby designates a portion of the District
as"Improvement Area A.of the City of Huntington Beach Community Facilities District
No. 2002-1 (McDonnell Centre Business Park)" ("Area A"), and a portion of the District
as "Improvement Area B of the City of Huntington Beach Community Facilities District
No. 2002-1 (McDonnell Centre Business Park)" ("Area B").
Section 3. The proposed boundaries of Area A and of Area B of the District are
as shown on the map of the District on file with the City Clerk of the City, which
boundaries are hereby preliminarily approved. The City Clerk is hereby directed to
record, or cause to be recorded, the map of the boundaries of the District in the office of
the County Recorder as soon as practicable after the adoption of this Resolution.
Section 4. The type of public facilities (the "Area A Facilities") proposed to be
eligible for funding by Area A and pursuant to the Law shall consist of those.items listed
on Exhibit A hereto under the heading "Facilities," which Exhibit is by this reference
incorporated herein. The type of public facilities (the"Area B Facilities") proposed to be
eligible for funding by Area B and.pursuant to the Law shall consist of those items listed
on Exhibit A hereto under the heading "Facilities," which Exhibit is by this reference
incorporated herein.
Section 5. Except to the extent that funds are otherwise available to Area A of the
District to pay for the Area A Facilities and/or pay the principal and interest as it
becomes due on bonds of Area A of the District issued to finance the Area A Facilities,a
special tax sufficient to pay the costs thereof,secured by recordation of a continuing lien
against all non-exempt real property in Area A of the District,will be levied within Area
A of the District and collected in the same manner as ordinary ad valorem property
taxes or in such other manner as this City Council or its designee shall determine,
including direct billing of the affected property owners. The proposed rate and method
of apportionment of the special tax among the parcels of real property within Area A of
the District, in sufficient detail to allow each landowner within the proposed Area A of
the District to estimate the maximum amount such owner will have to pay,is described
in Exhibit C attached hereto which Exhibit is by this reference incorporated herein.
Except to the extent that funds are otherwise available to Area B of the District to
pay for the Area B Facilities and/or pay the principal and interest as it becomes due on
bonds of Area B of the District issued to finance the Area B Facilities, a special tax
sufficient to pay the costs thereof, secured by recordation of a continuing lien against all
E-2
Res.No.2002-26
Ex.E
non-exempt real property in Area B of the District, will be levied within Area B of the
District and collected in the same manner as ordinary ad valorem property taxes or in
such other manner as this City Council or its designee shall determine,including direct
billing of the affected property owners. The proposed rate and method of
apportionment of the special tax among the parcels of.real property within Area B of the
District, in sufficient detail to allow each landowner within the proposed Area B of
District to estimate the maximum amount such owner will have to pay, is described in
'Exhibit D attached hereto which Exhibit is by this reference incorporated herein.
This City Council finds that the provisions of Section 53313.6, 53313.7 and
53313.9 of the Act (relating to adjustments to.ad valorem property taxes and schools
financed by a community facilities district) are inapplicable to either Area A or Area B of
the District.
Section 6. It is the intention of this City Council,acting as the legislative body for
Area A of the District, to cause bonds of the City to be issued for Area A of the District
pursuant to the Law to finance a portion of the costs of the Area A Facilities. If so
issued, the bonds shall be issued in one or more series in an aggregate principal amount
of not to exceed $13,000,000, shall bear interest payable semi-annually or in such other
manner as this City Council shall determine,.at a rate not to exceed the maximum rate of
interest as may be authorized by applicable law at the time of sale of such bonds, and
shall mature not to exceed 40 years from the date of the issuance thereof.
It is the intention of this.City Council,acting as the legislative body for-Area B of
the District, to cause bonds.of the City to be issued for Area B of the District pursuant to
the Law to finance a portion of the costs of the Area B Facilities. If so issued, the bonds
shall be issued in one or more series in an aggregate principal amount of not to exceed
$13,000,000, shall bear interest payable semi-annually or in such other manner as this
City Council shall determine,at a rate not to exceed the maximum rate of interest as may
be authorized by applicable law at the time of sale of such bonds, and shall mature not
to exceed 40 years from the date of the issuance thereof.
Section 7. This City Council reserves to itself the right and authority to allow any
interested owner of property in either Area A or Area B of the District, subject to the
provisions of Section 53344.1 of the Act and such requirements as it may otherwise
impose,and any applicable prepayment penalties as prescribed in the indenture or fiscal
agent agreement for any bonds of the City for the respective improvement area of the
District, to tender to the Director of Administrative Services of the City (who shall remit
the same to the City Treasurer) in full payment or part payment of any installment of
special taxes for such improvement area of the- District or the interest or penalties
thereon which may be due or delinquent, but for which a bill has.been received, any
bond or other obligation secured thereby, in the manner described in Section 53344.1 of
the Act.
Section 8. The levy of the proposed special tax in each improvement area of the
District shall be subject to the approval of the qualified electors of such improvement
area at a special election. The proposed voting procedure shall be by mailed or hand-
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Res.No.2002-26
Ex.E
delivered ballot among the landowners in the proposed improvement area of the
District,with each owner having one vote for each acre or portion of an acre of land such
owner owns in the respective improvement area of the District.
Section 9. Except as may otherwise be provided by law or the rate and method .
of apportionment of the special,tax for the respective improvement area of the District,
all lands owned by any public entity, including the United States, the State of California
and/or.the City, or any departments or political subdivisions of any thereof, shall be
omitted from the levy of the special tax to be made to cover the costs and expenses of the
facilities,the issuance of bonds by the City for such improvement area of the District and
any expenses of the respective improvement area of the District.
Section 10. The Director of Public Works of the City is hereby directed to study
said proposed facilities for each improvement area of the District and to make, or cause
to be made,and file with the City Clerk a report in writing,presenting the following:
(a) A brief description of the facilities for.each improvement area of
the District.
(b) An estimate of the fair and reasonable cost of providing the
facilities for each improvement area of the District, including the incidental
expenses in connection therewith, including the costs of the proposed bond
financing,any City administrative costs and all other related costs.
Said report shall be made a part of the record of the public hearing provided for
below.
Section 11. Monday, May 6,2002, at 7:00 p.m. or as soon thereafter as the matter
may be heard, in the regular meeting place of this City Council,City Council Chambers,
City Hall, 2000 Main Street, Huntington Beach, California, be, and the same are hereby
appointed and fixed as the time and place when and where this City Council, as
legislative body for the District, will conduct a public hearing on the establishment of
each improvement area of the District and consider and finally determine whether the
public interest, convenience and necessity require the formation of each improvement
area of the District and the levy of said special tax within the respective improvement
area.
Section 12. The City Clerk is hereby directed to cause notice of said public
hearing to be given by publication one time in a newspaper published in the area of the
District. The publication of said notice shall be completed at least seven days before the
date.herein_set for said hearing. Said notice shall be substantially in the form of Exhibit
C hereto.
Section 13. The firms of Michael Swan Consulting and Quint & Thimmig LLP
are hereby designated as special tax consultant and bond counsel and disclosure
counsel, respectively, to the City for the District. The City Director of Administrative
Services and the City Attorney, respectively, are hereby authorized to execute
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Res.No.2002-26
Ex.E
agreements with said firms for their services related to the District provided that all fees
and expenses of such firms are payable solely from a deposit by the landowner in the
District or the proceeds of the bonds, if any, issued by the City for either of the
improvement areas of the District.
Section 14. This Resolution shall take effect upon its adoption.
B. The exhibits to the Resolution which describe the facilities eligible to be funded and the rate
and method of apportionment of the special taxes for each improvement area of the district are
on file in the office of the City Clerk of the City of Huntington Beach.
C. The time and place established under said Resolution.for the public hearing required under
the Law are Monday, May 6, 2002, at the hour of 7:00 p.m. or as soon thereafter as the matter
may be heard, in the regular meeting place of the City Council of the City of Huntington Beach,
City Council Chambers, City Hall,2000 Main Street,Huntington Beach, California.
D. At said hearing,the testimony of all interested persons or taxpayers for or against the
establishment of each of the improvement areas of the district,the extent of each of the
improvement areas of the district or the furnishing by each improvement area of the specified
types of facilities will be heard. Any person interested may file a protest in writing with the City
Clerk. If fifty percent or more of the registered voters, or six registered voters,whichever is
r=
more,residing in the territory proposed to be included in an improvement area of the district,or
the owners of one-half or more of the area of land in the territory proposed to be included in an
improvement area of the district and not exempt from the special tax file written protests against
the establishment of such improvement area and the protests are not withdrawn to reduce the
value of the protests to less than a majority,the City Council shall take no further action to
establish such improvement area or levy the special taxes in such improvement area for a period
of one year from the date of the decision of the City Council, and if the majority protests of the
registered voters or the landowners are only against the furnishing of a type or types of facilities
within an improvement area of the district, or against levying a specified special tax in such
improvement area,those types of facilities or the specified special tax will be eliminated from
the proceedings to form such improvement area.
E. The proposed voting procedure shall be by special mail or hand-delivered ballot to the
property owners within the territory proposed to be included in each respective improvement
area of the district.
Dated: April 2002
/s/Connie Brockway
City Clerk,
City of Huntington Beach
E-5
Res. No. 2002-26
STATE OF CALIFORNIA )
COUNTY OF ORANGE _ ) ss
CITY OF HUNTINGTON BEACH )
1, 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 1st
day of April, 2002 by the following vote:.
AYES: Green, Dettloff, Bauer, Cook, Houchen,Winchell, Boardman
NOES: None
ABSENT: None
ABSTAIN: None
City Clerk.and ex-officio derk of the
City Council of the City of
Huntington Beach, California
TIN iorogc*V huwurn"is a collet
dopy d tlw,odghal on fie In ft oMba.
An" - 07- 12 20 62
CONNIE BROCKWAY
Council d. Hundington Beach,
calUon�►.
By Deputy
PROOF OF PUBLICATION
STATE OF CALIFORNIA)
SS.
County of Orange )
1 am a Citizen of the United States and a
resident of the County aforesaid; I am
over the age of eighteen years, and not a
party to or interested - in the below
entitled matter. I am a principal clerk of
the HUNTINGTON BEACH INDEPENDENT, a
newspaper of general .circulation, printed
and published in the City of Huntington
Beach, County of Orange, State of
California, and that attached Notice is a
true and complete copy as was printed.
and published in the Huntington Beach
and Fountain Valley issues of said
newspaper to wit the issue(s) of:
April 11, 2002
I declare, under penalty of perjury, that
the foregoing is true and correct.
Executed on April ll -, 2002
at Costa Mesa, California.
Signature
CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK
NOTICE OF PUBLIC HEARING
r - - Notice Is hereby Oven Oct an Apal t 2M.to City Cance 0l the City d Kmck tm Beach adopted a Resolution end0ed'A
Rmohatan d the COY Card a tee Cty d HhrythhWan Bacon Dadrkq lb anhntlen To EaabON AC«iwa"fy Fad01m
DUbbt And To AWharlze 710 Levy p Spetld Texee Thereby Pnrwr4 b Oa proWslore d Ctaptr 0.58 d the Mttnidpd
Cade a the
City en0.m eppaeebb.Ilia MetoRpa Camwdy FadOtles Ada 19a12,ne fly Carhri d to C9y twsby
goes ratite n lefows
A The text d cam Fkeolutton d kdentlan b m fMows:(gran.Na 2002.28)
PROOF OF P U BLI WHEREAS,mlar the prodalorm d Chapter ilea(wnnarckp with Se lion a.6&ol0)d nor M lddpel coda d me ay d
hkrOkgtoah Bewh(te'Code�and,m ODDOaable dradr the Code,the MetdRoos C«maau'tyr FedLOes Act d 1902,
cca m•t seadm 50711 a ere F d the CeGlade Gowrrvred Code(the Ad'east.math«with ue toes ate Lear)ode
City Coed may osarrahares prooeedirhg tier tla esahfnMaral d e osnrrrrhiy IecBtim datrkt end
TE OF CALIFORNIA7..) „e,���we CoLince a amemwwtyf McDonnell Dm4a MUM uncler ieprob:"�nmme
CiN a Hha^IlhOtohh Beall Caonarity FacMiles Dfaulct No.2W2-1(Macon"Centre Btmmme Park)(One 9isaicn
c=VW d two separate Improvernenl News;and
Countyof Orange pr There nm been^rmWd toCity �
ab this Cashel a oapaeiaaeasarnaa Agreement(tins veposil Agrra eann w+herem
the peatla N hm speed to pay al«am d this City d Huntington Beech(the'Cily)related to the kxmation d the Mutt;
end
Under the law,this Cly Card ts the IeadaM body far the proposal District and is ampowed with do ilWhcriy to
I rim a Citizen Of the Unit "A"i' htheDisalcland special texnwitwhthe Dtsakt end
resident Of the County a NO City Card now desires m proceed with to°e9m°necessary"awider the m'ahfi'""w"a the District And the
•/ designation d knprawerne t are"dweh
over the age of eighteen y NOW THEREFORE,BE rT RESOLVED by the City Carwc d the City of Hundroon Beach as meows:
Section L This City Council proposes to begin the proceeding necessary to establish the District pmu int to the law Receipt
party to or interested - d the Petition m ham ow owrid wd u»Depot km wom h mmby adtra wWpd The Gay Anredstramr is woby
wft&ed to axeadet the Deposit Apeenenl and the Director of AArddstrativt SeAtoss of the COW walihp with the city
entitled matter. I am a pr Tremuer.Is hereby wt hafzd a cmh the depmk rderencee theraN and to axped tha deposits for curb of mrmalbn d
the HUNTINGTON BEACH 11 ft D4 ucwdunOawbyfa DepalAwmmem.
Section 2.The new proposed IN the DWkt is city of Hmtinglon Beech Caaaxeaty FactOlm DWW Na.2002-I(McDonnell
newspaper of general ci rC Centre Bttsiren Pwk).Nmmd m Section 50.T50 d the ML d*City Caved hereby eesgnams a p«tim d Ore D4Wd m
Imprand published in the City PParkr°A"AruAnent%areaporti ndteDwri�'on Beach Cornnunitytas Ar sBofth City cfta District *VMBe 2002-1 Da"e1�"`�'"�')c '). Cdy d Hmttripmrh Beach ConAnhwly Fedbt&
Beach, County of Ora D""a No•o•'(1Ac da Centre Baskets Parkr raree B-). .
�/ Seca"J.Tea proposed bohoderies of Area Aand of Area B a the District are as shown on the map of the District on Me with
the City Clarkd the Coy.with Dordarles we hereby perarinergy approved The pry Clark b hereby directed to
California, and that attic
osw a be reomded,the map d the boaderfes d the District"chat otke of the Co mty Recorder m mom m Pradfosble
true and complete copy d,a tor, on
(th.'Ar.aAF 4.The type edhleO proposed to be eligible tar krhdirq by Ara&A and watant to the
and published in the Hui LewdhetwWddth mtwmlstedon Ei&ft Ah«etowWwOeheaft'Fac&*e dchbLMisbyt&mWence
and Fountain Valle i' morporaldIwdn.The gypd publb lar�Um(Ill•Are&B FacOltlmlproposedmbeetpible far kr&v bvknB and
Y pmuant to the law Ohae mrabt d these Man*NOW an EAU B harem under the hearing 4ed0tm.•wldch Ext01 Is by
newspaper to wit the issuei wardarenoo kcapaatad harsh
Section S.Except to the extent tal hands are oterwin available to Nee A of the District to pay for the Mee A Faeido anNa
pay go principal and Interest as I becares due on bOrh I d Area A d the District Issued to franca fo Area A FecNes,a
special tax SidWerd to pay the men Owed,exceed by teeardation at a contkiukp ten apeew all non-oumpt red property
in Area Ad t e Daft w0 be levied wit"Ares Ad the DWacl end cdlecW in dw same maaw m adnwy ad vab«
property taw a"Ouch other rrerver as this City Cadet or its desphm shd demmene."cite ft dead bOfmg at do
affected property owners,The proposed retie and rtotgd a apportavrhent d the spacial W among the parcelsd real
April 11, 200
property wtdn Area A d the Obbid,In sufficient detall m dow each landowner,with"the proposed Area A d the District to
estimate to mednadn emrew such owner will have to pay,Is desalbed In Ehdubit C atedhed hereto which EtdJdt Is by this
reference incorporated hare".
Except to the e)dwd Oat hags are Wwwlee amiable to Area B of the Dlsald to pay IN the Nm B Facilities Order Pay fo
principal and interest as 0 became due on bards d Mee 8 d the District Issued to Nonce the Am B FadTitres,a special
I declare, under penalty i W sufficient to prey the cosb hared.se Cued by recordation of a coa l g fen aping sit nd.axenhpt red property"Area
B d the District.wit be Ivied within Area B d the District and edtectd m In the saire aruwr a ord erty rwy ad valorem prop
the foregoing is true and c �m«".adh«hermrawmwsCiycaad«nedmlip" doiarm".."wamw direct wftwd the dfeamd
property owners.The proposed rare and rmthod of s W16nebrw of the spiel W emarp the parcels d red property'•
with"Arm B at Ow District In suwdent detal to Wow each landowner with"the proposed Area B of Doak:to saw new to
medm m amaad etch owner will have to M.to dmcrhmd"Exhibit D aat&ched harem which Exththit Is by this WoMC0,
Executed on April incorporated hereh
Coy Card Md,thal the WwWona 01 Section 59013.6.SM13.7 and 53319.9 of the Ad(Watap to a401nents to ad
at Costa Mesa California. vdcrerrc property taw and eclhoots financed by a wormadty tadR&district)we"appkable to dtwNea A or Area Bd
r the District.
Section B.f b the Intendon of taci City CohvhdL xanp as to kghtatw body for Area A d the District le dime bands duo
City to be bred for Area A d the District Waled to the Law to Marrs a portion of to cosh d the Area A Facilities.B ao
issued,the bonds shd be" In one or more series In an aggregate principal arroum of not to exceed f13.000.OW.shai
beer Wiest payable mmf•arvaady or in awh other manor as this City Camel shall datermke.at a rate nua to exceed the
maxknm stria d interest as may be authorized by applicable law at the t"ne d sale at such bonds,and and name not to
sxead e0 years Iran fa dam d the hauance there°. .
ath the Intention d Via City Cara.ac&gas the laosh ebodyhrAreaB-dtheDIBUKmcamebadsdtoCitymbe
Issued tar Area
B a the Dhtriet puwanl a the Law m hence a pagan a the Dann a Oho him B Facilities.ff so head.the
bads shag be Jawed"one ep«more ewlm"an eppeb principal amount at not to exceed f17,0o0.000,anal bear
Signature interest pay"—1-rmaty or In wdlw m i darvw as this City Card dent determina,a1 a rate not to exceed the
maArnurn ram of Interest as may be auumrimd by applicable law to the tens of ado d such bads,and anal mabre not to
exceed e0 years ban the dale a the Issuance thee°. .
Section 7.This City Cottrell reserves to itsell the dot and eu0onaty to allow any"traded owner of property In either Arm A
or Area B d to District.subject to the provisions d Section S&W.I of the Ad and such(Mikertanls as I may otherwise
tepose,and any eppkAm prepayment penalties as prex+Poed"the i dmme or Mcal aard agremord for any bands of
the City lr the respeego knpaArrwd eras of the Oaseid,to teller to the Director d AdnNrastrathe Se 4 m at to City
(who shd remxt the Berne to to City Treasure)"mf payment or pad payment d arty Wtalned d special taxes la such
Inprwa hors area of 0a D sW or the War"or pendaee 0ween which may be Act or da6hptont,but for which a bi has
been mcelved,any bond or odw dt0palm seared teraby,In de rnaraew described In Section 509e4.1.d the AcL .
Section&The lmy of the proposed epeeist tax In each"prwerod area d the District dal be stibje t to to apprwd d the
Waidled electors d arch Iahprtrverem area at a special election.The Iropmed vo&q poceckee Mal be by matte at hand-
delivered betel sanmg tht handownen In the proposed irnporamwe area of the Wft with each owor Mw"p ore vote IN
each Kra or portion of in acre d Wnd rich owner owns In the respedbe"praerned eras d the District,
Section 9.Except as may,otherwise be provided by law or to reh and method d&ppatlarwd d do spacial tax for the
respective fa Wmernenl arm d the DmbK al len&areal by any pubic entity,"du ft the United SWes,Ill Stab Of
California ardor Ill Cky,or any deper"nents at Political take1kroons d any Owed.anal be candied from to levy d to
aped°to to be male to car chat mete and mpemes d Oo fac+Tt&.the issuance of bads by the COY for shtdh .
k pwenom area d do District and my expenses d the rmpe dos"praanad area d Ill District.
Section 10.The Director d PL4*Wake d the City Is hereby directed to Bwdy said proposed facilities IN each kV-
am d do District and to a"or cum to be nods,and Me with the Clay Cleric a report in-111 ,premrttkq 0e fotdvea0:
(a)A brill dmd4 Don d the feaites for each knprovermnt area of the District.
(b)An stadmars d da lab end m mnabh and of pwavkt to facAm far each Inpro+onwd weed the Disft"ekadM
sir InactderaW epansm In aaxheafan Uereait4 krJhads+O fo oosb d to prapoeed bond financial.any Coy edsdhisuativs
costs and all other releld coat.
Said report slop be made a pad d the noon!d the puhfc how"pwlded for below,
Section It.Monde%May&2002.at 7:00 P.m or as*am tweaher as do rn aW may be heard.In to regAir mednl yam. _
add m otm s city Cock City Cd ChwnbsM City tilt.2000 Main Street.Fbrd"g on BONN CeBorrdd,be,end Ill same are
hereby appointed and Oxd as the tone and place when and whhers this City Caaci.m leytlets body kr do Dam wil
conduct a pabtic hearN on Ill edehOWmd of each"povemad area of to Distract and weidet and On*dm n*o
wotlw to PAft"teed,Co Nedarme and necese'y retpih the brander d each Impovernead sum d the DWI°Ord
this hlvy of said special hx WM to rmpete"provemd etas
• Section 12.TM C1ty Dirk is hereby directed to cum notlq d said public hewing to be Oven by publication one tkm In a
newspaper pabWbd"it*area of Oa District The pikkadon d sand notice shall be sum I d d lead arm dap before
the deb heron ad IN said hee Saki mks shah be rtilen0aly Ingo form d Ed"E herata
Section II The it=of MWml Swan Consaft and Quint 6 Thkrdg LLP are hereby dedpwd as sped°tax cowitant
and bad wheal and disclosure caned,reapedhdlt to the City IN do Dhtrlot The C y OW"d Adidrdstralha
Services and the My ACarneyt sm WJv*me hereby wilhorbad to axewa agrarwrs wilh said tans la dot services
WWad to to DIOM provided he ON ism and eparam of each 6me are payable eddy ken a deposit by to landowner in
goDbaktorooWoo*96d0obads,9any,bdolbyOsCdyfardtlwdlieinVwmodacmedlieDbbK
Sackn 1/.This Atuhdta0on shah take treed tpon fs Odom
B.The axt*b NO the Reacks ion which describe the WcOn.hole tabs handed and do rate and method d appDrAWWwd
d no special taw for each hptannte d area d the district are on%In 0e o foe d the City Chit doe City of Metgmn
Beach,
G no taro and plan miaboehed wda sold RoWtii"n rot the Oft to•w"O inked trade to Law am Malay,May 6.
200Ealtoherd7'.00 jun.am sow tersafwes the matter may be heard.In the repdrmeeft0110sdtheCOY
Card at the city of Nhtntiroon Beack City Coed Chambers,City Hal.200D Ma"Street.lluhl4plan B1 Calianis.
D.M said hearing,do WAxurl of al Interested r-- of taxpayers tar or aagakw Ill edehOWrerd d each deo
"prwamonl scan at de district to extent d each at the krpwenani are"of de district or osi kwhhbv by each .
"p m,ar ard arm'd the spw9fed""d bath&wi be heard Any person Interested my Be O priest In Wit"wall to
Coy Clot 0 My permit a more d to repsteed vows.or sh repsWed vale«,wledhwa Is maw rmldiip In ten 140110y
proposed m be Ickeded"an kwum wd arse d the district.a tine Ownene d dNhal a move a sir Ores d hie"0o
cartiory propoead m W Ychadad In an"pwnwaaaed arm d sir district and not exeny ham tie specid bx 0e nithe
pre&b agekw Oo satebBtwnharw d rrh knpro wenod arcs end to protects are nd wdchoraan m mdm**VAX d O»
Protests to ism than a mejodgt the City Cord anal take no When roan to esW)M such"prownwa area a"the
spacial taw"wch"prowamrw arse for a period d one yew kern 0e data d Ill decision d the City Carci,and il ne
majority protests d the reystered voters at the ardbwrws we a ly ageYw the korirdtq d a type or"a d baiitles
with"an hrprahrenerd arm d the district.«sOeInst bvyinp a specified special W In such Impomment area,Dom types of
1a iliidm a Be W W uv a ho wirisied porn de amadwa to lam sWh IMWenww red. -
Thursday, April 11,2002, B11,
PIJBt sIC NO7 GE;;.. PUBI��+G NOTIC�S'1. , ML>;>I.-C L'$Ni?O.T.I�G:: BL�IsG aN>„UTIU•i Fx�ix
Plug Into
PUBL�OTI P N
qt?�� the
ctitious Business ducted by:.a corporation Clerk of Orange County doing business yet? ducted by: an Individual E. La Palma, Yorba Cidsslfled
flame Statement Have you started on.03/05/2002 Yes, March f, 2002 Have. you started Linda,.CA.92887
doin business et?.No 20026894596 Skelle Ska s doing business et? The Fictitious Busi- S8C110n f0
he to" '-ig persons 9 Y Y gg 9 Y
• doir ness as: Windsor Capital Morl- Huntington Beach Inde- This statement was Yes, 1991 ness name referred to find services
On-T. Trainingg gage Corp. pendent Mar. 21, 28, filed with the County Anthony Lucio above was filed in Or:,
585 Ma-- St., #A•366, Aaron Cuha, Manager Apr. 4, 11, 2002 Clerk of Orange County This statement was ange County on frpm
ntington Beach, CA This -statement was 033-917 on 03/19/2002 filed with the. County 11/29/2001, FILE NO. gle.ctriclons,,:
548 filed with the County 20026896253 Clerk of Orange County 20016884320
AaII n McCormack, Clerk of.Orange County Fictitious Business Huntington Beach Inde- on 03/15/2002 Ernie F. Luna, 7863 E. Ond
34 Shady Glen Circle, on 0 3/1 212 0 02 Name Statement Pendent Mar. 28, Apr. 4, 20026896002 Margaret • Court, plumbers t0
ntin ton Beach, CA 20026895473 11, 18, 2002 034.929 Huntington Beach Inde- Anaheim, CA 92808
g Huntington Beach Inde- The following persons londscO ers
i48 g are doing business as: pendent Mar. 28, Apr. 2 This business is con. P
ils business is con- Pendent Mar. 21, 28, Fictitious.Business 11, 18, 2002 034.932 ducted b : an individual
Custom Creations by y &pointers.
•tad by: an Individual Apr. 4, 11, 2002 ShelleySkaggs. 20291 Name Statement Ernie F. Luna
033.908 gg The following persons STATEMENT OF This statement was
;ave you started Mansard Lane, Hunt are doing bus ness as: ABANDONMENT OF filed with the County Indgpendent
g business yet? No Fictitious Business ington Beach, CA 92646 ATL Services, 404 Call- USE OF.FICTITIOUS Clerk of Orange County
!arylyn McCormack Shelley Skaggs, g
'his statement was Name Statement fornia St., Huntington BUSINESS NAME on 63/19/2002
20291 Mansard Lane,
J with the County The following persons Huntington Beach, CA Beach, Ca. 92648 The following person(s) 20026896247
rk of Orange County are doing business as: 92646 Anthony Lucio, 404 has (have) abandoned Huntington Beach Inde-
03/13/2002 Zabala Custom Con- This business is con• California St., Hunt. the use of the fictitious pendent Mar: 28, Apr. 4, (949).
20026895631 struction, 6935 San ducted by: an individual ington Beach, Ca. 92648 business name: Yorba 11, 18, 2002 034-934 642-5678
itington Beach Inde. Bernadino Cir., Buena Have you started This business is con- Linda Auto.Sales, 23041
ident• Mar. 21, 28, Park, CA 90620 -
4, 11, 2002 Carlos Zabala, 6935
033.901 San Bernadino Cir.;
Buena Park, CA 90620 Public Hearing Scheduled on May 6, 2002 at 7:00 P.m:
•titlous Business Daniel .Zabala, 6935. CITY OF HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT NO. 2002-1
lame .Statement San Bernadino Cir., .
is following persons Buena Park, CA 90620 (MCDONNELL CENTRE BUSINESS PARK).
doing business as: This business is con-
imegga Fira Protec- ducted by: a general NOTICE'OF PUBLIC HEARING
15571 Producer Partnership . Notice is hereby given that on April 1,2002,the City Council of the City of Huntington Beach adopted a Resolufion/entitled"A ,
e, A' Huntington Have you started Resolution of the CityCouncil of the City of Huntington Beach Declaring Its Intention To.Establish A Community Facilities
Bch CA 92649 doing business yet? No ty g 9 ty
evin M. McCarrick, Carlos.Zabala District And To Authorize The Levy Of Special Taxes Therein."Pursuant to the provisions of Chapter 3.56 of the Municipal
;2 Holland Drive, This statement was Code of the City and,as applicable;the Mello-Roos Community Facilities Act of 1982,the City Council of the City hereby.
itin ton Beach, CA filed with the County gives notice as follows:
g
A7 Clerk of Orange County A.The text of said Resolution of Intention is as follows: Res.No.2002.26
its business is con- on 03/12/02 ( )
led by: an individual 20026895470 WHEREAS,under the provisions of Chapter 3.56(commencing with Section 3.56.010)of the Municipal Code of the City of
lave you started Huntington Beach Inde- Huntington Beach(the"Code")and,as applicable under the Code,the Mello-Roos Community Facilities Act of 1982,
ig business yet? Pendent Mar. 21, 28, . constituting Section 53311 at seq.of the California Government Code(the."Act,"and,together with the Code,the"Law"),this
10/1. McC Apr. a, 11, 2002 CityCouncil me commence proceedings for the establishment of a-community facilities district;and
�vin M. .McCarrick 033.909 Y. P g Y
his statement was There has been submitted to this City Council a Petition(including Waiver)of McDonnell Douglas Corporation(the
I wit County Fictitious Business "Petition"),requesting the formation by this City Council of a community facilities district under the Law to be known as the
k of a County Name Statement City of Huntington Beach Community Facilities District No.2002•i(McDonnell Centre Business Park)(the"District")
03/151._ The following persons.
26026895933 are doing business as: com+ised of two.separate improvement areas;and
,tington Beach Inds. Virtual Artifice, 8884 There has also been submitted to this City Council a Deposit/Reimbursement Agreement(the"Deposit Agreement..)wherein
dent Mar. 21, 28, Nightingale Ave., Foun• the petitioner has agreed to pay all Costs of the City of Huntington Beach(the City related to the formation of the'Distrfct
4, 11, 2002 fain Valley; CA 92708 and
033.902 Hamesh Shahanl, Under the Law,this City 8884 Nightingale Ave., Council is the legislative body for.the proposed District and Is empowered with the authority.to
:titlous Business Fountain Valley, Califor• establish the District and levy special taxes within'the District;and
ame Statement nia 92708 This City Council now desires to proceed with the-actions necessary to consider the'establishment of the District and the
e following persons This business is con. desig P nation of improvement areas therein.
doing business as: ducted by: an Individual
omeBusinessBuilder Have you started NOW,THEREFORE;BE IT RESOLVED by the City Council of the City of Huntington Beach as follows:
1 Mandevlle Drive, doing business yet? No Section I.This City Council proposes to begin the proceedings necessary to establish the District pursuant to the Law.Receipt
tin ton Beach, CA Hamesh Shahanl
46 203o This. statement was of the Petition to form the District and the Deposit Agreement is hereby acknowledged.The City Administrator is hereby
seman Dale Taylor, filed with the County authorized to execute the Deposit Agreement and the Director of Administrative Services of the City,working with the City
1 Mandeville Drive, Clerk of Orange County Treasurer,is hereby authorized to cash the deposit referenced therein and to expend the deposits for costs of formation of
tington Beach, CA on 03/12/2002 the District,as contemplated by the Deposit Agreement.
46.2030 20026895466
a Fayye Taylor, 8231 Huntington Beach Ind Section 2.The namero
proposed posed for the District is City of Huntington Beach Community Facilities District No,2002.1 (McDonnell
deville Drive, Hunt. Pendent Mar. 21, 28, Centre Business Park).Pursuant to Section 53350 of the Act,the City Council hereby designates a portion of the District as
on Beach, CA Apr. 4, 11, 2002 "Improvement Area A of the City of Huntington Beach Community Facilities District No.2002-1(McDonnell Centre Business
46.2030 033.911 park)"("Area A"),and a portion of the District as"Improvement Area B of the City of Huntington Beach Community Facilities
is business is con-
Fictitious Business District No.2002-1 (McDonnell Centre Business Park)"("Area B").
sd by: Husband and Section 3.The proposed boundaries of Area A and.of Area B of the District are as shown on the ma of the District on file with
Name Statement P P P
ave you started The following persons the City Clerk of the City,which boundaries are hereby preliminarily approved.The City Clerk is hereby directed to record,or
3 business yet? No are doing business as: cause to be recorded,the map of the boundaries of the District in the office of the County Recorder as soon as practicable
lemon Dale Taylor Irvin Inspire, 6491 its statement was Havenwood Circle P fitter the adoption of this Resolution.
,
with the County Huntington Beach, CA Section 4.The type of public facilities(the"Area A Facilities")proposed to be eligible for funding by Area A and pursuant to the
c of Orange County 92648 Law shall consist of those items listed on.Exhibit A hereto under the heading"Facilities"which Exhibit Is by this reference
)2/05/02 Kristen Irvin, 6491 incorporated herein.The type of public facilities(the"Area B Facilities")proposed to be eligible for funding by Area B and
2Beach I do- Hav Huntington
Circle, pursuant to the Law shall consist of those items listed on Exhibit B hereto under the heading"Facilities," Exhibit is b
ington Beach Inde- Huntington Beach, CA P 9" Y
lent Mar. 21, 28, 92648 this reference incorporated herein.
4, 11, 2002 This business is con- Section 5.Except to the extent that funds are otherwise available to Area A of the District to pay for the Area A Facilities and/or
033-903 ducted by: an individual pay the principal and interest as it becomes due on.bonds of Area A of the District issued to finance the Area A Facilities,a
Have you started special tax sufficient to a the costs thereof,secured b recordation of a continuing lien against all non-exempt real property
:itious Business doing business yet? P pay Y g � g P P P rtl+
ime Statement Yes, 1/1/02 in Area A of the District,will be levied within Area A of the District and collected in the same manner as ordinary ad valorem
i following persons Kristen Irvin property taxes or in such other manner as this City Council or its designee shall determine,including direct billing of the
i lusg ass as: This statement was affected property owners.The r pp p g
�dus: as71 tiled with the County P P Y proposed rate and method of a ortionment of the special tax among the parcels of real
or A\` .6ts. 203, Clerk.of Orange County property within Area A of the District,in sufficient detail to allow each landowner within the proposed Area A of the District to
ington`Beach, CA on 03/12/2002 estimate the maximum amount such owner will have to Pay,is described in Exhibit C attached hereto which Exhibit is by this
9 20026895464 reference incorporated herein.
tothy M. Robbins, Huntington Beach Inde-
Warner t to the extent that funds are otherwise available to Area B of the District to a for the Area B Facilities and/or a the
Wamer Ave., Ste. pendent Mar. 21, 28, � P pay pay
Huntington Beach, Apr. 4, 11, 2002 principal and interest as it becomes due on bonds of Area B of the District issued to finance the Area B Facilities,a special
12649 033-912 tax sufficient to pay the costs thereof,secured by recordation of a continuing lien against all non-exempt real property in Area
t business_is'con. B of the District,will be levied within Area B of the District and collected in the same manner as ordinary ad valorem property
d by: q individual Fictitious Business taxes or in such other manner as,this City Council or its designee shall determine,Including direct billing of the affected
,ve you .started Name Statement ty 9. g g
business yet? No The following persons property owners.The proposed rate and method:bf a0portichr66nt of.the special tax among.the parcels of real property.,
Why M. Robbins are doing business as: within Area B of the District,in sufficient detail to allow each landowner within the proposed Area B of District to estimate the
s statement was Aunt Mary's Gifts, 8200 maximum amount such owner will have to pay,is described in Exhibit D attached hereto which Exhibit is by this reference_
with the County Bolsa Ave. s60, Midway incorporated herein.
of Orange County City, California, 92655
-1/12/2002 Steven Gaines, 8200 This City Council finds that the provisions of Section 53313.6,53313.7 and 53313.9 of the Act(relating to adjustments to ad
20026895479 Boise Ave. #60,.Midway valorem,property taxes and schools financed by a community facilities district)are inapplicable to either Area A or Area B of
igton. Beach Inds. City, California 92655 the District.
ant Mar. 21, 28, Gary Frost, 8200
1, 11, 2002 Boise Ave. a60, Midway Section 6.It is the intention of.this City Council,acting as the legislative body for Area A of the District,to cause bonds of the
033.904 City, California 92655 City to be issued for Area A of the District pursuant to the Law to finance a portion of the costs of the Area A Facilitfe .If so
This business .is.con• issued,the bonds shall be issued in one or more series in an aggregate rinci al amount of not to exceed$13,000,000,shall
tlous Business ducted by: a .general principal
ne Statement partnership bear interest payable semi-annually or.in such other manner as this City Council shall determine,at a rate not to exceed the
following persons Have you started maximum rate of interest as may be authorized by applicable law at the time of sale of such bonds,and shall mature not to.
Nng business as: doing business yet? No exceed 40 years from the date of the issuance thereof.
!IliOuest Network Steve Gaines It is the Intention of this City Council,acting as the legislative body for Area l3.of the District,to cause bonds of the City to be
ns, 16112 Sims This statement was
Hu
k102, Huntington_ tiled with the County Issued for.Area B of the District pursuant to the Law to finance a portion of the costs of the Area B Facilities.If so issued,the
CA 92649 Clerk of Orange County bonds shall be issued•in one or more series in an aggregate principal amount of not to exceed$13,000,000,shall bear
i N. Petelo, 16912 on 03/07/2002 Interest payable semi-annually or in such other manner as this City Council shall determine,at a rate not to.exceed the
St. #102, Hunt- 20026895025 maximum rate of interest as may be authorized by applicable law at the time•of sale of such bonds,and shall mature not to
Beach, CA 92649 Huntington Beach Inde- '
business is con- pendent Mar. 21, 28, exceed 40 years from the date of the issuance thereof. .
by: an Individual Apr. a, 11, 2002 Section 7.This City Council reserves to itself the right and authority to allow any Interested owner of property in either Area A
/e you started 033.913 or Area B of the District,subject to the provisions of Section 53344.1 of the Act and such requirements as It may otherwise
business yet? No Impose,and an applicable prepayment p p g g y
I N. Petelo Fictitious Business � Y PP•cable penalties as prescribed in the Indenture or fiscal a ante regiment for an bonds of
statement was Name Statement the City for the respective Improvement area of the District,to tender to the Director of Administrative Services of the Clty
with the County The followin persons (who shall remit the same to the City Treasurer)in full payment or part payment of any Installment of special taxes for such
of Orange County are doing bus ness aa: i...................r ,w.,;.,.......,.....___,,,._.�•....... ,-�__..�. J.._
-le u..: Hus .. "an' Fictitious Business Vhl4 n.l,vv.cuv.. , pnovun„on vonuo vuou,oau,urn, ,.�,w..�. - __-
fed by: Husband and Section 3.The proposed map e � Name Statement , p pos d boundaries of Area A and.of Area B of the District are as shown on them of the District on file with
-lave you c.starieo - Tpe-;ellowing persons the City Clerk of the City,which boundaries are hereby preliminarily approved.The City Clerk is hereby directed to record,or
ng business yet? No are doing business as: cause to be recorded,the reap of the boundaries of the District in the office of the County Recorder as soon as practicable
reeman Dale Taylor Irvin Inspire, 6491 after the adoption of this Resolution.
his statement was Havenwood Circle, Section 4:The t p ( )proposed g g y
d with the' County Huntington Beach, CA type of public facilities the"Area A Facilities" ro sed to be.efi ible for funding b Area A and pursuant to the
:rk of Orange County 92648 Law shall consist of those Items listed on.Exhibit A hereto under the heading"Facilities"which Exhibit is by this reference
02/05/09 Kristen Irvin,. 6491 Incorporated herein.The type of public facilities(the"Area B Facilities")proposed to be eligible for funding by Area B and
`2ch Incl - Havenwood Circle, pursuant to the Law shall consist of those items listed on Exhibit B hereto under the heading Facilities,"which Exhibit is b
Ming, ach Inds- Huntington Beach, CA p g� y
,dent ...,.,. 21, 28, 92648 this reference Incorporated herein.
r, 4, 11, 2002 This business is con- Section 5.Except to the extent that funds are otherwise available to Area A of the District to pay for the Area A Facilities and/or
033-903 ducted by: an individual Have you started pay the principal and Interest as it becomes due on,bonds of Area A of the District issued to finance the Area A Facilities,a
ctitious Business doing business yet? special tax sufficient to pay the costs thereof,secured by recordation of a continuing lien against all non-exempt real property
flame Statement Yes, 1/1/02 in Area A of the District,will be levied within Area A of the District and collected in the same manner as ordinary ad valorem
he following persons Kristen Irvin property taxes or in such other manner as this City Council or its designee shall determine,including direct billing of the
doing business as: This statement was affected property owners.The proposed rate and method of apportionment of the special tax among the parcels of real
Industry.33, 4571 filed with the County
tmer Ave., Ste. 203, Clerk,of Orange County property within Area A of the District,in sufficient detail to allow each landowner within the proposed Area A of the District to
mtington Beach, CA on 03/12/2002 estimate the maximum amount such owner will have to pay,is described in Exhibit C attached hereto which Exhibit is by this
649 20026895464 reference incorporated herein.
Timothy Robbins, Huntington Beach Inge
71 Warnerr Ave., Ste. pendent Mar. 21, 28,, Except to the extent that funds are otherwise available to Area B of the District to pay for the Area B Facilities and/or pay the
3, Huntington Beach, Apr. 4, 11, 2002 principal and interest as it becomes due on bonds of Area B of the District issued to finance the Area B Facilities,a special
k 92649 033.912 tax sufficient to pay the costs thereof,secured by recordation of a continuing lien against all non-exempt real property in Area
'his business is con- B of the District,will be levied within Area B of the District and collected in the same manner as ordinary ad valorem property
clad by: an Individual Fictitious Business taxes or in such other manner as this City Council or its designee shall determine,Including direct billing of the affected
Have you .started Name. Statement ty g, g g
ing:business yet?.No The following persons Property owners.The proposed rate and methdd:bf a(5po"rtiotlment,of•the_special tax among.the parcels of.real properly.:,.
im6thy M. Robbins are doing business as: within Area B of the District,in sufficient detail to allow each landowner within the proposed Area B of District to estimate the
This statement was Aunt Marys
Gifts, 8200 maximum amount such owner will have to pay,is described in.Exhibit D attached hereto which Exhibit is by this reference
id with the County Boise Ave. #60, Midway incorporated herein.
ark of Orange County City,.California, 92655 P
03/12/2002. Steven Gaines, 82oo This City Council finds that the provisions of Section 53313.6,53313.7 and 53313.9 of the Act(relating to adjustments to ad
20026895479 Boise Ave. #60,_Midway valorem,property taxes and schools financed by a community facilities district)are inapplicable to either Area A or Area B of
mtington Beach Inde- City, California 92655 the District.
itndent4, Mar. 21, 28, Gary Frost; 8200
Midway
Section 6.It is the intention ot.this City Council;actin as the legislative body for Area A of the District,to cause bonds of the
r. 4, 11, 2002 Boise Ave'. #60, Midway Y g g. Y
033.904 City, California 92655 City to be Issued for Area A of the District pursuant to the Law to finance a portion of the costs of the Area AFacilities.If so
business .is con• issued,the bonds shall be issued in one or more series in an aggregate principal amount of not to exceed$13,000,000,shall
ctitious Business This
ducted by: a .general bear interest payable semi-annually or in such.other manner as this CityCouncil shall determine,at a rate not exceed the
Name Statement partnership p Y y
he following persons Have you started -maximum rate'of interest as may be authorized by applicable law at the time of sale of such bonds,and shall mature not to
i doin business as: doing business yet? No exceed 40 years from the date of the issuance thereof.
into Ilauest Network Steve Gaines It is the intention of this City Council,acting as the legislative.body for Area B of the District,to cause bonds of the City to be
stems, 16912 Sims This statement was Issued for Area B of the District pursuant to the Law to finance a portion of the costs of the Area B Facilities.If so issued,the
#102, Huntington filed with the County
ach, CA 92649 Clerk of Orange County bonds shall be issued.in one or more series in an aggregate principal amount of not to exceed$13,000,000,shall bear
creel N. Petelo, 16912 on 03/07/2002 interest payable semi-annually or in such other manner as this City Council shall determine,at a rate not to.exceed the
ns St: #102, Hunt- 2Beach Inde-
maximum rate of interest as may be authorized by applicable law at the time-of sale of such bonds,and shall mature not to
Icon Beach, CA 92649 Huntington Beach Inde• Y his -as is con- pendent Mar. 21, 26, exceed 40 ears from the date of the issuance thereof.
cted . individual Apr. 4, 11, 2002 Section 7.This City Council reserves to itself the right and authority to allow any interested owner of property in either Area A
Have. .ou started 033.913 or Area B of the District,subject to the provisions of Section 53344.1 of the Act and such requirements as it may otherwise
ing business yet? No Impose,and an applicable r p g g Y
,,real N. Petelo Fictitious Business Po Y PP prepayment penalties as prescribed in the indenture or fiscal a ant agreement for an bonds of
This statement was Name Statement the City for the respective improvement area of the District,to tender to the Director of Administrative Services of the City
id with the County The following persons (who shall remit the same to the City Treasurer)in full payment or part payment of any Installment of special taxes for such
ark of Orange County ere doing business as: improvement area of the District or the interest or penalties thereon which may be due or delinquent,but for which a bill has
03/12/2002 - a) Dermal Prescription been received,any bohd or other obligation secured thereby,in the manner described_In Section 53344.1.of the Act.
2Beach Inde-
Institute/RI Skin Center Section 8.The le of the proposed special tax In each Improvement area of the District shall be subject to the approval of the
mtington Beach Inde• b) IRCO Aircraft Sup. levy P� _ P
ndent Mar, 21, 28, port, 18782 Main Street qualified electors of such Improvement eras at a special election.The proposed voting procedure shall be by mailed or hand-
r. 4, 11, 2002 117, Huntington Beach, delivered ballot among the landowners In the proposed improvement area of the District,with each owner having one vote for
033.905 CA 92648 each acre or portion of an acre of land such owner owns in the respective Improvement area of the District. .
ctitious. Business IRCO. Group, Inc.,
18782 Main Street #7, Section 9.Except as inay otherwise-be provided by law or the rate.and method of apportionment of the special tax for the
Name.Statement Huntington .Beach, CA respective improvement area of the District,all lands owned by any public entity,including the United States,the.State of
'he f i
ollowing persons 92648 California and/or the City,or any departments or political subdivisions of any thereof,shall be omitted from the levy of the
t doing business as: This business Is con-' special tax to be made to cover the costs and expenses of the facilities,the Issuance of bonds by the bity for such
& T Vend ng; 15123 ducted by: a corporation
30khurat #389,.West- Have you started improvement area of the District and any expenses of the respective improvement area of the District.
nster, CA 92683 doing business yet? Section 10.The Director of Public Works of the City is hereby directed to study said proposed facilities for each improvement
Kenneth A. .Settles, Yes, 1995 area of the District and to make,or cause.to be made,and file with the City Clerk a report in writing,presenting the following:
123 Brookhursl #389, IRCO, Group, Inc.,
3stminster, CA 92683 Rouayda Iretfel, Presi- (a)A brief description of the facilities for.each Improvement area of the District'
'his business is con- dent (b)An estimate of the fair and reasonable cost of providing the facilities for each improvement area of the District,including
cted by: an individual This statement was the incidental expenses in connection therewith,including the costs of the proposed bond financing,any City administrative
Have you started filed with the County costs and all other related costs.
ing business yet? No Clerk of Orange County
'enneth A. Softies on 03/12/2002 Said report shall be made a part of the record of the public hearing provided for below.
This statement was 20026895458 Section 11.Monday,May 6,2002,at 7:00 p.m.or as soon thereafter as the matter may be heard,in the regular meeting place
id with the County Huntington Beach Inde of this City Council,City Council Chambers,City Hall,2000 Main'Street,Huntington Beach,California,be,and the same are
ark /1 Orange County _pendent Mar. 21, 28, hereby a ointed.and fixed as the time and place when and where this CityCouncil,as legislative bodyfor the District,
03/12/2002' Apr, 4,.11, 2002 Y PP � g
20026895475 033-914 conduct a public hearing on the establishment of each improvement area of the District and consider and finally determine
mtington Beach Inde- whether the public Interest,convenience and necessity require the formation of each improvement area of the District and
ndent Mar. 21, 28, Fictitious Business the levy of said special tax within the respective Improvement area.
r. 4, 11, 2002 Name Statement
033.90s The following persons Section 12.The City Clerk is hereby directed to cause notice of said public hearing to be given by publication one time in e
ictitlous Buslness are doing business as: newspaper published in the area of the District.The publication of said notice_shall be completed at least Seven days before
Precis Consulting, 7416• the date herein set for said hearing.Said notice shall be substantially in the form of Exhibit E hereto.
Name Statement Paloma Drive, Hunt- Section 13.The firms of Michael Swan Consulting and Ouint&Thimmig LLP are hereby designated as specfal'tax consultant
'he following persons in ton Beach, CA 92648
3 doln^ husiness as: Michael Wang, 7416 and bond counsel and disclosure counsel,respectively,to the City for the District,The City Director of Administrative
M.F )nstruction Paloma Drive, Hunt- Services and the City Attorney,respectively,are hereby authorized to execute agreements with said firms for their services
irvica 381 Venus Ington Beach, CA 92648 related to the District provided that all fees and expenses of such firms are payable solely from a deposit by the landowner in.
r., H4...,igton Beach This.business is con-
t 92646 ducted by: an individual the District or the proceeds of the bonds,If any,issued by the City for either of the improvement areas of the District.
'
Marc Jason Butman, Have you started Section 14.This Resolution shall take effect upon its adoption.
,381 Venus Circle', doing business yet? B.The exhibits to the Resolution which describe the facilities eligible to be funded and the rate and method of apportionment.
mtington Beach, CA Yes, 2/26/02 of the speciaf taxes for each improvement area of the district are on file In the office of the City Clerk of the City of Huntington
:846 Michael Wang Beach: .
his business is con- This statement was
cted by: an Individual.. filed with the County C.The time and place established under said Resolution for the public hearing required under the Law are Monday,May 6,
Have you started Clerk of Orange County, 2002,at the hour of 7:00 p.m,or as soon thereafter as the matter may be heard,In the regular mesting.place of the City
ing business yet? No on 03/12/2002 Council of the City of Huntington Beach,City Council Chambers,City Hall,2060 Main Street,Huntington Beach,California.
Marc Butman 20026895451
This statement was Huntington Beach Inde- D.At said hearing,the testimony of all Interested persons or taxpayers for or against the establishment of each of the
3d with the County pendent Mar. 21, 28, improvement areas of the district,the extent of each of the improvement areas of the district or the furnishing by each
ark of Orange County Apr. 4, 11, 2002 improvement area of the specified types of facilities will be heard.Any person interested may file a protest in writing with the
03/12/2002 033-916 20026895474 City Clerk.If fifty percent or more of the registeredvoters,or six registered voters,whichever is more,residing in the territory
inlington Beach Inde- Fictitious Business proposed to be Included in an improvement area of the district,or the owners of one-half or more of the area of land in the
!ndent Mar, 21, 28, Name Statement territory proposed to be included in an improvement area of the district and not exempt from the special tax rile written
W. 4, 11, 2002 The following persons protests against the establishment of such improvement area and the protests are not withdrawn to reduce the value of the
033-907 are doing business as: protests to less than a majority,the City Council shall take no further action to establish such Improvement area or levy the
Cycle Pit Stop, 3345
ictitlous'.Business East Chapman.Ave., Or- special taxes in such Improvement area for a period of one year from the date of the decision of the City Council,and if the
Name_ Statement ange, CA 92865 majority protests of the registered voters or the landowners are only against the furnishing of a type or types of facilities
he following persons Rabyne Lynne Hinds, within an improvement area of the district,or against levying a specified special tax In such improvement area,those types of
3 doing business as: 17651 Still Harbor Lane, facililies or the specified special tax will be eliminated from the proceedings to form such improvement ares.
Direct Lender, 8700 Huntingtdn Beach, CA
arner Ave., #100, 92647 E.The proposed voting procedure shall be by special mall or hand•defivered ballot to the property owners within the territory
,untain Valley, This business Is con- proposed to be included in each respective improvement area of the district.
t 92708 ducted by: an Individual Dated:April 1,2002
Vlndsor Capital Mort. Have, you started /s/Connie Brockway City Clerk,
ge Corp. (CA), 169 doingg business yet? No
cxony Rd., #115, Robyne L. Hinds City of Huntington Beach
cinitas 92024 This statement was Published Huntington Beach Independent April 11,2002 042.979
his business is con- filed with the County
RESOLUTION NO. 2002-27
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH DECLARING ITS INTENTION TO
INCUR BONDED INDEBTEDNESS OF THE PROPOSED CITY OF
HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT
NO.2002-1 (MCDONNELL CENTRE BUSINESS PARK)
WHEREAS,this City Council has this date adopted its Resolution entitled"A Resolution of the
City Council of the City of Huntington Beach Declaring Its Intention to Establish a Community
Facilities District and To Authorize the Levy of Special Taxes Therein,"stating its intention to
form a community facilities district pursuant to the provisions of Chapter 3.56 (commencing
with Section 3.56.010)of the Municipal Code of the City of Huntington Beach and, as
applicable,the Mello-Roos Community Facilities Act of 1982 (collectively, the"Law"), for the
purpose of financing a portion of the costs of certain public improvements (the"Facilities"),as
further provided in said Resolution; and
This City Council estimates the amount required for the financing of a portion of the
costs of the Facilities to be the sum of$11,000,000;and
In order to finance said Facilities it is necessary to incur bonded indebtedness for each
improvement area identified below as"Area A" and"Area B"in the amount of not to exceed
$13,000,000.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington Beach
as follows:
Section 1. It is necessary-to incur bonded indebtedness within the boundaries of the proposed
Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park) (the"Area A") in the amount of not to exceed $13,000,000 to
finance a portion of the costs of the Facilities. It is necessary to incur bonded indebtedness
within the boundaries of the proposed Improvement Area B of the City of Huntington Beach
Community Facilities District No. 2002-I (McDonnell Centre Business Park) (the"Area B") in
the amount of not to exceed $13,000,000 to finance a portion of the costs of the Facilities.
Section 2. The bonded indebtedness for each improvement area described in Section 1 is
proposed to be incurred for the purpose of financing a portion of the costs of the Facilities,
including costs incidental to or connected with the accomplishment of said purposes and of the
financing thereof.
Section 3. This City Council, acting as legislative body for Area A, intends to authorize the
issuance and sale of bonds in one or more series in the maximum aggregate principal amount of
$13,000,000, bearing interest payable semi-annually or in such other manner as this City Council
shall determine, at a rate not to exceed the maximum rate of interest as may be authorized by
applicable law at the time of sale of such bonds, and maturing not to exceed forty(40) years
from the date of the issuance of said bonds. This City Council, acting as legislative body for
Res.No.2002-27
Area B, intends to authorize the issuance and sale of bonds in one or more series in the
maximum aggregate principal amount of$13,000,000,bearing interest payable semi-annually or
in such other manner as this City Council shall determine, at a rate not to exceed the maximum
rate of interest as may be authorized by applicable law at the time of sale of such bonds, and
maturing not to exceed forty(40) years from the date of the issuance of said bonds.
Section 4. Monday,May 6, 2002, at 7:00 p.m. or as soon thereafter as the matter may be heard,
in the regular meeting place of this City Council, City Council Chambers, City Hall, 2000 Main
Street,Huntington Beach, California,be, and the same are hereby appointed and fixed as the
time and place when and where this City Council, as legislative body for each improvement area
described in Section 1,will conduct a public hearing on the proposed debt issue for each of the
improvement areas and consider and finally determine whether the public interest, convenience
and necessity require the issuance of bonds of the City of Huntington Beach for each respective
improvement area.
Section 5. The City Clerk is hereby directed to cause notice of said public hearing to be given by
publication one time in a newspaper of general circulation circulated within the District. The
publication of said notice shall be completed at least seven (7) days before the date herein set for
said public hearing. The notice shall substantially in the form of Exhibit A hereto.
Section 6. This Resolution shall take effect upon its adoption.
J'.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Huntington
Beach on this 151 day of April,2002,by the following vote, to wit:
AYES:
NOTE:
ABSENT:
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk o4-0-1 Z City Attorney l.W
3,a 5-o2-
REVIEWED AND APPROVED: INITIATED AND APPROVED:
C,71 e. 6V
ity Administrator Director of Economic Development
-2-
Res.No.2002-27
Ex.A
EXHIBIT A
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(MCDONNELL CENTRE BUSINESS PARK)
NOTICE OF PUBLIC HEARING
Notice is hereby given that on April 1, 2002,the City Council of the City of Huntington Beach
adopted a Resolution entitled"A Resolution of the City Council of the City of Huntington Beach
Declaring•Its Intention To Incur Bonded Indebtedness of the Proposed City of Huntington Beach .
Community Facilities District No. 2002-1 (McDonnell Centre Business Park)." Pursuant to the
provisions of Chapter 3.56 of the Municipal Code of the City of Huntington Beach and, as
applicable, the Mello-Roos Community Facilities Act of 1982, the City Council of the City of
Huntington Beach hereby gives notice as follows:
A. The text of said Resolution is as follows:
WHEREAS, this City Council has this date adopted its Resolution entitled "A
Resolution of the City Council of the City of Huntington Beach Declaring Its Intention to
Establish a Community Facilities District and To Authorize the Levy of Special Taxes
Therein," stating its intention to form a community facilities district pursuant to the
provisions of Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of
the City of Huntington Beach and, as applicable,.the Mello-Roos Community Facilities
Act of 1982 (collectively, the "Law"), for the purpose of financing a portion of the costs
of certain public improvements (the "Facilities"), as further provided in said Resolution;
and
This City Council estimates the amount required for the financing of a portion of
the costs of the Facilities to be the sum of$11,000,000;and
In order to finance said Facilities it is necessary to incur bonded indebtedness for
each improvement area identified below as"Area A" and"Area B" in the amount of not
to exceed$13,000,000.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Huntington Beach as follows:
Section 1. It is necessary to incur bonded indebtedness within the boundaries of
the proposed Improvement Area A of the City of Huntington Beach Community
Facilities District No. 2002-1 (McDonnell Centre.Business.Park) (the "Area A") in the
amount of not to exceed$13,000,000 to finance a portion of the costs-of the Facilities. It is
necessary to incur bonded indebtedness within the boundaries of the proposed
Improvement Area B of the City of Huntington Beach Community Facilities District No.
2002-1 (McDonnell Centre Business Park) (the "Area B") in the,amount of not to exceed
$13,000,000 to finance a portion of the costs of the Facilities.
A-1
Res.No.2002-27
Ex.A
Section 2. The bonded indebtedness for each improvement area described in
Section 1 is proposed to be incurred for the purpose of financing a portion of the costs of
the Facilities,including costs incidental to or connected with the accomplishment of said
purposes and of the financing thereof.
Section 3. This City Council, acting as legislative body for Area A, intends to
authorize the issuance and sale of bonds in one or more series in the maximum
aggregate principal amount of $13,000,000,bearing interest payable semi-annually or in
such other manner as this City Council shall determine, at a rate not to exceed the
maximum rate of interest as may be authorized by applicable law at the time of sale of
such bonds, and maturing not to exceed forty (40)years from the date of the issuance of
said bonds. This City Council,acting as legislative body for Area B,intends to authorize
the issuance and sale of bonds in one or more series in the maximum aggregate principal
amount of $13,000,000, bearing interest payable semi-annually or in such other manner
as this City Council shall determine, at a rate not to exceed the maximum rate of interest
as may be authorized by.applicable law at the time of sale of such bonds, and maturing
not to exceed forty (40)years from the date of the issuance of said bonds.
Section 4. Monday, May 6, 2002, at 7:00 p.m. or as soon thereafter as the matter
may be heard, in the regular meeting place of this City Council,City Council Chambers,
City Hall, 2000 Main Street, Huntington Beach, California, be, and the same are hereby
appointed and fixed as the time and place when and where this City Council, as
legislative body for each improvement area described in Section 1,will conduct a public
hearing on the proposed debt issue for each of the improvement areas and consider and ..
finally determine whether the.public interest, convenience and necessity require the
issuance of bonds of the City of Huntington Beach for each respective improvement
area.
Section 5. The City Clerk is hereby directed to cause notice of said public hearing
to be given by publication one time in a newspaper of general circulation circulated
within the District. The publication of said notice shall be completed at least seven (7)
days before the date herein set for said public hearing. The notice shall substantially in
the form of Exhibit A hereto.
Section 6.This Resolution shall take effect upon its adoption.
B. The hearing referred to in the aforesaid Resolution shall be at the time and place
specified in the Resolution.
C. At that time and place any person interested, including persons owning property in
the area of the proposed community facilities district, will be heard upon the proposed debt
issue.
Dated: April 2002
/s/Connie Brockway _
City Clerk,
City of Huntington Beach
A-2
Res. No. 2002-27
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 1st
day of April, 2002 by the following vote:
AYES: Green, Dettloff, Bauer, Cook, Houchen, Winchell, Boardman
NOES: None
ABSENT: None
ABSTAIN: None
City Clerk and ex-officio Clerk of the
City Council of the City of
Huntington Beach, California
TM kwag kq kwW nant is a correct
copy d the orlp W on Me In ft office.
Acted d7-12 20 02
OONME. BROCKWAX
C �i'W*-w o Exr-o fido CieR of mi eery
counco- the oilHmkfpton Bead%
By Deputy
PROOF OF PUBLICATION
Public Hearing. .I provement area identi- terest as may be-author-
Scheduled On fled below as "Area A" ized by applicable law at
Me 6 2002 and "Area 8" in the the time of sale of such
Y amount of not to exceed bonds, and maturing not
STATE OF CALIFORNIA) Sint' $13,000,000. to exceed forty. (40)
CITY F NOW, THEREFORE, Years from the date of
nn HUNTINGTON gE IT RESOLVED by the issuance :of-said
$S. �t BEACH bonds.
the City Council of the
COMMUNITY- City, of Huntington Section 4. Monday,May
County of Orange ) as follows: 6, 2002, at 7:00 p.m. or
h" DISTRICT N0. Section t. It is neces- as soon thereafter as the
�,, FACILITIES Beach
~� matter may be heard, in
2002-1 sary to incur bonded in-
debtedness within the the regular -meeting
am a Citizen of the United States and a <: (MCDONNELL boundaries of the Place.of this City . -
;si CENTRE proposed Improvement Council, City: Council
"BUSINESS PARK . Area A of the City of Chambers, City-:-Hall,
resident of the County aforesaid; I am -:: NOTICE.OF Huntington Beach Com- 2000 Main Street, Hunt-
over the age of eighteen years and not a `PUBLIC HEARING mo.2 Facilities District ingbe, a d Ahe California,. 6a
/ "Notice s here byy given No. 2002.1 (McDonnell be, and.the same are
that on April 1,2002,the Centre Business Park) hereby appointed::and
party to or interested - in the below City Council of the City (the "Area 'A") in the, fixed as the time and
entitled matter. I am a principal clerk of oPedtia-Huntington Beach $3,000,000ototfinanceea1 thscCity Council,e when andaWhere
eg
entitled "A Resolution of portion of the costs of i islative body for each im-
provement City Council.of the the Facilities. It is neces=' provement .area 'de-
the HUN7INGTON BEACH INDEPENDENT, a scribed in section l; will
City. of Huntington. nary to incur bonded in- -conduct a public- aring
B'ach Declaring Its In debtedness within the
news aper of general-circulation printedon the proposed debt
P b g / eenbon To Incur Bonded boundaries of the issue for each of the im-
Indebtedness of the proposed Improvement
and pu lished in the City of Huntington Pto,, c y of Hunt- Area B of me City of consdeen tlare de
Beach County of Orange State of ington Beach,, Com- — �- termine whether ;the
/ / Huntington Beach Com-: public interest, .eunve-
munlry Facilities District
California and that attached Notice is a 2 munity Facilities District nience and ri r
No. 002-1 (McDonnell e�ssriy�e•
Centre Business Park)."
No. 2002-1 (McDonnll quire the issuance of
Centre Business Park
Pursuant- to the ) bonds of the.--City of
true and complete copy as was printed provisions of Chapter (the "Area B")` in the Huntington Beach -.for
3.56 of the Municipal amount of not to exceed each respective~im-
�.nd published in . the Huntington Beach Code of the City of Hunt $13,000,000 to finance a provement area..-:'
Ington .Beach and, as Portion of the costs of Section 5.The City Clerk
and Fountain Valle issues of said applicable, the Mello- .the Facilities. is hereby directed
y Roos Community Facil• Section 2. The'bonded cause notice of-:said
newspa news er to wit the issue(s) of: ides Act of 1982,the City indebtedness for each public hearing,_:to..be
aper Council of the City of improvement area de given by publication=one
Huntington Beach .scribed in Section 1-is time in a ne r.of
hereby gives notice as proposed to be incurred general circulation
follows. for the purpose of fi- circulated within.:the;Ds-;
A. The..text of•said,nancing a portion of the trict. The publication of i
Resolution is as follows:j.costs of the Facilities, in- said notice shall_be corn-i
(Res. No. 2002-27) eluding costs incidentat plated at least.seveh(7);
2 O O 2 -to or connected with the days before the date
WHEREAS, this City. Y
April 11 Council has this date accomplishment of said herein set for said public
purposes and of the fi- hearing. Then}:-notice
adopted its Resolution 9•
entitled "A Resolution of nancing thereof..- shall substa to the
the City Council of the Section 3. The City form of ExhZ Antialy:hereto.
City of Huntington Council, acting as legis- Section 6..Ths-;Resolu-
Beach Declaring Its In- lative body for Area A, tion .shall take -effect
I declare under penalty of perjury, that tension to Establish a intends to authorize the upon its adoption;fe
/ r Communi Facilities issuance and sale of B. The hearing referred
District To Authorize bonds in one or more to in the aforesaid Reso.
the foregoing is true and correct. the Levy. of Special series in the maximum I lution shall be at the.time
aggregate principal'and place.specified in
Taxes Therein," stating the Resolution.-
its intention to form a amount of $13,000,000, C.At the.time and.place
community facilities dis- bearing interest payable, any person'interested,
trict pursuant to the semi-annually or in such. including persons own-
Executed on April 11 , 2002 provisions of Chapter other manner as this. 'ng property on the area
3.56-(commencing with City Councl{ spat{ de- Of the proposed::com-
at Costa Mesa, California. Section 3.56.010) of the termine, at a rate not to muni facilities'districM
Municipal Code of the exceed the maximum ty
City of Huntington rate of interest as may will be heard upon;ttie
Beach and, as ap- be authorized by ap- Proposed debt issue_'
plicable, the Mello-Roos plicable law at the time Dated: April 1. 2002: .
Community Facilities Act of sale of such bonds, /S/Connle.Brockway
of 1982 (collectively, the and maturing not to ex- City Clerk';X_
"Law"), for the purpose ceed forty (40) years of
Huntingto Beach_'.
of financing a portion of from the date of the is. Published Huntington
the costs of certain pub- suance of said bonds. Peach Independent..
I{c improvements (the This City Council, acting Beach
2002
'Facilities"), as further as legislative body for 042=980
provided in said Resolu- Area B intends to au-
Signature bon;and This City Coun- thorize the issuance and
cil estimates the amount sale of bonds in one or
required for the {inane- more series n the
ing of a portion of the maximum aggregate
costs of the Facilities to;principal amount of
be the sum of i$13,000,000, bearing in-
$11,000,000; and terest payable semi-an-
In order to finance said.nually or in such other
Facilities it is necessary'manner as this City
to incur bonded indebt-1 Council shall determine,
edness for each im-I at a rate not to exceed
the maximum rare of in-
Michael Swan Consulting April 26,2002
IMPROVEMENT AREAS A AND B OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(MCDONNELL CENTRE BUSINESS PARK
f;.
COMMUNITY FACILITIES DISTRICT REPORT
IMPROVEMENT AREAS A AND B OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(MCDONNELL CENTRE BUSINESS PARK
Introduction
The City of Huntington Beach did, pursuant to the provisions of Chapter 2.5 of Part 1 of
Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the
"Act"), on April 1, 2002, adopt Resolution No. 2002-26 entitled "A Resolution of the City
Council of the City of Huntington Beach Declaring Its Intention to.Establish a Community
Facilities District and to Authorize the Levy of Special Taxes Therein" (the "Resolution of
Intention"). In the Resolution of Intention, the City Council expressly ordered the preparation of
a written Community Facilities District Report (the "Report") for the .proposed City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)
comprised of two separate improvement areas (the "District"). Pursuant to Section 53350 of the
Act, the City Council designated a portion of the District as "Improvement Area A of the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)"
("Area A"), and a portion of the District as "Improvement Area B of the City of Huntington
Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)" ("Area
B"
The Resolution of Intention ordering the Report did direct that the Report generally
contain the following:
1. A brief description of the facilities by type required to adequately meet the needs
of the District; and
2. An estimate of the fair and reasonable cost of the facilities, including the cost of
incidental expenses in connection therewith, and the costs of the proposed bond financing and all
other related costs as provided in Section 53345.3 of the Act. .
For particulars,reference is made to the Resolution of Intention, as previously adopted by
the City Council.
NOW, THEREFORE, I, Robert F. Beardsley, Director of Public Works for the City of
Huntington Beach, directed to prepare the Report for the District, do hereby submit the following
Report consisting of three(3)parts:
Part I A description of the proposed District and Improvement Areas
Part II A description of the proposed facilities
Part III A cost estimate of the proposed facilities
Robert F. Beardsley '
Director of Public Works
1
PART
Description of District,Area A and Area B
The proposed boundaries of Area A and Area B of the District are those properties and
parcels on which special taxes may be levied to pay for the costs and expenses of the financing of
needed facilities, and any indebtedness or administrative expenses of the District.
The proposed District is generally located to the north and east of the intersection of
Bolsa Avenue and Bolsa Chica Road in the City of Huntington Beach, County of Orange, State
of California and includes the currently designated County Assessor's Parcel Numbers 195-111-
03, 195-111-24, 195-111-295 195-111-31 and 195-111-34. The District is comprised of two
separate improvement areas designated Improvement Area A and Improvement Area B, whose
boundaries are described as follows:
Improvement Area A is comprised generally of Parcels 4 through 11, the proposed public
well site and adjacent portions of the following roadway rights-of-way: Skylab Road,
Astronautics Road, Street `B' and Street `C', as shown on Tentative Parcel Map No. 2001-122 on
file with the City. Once the proposed Final Parcel Map No. 2001-226 is recorded, said
Improvement Area A is envisioned to include Parcels 1 through 8, the proposed public well site
and adjacent portions of the following roadway rights-of-way: Skylab Road, Delta Lane and
Astronautics Lane, as shown on said proposed Final Parcel Map, encompassing approximately
40.339 gross acres and 33.286 net taxable acres.
Improvement Area B is.comprised generally of Parcels 1, 2, 3, 12;.13, 15, 17 through 20
and adjacent portions of the following roadway rights-of-way: Skylab Road, Street `A', Street
`C' and Street `D', as shown on Tentative Parcel Map No. 2001-122 on file with the City and
encompassing approximately 48.803 gross acres and 43.785 net taxable acres.
For more particulars, reference is made to the boundary map entitled "Proposed
Boundaries of Improvement Areas A and B 'of the City of Huntington Beach Community
Facilities District No. 2002-1 (McDonnell Centre Business Park), County of Orange, State of
California" approved by the City Council on April 1, 2002 and on file with the City Director of
Public Works.
2
PART II
Description of Facilities
A brief description of the facilities required to adequately meet the needs of Area A of the
District is as shown in Exhibit "A" attached hereto and hereby made a part hereof. A brief
description of the facilities required to adequately meet the needs of Area B of the District is as
shown in Exhibit`B"attached hereto and hereby made a part hereof.
It should be noted that the list of facilities is identical for both Area A and Area B as each
area requires the same facilities. It is not the intent to duplicate the financing of facilities.
Rather, the entire list of facilities is included as eligible District facilities for each separate area.
This provides the flexibility to annex anywhere from a portion to all of Area B into Area A and
finance, potentially, all the facilities through Area A. Area B, which is intended to be developed
after Area A, would also have the ability to separately finance eligible facilities that were not
previously financed by Area A. Ultimately, Area A and Area B,together,will have the ability to
finance any or all of the facilities listed in Exhibits "A"and`B".
3
PART III
Cost Estimate
The estimate of the fair and reasonable cost of the proposed facilities required by Area A
and delineated on Exhibit "A" are deemed to be not to exceed$13,000,000. The estimate of the
fair and reasonable cost of the proposed facilities required by Area B and delineated on Exhibit
"B" are deemed to be not to exceed $13,000,000. In addition to the cost of construction, these
costs include technical services related to design and construction, related permits and fees, the
cost of acquisition of lands, rights-of-way and easements, and any physical facilities required in
conjunction therewith, and incidental expenses in -connection with said acquisition and
construction,.also including the cost of proposed bond financing and all other related costs as
provided in the Act.
Here again, it is noted that, while the total authorized amount for Area A and Area B is
$13,000,000 each, it is not anticipated that the total combined bond financing for Area A and
Area B, together, will exceed $13,000,000 in total, as discussed in Part II, herein. A detailed
breakdown of the design, acquisition and construction cost estimate for each Area corresponding
to the line items in Exhibits"A''and`B"is shown on Exhibit"C".
A summary breakdown of the cost estimate for each Area is shown below:
DESIGN,ACQUISITION&CONSTRUCTION $10,586,720
BOND RELATED EXPENSES 2,413,280
TOTAL TO BE BOND FINANCED $13,000,000
Design, acquisition and construction costs relate to those facilities described in Part II,
herein. The major bond related expenses include reserve fund estimated at $1,300,000 and
capitalized interest estimated at$250,000, with the remaining bond related expenses estimated at
$863,280 and including underwriter's discount, financial advisor, appraisal, bond counsel,
disclosure counsel, underwriter's counsel, special tax consultant, bond and official statement
printing, fiscal agent, fiscal agent's counsel, city administration and legal services, developer
administration and legal services and all other incidental expenses.
4
EXHIBIT A
IlVIPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
DESCRIPTION OF FACILITIES ELIGIBLE TO BE FUNDED BY
IMTROVEMENT AREA A OF THE DISTRICT
FACILITIES
It is intended that Improvement Area A of the District will finance all or a portion of the
costs of any of the following:
1. The construction of sewer lines in existing Skylab Road, new Delta Lane and new
Astronautics Lane.
2. The construction of streets, curbs, and gutters from the extension of Skylab Road
from its current terminus at Astronautics Lane west to approximately 400 feet
west of new Delta Lane.
3. The construction of streets, curbs, and gutters from.the new Delta Lane between
Skylab Road north to new Astronautics Lane.
4. The construction of streets, curbs, and gutters for the new Astronautics Lane from
its current terminus west to Rancho Road.
5. The construction of street, curbs, and gutters for the new Skylab Lane from new
Astronautics Lane south approximately 200 feet.
6. The construction of the waterline in Rancho Road connecting its current terminus
east of Bolsa Chica Road to the existing waterline north of the Navy Railroad. .
7. The construction of onsite waterlines in extended Skylab Road, new Delta Lane
and new Astronautics Lane.
8. The construction of conduit and fixtures for new street lighting in extended
Skylab Road,new Delta Lane, and new Astronautics Lane.
9. The,construction of street, curbs, and gutters for the new Delta Lane from Bolsa
Avenue north to Skylab Road.
10. The construction of a waterline in new Delta Lane from.Bolsa Avenue to Skylab
Road.
A-1
11. The construction of storm drains in new Skylab Road, new Delta Lane new
Astronautics Lane and new Skylab Lane.
12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane
including modifications to the existing traffic signal.
13. Roadway improvements at the intersection of Rancho Road and Astronautics
Lane including construction of the new traffic signal.
14. Roadway improvements to Rancho Road consisting of installation of new
sidewalk.
The Improvements to be financed shall include the costs of the acquisition of right-of-
way that is intended to be dedicated by the recording of a final map, the costs of design,
engineering and planning, the costs of any environmental or traffic studies, surveys or other
reports, costs related to landscaping and irrigation, soils testing, permits, plan check and
inspection fees, insurance, legal and related overhead costs,coordination and supervision and any
other costs or appurtenances related to any of the foregoing.
OTHER - �
Improvement.Area A of the District may also finance any of the.following:
1. Bond related expenses, including underwriters discount, reserve fund, capitalized
interest, letter of credit fees and expenses, bond and disclosure counsel fees and expenses, bond
remarketing costs, and all other incidental expenses.
2. Administrative fees of the City of Huntington Beach and the Bond trustee or fiscal
agent related to the District and the Bonds.
3. Reimbursement of costs related to the formation of the District advanced by the City
of Huntington Beach, the landowner in the District, or any party related to any of the foregoing,
as well as reimbursement of any costs advanced by the City of Huntington Beach, the landowner
in the District or any party related to any of the foregoing, for facilities, fees or other purposes or
costs of the District.
A-2
EXHIBIT B
IMPROVEMENT AREA B OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
DESCRIPTION OF FACILITIES ELIGIBLE TO BE FUNDED BY
IMPROVEMENT AREA B OF THE DISTRICT
FACILITIES
It is intended that Improvement Area B of the District will finance all or a portion of the
costs of any of the following:
1. The construction of sewer lines in existing Skylab Road, new Delta Lane and new
Astronautics Lane.
2. The construction of streets, curbs, and gutters from the extension of Skylab Road
from its current terminus at Astronautics Lane west to approximately 400 feet
west of new Delta Lane.
3. The construction of streets, curbs, and gutters from the new Delta Lane between
Skylab Road north to new Astronautics Lane.
4. The construction of streets, curbs, and gutters for the new Astronautics Lane from
its current terminus-west to Rancho Road.
5. The construction of street, curbs, and gutters for the new Skylab Lane from new
Astronautics Lane south approximately 200 feet.
6. The construction of the waterline in Rancho Road connecting its current terminus
east of Bolsa Chica Road to the existing waterline north of the Navy Railroad.
7. The construction of onsite waterlines in extended Skylab Road, new Delta Lane
and new Astronautics Lane.
8. The construction of conduit and fixtures for new street lighting in extended
Skylab Road,new Delta Lane, and new Astronautics Lane.
9. The construction of street, curbs, and gutters for the new.Delta Lane from Bolsa
Avenue north to Skylab Road.
10. The construction of a waterline in new Delta Lane from Bolsa Avenue to Skylab
Road.
B-1
11. The construction of storm drains in new Skylab Road, new Delta Lane new
Astronautics Lane and new Skylab Lane.
12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane
including modifications to the existing traffic signal.
13. Roadway improvements at the intersection of Rancho Road and Astronautics
Lane including construction of the new traffic signal.
14. Roadway improvements to Rancho Road consisting of installation of new
sidewalk.
The Improvements to be financed shall include the costs of the acquisition of right-of-
way that is intended to be dedicated by the recording of a final map, the costs of design,
engineering and planning, the costs of any environmental or traffic studies, surveys or other
reports, costs related to landscaping and irrigation, soils testing, permits, plan check and
inspection fees,insurance, legal and related overhead costs, coordination and supervision and any
other.costs or appurtenances related to any of the foregoing.
OTHER y'
Improvement Area B of the District may also finance any of the following:
1. Bond related expenses, including underwriters discount, reserve fund, capitalized
interest, letter of credit fees and expenses, bond and disclosure counsel fees and expenses, bond
remarketing costs, and all other incidental expenses.
2. Administrative fees of the City of Huntington Beach and the Bond trustee or fiscal
agent related to the District and the Bonds.
3. Reimbursement of costs related to the formation of the-District advanced by the City
of Huntington Beach, the landowner in the District, or any party related to any of the foregoing,
as well as reimbursement of any costs advanced by the City of Huntington Beach, the landowner
in the District or any party related to any of the foregoing, for facilities, fees or other purposes or
costs of the District.
The lomWAV insvwnent is a CoReat
Copy of the wOW on go In this ofNoe.
Atteet : 0-7— )Z 20 A
CONNIE BROCKWAY
a4 the
Council the Huntington Beach,
B-2
BY Deputy
RESOLUTION NO. 2002-38
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF HUNTINGTON BEACH OF FORMATION OF
IMPROVEMENT AREA A AND IMPROVEMENT AREA B
OF THE CITY OF HUNTINGTON BEACH COMMUNITY
FACILITIES DISTRICT NO. 2002-1 (MCDONNELL
CENTRE BUSINESS PARK)
WHEREAS,. on April 1, 2002, this City Council adopted a resolution entitled "A
Resolution of the City Council of the City of Huntington Beach Declaring Its Intention to
Establish a Community Facilities District and to Authorize the Levy of Special Taxes Therein"
(the "Resolution of Intention") stating its intention to form the City of Huntington Beach
Community Facilities District No, 2002-1 (McDonnell Centre Business'Park) (the "District")
pursuant to the provisions of Chapter 3.56 (commencing with Section 3.56.010) of the Municipal
Code of the City of Huntington Beach(the"Code") and, as applicable under the Code, the Mello-
Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of the California
Government Code(the"Act,"and,together with the Code,the"Law"); and
The Resolution of Intention designated a portion of the District as "Improvement Area A
of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre '
Business Park)" ("Area A"), and a portion of the District as "Improvement Area B of the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)"
'("Area B"), as authorized by Section 533.50 of the Act (Area A and Area B are "sometimes
referred to below individually as an "improvement area" and, collectively, as the "improvement
areas"); and
The Resolution of Intention, incorporating by reference a map of the proposed boundaries
of Area A and of Area B and stating the improvements to be provided by Area A and Area B
(collectively, the "Facilities"), the cost of providing the Facilities, and the rate and method of
apportionment of the special tax to be levied within Area A_ and Area B to pay the costs of the
Facilities and the principal and interest on bonds.proposed to be issued with respect to Area A
and Area B, is on file with the City Clerk and the provisions thereof 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 Law and
the Resolution of Intention relative to the proposed formation of Area A and of Area B; and
At the,hearing all interested persons desiring to be heard on all matters pertaining to the
formation of Area.A and of Area B, the Facilities to be provided by each such improvement area
of the District and the levy of the special tax in each such improvement area were heard and.a
full and fair hearing was held; and
Res.No.2002-38
At the hearing certain changes were presented to the rate and method of apportionment of.
special taxes for the improvement areas, and the revised rate and method of apportionment of
special taxes for Area A is attached to this Resolution as Exhibit A and the revised rate and
method of apportionment of special taxes for Area B is attached hereto as Exhibit B; and
At the hearing evidence was presented to this City Council on the matters before it,
including a report by the Director of Public Works of the City (the "Report") as to the Facilities
to be provided by each improvement area of the District and the costs thereof, a copy of which is
on file with the City Clerk, and this City Council at the conclusion of the hearing was fully
advised regarding each improvement area of the District; and
The sole owner of the land in the improvement areas that will be subject to the levy of the
special taxes has been furnished with copies of this Resolution, including Exhibits A and B
hereto; and
Written protests with respect to the formation of the improvement areas of the District
and/or the furnishing of specif ed types of Facilities by such improvement areas as described in
the Report have not been filed with the City Clerk by fifty percent (50%) or more of the
registered voters residing within the territory of either of the improvement areas of the District or
property owners of one-half(1/2) or more of the area of land within either of the improvement
areas of the District and not exempt from the special tax; and
The special tax proposed to be levied in.Area A to pay for the Facilities.to be provided
thereby, as set forth in Exhibit A to this Resolution,has not been.eliminated by protest by fifty
percent (50%) or more of the registered voters residing within the territory of Area A or the
owners of one-half(1/2) or more of the area of land within Area A and not exempt from the
special tax; and
The special tax proposed to be levied in Area B to pay for the Facilities to be provided
thereby, as set forth in Exhibit B to this Resolution, has not been eliminated by protest by fifty
percent (50%) or more of the registered voters residing within the territory of Area B or the
owners of one-half(1/2) or more of the area of land within Area B and not exempt from the
special tax; and .
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington
Beach as follows:
Section 1. The foregoing recitals are true and correct.
Section 2. The proposed special tax to be levied within the Area A of the District has not
been precluded by majority protest pursuant to Section 53324 of the California Government
Code. The proposed special tax to be levied within the Area B of the District has not been
precluded by majority protest pursuant to Section 53324 of the California Government Code.
-2-
G:M ulvihiILMc Donnell Dou2lasCFD:ResoFormationJ6158
Res.No.2002-38
Section 3. All prior proceedings taken by this City Council in connection with the
establishment of Area A of the District and the establishment of Area B of the District and the
levy of the special tax in each such improvement area have been duly considered and are hereby
found and determined to be valid and in conformity with the Law.
Section 4. The community facilities district improvement areas designated"Improvement
Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell
Centre Business Park)" and designated "Improvement Area B of the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park)" are hereby
established pursuant to the Law.
Section 5. The boundaries of Area A and of Area B of the District, as described in the
Resolution of Intention and set forth in the boundary map of the District recorded in the Orange
County Recorder's Office at Book 85 of Maps of Assessment and Community Facilities Districts
at Pages 3-6 (Instrument Number 20020279386), are hereby approved, are incorporated herein by
this reference and shall be the boundaries of Area A and of Area B,respectively, of the District.
Section 6. The type of public facilities proposed to be financed by Area A of the District
pursuant to the Law shall consist of those items listed as Facilities on Exhibit A to the Resolution
of Intention which Exhibit is by this reference incorporated herein. The type of public facilities
proposed to be financed by Area B of the District pursuant to the Law shall consist of those items
listed as Facilities on Exhibit B to the Resolution of Intention which Exhibit is by this reference
incorporated herein.. This City Council hereby finds that the..Facilities are necessary to meet
increased demands placed upon local agencies as the result of development occurring in the
applicable improvement area of the District.
Section 7. Except to the extent that funds are otherwise available to Area A of the
District to pay for the Facilities and/or the principal and interest as it becomes due on bonds of
Area A of the District issued to finance the Facilities, a special tax sufficient to pay the costs
thereof, secured by recordation of a continuing lien against all non-exempt real property in Area
A of the District, will be levied annually within Area A of the District and collected in the same
manner as ordinary ad valorem property taxes or in such other manner as this City Council shall
determine, including direct billing of the affected property owners. The proposed rate and
method of apportionment of the special tax among the parcels of real property within Area A of
the District, in sufficient detail to allow each landowner within the proposed District to estimate
the maximum amount such owner will have to pay, are described in Exhibit A to this Resolution
which Exhibit is by this reference incorporated herein.
Except to the extent that funds are otherwise available to Area B of the District to pay for
the Facilities and/or the principal and interest as. it becomes due on bonds of Area B of the
District issued to finance the Facilities, a special tax sufficient to pay the costs thereof, secured
by recordation of a continuing lien against all non-exempt real property in Area B of the District,
will be levied annually within Area B of the District and collected in the same manner as
ordinary ad valorem property taxes or in such other manner as this City Council shall determine,
including direct billing of the affected property owners. The proposed rate and method of
apportionment of the special tax among the parcels of real property within Area B of the District,
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Res.No.2002-38
in sufficient detail to allow each landowner within the proposed District to estimate the
maximum amount such owner will have to pay, are described in Exhibit B to this Resolution
which Exhibit is by this reference incorporated herein.
Section 8. The Director of Administrative Services of the City of Huntington Beach,.
2000 Main Street, Huntington Beach, California, 92648, telephone number (714) 536-5236, is
the officer of the City that 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 53340.2 of the California Government Code.
Section 9. 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 attach to all nonexempt real property in each of Area A and Area B of the District,
respectively, and this lien shall continue in force and effect until the special tax obligation
imposed in the respective improvement area is fully paid or prepaid and permanently satisfied
and the lien canceled in accordance with law or until collection of the tax in the applicable
improvement area by the City ceases.
Section 10. In accordance with Section 53325.7 of the California Government Code, the
appropriations limit, as defined by subdivision (h) of Section 8 of Article XUB of the California
Constitution, of Area A of the District is hereby preliminarily established at$13,000,060 and said
appropriations limit shall be submitted to the voters of the District as provided below. . In
accordance with Section 53325.7 of the California Government Code,the appropriations limit, as
defined by subdivision (h) of Section 8 of Article XM of the California Constitution, of Area B
of the District is hereby preliminarily established at $13,000,000 and said appropriations limit
shall be submitted to the voters of the District as provided below. The proposition establishing
an appropriations limit shall become effective if approved by the qualified electors voting
thereon and shall be adjusted in accordance with the applicable provisions of Section 53325.7 of
the California Government Code.
Section 11. Pursuant to the provisions of the Law, the proposition of the levy of the
special tax and the proposition of the establishment of the appropriations limit specified above
for Area A shall be submitted to the qualified electors of Area A 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. Pursuant to the provisions of the Law, the proposition of the levy of the special tax
and the proposition of the establishment of the appropriations limit specified above for Area B
shall be submitted to the qualified electors of Area B 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.
Section 12. This Resolution shall take effect upon its-adoption.
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G:M ulvihi ll:r1 c Donnell DouglasC FD:ResoFormat ion.16158
Res.No.2002-38
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 3rd day of June , 2002.
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk 01 6-dz City Attorney
REVIEWED AND APPROVED: INITIATED AND APPROVED:
ity Administrator Director of Economic Development
.a=
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Res.No.2002-38
Ex.A
EXHIBIT A
IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(MCDONNELL CENTRE BUSINESS PARK)
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
- Res.No.2002-38 .
Ex.A
EXHIBIT A
IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS.PARK)
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax applicable to each Assessor's Parcel of Taxable Property in the City of
Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business
Park) (herein "CFD No. 2002-1") shall be levied and collected according to the special
tax liability determined by the Administrator through the application of the procedures
described below. The real property in Improvement Area A of CFD No. 2002-1, unless
exempted by law or by the provisions hereof, shall be specially taxed for the purposes,
to the extent,and in the manner herein provided.
A. DEFINITIONS
The capitalized terms hereinafter set forth have the following meanings when used in
this Rate and Method of Apportionment of Special Tax:
Acre or Acreage means the land area of an .Assessor's Parcel as shown on the
applicable final map, parcel map, or other parcel map recorded with the County
Recorder. If the Acreage of a -particular Parcel is unclear after reference to available
maps,the Administrator shall determine the appropriate Acreage for that Parcel.
Act means Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of
the City of Huntington Beach and, as applicable, the Mello-Roos Community Facilities
Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311), Part 1,
Division 2, of Title 5 of the Government Code of the State of California.
Administrative Expenses means any or all of the following actual or reasonably
estimated costs directly related to the administration of Improvement Area A .of CFD
No. 2002-1: the fees and expenses of any Fiscal Agent(including any fees and expenses
of its counsel) employed in connection with any Bonds; any costs associated with the
marketing or remarketing of the. Bonds; costs related to credit enhancement for the
Bonds;the expenses of the Administrator and the City in carrying out their duties under
any Indenture,including,but not limited to; the levy and collection of the Special Tax; .
the fees and expenses of legal counsel,Bond redemption expenses,charges levied by the
County or any division or office thereof in connection with the levy and collection of the
Special Tax, audits, and amounts needed to pay arbitrage rebate to the federal
government with respect to the Bonds;costs associated with complying with continuing
disclosure requirements; costs associated with responding to.public inquiries regarding
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Res.No.2002-38
Ex.A
Special Tax levies and appeals; attorneys' fees and other costs associated with
commencement or pursuit of foreclosure for any delinquent Special Tax; and all other
costs and expenses of City, the Administrator,the County,and any Fiscal Agent,escrow
agent or trustee related to the administration of Improvement Area A of CFD No.2002-1
or any Bonds.
Administrator means the Director of Administrative Services of the City or such other
person or entity designated by the City Administrator or the City Council to administer
the Special Tax according to this Rate and Method of Apportionment of Special Tax.
Assessor's Parcel or Parcel means a lot, parcel or airspace parcel shown on an
Assessor's Parcel.Map with an assigned Assessor's Parcel Number that is located
within Improvement Area A of CFD No.2002-1.
Assessor's Parcel Map means an official map of the Assessor of the County
designating Parcels by Assessor's P arcel Number.
Bonds mean any bonds or other debt(as defined in Section 53317(d)of the Act),whether
in one or more series, issued by the City for Improvement Area A of CFD No. 2002-1
under the Act.
Bond Fund means the fund or account created pursuant to the Indenture in which the
collections of the Special Tax are deposited.
Bond Year means the.one year period from September 2 to the following September 1..
City means the City of Huntington Beach.
City CounciI means the City Council of the City of Huntington Beach, acting as the
legislative body of CFD No.2002-1.
County means the County of Orange.
Delinquencies mean the. amount, if any, equal to delinquencies in payment of the
Special Tax levied in Improvement Area A of CFD No. 2002-1 in the previous Fiscal
Year.
Exempt Land means (1) any real property within the boundaries of Improvement Area
A of CFD No. 2002-1 which is owned by a governmental agency for public right of way
purposes, including, but not limited to, streets, water well production facilities, public
-walkway corridors, and slopes as determined in each Fiscal Year by the Administrator,
:and (2)any Assessor's Parcel for which the Special Tax has been paid in full.
Fiscal Agent means the fiscal agent'or trustee who is a party to the Indenture.
Fiscal Year means the period commencing on July 1 and ending on the following June
30,in any year in which the Bonds are outstanding.
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Res.No.2002-38
Ex.A
Improvement Area A means any real property within the boundaries of CFD No.2002-1
as depicted on the boundary map for said CFD entitled "Proposed Boundaries of The
City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre
Business Park), County of Orange.. State of California" and approved by the City
Council. Said Improvement Area A is comprised generally of Parcels 4 through 11, the
proposed public well site and adjacent portions of the following roadway right-of-way;
Skylab Road, Astronautics Road, Street 'B' and Street 'C'; as shown on Tentative
Parcel Map No. 2001-122 on file with the City. Said Improvement Area A is also
envisioned to include Parcels 1 through 8, the proposed public well site and adjacent
portions of the following roadway right-of-way; Skylab Road, Delta Lane and
Astronautics Lane; as shown on proposed Final Parcel Map No. 2001-226 and
encompassing approximately 40.339 gross acres and 33.286 net taxable acres. In no case
shall the net taxable acres in Improvement Area A be less than 33.286.
Indenture means the indenture, fiscal agent agreement, resolution or other instrument
approved pursuant to the Resolution of Issuance and pursuant to which Bonds are
issued, as modified, amended and/or supplemented from time to time, and any
instrument replacing or supplementing the same.
Infrastructure means the public improvements authorized to be financed by
Improvement Area A of CFD No.2002-1 in accordance with the terms of the Act. ,
Interest Payment Date means any date on which regularly scheduled principal and/or
interest payments are due on the Bonds.
Maximum Special Tax- means, with respect to any Assessor's Parcel of Taxable
Property, the maximum Special Tax determined in accordance with Section C that can
be levied in any Fiscal Year on such Assessor's Parcel.
Outstanding Bonds means all Bonds that are then outstanding under the Indenture.
Property Owner means the owner of an Assessor's Parcel within the boundaries of
Improvement Area A of CFD No. 2002-1 as determined from the latest equalized tax
rolls of the County or as proved through some other acceptable manner to the
Administrator.
Reserve Fund means the fund of that name created under the Indenture.
Special Tax means the special tax to be levied pursuant to the Act and this Rate and
Method of Apportionment of Special Tax on Taxable Property- within Improvement
Area A of CFD No 2002-1:
Special Tax Requirement means the amount required in any Fiscal Year for
Improvement Area A of CFD No. 2002-1 necessary: (i) to pay the annual scheduled debt
service on the Outstanding Bonds due in the next succeeding •Bond Year which
commences in such Fiscal Year, (ii) to pay any amounts required to establish or
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Res.No.2002-38
Ex.A
replenish the Reserve Fund for all Outstanding Bonds, (iii) to pay Administrative
Expenses due and estimated by the Administrator to become due prior to the next levy
of the Special Tax, and (iv) to cure any Delinquencies in the payment of principal or
interest on indebtedness of Improvement Area A of CFD No. 2002-1. The Special Tax
Requirement shall be reduced by the following: (i) any credit from interest earnings on
the Reserve Fund or other.Bond funds the earnings on which are available under the
terms of the Indenture to pay debt service on the Bonds, (ii) the collection of delinquent
Special Tax since the last Special Tax Levy, and (iii) any other funds legally available to
apply against the Special Tax Requirement as determined by the Administrator.
Taxable Property means all of the.Assessor's Parcels within the boundaries of
Improvement Area A of CFD No. 2002-1, which are not Exempt Land, or otherwise
exempt from the Special Tax pursuant to the Act.
B. IDENTIFYING TAXABLE PROPERTY
On or about each July 1st, the Administrator shall determine which Assessor's Parcels
in Improvement Area A of CFD No. 2002-1 are Taxable Property. The Taxable Property
shall be subject to the Special Tax in accordance with the rate and method of
apportionment described in Sections C and D below.
C. MAMMUM SPECIAL TAX . .
The Maximum Special Tax for each Parcel of Taxable Property is $11,200 per Acre
commencing in Fiscal Year 2002-2003 and such Maximum Special Tax shall increase in
every Fiscal Year thereafter by two percent (2%) of the Maximum Special Tax for the
prior Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2002-2003,and during each Fiscal Year thereafter,the City
Council or its designee shall levy the Special Tax proportionally on each Assessor's
Parcel of Taxable Property at up to one hundred percent(100%)of the Maximum Special
Tax for that Fiscal Year,as described in Section C,above,as needed to satisfy the Special
Tax Requirement.
E. LIMITATIONS
No Special Tax shall be levied on an Assessor's Parcel after such Assessors Parcel
becomes Exempt Land.
The Special Tax may be levied and collected on Taxable Property, commencing with
Fiscal Year 2002-2003, and for each Fiscal Year thereafter, and until the date on which
A-4
Res.No.2002-38
Ex.A
principal and interest on all Outstanding Bonds have been paid in full (or provision for
their payment has been made). Upon determination by the Administrator that this
requirement has been met, the Special Tax lien shall be removed from all Assessor's
Parcels in Improvement Area A of CFD No.2002-1.
F. MANNER OF COLLECTION
The Special Tax shall be collected at the same time as ordinary ad valorem property taxes,
provided, however, that CFD No. 2002-1 may at any time directly bill the Special Tax,
may collect the Special Tax at a different time or manner if necessary to meet.its financial
obligations, and may covenant to foreclose and may actually foreclose on delinquent
Assessor's P arcels as permitted by the Act.
G. PREPAYMENT OF SPECIAL TAX
The following definitions apply solely to this Section G.:
Amount of Current Special Taxes Paid means the amount of the Special Tax levied
against the subject Assessor's Parcel that was paid to the County or the City by the
owner of the subject Assessor's Parcel and would be applied to debt service payments
on.the Redemption Date and the. Interest Payment Date immediately following the
Redemption Date.
Outstanding Bonds means all Bonds which are deemed to be outstanding under the
Indenture the day immediately preceding the next Interest Payment Date.
Redemption Date means the Interest Payment Date on which Bonds are proposed to be
redeemed from the prepayments of the Special Tax.
1. Prepayment in Full
The Special Tax obligation applicable to such Assessor's Parcel in Improvement Area A
may be fully prepaid and the obligation of such Assessor's P arcel to pay the Special Tax
permanently satisfied as described herein. The owner intending to prepay the Special
Tax obligation on one or more Assessor's Parcel(s) shall provide the Administrator
with written notice of intent to prepay. It shall be a condition precedent to prepayment
that the owner intending to prepay the Special Tax must pay to the County all past due
Special Tax on the Assessor's Parcel to be prepaid and provide proof of payment to the
Administrator. Promptly following receipt of such notice,the Administrator shall notify
the owner of such Assessor's. Parcel(s) of the prepayment.amount of such Assessor's
Parcel(s). The Administrator may charge a reasonable fee-for providing this figure.
Prepayment must be made.not less than 90 days prior to the next occurring date that
Bonds may be redeemed from the proceeds of such prepayment pursuant to the
Indenture.
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Res.No.2002-38
Ex.A
The Prepayment Amount (defined below) shall be calculated as summarized below
(capitalized terms as defined above or below):
Bond Redemption Amount
Plus Redemption Premium
Plus Defeasance Amount
Plus Administrative Fees and Expenses
Less Reserve Fund Credit
Less Amount of Current Special Taxes Paid
Total: Equals Prepayment Amount
As of the proposed date of_prepayment, the Prepayment Amount (defined below) shall
be calculated as follows:
Paragraph No.
1. For Assessor's Parcels of Taxable Property intended to be prepaid,compute the-
Maximum Special Tax for such Assessor's P arcels for the current Fiscal Year.
2. Divide the Maximum Special Tax computed pursuant to Paragraph 1 by the total
Maximum Special Tax of all Assessor's Parcels of Taxable Property for the
current Fiscal Year.
3. Multiply the quotient computed pursuant to_Paragraph 2 by the Outstanding
Bonds as defined in this Section_G to compute the amount of Outstanding Bonds.
to be retired and prepaid, and round the result up to the nearest multiple of'
$5,000(the Bond Redemption Amount).
4. Multiply the Bond Redemption Amount less the par amount of Bonds scheduled
to mature on the Redemption Date by the applicable redemption premium (the
Redemption Premium).
5. Compute the amount needed to pay interest on the Bond Redemption Amount
from the Interest Payment Date immediately preceding the Redemption Date to
the Redemption Date.
6. Compute the amount the Administrator reasonably expects to derive from the
reinvestment of the Prepayment Amount from the date of prepayment until the
redemption date for. the Outstanding Bonds to be redeemed with the
prepayment.
7. Add the amounts computed pursuant to Paragraph 5 and subtract the amount
computed pursuant to Paragraph 6 (the Defeasance Amount).
8. Determine the administrative fees _ and expenses. of Improvement Area A
associated with the costs of computation of the prepayment, the costs to invest.
the prepayment proceeds, the costs of redeeming Bonds, and the costs of
recording any notices to evidence the prepayment and the redemption (the
Administrative Fees and Expenses).
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Res.No.2002-38
Ex.A
9. Determine the reserve fund credit (the Reserve Fund Credit) which shall equal
the lesser of: (a) the expected reduction in the Reserve Requirement (as defined
in the Indenture), if any, associated with the redemption of Outstanding Bonds
as a result of the prepayment, or (b) the amount derived by subtracting the new
Reserve Requirement(as defined in the Indenture) in effect after the redemption
of Outstanding Bonds as a result of the prepayment from the balance in the
reserve fund on the prepayment date,but in no event shall such amount be less
than zero.
10. The Special Tax prepayment is equal to the sum of the amounts computed
pursuant to Paragraphs 3, 4, 7 and 8,less (i) the amounts computed pursuant to
Paragraph 9 and (ii) the Amount of Current Special Taxes Paid (the.Prepayment
Amount).
11. From the Prepayment Amount, the amounts computed pursuant to Paragraphs
3,4,7(if greater than zero),and 9 shall be deposited into the appropriate fund as
established under the Indenture and be used to redeem Outstanding Bonds or
make debt service payments (as appropriate). The amount computed pursuant
to Paragraph 8 shall be retained by the Administrator.
With respect to any Assessor's Parcel-that is prepaid, the City Council shall (i) cause a
suitable notice to be recorded in compliance with the Act, to indicate the prepayment of
the Special Tax and the release of the.Special Tax lien on such Assessor's Parcel, (h)
notify the County that the Special Tax, if any, remaining on the secured tax roll for the
.Assessor's Parcel has been satisfied and that the County should remove such amounts
from the secured tax roll,and (iii)refund the owner for any Special Tax payments made
on the Assessor's Parcel after the date of prepayment. From and after the prepayment,
the obligation of such Assessor's P arcel to pay the Special Tax shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the
amount of the Maximum Special Tax that may be levied on Taxable Property within
Improvement Area A of CFD No. 2002-1 after the proposed prepayment is at least 1.1
times the maximum annual debt service on all Outstanding Bonds.
2. Prepayment in Part
The Maximum Special Tax- on an Assessor' s Parcel of Taxable Property may be
partially prepaid. The amount of the prepayment shall be calculated as in Section G.1,
except that a partial prepayment shall be calculated according to the following formula:
PP=(PH xF) +G
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Res.No.2002-38
Ex.A
Where these terms are defined as follows:
PP = the partial prepayment
PH= the Prepayment Amount calculated according to Section G.1,minus the amounts
determined in Paragraph No. 8 of Section G.1.
F. = the percent by which the owner of an Assessor's .Parcel(s) is partially prepaying
the Maximum Special Tax.
G = the amounts determined in Paragraph No. 8 of Section G.1.
The owner of an Assessor's Parcel who desires to partially prepay the Maximum
Special Tax shall notify the Administrator.of(i) such owner's intent to partially prepay
the Maximum Special Tax, and (ii) the percentage by which the Maximum Special Tax
shall be prepaid. The Administrator shall promptly provide the owner with a statement
of the amount required for the partial prepayment of the Maximum Special Tax for an
Assessor's P arcel following receipt of the request.
With respect to any Assessor's Parcel that is partially prepaid, CFD No. 2002-1 shall (i)
distribute the funds remitted to it according to Paragraph 11 of Section G.1, and (ii)
indicate in the records of Improvement Area A of CFD No. 2002-1 that there has been a
partial prepayment of the Maximum Special Tax and that a portion of the Maximum
Special Tax equal to the outstanding percentage (i.e., 100% - F) of the remaining
Maximum Special Tax shall continue to be authorized to be levied on such Assessor's
Parcel pursuant to Section D.
H. PROPERTY OWNER APPEALS OF SPECIAL TAX LEVIES
Any property owner claiming that the amount or application of the Special Tax is not
correct and requesting a refund may file a written notice of appeal and refund to that
effect with the Administrator not later than one calendar year after having paid the
Special Tax that is disputed. The Administrator shall promptly review the appeal,and if
necessary, meet with the property owner, consider written and oral evidence regarding
the amount of the Special Tax, and decide the appeal. If the Administrator's decision
requires that the Special Tax be modified or changed in favor of the property owner, a
cash refund shall not be made (except for the last year of the levy), but an adjustment
shall be made to the next Special Tax levy. Any dispute over the decision of the
Administrator shall be referred to the City Council and the decision of the City Council
shall be final. This procedure shall be exclusive and its exhaustion by any property
owner shall be a condition precedent to any legal action by such owner.
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Res.No.2002-38
Ex.B
EXHIBIT B
IMPROVEMENT AREA B OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1.
(MCDONNELL CENTRE BUSINESS PARK)
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
Res.No.2002-38
Ex.B
EXHIBIT B
IMPROVEMENT AREA B OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax applicable to each Assessor's Parcel of Taxable Property in the City of
Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business
Park) (herein "CFD No. 2002-1") shall be levied and collected according to the special
tax liability determined by the Administrator through the application of the procedures
described below. The real property in Improvement Area B of CFD No. 2002-1, unless
exempted by law or by the provisions hereof, shall be specially taxed for the purposes,
to the extent,and in the manner herein provided.
A. DEFINITIONS
The capitalized terms hereinafter set forth have the following meanings when used in
this Rate and Method of Apportionment of Special Tax:
Acre or Acreage means the land area of an Assessor's Parcel as shown on the
applicable final map, parcel map, or other parcel map recorded with the County
Recorder. If the Acreage of a particular Parcel is unclear after reference to available
maps,the Administrator shall determine the appropriate Acreage for that Parcel.
Act means Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of
the City of Huntington Beach and, as applicable, the Mello-Roos Community Facilities
Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311), Part 1,
Division 2,of Title 5 of the Government Code of the State of California.
Administrative Expenses means any or all of the following actual or reasonably
estimated costs directly related to the administration of Improvement Area B of CFD
No. 2002-1: the fees and expenses of any Fiscal Agent (including any fees and expenses
of its counsel) employed in connection with any Bonds; any costs associated with the
marketing or remarketing of the Bonds; costs related to credit enhancement•for the
Bonds; the expenses of the.Administrator and the City in carrying out their duties under
any Indenture, including,but not limited to, the levy and collection of the Special Tax,
the fees and expenses of legal counsel,Bond redemption expenses,charges levied by the .
County or any division or office thereof in connection with the levy and collection of the
Special Tax, audits, and amounts needed to pay arbitrage rebate to the federal
government with respect to the Bonds;costs associated with complying with continuing
disclosure requirements; costs associated with responding to public inquiries regarding
B-1
Res.No.2002-38
Ex.B
Special Tax levies and appeals; attorneys' fees and other costs associated with
commencement or pursuit of foreclosure for any delinquent Special Tax; and all other
costs and expenses of City,the Administrator, the County,and any Fiscal Agent,escrow
agent or trustee related to the administration of Improvement Area B of CFD No.2002-1
or any Bonds.
Administrator means the Director of Administrative Services of the City or such other
person or entity designated by the City Administrator or the City Council to administer
the Special Tax according to this Rate and Method of Apportionment of Special Tax.
Assessor's Parcel or Parcel means. a lot, parcel or airspace parcel shown on an
Assessor's Parcel Map with an assigned Assessor's Parcel Number that is located
within Improvement Area B of CFD No.2002-1.
Assessor's Parcel Map means an official map of the Assessor of the County
designating Parcels by Assessor's P arcel Number.
Bonds mean any bonds or other debt(as defined in Section 53317(d)of the Act),whether
in one or more series, issued by the City for Improvement Area B of CFI) No. 2002-1
under the Act.
Bond Fund means the fund or account created pursuant to the Indenture in which the
collections of the Special Tax are deposited.
Bond Year means the one year period from September 2 to the following September 1, .
City means the City of Huntington Beach.
City Council means the City Council of the City of Huntington Beach, acting as the
legislative body of CFD No.2002-1.
County means the County of Orange.
Delinquencies mean the amount, if any, equal to delinquencies in payment of the
Special Tax levied in Improvement Area B of CFD No. 2002-1 in the previous Fiscal
Year.
Exempt Land means(1)any real property within the boundaries of Improvement Area B
of CFD No. 2002-1 which is owned by a governmental agency for public right of way
purposes, including, but not limited to, streets, water well production facilities, public
walkway corridors, and slopes as determined in each Fiscal Year by the Administrator,
and (2)any Assessors Parcel for which the Special Tax has been paid in full.
Fiscal Agent means the fiscal agent or trustee who is a party to the Indenture.
Fiscal Year means the,period commencing on July 1 and ending on the following June
30,in any year in which the Bonds are outstanding.
B-2
Res.No.2002-38
Ex.B
Improvement Area B means any real property within the boundaries of CFD No.2002-1
as depicted on the boundary map for said CFD entitled "Proposed Boundaries of The
City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre
Business Park), County_of Orange, State of California" and approved by the City
Council. Said Improvement Area B is comprised generally of Parcels 1, 2, 3, 12, 13, 15,
17 through 20 and adjacent portions of the following roadway right-of-way; Skylab
Road, Street 'A', Street 'C' and Street 'D'; as shown on Tentative Parcel Map No.
2001-122 on file with the City and encompassing approximately 48.803 gross acres and
43.785 net taxable acres. In no case shall the net taxable acres in Improvement Area B be
less than 43.785.
Indenture means the indenture, fiscal agent agreement, resolution or other instrument
approved pursuant to the Resolution of Issuance and pursuant to which Bonds are
issued, as modified, amended and/or supplemented from time to time, and any
instrument replacing or supplementing the same.
Infrastructure means the public improvements authorized to be financed by
Improvement Area B of CFD No.2002-1 in accordance with the terms of the Act.
Interest Payment Date means any date on which regularly scheduled principal and/or
interest payments are due on the Bonds.
Maximum. Special. Tax means, with respect to any Assessor's Parcel of Taxable
Property, the maximum Special Tax determined in accordance with Section C that can
be levied in any Fiscal Year on such Assessor's Parcel.
Outstanding Bonds means all Bonds that are then outstanding under the Indenture.
Property Owner means the owner of an Assessor's Parcel within the boundaries of
Improvement Area B of CFD No. 2002-1 as determined from the latest equalized tax
rolls of the County or as proved through some other acceptable manner to the
Administrator.
Reserve Fund means the fund of that name created under the Indenture.
Special Tax means the special tax to be levied pursuant to the Act and this Rate and
Method of Apportionment of Special Tax on Taxable Property within Improvement
Area B of CFD No.2002-1.
Special Tax Requirement means the amount required in any Fiscal Year for
Improvement Area.B of CFD No.2002-1 necessary; (i).to pay the annual-scheduled debt
service on the Outstanding Bonds due in the next succeeding Bond Year .which
commences in such Fiscal Year, (ii) to pay any amounts required to establish or
replenish the Reserve Fund for all Outstanding Bonds, (iii) to pay Administrative
Expenses due and estimated by the Administrator to become due prior to the next levy
of the Special Tax, and (iv) to cure any Delinquencies in the payment of principal or
B-3
Res.No.2002-38
Ex.B
interest on indebtedness of Improvement Area B of CFD No. 2002-1. The Special Tax
Requirement shall be reduced by the following: (i) any credit from interest earnings on
the Reserve Fund or other Bond funds the earnings on which are available under the
terms of the Indenture to pay debt service on the Bonds, (ii) the collection of delinquent
Special Tax since the last Special Tax Levy, and (iii) any other funds legally available to
apply against the Special Tax Requirement as determined by the Administrator..
Taxable Property means all of the Assessor's Parcels within the boundaries of
Improvement Area B of CFD No. 2002-1, which are not Exempt Land, or otherwise
exempt from the Special Tax pursuant to the Act.
B. IDENTIFYING TAXABLE PROPERTY
On or about each July 1st, the Administrator shall determine which Assessor's Parcels
in Improvement Area B of CFD No. 2002-1 are Taxable Property. The Taxable Property
shall be subject to the Special Tax in accordance with the rate and method of
apportionment described in Sections C and D below.
C. MAXIMUM SPECIAL TAX
The Maximum Special Tax for each Parcel of Taxable Property is $11,200 per Acre
commencing in Fiscal Year 200.2-2003 and such Maximum Special Tax shall.increase in
every Fiscal Year thereafter by two percent (2%) of the Maximum Special Tax for the
prior Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2002-2003,and during each Fiscal Year thereafter,the City
Council or its designee shall levy the Special Tax proportionally on each Assessor's
Parcel of Taxable Property at up to one hundred percent(100%)of the Maximum Special
Tax for that Fiscal Year,as described in Section C,above,as needed to satisfy the Special
Tax Requirement.
E. LIMITATIONS
No Special Tax shall be levied on an Assessor's Parcel after such Assessor's Parcel
becomes Exempt Land.
The Special Tax may be levied. and collected on Taxable Property commencing with
Fiscal Year 2002-2003, and for each Fiscal Year thereafter, and until the date on which
principal and interest on all Outstanding Bonds have been paid in full (or provision for
their payment has been made). Upon determination by the Administrator that this
B-4
Res.No.2002-38
Ex.B
requirement has been met, the Special Tax lien shall be removed from all Assessor's
Parcels in Improvement Area B of CFD No.2002-1.
F. MANNER OF COLLECTION
The Special Tax shall be collected at the same time as ordinary ad valorem property taxes,
provided, however, that CFI) No. 2002-1 may at any time directly bill the Special Tax,
may collect the Special Tax at a different time or manner if necessary to meet its financial
obligations, and may covenant to foreclose and may actually foreclose on delinquent
Assessor's P arcels as permitted by the Act.
G. PREPAYMENT OF SPECIAL TAX
The following definitions apply solely to this Section G.:
Amount of Current Special Taxes Paid means the amount of the Special Tax levied
against the subject Assessor's Parcel that was paid to the County or the City by the
owner of the subject Assessor's Parcel and would be applied to debt service payments
on the Redemption Date and the Interest Payment Date immediately following the
Redemption Date.
Outstanding Bonds means all Bonds which are deemed.to.be outstanding under the
Indenture the day immediately preceding the next Interest Payment Date:
Redemption Date means the Interest Payment Date on which Bonds are proposed to be
redeemed from the prepayments of the Special Tax.
1. Prepayment in Full
The Special Tax obligation applicable to such Assessor's Parcel in Improvement Area B
may be fully prepaid and the obligation of such Assessor's P arcel to pay the Special Tax
permanently satisfied as described herein. The owner intending to prepay the Special
Tax obligation on one or more Assessor's Parcel(s) shall provide the Administrator
with written notice of intent to prepay. It shall be a condition.precedent to prepayment
that the owner intending to prepay the Special Tax must pay to the County all past due
Special Tax on the Assessor's Parcel to be prepaid and provide proof of payment to the
Administrator. Promptly following receipt of such notice,the Administrator shall notify
the owner of such Assessor's Parcel(s) of the prepayment amount of such Assessor's
Parcel(s). The _Administrator may charge a reasonable_fee for providing this figure..
Prepayment must be made not less than 90.days prior to the next occurring date that.
Bonds may be redeemed from the proceeds of such prepayment pursuant to the
Indenture.
B-5
Res.No.2002-38
Ex.B
The Prepayment Amount (defined below) shall be calculated as summarized below
(capitalized terms as defined above or below):
Bond Redemption Amount
Plus Redemption Premium
Plus . Defeasance Amount
Plus Administrative Fees and Expenses
Less Reserve Fund Credit
Less Amount of Current Special Taxes Paid
Total: Equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount (defined below) shall
be calculated as follows:
Paragraph No.
1. For Assessor's Parcels of Taxable Property intended to be prepaid,compute the
Maximum Special Tax for such Assessor's P arcels for the current Fiscal Year.
2. Divide the Maximum Special Tax computed pursuant to Paragraph 1 by the total
Maximum Special Tax of all Assessor's Parcels of Taxable Property for the
current Fiscal Year.
. . 3. Multiply the quotient computed pursuant to Paragraph 2 by the Outstanding
Bonds as defined in this Section G to compute the amount-of Outstanding Bonds
to be retired arid.prepaid, and-round the result up to the .nearest multiple of
$5,000(the Bond Redemption Amount).
4. Multiply the Bond Redemption Amount less the par amount of Bonds scheduled
to mature on the Redemption-Date by the applicable redemption premium (the
Redemption Premium).
5. Compute the amount needed to pay interest on the Bond Redemption Amount
from the Interest Payment Date immediately preceding the Redemption Date to
the Redemption Date.
6. Compute the amount the Administrator reasonably expects to derive from the
reinvestment of the Prepayment Amount from the date of prepayment until the
redemption date for the Outstanding Bonds to be redeemed with the
prepayment.
7. Add the amounts computed pursuant to Paragraph 5 and subtract the amount
computed pursuant to Paragraph 6(the Defeasance Amount).
8. Determine the administrative fees and expenses of Improvement Area B
associated with the costs of computation.of the prepayment, the costs to invest
the prepayment proceeds, the costs of redeeming Bonds, and the costs .of
recording any notices to evidence the prepayment and the redemption (the
Administrative Fees and Expenses).
B-6
Res.No.2002-38
Ex.B
9. Determine the reserve fund credit (the Reserve Fund Credit) which shall equal
the lesser of: (a) the expected reduction in the Reserve Requirement (as defined
in the Indenture), if any, associated with the redemption of Outstanding Bonds
as a result of the prepayment,or(b) the amount derived by subtracting the new
Reserve Requirement(as defined in the Indenture) in effect after the redemption
of Outstanding Bonds as a result of the prepayment from the balance. in the
reserve fund on the prepayment date,but in no event shall such amount be less
than zero.
10. The Special Tax prepayment is equal to the sum of the amounts computed
pursuant to Paragraphs 3,4, 7 and 8,less (i) the amounts computed pursuant to
Paragraph 9 and (ii) the Amount of Current Special Taxes Paid (the_ Prepayment
Amount).
11. From the Prepayment Amount, the amounts computed pursuant to Paragraphs
3,4,7(if greater than zero),and 9 shall be deposited into the appropriate fund as
established under the Indenture and be used to redeem Outstanding Bonds or
make debt service payments (as appropriate). The amount computed pursuant
to Paragraph 8 shall be retained by the Administrator.
With respect to any Assessor's Parcel that is prepaid, the City Council shall (i) cause a
suitable notice to be recorded in compliance with the Act,to indicate the prepayment of
the Special Tax and the release of the Special Tax lien on such Assessor's Parcel, (H)
notify the County that the Special Tax,if any,remaining on the secured tax roll for the
Assessor's Parcel has been satisfied and that the County should remove such amounts'.
from the secured tax roll,and (iii) refund the owner for any Special Tax payments made
on the Assessor's Parcel after the date of prepayment. From and after the prepayment,
the obligation of such Assessor's P arcel to pay the Special Tax shall cease.
Notwithstanding the foregoing,no Special Tax prepayment shall be allowed unless the
amount of the Maximum Special Tax that may be levied on Taxable Property within
Improvement Area B of CFD No. 2002-1 after the proposed prepayment is at least 1.1
times the maximum annual debt service on all Outstanding Bonds.
2. Prepayment in Part
The Maximum Special Tax on an Assessor' s Parcel of Taxable Property may be
partially prepaid. The amount of the prepayment shall be calculated as in Section G.1,
except that a partial prepayment shall be calculated according to the following formula:
PP= (PH xF)+.G
B-7
Res.No.2002.38
Ex.B
Where these terms are defined as follows:
PP = the partial prepayment
PH= the Prepayment Amount calculated according to Section G.1,minus the amounts
determined in Paragraph No. 8 of Section G.1.
F = the percent by which the-owner of an Assessor's Parcel(s) is partially prepaying
the Maximum.Special Tax.
G = the amounts determined in Paragraph No. 8 of Section G.1.
The owner of an Assessor's Parcel who desires to partially prepay the Maximum
Special Tax shall notify the Administrator of(i) such owner's intent to partially prepay
the Maximum Special Tax, and (ii) the percentage by which the Maximum Special Tax
shall be prepaid. The Administrator shall promptly provide the owner with a statement
of the amount required for the partial prepayment of the Maximum Special Tax for an
Assessor's P arcel following receipt of the request.
With respect to any Assessor's Parcel that is partially prepaid,CFD No.2002-1 shall (i)
distribute the funds remitted to it according to Paragraph 11 of Section G.1, and (ii)
indicate in the records of Improvement Area B of CFD No. 2002-1 that there has been a
partial prepayment of the Maximum Special Tax and that a portion of the Maximum
Special Tax equal to the outstanding percentage (i.e., 100% - F) of the remaining
Maximum Special Tax shall continue to be authorized to be levied on such Assessor's
Parcel.pursuant to Section D.
H. PROPERTY OWNER APPEALS OF SPECIAL TAX LEVIES
Any property owner.claiming that the amount or application of the Special Tax is not
correct and requesting a refund may file a written notice of appeal-and refund to that
effect with the Administrator not later than one calendar year after having paid the
Special Tax that is disputed. The Administrator shall promptly review the appeal,and if
necessary,meet with the property owner, consider written and oral evidence regarding
the amount of the Special Tax, and decide the appeal. If the Administrator's decision
requires that the Special Tax be modified or changed in favor of the property owner, a
cash refund shall not be made (except for the last year of the levy),but an adjustment
shall be made to the next Special Tax levy. Any dispute over the decision of the
Administrator shall be referred to the City Council and the decision of the City Council
shall be final. This procedure shall be exclusive and its exhaustion by any property
owner shall be a condition precedent to any legal action by such owner.
B-8
Res. No. 2002-38
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 3rd
day of June, 2002 by the following vote:
AYES: Green, Dettloff, Boardman,Cook, Wincheil, Bauer
NOES: None
ABSENT: Houchen (out of room)
ABSTAIN: None
City Clerk and ex-officio C erk of the
City Council of the City of
Huntington Beach, California
The W9906V kmM me u b a cones
copy of the orlpinal on go in this atr".
Anal 07--12 20 02
CONNIE BROCKWAY
the Chy
(:ounedla. HuntkVton Beach,
Deputy
RESOLUTION NO.2002-39
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH DETERMINING THE NECESSITY TO
INCUR BONDED INDEBTEDNESS WITHIN IMPROVEMENT
AREA A,AND WITHIN IMPROVEMENT AREA B,OF THE CITY
OF HUNTINGTON BEACH COMMUNITY FACILITIES
DISTRICT NO. 2002-1 (MCDONNELL CENTRE BUSINESS PARK)
WHEREAS, on April 1, 2002, this City Council adopted a resolution entitled "A
Resolution of the City Council of the City of Huntington Beach Declaring Its Intention to
Establish a Community Facilities District and to Authorize the Levy of Special Taxes Therein"
(the "Resolution of Intention') stating its intention to form the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park) (the "District"),
pursuant to the provisions of Chapter 3.56 (commencing with Section 3.56.010) of the Municipal
.Code of the City of Huntington Beach (the "Code") and, as applicable under the Code, the
Mello-Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of the
California Government Code (the "Act," and, together with the Code, the "Law"), to fund
certain public improvements (the "Facilities"),as described therein;and
The Resolution of Intention designated a portion of the District as "Improvement Area
A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre
Business Park)" ("Area A"), and a portion of the District as"Improvement Area B of the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)-"
("Area B"), as authorized by Section 53350 of the Act (Area A and Area B are sometimes
referred to below as an"improvement area" and,collectively,as"improvement areas");and
On April 1, 2002, this City Council also adopted a resolution entitled "A Resolution of
the City Council of the City of Huntington Beach Declaring Its Intention to Incur Bonded
Indebtedness of the Proposed City of Huntington Beach Community Facilities District No.
2002-1 (McDonnell Centre Business Park)" (the "Resolution of Intention to Incur
Indebtedness") stating its intention to incur bonded indebtedness within the boundaries of
Area A and its intention to incur bonded indebtedness within the boundaries of Area B for the
purpose of financing the costs of the Facilities;and
On this date, this City Council held a noticed public hearing as required by the Law
relative to the determination to proceed with the formation of the improvement areas of the
District, the provision of the Facilities for each of the improvement areas as specified in the
Resolution of Intention and the rate and method of apportionment of the special tax to be levied
within each of the improvement areas of the District to pay the principal and interest on the
proposed indebtedness and the administrative costs of the City relative to the District;and
At the hearing all persons desiring to be heard on all matters pertaining to the formation
of each of the improvement areas of the District, the provision of the Facilities and the levy of
the special tax on property within each of the improvement areas of the District were heard and
a full and fair hearing was held;and
Res. No. 2002-39
Subsequent to the hearing,this City Council adopted a resolution entitled "A Resolution
of the City Council of the City of Huntington Beach of Formation of Improvement Area A and
Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park)" (the "Resolution of Formation'), which incorporated by
reference the description of the Facilities to be provided by each improvement area of the
District as set forth in the exhibits to the Resolution of Intention, and incorporated by reference
the rate and method of apportionment of the special tax for each improvement area of the
District as set forth in exhibits to the Resolution of Formation;and
On this date, this City Council held a noticed public hearing as required by the Law
relative to the matters material to the questions set forth in the Resolution of Intention to Incur
Indebtedness;and
No written protests with respect to the matters material to the questions set forth in the
Resolution of Intention to Incur Indebtedness have been filed with the City Clerk.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington
Beach as follows:
Section 1. The foregoing recitals are true and correct.
Section 2. This City Council deems it necessary to incur bonded indebtedness in the ,
maximum aggregate principal amount of $13,000,000 within the boundaries of Area A of the
District, and bonded indebtedness in the maximum aggregate principal amount of $13,000,000 .
within the boundaries of Area B of the District;provided that in no event shall the total bonded
indebtedness of the District exceed $13,000,000.
Section 3. The indebtedness to be incurred in each improvement area of the District is
for the purpose of financing the costs of the Facilities, as provided -in-the Resolution of
Formation including, but not limited to, the costs of issuing and selling bonds to finance the
Facilities and the costs of the City in administering the respective improvement area of the
District.
Section 4. The whole of Area A of the District shall pay for the bonded indebtedness
with respect to Area A through the levy of the special tax. The special tax for Area A is to be
apportioned in accordance with the formula set forth in Exhibit A to the Resolution of
Formation. The whole of Area B of the District shall pay for the bonded indebtedness with
respect to Area B through the levy of the special tax. The special tax for Area B is to be
apportioned in accordance with the formula set forth in Exhibit B to the Resolution of
Formation.
Section 5. The maximum amount of bonded indebtedness to be incurred for Area A of
the District is $13,000,000 and the maximum term of the bonds to be issued shall in no event
exceed forty (40) years. The maximum amount of bonded indebtedness to be incurred for Area
B of the District is $13,000,000 and the maximum term of the bonds to be issued shall in no
event exceed forty (40) years. Notwithstanding the foregoing, in no event shall the total
bonded indebtedness of the District,including both improvement areas,exceed$13,000,000.
-2-
Res. No. 2002-39
Section 6. The bonds for each improvement area shall bear interest at a rate or rates not
to exceed the maximum interest rate permitted by applicable law at-the time of sale of the
bonds, payable semiannually or in such other manner as this City Council or its designee shall
determine, the actual rate or rates and times of payment of such interest to be determined by
this City Council or its designee at the time or times of sale of the bonds.
Section 7. The proposition of incurring the bonded indebtedness herein authorized for
each improvement area of the District shall be submitted to the qualified electors of the
respective improvement area of the District and shall be consolidated with elections on the
proposition of levying special taxes within such improvement area of the District and the
establishment of an appropriations limit for such improvement area of the District pursuant to
Section 53353.5(a) of the Act. The time, place and conditions of said election shall be as
specified by separate resolution of this City Council.
Section 8. This Resolution shall take effect upon its adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 3rd day of June 2002.
Mayor
ATTEST: APPROVED AS TO FORM:
• G���ti'�10�1^ .' r
City Clerk d -ev at "dZ City Attorney
REVIEWED AND APPROVED: INITIATED AND APPROVED:
CitrAdministrator Director of Economic Development
08003.07:J6157
4/19/02
-3-
Res. No. 2002-39
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 3rd
day of June,.2002 by the following vote:
AYES: Green, Dettloff, Boardman, Cook, Winchell, Bauer
NOES: None
ABSENT: Houchen (out of room)
ABSTAIN: None
City Clerk and ex-officio derk of the
City Council of the City of
Huntington Beach, California
The f wegokV k uu nent is a comsat
cwy of ft ocGbW on No In Me office.
An" ' 07,12 20 pZZ
CONNIE BROCKWAY
ti . can the My
Coundl tf�e y of Hunthvton Bewh,
caNfomla.
By Deputy
RESOLUTION NO.2002-40
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH CALLING SPECIAL ELECTION
WITHIN IMPROVEMENT AREA A AND WITHIN
IMPROVEMENT AREA B OF THE CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
WHEREAS, on this date, this City Council adopted a resolution entitled "A Resolution
of the.City Council of the City of Huntington Beach of Formation of Improvement Area A and
Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park)" (the "Resolution of Formation'), ordering the formation of
Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park) ("Area A"), and Improvement Area B of the City of
Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park)
("Area B"), authorizing the levy of a special tax on property within Area A and within Area B
and preliminarily establishing an appropriations limit for Area A and for Area B;and
On this date, this City Council also adopted a resolution entitled "A Resolution.of the
City Council of the City of Huntington Beach Determining the Necessity to Incur Bonded
Indebtedness Within Improvement Area A, and within Improvement Area B, of the City of
Huntington Beach Community Facilities District No.2002-1 (McDonnell Centre Business Park)"
(the "Resolution to Incur Indebtedness"), determining the necessity to incur bonded
indebtedness in the maximum aggregate principal amount of $13,000,000 for each of Area A
and of Area B (but not more than $13,000,000 in total for both areas) upon the security of the
special tax to be levied within Area A and Area B,respectively;and
Pursuant to the provisions of said resolutions, the propositions of the levy of said
special tax, the establishment of the appropriations limit and the incurring of the bonded
indebtedness for each of Area A and of Area B is to be submitted to the qualified electors of
Area A and Area B, respectively, as required by the provisions of Chapter 3.56 (commencing
with Section 3.56.010) of the Municipal Code of the City of Huntington Beach (the"Code") and,
as applicable under the Code, the Mello-Roos Community Facilities Act of 1982, constituting
Section 53311 et seq. of the California Government Code (the "Act," and, together with the
Code, the "Law").
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington
Beach as follows:
Section 1. Pursuant to the Code and Sections 53325.7, 53326 and 53351 of the-Act, the
issues .of the .levy of said special tax, the incurring of bonded indebtedness and the
establishment of said appropriations limit for. Area A shall be submitted to the qualified
electors of Area A at an election called therefor as provided below. Pursuant to the Code and
Sections 53325.7, 53326 and 53351 of the Act, the issues of the levy of said special tax, the
incurring of bonded indebtedness and the establishment.of said appropriations limit for Area B
Res.No.2002-40
shall be submitted to the qualified electors of Area B at an election called therefor as provided
below.
Section 2. As authorized by Section 53353.5 of the Act, the three propositions described
in paragraph 1 above for each of Area A and Area B shall be combined into a single ballot
measure for Area A and for Area B,respectively,.the forms of which measures being as set forth
in the form of ballot attached hereto as Exhibit A and by this reference incorporated herein.
The form of the ballot in Exhibit A is hereby approved.
Section 3. This City Council hereby finds that fewer than 12 persons have been
registered to vote within the territory of Area A for each of the ninety (90) days preceding the
close of the public hearings heretofore conducted and concluded by this City Council for the
purposes of these proceedings. Accordingly, and pursuant to the Code and Section 53326(b) of
the Act, this City Council finds that for purposes of these proceedings the qualified electors for
Area A are the owners of land within Area A that may be subject to the levy of special taxes
and that the vote with respect to Area A shall be by said landowners or their authorized
representatives, each having one vote for each acre or portion thereof such landowner owns in
Area A as of the close of the public hearings.
This City Council hereby finds that fewer than 12 persons have been registered to vote
within the territory of Area B for each of the ninety (90) days preceding the close of the public
hearings heretofore conducted and concluded by this"Cite Council for the purposes of these
proceedings. Accordingly, and pursuant to the Code and Section 53326(b) of the Act, this City
Council finds that for purposes of these proceedings the qualified electors for Area B are the
owners of land within Area B that maybe subject to the levy of special taxes and that the vote
with respect to Area B shall be by said landowners or their authorized representatives, each
having one vote for each acre or portion thereof such landowner owns in Area B as of the close
of the public hearings.
Section 4. This City Council hereby calls a special election to consider the measures
described in Section 2 above, which election shall be held immediately following adoption of
this Resolution in the Chambers of the City Council of the City of Huntington Beach. The City
Clerk is hereby designated as the official to conduct said election. It is hereby acknowledged
that the City Clerk has on file the Resolution of Formation, a map of the proposed boundaries
of Area A and of Area B, and a sufficient description to allow the City Clerk to determine the
boundaries of Area A and of Area B.
The voted ballots shall be returned to the City Clerk no later than immediately
following the adoption of this Resolution; and when all of the qualified voters have voted, the
election shall be closed.
Section 5. Pursuant to the Code and Section 53327 of the Act, the election shall_be
conducted by mail or hand delivered ballot pursuant to the California Elections Code: This
City Council hereby finds that paragraphs (a), (b), (c) (1) and (c)(3) of Section 4000 of the
California Elections Code are applicable to this special election.
Section 6. This City Council acknowledges that the City Clerk has caused to be
delivered to the qualified elector of Area A, and to the qualified elector of Area B,a ballot in the
-2-
Res.No.2002-40
form set forth in Exhibit A hereto. The ballot indicates the number of votes to be voted by the
landowner with respect to each ballot measure.
The ballot was accompanied by all supplies and written instructions necessary for the
use and return of the ballot. The envelope to be used to return the ballot was enclosed with the
ballot, had the return postage.prepaid, and contained the following: (a) the name and address
of the landowner, (b) a declaration,under penalty of perjury,stating that the voter is the owner
of record or authorized representative of the landowner entitled to vote and is the person
whose name appears on the envelope, (c) the printed name, signature and address of the voter,
(d) the date of signing and place of execution of the declaration pursuant.to clause (b) above,
and (e) a notice that the envelope contains an official ballot and is to be opened only by the City
Clerk.
Analysis and arguments with respect to the ballot measures were waived by the owner
of all of the land in Area A and in Area B that will be subject to the levy of special taxes in its
petition to form the District as well as in the voted ballot, as permitted by the Code and Section
53327(b) of the Act.
Section 7. The City Clerk shall accept the ballot of the qualified elector upon and prior
to the adoption.of this Resolution, whether the ballot was personally delivered or received by
mail. The City Clerk shall have available a ballot which may be marked in the City Council
chambers on the election day by the qualified elector.
Section 8. This.City Council hereby further finds.that the provision of the Act requiring
a minimum of 90 days following the adoption of the Resolution of Formation to elapse before
said special election is for the protection of the qualified electors of Area A and Area B. The
petition previously submitted by the sole owner of land in Area A and in Area B that will be
subject to the levy of special taxes and the voted ballot of the sole qualified elector of Area A
and Area B contain an acknowledgment of a waiver of-any time limit pertaining to the conduct
of the election and of a waiver of any requirement for analysis and arguments in connection
with the election. Accordingly,this City Council finds and determines that the qualified elector
has been fully apprised of and has agreed to the shortened time for the election and waiver of
analysis and arguments, and has thereby been fully protected in these proceedings. This City
Council also finds and determines that the City Clerk has concurred in the shortened time for
the election
Section 9. Pursuant to the Local Agency Special Tax and Bond Accountability Act,
Sections 50075.1 et. seq. and Sections 53410 et. seq. of the California Government Code, (a) the
ballot measures referred to in Section 4 above each contain a statement indicating the specific
purposes of the special tax referenced in the respective ballot measure, the proceeds of the
special tax will be applied only to the purposes specified in the applicable ballot measure, there
shall be created by the.City Treasurer accounts into which proceeds of the special tax levies of
Area A and of-Area B. respectively, will be deposited, and the Director. of Administrative
Services is hereby directed to provide an annual report to this City Council as required by
Section 50075.3 of the California Government Code; and (b) the ballot measures contain a
statement indicating the purpose of the bonds referenced in the respective ballot measure, the
proceeds of the bonds will be applied only to the purpose specified in the applicable ballot
measure, there shall be created by the City Treasurer accounts into which the proceeds of the
-3-
Res.No.2002-40
bonds will be deposited (which need not be separate bank accounts,but which may be separate
general ledger accounts so long as such proceeds can be separately accounted for), and the
Director of Administrative Services is hereby directed to provide an annual report to this City
Council as required by Section 53411 of the California Government Code.
Section 10. The City Clerk is hereby directed to cause to be published in a newspaper of
general circulation circulating within Area A and Area B a copy of this resolution and a copy of
the Resolution to Incur Indebtedness, as soon as practicable after the date of adoption of this
Resolution.
Section 11. This Resolution shall take effect upon its adoption.
PASSED AND ADOPTED by the City.Council of the City of Huntington Beach at a
regular meeting thereof held on the 3rd day of .Tune . 2002.
Mayor.
ATTEST: APPROVED AS TO FORM:
City Clerk 06—d% �6 Z City Attorney
REVIEWED AND APPROVED: INITIATED AND APPROVED:
City dministrator Director of Economic Development
O8003.07J6155
4/19/02
-4-
Res.No.2002-40
Ex.A
EXHIBIT A
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
OFFICIAL BALLOT
Special Tax and Bond Election
(JUNE 3,2002)
This ballot is for a special, landowner election. You must return this ballot in the
enclosed postage paid envelope to the City Clerk of the City of Huntington Beach no later than
immediately after adoption of the resolution of the City Council calling said election, either by
mail or in person.
To vote, mark a cross (X) on the voting line after the word"YES" or after the word"NO". All
marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.
If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of
Huntington Beach and obtain another.
BALLOT MEASURE A: Shall the City of Huntington Beach incur an
indebtedness and issue bonds in one or more series in the maximum aggregate
principal amount of$13,000,000,with interest at a rate or rates not to exceed the
maximum interest rate permitted by law at.the time of sale of such bonds on
behalf of Improvement Area A of the City of Huntington Beach Community
Facilities District No.2002-1 (McDonnell Centre Business Park)("Area A"),the Yes:
proceeds of which will be used only to finance the costs of improvements
specified in the Resolution of Intention to form Area A and the costs of issuing
the bonds as well as the establishment of a bond reserve fund;shall a special tax No:
payable solely from lands within Area A be levied annually upon lands within
Area A to be applied only to the payment of the principal and interest upon such
bonds to be issued and to replenish the reserve fund for the bonds and to pay the
costs of the City in administering Area A; and shall the annual appropriations
limit of Area A be established in the amount of$13,000,000?
BALLOT MEASURE B: Shall the City of Huntington Beach incur an
indebtedness and issue bonds in one or more series in the maximum aggregate
principal amount of$13,000,000,with interest at agate or rates not to exceed the
maximum interest rate permitted by law at the time of sale of such bonds on
behalf of Improvement Area B of the City of Huntington Beach Community
Facilities District No.2002-1 (McDonnell Centre Business Park)("Area B"),the Yes:
proceeds of which will be used only to finance the costs of improvements
specified in the Resolution of Intention to form Area B and the costs of issuing
the bonds as well as the establishment of a bond reserve fund;shall a special tax No: _
payable solely from lands within Area B be levied annually upon lands within
Area B to be applied only to the payment of the principal and interest upon such
bonds-to be issued and to replenish the reserve fund for the bonds and to pay the
costs of the City in administering Area B; and shall the annual appropriations
limit of Area B be established in the amount of$13,000,000?
Res.No.2002-40
Ex.A
By execution in the space provided below,you also indicate your waiver of the time limit
pertaining to the conduct of the election and any requirement for analysis and arguments with
respect to the ballot measure, as such waivers are described and permitted by Sections 53326(a)
and 53327(b)of the California Government Code.
Number of Votes for Ballot Measure A: 41
Number of Votes for Ballot Measure B: -49
Property Owner: McDonnell Douglas Corporation
By:
Its:
Res. No. 2002-40
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 3rd
day of June, 2002 by the following vote:
AYES: Green, Dettloff, Boardman, Cook,Winchell, Bauer
NOES: None
ABSENT: Houchen (out of room)
ABSTAIN: None
City Clerk and ex-officio Clerk of the.
City Council of the City of
Huntington Beach, California
The fompohq hcsmmm t is a collect
copy of the original on so In ft ofte.
Atteat 07-` 20 OZ
CONNIE BROCKWAY
citycan x o Cleiko the Chy
council the Huntington Beach.
CaNOMIa.
By Deputy
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1 z
(MCDONNELL CENTRE BUSINESS PARK) o
o
OFFICIAL BALLOT
Special Tax and Bond Election
(June 3, 2002)
This ballot is for a special, landowner election. You must return this ballot in theNnclRried
postage paid envelope to the City Clerk of the City of Huntington Beach no later than immediately Per
adoption of the resolution of the City Council calling said election,either by mail or in person.
To vote, mark a cross (X) on the voting line after the word "YES" or after the word "NO". All
marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.
If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of
Huntington Beach and obtain another.
BALLOT MEASURE A: Shall the City of Huntington Beach
incur an indebtedness and issue bonds in one or more series in the
maximum aggregate principal amount of $13,000,000, with interest at a
rate or rates not to exceed the maximum interest rate permitted by law at
the time of sale of such bonds on behalf of Improvement Area A of the /
City of Huntington Beach Community Facilities District No. 2002-1 Yes: _/ '
(McDonnell Centre Business Park) ("Area A"), the proceeds of which
will be used only to finance the costs of improvements specified in the
Resolution of Intention to form.Area A and the costs of issuing the bonds No
as well as the establishment of a bond reserve fund; shall a special tax.
payable solely from lands within Area A be levied annually upon lands
within Area A to be applied only to the payment of the principal and
interest upon such bonds to be issued and to replenish the reserve fund
for the bonds and to pay the costs of the City in administering Area.A;
and shall the annual appropriations limit of Area A be established in the
amount of$13,000,000?
BALLOT MEASURE B: Shall the City of Huntington Beach incur
an indebtedness and issue bonds in one or more series in the maximum
aggregate principal amount of$13,000,000,with interest at a rate or rates
not to exceed the maximum interest rate permitted by law at the time of
sale of such bonds on behalf of Improvement Area B of the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Yes:
Centre Business Park) ("Area B"), the proceeds of which will be used
only to finance the costs of improvements specified in the Resolution of
Intention to form Area B and the costs of issuing the bonds as well as the No: _
establishment of a bond reserve fund; shall a special tax payable solely
from lands within Area B be levied annually upon lands within Area B to
be applied only to the payment of the principal and interest upon such
bonds to be issued and to replenish the reserve fund for the bonds and to
pay the costs of the City in administering Area B; and.shall the annual
appropriations limit of Area B be established in the amount of
$13,000,000?
-1-
By execution in the space provided below, you also indicate your waiver of the time limit
pertaining to the conduct of the election and any requirement for analysis and arguments with respect to
the ballot measure,as such waivers are described and permitted by Sections 53326(a) and 53327(b)of the
California Government Code.
Number of Votes for Ballot Measure A: 41
Number of Votes for Ballot Measure B: 49
The property that is the subject of this
Ballot is identified for Ballot Measure
A as Orange County Assessor Parcel
Nos. 195-111-34 (portion), 195-111-24,
and 195-111-31;and for Ballot Measure
B is identified as Orange County
Assessor Parcel Nos. 195-111-29
(portion),195-111-34(portion) and 195-
111-03.
Property Owner: McDonnell Douglas Corporation
By:
n Ja
Its: S
-2-
q .NCISCO
V
w_► s0-5 io $70.57e t0.570
Land Owner and Voter. I C 11 Y G �' • 1 N METER '
McDonnell Douglas Corporation f leeC/ ALO, T �!` �r � HUIi T ii-k,T 0'i E E CH. CA � 3804335
c/o Boeing Realty Corporation
3760 Kilroy Airport Way#500 1001 MAY 2 9 N 12: 1 C.
Long Beach,CA 90806
Attn:Jim Schulte
a
1 No c
' N ! c G
O
Q mt
i
� N �
in
To: City Clerk w
City of Huntington Beach z
2000 Main Street
Huntington Beach, CA 92648 a
I hereby declare under penalty of perjury that
the voter listed on the enclosed ballot is the
owner of record or the authorized
representative of the land owner entitled to
vote said ballot.
Executed on 2 12� ,2002, Attention: This envelope contains an official ballot and is
at N Co ,California. to be opened only by the canvassing board with respect
to the City of Huntington Beach Community Facilities
District No. 2002-1 (McDonnell Centre Business Park)
McDonnell Douglas Corpo on special election to be held on June 3,2002.
By:
Its:_ en Il Barn
RESOLUTION NO.2002-41
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH DECLARING RESULTS OF SPECIAL
ELECTION AND DIRECTING RECORDING OF NOTICE OF
SPECIAL TAX LIEN
WHEREAS, in proceedings heretofore conducted by this City Council pursuant to the
provisions of Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of the
City.of Huntington Beach (the "Code") and, as applicable under the Code, the Mello-Roos
Community Facilities Act of 1982, constituting .Section 53311 et seq. of the California
Government Code (the "Act," and, together with the Code, the "Law"), this City Council on
this date adopted a resolution entitled "A Resolution of the City Council of the City of
Huntington Beach Calling Special Election Within Improvement Area A and within
Improvement Area B of the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park)",calling-for a special election of the qualified electors within
Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park) ("Area A") and of the qualified electors within Improvement
Area B of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell
Centre Business Park) ("Area B"); and
Pursuant to the terms of said resolution, which are by this reference incorporated
herein, the special election was held on this date, and the City Clerk has on file a Canvass and
Statement of Results of Election,a.copy of which is attached hereto as Exhibit A;and
This City Council has reviewed the canvass and hereby approves it.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington
Beach as follows:
Section 1. The issues presented at the special election were the incurring of a bonded
indebtedness in the maximum aggregate principal amount for each of Area A and Area B of
$13,000,000, the levy of a special tax within each of Area A and Area B to be levied in
accordance with the respective formula for such improvement area heretofore approved by this
City Council by its resolution adopted this date entitled "A Resolution of the City Council of
the City of Huntington Beach of Formation of Improvement Area A and Improvement Area B
of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre
Business Park)," and the approval of an appropriations limit for each of Area A and Area B of
not to exceed$13,000,000 pursuant to said resolution.
Section 2. Pursuant to the canvass of the special election on file with the City Clerk, the
issues presented at the special election with respect to Area A were.approved by the qualified
elector of Area A by more than two-thirds of the votes cast at the special election regarding
Area A, and the issues presented at the special election with respect to Area B were approved
by the qualified elector of Area B by more than two-thirds of the votes cast at the special
election regarding Area B.
Res.No.2002-41
Section 3. Pursuant to such voter approval, Area A is hereby declared to be fully
formed with the authority to incur bonded indebtedness and to levy special taxes as heretofore
provided in these proceedings and in the Law,and Area B is hereby declared to be fully formed
with the authority to incur bonded indebtedness and to levy special taxes as heretofore
provided in these proceedings and in the Law.
Section 4. It is hereby found that all prior proceedings and actions taken by this City
Council with respect to each of Area A and Area B were valid and in conformity with the Law.
Section 5. The City Clerk is hereby directed to execute and cause to be recorded in the
office of the County Recorder of the County of Orange a notice of special tax lien for Area A
and Area B in the form required by the Act, said recording to occur no later than fifteen.days
following adoption by the City Council of this Resolution.
Section 6. This Resolution shall take effect upon its adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 3rd day of June 2002.
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk C --0 s City Attorney
REVIEWED AND APPROVED: INITIATED AND APPROVED:
City A trator Director of EconoKuc Development
08003.07:]6156
4/19/02
Res.No.2002-41
Ex.A
EXHIBIT A
CANVASS AND STATEMENT OF RESULT OF ELECTION
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
I hereby certify that on June 3, 2002, I canvassed the returns of the special elections held
on June 3, 2002, in Improvement Areas A and B of the City of Huntington Beach Community
Facilities District No. 2002-1 (McDonnell Centre Business Park) and the total number of ballots
cast in said election and the total number of votes cast for and against the respective ballot
measures are as follows and the totals as shown for and against the measure are full, true and
correct:
Qualified
Landowner Votes
Votes Cast YES NO
Improvement Area A of the City of
Huntington Beach Community
Facilities District No. 2002-1
(McDonnell Centre Business Park) .41 41 41 0
Special Tax and.Bond Election June 3,
2002.
BALLOT MEASURE A: Shall the City of Huntington Beach incur an indebtedness and
issue bonds in one or more series in the maximum aggregate principal amount of$13,000,000,
with interest at a rate or rates not to exceed the maximum interest rate permitted by law at the
time of sale of such bonds on behalf of Improvement Area A of the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park) ("Area A"), the
proceeds of which will be used only to finance the costs of improvements specified in the
Resolution of Intention to form Area A and the costs of issuing the bonds as well as the
establishment of a bond reserve fund; shall a special tax payable solely from lands within Area
A be levied annually upon lands within Area A to be applied only to the payment of the
principal and interest upon such bonds to be issued and to replenish the reserve fund for the
bonds and to pay the costs of the City in administering Area A; and shall the annual
appropriations limit of Area A be established in the amount of$13,000,000?
Qualified
Landowner Votes
Votes Cast YES NO
Improvement. Area B of the City of
Huntington Beach Community
Facilities District No. 2002-1
(McDonnell Centre Business Park) 49 49 49 0
Special Tax and Bond Election June 3,
Res.No.2002-41
Ex.A
2002.
BALLOT MEASURE B: Shall the City of Huntington Beach incur an indebtedness and
issue bonds in one or more series in the maximum'aggregate principal amount of$13,000,000,
with interest at a rate or rates not to exceed the maximum interest rate permitted by law at the
time of sale of such bonds on behalf of Improvement Area B of the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park) ("Area B"), the
proceeds of which will be used only to finance the costs of improvements specified in the
Resolution of Intention to form Area B and the costs of issuing the bonds as well as the
establishment of a bond reserve fund; shall a special tax payable solely from lands within Area
B be levied annually upon lands within Area B to be applied only to the payment of the
principal and interest upon such bonds to be issued and to replenish.the reserve fund for the
bonds and to pay the costs of the City in administering Area B; and shall the annual
appropriations limit of Area B be established in the amount of$13,000,000?
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 3 Ada
Y
2002
By:
City Clerk,
City of Huntington Beac
-4-
Res. No. 2002-41
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 3rd
day of June, 2002 by the following vote:
AYES: Green, Dettloff, Boardman, Cook,Winchell, Bauer
NOES: None
ABSENT: Houchen (out of room)
ABSTAIN: None
City Clerk and ex-officio C erk of the
City Council of the City of
Huntington Beach, California
MW foreF ft hournent is a correct
copy of the orWal on fib In this office.
Aft a 20 0 -
CONNIE BROCKWAY
Council the HuntkKpn Beach,
Caifornia.
By Deputy
Quint k Thimmig LLP FINAL
Recorded in Official Records, County of Orange
RECORDING REQUESTED BY AND Darlene Bloom, Interim Clerk-Recorder
AFTER RECORDATION RETURN TO: 111111111111111111111111111111111111111111111 NO FEE
City Clerk 2002050964012:05pm 06118102
City of Huntington Beach 116 32 NO3 17
2000 Main Street 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Huntington Beach,California 92648
This document is solely for thD
official business of the City
of Hunting-tcn Beach, as content- NOTICE OF SPECIAL TAX LIEN I��
plated under Government Code
Sec. 6103 _ncl should be recorded
iTea of charge. Improvement Area A of the.
City of Huntington Beach
Community Facilities District No.2002-1
(McDonnell Centre Business Park)
Pursuant to the requirements of Section 3114.5 of the California Streets and Highways
Code, and the provisions of Chapter 3.56 of the Municipal Code of the City of Huntington
Beach (the "Code") and,as applicable under the.Code, the Mello-Roos Community Facilities
Act of 1982, constituting Section 53311 et seq. of the California Government Code (the "Act,"
and,together with the Code, the "Law"), the undersigned City Clerk of the City of Huntington
Beach (the "City"), County of Orange, State of California, hereby gives notice that alien to
secure payment of a special tax which the City Council of the City authorized, 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
certain public improvements described on Exhibit A. attached hereto and hereby made a part.
hereof.
The special tax is authorized to be levied within Improvement Area A of the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)
(the"Improvement 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 prepaid, 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 in accordance with Section 53330.5 of the Act.
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 provided in Exhibit B hereto.
Notice is further given that upon the recording of this notice in the office of the County
Recorder,the obligation to pay the special tax levy shall become a lien upon all nonexempt real
property within the Improvement Area in accordance with Section 3115.5 of the California
Streets and Highways Code.
The assessor's tax parcel(s) numbers of all parcels or any portion thereof. which are
included within improvement Area, and the name(s) of the owner(s) of the real property
included within the Improvement Area as they appear on the latest secured assessment roll as
of the date of recording of this or as otherwise known to the City, are as set forth in Exhibit C
attached hereto and hereby made a part hereof.
08003.07:J6152A
Reference is made to the boundary map of the Improvement Area recorded at Book 85
of Maps of Assessment and Community Facilities Districts at Pages 3-6 (Instrument No.
20020279386), 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 Improvement Area.
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 Administrative Services of the City of Huntington Beach, City of
Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648, telephone number (714)
536-5236.
By: : l.Ce
City Clerk,
/'I, 00� City of Huntington Beach
-2-
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
ss.
County of
On 17 �� , before me, kle-h/3'1
cfate lN�ma and Title of Officer(e.g., Jane Doe.Notary Ru ic-)
personally appeared
Name(s)of S' er(s)
i
personally known to me
❑ proved to me on the basis of satisfactory
evidence
to be the personN whose names)�'r
subscribed to the within instrument and
!AURA A.NELSON acknowledged to me that+egD"executed
Commission# 1226066 the. same in his�Dthei'r aut orized
NotaryPubric-Colifcrrda capacity(49s), and that by / er r
Orange County signature(s)on the instrument the personjs),or
MYCamME:PIP JU23,2003 the entity upon behalf of which the person(,&)
acted, executed the instrument.
I:
i� WITNESS hand and official seal.
i
Place Notary Seal AWv,e - _Signature of Notary Public - -
OPTIONAL
is Though the information below is not required by law, it may prove valuable to persons relying on the document
is and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached Doculne t r'
i Title or Type of Document:
f Document Date: Number of Pages:
r�
f' Signer's)Other Than Named Above: /`1NLk--/
Capacity(ies) Clai ed by Signer/)
Signer's Name: G(l�c
i. ❑ Individual n„ � � •
I � (�/e
- '� Corporate Officer—Title(s): Top of thumb here
i' ❑ Partner—❑ Limited ❑General
❑ Attorney in Fact
❑ Trustee
❑ Guardian or-Conservator
i ❑ Other:
Signer Is Representing: C
i
0 1999 National Notary Association•9350 De Soto Ave.,P.O.Box 2402•Chatsworth,CA 91313.2402•www.mbonatnotary.org Prod.No.5907 Reorder.Call Toll-Free 1-800-976-6827
EXHIBIT A
IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
DESCRIPTION OF FACILITIES ELIGIBLE TO BE FUNDED BY
IMPROVEMENT AREA A OF THE DISTRICT
FACILITIES
It is intended that Improvement Area A of the District will finance all or a portion of the
costs of any of the following: .
1. The construction of sewer lines in existing Skylab Road,new Delta Lane and new
Astronautics Lane.
2. The construction of streets,curbs,and gutters from the extension of Skylab Road
from its current terminus at Astronautics Lane west to approximately 400 feet
west of new Delta Lane.
3. The construction of streets,curbs, and gutters from the new Delta Lane between
Skylab Road north to new Astronautics Lane.
4. The construction of streets, curbs, and gutters for the new Astronautics Lane
from its current terminus west to Rancho Road.•
5. The construction of street, curbs, and gutters for the new Skylab Lane from new
Astronautics Lane south approximately 200 feet.
6. The construction of the waterline in Rancho Road connecting its current terminus
east of Bolsa Chica Road to the existing waterline north of the Navy Railroad.
7. The construction of onsite waterlines in extended Skylab Road, new Delta Lane
and new Astronautics Lane.
8. The construction of conduit and fixtures for new street lighting in extended
Skylab Road,new Delta Lane, and new Astronautics Lane.
9. The construction of street,curbs, and gutters for the new Delta Lane from Bolsa
Avenue north to Skylab Road.
10. The construction of a waterline in new Delta Lane from Bolsa Avenue to Skylab
Road.
11. The construction of storm drains in new Skylab Road,.new Delta Lane new
Astronautics Lane and new Skylab Lane.
12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane
including modifications to the existing traffic signal.
A-1
13. Roadway improvements at the intersection of Rancho Road and Astronautics
Lane including construction of the new traffic signal.
14. Roadway improvements to Rancho Road consisting of installation of new
sidewalk.
The Improvements to be financed shall include the costs of the acquisition of right-of-
way that is intended to be dedicated by the recording of a final map, the costs of design,
engineering and planning, the costs of any environmental or traffic studies, surveys or other
reports, costs related to landscaping and irrigation, soils testing, permits, plan check and
inspection fees, insurance, legal and related overhead costs, coordination and supervision and
any other costs or appurtenances related to any of the foregoing.
OTHER
Improvement Area A of the District may also finance any of the following:
1. Bond related expenses, including underwriters discount, reserve fund, capitalized
interest,letter of credit fees and expenses,bond and disclosure counsel fees and expenses, bond
remarketing costs,and all other incidental expenses.
2. Administrative fees of the City of Huntington Beach and the Bond trustee or fiscal
agent related to the District and the Bonds.
3. Reimbursement of costs related to the formation of the District advanced by the.City
of Huntington Beach, the landowner in the District,or any party related to any of the foregoing,
as well as reimbursement .of any costs advanced by the City of Huntington Beach, the
landowner in the District or any party related to any of the foregoing,for facilities, fees or other
purposes or costs of the District.
A-2
EXFIIBII'B
IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax applicable to each Assessor's Parcel of Taxable Property in the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)
(herein "CFD No. 2002-1") shall be levied and collected according to the special tax liability
determined by the Administrator through the application of the procedures described below.
The real property in Improvement Area A of CFD No. 2002-1, unless exempted by law or by
the provisions hereof,shall be specially taxed for the purposes, to the extent,and in the manner
herein provided.
A. DEFINMONS
The capitalized terms hereinafter set forth have the following meanings when used in this Rate
and Method of Apportionment of Special Tax:
Acre or Acreage means the land area of an Assessor's Parcel as shown on the applicable final
map,parcel map,or other parcel map recorded with the County Recorder. If the Acreage of a
particular Parcel is unclear after reference to available maps, the Administrator'shall determine
the appropriate Acreage for that Parcel.
Act means Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of the City
of Huntington Beach and, as applicable, the Mello-Roos Community Facilities Act of 1982, as
amended,being Chapter 2.5(commencing with Section 53311), Part 1, Division 2, of Title 5 of
the Government Code of the State of California.
Administrative Expenses means any or all of the following actual or reasonably estimated costs
directly related to the administration of Improvement Area A of CFD No. 2002-1: the fees and
expenses of any Fiscal Agent (including any fees and expenses of its counsel) employed in
connection with any Bonds; any costs associated with the marketing or remarketing of the
Bonds; costs related to credit enhancement for the Bonds; the expenses of the Administrator
and the City in carrying out their duties under any Indenture, including, but not limited to, the
levy and collection of the Special Tax,the fees and expenses of legal counsel, Bond redemption
expenses,charges levied by the County or any division or office thereof in connection with the
levy and collection of the Special Tax, audits, and amounts needed to pay arbitrage rebate to
the federal government with respect to the Bonds; costs associated with complying with
continuing disclosure requirements; costs associated with responding to public inquiries
regarding Special Tax levies and appeals; attorneys' fees and other costs associated with
commencement or pursuit of foreclosure for any delinquent Special Tax; and all other costs and
expenses of City, the Administrator, the County; and any Fiscal Agent, escrow agent or trustee
related to the administration of Improvement Area A of CFD No. 2002-1 or any Bonds.
Administrator means the Director of Administrative Services of the City or such other person or
entity designated by the City Administrator or the City Council to administer the Special Tax
according to this Rate and Method of Apportionment of Special Tax.
B-i
Assessor's Parcel or Parcel means a lot, parcel or airspace parcel shown on an Assessor's
Parcel Map with an assigned Assessor's Parcel Number that is located within Improvement
Area A of CFD No. 2002-1.
Assessor's Parcel Map means an official map of the Assessor of the County designating Parcels
by Assessor's Parcel Number.
Bonds mean any bonds or other debt (as defined in Section 53317(d) of the Act), whether in
one or more series, issued by the City for Improvement Area A of CFD No. 2002-1 under the
Act.
Bond Fund means the fund or account created pursuant to the Indenture in which the collections
of the Special Tax are deposited.
Bond Year means the one year period from September 2 to the following September 1.
City means the City of Huntington Beach:
City Council means the City Council of the City of Huntington Beach, acting as the legislative
body of CFD No. 2002-1.
County means the County of Orange.
Delinquencies mean the amount, if any, equal to delinquencies in payment of the Special Tax
levied in Improvement Area A of CFD No. 2002-1 in the previous Fiscal Year.
Exempt Land means (1) any real property within the.boundaries of Improvement Area A of
CFD No. 2002-1 which is owned by a governmental agency for.public right of way purposes,
including,but not limited to,streets,water well production facilities, public walkway corridors,
and slopes as determined in each Fiscal Year by the Administrator, and (2) any Assessor's
Parcel for which the Special Tax has been paid in full.
Fiscal Agent means the fiscal agent or trustee who is a party to the Indenture.
Fiscal Year means the period commencing on July 1 and ending on the following June 30, in any
year in which the Bonds are outstanding.
Improvement Area A means any real property within the boundaries of CFD No. 2002-1 as
depicted on the boundary map for said CFD entitled "Proposed Boundaries of The City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park),
County of Orange, State of California" and approved by the City Council. Said Improvement
.Area A is comprised generally of Parcels 4 through 11, the proposed public well site and
adjacent portions of the following roadway right-of-way; Skylab Road, Astronautics Road,
Street'B' and Street 'C'; as shown on Tentative Parcel Map No. 2001-122 on file with the City.
Said Improvement Area A is also envisioned to include Parcels 1 through 8, the proposed public
well site and adjacent portions of the following roadway right-of-way; Skylab Road, Delta
Lane and Astronautics Lane; as shown on proposed Final Parcel .Map No. 2001-226 and
encompassing approximately.40.339 gross acres and 33.286 net taxable acres. In no case shall
the net taxable acres in Improvement Area A be less than 33.286.
Indenture means the indenture, fiscal agent agreement, resolution or other instrument approved
pursuant to the Resolution of Issuance and pursuant to which Bonds are issued, as modified,
B-2
amended and/or supplemented from time to time, and any instrument replacing or
supplementing the same.
Infrastructure means the public improvements authorized to be financed by Improvement Area
A of CFD No. 2002-1 in accordance with the terms of the Act.
Interest Payment Date means any date on which regularly scheduled principal and/or interest
payments are due on the Bonds.
Maximum Special Tax means, with respect to any Assessor's Parcel of Taxable Property, the
maximum Special Tax determined in accordance with Section C that can be levied in any Fiscal
Year on such Assessor's Parcel.
Outstanding Bonds means all Bonds that are then outstanding under the Indenture.
Property Owner means the owner of an Assessor's Parcel within the boundaries of
Improvement Area A of CFD No. 2002-1 as determined from the latest equalized tax rolls of
the County or as proved through some other acceptable manner to the Administrator.
Reserve Fund means the fund of that name created under the Indenture.
Special Tax means the special tax to be levied pursuant to the Act and this Rate and Method of
Apportionment of Special Tax on Taxable Property within Improvement Area A of CFD No.
2002-1.
Special Tax Requirement means the amount required in any Fiscal Year for Improvement Area A
of CFD No. 2002-1 necessary: (i) to pay the.annual scheduled debt service on the Outstanding
Bonds due in the next succeeding Bond Year which commences in such Fiscal Year, (ii).to.pay
any amounts required to establish or replenish the Reserve Fund for all Outstanding Bonds, (iii)
to pay Administrative Expenses due and estimated by the Administrator to become due prior
to the next levy of the Special Tax, and (iv) to cure any Delinquencies in the payment of
principal or interest on indebtedness of Improvement Area A of CFD No. 2002-1. The Special
Tax Requirement shall be reduced by the following: (i) any credit from interest earnings on the
Reserve Fund or other Bond funds the earnings on which are available under the terms of the
Indenture to pay debt service on the Bonds, (ii) the collection of delinquent Special Tax.since the
last Special Tax Levy, and (iii) any other funds legally available to apply against the Special
Tax Requirement as determined by the Administrator.
Taxable Property means all of the Assessor's Parcels within the boundaries of Improvement
Area A of CFD No. 2002-1,which are not Exempt Land, or otherwise exempt from the Special
Tax pursuant to the Act.
B. IDENTIFYING TAXABLE PROPERTY
On or about each July V. the Administrator shall determine which Assessor's Parcels in
Improvement Area A of CFD No. 2002-1 are Taxable Property. The Taxable Property shall be
subject to the Special Tax in accordance with the rate and method of apportionment_described
'in Sections C and D below.
B-3
C. MAXIMUM SPECIAL TAX
The Maximum Special Tax for each Parcel of Taxable Property is $11,200 per Acre commencing
in Fiscal Year 2002-2003 and such Maximum Special Tax shall increase in every Fiscal Year
thereafter by two percent(2%) of the Maximum Special Tax for the prior Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2002-2003, and during each Fiscal Year thereafter, the City
Council or its designee shall levy the Special Tax proportionally on each Assessor's Parcel of
Taxable Property at up to one hundred percent (100%) of the Maximum Special Tax for that
Fiscal Year, as described in Section C, above,as needed to satisfy the Special Tax Requirement.
E. LD011TATIONS
No Special Tax shall be levied on an Assessor's Parcel after such Assessor's Parcel becomes
Exempt Land.
The Special Tax may be levied and collected on Taxable Property commencing with Fiscal Year
2002-2003, and for each Fiscal Year thereafter, and until the date on which principal and
interest on all Outstanding Bonds have been paid in full (or provision for their payment has
been made). Upon determination by the Administrator that this requirement has been met, the
Special Tax lien shall be removed from all Assessor's Parcels in Improvement Area A of CFD
No. 2002-1.
F. MANNER OF COLLECTION
The Special Tax shall be collected at the same time as ordinary ad valorem property taxes,
provided, however, that CFD No. 2002-1 may at any time directly bill the Special Tax, may
collect the Special Tax at a different time or manner if necessary to meet its financial
obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's
Parcels as permitted by the Act.
G. PREPAYMENT OF SPECIAL TAX
The following definitions apply solely to this Section G.:
Amount of Current Special Taxes Paid means the amount of the Special Tax levied against the
subject Assessor's Parcel that was paid to the County or the City by the owner of the subject
Assessor's Parcel and would be applied to debt service payments on the Redemption Date and
the Interest Payment Date immediately following the Redemption Date.
Outstanding Bonds means all Bonds which are deemed to be outstanding under the Indenture
the day_immediately preceding the next Interest Payment Date.
Redemption Date means the Interest Payment Date on which Bonds are proposed to be
redeemed from the prepayments of the Special Tax.
B-4
1. Prepayment in Full
The Special Tax obligation applicable to such Assessor's Parcel in Improvement Area A may be
fully prepaid and the obligation of such Assessor's Parcel to pay the Special Tax permanently
satisfied as described herein. The owner intending to prepay the Special Tax obligation on one
or more Assessor's Parcel(s) shall provide the Administrator with written notice of intent to
prepay. It shall be a condition precedent to prepayment that the owner intending to prepay the
Special Tax must pay to the County all past due Special Tax on the Assessor's Parcel to be
prepaid and provide proof of payment to the Administrator. Promptly following receipt of
such notice, the Administrator shall notify the owner of such Assessor's Parcel(s) of the
prepayment amount of such Assessor's Parcel(s). The Administrator. may charge a reasonable
fee for providing this figure. Prepayment must be made not less than 90 days prior to the next
occurring date that Bonds may be redeemed from the proceeds of such prepayment pursuant to
the Indenture.
The Prepayment Amount(defined below) shall be calculated as summarized below (capitalized
terms as defined above or below):
Bond Redemption Amount
Plus Redemption Premium
Plus Defeasance Amount
Plus Administrative Fees and Expenses
Less Reserve Fund Credit
Less Amount of Current Special Taxes Paid
Total: Equals Prepayment Amount
As of. the proposed date of prepayment, the Prepayment Amount: (defined below) shall be
calculated as follows:.
Para riaph No.
1. For Assessor's Parcels of Taxable Property intended to be prepaid, compute the
Maximum Special Tax for such Assessor's Parcels for the current Fiscal Year.
2. Divide the Maximum Special Tax computed pursuant to Paragraph 1 by the total
Maximum Special Tax of all Assessor's Parcels of Taxable Property for the current
Fiscal Year.
3. Multiply the quotient computed pursuant to Paragraph 2 by the Outstanding Bonds as
defined in this Section G to compute the amount of Outstanding Bonds to be retired and
prepaid, and round the result up to the nearest multiple of $5,000 (the Bond
Redemption Amount).
4. Multiply the Bond Redemption Amount less the par amount of Bonds scheduled to
mature on the Redemption Date by the applicable redemption premium (the
Redemption Premium).
5. Compute the amount needed to pay interest on the Bond Redemption Amount from the
Interest Payment Date immediately preceding the Redemption Date to the Redemption
Date.
6. Compute the amount the Administrator reasonably expects to derive from the
reinvestment of the Prepayment Amount from the date of prepayment until the
redemption date for the Outstanding Bonds to be redeemed with the prepayment.
7. Add the amounts computed pursuant to Paragraph 5 and subtract the amount
computed pursuant to Paragraph 6(the Defeasance Amount).
B-5
8. Determine the administrative fees and expenses of Improvement Area A associated with
the costs of computation of the prepayment, the costs to invest the prepayment
proceeds, the costs of redeeming Bonds, and the costs of recording any notices to
evidence the prepayment and the redemption(the Administrative Fees and Expenses).
9. Determine the reserve fund credit(the Reserve Fund Credit) which shall equal the lesser
of: (a) the expected reduction in the Reserve Requirement (as defined in the Indenture),
if any, associated with the redemption of Outstanding Bonds as a result of the
prepayment, or(b) the amount derived by subtracting the new Reserve Requirement (as
defined in the Indenture)in effect after the redemption of Outstanding Bonds as a result
of the prepayment from the balance in the reserve fund on the prepayment date, but in
no event shall such amount be less than zero.
10. The Special Tax prepayment is equal to the sum of the amounts computed pursuant to
Paragraphs 3, 4, 7 and 8, less (i) the amounts computed pursuant to Paragraph 9 and
(ii) the Amount of Current Special Taxes Paid(the Prepayment Amount).
11. From the Prepayment Amount,the amounts computed pursuant to Paragraphs 3,4,7 (if
greater than zero), and 9 shall be deposited into the appropriate fund as established
under the Indenture and be used to redeem Outstanding Bonds or make debt service
payments (as appropriate). The amount computed pursuant to Paragraph 8 shall be
retained by the Administrator.
With respect to any Assessor's Parcel that is prepaid,the City Council shall (i) cause a suitable
notice to be recorded in compliance with the Act,to indicate the prepayment of the Special Tax
and the release of the Special Tax lien on such Assessor's Parcel, (ii) notify the County that the
Special Tax,if any,remaining on the secured tax roll for the Assessor's Parcel has been satisfied
and that the County should remove such amounts from the secured tax roll, and_(iii) refund the
owner,for, any Special Tax payments made on the Assessor's-Parcel after the date of
prepayment. From and after the prepayment, the obligation of such Assessor's Parcel to pay
the Special Tax shall cease.
Notwithstanding the foregoing,no Special Tax prepayment shall be allowed unless the amount
of the Maximum Special Tax that may be levied on Taxable Property within Improvement Area
A of CFD No. 2002-1 after the proposed prepayment is at least 1.1 times the maximum annual
debt service on all Outstanding Bonds.
2. Prepayment in Part
The Maximum Special Tax on an Assessor's Parcel of Taxable Property may be partially
prepaid. The amount of the prepayment shall be calculated as in Section G.1, except that a
partial prepayment shall be calculated according to the following formula:
PP = (PHxF) + G
Where these terms are defined as follows:
PP = the partial prepayment..
PH -- the Prepayment Amount calculated according to Section. G.1, minus the amounts .
determined in Paragraph No. 8 of Section G.1.
F = the percent by which the owner of an Assessor's Parcel(s) is partially prepaying the
Maximum Special Tax.
G = the amounts determined in Paragraph No. 8 of Section G.1.
B-6
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax
shall notify the Administrator of (i) such owner's intent to partially prepay the Maximum
Special Tax, and (ii) the percentage by which the Maximum Special Tax shall be prepaid. The
Administrator shall promptly provide the owner with a statement of the amount required for
the partial prepayment of the Maximum Special Tax for an Assessor's Parcel following receipt
of the request.
With respect to any Assessor's Parcel that is partially prepaid, CFD No. 2002-1 shall (i)
distribute the funds remitted to it according to Paragraph 11 of Section G.1, and (ii) indicate in
the records of Improvement Area A of CFD No. 2002-1 that there has been a partial
prepayment of the Maximum Special Tax and that a portion of the Maximum Special Tax equal
to the outstanding percentage (i.e., 100% - F) of the remaining Maximum Special Tax shall
continue to be authorized to be levied on such Assessors Parcel pursuant to Section D.
H. PROPERTY OWNER APPEALS OF SPECIAL TAX LEVIES
Any property owner claiming that the amount or application of the Special Tax is not correct
and requesting a refund may file a written notice of appeal and refund to that effect with the
Administrator not later than one calendar year after having paid the Special Tax that is
disputed. The Administrator shall promptly review the appeal,and if necessary, meet with the
property owner, consider written and oral evidence regarding the amount of the Special Tax,
and decide the appeal. If the Administrator's decision requires that the Special Tax be
modified or changed in favor of the property owner,a cash refund shall not be made (except for
the last year of the levy), but an adjustment shall be made to the next Special Tax levy. Any
dispute over the decision of the Administrator shall be referred to the City Council and the
decision of the City Council shall be.final. This procedure shall.be exclusive and its exhaustion
by any property owner shall be a condition precedent to any legal action by such owner:
B-7
EXHIBIT C
IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
ASSESSOR'S PARCEL NUMBERS AND OWNERS OF LAND WITHIN
Orange County Assessor's
Parcel Numbers Owner of Record of Parcel
195-111-34 (portion), McDonnell Douglas Corporation
195-111-24, c/o Boeing Realty Corporation
and 195-111-31 3760 Kilroy Airport Way#500
Long Beach, CA 90806
C-1
fte"FORMED COPY /
N•,Co.P.W akh OMODW Sit'
PROPOSED BOUNDARIES OF J SHEET 1 OF"4
IMPROVEMENT AREAS A AND B OF
aoc THE CITY OF HUNIINGTON BEACH
`"'PM S`A't COMMUNITY FACILITIES DISTRICT NO. 2002-1
(McDONNELL CENTRE BUSINESS PARK),
COUNTY OF ORANGE, STATE OF CALIFORNIA.
1Lr.ssw
}+ SAM QF BEAFi94G4 ZT IN THE OFFICE OF T CHY CLERK OF THE CRY OF LAREBEAMGTON BEAM
} CFO 00.W02-1 BOU7DAi1Y TIE BEARINGS SHOW HEREON ARE BASED UPON OF DAY OF HE L.2002.
THE C0400C OF BOLSA AVENUE SEARING
N69'252D W.PER PARCEL NAP NO.97-190
® E)BFr LAND FLED N BOOK 2( PAGES 3 AND 4 OF PARCEL Come Y,TK CUERR OF THE Lr1Y OF HUNTINGTON BEACH
LAPS.RECORDS Of ORANGE COUNTY.CAL90RNLA
. 1 HEREBY CWn THAT THE WITM NAP SIOFOLC PROPOSED BOUNDARIES OF UV M 04
WROVEMENTAFFA A AREAS A NO B OF THE CRY OF MMflKTON BEACH COYWNITY FAQURES DISTRICT NC.
2002-1 Ouco maL cFxrRE B1A0LE55 PARIQ.COUMY Of ORANGE STATE OF WORK&
® 103 APPROVED BY LIE CIF COIRLCL K TIE T7f'7 Of)ARRDICM BERM 9 A FEW"11WNG
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SEE SHEET 4 MR 1LAP.' CONME BROCKWAY.TIE 67Y CLERK OF THE CRY OF NUN P CTON BEACH
DUALS AND OWE1SIOt6.
. RECOHD410 REOUFSTED W.CLAY Of Nl9RNGIDN BEALT6
FDID TmAUAY OF AMU- .2002.Ar THE HOUR OFS�LO'oUmN-LAI.IN
CURVE TABLE 8 YVS OF ASSESSLOU AND CDIUUDIY FACRM DISTNICR AT
CURVE DELTA I RADIUS LENGTT PAGE M' N THE OFFTCE OF T)E COUNTY RECORDER N THE COUMrf OF ORANIM
C1 89.4222' 2500 3914 STATE OF CAUFORidA
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SHEET 2 OF 4
PROPOSED BOUNDARIES OF
IMPROVEMENT AREAS A AND B OF
THE CITY OF HUNIINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(MCDONNELL CENTRE BUSINESS PARK),
COUNTY OF ORANGE, STATE OF CALIFORNIA.
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PROPOSED BOUNDARIES OF SHEET 3 OF 4
IMPROVEMENT AREAS A AND B OF
THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO. 2002 1
(McDONNELL CENTRE BUSINESS PARK),
COUNTY OF.ORANGE, STATE OF CALIFORNIA.
PAIICEL.-
PARCEL 6 AND PARCEL 3 AS SHOWN ON THE IMP FILED N BOOK 1.PAGES 3 .
THROUGH S OF PARCEL 114%N THE OFFICE OF THE COUNTY RECORDER OF
ORANGE COUNTY.CADDRNK
D(CEPBNO THEREFROM THE LAND INCLUDED WITHIN THE DISTINCTIVE BORDER
OF PARCEL MAP NO.67-424.AS SHOWN ON THE MAP ittID N BOOK 237.
PAGES 4.5.AND 6 OF SAID PARCEL MAPS.
Am Oman=TIE7REFR011 THE AMID INCLUDED WITHIN THE 06 D=K
BORDER OF PARCEL MAP NO.97-108.AS SHOWN ON THE YAP FEED N BOOK
209,PAGES 8 AID 9 OF SAID PARCEL MAPS. .
ALSO EKCEPIINO THEREFROM THE LARD NCWDED WITH THE DISTINOW .
BORDER OF PARCEL MAP NO.97-189,AS SHOWN ON THE MAP FLED N BOOK -
290.PAGO 1 AND 2 OF SAID PARCEL MAP'' ,
ALSO EXCEPIMO THEREFROM THE LAND NCUA)ED WITHIN THE WNCRYE .s
BORDER OF PARCEL YAP NO.97-190.AS 24OWN ON HAP FILED M BOOK 209.
PAGES 3 AND 4 OF SAID PARCEL MAPS.
ALSO DICEPINO THEREFROM PARCEL 4 OF PARCEL MAP NO.95-IW AS
SNOWY/ON THE MAP FLED N BOOK 296.PAGES 3 AND 4 OF SAID PARCEL -
14AP3.
PARCELS
PARCEL A OF PARCEL YAP 97-190.N THE CRY OF HUNTNGTON BFACK .
COUNTY OF ORANGE.STATE OF CALMINIk AS SHOWN 0E THE MAP FILED N
BOOK 292.PAGES 3 AND 4 OF PARCELS MAPS.IN THE OFFICE OF THE COUNTY
RECORDER OF SAD COUNTY.
PAIIS.>' '-
TINT PORTION OF SIMAB REAM N THE CITY OF HUNTNGTON BEACH,COUNRY
OF ORANGE STATE OF CQ FDF*4k AS SHOWN ON PARCEL MAP NO.95-186.
FLED N BOOK 296.PAGES 3 AND 4 OF PARCEL IMPS.N THE OFFICE OF THE
COUNTY RECORDER OF SAID COINTY.LYING WESTERLY OF THE FOLLOWNIG
DESCRIBED LNE
BEGINNING AT THE WESMY T00 045 OF THAT CERTAIN COURSE SHOW AS
'NORM 69'24'21'WEST 50261 FEET ON THE NORM LINE OF PARCEL 4 OF SAID
MAP.THENCE NORTH IMY N A DIRECT ENE TO THE WESTERLY 7E76eRR OF _
THAT CERTAIN COURSE SHOWN AS'DRRN 8724721'WEST 592-M FEET'ON THE
SOUTH LINE OF PARCEL 1 OF PARCEL MW NO,97-19D.FILM N BOOK 299.
PAGES 3 AND 4 OF PARCEL MAPS.N SAID OFFICE OF THE COUNTY
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5.,
ORDINANCE NO.3557
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
LEVYING SPECIAL TAXES WITHIN IMPROVEMENT AREA A
AND IMPROVEMENT AREA B OF THE CITY OF
HUNTINGTON BEACH COMMUNITY FACILITIES DISTRICT
NO.2002-1(MCDONNELL CENTRE BUSINESS PARK)
WHEREAS, on April 1, 2002, this City Council of the City of Huntington Beach (the
"City") adopted a resolution entitled "A Resolution of the City Council of the City of
Huntington Beach Declaring Its Intention to Establish a Community Facilities District and to
Authorize the Levy of Special Taxes Therein' (the "Resolution of Intention"), stating its
intention to establish the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park) (the "District") pursuant to the provisions of Chapter 3.56
(commencing with Section 3.56.010)of the Municipal Code of the City of Huntington Beach(the
"Code") and, as applicable under the Code, the Mello-Roos Community Facilities Act of 1982,
constituting Section 53311 et seq. of the California Government Code (the "Act," and, together
with the Code,the"Law"),to finance certain public improvements (the"Facilities");
The Resolution of Intention designated a portion of the District as "Improvement Area
A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre f
Business Park)" ("Area A."), and a portion of the District as "Improvement Area B of the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)"
("Area B"), as authorized by Section 53350 of the Act (Area A and Area B are sometimes
referred to below individually as an "improvement area" and, collectively, as the
"improvement areas");and
Notice was published as required by the Law—relative to the intention of this City
Council to form Area A and Area B of the District and to provide for the Facilities;
This City Council has held a noticed public hearing as required by Law relative to the
determination to proceed with the formation of Area A and Area B and the rate and method of
apportionment of the special tax to be levied within Area A and Area B, respectively,to finance
the costs of the Facilities;
At the public hearing all persons desiring to be heard on all matters pertaining to the
formation of Area A and the formation of Area B and the levy of the special taxes within the
respective improvement areas were heard, substantial evidence was presented and considered
by this City Council and a full and fair hearing was held;
Subsequent to said hearing, this City Council adopted resolutions entitled 'A
Resolution of the.City Council of the City of Huntington Beach of Formation of Improvement
Area A and Improvement Area B of the City of Huntington Beach Community Facilities District
No. 2002-1 (McDonnell Centre Business Park)" (the "Resolution of Formation'), "A Resolution
of the City Council of the City of Huntington Beach Determining the Necessity to Incur Bonded
Indebtedness Within Improvement Area A,and Within Improvement Area B,of the City of
lm/McD CDF/Ord J6153
Ord. No. 3557
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)"
(the "Resolution of Necessity") and"A Resolution of the City Council of the City of Huntington
Beach Calling Special Election Within Improvement Area A and Within Improvement Area B of
the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre
Business Park)", which resolutions established Area A and Area B, authorized the levy of a
special tax within Area A and within Area B, and called an election within Area A and within
Area B on the proposition of incurring indebtedness, levying a special tax and establishing an
appropriations limit within each such improvement area;and
On May 6, 2002 an election was held within Area A and within Area B in which the
eligible landowner elector in each such improvement area approved said propositions for such
improvement area by more than the two-thirds vote required by the Law.
NOW, THEREFORE, the City Council of the City of Huntington Beach ordains as
follows:
Section 1. By the passage of this Ordinance this City Council hereby authorizes and
levies special taxes within Area A of the District pursuant to the Law and Sections 53328 and
53340 of the Act, at the rate and in accordance with the rate and method of apportionment of
special taxes set forth in Exhibit A to the Resolution of Formation which Resolution is by this
reference incorporated herein. The special taxes are hereby levied commencing in fiscal year
2002-2003 and in each fiscal year thereafter until payment in full of any bonds issued by the
City for Area A of the District (the "Area A Bonds") as contemplated by the Resolution of
Formation and the Resolution of Necessity,and all costs of.administering Area A of the District
have been paid.
By the passage of this Ordinance this City Council hereby authorizes and levies special
taxes within Area B of the District pursuant to the Law and Sections 53328 and 53340 of the Act,
at the rate and in accordance with the rate and method of apportionment of special taxes set
forth in Exhibit B to the Resolution of Formation. The special taxes are hereby levied
commencing in the fiscal year for which the levy may be timely transmitted to the County of
Orange for inclusion on the ad valorem tax roll following the date bonds are first issued by the
City for such improvement area (taking into account any capitalized interest funded with bond
proceeds), and in each fiscal year thereafter until payment in full of any bonds issued by the
City for Area B of the District (the "Area B Bonds") as contemplated by the Resolution of
Formation and the Resolution of Necessity, and all costs of administering Area B of the District
have been paid.
Section 2. The City Director of Administrative Services is hereby authorized and
directed each fiscal year to determine the specific special tax rate and amount to be levied for
each parcel of real property within each improvement area of the District, in the manner and as
provided in.the Resolution of Formation._
Section 3. Properties or entities of the State, federal or local governments shall be
exempt from any levy of the special taxes, to the extent set forth in the Rate and Method of
Apportionment of the Special Taxes for each improvement area in the forms attached to the
Resolution of Formation. In no event shall the special taxes be levied on any parcel within an
-2-
Ord. No. 3557
improvement area of the District in excess of the maximum tax specified in said Rate and
Method of Apportionment of the Special Taxes for such improvement area.
Section 4. All of the collections of the special tax for an improvement area shall be
applied solely as provided for in the Resolution of Formation and the ballot measure that
approved the levy of the special tax for such improvement area.
Section 5. The special taxes shall be collected from time to time within an improvement
area as necessary to meet the financial obligations of such improvement area on the secured
real property tax roll.in the same manner as ordinary ad valorem taxes are collected. The
special taxes shall have the same lien priority, and be subject.to the same penalties and the
same procedure and sale in cases of delinquency as provided for ad valorem taxes. In addition,
the provisions of Section 53356.1 of the Act shall apply to delinquent special tax payments. The
Director of Administrative Services is hereby authorized and directed to provide all necessary
information to the auditor/tax collector of the County of Orange and to otherwise take all
actions necessary in order to effect proper billing and collection of the special tax, so that the
special tax shall be levied and collected in sufficient amounts and at the times necessary to
satisfy the financial obligations of each improvement area of the District in each fiscal year until
the Area A Bonds and the Area B Bonds, as applicable, are paid in full and provision has been
made for payment of all of the administrative costs of such improvement area of the District.
Notwithstanding the foregoing, the Director of Administrative Services may collect one
or more installments of the special taxes by means of direct billing by the City of the property
owners within an improvement area of .the District, if, in the judgment of the Director. of
Administrative Services, such means of collection will reduce the administrative burden on the
City in administering the District or is otherwise appropriate in the circumstances. In such
event, the special taxes shall become delinquent if not paid when due as set forth in any such
respective billing to the property owners.
Section 6. The City Treasurer is hereby directed to establish an account for each
improvement area (which need not be a separate deposit account, but may be a separate
general ledger account so long as such proceeds can be separately accounted for) into which
proceeds of the special tax levied for such improvement area will be deposited,and the Director
of Administrative Services is hereby directed to file an annual report with this City Council as .
required by Section 50075.3 of the California Government Code.
Section 7. If for any reason any portion of this Ordinance is found to be invalid,or if the
special tax is found inapplicable to any particular parcel within an improvement area of the
District,by a Court of competent jurisdiction,the balance of this Ordinance,and the application
of the special tax to the remaining parcels within the improvement areas of the District shall not
be affected.
Section 8. This ordinance shall take effect thirty (30) days after its passage.
-3-
Ord. No. 3557
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 17th day of .Tune 2002.
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk City Attorney
REVIEWED AND APPROVED: INYFIATED AND APPROVED:
Ci Administrator. Director of Economic Development
08003.07 j6153
4/19/02
-4-
Ord. No. 3557
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 ordinance was read to said City Council at
a regular meeting thereof held on the 3rd day of June,2002;and was again read to said
City Council at a regular meeting thereof held on the 17th day of June,2002,and was
passed and adopted by the affirmative vote of at least a majority of all the members of
said City Council.
AYES: Green,Boardman,Cook,Houchen,Winchell,Bauer
NOES:. None
ABSENT: Dettloff
ABSTAIN: None
I,Connie Brockway CrN CLERK of the City of
Huntington Beach and ex-officio Clerk of the City
Council,do hereby certify that a synopsis of this
ordinance has been published in the Huntington Beach A�J
Fountain Valley Independent on
52002
In.accordance with.the City Charter of said City City Clerk and ex-officio Clerk
Connie Brockway,City Clerk of the City Council of the City
Depuri City Clerk of Huni�R9�➢f=Mon f"kl Mn
! .
Attest 20 OL
CONNIE BROCKWAY
Cky Clerk and Ido Clerk the
Council at CI o H Ington Beach,
CsNornh.
By Deputy
RESOLUTION NO. 2002-63
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HUNTINGTON BEACH AUTHORIZING THE ISSUANCE OF
SPECIAL TAX BONDS OF THE CITY OF HUNTINGTON BEACH
FOR IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON
BEACH COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK),AND APPROVING
OTHER RELATED DOCUMENTS AND ACTIONS
WHEREAS, this City Council has conducted proceedings under and pursuant to the
provisions of Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of the
City of Huntington Beach (the "Code") and, as applicable under the Code, the Mello-Roos
Community Facilities Act of 1982, constituting Section 53311 et seq. of the California
Government Code (the "Act," and, together with the Code, the "Law"), to form Improvement
Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell
Centre Business Park) (the "Improvement Area"), to authorize the levy of special taxes upon
the land within the Improvement Area, and to issue bonds secured by the special taxes the
proceeds of which are to be used to finance certain public improvements (the"Facilities");and
On June 3, 2002 an election was held'within the Improvement Area and the sole
qualified elector approved the propositions of the incurrence of the bonded debt by the City for
the Improvement Area, the establishment of an appropriations limit for the Improvement Area
and the levy of special taxes in the Improvement Area by more than two-thirds of the votes cast at said special election;and
There have been submitted to this City Council certain documents providing for the
issuance of bonds of the City for the Improvement Area and the use of the proceeds of those
bonds to finance the Facilities anzl-this City Council, with the aid of City staff, has reviewed
said documents and found them to be in proper order;and
On October 15, 2001, this City Council adopted a resolution approving local goals and
policies for community facilities districts (the"Goals and Policies");and
The proposed bond financing program approved by this Resolution is consistent with
the Goals and Policies;and
Following the adoption of this Resolution, all conditions, things and acts required to
exist, to have happened and to have been performed precedent to and in the issuance of said
bonds and the levy of said special taxes as contemplated by this Resolution and the documents
referred to herein exist, will have happened and will have been performed in due time, form
and manner as required by the laws of the State of California, including the Act, and as
required by the Code.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington
Beach as follows:
Res. No. 2002-63
Section 1. Pursuant to the.Law, this Resolution and the Fiscal Agent Agreement
(hereafter defined), special tax bonds of the City for the Improvement Area designated as
"Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-
1 (McDonnell Centre Business Park) Special Tax Bonds" in an aggregate principal amount not
to exceed $13,000,000 (the "Bonds"), are hereby authorized to be issued, and the first series of
such bonds designated "Series 2002-A" in an aggregate principal amount not to exceed
$4,900,000 (the "Series 2002-A Bonds") are hereby authorized to be issued and sold as provided
below. The Series 2002-A Bonds shall be executed in the form set forth in and otherwise as
provided in the Fiscal Agent Agreement. Jurisdiction is hereby reserved to issue the remaining
authorized,but unissued portion of the Bonds.
In connection with the authorization, sale and issuance of the Series 2002-A Bonds, the .
City Council hereby makes the following determinations: (a) pursuant to the Goals and
Policies,(i) the appraisal, dated April 1,2002,of John S. Adams&Associates,Inc. of the land in
the Improvement Area has been prepared consistent with the Goals and Policies and
satisfactory land value to lien ratios exist, (ii) the rate and method of apportionment of special
taxes for the Improvement Area is in compliance with the Goals and Policies, and (iii) the
structure of the proposed financing is consistent with the applicable sections of the Goals and
Policies; (b) the proposed financing satisfies the requirements of a minimum 3:1 value to lien
ratio required by the Goals and Policies; and (c) the sale of the Series 2002-A Bonds at a
negotiated sale as contemplated by the Purchase Contract(defined below) will result in a lower
overall cost.
Section 2. The fiscal agent agreement (the "Fiscal Agent Agreement") with respect to
the.Bonds, in the form on file with the City Clerk, is hereby approved. The Mayor is hereby
authorized and directed to execute.and deliver, and the City Clerk is hereby authorized and
directed to attest, the Fiscal Agent Agreement in substantially said form, with such additions
thereto or changes therein as are approved by the Director of Administrative Services upon
.consultation with the City Attorney and Bond Counsel, including such additions or changes as
are necessary or advisable in accordance with Section 8 hereof, the approval of such additions
or changes to be conclusively evidenced by the execution and delivery of the Fiscal Agent
Agreement by the Mayor. The date,manner of payment,interest rate or rates,interest payment
dates, denominations, form, registration privileges, manner of execution, place of payment,
terms of redemption and other terms of the Series 2002-A Bonds shall be as provided in the
Fiscal Agent Agreement as finally executed.
Section 3. The purchase contract for the Series 2002-A Bonds (the "Purchase Contract")
between the City and Stone &Youngberg LLC(the "Underwriter"),in the form on file with the
City Clerk, is hereby approved. The Director of Administrative Services is hereby authorized
and directed to accept the offer of the Underwriter to purchase the Series 2002-A Bonds
contained in the Purchase Contract (provided that the aggregate principal amount of the Series
2002-A Bonds sold thereby is not in excess of$4,900,000, the net interest cost of the Series 2002-
A:Bonds is not in excess of 7.00%, and the underwriters'discount is not in excess of 2.50% of the
aggregate principal. amount of the Series. 2002-A- Bonds) and to execute and deliver the .
Purchase Contract in said form, with such additions thereto or changes therein as are
recommended or approved by such officer upon consultation with the City Attorney and Bond
Counsel, the approval of such additions or changes to be conclusively evidenced by the
execution and delivery of the Purchase Contract by the Director of Administrative Services.
Res. No. 2002-63
Section 4. The official statement relating to the Series 2002-A Bonds (the "Official
Statement"), in the form on file with the City Clerk, is hereby approved. The City
Administrator is hereby authorized and directed,for and in the name and on behalf of the City,
to execute the Official Statement in said form,with such additions thereto or changes therein as
are recommended or approved by such officer upon consultation with the City Attorney and
Bond Counsel, the approval of such additions or changes to be conclusively evidenced by the
execution and delivery of said Official Statement by the City Administrator.The Underwriter is
hereby authorized to distribute copies of the Official Statement to persons who may be
interested in the purchase of the Series 2002-A Bonds and is directed to deliver such copies to
all actual purchasers of the Series 2002-A Bonds. Distribution of a preliminary official
statement relating to the Series 2002-A Bonds is hereby approved and authorized. -
The Director of Administrative Services is hereby authorized to execute a certificate or
certificates to the effect that the Official Statement and such preliminary official statement were
deemed "final" as of their respective dates for purposes of Rule 15c2-12 of the Securities
Exchange Act of 1934,as amended,and is authorized to so deem such statements final.
Section 5. The Series 2002-A Bonds, when executed, shall be delivered to the Fiscal
Agent for authentication. The Fiscal Agent is hereby requested and directed to authenticate the
Series 2002-A Bonds by executing the Fiscal Agent's certificate of authentication and
registration appearing thereon, and to deliver the Series 2002-A Bonds, when duly executed
and authenticated, to the Underwriter in accordance with written instructions executed on
behalf of the City by the Director of Administrative Services, 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 Series.2002-A
Bonds to the Underwriter upon payment of the purchase price therefor.
Section 6. The Continuing Disclosure Certificate - Issuer and the Acquisition
Agreement, in the respective forms on file with the City Clerk, are hereby approved. The
Mayor is hereby authorized and directed, for and in the name of-and on behalf of the City, to
execute and deliver the Continuing Disclosure Certificate - Issuer. and the Acquisition
.Agreement in said forms, with such additions thereto or changes therein as are deemed
necessary, desirable or appropriate by the Director of Administrative Services upon
consultation with the City Attorney and Disclosure Counsel, the approval of such changes to be
conclusively evidenced by the execution and delivery by the Mayor of the Continuing
Disclosure Certificate-Issuer and the Acquisition Agreement.
Section 7. The City hereby covenants, for the benefit of the Bondowners, to commence
and diligently pursue to completion any foreclosure action regarding delinquent installments
of any amount levied as a special tax for the payment of interest or principal of the Bonds, said
foreclosure action to be commenced and pursued as more completely set forth in the Fiscal
Agent Agreement.
Section 8. All actions heretofore taken by the officers and agents of the City with respect
to the establishment of the Improvement Area and the sale and issuance of the Series 2002-A
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
-3-
Res. No. 2002-63
the Series 2002-A Bonds in accordance with this Resolution, and any certificate,agreement, and
other document described in the documents herein approved.
Section 9. This Resolution shall take effect upon its adoption.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Huntington
Beach on this 1761 day of June,2002.
14A-A A
Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk e4—%1-0Z 6� City Attorney L4W ItAtloa
REVIEWED AND APPROVED: INITIATED AND APPROVED:
1ty Administrator Director of Economic Development
08003.07:J6154
6/4/02
-4-
Res. No. 2002-63
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss:
.CITY OF HUNTINGTON BEACH )
1, 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
17th day of June, 2002 by the following vote:
AYES: Green, Boardman,Cook, Houchen, Winchell, Bauer
NOES: None
ABSENT: Dettloff
ABSTAIN: None
City Clerk and ex-officio derk of the
City Council of the City of
Huntington Beach, California
The fo"Obv Msaurn"is a collect
ocpy of the oripMai on f%in this of be.
Attest 07- 12-- 20 0 2
CONNIE BROCKWAY
Counco.of of untMpbon Beach,
CaNdmla.
By Deputy
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
Lisa M. Harris
FAX: (916) 654-744 Executive xecutive Director
April 11, 2002
TO: Paul J Thimmig
Quint & Thimmig LLP
One Embarcadero Ctr Ste 2420
San Francisco, CA 94111-3737
FROM: Lisa M. Harris, Executive Director
RE: ACKNOWLEDGEMENT OF REPORT OF PROPOSED DEBT ISSUANCE
Section 8855 (g) of the California Government Code requires written notice to be
given to the California Debt and Investment Advisory Commission (CDIAC) no later
than 30 days prior to the proposed sale of any public agency debt issue.
The Commission acknowledges your written notice of the following proposed debt
issuance:
CDIAC Nbr: 2002-0347
Issuer: Huntington Beach CFD No 2002-1
Project: McDonnell Centre Business Pk IA. A
Proposed Amount: $5,000,000.00
Proposed Sale Date: May 22, 2002
Date Notice Received: April 10, 2002
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: David C Biggs
Director of Economic Development
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: Improvement Area A of Community Facilities District No.2002-1 (McDonnell Centre Business Park)Special Tax Bonds,Series 2002-A
Please specify type/name of project: McDonnell Centre Business Park
PROPOSED SALE DATE: 5/22/2002 PROPOSED PRINCIPAL TO BE SOLD: $ $5,000,000
IS ANY PORTION OF THE DEBT FOR REFUNDING? 2
®No ❑Yes proposed amount for refunding $
Issuer Contact:
Name: David C.Biggs
Title: Director of Economic Development
Address: 2000 Main Street, Huntington Beach , CA 92648
Phone: 714/536-5542 . 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: Paul J.Thimmie
Firm/Agency: Quint&Thimmig LLP
Address: One Embarcadero Center,Suite 2420, San Francisco, CA 94111-3737
Phone: (415) 765-1550 E-mail: pthimmig@qtllp.com
Send acknowledgment/copies to:
FINANCING PARTIPANTS:
Bond Counsel: Quint&Thimmig LLP
Financial Advisor: NA
Underwriter\PURCHASER: Stone&Youngberg LLC
IS THE INTEREST ON THE DEBT EXEMPT FROM TAXATION?
Under State Law: ❑NO(taxable) ®YES (tax-exempt)
Under Federal Law: ❑NO(taxable) ®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 ®No,not a preference item
TYPE OF SALE: ❑Competitive ®Negotiated
1 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.
2 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(TALK) ❑ 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*part.icipationfleases (COP/L) ❑ Tax-allocation (TAB)
❑ Other(Please specify below.)(OTH)
Please specify"Othemote/Other bond/Other"was checked:
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 (IA13) ®Special tax revenues(SPTR)
❑Private obligor payments (POP) ❑Tax-increment (TI)
❑Other (lease specify.) (OTHS):
PURPOSE(S) OF FINANCING
❑Cash flow. interim financing (CF1F)
❑Project. interim financing (PiF) ❑airport(APRT)
❑ Bridges and highways (BR111)
❑College/university housing (CUfl) ❑Convention center (CCTR)
❑Multifamily housing (MFH) 3 ❑ Equipment(EQUP)
❑Single-family housing (SFH)3 ❑Flood control/storm 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.)(OI`•IHC) ❑Parks/open space (PRKG)
❑Ports and marinas(PRTS)
❑College/university facility (CUF) ❑Power generation/transmission (PWR)
❑ K-12 school facility (KSCID ❑Prisons/jails/correctional facilities (PRSN)
❑Other/multiple educational uses (equipment,etc.) (OMF.,D) ❑Public building (PB)
❑Student loans(SLC) ❑Public transit (PTR)
❑ Recreation and sports facilities (RCSP)
❑ Redevelopment, multiple uses (RD) ❑Seismic safety improvements/repair (SST)
❑Solid waste recovery facilities (SWST)
❑Commercial development(CMDV) ❑Street construction and improvements (SCI)
❑Industrial development (INDV) El Wastewater collection and treatment (WSTW)
❑Pollution control (PC) ❑Water supply/storage/distribution (WTR)
❑Insurance/pension funds (lPF)
Please specify type/name of project: McDonnell Centre Business Park
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.
1197
1'HSE ( UW OF Hl1N'I''I�NGTON REACH.:
Ik
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2000 Main Street
2nd Floor — City Hall
Huntington Beach CA 92648
(714) 536-5227
PURCHASE CONTRACT
$4,900,000
Improvement Area A of the City of Huntington Beach
Community Facilities District No. 2002-1
(McDonnell Centre Business Park)
Special Tax Bonds,Series 2002-A
June 27, 2002
City of Huntington Beach
2000 Main Street
Huntington Beach,California 92648
Attention:City Administrator
Ladies and Gentlemen:
Stone &Youngberg LLC (the "Underwriter") offers to enter into this Purchase Contract
(this "Purchase Contract") with the City of Huntington Beach, California (the "City"),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 Purchase Contract on or
before 11:59 p.m.on June 27,2002 or such later time as is acceptable to the Underwriter.
1. Upon the terms and conditions and _in reliance upon the 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 the $4,900,000
aggregate principal amount of Improvement Area A of the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park) ("Improvement
Area A") Special Tax Bonds, Series 2002-A (the "Bonds"), at an aggregate purchase price (the
"Purchase Price") of $4,805,862.30 (equal to the initial principal amount of the Bonds of
$4,900,000.00 less an Underwriter's discount of$94,137.70).
The Bonds will be issued pursuant to the City of Huntington Beach Special Tax
Financing Improvement Code (constituting Chapter 3.56 of the City's Municipal Code), and,
where applicable, the Mello-Ross Community Facilities Act of 1982, as amended (constituting
Sections 53311 et seq. of the California Government Code) (collectively, the "Law") and
Resolution No. 2002-63 adopted on June 17, 2002 by the City Council (the "City Council") of
the City acting as the legislative body of Improvement Area A (collectively, with Resolution
Nos. 2002-27 and 2002-28 of the City Council adopted on April 1, 2002 and Resolution Nos.
2002-38, 2002-39, 2002-40 and 2002-41 of the City Council adopted on June 3, 2002, the
"Resolutions"). The Special Tax to provide a source of payment for the Bonds will be levied
pursuant to Ordinance No. 3557 adopted by the City Council on June 17, 2002 (the
"Ordinance"). The Bonds will be issued pursuant to the terms of a Fiscal Agent Agreement(the
"Fiscal Agent Agreement"), dated as of June i, 2002,between the City and BNY Western Trust
Company, Los Angeles, California, as fiscal agent (the "Fiscal Agent"). The proceeds of the
sale of the Bonds will be used by the District for (a) the acquisition and construction of public
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improvements identified in the proceedings to form the District, pursuant to an Acquisition
Agreement, dated as of June 1, 2002 (the "Acquisition Agreement") between the City and
Boeing Realty Corporation (the "Developer"), (b) to fund a reserve fund, (c) to fund capitalized
interest for the Bonds for a limited period of time, and (d) to pay the costs of issuance and
administrative expenses related to the Bonds. The obligations of the Developer under the
Acquisition Agreement will be guaranteed under a Guaranty of The Boeing Company (the
"Guaranty") in the form attached to the Acquisition 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 D 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
June 18, 2002 and hereby authorizes and approves the Final Official Statement (the Final
Official Statement, the Preliminary Official Statement and any amendments or supplements
that may be authorized for use with respect to the Bonds are herein referred to collectively as
the "Official Statement"), consents to their distribution and use by the Underwriter and
authorizes the execution and approval of the Final Official Statement by a duly authorized
officer of the City.
4. The City and Improvement Area A represent and warrant to the Underwriter
that:
(a) The City is duly organized and validly existing as a charter city and
municipal corporation under the Constitution and laws of the State of California (the
"State"),Improvement Area A is duly organized and validly existing as an improvement
area of a community facilities district under the laws of the State, including the Law,_
with the City Council acting as Improvement Area A's legislative body,and the City has
the full legal right, power and authority (i) upon satisfaction of the conditions in this
Purchase Contract and the Fiscal Agent Agreement,to issue the Bonds,and (ii)to secure
the Bonds in the manner contemplated in the Fiscal Agent Agreement.
(b) The City Council, acting as the legislative body of Improvement Area A,
has the full legal right,power and authority to adopt the Resolutions and the Ordinance,
and the City has the full legal right, power and authority (i) to enter into this Purchase
Contract, the Acquisition Agreement, the Fiscal Agent Agreement, and the Continuing
Disclosure Certificate-Issuer relating to the Bonds (the "CFD Disclosure Certificate"),
(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 and on the part of
Improvement Area. A contemplated by each of the aforesaid documents (such
documents together with the Final Official Statement and such other certificates or
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instruments required on the part of the City or Improvement Area A to carry out the
transactions contemplated by such instruments are collectively referred to herein as the
"Community Facilities District Documents"), and the City, Improvement Area A and
the City Council have complied with all provisions of applicable law,including the Law,
in all matters relating to such transactions.
(c) The City and Improvement Area A have duly authorized (i)the execution
and delivery by the City of the Bonds, (ii) the execution, delivery and due performance
by the City and Improvement Area A of their obligations under the Fiscal Agent
Agreement, the Acquisition Agreement and the CFD Disclosure Certificate, (iii) the
distribution and use of the Preliminary Official Statement and execution, delivery and
distribution of the Final Official Statement,and (iv) the taking of any and all such action
as may be required on the part of the City or Improvement Area A to carry out, give
effect to and consummate the transactions on the part of the City and Improvement
Area A contemplated by such instruments. All consents or approvals necessary to be
obtained by the City or Improvement Area A in connection with the foregoing have been
received,and the consents or approvals so received are still in full force and effect.
(d) The Resolutions and Ordinance have been duly adopted by the City
Council and are in full force and effect; the Fiscal Agent Agreement, the Acquisition
Agreement and the CFD Disclosure Certificate,when executed and delivered by the City
and the other respective parties thereto, will constitute legal, valid and binding
obligations of the City enforceable 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 (acting as the legislative body for Improvement Area A)
and duly executed, issued and delivered by the City and 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,and will be entitled to the
benefit and security of the Fiscal Agent Agreement.
(f) The information relating to the City and Improvement Area A 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 Improvement Area A or omit to state any material fact
relating to the City and Improvement Area A 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) 90 days after the Closing, any event known to the officers of the City
participating in the issuance of the Bonds occurs with respect to the City or
Improvement Area A 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
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untrue or misleading statement of a material fact relating to the City or Improvement
Area A or omit to state any material fact relating to the City or Improvement Area A
necessary to make the statements therein, in the light of the circumstances under which
they were made,not misleading.
(h) To the best knowledge of the official of the City executing this Purchase
Contract, neither the adoption of the Resolutions or the Ordinance, the execution and
delivery of the Community Facilities District Documents, nor the consummation of the
transactions on the part of the City and Improvement Area A contemplated herein or
therein or the compliance by the City and Improvement Area A with the provisions
hereof or thereof will conflict with, or constitute on the part of Improvement Area A or
the City a violation of, or a breach of or default under, (i) any material indenture,
mortgage,commitment,note or other agreement or instrument to which Improvement
Area A or the City is a party or by which it is bound, (ii) any provision of the State
Constitution, or (iii) any existing law, rule,regulation, ordinance, judgment, order or
decree to which Improvement Area A or the City is subject.
(i) The City has never been in default at any time, as to principal of or
interest on any obligation which it has issued,which default may have an adverse effect
on the ability of the City or Improvement Area A to consummate the transactions on
their part under the Community Facilities District Documents,and other than the Fiscal
Agent Agreement, neither the City nor Improvement Area A has entered into any
contract or arrangement of any kind which night 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 official of the City executing this Purchase Contract, 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 Improvement
Area A has been served with process or threatened, which in any way questions the
powers of the City Council,the City or Improvement Area A 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 wherein an unfavorable decision, ruling or finding could
materially adversely affect the transactions contemplated by this Purchase Contract, or
of any other Community Facilities District Document, or which, in any way, could
adversely affect the validity or enforceability of the Resolutions, the Ordinance, the
Fiscal Agent Agreement,the Acquisition Agreement,the CFD Disclosure Certificate,the
Bonds or this Purchase Contract or,to the knowledge of the official of the City executing
this Purchase Contract,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 federal or 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 Community Facilities District Documents shall be deemed a
representation and warranty by the City and Improvement Area A to the Underwriter
as to the truth of the statements therein contained.
(1) Neither the City nor Improvement Area A has 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.
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(m) The Bonds will be paid from the Special Tax (as defined in the Rate and
Method of Apportionment of Special Taxes for Improvement Area A) received by the
City and from amounts in certain funds established under the Fiscal Agent Agreement.
(n) The Special Tax may lawfully be levied in accordance with the Rate and
Method of Apportionment of Special Taxes for Improvement Area A,and,when levied,
will be secured by a lien on the property on which it is levied.
(o) The Fiscal Agent Agreement creates a valid pledge of,first lien upon and
security interest in the Special Tax deposited thereunder, and the moneys in certain
funds and accounts established pursuant to the Fiscal Agent Agreement including the
investment earnings thereon, 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.
(p) Neither the City nor Improvement Area A has failed to comply with any
continuing disclosure obligations 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 in any jurisdiction. The City consents to the use by the Underwriter of the
Community Facilities District 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 July 17, 2002 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 Purchase Contract 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 definitive registered Bonds initially
with one Bond for each maturity of the Bonds registered in the name of CEDE & CO., as
nominee of The Depository Trust Company, and will be made available for checking and
packaging by the Underwriter at such place as the Underwriter and the Fiscal Agent shall agree
not less than 24 hours prior to the Closing.
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
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or effect of imposing federal income taxation upon revenues or other income of the
general character to be derived by the District,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 the Bonds,or of causing interest on obligations of the general character
of the Bonds, or 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 rereported 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 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 District 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 or the District 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, qualification or other requirements of 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
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(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 Improvement Area A,the City or any other governmental
body for which the members of the City Council act as the governing board;or
0) 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;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 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,underwriters.
8. The obligations of the Underwriter to purchase the Bonds shall be subject (a) to
the performance by the City and Improvement Area A of their 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 and Improvement Area A
herein, and (c) to the following conditions, including the delivery by Improvement Area A of
such documents as are enumerated herein:
(a) At the time of Closing, (i) the Official Statement,this Purchase Contract,
the CFD Disclosure Certificate,the Continuing Disclosure Certificate-Landowner (the
"Landowner Disclosure Agreement" and, collectively with the CFD Disclosure
Certificate, the "Disclosure Certificate"), the Acquisition Agreement 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 Council shall have duly adopted and there shall be in full
force and effect such resolutions as, in the opinion of Quint & Thimmig LLP, 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,
.as delivered,shall in all instances be as described in the 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:
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(i) A final approving opinion of Bond Counsel dated the date of
Closing, in substantially the form set forth in Appendix B to the Official
Statement.
(ii) A letter of Bond Counsel addressed to the Underwriter and dated
the date of Closing,which opines as to the matters set forth in Exhibit A hereto,
and 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.
(iii) An opinion of Disclosure Counsel in substantially the form set
forth in Exhibit B hereto.
(iv) The Final Official Statement executed on behalf of the District by
a duly authorized officer of the City.
(v) Certified copies of the Resolutions and the Ordinance, and
executed copies of the Fiscal Agent Agreement, the Acquisition Agreement,the
CFD Disclosure Certificate, the Landowner Disclosure Agreement and the
Guaranty.
(vi) Specimen Bonds.
(vii) A letter from John S. Adams & Associates in which consent is
given to the use of its Appraisal dated April 1, 2002 in the Preliminary Official
Statement and the Official Statement and the references to the firm, and the
Appraisal in the Preliminary Official Statement and the Official Statement.
(viii) A certificate, in form and substance as set forth in Exhibit C
hereto,of the City and Improvement Area A,dated as of the Closing Date.
(ix) A certificate of Michael Swan Consulting, dated the Closing Date
and addressed to the Underwriter and Improvement Area A, to the effect that
(A) the.descriptions in the Preliminary Official Statement and the Official
Statement of the Rate and Method of Apportionment of Special Taxes for
Improvement Area A (the "Rate and Method"), and as set forth in Appendix D
to the Official Statement, are fair and accurate; and (B) the Special Tax, if
collected in the maximum amounts permitted pursuant to the Rate and Method
as in effect on the Closing Date,would generate at least 110%of the gross annual
debt service payable on the Bonds.
(x) A certificate or certificates addressed to the Underwriter and the
City from the Developer to the effect that:
(A) to the best of the Developer's knowledge,nothing has come
to the Developer's attention which would contradict the information set
forth in the Official Statement under the headings "Improvement Area A
-Location" and "Improvement Area A-Public Facilities";
(B) any and all written information submitted by or on behalf
of the Developer to the Underwriter or Disclosure Counsel in connection
with the preparation of the Preliminary Official Statement and the
Official Statement or to the Appraiser in connection with the preparation
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of its appraisal report was at the time submitted and, to the best
knowledge of the officer of the Developer signing the certificate is, true
and correct;
(C) the statements relating to the Developer, McDonnell
Douglas Corporation,The Boeing Company and the Development (as
defined in the Official Statement) contained in the Preliminary Official
Statement and the Official Statement do not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein,in the light of
the circumstances in which they are made,not misleading;
(D) no proceedings are pending or threatened in which the
Developer,The Boeing Company or McDonnell Douglas Corporation may
be adjudicated as bankrupt or discharged from all or substantially all of
its respective debts or obligations or granted an extension of time to pay
its respective debts or a reorganization or readjustment of its debts;
(E) ' no action,suit proceedings,inquiry or investigation,at law
or in equity, before or by any court, regulatory agency, public board or
body,is pending or, to the best knowledge of the officer of the Developer
signing the certificate threatened in any way,seeking to restrain or enjoin
the development of the real property in Improvement Area A;
(F) the Developer covenants that, while the Bonds are
outstanding, it will not bring any action, suit, proceeding, inquiry or
investigation at law or in equity, before any court, regulatory agency,
public board or body which in any way seeks to challenge or overturn the
District's formation or existence,the levy or collection of the Special Tax
(provided that such levy and collection are in accordance with the terms
of the Rate and Method) or the validity of the Bonds or the proceedings
taken for their issuance;
(G) all property tax installments due with respect to the
property within Improvement Area A have been paid through the second
installment due for 2001/2002;
(H) the Developer is not in any material respect in violation of,
breach of, or default under any applicable constitutional provision or law
of any state or of the United States or any order,rule or regulation of any
court or governmental agency or body having jurisdiction over the
Developer of any of its activities, properties or assets, or any indenture,
mortgage,deed of trust,resolution,note agreement or other agreement or
instrument to which the Developer is a party which violation or breach of
or default would have a material adverse effect upon the transactions on
the part of the Developer contemplated by the Acquisition Agreement or
otherwise described in the Official Statement,and no event has occurred
and is continuing which with the passage of time or the giving of notice,or
both would constitute such a default or event of default under any such
instruments; and the execution and delivery by the Developer of the
Acquisition Agreement, and compliance with the provisions on the
Developer's part contained in the Acquisition Agreement,do not and will
not in any material respect conflict with or constitute on the part of the
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Developer a violation or breach of or default under any constitutional
provision or law of any state or of the United_States or any order,rule or
regulation. of any court or governmental agency or body having
jurisdiction over the Developer or any of its activities, properties or
assets, or any indenture, mortgage, deed of trust, resolution, note*
agreement,or other agreement or instrument to which the Developer is a
party or by which the Developer or any of its property or assets is bound
which breach or default would have a material adverse affect upon the
transactions on the part of the Developer contemplated by the
Acquisition Agreement or otherwise described in the Official Statement;
(n The Boeing Company is not in any material respect in
violation of, breach of, or default under any applicable constitutional
provision or law of any state or of the United States or any order,rule or
regulation of any court or governmental agency or body having
jurisdiction over The Boeing Company of any of its activities, properties
or assets, or any indenture, mortgage, deed of trust, resolution, note
agreement or other agreement or instrument to which The Boeing
Company is a party which violation or breach of or default would have a
material adverse effect upon the transactions on the part of The Boeing
Company contemplated by the Guaranty, and no event has occurred and
is continuing which with the passage of time or the giving of notice, or
both would constitute such a default or event of default under any such
instruments;and the execution and delivery by The Boeing Company of
the Guaranty, and compliance with the provisions on The Boeing
Company's part contained in the Guaranty, do not and will not in any
material respect conflict with or constitute on the part of The Boeing
Company a violation or breach of or default under any constitutional
provision or law of any state or of the United States or.any order,rule or
regulation of any court or governmental agency or body having
jurisdiction over The Boeing Company or any of its activities, properties
or assets, or any indenture, mortgage, deed of trust, resolution, note
agreement, or other agreement or instrument to which The Boeing
Company is a party or by which The Boeing Company or any of its
property or. assets is bound which breach or default would have a
material adverse affect upon the transactions on the part of The Boeing
Company contemplated by the Guaranty;
(j) the McDonnell Douglas Corporation is not in any material
respect in violation of, breach of, or default under any applicable
constitutional provision or law of any state or of the United States or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the McDonnell Douglas Corporation of any of its
activities,properties or assets,or any indenture, mortgage,deed of trust,
resolution,note agreement or other agreement or instrument to which the
McDonnell Douglas Corporation is a party which violation or breach of
or default would have a material adverse effect upon the transactions on
the part of the McDonnell Douglas Corporation contemplated by the
Landowner Disclosure Agreement or otherwise described in the Official
Statement, and no event has occurred and is continuing which with the
passage of time or the giving of notice, or both would constitute such a
default or event of default under any such instruments;and the execution
and delivery by the McDonnell Douglas Corporation of the Landowner
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Disclosure Agreement, and compliance with the provisions on the
McDonnell Douglas Corporation's part contained in the Landowner
Disclosure Agreement,do not and will not in any material respect conflict
with or constitute on the part of the McDonnell Douglas Corporation a
violation or breach of or default under any constitutional provision or law
of any state or of the United States or any order,rule or regulation of any
court or governmental agency or body having jurisdiction over- the
McDonnell Douglas Corporation or any of its activities, properties or
assets, or any indenture, mortgage, deed of trust, resolution, note
agreement, or other agreement or instrument to which the McDonnell
Douglas Corporation is a party or by which the McDonnell Douglas
Corporation or any of its property or assets is bound which breach or
default would have a material adverse affect upon the transactions on
the part of the McDonnell Douglas Corporation contemplated by the
Landowner Disclosure Agreement or otherwise described in the Official
Statement;and
(K) there are no legal or governmental actions, proceedings,
inquiries or investigations pending or, to the best knowledge of the officer
of the Developer signing the certificate, threatened by governmental
authorities onto which the Developer,The Boeing Company or McDonnell
Douglas Corporation is a party or of which any property of the
Developer,The Boeing Company or McDonnell Douglas Corporation is
subject, which (1) seek to restrain or to enjoin the continuation and/or
completion of the proposed development of the land in Improvement
Area A as described in the Official Statement, or (2) if determined
adversely to the Developer,The Boeing Company or McDonnell Douglas
Corporation, would materially and adversely affect the transactions
contemplated by the Official Statement to be engaged by the Developer,
The Boeing Company or McDonnell Douglas Corporation or the ability of
the Developer to perform its obligations under the Acquisition Agreement
or the ability of The Boeing Company to perform its obligations under the
Guaranty.
(xi) An opinion addressed to the Underwriter and the District, of in-
house counsel to the Developer,McDonnell Douglas Corporation and The Boeing
Company,to the effect that:
(A) the Developer is a corporation validly existing under the
laws of the State of California, and the Developer is authorized to enter
into and perform its obligations under the Acquisition Agreement;
(B) McDonnell Douglas Corporation is a corporation validly
existing under the laws of the State of Maryland, and is authorized to
enter into and perform its obligations under the Landowner Disclosure
Agreement;
(C) The Boeing Company is a corporation validly existing
under the laws of the State of Delaware, and is authorized to enter into
and perform its obligations under the Guaranty;
(D) the Acquisition Agreement, the Landowner Disclosure
Agreement, and the Guaranty have been duly authorized,executed and
-11-
delivered by the Developer, McDonnell Douglas Corporation and The
Boeing Company, respectively, and the Acquisition Agreement, the
Landowner Disclosure Agreement and the Guaranty constitute the valid
and binding legal obligations of such entities,respectively,enforceable in
accordance with their respective terms,except as such enforceability may
be limited by reorganization, insolvency, liquidation, readjustment of
debt, moratorium or other similar laws affecting the enforcement of the
rights of creditors generally as such laws may be applied in the event of a
reorganization, insolvency, liquidation, readjustment or debt or other
similar proceeding of or moratorium applicable to the Developer,
McDonnell Douglas Corporation or The Boeing Company, respectively,
and except that the availability of equitable remedies,including specific
performance,to persons seeking to enforce such documents against the
Developer, McDonnell Douglas Corporation or The Boeing Company,
respectively,is subject to the discretion of the court;and
(E) to the best knowledge of such counsel and without having
undertaken to determine independently the accuracy or completeness of
the statements contained in the Official Statement, and based on the
representations of the Developer, McDonnell Douglas Corporation and
The Boeing Company, and in reliance thereon,and on certain documents
reviewed by them as set forth in such opinion, no information came to
their attention during the course of their representation of the Developer,
McDonnell Douglas Corporation and The Boeing Company which caused
them to believe that the statements contained in the Official Statement
under the caption "THE DEVELOPER, THE LANDOWNER AND THE
DEVELOPMENT," contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made,not misleading (except that no opinion or belief need to
be expressed as to any financial, statistical or engineering data or
forecasts, numbers, charts, estimates, projections, assumptions, or
expressions of opinion,or any information about valuation,appraisals or
environmental matters contained therein).
(xii) Evidence that Federal Form 8038 has been executed by the City
for Improvement Area A and will be filed with the Internal Revenue Service.
(xiii) Evidence that, except as disclosed in the Final Official Statement,
all necessary approvals, whether legal or administrative, have been obtained
from applicable federal,state and local entities and agencies for the construction
of the public improvements to be built within the boundaries of Improvement
Area A.
(xiv) . An opinion of the City Attorney addressed to the Underwriter, to
the effect that: (A) the City is a municipal corporation and chartered city duly
organized and validly existing as a public body corporate and politic under the
Constitution and laws of the State of California and Improvement Area A is an
improvement area of a community facilities district duly organized and validly
existing under the Law, (B) the Resolutions and the Ordinance have been duly
adopted at meetings of the City Council of the City which were called and held
pursuant to law and with all public notices required by law at which a quorum
was present and acting throughout, (C) no action, suit, proceeding, inquiry or
-12-
investigation, at law or in equity, before any court, regulatory agency, public
board or body, to which the City or Improvement Area A is a party and has
received notice of, is pending or, to her knowledge, threatened, in any way
affecting the existence of the City or Improvement Area A or the titles of their
officers to their respective offices,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 Fiscal Agent Agreement, the levy and 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 Community Facilities District Documents or any action of the City or
Improvement Area A 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 Improvement Area A or their authority with respect to the Bonds,
the Community Facilities District Documents or any action on the part of the
City or Improvement Area A contemplated by any of said documents, or which
challenges the exemption of interest paid on the Bonds from federal income
taxation or State of California personal income taxation, (D) the City has duly
authorized,executed and delivered the Community Facilities District Documents
and the Official Statement, and (E) assuming due authorization, execution and
delivery by the respective parties thereto where necessary, the Community
Facilities District Documents constitute legal,valid and binding obligations of the
City enforceable in accordance with their respective terms,subject to bankruptcy,
insolvency,reorganization, moratorium, fraudulent conveyance or transfer and
other laws affecting the enforcement of creditors' rights in general and to the
application of equitable principles and the exercise of judicial discretion in
appropriate cases.
(xv) A certificate of the Fiscal Agent, dated the Closing Date, to the
effect that (A) the Fiscal Agent is duly organized and existing as a banking
corporation under the laws of the State of California having the full power and
authority to perform its duties under the Fiscal Agent Agreement, the CFD
Disclosure Certificate and the Landowner Disclosure Agreement(collectively,the
"Fiscal Agent Documents"); (B) the Fiscal Agent is duly authorized to accept the
obligations created by the Fiscal Agent Documents and to authenticate the Bonds
pursuant to the terms of the Fiscal Agent Agreement; (C) the Bonds have been
duly authenticated and delivered by the Fiscal Agent in accordance with the
Fiscal Agent Agreement,and the Fiscal Agent has duly authorized,executed and
delivered the Fiscal Agent Documents, and by all proper corporate action has
authorized the acceptance of the duties and obligations of the Fiscal Agent under
the Fiscal Agent Documents; (D) assuming due authorization, execution and
delivery by the other parties thereto, the Fiscal Agent Documents are valid,legal
and binding of the Fiscal Agent,enforceable in accordance with their respective
terms, except as such enforcement may be limited by bankruptcy, agreements
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights in general and by general equitable principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);no
consent, approval, authorization or other action by any governmental or
regulatory authority having jurisdiction over the Fiscal Agent that has not been
obtained is or will be required for the authentication of the Bonds or the
consummation by the Fiscal Agent of the other transactions contemplated to be
performed by the Fiscal Agent in connection with the authentication of the Bonds
and the acceptance and performance of the obligations created by the Fiscal
Agent Documents; (E) to the best knowledge of the officer of the Fiscal Agent
-13-
who signs the certificate, compliance with the terms of the Fiscal Agent
Documents will not conflict with, or result in a violation or breach of, or
constitute a default under,any loan agreement,indenture,bond,note,resolution
or any other agreement or instrument to which the Fiscal Agent is a party or by
which it is bound,or any law or any rule,regulation,order or decree of any court
or governmental agency or body having jurisdiction over the Fiscal Agent or any
of its activities or properties; and (F) to the best knowledge of the officer of the
Fiscal Agent who signs the certificate,there is no litigation pending or threatened
against or affecting the Fiscal Agent to restrain or enjoin the Fiscal Agent's
participation in, or in any way contesting the powers of the Fiscal Agent with
respect to the transactions contemplated by the Bonds and the Fiscal Agent
Documents.
(xvi) An opinion,dated the Closing Date and addressed to the District
and the Underwriter, of counsel to the Fiscal Agent, to the effect that: (A) the
Fiscal Agent has been duly organized and is validly existing and in good
standing as a banking corporation under the laws of the State of California with
full corporate power to undertake its obligations under the Fiscal Agent
Documents and to authenticate and deliver the Bonds; (B) the Bonds have been
duly authenticated and delivered by the Fiscal Agent in accordance with the
Fiscal Agent Agreement,and the Fiscal Agent has duly authorized,executed and
delivered the Fiscal Agent Documents, and by all proper corporate action has
authorized the acceptance of the duties and obligations of the Fiscal Agent under
the Fiscal Agent Documents; (C) assuming due authorization, execution and
delivery by the other parties thereto, the Fiscal Agent Documents are valid,legal
and binding agreements of the Fiscal Agent,enforceable in accordance with their
respective terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights in general and by general equitable principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);and
(D) no consent, approval, authorization or other action by any governmental or
regulatory authority having jurisdiction over the Fiscal Agent is or will be
required for the execution and delivery by the Fiscal Agent of the Fiscal Agent
Documents or the execution and delivery of the Bonds.
(xvii) A nonarbitrage certificate of the City in form and substance
acceptable to Bond Counsel and the Underwriter.
(xviii) Such additional legal opinions, certificates, proceedings,
instruments and other documents as Disclosure Counsel or the Underwriter may
reasonably request to evidence compliance by Improvement Area A or the
Developer with legal requirements, the truth and accuracy, as of the. time of
Closing, of the respective representations of the City and Improvement Area A
hereirr contained and of the Developer contained in the certificate executed by
the Developer as specified in this Section and the due performance or
satisfaction by each of them at or prior to such time of all agreements then to be
performed and all conditions then to be satisfied by each of them.
If Improvement Area A shall be unable to satisfy the conditions to the obligations of the
Underwriter contained in this Purchase Contract, or if the obligations of the Underwriter to
purchase and accept delivery of the Bonds shall be terminated for any reason permitted by this
Purchase Contract, this Purchase Contract shall terminate and none of the Underwriter, the
City or Improvement Area A shall be under further obligation hereunder; except that the
-14-
respective obligations to pay expenses, as provided in Section 11 hereof shall continue in full
force and effect.
9. The obligations of the City and Improvement Area A hereunder are subject to the
performance by the Underwriter of its obligations hereunder.
10. All representations,warranties and agreements of the City and Improvement
Area A hereunder shall remain operative and in full force and effect, regardless of any
investigations made by or on behalf of the Underwriter, and shall survive the Closing.
11. The City shall pay or cause to be paid, solely from contributions by the
Developer or the proceeds of the Bonds,all reasonable expenses incident to the performance of
its obligations under this Purchase Contract,including,but not limited to,delivery of the Bonds,
costs of printing and delivering the Bonds,the Preliminary Official Statement.and Final Official
Statement,any amendment or supplement to the Preliminary Official Statement or Final Official
Statement and this Purchase Contract, fees and disbursements of the City's Special Tax
Consultant, the appraiser,Bond Counsel, Disclosure Counsel, the City and other consultants,
including the fees of the Fiscal Agent and any 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.
The Underwriter shall pay all advertising expenses in connection with the public offering
of the Bonds, the fees and expenses of any counsel retained by the Underwriter and all other
expenses incurred by it in connection with their public offering and distribution of the Bonds.
12. Any notice or other communication to be given to the City or Improvement Area
A under this Purchase Contract 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
Purchase Contract may be given by delivering the same in writing to Stone &Youngberg LLC,
15260 Ventura Boulevard, Suite 1520, Sherman Oaks, California 91403, Attention: Stephen E.
Heaney.
13. This Purchase Contract is made solely for the benefit of the City, Improvement
Area A 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 Purchase Contract shall be governed by and construed in accordance with
the laws of the State of California.
-15-
15. This Purchase Contract shall become effective upon your acce ptance hereof.
Very truly yours,
STONE &YOUNGBERG LLC
By: 1
Its: Managing Director
Accepted and agreed to as of
the date first above written:
CITY OF HUNTINGTON BEACH,for itself
and on behalf of IMPROVEMENT AREA A
OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.
2002-1 (McDONNELL CENTRE
BUSINESS PARK)
By:
Mayor
Attest:
By: /
City Clerk G
Reviewed and Approved:
By: 4nd L
/Jircc, vr, Fcw►V+I t Oely meH f
Reviewed and Approved as to Form:
By:
City Attorney
08003.07.J6164
-16-
EXHIBIT A
[Letterhead of Bond Counsel]
July 2002
Stone&Youngberg LLC
15260 Ventura Boulevard,Suite 1520
Sherman Oaks, CA 91403
SUPPLEMENTAL OPINION: $4,900,000 Improvement Area A of the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business
Park) Special Tax Bonds, Series 2002=A
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance by the City of
Huntington Beach (the "City") of its $4,900,000 aggregate principal amount of Improvement
Area A of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell
Centre Business Park), (the "Improvement Area") Special Tax Bonds, Series 2002-A (the
"Bonds"),pursuant to the City of Huntington Beach Special Tax Financing Improvement Code
(constituting Chapter 3.56 of the City's Municipal Code), and, where applicable, the Mello-
Roos Community Facilities Act of 1982, as amended (Section 53311 et seq., of the California
Government Code) (collectively, the "Law"), a Fiscal Agent Agreement, dated as of June 1,
2002 (the "Fiscal Agent Agreement"), by and between the City and BNY Western Trust
Company, as Fiscal Agent, and Resolution No. 2002-63, adopted by the City Council of the
City of Huntington Beach (the "City"),acting as the legislative body of the Improvement Area,
on June 17, 2002.
In that connection,we have examined the executed Fiscal Agent Agreement;the Bond
Purchase Agreement, dated June 27, 2062 (the "Bond Purchase Agreement"), by and between
you, as underwriter, and the City; the Official Statement, dated June_, 2002,relating to the
Bonds (the "Official Statement"); the Acquisition Agreement, dated as of June 1, 2002 (the
"Acquisition Agreement"), between the City and Boeing Realty Corporation, the Continuing
Disclosure Certificate-Issuer (the "Disclosure Certificate") of the City;the law and such other
certified proceedings and other papers as we deem necessary to render this opinion.
As to questions of fact material to our opinion,we have relied upon representations of
the City contained in the Fiscal Agent Agreement and in the certified proceedings and other
certifications of representatives of the City furnished to us,without undertaking to verify such
facts by independent investigation.
Based upon our examination,we are of the opinion,under existing law, as follows:
1. The Bond Purchase Agreement, the Acquisition Agreement and the Disclosure
Certificate have been duly authorized, executed and delivered by, and, assuming due
authorization, execution and delivery by the other parties thereto, constitute legal,valid and
binding agreements of the City, enforceable in accordance with their.respective terms,subject to
bankruptcy,insolvency,reorganization, moratorium and other laws affecting the enforcement of
A-1
creditors'rights in general and to the application of equitable principles if equitable remedies
are sought.
2. The Bonds are not subject to registration requirements of the Securities Act of
1933,as amended,and the Fiscal Agent Agreement is exempt from qualification under the Trust
Indenture Act of 1939, as amended.
3. The information contained in the Official Statement under the captions
"INTRODUCTION," "THE FINANCING PLAN," "THE SERIES 2002-A BONDS,"
"SECURITY FOR THE SERIES 2002-A BONDS," "CONCLUDING INFORMATION - Tax
Matters," "APPENDIX A- Summary of the Fiscal Agent Agreement," and "APPENDIX B -
Proposed Form of Opinion of Bond Counsel," is accurate insofar as it purports to summarize
certain provisions of the Bonds,the Fiscal Agent Agreement,the Law, federal tax law,and our
final legal opinion with respect to the Bonds delivered on the date of this opinion.
Respectfully submitted,
A-2
EXHIBIT B
[Letterhead of Disclosure Counsel]
July_, 2002
City of Huntington Beach
2900 Main Street
Huntington Beach,California 92648
Stone&Youngberg LLC
15260 Ventura Boulevard,Suite 1520
Sherman Oaks, CA 91403
Re: $4,900,000 Improvement Area A of the City of Huntington Beach Community
Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax
Bonds, Series 2002-A
Dear Ladies and Gentlemen:
We have acted as Disclosure Counsel in connection with the Improvement Area A of the
City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business
Park), (the "Improvement Area") Special Tax Bonds,Series 2002-A, in the aggregate principal
amount of$4,900,000 (the "Bonds"),sold by the City pursuant to the Bond Purchase Contract
dated June_, 2002 (the "Purchase Contract") between the City of Huntington Beach (the
"City") and Stone & Youngberg LLC. The Bonds are issued pursuant to the Fiscal Agent
Agreement, dated as June 1, 2002 (the "Fiscal Agent Agreement") between the City and BNY
Western Trust Company, as fiscal agent (the "Fiscal Agent"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Purchase Contract.
In that connection, we have reviewed certain portions of the Fiscal Agent Agreement,the
Official Statement of the City, dated June_, 2002 with respect to the Bonds (the "Official
Statement"),the Purchase Contract,certificates of the City,the Fiscal Agent,the Developer and
others, the opinions referred to in Section 8 of the Purchase Contract 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 referred to 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 thereon
from gross income for federal income tax purposes). We have assumed that all records. .
documents, certificates and opinions that we have reviewed, and the signatures thereto, are
genuine.
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 and make
B-1
no representation that we have independently verified the accuracy,completeness or fairness of
any such statements. However; in our capacity as Disclosure Counsel,we met in conferences
with representatives of the City, the City's special tax consultant, the Developer, the
Underwriter and others, during which conferences the contents of the Official Statement and
related matters were discussed. Based on our participation in the above-mentioned
conferences, and in reliance thereon and on the records, documents, certificates and opinions
herein mentioned (as set forth above),we advise you that,during the course of our assistance in
the preparation of the Official Statement for this matter, no information came to the attention
of the attorney in our firm rendering legal services in connection with such representation which
caused us to believe that the Official Statement as of its date and as of the date of this opinion
(except for any financial,statistical or engineering data or forecasts,numbers,charts,estimates,
projections, assumptions, or expressions of opinion, any information about valuation,
appraisals or environmental matters, or the Appendices, or any information about book-entry
or DTC included therein,as to which we express no opinion or view) contained or contains any
untrue statement of a material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made,not misleading.
We are furnishing this letter to you pursuant to Section 8(c)(iii) of the Purchase Contract
solely for your benefit. 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 is not to be used,
circulated,quoted or otherwise referred to or relied upon for any other purpose or by any other
person. This letter is not intended to,and may not,be relied upon by owners of Bonds.
Very truly yours,
B-2
EXHIBIT C
CERTIFICATE OF CITY OF HUNTINGTON BEACH AND
IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
I, Ray Silver, hereby certify that I am the City Administrator.of the City of Huntington
Beach (the "City") and that as such,I am authorized to execute this Certificate on behalf of the
City and Improvement Area A of the City of Huntington Beach Community Facilities District
No. 2002-1 (McDonnell Centre Business Park) (the "Improvement Area")in connection with the
issuance of the Improvement Area A of the City of Huntington Beach Community Facilities
District No. 2002-1 (McDonnell Centre Business Park), Special Tax Bonds, Series 2002-A (the
'Bonds").
I hereby further certify on behalf of the City and the Improvement Area that:
(1) the representations, warranties and covenants of the City and the
Improvement Area contained in Section 4 of that certain bond purchase contract by and
between the City and Stone & Youngberg LLC, dated June 27, 2002 (the "Purchase
Contract") are true and correct and in all material respects as of the date hereof as if
made on the date hereof;
(2) the Purchase Contract, the Fiscal Agent Agreement, the Acquisition
Agreement and the CFD Disclosure Certificate (collectively, the "Community:Facilities
District Documents"), the Bonds and the Official Statement, dated June 27, 2002
relating to the Bonds. (the "Official Statement") have been duly executed and delivered
by the City, and when executed and delivered by the other respective parties thereto,
.will constitute valid and binding obligations of the City enforceable in accordance with
their respective terms and such documents conform to the descriptions thereof in the
Official Statement;
(3) the representations and warranties of the City and the Improvement Area
contained in.the Community Facilities District Documents are true and correct in all
material respects as of the date hereof as if made on the date hereof;
(4) the City and the Improvement Area have complied with all agreements,
covenants and conditions to be complied with by the City and the Improvement Area
under the Community Facilities District Documents and the Disclosure Certificates on or
prior to the date hereof;and
(5) to the best knowledge of the undersigned,no event affecting the City or
the Improvement Area 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 with respect to the City and the Improvement Area 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.
C-1
Capitalized terms not defined herein shall have the same meaning as is set forth in the
Purchase Contract.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
hereinbelow set forth.
Dated: June 27, 2002
CITY OF HUNTINGTON BEACH
By:
City Administrator
Attest:
By:
City Clerk
Reviewed and Approved as to Form:
By:
City Attorney
C-2
EXI EBIT D
IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
SPECIAL TAX BONDS,SERIES 2002-A
Maturity Principal Interest
(September 1) Amount Rate Yield Price
2005 $ 5,000.00 4.00% 4.00% 100.000
2006 10,000.00 4.25% 4.25% 100.000
2007 15,000.00 4.50% 4.50% 100.000
2008 25,000.00 4.70% 4.70% 100.000
2009 30,000.00 4.80% 4.80% 100.000
2010 40,000.00. 4.90% 4.90% 100.000
2011 50,000.00 5.00% 5.00% 100.000
2012 55,000.00 5.15% 5.15% 100.000
2013 65,000.00 5.30% 5.30% 100.000
2014 80,000.00 5.40% 5.40% 100.000
2015 90,000.00 5.50% 5.50% 100.000
2016 100,000.00 5.60% 5.60% 100.000
2017 115,000.00 5.70% 5.70% 100.000
2018 130,000.00 5.80% 5.80% 100.000
2019 145,000.00 5.90% 5.90% 100.000
2020 160,000.00 6.00% 6.00% 100.000
2021 180,000.00 6.10% 6.10% 100.000
2022 200,000.00 6.15% 6.15% 100.000
2023 220,000.00 6.20% 6.20% 100.000
2027 1,115,000.00 6.25% 6.25% 100.000
2032 2,070,000.00 6.30% 6.30% 100.000
$4,900,000.00
D-1
Quint&Thimmig LLP FINAL
FISCAL AGENT AGREEMENT
by and between the
CITY OF HUNTINGTON BEACH
and
BNY WESTERN TRUST COMPANY,
as Fiscal Agent
Dated as of June 1,2002
Relating to:
$4,900,000
Improvement Area A of the City of Huntington Beach
Community Facilities District No.2002-1
(McDonnell Centre Business Park)
Special Tax Bonds,Series 2002-A
08003.07:J6159
TABLE OF CONTENTS
ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement......................................................................................2
Section 1.02. Agreement for Benefit of Owners of the Bonds.............................................................2
Section1.03. Definitions.................................................................................................................2
ARTICLE H
THE BONDS
Section 2.01. Principal Amount;Designation................................................................................. 11
Section 2.02. Terms of the Series 2002-A Bonds..............................................................................11
Section2.03. Redemption............................................................................................................. 13
Section 2.04. Form of Bonds.......................................................................................................... 15
Section 2.05. Execution of Bonds....................................................................................................15
Section 2.06. Transfer of Bonds.........................:............................................................................ 16
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................................................................ 17
Section 2.11. Limited Obligation....................................................................................................17
Section2.12. No Acceleration........................................................................................................ 17
Section 2.13. Issuance of Parity Bonds............................................................................................ 17
Section2.13. Book-Entry System...................................................................................................18
ARTICLE III
ISSUANCE OF BONDS
Section 3.01. Issuance and Delivery of Bonds.................................................................................20
Section 3.02. Pledge of Special Tax Revenues................................................................................20
Section 3.03. Validity of Bonds......................................................................................................20
ARTICLE IV
FUNDS AND ACCOUNTS
Section 4.01. Application of Proceeds of Sale of Bonds and Other Moneys.......................................21
Section 4.02. Improvement Fund..................................................................................................21
Section 4.03. Costs of Issuance Fund..............................................................................................22
Section 4.04. Reserve Fund...........................................................................................................22
Section4.05. Bond Fund...............................:...............................................................................24
Section 4.06. Special Tax Fund......................................................................................................25
Section 4.07. Administrative Expense Fund...................................................................................26
ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment....................................................................................................27
Section 5.02. Limited Obligation...................................................................................................27
Section-5.03. Extension of Time for Payment..................................................................................27
Section 5.04. Against Encumbrances.............................................................................................27
Section 5.05. Books and Records....................................................................................................27
Section 5.06. Protection of Security and Rights of Owners...............................................................27
Section 5.07. Compliance with Law...............................................................................................27
Section 5.08. Collection of Special Tax Revenues............................................................................27
Section 5.09. Covenant to Foreclose...............................................................................................28
Section 5.10. Further Assurances...................................................................................................29
-i-
Section 5.11. Private Activity Bond Limitations..............................................................................29
Section 5.12. Federal Guarantee Prohibition..................................................................................29
Section 5.13. Rebate Requirement.................................................................................................29
Section5.14. No Arbitrage............................................................................................................30
Section 5.15. Yield of the Bonds....................................................................................................30
Section 5.16. Maintenance of Tax-Exemption..................................................................................30
Section 5.17. Continuing Disclosure to Owners..............................................................................W
Section 5.18. Reduction of Special Taxes........................................................................................30
Section 5.19. Limits on Special Tax Waivers and Bond Tenders......................................................30
Section 5.21. Limitation on Principal Amount of Parity Bonds........................................................31
Section 5.21. Annexation of Property.............................................................................................31
ARTICLE VI
INVESTMENTS, DISPOSITION OF INVESTMENT PROCEEDS,
LIABILITY OF THE AUTHORITY
Section 6.01. Deposit and Investment of Moneys in Funds.............................................................32
Section 6.02. Limited Obligation...................................................................................................33
Section 6.03. Liability of City...........................................................:............................................33
Section 6.04. Employment of Agents by City.................................................................................34
ARTICLE VII
THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent....................................................................................35
Section 7.02. Liability of Fiscal Agent............................................................................................35
Section7.03. Information..............................................................................................................37
Section 7.04. Notice to Fiscal Agent...............................................................................................37
Section 7.05. Compensation,Indemnification.................................................................................37
Section 7.06. Books and Accounts..................................................................................................37
ARTICLE VIII
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted.............................................................................................39
Section 8.02. Owners'Meetings....................................................................................................39
Section 8.03. Procedure for Amendment with Written Consent of Owners......................................39
Section 8.04. Disqualified Bonds...................................................................................................40
Section 8.05. Effect of Supplemental Agreement............................................................................40
Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments..............................40
Section 8.07. Amendatory Endorsement of Bonds..........................................................................41
ARTICLE IX
MISCELLANEOUS
Section 9.01. Benefits of Agreement Limited to Parties and School District......................................42
Section 9.02. Successor is Deemed Included in All References to Predecessor..................................42
Section9.03. Discharge of Agreement...........................................................................................42
Section 9.04. Execution of Documents and Proof of Ownership by Owners......................................43
Section 9.05. Waiver of Personal Liability......................................................................................43
Section 9.06. Notices to and Demands on City and Fiscal Agent.....................................................43
Section 9.07. State Reporting Requirements...................................................................................44
Section9.08. Partial Invalidity......................................................................................................45
Section9.09. Unclaimed Moneys...................................................................................................45
Section9.10. Applicable Law........................................................................................................45
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Section 9.11. Conflict with Law.....................................................................................................45
Section 9.12. Conclusive Evidence of Regularity............................................................................45
Section 9.13. Payment on Business Day.........................................................................................45
Section 9.14. Counterparts............................................................................................................45
EXHIBIT A—FORM OF SERIES 2002-A BOND
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FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (the "Agreement")is made and entered into as of
June 1, 2002, by and. between the City of Huntington Beach, a chartered city and municipal
corporation organized and existing under the.laws of the State of California (the "City") for
and on behalf of Improvement Area A of the City of Huntington Beach Community Facilities
District No. 2002-1 (McDonnell Centre Business Park) ("Improvement Area A"), and BNY
Western Trust Company,a banking corporation duly organized and existing under the laws of
the State of California, as fiscal agent (the "Fiscal Agent").
RECITALS:
WHEREAS,the City Council of the City has formed the Improvement Area A under the
provisions of Chapter 3.56 (commencing with Section 3.56.010) of the Municipal Code of the
City of Huntington Beach (the "Municipal Code") and, as applicable under the Code, the
Mello-Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of the
California Government Code (the "Act," and, together with the Code, the "Law") and
Resolution No. 2002-38 of the City Council of the City adopted on June 3, 2002 (the
'Resolution of Formation");
WHEREAS,the City Council of the City, as the legislative body for Improvement Area
A,is authorized under the Law to levy special taxes to pay for the costs of Improvement Area
A and to authorize the issuance of bonds secured by said special taxes under the Law;
WHEREAS, under the provisions of the Law, on June 17, 2002 the City Council of the
City adopted its Resolution No. 2002-63 (the 'Resolution"), which resolution authorized the
issuance and sale of Improvement Area A of the City of Huntington Beach Community Facilities
District No. 2002-1 (McDonnell Centre.Business Park) Special Tax Bonds (the 'Bonds"), in the
aggregate principal amount of not to-exceed$13,000,000,authorized the issuance and sale of a
first series of the Bonds designated as "Series 2002-A" in the aggregate principal amount of not
to exceed $4,900,000,.and authorized the execution and delivery of this Agreement;
WHEREAS,it is in the public interest and for the benefit of the City, Improvement Area
A 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,the City has determined that all things necessary to cause the Bonds, when
executed by the City for Improvement Area A and issued as in the Law, the Resolution and this
Agreement provided, to be legal, valid and binding and special obligations of the City for
Improvement Area A 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.
AGREEMENT:
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 Law and the Resolution.
Section 1.02. Agreement for Benefit of Owners of the Bonds. 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 of the Bonds. 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. 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
sof 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.
"Acquisition Agreement" means the Acquisition Agreement, dated as of June 1, 2002,
between the City and Boeing Realty Corporation.
"Act" means the Mello-Roos Community Facilities Law of 1982, as amended, being
Sections 53311 et seq. of the California Government Code.
"Administrative Expenses" means costs directly related to the administration of
Improvement Area A consisting of the costs of computing the Special Taxes and preparing any
Special Tax collection schedules (whether by the Director of Administrative Services or designee
thereof or both) and the costs of collecting the Special Taxes (whether by the County or
otherwise); the costs of remitting the Special Taxes to the Fiscal Agent; fees and costs of the
Fiscal Agent(including its legal counsel) in the discharge of the duties required of it under this
Agreement; the costs of the City or any designee of the City of complying with the disclosure
provisions of the Act,the Continuing Disclosure Agreement and this Agreement, including those
related to public inquiries regarding the Special Tax and disclosures to Bondowners and the
Original Purchaser;the costs of the City or any designee of the City related to an appeal of the
Special Tax;any amounts required to be rebated to the federal government in order for the City
to comply with Section 5.13; the costs of performance by the City under the Acquisition
Agreement; an allocable share of the salaries of the City staff directly related to the foregoing
and a proportionate amount of City general administrative overhead related thereto.
.Administrative Expenses shall also include amounts advanced by the City for any
administrative purpose of Improvement Area A, including costs related to prepayments of
Special Taxes, recordings related to such prepayments and satisfaction of Special Taxes,
amounts advanced to ensure compliance with Section 5.13, costs related to annexations to
Improvement Area A, and the costs of commencing and pursuing foreclosure of delinquent
Special Taxes.
"Administrative Expense Fund" means the fund by that name established by Section
4.07(A) hereof.
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"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(including by reason of the provisions of Section 2.03(A)(ii) providing for mandatory
sinking payments), and (ii) the principal amount of the Outstanding Bonds due in such Bond
Year (including any mandatory sinking payment due in such Bond Year pursuant to Section
2.03(A)(ii)).
"Auditor"means the auditor/controller of the County.
"Authorized Officer" means the Mayor, City Administrator, City Director of
Administrative Services,City Treasurer,City Finance Officer, 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 other 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 4.05(A) hereof.
"Bond Register"means the books for the registration and transfer of Bonds maintained
by the Fiscal Agent under Section 2.08 hereof.
"Bond Year" means the one-year period beginning on September 2nd in each year and
ending on September 1st in the following year,except that the first Bond Year shall begin on the
Closing Date and end on September 1,2002.
"Bonds" means the Series 2002-A Bonds, and, if the context requires, any Parity 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 of California or any successor agency or bureau thereto.
"Capitalized Interest Account" means the account by that name established by Section
4.05(A) hereof.
"Ct "means the City of Huntington Beach,California.
"Closing Date" means July 17, 2002, being the date upon which there is a physical
delivery of the Series 2002-A Bonds in exchange for the amount representing the purchase price
of the Series 2002-A Bonds by the Original Purchaser.
"Continuing Disclosure Agreement" shall mean that certain Continuing Disclosure
Certificate — Issuer executed by the City on the Closing Date, as originally executed and as it
may be amended from time to time in accordance with the terms thereof.
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"Costs of Issuance" means items of expense payable or reimbursable directly or
indirectly by the City and related to the authorization, sale and issuance of the Bonds, which
items of expense shall include,but not be limited to, printing costs, costs of reproducing and
binding documents,closing costs,filing and recording fees, initial fees and charges of the Fiscal
Agent including.its first annual administration fee, expenses incurred by the City in connection
with the issuance of the Bonds and the establishment of Improvement Area A, special tax
consultant fees and expenses, preliminary engineering fees and expenses, Bond (underwriter's)
discount, legal fees and charges, including bond and disclosure counsel, financial consultants'
fees, charges for execution, transportation and safekeeping of the Bonds, landowner expenses
related to Improvement Area A formation,and other costs, charges and fees in connection with
the foregoing.
"Costs of Issuance Fund" means the fund by that name established by Section 4.03(A)
hereof.
"Coup "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 by reason of Section 2.03(A)(ii) 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 2.14.
"Director of Administrative Services" means the Director of Administrative Services of
the City or such other officer or employee of the City performing the functions of the chief
financial officer of the City.
"District" means the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park), formed by the City under the Law and the Resolution of
Formation.
"District Value" means the market value, as of the date of the appraisal described
below, of all parcels of real property in Improvement Area A subject to the levy of the Special
Taxes and not delinquent in the payment of any Special Taxes then due and owing, including
with respect to such nondelinquent parcels the value of the then existing improvements and any
facilities to be constructed or acquired with any amounts then on deposit in the Improvement
Fund and with the proceeds of any proposed series of Parity Bonds, as determined by reference
to (i) an appraisal performed within six (6) months of the date of issuance of any proposed
Parity Bonds by an MAI appraiser (the "Appraiser") selected by the City, or (ii), in the
alternative,the assessed value of all such nondelinquent parcels and improvements thereon as
shown on the then current County real property tax roll available to the City. The City shall not
be liable to the Owners, the Original Purchaser or any other person or entity in respect of any
appraisal provided for purposes of this definition or by reason of any exercise of discretion
made by any Appraiser pursuant to this definition.
"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 Tax Code) and,
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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 Tax 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 Tax 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 of California 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 are non-callable and which at the
time of investment are legal investments under the laws of the State of California for funds held
by the Fiscal Agent: 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.
"Fiscal Agent" means 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.
"Fiscal Year" means the twelve-month period extending from October 1 in a calendar
year to September 30 of the succeeding year,both dates inclusive.
"Improvement Area A"means Improvement Area A of the District, as first identified in
the Resolution of Intention, together with any property annexed thereto under the Act and the
Municipal Code.
"Improvement Fund" means the fund by that name created by and held by the Fiscal
Agent pursuant to Section 4.02(A) hereof.
"Independent Financial Consultant" means any consultant or firm of such consultants
appointed by the City or the Director of Administrative Services, and who, or each of whom:
.(i)has experience in matters relating to the issuance and/or administration of bonds under the
Act; (ii) is in fact independent and not under the domination of the City; (iii) does not have any
substantial interest, direct or indirect, with or in the City, or any owner of real property in
Improvement Area A, or any real property in Improvement Area A; and (iv) is not connected
with the City as an officer or employee of the City, but who may be regularly retained to make
reports to the City.
"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", 65 Broadway, 16th Floor, New York, New York
10006; 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.
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"Interest Payment Dates" means March 1 and September 1 of.each year, commencing
March 1, 2003.
."Law" means the Municipal Code and, as applicable under the Municipal Code, the
Act.
"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.
"Moody's" means Moody's Investors Service,and any successor thereto.
"Municipal Code" means Chapter 3.56 (commencing with Section 3.56.010) of the
Municipal Code of the City.
"Officer's Certificate" means a written certificate of the City signed by an Authorized
Officer of the City.
"Ordinance"means any ordinance of the City levying the Special Taxes.
"Original Purchaser" means Stone & Youngberg LLC, the first purchaser of the Bonds
from the City.
"Outstanding," when used as of any particular time with reference to Bonds, means
(subject to the provisions of Section 8.04) 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;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" or "Bondowner" means any person who shall be the registered owner of any
Outstanding Bond.
"Parity Bonds" means any bonds issued by the City for Improvement Area A on a
parity with any then Outstanding Bonds pursuant to Section 2.13 hereof.
"Participating Underwriter" shall have the meaning ascribed thereto in the Continuing
Disclosure Agreement.
"Permitted Investments" means any of the following, but only to the extent that the
same are acquired at Fair Market Value:
(a) Federal Securities.
(b) Time certificates of deposit or negotiable certificates of deposit issued by a
state or nationally chartered bank (including the Fiscal Agent and its affiliates) or trust
company, or a state or federal savings and loan association; provided, that the
certificates of deposit shall be one or more of the following: continuously and fully
insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan
Insurance Corporation,and/or continuously and fully secured by securities described in
subdivision (a) of this definition of Permitted Investments which shall have a market
value, as determined on a marked-to-market basis calculated at least weekly, and
exclusive of accrued interest, of not less than 102 percent of the principal amount of the
certificates on deposit.
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(c) Commercial paper of"prime" quality of the highest ranking or of the highest
letter and numerical rating as provided by either Moody's or S&P, which commercial
paper is limited to issuing corporations that are organized and operating within the
United States of America and that have total assets in excess of five hundred million
dollars ($500,000,000) and that have an "A" or higher rating for the issuer's debentures,
other than commercial paper, by either Moody's or S&P, provided that purchases of
eligible commercial paper may not exceed 180 days' maturity nor represent more than
10 percent of the outstanding commercial paper of an issuing corporation.
(d) A repurchase agreement with a state or nationally charted bank or trust
company or a national banking association or government bond dealer reporting to,
trading with, and recognized as a primary dealer by the Federal Reserve Bank of New
York, or any other financial institution 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 S&P and Moody's;
provided that all of the following conditions are satisfied: (1) the agreement is secured
by any one or more of the securities described in subdivision (a) of this definition of
Permitted Investments, (2) the underlying securities are required by the repurchase
agreement to be held by a bank, trust company, or primary dealer having a combined
capital and surplus of at least one hundred million dollars ($100,000,000) and which is
independent of the issuer of the repurchase agreement, and (3) the underlying securities
are maintained at a market value, as determined on a marked-to-market basis
calculated at least weekly, of not less than 103 percent of the amount so invested.
(e) An investment agreement or guaranteed investment contract with, or
guaranteed by, a financial institution the long-term unsecured obligations of which are
rated "AA3" or better by Moody's and "AA-" or better by S&P at the time of initial
investment. The investment agreement shall be subject to a downgrade provision with at
least the following requirements: (1) the agreement shall provide that within five
business days after the financial institution's long-term unsecured credit rating has been
withdrawn, suspended, other than because of general withdrawal or suspension by
Moody's or S&P from the practice of rating that debt, or reduced below "AA-" by S&P
or below "Aa3"by Moody's (these events are called "rating downgrades") the financial
institution shall give notice to the Fiscal Agent and, within the five-day period, and for
as long as the rating downgrade is in effect,shall deliver in the name of the Fiscal Agent
to the Fiscal Agent federal securities allowed as investments under subdivision (a) of
this-definition of Permitted Investments with aggregate current market value equal to at
least 105 percent of the principal amount of the investment agreement invested with the
financial institution at that time, and shall deliver additional allowed federal securities
as needed to maintain an aggregate current market value equal to at least 105 percent of
the principal amount of the investment agreement within three days after each
evaluation date,which shall be at least weekly,and (2) the agreement shall provide that,
if the financial institution's long-term unsecured credit rating is reduced below "A3" by
Moody's or below "A-"by S&P,the Fiscal Agent may,upon not more than five business
days' written notice to the financial institution, withdraw the investment agreement,
with accrued but unpaid interest thereon to the date,and terminate the agreement.
(f) The Local Agency Investment Fund of the State Treasurer of the State of
California as permitted by the State Treasurer pursuant to Section 16429.1 of the
California Government Code.
(g) Investments in money market accounts (including any accounts of the Fiscal
Agent and its affiliates for which they may receive compensation) registered under the
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Federal Investment Company Act of 1940,whose shares are registered under the Federal
Securities Act of 1933 and having a rating by S&P of AAAm-G, AAAm, or Aam, and if
rated by Moody's,having a rating of Aaa, Aal or Aa2.
(h) Bonds, debentures, notes or other evidence issued or guaranteed by any of
the following Federal agencies and provided such obligations are backed by the full faith
and credit of the United States of America (stripped securities are only permitted if they
have been stripped by the agency itself):
(i) U.S. Export-Import Bank
Direct obligations or fully guaranteed certificates of beneficial
ownership
(ii) Farmers Home Administration
Certificates of beneficial ownership
(iii) Federal Financing Bank
(iv) Federal Housing Administration Debentures
(v) General Services Administration
Participation certificates
(vi) Government National Mortgage Association(GNMA)
GNMA-guaranteed mortgage-backed bonds
GNMA-guaranteed pass-through obligations
(vii) U.S.Maritime Administration
Guaranteed Title XI financing
(viii) U.S. Department of Housing and Urban Development
Project Notes
Local Authority Bonds
New Communities Debentures-United States government
guaranteed debentures
U.S. Public Housing Notes and Bonds-United States government
guaranteed public housing notes and bonds;
(i) Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit United States government
agencies(stripped securities are only permitted if they have been stripped by the agency
itself):
(i) Federal Home Loan Bank System
Senior debt obligations
(ii) Federal Home Loan Mortgage Corporation
Participation Certificates
Senior debt obligations
(iii) Federal National Mortgage Association
Mortgage-backed securities and senior debt obligations
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(iv) Student Loan Marketing Association
Senior debt obligations
(v) Resolution Funding Corporation(REFCORP)obligations;and
(vi) Farm Credit System
Consolidated systemwide bonds and notes;
(j) Forward Delivery Agreements or Forward Purchase and Sale Agreements,
having as the underlying investment property those investments which are described in
clause (a), (c) and/or (h) above.
"Principal Office" means the principal corporate trust office of the Fiscal Agent set forth
in Section 9.06, except for the purpose of maintenance of the registration books and
presentation of Bonds for payment, transfer or exchange, such term shall mean the office at
which the Fiscal Agent conducts its corporate agency business, or such other or additional
offices as may be designated by the Fiscal Agent.
"Project"means the facilities more particularly described in the Resolution of Formation.
"Qualified Reserve Fund Credit Instrument"means an irrevocable standby or direct-pay
letter of credit or surety bond issued by a commercial bank or insurance company and
deposited with the Fiscal Agent pursuant to Section 4.04(H), provided that all of the following
requirements are met: (a) the long-term credit rating or claims paying ability of such bank or
insurance company is in one of the two highest rating categories by S&P and Moody's; (b) such
letter of credit or surety bond has a term of at least twelve (12) months; (c) such letter of credit
or surety bond has a stated amount at least equal to the portion of the Reserve Requirement
with respect to which funds are proposed to be released pursuant to Section 4.04(H); and (d)
the Fiscal Agent is authorized pursuant to the terms of such letter of credit or surety bond to
draw thereunder for the purpose of making payments'required pursuant to Section 4.04.
"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.
"Reserve Fund" means the fund by that name established pursuant to Section 4.04(A)
hereof.
"Reserve Requirement" means,as of any date of calculation an amount equal to the least
of (i) the then Maximum Annual Debt Service, (ii) one hundred twenty-five percent (125%) of
the then average Annual Debt Service, or (iii) ten percent (10%) of the then Outstanding
principal amount of the Bonds. The Reserve Requirement as of the Closing Date is$490,000.00.
"Resolution" means Resolution No. 2002-63, adopted by the City Council of the City on
June 17, 2002.
"Resolution of Formation"means Resolution No. 2002-38, adopted by the City Council
of the City on June 3,2002.
"Resolution of Intention" means Resolution No. 2002-26 adopted by the City Council of
the City on April 1, 2002.
"S&P" means Standard & Poor's Ratings Service, a division of McGraw-Hill, and any
successor thereto.
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"Securities Depositories" means The Depository Trust Company, 55 Water Street, 501"
Floor, New York, New York 10041-0099, Attention: Call Notification Department, Fax (212)
855-7232; 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.
"Series 2002-A Bonds" means the Bonds so designated and authorized to be issued
under Section 2.01 hereof.
"Special Tax Fund" means the fund by.that name established by Section 4.06(A) hereof.
"Special Tax Prepayments" means the proceeds of any Special Tax prepayments
received by the City, as calculated pursuant to the Rate and Method of Apportionment of the
Special Taxes for Improvement Area A, less any administrative fees or penalties collected as
part of any such prepayment.
"Special Tax Prepayments Account" means the account by that name_established by
Section 4.05(A) hereof.
"Special Tax Revenues" means the proceeds of the Special Taxes received by the City,
including any scheduled payments and any prepayments thereof, interest thereon 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 lien and interest thereon. "Special Tax Revenues" does not include
any penalties collected in connection with delinquent Special Taxes.
"Special Taxes" means the special taxes levied within Improvement Area A pursuant to
the Law,the Ordinance and this Agreement.
"Supplemental A,gi:eement"means an agreement the execution of which is authorized by
a resolution which has been duly adopted by the City under the Law 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.
"Tax Code" means the Internal Revenue Tax Code of 1986 as in effect on the date of
issuance of the Series 2002-A 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 proposed, temporary and final regulations promulgated, and applicable official
public guidance published,under the Tax Code.
"Tax Consultant" means Michael Swan Consulting or another independent financial or
tax consultant retained by the City for the purpose of computing the Special Taxes.
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ARTICLE II
THE BONDS
Section 2.01. Principal Amount; Designation. Bonds in the aggregate principal amount
of Thirteen Million Dollars ($13,000,000) are hereby authorized to be issued by the City for
Improvement Area A under and subject to the terms of the Resolution and this Agreement, the
Law and other applicable laws of the State of California. The Series 2002-A Bonds shall be
designated as the "Improvement Area A of the City of Huntington Beach Community Facilities
District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds, Series 2002-A," and
shall be in the initial principal amount of$4,900,000.
Section 2.02. Terms of the Series 2002-A Bonds.
(A) Form;Denominations. The Series 2002-A Bonds shall be issued as fully registered
Bonds without coupons in the denomination of$5,000 or any integral multiple in excess thereof.
(B) Date of Bonds. The Series 2002-A 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 Series 2002-A Bonds shall mature and become
payable on September 1 in each of the years, and shall bear interest at the rates per annum as
follows:
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Maturity Date
(September 1) Principal Amount Interest Rate
2005 $ 5,000 4.00%
2006 10,000 4.25
2007 15,000 4.50
2008 25,000 4.70
2009 30,000 4.80
2010 40,000 4.90
2011 50,000 5.00
2012 55,000 5.15
2013 65,000 5.30
2014 80,000 5.40
2015 90,000 5.50
2016 100,000 5.60
2017 115,000 5.70
2018 130,000 5.80
2019 145,000 5.90
2020 160,000 6.00
2021 180,000 6.10
2022 200,000 6.15
2023 220,000 6.20
2027 1,115,000 6.25
2032 2,070,000 6.30
(E) Interest. The Series 2002-A 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 Pay men 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 pursuant to Section 2.14), 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
received before the applicable Record Date, 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.
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Section 2.03. Redemption.
(A) Redemption Dates.
(i) Optional Redemption. The Series 2002-A Bonds are subject to optional
redemption prior to their stated maturity on any Interest Payment Date,as a whole or in
part,among maturities so as to maintain substantially the same debt service profile as in
effect on the Closing Date and by lot within a maturity, at a redemption price
(expressed as a percentage of the principal amount of the Series 2002-A Bonds to be
redeemed), as set forth below, together with accrued interest thereon to the date fixed
for redemption:
Redemption Dates Redemption Prices
Any Interest Payment Date from March 1,2003 103.0%
to and including March 1,2010
September 1, 2010 and March 1, 2011 102.0
September 1, 2011 and March 1, 2012 101.0
September 1,2012 and any Interest Payment 100.0
Date thereafter
(ii) Mandatory Sinking Payment Redemption. The Series 2002-A Bonds maturing
on September 1,2027, are subject to mandatory sinking payment redemption in part on
September 1, 2024, and on each September 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
payments as follows:
Redemption Date
(September 1) Sinking Payments
2024 $240,000
2025 265,000
2026 290,000
2027 (maturity) 320,000
The Series 2002-A Bonds maturing on September 1, 2032, are subject to
mandatory sinking payment redemption in part on September 1, 2028, and on each
September 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 payments as follows:
Redemption Date
(September 1) Sinking Payments
2028 $345,000
2029 380,000
2030 410,000
2031 450,000
2032 (maturity) 485,000
The amounts in the foregoing tables shall be reduced to the extent practicable so
as to maintain the same debt service profile as in effect on the Closing Date on the Series
2002-A Bonds, as a result of any prior partial redemption of the Series 2002-A Bonds
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pursuant to Section 2.03(A)(i) above or Section 2.03(A)(iii) below, as specified in
writing by an Authorized Officer to the Fiscal Agent.
(iii) Redemption From Special Tax Prepayments. Special Tax Prepayments and
any corresponding transfers from the Reserve Fund pursuant to Section 4.05(B)(ii) and
Section 4.04(F), respectively, shall be used to redeem Series 2002-A Bonds on the next
Interest Payment Dates for which notice of redemption can timely be given under Section
2.03(D), among maturities so as to maintain substantially the same debt service profile
as in effect on the Closing Date and by lot within a maturity, at a redemption price
(expressed as a percentage at the principal amount of the Series 2002-A Bonds to be
redeemed), as set forth below, together with accrued interest to the date fixed for
redemption:
Redemption Dates Redemption Prices
Any Interest Payment Date from March 1,2003 to 103.0%
and including March 1,2010
September 1, 2010 and March 1, 2011 102.0
September 1, 2011 and March 1, 2012 101.0
September 1,2012 and any Interest Payment Date 100.0
thereafter
(B) Notice to Fiscal Agent. The City shall give the Fiscal Agent written notice of its
intention to redeem Bonds pursuant to subsection (A)(i) or (A)(iii) not less than forty-five (45)
days prior to the applicable redemption date, or such lesser number of days as shall be
consented to by the Fiscal Agent.
(C) Purchase of Bonds in Lieu of Redemption. In lieu of redemption under 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
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, plus interest accrued
to the date of purchase and any premium which would otherwise be due if such Bonds were to
be redeemed in accordance with this Agreement.
(D) 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 Original Purchaser, to
the Securities Depositories,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 designate the CUSIP
numbers and Bond numbers of the Bonds to be redeemed by giving the individual CUSIP
number and Bond number of each Bond to be redeemed or shall state that all Bonds between
two stated Bond numbers,both inclusive,are to be redeemed or that all of the Bonds of one or
more maturities have been 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
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shall state that further interest on such Bonds will not accrue from and after the redemption
date.
Upon the payment of the redemption price of Bonds being redeemed, each check or
other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP
number identifying, by issue and maturity, of the Bonds being redeemed with the proceeds of
such check or other transfer.
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, among maturities
as directed in writing by the Director of Administrative Services (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, unless otherwise specified herein), and by lot within a
maturity 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.
(E) 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 on or after the redemption date
specified in such notice.
All Bonds redeemed and purchased 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.
Section 2.04. Form of Bonds. The Series 2002-A Bonds, the form of Fiscal Agent's
certificate of authentication and the form of 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 Law.
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 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 signature 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, 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
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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 form 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 Bonds shall be surrendered for transfer, the City shall execute
and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds, for like aggregate
principal amount of authorized denomination(s).
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, (ii) with respect to a
Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the
succeeding Interest Payment Date.
Section 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Office of
the Fiscal Agent for a like aggregate principal amount of Bonds of authorized denominations
and of the same series and 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, (ii) with respect to a
Bond after such Bond has been selected for redemption, or (iii) between a Record Date and the
succeeding Interest Payment Date.
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, 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
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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 to this Agreement as definitive Bonds authenticated and delivered hereunder.
Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the City, at the expense of the Owner of said Bond, shall execute, and the Fiscal
.Agent shall authenticate and deliver, a new 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
be canceled by it and destroyed by the Fiscal Agent who shall deliver a certificate of destruction
thereof to the City. If any Bond shall be lost, destroyed or stolen, evidence of such loss,
destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory
to it and indemnity for the City and the Fiscal Agent satisfactory to the Fiscal Agent shall be
given, the City, at the expense of the Owner, shall execute, and the Fiscal Agent shall
authenticate and deliver, a new Bond of like tenor and principal amount in lieu of and in
substitution for the Bond so lost, destroyed or stolen. The City may require payment of a sum
not exceeding the actual cost of preparing each new Bond delivered under this Section and of
the expenses which may be incurred by the City and the Fiscal Agent for the preparation,
execution,authentication and delivery. Any Bond delivered under the provisions of this Section
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 be special obligations of the City,payable solely from the Special Tax Revenues
and the funds pledged therefore hereunder. Neither the faith and credit nor the taxing power of
the City(except to the limited extent set forth herein) or the State of California 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 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. Issuance of Parity Bonds. The City may from time to time issue bonds
(the "Parity Bonds"), in addition to the Series 2002-A Bonds authorized under Section 2.01
hereof, by means of a Supplemental Agreement and without the consent of any Bondowners,
upon compliance with the provisions of this Section 2.13. Any such Parity Bonds shall
constitute Bonds hereunder and shall be secured by alien on the Special Tax Revenues and
funds pledged for the payment of the Bonds hereunder on a parity with all other Bonds
Outstanding hereunder. The City may issue the Parity Bonds subject to the following specific
conditions precedent:
(A) Current Compliance. The City shall be in compliance on the date of issuance of the
Parity Bonds with all covenants set forth in this Agreement and all Supplemental Agreements.
(B) Payment Dates. The Supplemental Agreement providing for the issuance of such
Parity Bonds shall provide that interest thereon shall be payable on March 1 and September 1,
and principal thereof shall be payable on September 1 in any year in which principal is payable
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(provided that there shall be no requirement that any Parity Bonds pay interest on a current
basis).
(C) Funds and Accounts; Reserve Fund Deposit. The Supplemental Agreement
providing for the issuance of such Parity Bonds may provide for the establishment of separate
funds and accounts, and shall provide for a deposit to the Reserve Fund in an amount
necessary so that the amount on deposit therein,following the issuance of such Parity Bonds, is
equal to the Reserve Requirement.
(D) Value-to-Lien Ratio. The District Value shall be at least three times the sum of: (i)
the aggregate principal amount of all Bonds then Outstanding, plus (ii) the aggregate principal
amount of the series of Parity Bonds proposed to be issued, plus (iii) the aggregate principal
amount of any fixed assessment liens on the parcels in Improvement Area A subject to the levy
of Special Taxes, plus (iv) a portion of the aggregate principal amount of any and all other
community facilities district bonds then outstanding and payable at least partially from special
taxes to be levied on parcels of land within Improvement Area A (the "Other District Bonds")
equal to the aggregate principal amount of the Other District Bonds multiplied by a fraction, the
numerator of which is the amount of special taxes levied for the Other District Bonds on parcels
of land within Improvement Area A, and the denominator of which is the total amount of
special taxes levied for the Other District Bonds on all parcels of land against which the special
taxes are levied to pay the Other District Bonds (such fraction to be determined based upon the
maximum special taxes which could be levied in the year in which maximum annual debt service
on the Other District Bonds occurs), based upon information from the most recent available
Fiscal Year.
(E) The Special Tax Coverage Test. The City shall obtain a certificate of a Tax
Consultant to the effect that(i) the amount of the maximum Special Taxes that may be levied in
each Fiscal Year, after deducting an amount determined by the City as appropriate to pay for
annual Administrative Expenses, shall be at least one hundred ten percent (110%) of the total
Annual Debt Service for each such Fiscal Year on the Bonds and the proposed Parity Bonds,
and (ii) the aggregate Special Tax Prepayments that could occur after the issuance of the Parity
Bonds is not less than the Outstanding principal amount of the Bonds and such Parity Bonds.
(F) Officer's Certificate. The City shall deliver to the Fiscal Agent an Officer's
Certificate certifying that the conditions precedent to the issuance of such Parity Bonds set
forth in subsections (A), (B), (C), (D) and (E) of this Section 2.13 have been satisfied, and the
limitation in Section 5.20 has not been exceeded.
Section 2.14. Book-Entry System. DTC shall act as the initial Depository for the Bonds.
One Bond for each maturity of the Series 2002-A 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
Series 2002-A 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
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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
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 2.14 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 Series 2002-A Bonds for Improvement Area A in the
aggregate principal amount set forth in Section 2.01 and, subject to the provisions of Section
-2.13, any Parity Bonds. 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 Law, 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.
Section 3.02. 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 (including the Special Tax
Prepayments Account and the Capitalized Interest Account therein), 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 Law 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 Improvement Fund and the Costs of
Issuance Fund are not pledged to the repayment of the Bonds. The facilities financed with the
proceeds of the Bonds are not in any way pledged to pay the Debt Service on the Bonds. Any
proceeds of condemnation or destruction 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 3.03. Validity of Bonds. The validity of the authorization and issuance of the
Bonds shall not be dependent upon the completion of the construction of the Project, or upon
the performance by any person of such persons obligation(s)with respect to the Project.
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.ARTICLE W
FUNDS AND ACCOUNTS
Section 4.01. Application of Proceeds of Sale of Bonds and Other Moneys. The
proceeds of the purchase of the Series 2002-A Bonds by the Original Purchaser (being
$4,805,862.30) shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and
deposit such proceeds on the Closing Date as follows:
(A) Deposit in the Costs of Issuance Fund an amount equal to $150,000.00;
(B) Deposit in the Reserve Fund an amount equal to $490,000.00;
(C) Deposit in the Improvement Fund an amount equal to$4,059,569.34;
(D) Deposit in the Capitalized Interest Account of the Bond Fund an amount
equal to $36,292.96; and
(E) Deposit in the Administrative Expense Fund an amount equal to $70,000.00.
Section 4.02. Improvement Fund
(A) Establishment of Improvement Fund. There is hereby established as a separate
fund to be held by the Fiscal Agent, the Improvement Area A of the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Improvement Fund
(the "Improvement Fund"). Deposits shall be made to the Improvement Fund as required by
Sections 4.01(C) and by any Supplemental Agreement. Moneys in the Improvement Fund shall
be held in trust by the Fiscal Agent for the benefit of the City, and shall be disbursed for the
payment or reimbursement of costs of the Project.
(B) Procedure for Disbursement. Disbursements from the Improvement Fund shall be
made by the Fiscal Agent upon receipt of an Officer's Certificate which shall: (i) set forth the
amount required to be disbursed,the purpose for which the disbursement.is to be made (which
shall be for payment of a Project cost or to reimburse expenditures of the City or any other
party for Project costs previously paid),that the disbursement is a proper expenditure from the
Improvement Fund,and the person to which the disbursement is to be paid; and (ii) certify that
no portion of the amount then being requested to be disbursed was set forth in any Officer's
Certificate previously filed requesting a disbursement. Notwithstanding .the foregoing, no
Officer's Certificate shall request a disbursement from the Improvement Fund for the payment
of the cost of right-of-way under the Acquisition Agreement until a guaranty of The Boeing
Company substantially in the form of Exhibit D to the Acquisition Agreement has been
delivered to the City,as described in Section 5.06F. of the Acquisition Agreement.
Each such Officer's Certificate submitted to the Fiscal Agent as described in this Section
4.02(B) shall be sufficient evidence to the Fiscal Agent of the facts stated therein, and the Fiscal
Agent shall have no duty to confirm the accuracy of such facts.
(C) Investment. Moneys in the accounts within the Improvement Fund shall be invested
and deposited in accordance with Section 6.01. Interest earnings and profits from the
investment and deposit of amounts in the Improvement Fund shall be retained in the
Improvement Fund to be used for the purposes of the Improvement Fund.
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(D) Closing of Fund. Upon the filing of an Officer's Certificate stating that the Project
has been completed and that all costs of the Project have been paid, or that any such costs are
not required to be paid from the Improvement Fund,the Fiscal Agent shall transfer the amount,
if any,remaining in the Improvement Fund to the Bond Fund to be used to pay debt service on
the Bonds on the next Interest Payment Date and the Improvement Fund shall be closed.
Section 4.03. Costs of Issuance Fund.
(A) Establishment of Costs of Issuance Fund. There is hereby established as a separate
fund to be held by the Fiscal Agent, the Improvement Area A of the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Costs of Issuance
Fund (the "Costs of Issuance Fund"),to the credit of which a deposit shall be made as required
by Section 4.01(A). Moneys in the Costs of Issuance Fund shall be held in trust by the Fiscal
Agent and shall be disbursed as provided in subsection (B) of this Section 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 containing respective amounts to
be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal
Agent concurrently with the delivery of the Series 2002-A Bonds. The Fiscal Agent shall pay all
Costs of Issuance after receipt of an invoice from any such payee which requests payment in an
amount which is less than or equal to the amount set forth with respect to such payee pursuant
to an Officer's Certificate requesting payment of Costs of Issuance. The Fiscal Agent shall
maintain the Costs of Issuance Fund for a period of 90 days from the date of delivery of the
Series 2002-A Bonds and then shall transfer any moneys remaining therein, including any
investment earnings thereon,to the Administrative Expense Fund.
(C) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited
in accordance with Section 6.01. 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.
Section 4.04. Reserve Fund.
(A) Establishment of Fund. There is hereby established as a separate fund to be held
by the Fiscal Agent, the Improvement Area A of the City of Huntington Beach Community
Facilities District No. 2002-1 (McDonnell Centre Business Park) Reserve Fund (the "Reserve
Fund"), to the credit of which a deposit shall be made as required by Section 4.01(B) equal to
the Reserve Requirement as of the Closing Date for the Series 2002-A Bonds, and deposits shall
be made as provided in Sections 4.06(B) and 2.14(C). 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 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 Due to Deficiency in Bond Fund. Whenever transfer is made from the
Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Fiscal Agent shall
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provide written notice thereof to the Director of Administrative Services, specifying the amount
withdrawn.
(D) Transfer of Excess of Reserve Requirement. Whenever,on the Business Day prior to
any Interest Payment Date, or on any other date at the written request of the Director of
Administrative Services, the amount in the Reserve Fund exceeds the Reserve Requirement, the
Fiscal Agent shall provide written notice to the Director of Administrative Services 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 used.for the payment of interest on the Bonds on the next Interest Payment
Date in accordance with Section 4.05.
(E) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the
Reserve Fund equals or 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 Fiscal Agent shall upon the written direction of the Director of Administrative
Services transfer the amount 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
2.03 and 4.05, 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 City
to be used for any lawful purpose of the City.
Notwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund
pursuant to this Section 4.04(E) until after (i) the calculation of any amounts due to the federal
government pursuant to Section 5.13 following payment of the Bonds and withdrawal of any
such amount from the Reserve Fund for purposes of making such payment to the federal
government,and (ii)payment of any fees and expenses due to the Fiscal Agent.
(F) Transfer Upon Special Tax Prepayment. Whenever Special Taxes are prepaid and
Bonds .are to be redeemed with the proceeds of such prepayment pursuant to Section
2.03(A)(iii), a proportionate amount in the Reserve Fund (determined on the basis of the
principal of Bonds to be redeemed,and the original principal of the Bonds) shall be transferred
on the Business Day prior to the redemption date by the Fiscal Agent to the Bond Fund to be
applied to the redemption of the Bonds pursuant to Section 2.03(A)(iii). The Director of
Administrative Services shall deliver to the Fiscal Agent an Officer's Certificate specifying any
amount to be so transferred, and the Fiscal Agent may rely on any such Officer's Certificate.
(G) Transfer to Pay Rebate. Amounts in the Reserve Fund may at any time be used, at
the written direction of an Authorized Officer,for purposes of paying any rebate liability under
Section 5.13.
(H) Substitution of Qualified Reserve Fund Credit Instrument. The City shall have the
right at any time to release funds from the Reserve Fund,in whole or in part, by tendering to the
Fiscal Agent: (i) a Qualified Reserve Fund Credit Instrument, and (ii) an opinion of Bond
Counsel stating that neither the release of such funds nor the acceptance of such Qualified
Reserve Fund Credit Instrument will cause interest on the Bonds to become includable in gross
income for purposes of federal income taxation. Upon tender of such items to the Fiscal Agent,
and upon delivery by the City to the Fiscal Agent of a written calculation of the amount
permitted to be released from the Reserve Fund (upon which calculation the Fiscal Agent may
conclusively rely),the Fiscal Agent shall transfer such funds from the Reserve Fund to the City
free and clear of the lien of this.Agreement, to be used by the City for any lawful purpose of
Improvement Area A under the Law. The Fiscal Agent shall comply with all documentation
relating to a Qualified Reserve Fund Credit Instrument as shall be required to maintain such
Qualified Reserve Fund Credit Instrument in full force and effect and as shall be required to'
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receive payments thereunder in the event and to the extent required to make any payment when
and as required under Section 4.04.
At least fifteen (15) days prior to the expiration of any Qualified Reserve Fund Credit
Instrument,the City shall be obligated either (i) to replace such Qualified Reserve Fund Credit
Instrument with a new Qualified Reserve Fund Credit Instrument, or (ii) to deposit or cause to
�be deposited with the Fiscal Agent an amount of funds such that the amount on deposit in the
:Reserve Fund is equal to the Reserve Requirement (without taking into account such expiring
Qualified Reserve Fund Credit Instrument). In the event that the City shall fail to.take action as
specified in clause (i) or (ii) of the preceding sentence, the Fiscal Agent shall, prior to the
expiration thereof,draw upon the Qualified Reserve Fund Credit Instrument in full and deposit
the proceeds of such draw in the Reserve Fund.
In the event that the Reserve Requirement shall at any time be maintained in the Reserve
Fund in the form of a combination of cash and a Qualified Reserve Fund Credit Instrument, the
Fiscal Agent shall apply the amount of such cash to make any payment required to be made
from the Reserve Fund before the Fiscal .Agent shall draw any moneys under such Qualified
Reserve Fund Credit Instrument for such purpose. In the event that the Fiscal Agent shall at any
time draw funds under a Qualified Reserve Fund Credit Instrument to make any payment then
required to be made from the Reserve Fund,the Special Tax Revenues thereafter received by the
Fiscal Agent, to the extent deposited to the Reserve Fund under Section 4.06(B)(ii), shall be
used to reinstate the Qualified Reserve Fund Credit Instrument.
Section 4.05. Bond Fund.
(A) Establishment of Bond Fund, Capitalized Interest Account and Special Tax
Prepayments Account. There is hereby established as a separate fund to be held by the Fiscal
Agent the Improvement Area A of the City of Huntington Beach Community Facilities District
No. 2002-1 (McDonnell Centre Business Park) Bond Fund (the 'Bond Fund"), to the credit of
which deposits shall be made as required by Sections 4.02(D), 4.04(B), 4.04(D), 4.04(E),
4.04(F), and 4.06(B), and any other amounts required to be deposited therein by this Agreement
or the Law.There is also hereby created in the Bond Fund,a separate account held by the Fiscal
Agent, the Capitalized Interest Account, to the credit of which deposits shall be made under
Section 4.01(D). There is also hereby created in the Bond Fund a separate account to be held by
the Fiscal Agent, consisting of the Special Tax Prepayments Account, to the credit of which
deposits shall be made as provided in Section 4.06(A).
Moneys in the Bond Fund and the accounts therein shall be held in trust by the Fiscal
Agent for the benefit of 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, and, pending
such disbursement,shall be subject to a lien in favor of the Owners of the Bonds.
(B) Disbursements. (i) Bond Fund 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, and interest and any premium, then due and payable on the
Bonds,including any amounts due on the Bonds by reason of the sinking payments set
forth in Section 2.03(A)(ii), or a redemption of the Bonds required by Section 2.03(A)(i)
or (iii), such payments to be made in the priority listed in the second succeeding
paragraph. Notwithstanding the foregoing, amounts in the Bond Fund as a result of a
transfer pursuant to Section 4.02(D) shall be used to pay the interest on the Bonds prior
to the use of any other amounts in the Bond Fund for such purpose.
In the event that amounts in the Bond Fund are insufficient for the purposes set
forth in the preceding paragraph,the Fiscal Agent shall withdraw from the Reserve Fund
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to the extent of any funds therein amounts 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 transfers, 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)(i), 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 as scheduled shall be
added to the sinking payment to be made on the next sinking payment date.
(ii) Special Tax Prepayments Account Disbursements. Moneys in the Special
Tax Prepayments Account shall be transferred by the Fiscal Agent to the Bond Fund on
the next date for which notice of redemption of Bonds can timely be given under Section
2.03(A)(iii), and notice to the Fiscal Agent can timely be given under Section 2.03(B),
and shall be used (together with any amounts transferred pursuant to Section 4.04(F)) to
redeem Bonds on the redemption date selected in accordance with Section 2.03.
(iii) Capitalized Interest Account Disbursements. All moneys in the Capitalized
Interest Account shall be transferred to the Bond Fund on the Business Day prior to each
Interest Payment Date,in the amount equal to and to be used for the payment of interest
on the Bonds due on the next succeeding Interest Payment Date; provided that no such
transfer shall exceed the amount then on deposit in the Capitalized Interest Account.
When no amounts remain on deposit in such account, the Capitalized Interest Account
shall be closed.
(C) Investment. Moneys in the Bond Fund, the Capitalized Interest Account and the
Special Tax Prepayments Account shall be invested and deposited in accordance with Section
6.01. Interest earnings and profits resulting from the investment and deposit of amounts in the
Bond Fund, the Capitalized Interest Account and the Special Tax Prepayments Account shall
be retained- in the Bond Fund, the Capitalized Interest Account and the Special Tax
Prepayments Account,respectively,to be used for purposes of such fund and accounts.
Section 4.06. Special Tax Fund.
(A) Establishment of Special Tax Fund. There is hereby established as a separate fund
to be held by the Fiscal Agent, the Improvement Area A of the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Fund
(the "Special Tax Fund"), to the credit of which the Fiscal Agent shall deposit amounts received
from or on behalf of the City consisting of Special Tax Revenues, and any amounts required by
Section 4.07(B) to be deposited therein. The City shall remit, not later than five (5) Business
Days after receipt,all Special Taxes received by it to the Fiscal Agent for deposit by the Fiscal
Agent to the Special Tax Fund.
Notwithstanding the foregoing, any proceeds of Special Tax Prepayments shall be
transferred by the City to the Fiscal Agent for deposit by the Fiscal Agent (as specified in
writing by an Authorized Officer to the Fiscal Agent) in the Special Tax Prepayments Account
established pursuant to Section 4.05(A).
Moneys in the Special Tax Fund shall be held in trust by the Fiscal Agent for the benefit
of the City and the Owners of the Bonds, shall be disbursed as provided below and, pending
disbursement,shall be subject to a lien in favor of the Owners of the Bonds and the City.
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(B) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw
from the Special Tax Fund and transfer the following amounts in the following order of priority
(i) to the Bond Fund an amount, taking into account any amounts then on deposit in the Bond
Fund and any expected transfers from the Improvement Fund, the Reserve Fund, the
Capitalized Interest Account and the Special Tax Prepayments Account to the Bond Fund
pursuant to Sections 4.02(D), 4.04(D), (E), and (F), and 4.05(B)(ii) and (iii), such that the
amount in the Bond Fund equals the principal(including any sinking payment),premium,if any,
and interest due on the Bonds on such Interest Payment Date, and (ii) 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 is equal to the Reserve Requirement. Amounts in the Special Tax Fund shall
also be transferred from time to time by the Fiscal Agent,at the written direction of the City, to
the Administrative Expense Fund,but the City agrees that any such transfers shall not exceed,
in any Fiscal Year, the amount included in the Special Tax levy for such Fiscal Year for
Administrative Expenses.
(C) Investment. Moneys in the Special Tax 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 Special Tax Fund to be used for the purposes thereof.
Section 4.07. Administrative Expense Fund.
(A) Establishment of Administrative Expense Fund. There is hereby established as a
separate fund to be held by the Fiscal Agent, the Improvement Area A of the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)
Administrative Expense Fund (the "Administrative Expense Fund"), to the credit of which
deposits shall be made as required by Sections 4.01(E), 4.03(B) and 4.06(B). Moneys in the
-Administrative Expense_Fund shall be held in trust by the Fiscal Agent 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 Fiscal Agent and paid to the City or its order upon receipt by the Fiscal Agent of an
Officer's Certificate stating-the amount to be withdrawn,that such amount is to be used to pay
an Administrative Expense or a Costs of Issuance, and the nature of such Administrative
Expense or Costs of Issuance. Amounts transferred from the Costs of Issuance Fund to the
Administrative Expense Fund pursuant to Section 4.03(B) shall be separately identified at all
times, and shall be expended for purposes of the Administrative Expense Fund prior to the use
of amounts transferred to the Administrative Expense Fund from the Special Tax Fund
pursuant to Section 4.06(B).
Annually, on the last day of each Fiscal Year commencing with the last day of Fiscal
Year following the Fiscal Year in which the improvements described in Exhibit B to the
Acquisition Agreement have been completed,the Fiscal Agent shall withdraw any amounts then
remaining in the Administrative Expense Fund in excess of $20,000 that have not otherwise
been allocated to pay Administrative Expenses incurred but not yet paid, and which are not
otherwise encumbered,and transfer such amounts to the Special Tax Fund.
(C) Investment. Moneys in the Administrative Expense Fund shall be invested and
deposited in accordance with Section 6.01. Interest earnings and profits resulting from said
investment shall be retained by the Fiscal Agent in the Administrative Expense Fund to be used
for the purposes thereof.
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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 Obligation. The Bonds are limited obligations of the City on
behalf of Improvement Area A and are payable solely from and secured solely by the Special
Tax Revenues and the amounts in the Bond Fund.(including the Special Tax Prepayments
Account and the Capitalized Interest Account therein), the Reserve Fund and, until disbursed
as provided herein,the Special Tax Fund.
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 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 Records. 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 Special Tax
Revenues. Such books of record and accounts shall at all times during business hours be subject
.,to the inspection of the Fiscal Agent 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 of the Bonds and the rights of the Owners, and will warrant and defend
their rights 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.
Section 5.07. Compliance with Law. The City will comply with all provisions of the
Law and any other applicable law in administering Improvement Area A and completing the
.acquisition of the Project.
Section 5.08. Collection of Special Tax Revenues. The City shall comply with all
requirements of the Law so as to assure the timely collection of Special Tax Revenues, including
without limitation,the enforcement of delinquent Special Taxes.
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On or within five (5) Business Days of each July 1, the Fiscal Agent shall provide the
Director of Administrative Services with a notice stating the amount then on deposit in the
Bond Fund,the Capitalized Interest Account and the Reserve Fund,and informing the City that
the Special Taxes may need to be levied pursuant to the Ordinance as necessary to provide for
Annual Debt Service and Administrative Expenses and replenishment (if necessary) of the
Reserve Fund so that the balance therein equals the Reserve Requirement. The receipt of or
failure to receive such notice by the Director of Administrative Services shall in no way affect
the obligations of the Director of Administrative Services under the following two paragraphs.
Upon receipt of such notice, the Director of Administrative Services shall communicate with the
_Auditor 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 City shall effect the levy of the Special Taxes in accordance with the Ordinance by
each July 15 that the Bonds are outstanding,or otherwise such that the computation of the levy
is complete before the final date on which Auditor will accept the transmission of the Special
Tax amounts for the parcels within Improvement Area A for inclusion on the next real property
tax roll. Upon the completion of the computation of the amounts of the levy, the City 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 real property tax roll.
The City Treasurer or the Treasurer's designee shall fix and levy the amount of Special
Taxes within Improvement Area A required for the payment of principal of and interest on any
outstanding Bonds of Improvement Area A becoming due and payable during the ensuing Bond
Year, including any necessary replenishment or expenditure of the Reserve Fund for the Bonds
and an amount estimated to be sufficient to pay the Administrative Expenses (including
amounts necessary to discharge any obligation under Section 5.13) during such Bond Year,
taking into account the balances in such funds and in the Special Tax Fund. 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 time and in the same proportionate amounts and
bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes
on real property;provided that,pursuant to and in accordance with the Ordinance, the Special
Taxes may be collected by means of direct billing of the property owners within Improvement
Area A, in which event the Special Taxes shall become delinquent if not paid when due
pursuant to said billing.
Section 5.09. Covenant to Foreclose. Pursuant to Section 53356.1 of the Act and the
provisions of the Code, 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 paragraph. The Director of Administrative
Services 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 February 15 and June 15 of each Fiscal Year, the Director of Administrative
Services shall compare the amount of Special Taxes theretofore levied in the Improvement Area
A to the amount of Special Tax Revenues theretofore received by the City,and:
(A) Individual Delinquencies. If the Director of Administrative Services
determines that any single parcel subject to the Special Tax in the Improvement Area A
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is delinquent in the payment of Special Taxes in the aggregate amount of$5,000 or more,
then the Director of Administrative Services 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 Director of Administrative Services
determines that 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, the
Director of Administrative Services 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 the City shall
commence foreclosure proceedings within 90 days of such determination against each
parcel of land in Improvement Area A with a Special Tax delinquency.
The Director of Administrative Services and the City Attorney,as applicable, are hereby
authorized to employ counsel to conduct any such foreclosure proceedings. The fees and
expenses of any such counsel (including a charge for City staff time) in conducting foreclosure
proceedings shall be an Administrative Expense hereunder.
Section 5.10. 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 5.11. Private Activity Bond Limitations. The City shall assure that the
proceeds of the Series 2002-A Bonds are not so used as to cause the Series 2002-A Bonds to
satisfy the private business tests of section 141(b) of the Tax Code or the private loan financing
test of section 141(c) of the Tax Code.
Section 5.12. 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 the Series
2002-A Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Tax
Code.
Section 5.13. Rebate Requirement. The City shall take any and all actions necessary to
assure compliance with.section 148(f) of the Tax 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 Series 2002-A Bonds.
If necessary,the City may use amounts in the Reserve Fund, amounts on deposit in the
Administrative Expense Fund, and any other funds available to Improvement Area A, including
amounts advanced by the City, in its respective sole discretion, to be repaid by Improvement
Area A as soon as practicable from amounts described in the preceding clauses, to satisfy its
obligations under this Section 5.13. The City Treasurer shall take note of any investment of
monies hereunder in excess of the yield on the Series 2002-A Bonds,and shall take such actions
as are necessary to ensure compliance with this Section 5.13, such as increasing the portion of
the Special Tax levy for Administration Expenses as appropriate to have funds available in the
Administrative Expense Fund to satisfy any rebate liability under this Section 5.13.
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Section 5.14. 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 Series 2002-A
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 Series 2002-A Bonds would
have caused the Series 2002-A Bonds to be"arbitrage bonds"within the meaning of section 148
of the Tax Code.
Section 5.15. Yield of the Bonds. In determining the yield of the Series 2002-A Bonds to
comply with Section 5.13 and 5.14 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.
Section 5.16. Maintenance of Tax-Exemption. The City shall take all actions necessary
to assure the exclusion of interest on the Series 2002-A 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 Tax Code as in effect on the date of issuance of the Series 2002-A Bonds.
Section 5.17. Continuing Disclosure to Owners. In addition to its obligations under
Section 9.07, the City hereby covenants and agrees that it will comply with and carry out all of
the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of
this Agreement, failure of the City to comply with the Continuing Disclosure Agreement shall
not be considered a default hereunder;however,any Participating Underwriter or any holder or
Beneficial Owner (as defined in Section 2.14) of the Series 2002-A 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.
An owner of the real property in Improvement Area A as of the Closing Date has also
executed a continuing disclosure agreement for the benefit of the holders and beneficial owners
of the Series 2002-A Bonds. Any Participating Underwriter or holder or beneficial owner may
take such actions as may be necessary and appropriate directly against such landowner to
compel performance by it of its obligations thereunder, including seeking mandate or specific
performance by court order; however the City shall have no obligation whatsoever to enforce
any obligations under any such agreement.
Section 5.18. 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 Improvement Area A below an amount, for any Fiscal Year, equal to 110% of the
aggregate of the debt service due on the Bonds in such Fiscal Year,plus a reasonable estimate of
Administrative Expenses for such Fiscal Year. 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.
Section 5.19. Limits on Special Tax Waivers and Bond Tenders. The City covenants not
to exercise its rights under the Act to waive delinquency and redemption penalties related to the
Special Taxes or to declare Special Tax penalties amnesty program if to do so would materially
.and adversely affect the interests of the owners of the Bonds and further covenants not to
permit the tender of Bonds in payment of any Special Taxes except upon receipt of a certificate
of an Independent Financial Consultant that to accept such tender will not result in the City
having insufficient Special Tax revenues to pay the principal of and interest on the Series 2002-
A Bonds and any Parity Bonds remaining Outstanding following such tender.
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Section 5.20. Limitation on Principal Amount of Parity Bonds. The City will not issue
more than $8,100,000 initial principal amount of Parity Bonds (exclusive of any refunding
Bonds issued in a principal amount not in excess of the principal amount of the Bonds being
refunded).
Section 5.21. Annexation of Property. The City agrees not to annex any territory to
Improvement Area A unless the "District Value" of such area (inserting for this purpose the
description of such area for the words "Improvement Area A" in the definition of District Value
in Section 1.03 hereof) is at least three times the sujn of (i) the amount necessary to prepay the
Special Tax Lien that would apply to such property upon its annexation to Improvement Area
A (including amounts so required by reason of the issuance of any Parity Bonds to be issued in
conjunction with the annexation, plus (h) the aggregate principal amount of any fixed
assessment liens on the parcels to be annexed, plus (iii) a portion of the aggregate principal
amount of any and all other community facilities district bonds then outstanding and payable
at least partially from special taxes to be levied on the parcels of land to be annexed (the
"Other District Bonds") equal to the aggregate principal amount of the Other District Bonds
multiplied by a fraction, the numerator of which is the amount of special taxes levied for the
Other District Bonds on the parcels to be annexed, and the denominator of which is the total
amount of special taxes levied for the Other District Bonds on all parcels of land against which
the special taxes are_levied to pay the Other District Bonds (such fraction to be determined
based upon the maximum special taxes which could be levied in the year in which maximum
annual debt service on the Other District Bonds occurs),based upon information from the most
recent available Fiscal Year.
The City agrees that, in addition to the foregoing, any annexation of land in
Improvement Area B of the District to Improvement Area A will be contingent upon, and
effective from and after, the issuance of Parity Bonds in accordance with Sections 2.13 and 5.20
hereof.
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ARTICLE VI
INVESTMENTS,DISPOSITION OF INVESTMENT PROCEEDS,
LIABILITY OF THE AUTHORITY
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 an Officer's Certificate
.filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such
investments. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest, to
the extent reasonably practicable, any such moneys in Permitted Investments described in
clause(g)of the definition thereof in Section 1.03,which by their terms mature prior to the date
on which such moneys are required to be paid out hereunder. The City Treasurer shall make
note of any_investment of funds hereunder in excess of the yield on the Bonds, so that
appropriate actions can be taken to assure compliance with Section 5.13.
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 and its affiliates may act as sponsor, advisor, depository, principal or
agent in the acquisition or disposition of any investment. The Fiscal Agent shall not incur any
liability for losses arising from any investments made pursuant to this Section.
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 Tax Code)
shall be acquired, disposed of, and valued (as of the date that valuation is required by this
Agreement or the Tax Code) at Fair Market Value. The Fiscal Agent shall have no duty in
connection with the determination of Fair Market Value other than to follow the investment
direction of an Authorized Officer in any written direction of any Authorized Officer.
Investments in funds or accounts (or portions thereof) that are subject to a yield restriction
under the applicable provisions of the Tax Code and (unless valuation is undertaken at least
annually) investments in the subaccounts within the Reserve Fund shall be valued at their
present value(within the meaning of section 148 of the Tax 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 hereunder,provided that the Fiscal Agent shall at
all times account for such investments strictly in accordance with the funds and accounts to
which they are credited and otherwise as provided in this Agreement.
The Fiscal Agent shall sell at Fair Market Value, 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 City nor the Fiscal Agent shall be liable or
responsible for any loss resulting from the acquisition or disposition of such investment security
in accordance herewith.
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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
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. Limited Obligation. The City's obligations hereunder are limited
obligations of the City on behalf of Improvement Area A and are payable solely from and
secured solely by the Special Tax Revenues and the amounts in the Special Tax Fund, the Bond
Fund (including the Special Tax Prepayments Account and the Capitalized Interest Account
therein)and the Reserve Fund created hereunder.
Section 6.03. 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 City Treasurer and the Director of
Administrative Services, 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 Director of
Administrative Services,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.
The City and the Director of Administrative Services 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 satisfactory
established, if disputed.
Whenever in the administration of its duties under this Agreement the City 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, an Appraiser (as such
term is used in the definition"District Value" in Section 1.03 hereof), an Independent Financial
Consultant or a Tax Consultant, and such certificate shall be full warrant to the City for any
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action taken or suffered under the provisions of this Agreement or any Supplemental Agreement
upon the faith thereof,but in its discretion the City may,in lieu thereof,accept other evidence of
such matter or may require such additional evidence as to it may seem reasonable.
Section 6.04. Employment of Agents by City. In order to perform its duties and
obligations hereunder, the City, the City Treasurer and/or the Director of Administrative
Services 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. ,A1212ointment of Fiscal Agent. BNY Western Trust Company 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, 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 City may at any time 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, corporation 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,corporation 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 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 upon written
acceptance of appointment by the successor Fiscal Agent. Upon such-acceptance, the successor
Fiscal Agent shall be vested with all rights and powers of its predecessor hereunder without any
further act.
If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing
provisions of this Section 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 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, or reasonable agency, 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 Treasurer of the City in trust
for the benefit of the Owners. The City covenants for the direct benefit of the Owners that its
Treasurer 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. In such event, the
Treasurer may designate a successor Fiscal Agent qualified to act as Fiscal Agent hereunder.
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
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the City, and the Fiscal Agent assumes no responsibility for the correctness of the same, or
makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, or
shall 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 default. 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.
In the absence of bad faith,the Fiscal Agent 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 Fiscal Agent and conforming to the requirements of this Agreement; but in the
case of any such certificates 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 the form of any such certificate or opinion conforms to the
requirements of this Agreement (but without any need to independently confirm any of the
factual representations or conclusions contained therein). Except as provided above in this
paragraph,Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or
in not acting or not proceeding, in good faith, reasonably and 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 in good faith 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 liable for any error of judgment made in good faith 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 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.
The Fiscal Agent shall have no duty or obligation whatsoever to enforce the collection of
Special Taxes or other funds to be deposited with it hereunder, or as to the correctness of any
amounts received, and its liability shall be limited to the proper accounting for such funds as it
shall actually receive.
In order to perform its duties and obligations hereunder, the Fiscal Agent may employ
such persons or entities as it deems necessary or advisable. The Fiscal Agent 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. Such persons
and entities shall be entitled to the immunities and exceptions from liability granted to the
Fiscal Agent hereunder.
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All provisions in related documents as to the conduct and liability of the Fiscal Agent
are subject to this Section 7.02. The Fiscal Agent's rights to immunities and protection from
liability hereunder shall survive its resignation or removal and payment of the Bonds and
discharge of this Agreement.
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.
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,report,warrant,bond or other paper or document believed in good faith 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 or suffered by it hereunder in good faith and in accordance
therewith.
The Fiscal Agent shall not be bound to recognize any person as the Owner of a Bond
unless and until such Bond is submitted for inspection, if required, and his title thereto
satisfactorily established, if disputed.
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, 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 their 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
whatsoever,including without limitation fees and expenses 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 obligation of the City under this Section shall survive
resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and
discharge of this Agreement, but any monetary obligation of the City arising under this Section
shall be limited solely to amounts on deposit in the Administrative Expense Fund.
Section 7.06. Books and Accounts. 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 relating to the
expenditure of amounts disbursed from the Bond Fund (including the Special Tax Prepayments
Account and the Capitalized Interest Account therein),the Reserve Fund,the Special Tax Fund,
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the Administrative Expense Fund,the Improvement Fund and the Costs of Issuance Fund. Such
books of record and accounts shall at all times during business hours be subject to the
inspection by 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 upon reasonable
prior notice.
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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
Owners of the Bonds (except as otherwise permitted by the Law, the laws of the State of
California or this Agreement), or (iii) reduce the percentage of Bonds required for the
amendment hereof. Any such amendment may not modify any of the rights or obligations of the
Fiscal Agent without its written consent.
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 series of
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 or 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;
(D) to make such additions, deletions or modifications as may be necessary or
desirable to assure exemption from gross federal income taxation of interest on the
Bonds; and
(E) in connection with the issuance of Parity Bonds under and pursuant to
Section 2.13.
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. A
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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 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 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 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. 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 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 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 (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; provided, however, that the Fiscal Agent shall not be deemed to have
knowledge that any Bond is owned or held by the City unless the City is the registered Owner
or the Fiscal Agent has received written notice that any other registered Owner is an Owner for
the account of the City.
Section 8.05. Effect of Supplemental Agreement. From and after the time any
Supplemental Agreement becomes effective pursuant to this Article VIU,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 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 VIH shall bear a notation, by endorsement or otherwise, in form
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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 presentation of his Bond for that purpose at the
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 VIU
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 and School District. 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. The City shall have the option to pay and
discharge the entire indebtedness on all or any portion of the Outstanding Bonds 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,such Outstanding Bonds, 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 4.04 and 4.05 is fully sufficient to pay such Outstanding Bonds, including
all principal,interest and redemption premiums;or
(C) by irrevocably depositing with the Fiscal Agent, in-trust, cash and 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
4.04 and 4.05, be fully sufficient to pay and discharge the indebtedness on such Bonds
(including all principal, interest and redemption premiums) at or before their respective
maturity dates.
If the City shall have taken any of the actions specified in (A), (B) or (C) above, 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 such Outstanding Bonds shall cease and terminate.
Notice of such election shall be filed with the Fiscal Agent. Notwithstanding the foregoing, the
obligation 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,all amounts owing to the Fiscal Agent pursuant to Section 7.05,
and otherwise to assure that no action is taken or failed to be taken if such action or failure
adversely affects the exclusion of interest on the Bonds from gross income for federal income
tax purposes,shall continue in any event.
-42-
Upon compliance by the City with the foregoing with respect to all Bonds Outstanding,
any funds held by the Fiscal Agent after payment of all fees and expenses of the Fiscal Agent,
which are not required for the purposes of the preceding paragraph, shall be paid over to the
City and any Special Taxes thereafter received by the City shall not be remitted to the Fiscal
Agent but shall be retained by the City to be used for any purpose permitted under the Law.
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 registry
books.
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, official, agent or
employee of the City or Improvement Area A 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 Councslmember, officer, official, 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
2000 Main Street
Huntington Beach,CA 92648
Attn:Director of Administrative Services
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 (provided that any such notice shall not be
effective until actually received by the Fiscal Agent):
BNY Western Trust Company
700 South Flower Street, Suite 500
Los Angeles, CA 90017-4104
Attn: Corporate Trust
-43-
Section 9.07. State Reporting Requirements. The following requirements shall apply to
the Bonds,in addition to those requirements under Section 5.17:
(A) Annual Reporting. Not later than October 30 of each calendar year,
beginning with the October 30 first succeeding the date of the Series 2002-A Bonds, and
in each calendar year thereafter until the October 30 following the final maturity of the
Bonds, the Director of Administrative Services shall cause the following information to
be supplied to CDIAC: (i) the principal amount of the Outstanding Bonds; (ii) the
balance in the Reserve Fund; (iii)the balance,if any,in the Capitalized Interest Account;
(iv) the number of parcels in the Improvement Area A 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; (v) the balance in the
accounts within the Improvement Fund;and (vi) the assessed value of all parcels in the
Improvement Area A subject to the levy of the Special Taxes as shown in 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 Director of Administrative Services of such failure.or withdrawal in writing.
The Director of Administrative Services shall notify CDIAC and the Original Purchaser
of such failure or withdrawal within 10 days of such failure or withdrawal.
(C) Special Tax Reporting. The Director of Administrative Services shall file a
report with the City no later than March 31, 2003, and at least once a year thereafter,
which annual report shall contain: (i) the amount of Special Taxes collected and
expended with respect to Improvement Area A, (ii) the amount of Bond proceeds
collected and expended with respect to Improvement Area A, and (iii) the status of the
Project. It is acknowledged that the Special Tax Fund and the Special Tax Prepayments
Account are the accounts into which Special Taxes collected in Improvement Area A will
be deposited for purposes of Section 50075.1(c) of the California Government Code,
and the funds and accounts listed in Section 4.01 are the funds and accounts into which
Bond proceeds will be deposited for purposes of Section 53410(c) of the California
Government Code,and the annual report described in the preceding sentence is intended
to satisfy the requirements of Sections 50075.1(d), 50075.3(d) and 53411 of the
California Government Code.
(D) Amendment. .The reporting requirements of this Section 9.07 shall be
amended from time to time, without action by the City or the Fiscal Agent (i) with
respect to subparagraphs (A) and (B) above, to reflect any amendments to Section
53359.5(b) or Section 53359.5(c) of the Act, and (ii) with respect to subparagraph (C)
above, to reflect any amendments to Section 50075.1, 50075.3, 53410 or 53411 of the
California Government Code. Notwithstanding the foregoing,any such amendment shall
not, in itself, affect the City's obligations under the Continuing Disclosure Agreement.
The City shall notify the Fiscal Agent in writing of any such amendments which affect
the reporting obligations of the Fiscal Agent under this Agreement.
(E) No Liability. None of the City and its officers, agents and employees, the
Director of Administrative Services or the Fiscal Agent shall be liable for any inadvertent
error in reporting the information required by this Section 9.07.
-44-
The City shall provide copies of any of such reports to any Bondowner upon the written
request of a Bondowner and payment by the person requesting the information of the cost of the
City to produce such information and pay any postage or other delivery cost to provide the
same,as determined by the Director of Administrative Services or the City Treasurer. The term
"Bondowner" for purposes of this Section 9.07 shall include any beneficial owner of the Bonds.
Section 9.08. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of
this Agreement shall for any reason be held illegal or 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 issue 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 9.09. 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 payments of such principal, interest and premium have
become payable,if such moneys was 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 shall look only
to the City for the payment of the principal of, and interest and any premium on, such Bonds.
Section 9.10. Applicable Law. This Agreement shall be governed by and enforced in
accordance with the laws of the State of California applicable to contracts made and
performed in the State of California.
Section 9.11. Conflict with Law. In the event of a conflict between any provision of this
Agreement with any provision of the Law as in effect on the Closing Date, the provision of the
Law shall prevail over the conflicting provision of this Agreement.
Section 9.12. Conclusive Evidence of Regularity. Bonds issued pursuant to this
Agreement shall constitute conclusive evidence of the regularity of all proceedings under the
Law relative to their issuance and the levy of the Special Taxes.
Section 9.13. 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 9.14. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
-45-
IN WITNESS WHEREOF,the City caused this Fiscal Agent Agreement to be executed all
as of June 1, 2002.
CITY OF HUNTINGTON BEACH, for and
on behalf of
IMPROVEMENT AREA A OF THE CITY
OF HUNTINGTON BEACH COMMUNITY
FACILITIES DISTRICT NO. 2002-1
(MCDONNELL CENTRE BUSINESS
PARK)
By:
—4&hdz &44�1
Mayor
Attest:
7
By: u Q�
City Clerk
Approved as to Form:
By:
b6ltlI
v.a2City Attorney
Reviewed and Approved:
By:
ty Treasurer
BNY WESTERN TRUST COMPANY,
as Fiscal Agent
By:
Authorized Officer
08003.07:J6159
-46-
IN WITNESS WHEREOF,the City caused this Fiscal Agent Agreement to be executed all
as of June 1, 2002.
CITY OF HUNTINGTON BEACH, for and
on behalf of
IMPROVEMENT AREA A OF THE CITY
OF HUNTINGTON BEACH COMMUNITY
FACILITIES DISTRICT NO. 2002-1
(MCDONNELL CENTRE BUSINESS
PARK)
By:
Mayor
Attest:
By:
City Clerk
Approved as to Form:
By:
City Attorney
Reviewed and Approved:
By:
City Treasurer
BNY WESTERN TRUST COMPANY,
as Fiscal Agent
By:
Authorized Officer
08003.07.J6159
-46-
EXHIBIT A
FORM OF SERIES 2002-A BOND
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF ORANGE
No. $
IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
SPECIAL TAX BOND,SERIES 2002-A
INTEREST RATE MATURITY DATE BOND DATE CUSIP
September 1, July 17, 2002
REGISTERED OWNER:
PRINCIPAL AMOUNT: . DOLLARS
The City of Huntington Beach (the "City") for and on behalf of Improvement Area A of
the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre
Business Park) ("Improvement Area A"),for value received,hereby promises to pay solely from
the Special Tax (as hereinafter defined) to be collected in Improvement Area A or amounts in
the 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 March 1 and September 1, commencing March 1, 2003, 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 BNY Western Trust Company(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.
This Bond is one of the first series of a duly authorized issue of bonds in the aggregate
principal amount of $13,000,000 approved by the qualified electors of Improvement Area A
pursuant to the provisions of Chapter 3.56 of the Municipal Code of the City (the "Code") and,
as applicable under the Code, the Mello-Roos Community Facilities Law of 1982, as amended,
Sections 53311, of seq., of the California Government Code (collectively, the "Law") for .the
A-1
purpose of financing certain public facilities within and in the vicinity of Improvement Area A
(the "Project"), and is one of the series of Bonds designated "Improvement Area A of the City
of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business
Park) Special Tax Bonds, Series 2002-A" (the 'Bonds") in the aggregate principal amount of
$4,900,000. The creation of the Bonds and the terms and conditions thereof are provided for
by resolution adopted by the City Council of the City on June 17, 2002 (the 'Resolution"), and
the Fiscal Agent Agreement, dated as of June 1, 2002, between the City and the Fiscal Agent
(the "Agreement")and this-reference incorporates the Resolution and the Agreement herein, and
by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to
and as more particularly provided in the Resolution and in the Agreement, additional bonds
may be issued by the City from time to time not to exceed the aggregate principal amount of
$8,100,000 secured by a lien on a parity with the lien securing the Bonds ("Parity Bonds"). The
Resolution is adopted and the Agreement is entered into under and this Bond is issued under,
and all are to be construed in accordance with,the laws of the State of California.
Pursuant to the Law,the Agreement and the Resolution, the principal of and interest on
this Bond are payable solely from the annual special tax authorized under the Law to be
collected within Improvement Area A (the "Special Tax") and certain funds held under the
Agreement.
Interest on this Bond shall be payable from the interest payment date next preceding the
date of authentication hereof, 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 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 paymerifhereon.
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 are subject to redemption prior to their stated maturity on any interest
payment date, as a whole or in part among maturities as provided in the Agreement, at a
redemption price (expressed as a percentage of the principal amount of the Bonds to be
redeemed), as set forth below, together with accrued interest thereon to the date fixed for
redemption:
Redemption Dates Redemption Prices
Any interest payment date from March 1,2003 103.0%
to and including March 1,2010
September 1, 2010 and March 1, 2011 102.0
September 1, 2011 and March 1, 2012 101.0
September 1,2012 and any interest payment 100.0
date thereafter
The Bonds maturing on September 1, 2027, are subject to mandatory sinking payment
redemption in part on September 1, 2024 and on each September 1 thereafter to maturity, by
lot, at a redemption price equal to the principal amount thereof to be redeemed, together with
A-2
accrued interest to the date fixed for redemption, without premium, from sinking payments as
follows:
Redemption Date
(September 1) Sinking Payments
2024 $240,000
2025 265,000
2026 290,000
2027 (maturity) 320,000
The Bonds maturing on September 1, 2032, are subject to mandatory sinking payment
redemption in part on September 1, 2028 and on each September 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 payments as
follows:
Redemption Date
(September 1) Sinking Payments
2028 $ 345,000
2029 380,000
2030 410,000
2031 450,000
2032 (maturity) 485,000
The Bonds are also subject to redemption on any interest payment date from the
proceeds of Special Tax Prepayments and any corresponding transfers from the Reserve Fund
pursuant to the Agreement among maturities so as to maintain substantially the same debt
service profile as in effect on the Closing Date and by lot within a maturity, at a redemption
price (expressed as a percentage at the principal amount of the Bonds to be redeemed), as set
forth below, together with accrued interest to the date fixed for redemption:
Redemption Dates Redemption Prices
Any interest payment date from March 1, 103.0%
2003 to and including March 1, 2010
September 1, 2010 and March 1, 2011 102.0
September 1, 2011 and March 1, 2012 101.0
September 1, 2012 and any interest payment 100.0
date thereafter
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.
A-3
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, (ii) with respect to a Bond after such Bond has been selected
for redemption, or (iii) between a Record Date and the succeeding interest payment date.
Exchanges may only be made for Bonds in authorized denominations, as provided in the
Agreement.
The Agreement and the rights and obligations of the City thereunder may be modified or
amended as set forth therein.
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 of the City or the State of California or any political subdivision thereof is pledged to the
payment of the Bonds.
This Bond shall not become valid or obligatory for any purpose until the certificate of
authentication and registration hereon endorsed shall have been dated and signed by the Fiscal
Agent.
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.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required by law to exist, happen and be performed precedent to and in the issuance of
this Bond have existed, happened and been performed in due time, form and manner as
required by law,and that the amount of this Bond does not exceed any debt limit prescribed by
the laws or Constitution of the State of California.
A-4
IN WITNESS WHEREOF, City of Huntington Beach 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 its City Clerk.
CITY OF HUNTINGTON BEACH
(SEAL]
Mayor
ATTEST
City Clerk
A-5
FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the Resolution and in the Agreement which has
been authenticated on
BNY WESTERN TRUST COMPANY,as
Fiscal Agent
By:
Authorized Signatory
A-6
ASSIGNMENT
For value received the undersigned hereby sells,assigns and transfers unto
(Name,Address and Tax Identification or Social Security Number of Assignee)
the within-registered Bond and hereby irrevocably constitute(s) and appoints(s)
attorney,
to transfer the same on the registration books of the Fiscal Agent with full power of substitution
in the premises.
Dated:
Signature Guaranteed: Signature:
Note: Signature(s) must be guaranteed by an eligible Note: The signature(s) on this Assignment must
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.
A-7
Quint&Thimmig LLP FINAL
ACQUISITION AGREEMENT
by and between the
CITY OF HUNTINGTON BEACH
and
BOEING REALTY CORPORATION
Dated as of June 1, 2002
Relating to:
Improvement Area A of the City of Huntington Beach
Community Facilities District No. 2002-1
(McDonnell Centre Business Park_)
and
Improvement Area B of the City of Huntington Beach
Community Facilities District No. 2002-1
(McDonnell Centre Business Park)
08003.07:J6176
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section1.01. Definitions.................................................................................................................I
ARTICLE II
RECITALS
Section2.01. The CFD....................................................................................................................4
Section 2.02. The Development.......................................................................................................4
Section2.03. The Facilities..............................................................................................................4
Section2.04. The Financing............................................................................................................4
Section2.05. The Bonds..................................................................................................................4
Section 2.06. No Advantage to City Construction.............................................................................4
Section2.07. Agreements...............................................................................................................4
ARTICLE III
FUNDING
Section3.01. CFD Proceedings........................................................................................................6
Section3.02. Bonds.........................................................................................................................6
Section3.03. Bond Proceeds............................................................................................................6
ARTICLE IV
CONSTRUCTION OF FACILITIES
Section4.01. Plans..........................................................................................................................8
Section 4.02. Duty of Developer to Construct...................................................................................8
Section 4.03. Relationship to Public Works; Bidding Requirements..................................................8
Section 4.04. Independent Contractor............................................................................................10
Section 4.05. Performance and Payment Bonds..............................................................................10
Section 4.06. Contracts and Change Orders...................................................................................10
Section 4.07. Time for Completion.................................................................................................11
ARTICLE V
ACQUISITION AND PAYMENT
Section5.01. Inspection.................................................................................................................12
Section 5.02. Agreement to Sell and Purchase Facilities..................................................................12
Section 5.03. Payment Requests....................................................................................................12
Section 5.04. Processing Payment Requests...................................................................................12
Section5.05. Payment..................................................................................................................13
Section 5.06. Restrictions on Payments..........................................................................................13
Section 5.07. Acquisition of Additional Facilities............................................................................16
Section 5.08. Defective or Nonconforming Work............................................................................16
Section 5.09. Modification of Discrete Components.........................................................................16
ARTICLE VI
OWNERSHIP AND TRANSFER OF FACILITIES
Section 6.01. Facilities to be Owned by the City-Conveyance of Land and Easements to City........17
Section 6.02. Facilities to be Owned by the City-Title Evidence...................................................17
Section 6.03. Facilities Constructed on Private Lands......................................................................17
Section 6.04. Facilities Constructed on City Land...........................................................................17
Section 6.05. Maintenance and Warranties.....................................................................................17
-i-
ARTICLE VII
INSURANCE; RESPONSIBILITY FOR DAMAGE
Section 7.01. Liability Insurance Requirements..............................................................................19
Section 7.02. Responsibility for Damage........................................................................................21
ARTICLE VIII
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 8.01. Representations, Covenants and Warranties of the Developer....................................23
ARTICLE IX
TERMINATION
Section9.01. No Bonds....................................................................................:............................25
Section 9.02. Mutual Consent........................................................................................................25
Section 9.03. City Election for Cause..............................................................................................25
Section9.04. Force Majeure...........................................................................................................26
ARTICLE X
MISCELLANEOUS
Section 10.01. Limited Liability of City...........................................................................................27
Section 10.02. Excess Costs..............................................................................................................27
Section10.03. Audit.......................................................................................................................27
Section 10.04. Attorney's Fees........................................................................................................27
Section10.05. Notices.....................................................................................................................27
Section10.06. Severability..............................................................................................................27
Section 10.07. Successors and Assigns.............................................................................................28
Section 10.08. Other Agreements....................................................................................................28
Section10.10. Waiver.....................................................................................................................28
Section10.11. Merger.....................................................................................................................28
Section 10.12. Parties in Interest.......................................................................................................28
Section10.13. Amendment.............................................................................................................28
Section10.14. Counterparts............................................................................................................28
EXHIBIT A DESCRIPTION OF AUTHORIZED FACILITIES ELIGIBLE FOR ACQUISITION
FROM THE DEVELOPER
EXHIBIT B DESCRIPTION OF FACILITIES,DISCRETE COMPONENTS AND BUDGETED
COSTS
EXHIBIT C FORM OF PAYMENT REQUEST
EXHIBIT D FORM OF GUARANTY
EXHIBIT E LIST OF PREFORMATION CONTRACTS
-ii-
THIS ACQUISITION AGREEMENT (the "Acquisition Agreement"), dated as of June 1,
2002, is by and between the City of Huntington Beach, a chartered city and municipal
corporation organized and existing under the laws of the State of California (the "City"), for
Improvement Area A of the City of Huntington Beach Community Facilities District No. 2002-1
(McDonnell Centre Business Park) (the "Improvement Area A"),and for Improvement Area B
of the City of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre
Business Park) (the "Improvement Area B") and Boeing Realty Corporation (the "Developer").
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The following terms shall have the meanings ascribed to them
in this Section 1.01 for purposes of this Acquisition Agreement. _Unless otherwise indicated,
any other terms, capitalized or not,when used herein shall have the meanings ascribed to them
in the Fiscal Agent Agreement (as hereinafter defined).
"Acceptable Title" means title to land or interest therein, in form acceptable to the
Director of Public Works, free and clear of all liens, taxes, assessments, leases, easements and
encumbrances, whether or not recorded, but subject to any exceptions determined by the
Director of Public Works as not interfering with the actual or intended use of the land or interest
therein. Notwithstanding the foregoing, an irrevocable offer of dedication may constitute land
with an "Acceptable Title" if: (i) such offer is necessary to satisfy a condition to a tentative or
final parcel map, (ii) such offer is in a form acceptable to the Director of Public Works, (iii) the
Director of Public Works has no reason to believe that such offer of dedication will not be
accepted by the applicable public agency, and (iv) the Developer commits in writing not to
allow any liens to be imposed on such property prior to its acceptance.
"Acceptance" means (i) as to any Facility, the final action taken by the City Council of
the City (or other public entity that is to own a Facility) to accept dedication of or transfer of
title to a Facility; and (ii) as to any land, the recordation of a subdivision map which
irrevocably conveys such land to the City, or, if the conveyance is by deed, the action by the
City Council to accept the conveyance and recordation of the deed.
"Acquisition Agreement" means this Acquisition Agreement, together with any
Supplement hereto.
"Act" means the Mello-Roos Community Facilities Act of 1982, Sections 53311 et seq.
of the California Government Code, as amended.
"Actual Cost" means the substantiated cost of a Facility or a Discrete Component,
which costs may include: (i) the costs (evidenced by payments to parties unrelated to the
Developer) incurred by the Developer for the construction of such Facility or Discrete
Component, (ii) the documented costs incurred by the Developer in preparing the Plans for such
Facility or Discrete Component and the related costs of design, engineering and environmental
evaluations of the Facility or Discrete Component, (iii) the fees paid to governmental agencies
for obtaining permits, licenses or other governmental approvals for such Facility or Discrete
Component, (iv) documented professional costs incurred by the Developer associated with such
Facility or Discrete Component,such as engineering, legal, accounting,inspection,construction
staking, materials testing and similar professional services; and (v) costs directly related to the
construction and/or acquisition of a Facility or Discrete Component, such as costs of payment,
performance and/or maintenance bonds, and insurance costs (including costs of any title
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insurance required hereunder). Actual Cost may include an amount not in excess of 7.0%of the
cost described in clause (i) of the preceding paragraph in respect of any construction, project
management or other similar fee payable to the Developer or any party related thereto. Actual
Cost shall not include any financing fees, costs or charges,or any interest, cost of carry or other
similar charges.
"Affiliate" means any entity with respect to which fifty percent (50%) or more of the
ownership or voting power is held individually or collectively by any of the Developer and any
other entity owned,controlled or under common ownership or control by or with, as applicable,
the Developer, and includes all general partners of any entity which is a partnership. Control
shall mean ownership of fifty percent (50%) or more of the voting power of or ownership
interest in the respective entity.
"Bonds" means, collectively, (i) the bonds designated "Improvement Area A of the City
of Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business
Park) Special Tax Bonds, Series 2002-A", to be issued by the City for Improvement Area A, (ii)
any Parity Bonds issued under and as such term is defined in the Fiscal Agent Agreement, and
(iii) any bonds issued by the City for Improvement Area B under the Law.
"Budgeted Cost" means the estimated cost of a Facility or Discrete Component as
shown on Exhibit B hereto.
"CFD" means, collectively,Improvement Area A and Improvement Area B.
"City" means the City of Huntington Beach, California.
"County" means the County of Orange, California.
"Developer" means Boeing Realty Corporation, and its successors and assigns to the
extent permitted under Section 10.07 hereof.
"Director of Public Works" means the Director of Public Works of the City, or his
written designee acting as such under this Acquisition Agreement.
"Discrete Component" means a functional segment or component of a Facility that the
Director of Public Works has agreed can be separately identified, inspected and completed, and
be the subject of a Payment Request hereunder. The Discrete Components are shown on Exhibit
B hereto.
"Facilities" means the public facilities described in Exhibit A hereto which are eligible to
be financed by the CFD.
"Fiscal Agent" means BNY Western Trust Company, in its capacity as fiscal agent
under the Fiscal Agent Agreement, or any successor thereto acting as fiscal agent under the
Fiscal Agent Agreement.
"Fiscal Agent Agreement" means, collectively, (i) the agreement by that name between
the City and the Fiscal Agent, providing for, among other matters, the issuance of the Bonds
described in clause (i) of the definition of Bonds herein and the establishment of the
Improvement Fund, as it may be amended from time to time; and (ii) any similar agreement
providing for the issuance of bonds of the City for Improvement Area B.
"Guaranty" means the Guaranty of The Boeing Company in favor of the City, in the
form of Exhibit D hereto.
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"Improvement Area A" means Improvement Area A of the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park), created by the
City Council of the City under the Law.
"Improvement Area B" means Improvement Area B of the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park), created by the
City Council of the City under the Law.
"Improvement Fund" means,collectively,each and every Improvement Fund established
by any Fiscal Agent Agreement.
"Law" means the Municipal Code and, as applicable under the Municipal Code, the
Act.
"Municipal Code" means Chapter 3.56 (commencing with Section 3.56.010) of the
Municipal Code of the City.
"Payment Request" means a document, substantially in the form of Exhibit C hereto, to
be used by the Developer in requesting payment of a Purchase Price.
"Plans" means the plans, specifications, schedules and related construction contracts
for the Facilities described in Exhibit B and/or any Discrete Components thereof approved
pursuant to the applicable standards of the City or other entity that will own, operate or
maintain the Facilities when completed and acquired. As of the date of this Acquisition
Agreement, the City standards for construction incorporate those set forth in the Green Book,
Standard Specifications for Public Works Construction (SSPWC), of the Southern California
Chapter of the American Public Works Association,as modified by applicable City regulations.
"Purchase Price" means the amount paid by the City for a Facility and/or any Discrete
Components thereof determined in accordance with Article V hereof, being an amount equal to
the Actual Cost of such Facility or Discrete Component, but subject to the limitations and
reductions provided for in Article V.
"Risk Manager" shall mean the person acting in the capacity of Risk Manager for the
City.
"State" means the State of California.
"Supplement" means a written document amending, supplementing or otherwise
modifying this Acquisition Agreement and any exhibit hereto, including any amendments to the
list of Discrete Components in Exhibit B, and/or the addition to Exhibit B of additional
Facilities (and Discrete Components) to be financed with the proceeds of the Bonds deposited
in the Improvement Fund.
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ARTICLE 11
RECITALS
Section 2.01. The CFD. The City Council of the City has established Improvement Area
A and Improvement Area B under the Act for the financing of, among other things, the
acquisition,construction and installation of public facilities listed in Exhibit A hereto.
Section 2.02. The Development. The Developer is developing land located within the
CFD.
Section 2.03. The Facilities. The Facilities are within or in the vicinity of the CFD, and
the City and the Developer will benefit from a coordinated plan of design, engineering and
construction of the Facilities and the development of the land owned by an affiliate of the
Developer that is located within the CFD. The Developer acknowledges that the inclusion of
Facilities in Exhibit A hereto in no way, in itself, obligates the City to issue any Bonds to acquire
the Facilities from the Developer or implies that the City has in any way engaged the Developer
to construct the Facilities, except as specifically provided in this Acquisition Agreement.
Moreover, except for those Facilities listed in Exhibit B, this Acquisition Agreement shall in no
way, by itself, obligate the Developer to construct the Facilities. The Facilities which are the
subject of acquisition by the City from the Developer under this Acquisition Agreement are only
the Facilities listed in Exhibit B hereto, as such Exhibit may be amended and/or supplemented
by any Supplement.
Section 2.04. The Financing. The Developer and the City wish to finance the acquisition
of the Facilities and the payment therefor by entering into this Acquisition Agreement for the
acquisition of the Facilities and payment for Discrete Components thereof as shown in Exhibit
B hereto (as it may be amended and supplemented) with a portion of the proceeds of the Bonds
on deposit in the Improvement Fund.
Section 2.05. The Bonds. The City is proceeding with the authorization and issuance of
the Bonds under the Law and the Fiscal Agent Agreement,the proceeds of which Bonds shall be
used, in part, to finance the acquisition of all or a portion of the Facilities. The execution by the
City of this Acquisition Agreement in no way obligates the City to issue any Bonds, or to
acquire any Facilities with proceeds of any Bonds issued, except the Facilities listed in Exhibit B
hereto (as such exhibit may be amended from time to time) which are to be acquired subject to
the terms and conditions set forth in this Agreement.
Section 2.06. No Advantage to City Construction. The City, by its approval of this
Acquisition Agreement, has determined that it will obtain no advantage from undertaking the
construction by the City directly of the Facilities listed in Exhibit B (as such exhibit may be
amended from time to time), and that the provisions of this Acquisition Agreement require that
the Facilities be constructed by the Developer as if they had been constructed under the
direction and supervision of the City. The Developer hereby represents that it has experience in
the supervision of the construction of public facilities of the character of the Facilities.
Section 2.07. Agreements. In consideration of the mutual promises and covenants set
forth herein,and for other valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the City and the Developer agree that the foregoing recitals, as applicable to
each,are true and correct and further make the agreements set forth herein.
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ARTICLE III
FUNDING
Section 3.01. CFD Proceedings. The City shall conduct all necessary proceedings under
the Law for the issuance, sale and delivery of the Bonds described in clause (i) of the definition
of "Bonds" in Section 1.01; provided, however, that nothing herein shall be construed as
requiring the City to issue such Bonds or any portion thereof. Upon the written request of the
Developer, the Developer and the City staff shall meet regarding the amount, timing and other
material aspects of the Bonds, but the legal proceedings and the principal amount, interest
rates, terms and conditions and timing of the sale of the Bonds shall be in all respects subject to
the approval of the City Council of the City. The authorized aggregate principal amount of the
Bonds of each of Improvement Area A and Improvement Area B is $13,000,000; however (i) it
is expected that in no event will more than $13,000,000 of Bonds (exclusive of any refunding
bonds) be issued for the CFD, and (ii) the City expects that the first series of the Bonds
described in clause (i) of the definition of"Bonds" in Section 1.01 will be in a principal amount
equal to $4,900,000 and the amount that the City anticipates depositing to the Improvement
Fund from the proceeds of such initial series of the Bonds is $4,070,000. A portion of the net
proceeds from any subsequent sale of Bonds (other than Bonds issued to refund previously
issued Bonds) will be deposited in the Improvement Fund.
Section 3.02. Bonds. The City, in connection with this Acquisition Agreement, is
proceeding with the issuance and delivery of the initial series of the Bonds for Improvement
Area A. The City agrees to consider the issuance of additional series of the Bonds upon the
written request of the Developer subject to the following: (a) the Developer shall provide the.
City with a deposit in an amount sufficient to pay all non contingent costs of the City necessary
to consider the issuance of such additional Bonds (including but not limited to appraisal costs
and City staff costs), subject to reimbursement of such amount so advanced by the Developer
from the proceeds of the additional Bonds, when and if issued and as permitted under the
Law; (b) the additional Bonds shall satisfy all of the requirements for "Parity Bonds" under
and as such term is defined in the Fiscal Agent Agreement for Improvement Area A or otherwise
satisfy similar criteria if issued with respect to Improvement Area B; (c) the landowners in the
CFD shall assist the City in preparation of any disclosure agreement as deemed appropriate by
the City in connection with the offer and sale of such additional Bonds and the execution of any
related disclosure certificate; and (d) the timing of sale and principal amount of such additional
Bonds shall be determined by the City upon consultation with the Developer.
The City shall not be obligated to pay the Purchase Price of the Facilities listed in
Exhibit B or any Discrete Components thereof except from amounts on deposit in the
Improvement Fund on or after the closing date of the Bonds. The City makes no warranty,
express or implied, that the proceeds of the Bonds deposited and held in the Improvement
Fund, and any investment earnings thereon deposited to the Improvement Fund, will be
sufficient for payment of the Purchase Price of all of the Facilities.
Section 3.03. Bond Proceeds. The proceeds of the Bonds shall be deposited, held,
invested, reinvested and disbursed as provided in the applicable Fiscal Agent Agreement. A
portion of the proceeds of the Bonds (other than proceeds of refunding bonds) will be set aside
under each Fiscal Agent Agreement in the Improvement Fund. Moneys in the Improvement Fund
shall be withdrawn therefrom in accordance with the provisions of the applicable Fiscal Agent
Agreement and the applicable provisions hereof for payment of all or a portion of the costs of
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construction and/or acquisition of the Facilities listed in Exhibit B (including payment of the
Purchase Price of Discrete Components thereof),all as herein provided.
The Developer agrees that the City alone shall direct the investment of the funds on
deposit in the funds and accounts established by or pursuant to a Fiscal Agent Agreement,
including the Improvement Fund, and that the Developer has no right whatsoever to direct
investments under a Fiscal Agent Agreement.
The City shall have no responsibility whatsoever to the Developer with respect to any
investment of funds made by a Fiscal Agent under a Fiscal Agent Agreement,including any loss
of all or a portion of the principal invested or any penalty for liquidation of an investment.
Any such loss may diminish the amounts available in the Improvement Fund to pay the
Purchase Price of Facilities and Discrete Components hereunder. The Developer further
acknowledges that the obligation of any owner of real property in the CFD, including
McDonnell Douglas Corporation to the extent it owns any real property in the CFD, to pay
special taxes levied in the CFD is not in any way dependent on: (i) the availability of amounts
in the Improvement Fund to pay for all or any portion of the Facilities or Discrete Components
thereof hereunder, or (ii) the alleged or actual misconduct of the City in the performance of its
obligations under this Acquisition Agreement, a Fiscal Agent Agreement, any subdivision
agreement or amendment thereto or any other agreement to which the Developer (and/or
McDonnell Douglas Corporation) and the City are signatories.
The Developer acknowledges that any lack of availability of amounts in the
Improvement Fund to pay the Purchase Price of Facilities or any Discrete Components thereof
shall in no way diminish any obligation of the Developer with respect to the construction of or
contributions for public facilities required by any subdivision or other agreement to which the
Developer is a party, or any governmental approval to which the Developer or any land within
the CFD is subject.
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ARTICLE IV
CONSTRUCTION OF FACILITIES
Section 4.01. Plans. To the extent that it has not already done so, the Developer shall
cause Plans to be prepared for the Facilities listed in Exhibit B. The Developer shall obtain the
written approval of the Plans in accordance with applicable ordinances and regulations of the
City. Copies of all Plans shall be provided by the Developer to the Director of Public Works
upon request therefor, and, in any event, as built drawings and a written assignment of the
Plans for any Facility listed in Exhibit B shall be provided to the City prior to its acceptance of
the Facility.
Section 4.02. Duty of Developer to Construct. All Facilities to be acquired hereunder
specified in Exhibit B hereto, as amended from time to time, shall be constructed by or at the
direction of the Developer in accordance with the approved Plans. The Developer shall
perform all of its obligations hereunder and shall conduct all operations with respect to the
construction of such Facilities in a good, workmanlike and commercially reasonable manner,
with the standard of diligence and care normally employed by duly qualified persons utilizing
their best efforts in the performance of comparable work and in accordance with generally
accepted practices appropriate to the activities undertaken. The Developer shall employ at all
times adequate staff or consultants with the requisite experience necessary to administer and
coordinate all work related to the design, engineering, acquisition,construction and installation
of such Facilities to be acquired by the City from the Developer hereunder.
The Developer shall be obligated: (i) to construct and cause conveyance to the City all
Facilities and Discrete Components thereof listed in Exhibit B hereto, and (ii) to use its own
funds to pay all costs thereof in excess of the Purchase Prices thereof to be paid therefor
hereunder.
The Developer shall not be relieved of its obligation to construct each Facility and
Discrete Component thereof listed in Exhibit B hereto and convey each such Facility to the City
in accordance with the terms hereof, even if, (i) because of the limitations imposed by Section
5.06 hereof, the Purchase Price for such Discrete Component or Facility is less than the Actual
Cost, or cost to the Developer, of such Discrete Component or Facility, or (ii) there are
insufficient funds in the Improvement Fund to pay the Purchase Prices thereof, and, in any
event, this Acquisition Agreement shall not affect any obligation of any owner of land in the
CFD under any other agreement or any governmental approval to which any land within the
CFD is subject, with respect to the public improvements required in connection with the
development of the land within the CFD. Such obligation of the Developer to construct and
convey such Facilities, and pay the costs thereof in excess of available monies in the
Improvement Fund, shall be an obligation of the Developer as a party to this Acquisition
Agreement without regard to any governmental conditions to development of the land in the
CFD that may otherwise apply to the land owners in the CFD.
Section 4.03. Relationship to Public Works;Bidding Requirements. The following shall
apply to all contracts applicable to the Facilities listed in Exhibit B and any Discrete
Components thereof:
A. General. This Acquisition Agreement is for the acquisition by the City of
the Facilities listed in Exhibit B hereto and payment for Discrete Components thereof
from moneys in the Improvement Fund and is not intended to be a public works
contract. The City and the Developer agree that the Facilities listed in Exhibit B are of
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local, and not state-wide concern, and that the provisions of the California Public
Contract Code shall not apply to the construction of such Facilities. The City and the
Developer agree that the Developer shall award all contracts for the construction of the
Facilities listed in Exhibit B hereto and the Discrete Components thereof and that this
Acquisition Agreement is necessary to assure the timely and satisfactory completion of
such Facilities and that compliance with the Public Contract Code with respect to such
Facilities would work an incongruity and would not produce an advantage to the City or
the CFD.
B. Bidding Procedures. Notwithstanding the foregoing, the Developer shall
award all contracts for construction of the Facilities listed in Exhibit B and any Discrete
Components thereof, and materials related thereto, by means of a bid process consistent
with this Section 4.03 B. or otherwise acceptable to the Director of Public Works, and in
each case consistent with the City Charter and applicable City ordinances and
regulations.
The Developer shall prepare bid packages, including engineering reports and an
estimated schedule of values and unit costs for each of the Facilities (or any specific
Discrete Components thereof to be separately bid), and shall submit such packages to
the Director of Public Works, reasonably in advance of the anticipated bid, for review.
Upon agreement by the Director of Public Works and the Developer on the content of
such bid packages and a schedule of bid prices, plus an acceptable margin of variance,
the Developer may proceed to take bids on the applicable Facilities (or Discrete
Components) after notice by publication in accordance with City Charter Section 503 by
two or more insertions, the first of which shall be at least ten days before the time for
opening bids. The Developer shall establish a list of written criteria acceptable to the
Director of Public Works (including experience, ability to perform on schedule and
financial ability to complete the work) to determine requisite qualification for
contractors for any contract. Such general contractors shall comply with any applicable
City regulations. The Director of Public Works shall meet with the qualified general
contractors to discuss the requirements of the particular contract to be bid at the written
request of the Developer; provided that any such written request is delivered to the
Director of Public Works at least five (5) business days prior to the date of the meeting.
Bids for each Facility or Discrete Component shall be submitted to the Director
of Public Works prior to the time and date prescribed for bid opening and shall include
a complete schedule of values and unit costs of each of the Facilities (or any specific
Discrete Components thereof to be separately bid). If a bid is within the constraints of
the approved bid package, the Developer shall, subject to the provisions of Section
4.03 C. below, award the applicable contract to the lowest responsible bidder. If all
bids are in excess of the bid parameters, the Developer shall obtain the consent of the
Director of Public Works prior to awarding the contract. Upon written request of the
Director, the Developer shall provide an analysis of bids for construction and materials
for the Facilities or applicable Discrete Components,indicating how the winning bid was
determined and how it was consistent with the applicable bid package. The Developer
shall promptly publish notice of the award of any contract in such paper as the Director
of Public Works shall specify.
C. Pre-approved Contracts. Notwithstanding .the provisions of Section
4.03 B. above, the City hereby approves the contracts for work related to the Facilities
that were executed by the Developer prior to the formation of the CFD that are listed in
Exhibit E hereto.
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D. Scheduling. The Developer shall develop or cause to be developed and
shall maintain or cause to be maintained a project schedule for all major project
elements included in the construction of the Facilities to be acquired hereunder, so that
the whole project is scheduled in an efficient manner. The Developer shall provide the
Director of Public Works with complete copies of the schedule and each update to the
schedule for the Director's review and approval.
E. Periodic Meetings. From time to time (expected to be at least every two (2)
weeks) at the request of the Director of Public Works, representatives of the Developer
shall meet and confer with City staff, consultants and contractors regarding matters
arising hereunder with respect to the Facilities,Discrete Components and the progress in
constructing and acquiring the same, and as to any other matter related to the Facilities
or this Acquisition Agreement. The Developer shall advise the Director of Public Works
in advance of any coordination and scheduling meetings to be held with contractors
relating to the Facilities,in the ordinary course of performance of an individual contract.
The Director of Public Works or the Director of Public Work's designated representative
shall have the right to be present at such meetings, and to meet and confer with
individual contractors if deemed advisable by the Director of Public Works to resolve
disputes and/or ensure the proper completion of the Facilities.
Section 4.64. Independent Contractor. In performing this Acquisition Agreement, the
Developer is an independent contractor and not the agent or employee of the City or the CFD.
Neither the City nor the CFD shall be responsible for making any payments to any of the
.entities that are parties to any of the contracts listed in Section 4.03(C), or to any other
contractor,subcontractor,agent,consultant, employee or supplier of the Developer.
Section 4.05. Performance and Payment Bonds. The Developer agrees to comply with
all applicable performance and payment bonding requirements of the City as required by the
Director of Public Works with respect to the construction of the Facilities listed in Exhibit B.
All contractors and/or subcontractors employed by the Developer in connection with the
construction of Facilities listed in Exhibit B shall provide a labor and materials and
performance bonds which name the City as an additional insured.
Section 4.06. Contracts and Change Orders. The Developer shall be responsible for
entering into all contracts and any supplemental agreements (commonly referred to as "change
orders") required for the construction of the Facilities listed in Exhibit B hereto, as amended
from time to time, and all such contracts and supplemental agreements shall be submitted to the
Director of Public Works for review. Prior written approval of supplemental agreements by the
Director of Public Works shall be required for such change orders which in any way materially
alter the quality or character of the subject Facilities, or which involve an amount equal to five
percent (5%) or more of either the amount of the bid for the Discrete Component involved or
any change to the schedule of values or unit cost for each of the Facilities or Discrete
Components thereof. The City expects that such contracts and supplemental agreements
needing prior approval by the Director of Public Works will be approved or denied (any such
denial to be in writing,stating the reasons for denial and the actions, if any, that can be taken to
obtain later approval) within ten (10) business days of receipt by the Director of Public Works
thereof. Any approval by the Director of Public Works of a supplemental agreement shall in no
way affect the Budgeted Costs listed in Exhibit B for any related Facility or Discrete
Component, but to the extent that it increases the Actual Cost of a Facility or Discrete
Component, such increased cost may be payable as part of the Purchase Price of the related
Facility or Discrete Component as provided in Section 5.06A. hereof.
Section 4.07. Time for Completion. The Developer agrees that this Acquisition
Agreement is for the benefit of the City and the Developer and, therefore, the Developer
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represents that it expects to complete the Facilities listed in Exhibit B and to have requested
payment for such Facilities under this Acquisition Agreement within ten (10) calendar months
from the date of the closing of the first series of the Bonds.The Developer agrees to use its good
faith efforts to complete all Facilities initially listed in Exhibit B within ten (10) calendar months
from the date of closing of the first series of the Bonds. Any failure to complete any Facilities
within said time period shall not, however, in itself,constitute a breach by the Developer of the
terms of this Acquisition Agreement.
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ARTICLE V
ACQUISITION AND PAYMENT
Section.5.01. Inspection. No payment hereunder shall be made by the City to the
Developer for a Facility or Discrete Component thereof until the Facility or Discrete Component
thereof has been inspected and found to be completed in accordance with the approved Plans
by the City as evidenced by formal acceptance of the improvements. The City shall make
periodic site inspections of the Facilities to be acquired hereunder; provided that in no event
shall the City incur any liability for any delay in the inspection of any Facilities or Discrete
Components. The Developer agrees to pay all inspection, permit and other similar fees of the
City applicable to construction of the Facilities.
Section 5.02. Agreement to Sell and Purchase Facilities. The Developer hereby agrees to
sell the Facilities listed in Exhibit B hereto to the City, and the City hereby agrees to use
amounts in the Improvement Fund to pay the Purchase Prices thereof to the Developer,subject
to the terms and conditions hereof. The City shall not be obligated to use amounts in the
Improvement Fund to pay the Purchase Price of any Facility or Discrete Component until the
Facility or Discrete Component is completed and the processing requirements of Section 5.05
hereof for such Facility or Discrete Component have occurred; provided, however, that,
payment shall be made for the right-of-way described in Exhibit B upon confirmation of the
recordation of a map dedicating the right-of-way to the City, without the requirement for a
separate approval of the City Council described in Section 5.05 accepting such right-of-way. In
any event,the City shall not be obligated to pay the Purchase Price for any Facility or Discrete
Component except from the moneys in the Improvement Fund.
Section 5.03. Payment Requests. In order to receive the Purchase Price for a completed
Facility or Discrete Component, inspection and acceptance thereof under Section 5.01 shall
have been made and the Developer shall deliver to the Director of Public Works: (i) a Payment
Request in the form of Exhibit C hereto for such Facility or Discrete Component, together with
all attachments and exhibits required by Exhibit C and this Section 5.03 to be included
therewith (including, but not limited to Attachments 1 and 2 to Exhibit C), and (ii) if payment
is requested for a completed Facility, (a) if the property on which the Facility is located is not
owned by the City at the time of the request, a copy of the recorded documents conveying to the
City Acceptable Title to the real property on, in or over which such Facility is located, as
described in Section 6.01 hereof, (b) a copy of the recorded notice of completion of such Facility
(if applicable), (c) to the extent paid for with the proceeds of the Bonds, an assignment to the
CFD of any reimbursements that may be payable with respect to the Facility, such as public or
private utility reimbursements, and (d)an assignment of the warranties and guaranties for such
Facility, as described in Section 6.05 hereof, in a form acceptable to the Director.
Section 5.04. Processing Payment Requests. Upon receipt of a Payment Request (and
all accompanying documentation), the Director of Public Works shall conduct a review in order
to confirm that such request is complete, that such Discrete Component or Facility identified
therein was constructed in accordance with the Plans therefor, and to verify and approve the
Actual Cost of such Discrete Component or Facility specified in such Payment Request. The
Director of Public Works shall also conduct such review as is required in his discretion to
confirm the matters certified in the Payment Request. The Developer agrees to cooperate with
the Director of Public Works in conducting each such review and to provide the Director of
Public Works with such additional information and documentation as is reasonably necessary
for the Director of Public Works to conclude each such review. Within ten (10) business days of
receipt of any Payment Request, the Director of Public Works shall review the request for
completeness and notify the Developer whether such Payment Request is complete, and, if not,
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what additional documentation must be provided. If such Payment Request is complete, the
Director of Public Works shall provide a written approval or denial (specifying the reason for
any denial) of the request within twenty (20) days of its submittal. If a Payment Request
seeking reimbursement for more than one Facility or Discrete Component is denied,the Director
of Public Works shall state whether the Payment Request is nevertheless approved and
complete for any one or more Facilities or Discrete Components and any such Facilities or
Discrete Components shall be processed for payment under Section 5.05 notwithstanding such
partial denial.
Section 5.05. Payment. Upon approval of the Payment Request by the Director of
Public Works,the Director of Public Works shall submit a request to the City Council for formal
acceptance of the dedication or transfer of and/or facilities of title to the Facility or Discrete
Component identified in the Payment Request. Upon final action by the City Council to accept
dedication of or transfer of title to a Facility or Discrete Component thereof, the Director of
Public Works shall, within twenty (20) days of the City's Council's action, sign the Payment
Request and forward the same to the City Treasurer,with a copy to the City's Finance Officer.
Upon receipt of the reviewed and fully signed Payment Request,the City Treasurer or the City's
Finance Officer shall,within the then current City financial accounting payment cycle but in any
event within thirty (30) days of receipt of the approved Payment Request, cause the same to be
paid by the Fiscal Agent under the applicable provisions of the Fiscal Agent Agreement, to the
extent of funds then on deposit in the Improvement Fund. Any approved Payment Request not
paid due to an insufficiency of funds in the Improvement Fund, shall be paid promptly
following the deposit into the Improvement Fund of proceeds of any additional Bonds, any
investment earnings or other amounts transferred to the Improvement Fund under the terms of
the Fiscal Agent Agreement.
The parties hereto acknowledge that (i) the Developer will be constructing Facilities and
Discrete Components prior to the issuance of additional Bonds the proceeds of which will be
used to reimburse the Developer for those Facilities and Discrete Components, (ii) the
Developer will be submitting Payment Requests to the City in advance of such an issuance of
additional Bonds, with knowledge that there may be insufficient funds available in the
Improvement Fund for reimbursement, (iii) the Facilities and Discrete Components that are the
subject of the Payment Requests submitted when there are insufficient proceeds will be
inspected and reviewed by the Director of Public Works as set forth in this Article V and that
such Payment Requests will be reviewed by the Director of Public Works and, if appropriate,
submitted to the City Council in the manner set forth in Sections 5.03, 5.04 and 5.05, and (iv)
the payment for any Payment Requests approved in the preceding manner will be deferred until
the date, if any, on which there are sufficient amounts in the Improvement Fund to make such
payment, at which time the Director of Public Works will forward the approved Payment
Requests to the City Treasurer,with a copy to the City's Finance Officer,who will then arrange
for payment from the Fiscal Agent in the manner set forth above.
The Purchase Price paid hereunder for any Facility or Discrete Component shall
constitute payment in full for such Facility or Discrete Component, including, without
limitation, payment for all labor, materials, equipment,tools and services used or incorporated
in the work, supervision, administration, overhead, expenses and any and all other things
required, furnished or incurred for completion of such Facility or Discrete Component, as
specified in the Plans or associated construction documents.
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Section 5.06. Restrictions on Payments. Notwithstanding any other provisions of this
Acquisition Agreement, the following restrictions shall apply to any payments made to the
Developer under Sections 5.02 and 5.05 hereof:
A. Amounts of Payments. Subject to the following paragraphs of this Section
5.06, payments for each Discrete Component or Facility will be made only in the amount
of the Purchase Price for the respective Discrete Component or Facility; however, if the
Actual Cost exceeds the Budgeted Cost for a Discrete Component or a Facility, the
excess shall be borne by the Developer until such time as (i) proceeds of additional
Bonds are deposited to the Improvement Fund, or (ii) a Budgeted Cost for another
Discrete Component or Facility is greater than the Actual Cost therefore, in which event
the savings shall be applied to reduce any excess of Actual Cost over Budgeted Cost
previously paid for any Facility or Discrete Component by the Developer, unless the
Developer consents in writing to another application of such savings. Any savings
attributable to the Actual Cost being less than Budgeted Cost which are not disbursed
under the previous sentence to cover unreimbursed Actual Costs or as otherwise
consented to by the Developer shall be carried forward to be credited against future cost
overruns, or costs related to supplemental agreements (change orders).
Nothing herein shall require the City in any event (i) to pay more than the Actual
Cost of a Facility or Discrete Component, or (ii) to pay an amount which would cause
the sum of all Purchase Prices paid for all acquired Facilities and Discrete Components
to exceed the sum of all Budgeted Costs for such acquired items, or (iii) to make any
payment beyond the available funds in the Improvement Fund. The parties hereto
acknowledge and agree that all payments to the Developer for the Purchase Prices of
Facilities or Discrete Components are intended to be reimbursements to the Developer
for monies already expended or for immediate payment by the Developer (or directly by
the City) to third parties in respect of such Facilities and/or Discrete Components.
B. Toint or Third Party Payments. The City may make any payment jointly to
the Developer and any mortgagee or trust deed beneficiary, contractor or supplier of
materials, as their interests may appear, or solely to any such third party, if the
Developer so requests the same in writing or as the City otherwise determines such joint
or third party payment is necessary to obtain lien releases.
C. Withholding Payments. The City shall be entitled, but shall not be required,
to withhold any payment hereunder for a Discrete Component or a Facility if the
Developer or any Affiliate, or McDonnell Douglas Corporation, is delinquent in the
payment of ad valorem real property taxes, special assessments or taxes levied in the
CFD, or Special Taxes levied in the CFD. In the event of any such delinquency, the City
shall only make payments hereunder, should any be made at the City's sole discretion,
directly to contractors or other third parties employed in connection with the
construction of the Facilities or to any assignee of the Developer's interests in this
Acquisition Agreement (and not to the Developer or any Affiliate),until such time as the
Developer provides the Director of Public Works with evidence that all such delinquent
taxes and assessments have been paid.
The City shall withhold payment for any Discrete Component or Facility
constructed on land, until Acceptable Title to such land is conveyed to the City, as
described in Article VI hereof.
The City shall be entitled to withhold any payment hereunder for a Discrete
Component that is the subject of a Payment Request until it is satisfied that any and all
claims for labor and materials have been paid by the Developer for the Discrete
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Component that is the subject of a Payment Request, or conditional lien releases have
been provided by the Developer for such Discrete Component. The City, in its
discretion, may waive this limitation upon the provision by the Developer of sureties,
undertakings, securities and/or bonds of the Developer or appropriate contractors or
subcontractors and deemed satisfactory by the Director of Public Works to assure
payment of such claims.
The City shall be entitled to withhold payment for any Facility hereunder to be
owned by the City (or the final Discrete Component of any such Facility) until: (i) the
Director of Public Works determines that the Facility is ready for its intended use, (ii)
the Acceptance Date for the Facility has occurred and the requirements of Section 6.01,
if applicable to such Facility, have been satisfied, and (iii) a Notice of Completion
executed by the Developer, in a form acceptable to the Director of Public Works, has
been recorded for the Facility and general lien releases conditioned solely upon payment
from the proceeds of the Bonds to be used to acquire such Facility (or final Discrete
Component) have been submitted to the Director of Public Works for the Facility. The
City hereby agrees that the Developer shall have the right to post or cause the
appropriate contractor or subcontractor to post a bond with the City to indemnify it for
any losses sustained by the City because of any liens that may exist at the time of
acceptance of such a Facility, so long as such bond is drawn on an obligor and is
otherwise in a form acceptable to the Director of Public Works. If the Director of Public
Works determines that a Facility is not ready for intended use under (i) above, the
Director of Public Works shall so notify the Developer as soon as reasonably practicable
in writing specifying the reason(s) therefor.
Nothing in this Acquisition Agreement shall be deemed to prohibit the Developer
from contesting in good faith the validity or amount of any mechanics or materialmans
lien nor limit the remedies available to the Developer with respect thereto so long as such
delay in performance shall not subject the Facilities or any Discrete Component thereof
to foreclosure, forfeiture or sale. In the event that any such lien is contested, the
Developer shall only be required to post or cause the delivery of a bond in an amount
equal to twice the amount in dispute with respect to any such contested lien, so long as
such bond is drawn on an obligor and is otherwise in a form acceptable to the Director
of Public Works.
D. Retention. The City shall withhold in the Improvement Fund an amount
equal to ten percent (10%) of the Purchase Price of each Facility or Discrete Component
to be paid hereunder. Any such retention will be released to the Developer upon final
completion and acceptance of the related Facility and the expiration of a maintenance
period consistent with applicable City policy thereafter (currently a one year warranty
period for any landscaping, and upon receipt of a faithful performance bond acceptable
to the Director of Public Works to remain in effect for one year as to other Facilities).
Notwithstanding the foregoing,the Developer shall be entitled to payment of any
such retention upon the completion and acceptance of a Facility or Discrete Component,
if a maintenance or warranty bond is posted in lieu thereof in accordance with Section
6.05 hereof. Payment of any retention shall also be contingent upon the availability of
monies in the Improvement Fund therefore. No retention shall apply if the Developer
proves to the Director of Public Work's satisfaction that the Developer's contracts for
the Facilities (or Discrete Components) provide for the same retention as herein
provided, so that the Purchase Price paid for the Facility or Discrete Component is at all
times net of the required retention.
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E. Frequency. Unless otherwise agreed to by the Director of Public Works, no
more than one Payment Request shall be submitted by the Developer in any calendar
month.
F. Restriction on Payments for Right-of-Way. The Developer may be reimbursed
for the acquisition of right-of-way prior to the completion of any improvements to the
right-of-way. The amount to reimburse the Developer for right-of-way shall be
determined by an appraisal. Notwithstanding the foregoing, no payment shall be made
to the Developer from the Improvement Fund in respect of the acquisition of right-of-
way (listed immediately after item number 14 in Exhibit B hereto) until the Guaranty,
substantially in the form of Exhibit D hereto, has been executed by The Boeing Company
and delivered to the City.
Section 5.07. Acquisition of Additional Facilities. If the construction and acquisition of
all the Facilities theretofore listed in Exhibit B have been completed and the Purchase Prices
(including any retentions described in 5.06D. above) with respect thereto have been paid, and
funds remain on deposit in the Improvement Fund or become available through the issuance of
additional Bonds, the City and the Developer may designate in a Supplement hereto, Facilities
(and/or Discrete Components thereof) to be constructed and acquired with such remaining or
additional funds to be selected from the list of Facilities in Exhibit A.
Section 5.08. Defective or Nonconforming Work. If any of the work done or materials
furnished for a Facility listed in Exhibit B or Discrete Component are found by the Director of
Public Works to be defective or not in accordance with the applicable Plans: (i) and such
finding is made prior to payment for the Purchase Price of such Facility or Discrete Component
hereunder, the City may withhold payment therefor until such defect or nonconformance is
corrected to the satisfaction of the Director of Public Works, or (ii) and such finding is made
after payment of the Purchase Price of such Facility or Discrete Component, the City and the
Developer shall act in accordance with the City's standard specification for public works
construction (which are set forth in the Green Book, Standard Specifications for Public Works
Construction (SSPWC), of the Southern California Chapter of the American Public Works
Association, as modified by applicable City regulations).
Section 5.09. Modification of Discrete Components. Upon written request of the
Developer, the Director of Public Works shall consider modification of the description of any
Discrete Component. Any such modification shall be subject to the written approval of the
Director of Public Works, and shall not diminish the overall Facilities listed in Exhibit B to be
provided by the Developer hereunder (in a material way such that the change invalidates any of
the assumptions used in the appraisal conducted to sell the Bonds) or in any way increase the
total Budgeted Costs identified in Exhibit B. It is expected that any such modification will be
solely for purposes of dividing up the work included in any Discrete Component for purposes
of acceptance and payment, for example: (i) separation of irrigation and landscaping from
other components of a Discrete Component, (ii) modifications to allow for payment for
roadway improvements prior to completion of the top course of paving, or (iii) division of
utility construction by utility work orders. In most instances, the Director of Public Works will
only approve modifications for payment purposes when there will be an unusual period of time
between the completion and acceptance of such divided work or to better implement the
phasing of the overall construction of the Facilities; but no such circumstances shall this Section
in any way obligate the Director of Public Works to approve such modification.
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ARTICLE VI
OWNERSHIP AND TRANSFER OF FACILITIES
Section 6.01. Facilities to be Owned by the City—Conveyance of Land and Easements
to City. Acceptable Title to all property on, in or over which each Facility to be acquired by the
City will be located, shall be deeded over to the City by way of grant deed, quitclaim, or
dedication of such property, or easement thereon, if such conveyance of interest is approved by
the City as being a sufficient interest therein to permit the City to properly own, operate and
maintain such Facility located therein, thereon or thereover, and to permit the Developer to
perform its obligations as set forth in this Acquisition Agreement. The Developer agrees to
assist the City in obtaining such documents as are required to obtain Acceptable Title.
Completion of the transfer of title to land shall be accomplished prior to the payment of the
Purchase Price for a Facility (or the last Discrete Component thereof) and shall be evidenced by
prompt recordation of the acceptance thereof by the City Council or the designee thereof.
Section 6.02. Facilities to be Owned by the City—Title Evidence. Upon the request of
the City, the Developer shall furnish to the City a preliminary title report for land with respect
to Facilities to be acquired by the City and not previously dedicated or otherwise conveyed to
the City, for review and approval at least fifteen (15) calendar days prior to the transfer of
Acceptable Title to a Facility to the City. The Director of Public Works shall approve the
preliminary title report unless it reveals a matter which, in the judgment of the City, could
materially affect the City's use and enjoyment of any part of the property or easement covered
by the preliminary title report. In the event the.City does not approve the preliminary title
report, the City shall not be obligated to accept title to such Facility and the City shall not be
obligated to pay the Purchase Price for such Facility (or the last Discrete Component thereof)
until the Developer has cured such objections to title to the satisfaction of the City.
Section 6.03. Facilities Constructed on Private Lands. If any Facilities to be acquired
are located on privately-owned land, the owner thereof shall retain title to the land and the
completed Facilities until acquisition of and payment for the Facilities under Article V hereof.
Pending the completion of such transfer, the Developer shall not be entitled to receive any
payment for any such Facility or the last Discrete Component thereof. The Developer shall,
however, be entitled to receive payment for Discrete Components (other than the last Discrete
Component) upon making an irrevocable offer of dedication of such land in form and substance
acceptable to the Director of Public Works. Notwithstanding the foregoing, upon written
request of the Director of Public Works before payment for any Discrete Component of such a
Facility, the Developer shall convey or cause to be conveyed Acceptable Title thereto in the
manner described in Sections 6.01 and 6.02 hereof.
Section 6.04. Facilities Constructed on City Land. If the Facilities to be acquired are on
land owned by the City, the City shall grant to the Developer a license to enter upon such land
for purposes related to the construction (and maintenance pending acquisition) of the Facilities.
The provisions for inspection and acceptance of such Facilities otherwise provided herein shall
apply.
Section 6.05. Maintenance and Warranties. The Developer shall maintain each Discrete
Component in good and safe condition until the Acceptance Date of the Facility of which such
Discrete Component is a part. Prior to the Acceptance Date, the Developer shall be responsible
for performing any required maintenance on any completed Discrete Component or Facility. On
or before the Acceptance Date of the Facility, the Developer shall assign to the City all of the
Developer's rights in any warranties, guarantees, maintenance obligations or other evidence of
contingent obligations of third persons with respect to such Facility. The Developer shall
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maintain or cause to be maintained each Facility to be owned by the City (including the repair
or replacement thereof) for a period of one year from the Acceptance Date thereof, or,
alternatively,shall provide a bond reasonably acceptable in form and substance to the Director
of Public Works for such period and for such purpose (specifically, a one-year maintenance
period for landscaping improvements, and for the posting of a warranty bond to remain in
effect for one year as to other Facilities), to insure that defects,which appear within said period
will be repaired, replaced, or corrected by the Developer, at its own cost and expense, to the
satisfaction of the Director of Public Works. During any such one-year period, the Developer
shall commence to repair, replace or correct any such defects within thirty (30) days after
written notice thereof by the City to the Developer, and shall complete such repairs,
replacement or correction as soon as practicable. After such one-year period, the City shall be
responsible for maintaining such Facility. Any warranties, guarantees or other evidences of
contingent obligations of third persons with respect to the Facilities to be acquired by the City
shall be delivered to the Director of Public Works as part of the transfer of title.
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ARTICLE VII
INSURANCE;RESPONSIBILITY FOR DAMAGE
Section 7.01. Liability Insurance Requirements. The Developer shall provide to the Risk
Manager evidence of insurance and endorsements thereto on forms acceptable to the Risk
Manager within 10 working days of execution by it of this Acquisition Agreement and prior to
any physical work on the Facilities being performed.
The Developer shall procure and maintain for the duration of this Acquisition
Agreement the following minimum insurance coverage and limits against claims for injuries to
persons or damage to property which may arise from or in connection with the performance of
the work covered by this Acquisition Agreement by the Developer, its agents, representatives,
employees or subcontractors:
(a) Premises,operation and mobile equipment.
(b) Products and completed operations.
(c) Explosion, collapse and underground hazards.
(d) Personal injury.
(e) Contractual liability.
(f) Errors and omissions for work performed by design professionals.
COVERAGE PER OCCURRENCE ISO FORM
Commercial General CG 00 011185 or 88 Rev.
Liability (Primary) $1,000,000
Umbrella Liability GL 00 011185 or 88 Rev.
(Over Primary, if required) $1,000,000
Business Auto CA 00 01 06 92 $1,000,000
Workers' Compensation/ Statutory
Employers' Liability $1,000,000
Errors and Omissions $1,000,000
Combined single limit per occurrence shall include coverage for bodily injury, personal injury,
and property damage for each accident and a five million dollar ($5,000,000) general aggregate.
Insurance shall be placed with insurers with a Best's Rating of no less than A:VII.
The Developer shall furnish to the Risk Manager certificates of insurance and
endorsements on forms specified by the Risk Manager, duly authenticated, giving evidence of
the insurance coverage required in this contract and other evidence of coverage or copies of
policies as may be reasonably required by the Risk Manager from time to time. Each required
insurance policy coverage shall not be suspended, voided, canceled by either party, reduced in
coverage or in limits except after fifteen (15) days written notice by certified mail, return receipt
requested,has been given to the Risk Manager.
Liability coverage shall not be limited to the vicarious liability or supervising role of any
additional insured nor shall there be any limitation with the severability clause. Coverage shall
contain no limitation endorsements and there shall be no endorsement or modification limiting
the scope of coverage for liability arising from pollution, explosion, collapse, underground
property damage or employment related practices.
Any umbrella liability coverage shall apply to bodily injury/property damage, personal
injury/advertising injury, at a minimum, and shall include a "drop down" provision providing
primary coverage above a maximum $25,000.00 self-insured retention for liability not covered
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by primary polices not covered by the umbrella policy. Coverage shall be following form to any
other underlying coverage. Coverage shall be on a "pay on behalf" basis, with defense costs
payable in addition to policy limits. There shall be no cross policy exclusion and no limitation
endorsement.The policy shall have starting and ending dates concurrent with the underlying
coverage.
All liability insurance shall be on an occurrence basis. Insurance on a claims made basis
will be rejected. Any deductibles or self-insured retentions shall be declared to and approved
by the Risk Manager. The insurer shall provide an endorsement to the City eliminating such
deductibles or self-insured retentions as respects the City, and its consultants, and each of its
Councilmembers,officials,employees and volunteers.
All subcontractors employed on the work referred to in this Acquisition Agreement shall
meet the insurance requirements set forth in this Section 7.01 for the Developer. The Developer
shall furnish certificates of insurance and endorsements for each subcontractor at least five
days prior to the subcontractor entering the job site, or the Developer shall furnish the Risk
Manager an endorsement including all subcontractors as insureds under its policies.
The City shall not be liable for any accident, loss, or damage to the work prior to its
completion and acceptance, and the Developer shall save, keep and hold harmless the City and
its consultants, and its Councilmembers, officers, officials, employees, agents and volunteers
from all damages, costs or expenses in law or equity that may at any time arise or be claimed
because of damages to property, or personal injury received by reason of or in the course of
performing work,which may be caused by any act or omission by the Developer or any of the
Developer's employees,or any subcontractor.
The cost of insurance required by this subsection shall be born by the Developer and its
subcontractors and no compensation for purchasing insurance or additional coverage needed to
meet these requirements will be paid for by the City.
In the event that any required insurance is reduced in coverage, canceled for any reason,
voided or suspended, the Developer agrees that the City may arrange for insurance.coverage as
specified, and the Developer further agrees that administrative and premium costs may be
deducted from any deposits or bonds the City may have, or from the Improvement Fund. A
reduction or cancellation of any required insurance will be grounds for termination of this
Acquisition Agreement (subject to any applicable cure period in Section 9.03) and will cause a
halt to payment for any work on the Facilities until the insurance is reestablished.
Liability policies shall contain, or be endorsed to contain the following provisions:
(a) General Liability and Automobile Liability: The City and its consultants, and
its Councilmembers, officers, officials, employees and volunteers shall be covered as
additional insureds using ISO form CG 20 10 1185 as it respects: liability arising out of
activities performed by or on behalf of the Developer; products and completed
operations of the Developer' premises owned, occupied or used by the Developer; or
automobiles owned, leased, hired or borrowed by the Developer. 'The coverage shall
contain no special limitations on the scope or protection afforded to the City and its
consultants,and its Councilmembers,officers,officials,employees,or volunteers.
The Developer's insurance coverage shall be primary insurance with respect to
the City and its consultants, and its Councilmembers, officers, officials, employees and
volunteers. Any insurance or self-insurance maintained by the City and its consultants,
and its Councilmembers, officers, officials, employees and volunteers shall be excess of
the Developer's insurance and shall not contribute with it.
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Any failure to comply with reporting provisions of the policies shall not affect
coverage provided to the City, and its consultants, and its Councilmembers, officers,
officials,employees,and volunteers.
The Developer's insurance shall apply separately to each insured against whom
claim is made or suit is brought, except with respect to the limits of the insurer's liability.
(b) Workers' Compensation and Employer's Liability: The Developer and all
subcontractors shall have workers' compensation for all employees in conformance with
the requirements in Section 3700 of the Labor Code.
(c) Error and Omissions Liability: The Developer and all subcontractors who
are design professionals shall have and maintain errors and omissions insurance.
Section 7.02. Responsibility for Damage. The Developer shall take and assume all
responsibility for the work performed as part of the Facilities constructed pursuant to this
Acquisition Agreement. The Developer shall bear all losses and damages directly or indirectly
resulting to it, to the City, and its consultants, and its Councilmembers, officers, employees and
agents, or to others on account of the performance or character of the work, unforeseen
difficulties, accidents of any other causes whatsoever.
The Developer shall assume the defense of and indemnify and save harmless the City,
and its consultants, and Councilmembers, officers, employees, and agents, from and against
any and all claims, losses, damage, expenses and liability of every kind, nature, and
description, directly or indirectly arising from the performance of the work, regardless of
responsibility for negligence, and from any and all claims, losses, damage, expenses, and
liability, howsoever the same may be caused, resulting directly, or indirectly from the nature of
the work covered by this Acquisition Agreement, regardless of responsibility for negligence, to
the fullest extent permitted by law. In accordance with Civil Code section 2782, nothing in this
Section 7.02 shall require defense or indemnification for death, bodily injury, injury to property,
or any other loss, damage or expense arising from the active or sole negligence or willful
misconduct of the City, and its consultants, and its Councilmembers, agents, servants or
independent contractors who are directly responsible to the City, or for defects in design
furnished by such persons. Moreover, nothing in this Section 7.02 shall apply to impose on the
Developer, or to relieve the City from, liability for active negligence of the City, or its
consultants as delineated in Civil Code Section 2782. Any relief for determining the City's sole
or active negligence shall be determined by a court of law.
The City does not, and shall not, waive any rights against the Developer which it may
have by reason of the aforesaid hold harmless agreements because of the acceptance by the
City, or deposit with the City by the Developer of any insurance policies described in Section
7.01. The aforesaid hold harmless agreement by the Developer shall apply to all damages and
claims for damages of every kind suffered, or alleged to have been suffered by reasons of any of
the aforesaid operations of the Developer, or any subcontractor, regardless of whether or not
such insurance policies are determined to be applicable to any of such damages or claims for
damages.
No act by the City, or its representatives in processing or accepting any plans, in
releasing any bond, in inspecting or accepting any work, or of any other nature, shall in any
respect relieve the Developer or anyone else from any legal responsibility,obligation or liability
it might otherwise have.
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ARTICLE VIII
REPRESENTATIONS,WARRANTIES AND COVENANTS
Section 8.01. Representations, Covenants and Warranties of the Developer. The
Developer represents and warrants for the benefit of the City and the CFD as follows:
A. Organization. The Developer is a corporation duly organized and validly
existing under the laws of the State of California, is in compliance with all applicable
laws of the State, and has the power and authority to own its properties and assets and
to carry on its business as now being conducted and as now contemplated.
B. Authority. The Developer has the power and authority to enter into this
Acquisition Agreement, and has taken all action necessary to cause this Acquisition
Agreement to be executed and delivered, and this Acquisition Agreement has been duly
and validly executed and delivered by the Developer.
C. Binding Obligation. This Acquisition Agreement is a legal, valid and binding
obligation of the Developer, enforceable against the Developer in accordance with its
terms,subject to bankruptcy and other equitable principles.
D. Compliance with Laws. The Developer shall not with knowledge commit,
suffer or permit any act to be done in, upon or to the lands in the CFD or the Facilities in
violation of any law, ordinance, rule, regulation or order of any governmental authority
or any covenant, condition or restriction now or hereafter affecting the lands in the CFD
or the Facilities.
E. Requests for Payment. The Developer represents and warrants that (i) it will
not request payment from the City for the acquisition of any improvements that are not
part of the Facilities, and (ii) it will diligently follow all procedures set forth in this
Acquisition Agreement with respect to the Payment Requests.
F. Financial Records. Until the final acceptance of the Facilities, the Developer
covenants to maintain proper books of record and account for the construction of the
Facilities and all costs related thereto. Such accounting books shall be maintained in
accordance with generally accepted accounting principles, and shall be available for
inspection by the City or its agent at any reasonable time during regular business hours
on reasonable notice.
G. Prevailing Wages. The Developer covenants that, with respect to any
contracts or subcontracts for the construction of the Facilities listed in Exhibit B to be
acquired from the Developer hereunder, it will assure complete compliance with any
applicable law or regulation for the payment of prevailing wages. The Developer agrees
to pay and require all subcontractors to pay all employees a salary or wage at least
equal to the general prevailing rate of per diem wages and the general prevailing rate for
legal holiday and overtime work in the locality in which the Facilities listed in Exhibit B
are to be constructed as ascertained by the City from the Director of Industrial Relations
of the State of California and set forth by resolution on file in the office of the City Clerk
of the City. The Developer shall pay not less than said prevailing wage rates to all
workers employed to construct the Facilities listed in Exhibit B (or any Discrete
Component thereof). In accordance with the provisions of Section 3700 of the California
Labor Code,the Developer agrees to secure payment of compensation to every employee
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pursuant to this Agreement and,with respect to the construction of the Facilities listed
in Exhibit B, in accordance with Section 1774 and 1775 of the California Labor Code,
the Developer shall, as penalty to City, forfeit twenty-five dollars ($25) for each
calendar day or portion thereof for each worker paid (either by the Developer or any of
its subcontractors) less than the prevailing wage rate established for that particular craft
or type of work.
H. Plans. The Developer represents that it has obtained or will obtain approval
of the Plans for the Facilities listed in Exhibit B to be acquired from the Developer
hereunder from all appropriate departments of the City. The Developer further agrees
that the Facilities listed in Exhibit B to be acquired from the Developer hereunder have
been or will be constructed in full compliance with such approved plans and
specifications and any supplemental agreements (change orders) thereto, as approved in
the same manner.
I. Land Owners. The Developer agrees that in the event that McDonnell Douglas
Corporation sells any land owned by such corporation within the boundaries of the
CFD, the Developer will (i) notify the purchaser in writing prior to the closing of any
such sale of the existence of this Acquisition Agreement and, in general, the Developer's
rights and obligations hereunder with respect to the construction of and payment for the
Facilities, and (ii) notify the purchaser in writing of the existence of the CFD and the
special tax lien in connection therewith, and otherwise comply with any applicable
provision of Section 53341.5 of the Act.
J. Additional Information. The Developer agrees to cooperate with all
reasonable written requests for nonproprietary information by the original purchasers of
the Bonds or the City related to the status of construction of improvements within the
CFD, the anticipated completion dates for future improvements, and any other matter
material to the investment quality of the Bonds.
K. Continuing Disclosure. The Developer agrees to comply with all of its
obligations under any continuing disclosure agreement or certificate executed by it in
connection with the offering and sale of any of the Bonds.
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ARTICLE IX
TERMINATION
Section 9.01. No Bonds. If, for any reason, the City does not issue the first series of the
Bonds for the CFD by October 30, 2002, this Acquisition Agreement shall terminate and be null
and void and of no further effect.
Section 9.02. Mutual Consent. This Acquisition Agreement may be terminated by the
mutual,written consent of the City and the Developer, in which event the City may.let contracts
for any remaining work related to the Facilities listed in Exhibit B not theretofore acquired from
the Developer hereunder, and use all or any portion of the monies in the Improvement Fund to
pay for same, and the Developer shall have no claim or right to any further payments for the
Purchase Price of Facilities or Discrete Components hereunder, except as otherwise may be
provided in such written consent.
Section 9.03. City Election for Cause. The following events shall constitute grounds for
the City, at its option, to terminate this Acquisition Agreement, without the consent of the
Developer:
(a) The Developer shall voluntarily file for reorganization or other relief under
any Federal or State bankruptcy or insolvency law.
(b) The Developer shall have any involuntary bankruptcy or insolvency action
filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take
possession of the assets of Developer, or shall suffer an attachment or levy of execution
to be made against the property it owns within the CFD unless, in any of such cases,
such circumstance shall have been terminated or released within thirty (30) days
thereafter.
(c) The Developer shall abandon construction of the Facilities listed in Exhibit B.
Failure for a period of ninety (90) consecutive days to undertake substantial work
related to the construction of the Facilities listed in Exhibit B, other than for a reason
specified in Section 9.04 hereof, shall constitute a noninclusive example of such
abandonment.
(d) The Developer shall breach any material covenant or default in the
performance of any material obligation hereunder.
(e) The Developer shall transfer any of its rights or obligations under this
Acquisition Agreement without the prior written consent of the City.
(f) The Developer shall have made any material misrepresentation or omission in
any written materials furnished in connection with any preliminary official statement,
official statement or bond purchase contract used in connection with the sale of the
Bonds.
(g) The Developer or any of its Affiliates shall at any time challenge the validity
of the CFD or any of the Bonds, or the levy of Special Taxes within the CFD, other than
on the grounds that such levy was not made in accordance with the terms of the Rate
and Method of Apportionment of the Special Taxes for the CFD.
-23-
If any such event occurs,the City shall give written notice of its knowledge thereof to the
Developer, and the Developer agrees to meet and confer with the Director of Public Works and
other appropriate City staff and consultants within ten (10) days of receipt of such notice as to
options available to assure timely completion of the Facilities listed in Exhibit B. Such options
may include, but not be limited to the termination of this Acquisition Agreement by the City. If
the City elects to terminate this Acquisition Agreement, the City shall first notify the Developer
(and any mortgagee or trust deed beneficiary specified in writing by the Developer to the City to
receive such notice) of the grounds for such termination and allow the Developer a minimum of
thirty (30) days to eliminate or mitigate to the satisfaction of the Director of Public Works the
grounds for such termination. Such period may be extended, at the sole discretion of the City, if
the Developer, to the satisfaction of the City, is proceeding with diligence to eliminate or
mitigate such grounds for termination. If at the end of such period (and any extension thereof),
as determined solely by the City, the Developer has not eliminated or completely mitigated such
grounds, to the satisfaction of the City, the City may then terminate this Acquisition Agreement.
Notwithstanding the foregoing, so long as any event listed in any of clauses (a) through
and including (g) above has occurred, notice of which has been given by the City to the
Developer, and such event has not been cured or otherwise eliminated by the Developer, the
City may in its discretion cease making payments for the Purchase Price of Facilities or Discrete
Components under Article V hereof until such time as such event has been cured or otherwise
eliminated to the satisfaction of the City.
Section 9.04. Force Majeure. Whenever performance is required of a party hereunder,
that party shall use all due diligence and take all necessary measures in good faith to perform,
but if completion of performance is delayed by reasons of floods, earthquakes or other acts of
God, war, terrorist attacks, civil commotion, riots, strikes, picketing, or other labor disputes,
damage to work in progress by casualty, or by other cause beyond the reasonable control of the
party (financial inability excepted), then the specified time for performance shall be extended
by the amount of the delay actually so caused.
-24-
ARTICLE X
MISCELLANEOUS
Section 10.01. Limited Liability of City. The Developer agrees that any and all
obligations of the City arising out of or related to this Acquisition Agreement are special and
limited obligations of the City and the City's obligations to make any payments hereunder are
restricted entirely to the moneys, if any, in the Improvement Fund and from no other source. No
Councilmember, or City staff member, employee or agent shall incur any liability hereunder to
the Developer or any other party in their individual capacities by reason of their actions
hereunder or execution hereof.
Section 10.02. Excess Costs. The Developer agrees to pay all costs of the Facilities that
it is obligated to construct pursuant to Section 4.02 in excess of the moneys available therefor in
the Improvement Fund.
Section 10.03. Audit. The Director of Public Works and/or the City's Director of
Administrative Services shall have the right, during normal business hours and upon the giving
of two.(2) business days prior written notice to the Developer, to review all books and records
of the Developer pertaining to costs and expenses incurred by the Developer in to any of the
Facilities, and any bids taken or received for the construction thereof or materials therefor.
Section 10.04. Attorney's Fees. In the event that any action or suit is instituted by either
party against the other arising out of this Acquisition Agreement, each party shall bear its own
attorney's fees and the prevailing party shall not be entitled to recover its attorney's fees from
the other party.
Section 10.05. Notices. Any notice, payment or instrument required or permitted by
this Acquisition Agreement to be given or delivered to either party shall be deemed to have been
received when personally delivered, or transmitted by telecopy or facsimile transmission (which
shall be immediately confirmed by telephone and shall be followed by mailing an original of the
same within twenty-four hours after such transmission); or seventy-two hours following deposit
of the same in any United States Post Office, registered or certified mail, postage prepaid,
addressed as follows:
City, Improvement Area A, City of Huntington Beach
Improvement Area B or CFD: 2000 Main Street
Huntington Beach, California 92648
Attention: Director of Public Works
Developer: Boeing Realty Corporation
3760 Kilroy Airport Way, Suite 500
Long Beach, California 90806
Attention:Jim Schulte
Each party may change its address or addresses for delivery of notice by delivering
written notice of such change of address to the other party.
Section 10.06. Severability. If any part of this Acquisition Agreement is held to be
illegal or unenforceable by a court of competent jurisdiction, the remainder of this Acquisition
Agreement shall be given effect to the fullest extent possible.
-25-
Section 10.07. Successors and Assigns. This Acquisition Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties hereto. This
Acquisition Agreement shall not be assigned by the Developer, except in whole to an Affiliate,
without the prior written consent of the City,which consent shall not be unreasonably withheld
or delayed. In connection with any such consent of the City,the City may condition its consent
upon the acceptability of the relevant experience and financial condition of the proposed
assignee, the assignee's express assumption of all obligations of the Developer hereunder,
and/or upon any other factor which the City deems relevant in the circumstances. In any event,
any such assignment shall be in writing, shall clearly identify the scope of the rights and/or
obligations assigned,and shall not be effective until approved in writing by the City.
Section 10.08. Other Agreements. The obligations of the Developer hereunder shall be
those of a party hereto and not as an owner of property in the CFD. Nothing herein shall be
construed as affecting the City's or the Developer's rights, or duties to perform their respective
obligations,under other agreements, use regulations or subdivision requirements relating to the
development of the lands in the CFD. This Acquisition Agreement shall not confer any
additional rights, or waive any rights given, by either party hereto under any development or
other agreement to which they are a party.
Section 10.10. Waiver. Failure by a party to insist upon the strict performance of any of
the provisions of this Acquisition Agreement by the other party, or the failure by a party to
exercise its rights upon the default of the other party, shall not constitute a waiver of such
party's right to insist and demand strict compliance by the other party with the terms of this
Acquisition Agreement thereafter.
Section 10.11. Merger. No other agreement, statement or promise made by any party or
any employee, officer or agent of any party with respect to any matters covered hereby that is
not in writing and signed by all the parties to this Acquisition Agreement shall be binding.
Section 10.12. Parties in Interest. Nothing in this Acquisition Agreement, expressed or
implied, is intended to or shall be construed to confer upon or to give to any person or entity
other than the City and the Developer any rights, remedies or claims under or by reason of this
Acquisition Agreement or any covenants, conditions or stipulations hereof, and all covenants,
conditions, promises, and agreements in this Acquisition Agreement contained by or on behalf
of the City or the Developer shall be for the sole and exclusive benefit of the City, and the
Developer.
Section 10.13. Amendment. This Acquisition Agreement may be amended, from time to
time, by written Supplement hereto and executed by both the City and the Developer.
Section 10.14. Counterparts. This Acquisition Agreement may be executed in
counterparts,each of which shall be deemed an original.
-26-
IN WITNESS WHEREOF, the parties have executed this Acquisition Agreement as of
the day and year first-above written.
BOEING REALTY CORPORATION
By: /Xl 6'sccl_ -
Its: WPM I RARKFR
DIRECTOR•BUSINESS OPERATIONS
CITY OF HUNTINGTON BEACH, for and on
behalf of IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT 2002-1
(MCDONNELL CENTRE BUSINESS PARK)
and IMPROVEMENT AREA B OF THE CITY
OF HUNTINGTON BEACH COMMUNITY
FACILITIES DISTRICT 2002-1
Attest: (MCDONNELL CENTRE BUSINESS PARK)
By: By: XL"Z� &A4,,
City-Clerk Mayor
Reviewed and Approved: Approved as to Form:
By. By
i Treasurer City Attorney Uhlol,
6_7 oZG-e,*
As owner of all of the real property in the
CFD, the undersigned consents to the
foregoing Acquisition Agreement
MCDONNELL DOUGLAS CORPORATION
By:
)"I L�:_
Its: St hen 1.Barker
Authorized Ana
20009.03:16176
-27-
ACQUISITION AGREEMENT
EXHIBIT A
DESCRIPTION OF AUTHORIZED FACILITIES ELIGIBLE FOR
ACQUISITION FROM THE DEVELOPER
FACILITIES
It is intended that the District will finance all or a portion of the costs of any of the
following:
1. The construction of sewer lines in existing Skylab Road, new Delta Lane and new
Astronautics Lane.
2. The construction of streets, curbs, and gutters from the extension of Skylab Road
from its current terminus at Astronautics Lane west to approximately 400 feet
west of new Delta Lane.
3. The construction of streets, curbs, and gutters from the new Delta Lane between
Skylab Road north to new Astronautics Lane.
4. The construction of streets, curbs, and gutters for the new Astronautics Lane
from its current terminus west to Rancho Road.
5. The construction of street, curbs, and gutters for the new Skylab Lane from new
Astronautics Lane south approximately 200 feet.
6. The construction of the waterline in Rancho Road connecting its current terminus
east of Bolsa Chica Road to the existing waterline north of the Navy Railroad.
7. The construction of onsite waterlines in extended Skylab Road, new Delta Lane
and new Astronautics Lane.
8. The construction of conduit and fixtures for new street lighting in extended
Skylab Road, new Delta Lane, and new Astronautics Lane.
9. The construction of street, curbs, and gutters for the new Delta Lane from Bolsa
Avenue north to Skylab Road.
10. The construction of a waterline in new Delta Lane from Bolsa Avenue to Skylab
Road.
11. The construction of storm drains in new Skylab Road, new Delta Lane new
Astronautics Lane and new Skylab Lane.
12. Roadway improvements at the intersection of Bolsa Avenue and Delta Lane
including modifications to the existing traffic signal.
13. Roadway improvements at the intersection of Rancho Road and Astronautics
Lane including construction of the new traffic signal.
Exhibit A
Page 1
14. Roadway improvements to Rancho Road consisting of installation of new
sidewalk.
The Improvements to be financed shall include the costs of the acquisition of right-of-
way that is intended to be dedicated by the recording of a final map, the costs of design,
engineering and planning, the costs of any environmental or traffic studies, surveys or other
reports, costs related to landscaping and irrigation, soils testing, permits, plan check and
inspection fees, insurance, legal and related overhead costs, coordination and supervision and
any other costs or appurtenances related to any of the foregoing.
Exhibit A
Page 2
ACQUISITION AGREEMENT
EXHIBIT B
DISCRETE COMPONENTS OF FACILITIES
Item No. Description Cost
1 On-site Sewer Lines $ 363,589
2,3,4,5 Streets, Curbs & Gutters for Skylab Road, Delta Lane, Astronautics 991,652
Lane and Skylab Lane
6 Rancho Road Waterline 366,154
7 Skylab Rd, Delta Lane and Astronautics Waterlines 646,301
8 Streetlight Trenching 183,164
8 Skylab Rd, Delta Lane and Astronautics Street Lights 204,410
9 Streets, Curbs & Gutters for Delta Lane
10 Delta Lane Waterline
11 Storm Drains in Skylab Road, Delta Lane, Astronautics Lane and 663,225
Skylab Lane
12 Bolsa/Delta Intersection &Signal Improvements
13 Rancho/Astronautics Intersection Imps. &New Signal 217,260
14 Roadway and Sidewalk for Rancho Road 47,837
Right-of-Way(1) 4,470,657
Total $8,154,249
(1) Consists of initial street right-of-way of 8.787 acres. The right-of-way is to be acquired at$11.68 per
square foot, as determined under the Appraisal,dated April 22, 2002 of John S.Adams &Associates,
Inc.with regard to the value of such land.
Exhibit B
Page 1
ACQUISITION AGREEMENT
EXHIBIT C
FORM OF PAYMENT REQUEST
PAYMENT REQUEST NO.
The undersigned (the "Developer"), hereby requests payment in the total amount of
$ for the Facilities (as defined in the Acquisition Agreement, dated as of June 1,
2002, between the City of Huntington Beach (the "City"), for and on behalf of Improvement
Area A of the City of Huntington Beach Community Facilities District 2002-1 (McDonnell
Centre Business Park), and Improvement Area B of the City of Huntington Beach Community
Facilities District 2002-1 (McDonnell Centre Business Park), and the Developer), or Discrete
Components thereof(as described in Exhibit B to that Agreement), all as more fully described in
Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby
represents and warrants to the Authority as follows:
1. He(she) is a duly authorized officer of the Developer, qualified to execute this
Payment Request for payment on behalf of the Developer and is knowledgeable as to the
matters set forth herein.
2. To the extent that this payment request is with respect to a completed Facility,
the Developer has submitted or submits herewith to the City of Huntington Beach (the "City")
as-built drawings or similar plans and specifications for the items to be paid for as listed in
Attachment 1 hereto with respect to any such completed Facility, and such drawings or plans
and specifications, as applicable, are true, correct and complete. To the extent that this
payment request is for a Discrete Component, the Developer has in his construction office a
marked set of drawings or similar plans and specifications for the Discrete Components to be
acquired as listed in Attachment 1 hereto, which drawings or plans and specifications, as
applicable, are current and show all changes or modifications which have been made to date.
3. All costs of the Facilities or Discrete Components thereof for which payment is
requested hereby are Actual Costs (as defined in the Agreement referenced above) and have not
been inflated in any respect. The items for which payment is requested have not been the
subject of any prior payment request submitted to the City.
4. Supporting documentation (such as third party invoices) is attached with respect
to each cost for which payment is requested.
5. There has been compliance with applicable laws relating to prevailing wages for
the work to construct the Facilities or Discrete Components thereof for which payment is
requested.
6. The Facilities or Discrete Components thereof for which payment is requested
were constructed in accordance with all applicable City or other governmental standards, and
in accordance with the as-built drawings or plans and specifications, as applicable, referenced
in paragraph 2 above.
7. The Developer is in compliance with the terms and provisions of the Acquisition
Agreement and no portion of the amount being requested to be paid was previously paid.
Exhibit C
Page 1
8. The Purchase Price for each Facility or Discrete Component (a detailed
calculation of which is shown in an Attachment 2 hereto for each such Facility or Discrete
Component), has been calculated in conformance with the terms of Section 5.06 of the
Acquisition Agreement.
9. Neither the Developer nor any Affiliate (as defined in the Acquisition
Agreement), nor McDonnell Douglas Corporation, is in default in the payment of ad valorem
real property taxes or special taxes or special assessments levied in the CFD (as defined in the
Acquisition Agreement), except as follows:
I hereby declare under penalty of perjury that the above representations and warranties
are true and correct.
DEVELOPER: CITY:
BOEING REALTY CORPORATION Payment Request Approved for
Submission to the City Treasurer (with a
copy to the Finance Officer of the City)
By:
Authorized Representative
of the Developer By:
Director of Public Works
Date:
Date:
Exhibit C
Page 2
ATTACHMENT 1
EXHIBIT C
[list here all Facilities or Discrete Components thereof for which payment is requested, and attach
support documentation]
Exhibit C-1
Page 3
ATTACHMENT 2
EXHIBIT C
CALCULATION OF PURCHASE PRICE
[Use a separate sheet for each Facility or Discrete Component
for which payment is being requested]
1. Description (by reference to Exhibit B to the Acquisition
Agreement) of the Facility or Discrete Component
2. Actual Cost (list here total of supporting invoices and/or other
documentation supporting determination of Actual Cost): $
3. Budgeted Cost: $
4. Permitted Additions to Budgeted Cost (to the extent, and only to
the extent, that Actual Cost exceeds Budgeted Cost):
A. Unused Facility Contingency for this Facility (see clause (i)
of second paragraph of Section 5.06A of the Acquisition
Agreement) $
B. Unused Facility Contingency from prior Facilities already
acquired by the Authority (see clause (i) of second
paragraph of Section 5.06A of the Acquisition Agreement) $
C. Savings (Actual Costs less than Budgeted Cost) carried
forward from prior acquired Facilities/Discrete
Components (see first paragraph of Section 5.06A) and
not previously applied to cover cost overruns (Actual
Costs greater than Budgeted Cost) on previously acquired
Facilities $
D. Unused Overall Contingency (see clause (ii) of second
paragraph of Section 5.06(A) of the Acquisition
Agreement) $
E. Additional Bond proceeds available $
5. Subtractions from Purchase Price:
A. Holdback for Lien releases (see Section 5.06(C) of the
Acquisition Agreement) $
B. Retention (see Section 5.06(D) of the Acquisition
Agreement) $
6. Total disbursement requested (Amount listed in 3, plus amounts,
if any, listed in 4 (total of amounts in 3 and 4 not to exceed
amount listed in 2), less amounts, if any, listed in 5) $
Exhibit C-2
Page 4
ACQUISITION AGREEMENT
EXHIBIT D
FORM OF GUARANTY
GUARANTY, dated as of 20_, of THE BOEING COMPANY, a Delaware
corporation ("Guarantor"), in favor of the City of Huntington Beach, California, a municipal
corporation ("Creditor").
WITNESSETH :
1. RECITALS.
1.1 Boeing Realty Corporation, a California corporation ("Boeing Affiliate") is a
subsidiary of Guarantor and has entered into the Acquisition Agreement, dated as of June 1,
2002, with Creditor (the "Agreement"). Boeing Affiliate intends to complete the Improvements
(as defined below) pursuant to the Agreement and in connection with the formation of City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)
(the "CFD").
1.2 In connection with the transactions contemplated by the Agreement, Creditor has
required that Guarantor execute and deliver this Guaranty.
2. DEFINITIONS. In addition to the terms defined above, the following terms shall
have the following respective meanings: "Improvements" shall mean the improvements
described in Exhibit B to the Agreement as of the date of execution of the Agreement (and shall
not include any facilities added to Exhibit B through an amendment to the Agreement).
"Obligations" shall mean (i) all obligations and liabilities of Boeing Affiliate to Creditor under
the Agreement for the financing, construction and maintenance of the Improvements in the
manner set forth in the Agreement, and (ii) all obligations and liabilities of Boeing Affiliate to
remediate the environmental hazards revealed by the Phase I and Phase II Environmental Site
Assessment Report of ENSR Corporation, dated March 26, 2001, on the property within and
adjacent to the boundaries of the CFD. "Obligations" shall not include, and the Guarantor is in
no way guaranteeing, the value of the right-of-way indicated on Exhibit B. "Person" shall mean
any individual, partnership, limited liability company, joint venture, trust, unincorporated
organization, corporation, institution, public benefit corporation, entity or government (whether
Federal, state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division agency, body or department thereof). References to this "Guaranty"
shall mean this Guaranty, including all amendments, modifications and supplements and any
exhibits or schedules to any of the foregoing, and shall refer to the Guaranty as the same may be
in effect at the time such reference becomes operative.
3. THE GUARANTY. The guaranty of Guarantor hereunder is as follows:
3.1 Guaranty of Obligations of Boeing Affiliate. Guarantor hereby unconditionally
guarantees to Creditor the performance of the Obligations. Guarantor agrees that its obligations
under this Guaranty shall be primary,irrespective of,and unaffected by:
(a) the absence of any action to enforce this Guaranty or the Agreement;or
(b) any other action or circumstances which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, other than as set forth herein,it
Exhibit D
Page 1
being agreed by Guarantor that its obligations under this Guaranty shall not be
discharged until the performance, in full, of the Obligations or the termination of the
Agreement. Guarantor shall be regarded, and shall be in the same position, as principal
obligor with respect to the Obligations. Guarantor expressly waives all rights it may
have, now or in the future, under any statute, or at common law, or at law or in equity,
or otherwise, to compel Creditor to proceed in respect of the Obligations against the
Boeing Affiliate or any other party or against any security for the performance of the
Obligations before proceeding against, or as a condition to proceeding against,
Guarantor.
3.2 Enforcement of Guaranty. In no event shall Creditor have any obligation (although
it is entitled, at its option) to proceed against Boeing Affiliate or any other Person before
seeking satisfaction from Guarantor. Any demand by Creditor for performance by Guarantor
under this Guaranty shall be in writing, shall make reference to this Guaranty and the
Agreement, shall indicate that the Obligations (or the applicable portion thereof) have not been
performed by Boeing Affiliate when due and shall specify the Obligations which are the subject
of such demand.
3.3 Bankruptcy. This Guaranty shall remain in full force and effect and continue to be
effective in the event any petition be filed by or against Boeing Affiliate or Guarantor for
liquidation or reorganization, in the event Boeing Affiliate or Guarantor becomes insolvent or
makes an assignment for the benefit of creditors or in the event a receiver or trustee be
appointed for all or any significant part of Boeing Affiliate's or Guarantor's assets.
3.4 Continuing Guaranty. Except as provided in Section 5.6, Guarantor agrees that this
Guaranty is a continuing guaranty and shall remain in full force and effect until the performance
in full of the Obligations.
4. REPRESENTATIONS AND WARRANTIES. To induce Creditor to enter into the
Agreement, Guarantor makes the following representations and warranties to Creditor, each
and all of which shall survive the execution and delivery of this Guaranty:
4.1 Corporate Existence. Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation.
4.2 Corporate Power; Authorization; Enforceable Obligations. The execution, delivery
and performance of this Guaranty are within Guarantor's corporate powers, have been duly
authorized by all necessary or proper corporate action, are not in contravention of any
provision of such Guarantor's Certificate or Articles of Incorporation or ByLaws. This
Guaranty has been duly executed and delivered on behalf of Guarantor, and constitutes a legal,
valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its
terms.
5. MISCELLANEOUS.
5.1 Entire Agreement; Amendments. This Guaranty, together with the Agreement,
constitutes the entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements relating to a guaranty of the Obligations and may not be
amended or supplemented except by a writing signed by Guarantor and Creditor.
5.2 Headings.-The headings in this Guaranty are for convenience of reference only and
are not part of the substance of this Guaranty.
Exhibit D
Page 2
5.3 Severability. In the event that any one or more of the provisions contained in this
Guaranty shall be determined to be invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision or provisions in every
other respect and the remaining provisions of this Guaranty shall not be in any way impaired.
5.4 Notices. Whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served upon any of
the parties by another, or whenever any of the parties desires to give or serve upon another any
such communication with respect to this Guaranty, each such notice, demand, request, consent,
approval, declaration or other communication shall be in writing and either shall be delivered in
person (by personal delivery, delivery service or overnight courier service) with receipt
acknowledged, or telecopied and confirmed immediately in writing by a copy mailed by
registered or certified mail, return receipt requested, postage prepaid, addressed as hereafter set
forth, or mailed by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) If to Creditor, at: City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attention: Director of Public Works
Telecopier No.: (714) 374-1573
(b) If to Guarantor, at: The Boeing Company
100 North Riverside, MC 5003-3020
Chicago, Illinois 60606-1596
Attention:Treasury Operations
Telecopier No.: (312) 544 -2399
or at such other address as may be substituted by notice given as herein provided. The giving of
any notice required hereunder may be waived in writing by the party entitled to receive such
notice. Every notice, demand, request, consent, approval, declaration or other communication
hereunder shall be deemed to have been duly given or served on the date on which personally
delivered, in person, by delivery service or by overnight courier service, with receipt
acknowledged, the date of telecopy transmission or three (3) business days after the same shall
have been deposited with the United States mail, postage prepaid.
5.5 Binding Effect. This Guaranty shall bind Guarantor and shall inure to the benefit of
Creditor and its successors and assigns. Guarantor may not assign this Guaranty.
5.6 Termination. This Guaranty shall terminate and be of no further force or effect at
the earlier of(i) such time as the Obligations shall be performed in full, or (ii) the Agreement is
terminated pursuant to Section 9.01, 9.02 or 9.03 of the Agreement. Upon such performance in
full of the Obligations,or termination of the Agreement, Creditor shall deliver to Guarantor such
documents as Guarantor may reasonably request to evidence such termination.
5.7 Governing Law. THE TERMS OF THIS GUARANTY SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK (EXCLUSIVE OF ANY RULES AS TO CONFLICT OF
LAWS) AND THE LAWS OF THE UNITED STATES APPLICABLE THEREIN.
GUARANTOR WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES HEREUNDER,
UNDER THE AGREEMENT OR RELATING TO THE FOREGOING. AS PART OF THE
CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, GUARANTOR HEREBY
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
Exhibit D
Page 3
WITHIN THE CITY OF NEW YORK AND WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS UPON GUARANTOR, AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO GUARANTOR AT THE
ADDRESSES PROVIDED IN SECTION 5.4 ABOVE AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE (5) BUSINESS DAYS AFTER THE SAME SHALL
HAVE BEEN DEPOSITED IN THE UNITED STATES MAIL, POSTAGE PREPAID.
GUARANTOR WAIVES ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.
5.8 Counterparts. This Guaranty may be executed in any number of counterparts which
shall individually and collectively constitute one agreement.
Exhibit D
Page 4
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the
date first above written.
THE BOEING COMPANY
By:
Name:
Title:
Accepted and acknowledged by
CITY OF HUNTINGTON BEACH, for and on
behalf of IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT 2002-1
(MCDONNELL, CENTRE BUSINESS PARK)
and IMPROVEMENT AREA B OF THE CITY
OF HUNTINGTON BEACH COMMUNITY
FACILITIES DISTRICT 2002-1
Attest: (MCDONNELL CENTRE BUSINESS PARK)
By: By:
City Clerk Mayor
Reviewed and Approved: Approved as to Form:
By: By:
City Treasurer City Attorney
Exhibit D
Page 5
ACQUISITION AGREEMENT
EXHIBIT E
LIST OF PREFORMATION CONTRACTS
The following scopes of work were awarded prior to the formation of the District,
pursuant to paragraph 4.03C. of the Acquisition Agreement.
1. Sanitary sewer lines located in Skylab Road West, Delta Lane, and Astronautics
Lane has been awarded for $257,854.00 pursuant to a contract, dated May 29, 2002, between
Boeing Realty Corporation and Rossi Construction Company.
2. Site Concrete i.e. curbs and gutters, and sidewalks along Skylab Road between
Astronautics and Delta has been awarded for $27,500.00, pursuant to a contract, dated May
29, 2002, between Boeing Realty Corporation and CL Concrete.
(b) Asphalt Paving along Skylab Road between Astronautics and Delta has
been awarded for $69,575.00, pursuant to a contract, dated May 29, 2002, between
Boeing Realty Corporation and Western Paving.
3. Site Concrete i.e. curbs and gutters, and sidewalks for Delta Lane from Skylab
Road north to Astronautics has been awarded for $48,150.00, pursuant to a contract, dated
May 29, 2002, between Boeing Realty Corporation and CL Concrete.
(b) Asphalt Paving for Delta Lane from Skylab Road north to Astronautics has
been awarded for $53,820.00, pursuant to a contract, dated May 29, 2002, between
Boeing Realty Corporation and Western Paving.
4. Construction of Site Concrete i.e. curbs and gutters, and sidewalks along "new"
Astronautics Lane to Rancho Road has been awarded for $118,944.00, pursuant to a contract,
dated May 29, 2002, between Boeing Realty Corporation and CL Concrete.
(b) Asphalt Paving for "new" Astronautics Road to existing Rancho Road has
been awarded for $126,600.00, pursuant to a contract, dated May 29, 2002, between
Boeing Realty Corporation and Western Paving.
6. Rancho Road domestic water line located in Rancho Road from Bolsa Chica to
Astronautics Lane has been awarded for $353,535.00 pursuant to a contract, dated May 29,
2002,between Boeing Realty Corporation and Doty Brothers Equipment Company.
7. Domestic water line located in Skylab Road West, Delta Lane, and Astronautics
Lane has been awarded for $589,177.00 pursuant to a contract, dated May 29, 2002, between
Boeing Realty Corporation and Rossi Construction Company.
11. Construct storm drain line located in Skylab Road West, Delta Lane, and
Astronautics Lane has been awarded for $521,880.00 pursuant to a contract, dated May 29,
2002,between Boeing Realty Corporation and Rossi Construction Company.
Exhibit E
Page 1
Quint&Thimmig LLP
GUARANTY
GUARANTY, dated as of July 17, 2002 of THE BOEING COMPANY, a Delaware
corporation ("Guarantor"), in favor of the City of Huntington Beach, California, a municipal
corporation("Creditor").
W ITNESSETH :
1. RECITALS.
1.1 Boeing Realty Corporation, a California corporation ('Boeing Affiliate") is a
subsidiary.of Guarantor and has entered into the Acquisition Agreement, dated as of June 1,
2002, with Creditor (the "Agreement"). Boeing Affiliate intends to complete the Improvements
(as defined below) pursuant to the Agreement and in connection with the formation of City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)
(the"CFD").
1.2 In connection with the transactions contemplated by the Agreement, Creditor has
required that Guarantor execute and deliver this Guaranty.
2. DEFINITIONS. In addition to the terms defined above, the following terms shall
have the following respective meanings: "Improvements" shall mean the improvements
described in Exhibit B to the Agreement as of the date of execution of-the Agreement (and shall
not include any facilities added to Exhibit B through an amendment to the Agreement).
"Obligations" shall mean (i) all obligations and liabilities of Boeing Affiliate to Creditor under
the Agreement for the financing, construction and maintenance of the Improvements in the
manner set forth in the Agreement, and (ii) all obligations and liabilities of Boeing Affiliate to
remediate the environmental hazards revealed by the Phase I and Phase H Environmental Site
Assessment Report of ENSR Corporation, dated March 26, 2001, on the property within and
adjacent to the boundaries of the CFD. "Obligations" shall not include, and the Guarantor is in
no way guaranteeing, the value of the right-of-way indicated on Exhibit B. "Person" shall mean
any individual, partnership, limited liability company, joint venture, trust, unincorporated
organization, corporation, institution,public benefit corporation,entity or government (whether
Federal, state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division agency, body or department thereof). References to this "Guaranty"
shall mean this Guaranty, including all amendments, modifications and supplements and any
exhibits or schedules to any of the foregoing,and shall refer to the Guaranty as the same may be
in effect at the time such reference becomes operative.
3. THE GUARANTY. The guaranty of Guarantor hereunder is as follows:
3.1 Guaranty of Obligations of Boeing Affiliate. Guarantor hereby unconditionally
guarantees to Creditor the performance of the Obligations. Guarantor agrees that its obligations
under this Guaranty shall be primary,irrespective of,and unaffected by:
(a) the absence of any action to enforce this Guaranty or the Agreement;or
(b) any other action or circumstances which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, other than as set forth herein, it
being agreed by Guarantor that its obligations under this Guaranty shall not be
discharged until the performance, in full, of the Obligations or the termination of the
Agreement. Guarantor shall be regarded, and shall be in the same position, as principal
08003.07:J6298
obligor with respect to the Obligations. Guarantor expressly waives all rights it may
have, now or in the future, under any statute, or at common law, or at law or in equity,
or otherwise, to compel Creditor to proceed in respect of the Obligations against the
Boeing Affiliate or any other party or against any security for the performance of the
Obligations before proceeding against, or as a condition to proceeding against,
Guarantor.
3.2 Enforcement of Guaranty. In no event shall Creditor have any obligation (although
it is entitled, at its option) to proceed against Boeing Affiliate or any other Person before seeking
satisfaction from Guarantor. Any demand by Creditor for performance by Guarantor under
this Guaranty shall be in writing, shall make reference to this Guaranty and the Agreement,
shall indicate-that the Obligations (or the applicable portion thereof) have not been performed
by Boeing Affiliate when due and shall specify the Obligations which are the subject of such
demand.
3.3 Bankruptcy. This Guaranty shall remain in full force and effect and continue to be
effective in the event any petition be filed by or against Boeing Affiliate or Guarantor for
liquidation or reorganization, in the event Boeing Affiliate or Guarantor becomes insolvent or
makes an assignment for the benefit of creditors or in the event a receiver or trustee be
appointed for all or any significant part of Boeing Affiliate's or Guarantor's assets.
3.4 Continuing Guaranty. Except as provided in Section 5.6, Guarantor agrees that this
Guaranty is a continuing guaranty and shall remain in full force and effect until the
performance in full of the Obligations.
4. REPRESENTATIONS AND WARRANTIES. To induce Creditor to enter into the
Agreement, Guarantor makes the following representations and warranties to Creditor, each
and all of which shall survive the execution and delivery of this Guaranty:
4.1 Corporate Existence. Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation.
4.2 Corporate Power; Authorization; Enforceable Obligations. The execution, delivery
and performance of this Guaranty are within Guarantor's corporate powers, have been duly
authorized by all necessary or proper corporate action, are not in contravention of any
provision of such Guarantor's Certificate or Articles of Incorporation or ByLaws. This Guaranty
has been duly executed and delivered on behalf of Guarantor, and constitutes a legal, valid and .
binding obligation of Guarantor,enforceable against Guarantor in accordance with its terms.
5. MISCELLANEOUS.
5.1 Entire Agreement; Amendments. This Guaranty, together with the Agreement,
constitutes the entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements relating to a guaranty of the Obligations and may not be
amended or supplemented except by a writing signed by Guarantor and Creditor.
5.2 Headings. The headings in this Guaranty are for convenience of reference only and
are not part of the substance of this Guaranty.
5.3 Severability. In the event that any one or more of the provisions contained in this
Guaranty shall be determined to be invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision or provisions in every
other respect and the remaining provisions of this Guaranty shall not be in any way impaired.
-2-
5.4 Notices. Whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served upon any of
the parties by another, or whenever any of the parties desires to give or serve upon another any
such communication with respect to this Guaranty, each such notice, demand, request, consent,
approval, declaration or other communication shall be in writing and either shall be delivered
in person (by personal delivery, delivery service or overnight courier service) with receipt
acknowledged, or telecopied and confirmed immediately in writing by a copy mailed by
registered or certified mail, return receipt requested,postage prepaid, addressed as hereafter set
forth, or mailed by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) If to Creditor,at: City of Huntington Beach
2000 Main Street
Huntington Beach,CA 92648
Attention: Director of Public Works
Telecopier No.: (714)374-1573
(b) If to Guarantor,at: The Boeing Company
100 North Riverside,MC 5003-3020
Chicago,Illinois 60606-1596
Attention:Treasury Operations
Telecopier No.: (312)544-2399
or at such other address as may be substituted by notice given as herein provided. The giving
of any notice required hereunder may be waived-in writing by the party entitled to receive such
notice. Every notice, demand, request, consent, approval, declaration or other communication
hereunder shall be deemed to have been duly given or served on the date on which personally
delivered, in person, by delivery service or by overnight courier service, with receipt
acknowledged, the date of telecopy transmission or three (3) business days after the same shall
have been deposited with the United States mail,postage prepaid.
5.5 Binding Effect. This Guaranty shall bind Guarantor and shall inure to the benefit of
Creditor and its successors and assigns. Guarantor may not assign this Guaranty.
5.6 Termination. This Guaranty shall terminate and be of no further force or effect at
the earlier of (i) such time as the Obligations shall be performed in full, or (ii) the Agreement is
terminated pursuant to Section 9.01, 9.02 or 9.03 of the Agreement. Upon such performance in
full of the Obligations, or termination of the Agreement, Creditor shall deliver to Guarantor
such documents as Guarantor may reasonably request to evidence such termination.
5.7 Governing Law. THE TERMS OF THIS GUARANTY SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK (EXCLUSIVE OF ANY RULES AS TO CONFLICT OF LAWS)
AND THE LAWS OF THE UNITED STATES APPLICABLE THEREIN. GUARANTOR
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY RIGHTS OR REMEDIES HEREUNDER, UNDER THE AGREEMENT OR
RELATING TO THE FOREGOING. AS PART OF THE CONSIDERATION FOR NEW VALUE
THIS DAY RECEIVED, GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN THE CITY OF NEW YORK AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON GUARANTOR, AND CONSENTS
THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO
GUARANTOR AT THE ADDRESSES PROVIDED IN SECTION 5.4 ABOVE AND SERVICE SO
-3-
MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) BUSINESS DAYS AFTER THE
SAME SHALL HAVE BEEN DEPOSITED IN THE UNITED STATES MAIL, POSTAGE
PREPAID. GUARANTOR WAIVES ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.
5.8 Counterparts. This Guaranty may be executed in any number of counterparts which
shall individually and collectively constitute one agreement.
-4-
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the
date first above written. ti a
THE BOEING COMPANY
1
By:
Name:—bro l A . gut ni
=r
` Title: �Mtat Asst*wd *1-4e.Treftwer
Accepted and acknowledged by
CITY OF HUNTINGTON BEACH,for and on
behalf of IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT 2002-1
(MCDONNELL CENTRE BUSINESS PARK)
and IMPROVEMENT AREA B OF THE CITY
OF HUNTINGTON BEACH COMMUNITY
FACILITIES DISTRICT 2002-1 (MCDONNELL
Attest: CENTRE BUSINESS PARK)
By: By:
City Clerk Mayor
Reviewed and Approved: Approved as to Form:
By: By:
City Treasurer City Attorney
-5-
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the
date first above written.
THE BOEING COMPANY
By:
Name:
Title:
Accepted and acknowledged by
CITY OF HUNTINGTON BEACH,for and on
behalf of IMPROVEMENT AREA A OF THE
CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT 2002-1
(MCDONNELL CENTRE BUSINESS PARK)
and IMPROVEMENT AREA B OF THE CITY
OF HUNTINGTON BEACH COMMUNITY
FACILITIES DISTRICT 2002-1 (MCDONNELL
Attest: CENTRE BUSINESS PARK)
By:
— 4144'L�
City Clerk Mayor
Reviewed and Approved: Approved as to Form:
By: e7 By:
Treasurer /L^e Y City Attorney
-5-
Quint&Thimmig LLP FINAL
CONTINUING DISCLOSURE CERTIFICATE—ISSUER
This Continuing Disclosure Certificate-Issuer (the "Disclosure Certificate") is executed
and delivered by the City of Huntington Beach (the "City") in connection with the issuance of
$4,900,000 Improvement Area A ("Improvement Area A") of the City of Huntington Beach
Community Facilities District No. 2002-1 (McDonnell Centre Business Park) Special Tax Bonds,
Series 2002-A (the 'Bonds"). The Bonds are being issued pursuant to a Fiscal Agent Agreement,
dated as of June 1, 2002 (the "Fiscal Agent Agreement'), between the City and BNY Western
Trust Company, as fiscal agent (the "Fiscal Agent'). The City, on behalf of Improvement Area
A,covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by Improvement Area A 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 Improvement Area A
pursuant to,and as described in,Sections 3 and 4 of this Disclosure Certificate.
"Dissemination Agent" shall mean the Fiscal Agent, acting in the capacity as
Dissemination Agent under this Disclosure Certificate, or any successor Dissemination Agent
designated in writing by Improvement Area A and which has filed with Improvement Area A
and the Fiscal Agent a written acceptance of such designation.
"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.
"Participating Underwriter" shall mean Stone & Youngberg LLC, the original underwriter
of the Bonds required to comply with the Rule in connection with offering of the Bonds.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended from time
to time.
"State 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 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 upon written request shall cause the Dissemination Agent to, not
later than March 31 of each year, commencing with March 31, 2003, provide to each Repository
08003.07:J6161
an Annual Report which is consistent with the requirements of Section 4 of this Disclosure
Certificate, with a copy to the Fiscal Agent and the Participating Underwriter. Not later than
fifteen (15) Business Days prior to said date, the City shall provide the Annual Report to the
Dissemination Agent. The City shall provide a written certification with each Annual Report
furnished to the Dissemination Agent, the Fiscal Agent and the Participating Underwriter to the
effect that such Annual Report constitutes the Annual Report required to be furnished by the
City 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 cross-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 not 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 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 provided to the Dissemination
Agent, file a report with the City and the Fiscal Agent 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) The City's audited financial statements prepared in accordance with generally
accepted accounting principles as promulgated to apply to governmental entities from time to
time by the Governmental Accounting Standards Board, and as further modified according to
applicable State law. -If the City's audited financial statements are not available by the time the
Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain
unaudited financial statements in a format similar to the usual format utilized by the City, and
the audited financial statements shall be filed in the same manner as the Annual Report when
they become available.
(b) The following additional items:
1. Principal amount of Bonds outstanding.
2. Balance,if any,in the improvement fund for the Bonds.
3. Balance in the reserve fund for the Bonds.
4. The assessed value of all parcels in the District subject to the Special
Taxes for the most recent year.
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5. Special Tax and property tax delinquency rate for parcels in the District
for the most recent year.
6. Concerning delinquent parcels:
• number of parcels delinquent in payment of Special Tax,
• amount of total delinquency and as a percentage of total Special Tax
levy,and
• status of Improvement Area A's actions on covenants to pursue
foreclosure proceedings upon delinquent properties.
7. Identity of any delinquent tax payer obligated for more than 10% of the
annual Special Tax levy and:
• assessed value of applicable properties,and
• summary of results of foreclosure sales,if available.
8. Significant amendments to land use entitlements for property in
Improvement Area A known to the City's Director of Administrative Services.
9. Status of any significant legislative, administrative, and judicial
challenges to the construction of the development in Improvement Area A known to the
City's Director of Administrative Services,_without independent inquiry, for any year in
which construction activity has occurred in Improvement Area A.
10. To the extent not otherwise provided pursuant to the preceding items 1-9,
annual information required to be filed by Improvement Area A with the California
Debt and Investment Advisory Commission pursuant to Sections 50075.1, 50075.3,
53359.5(b),53410(d)or 53411 of the California Government Code.
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:
-3-
(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) 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, but in no event later than ten (10) business days after the occurrence
thereof,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 and the Participating Underwriter. 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 owners 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).
Section 7. Dissemination Agent. The City may, from time to time, appoint or engage a
Dissemination Agent to act as such under this Disclosure Certificate, and may discharge any
such Dissemination Agent, with or without appointing a successor Dissemination Agent. The
initial Dissemination Agent shall be the Fiscal Agent.
The Dissemination Agent may at any time resign by providing thirty days written notice
to the City (if the then Dissemination Agent is other than the City) and the Fiscal Agent, such
resignation to become effective upon acceptance of appointment by a successor Dissemination
Agent. Upon receiving notice of such resignation, the City shall promptly appoint a successor
Dissemination Agent by an instrument in writing, delivered to the Fiscal Agent. If no
appointment of a successor Dissemination Agent shall be made pursuant to the forgoing
provisions of this Section within forty-five (45) days after the Dissemination Agent shall have
given to the City and the Fiscal Agent written notice of its resignation, the Dissemination Agent
may apply to any court of competent jurisdiction to appoint a successor Dissemination Agent.
Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a
successor Dissemination Agent. The City shall provide the Fiscal Agent with written notice of
the identity of any successor Dissemination Agent appointed or engaged by the City.
-4-
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) the amendment or waiver, if it relates to annual or event information to be
provided, is made in connection with a change in circumstances that arises from a
change in legal requirements, change in law, or change in the identify, nature, or status
of Improvement Area A,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;
(c) the proposed amendment or waiver (i) is approved by owners of the Bonds
in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal
Agent Agreement with the consent of owners, or (ii) does not, in the opinion of
nationally recognized bond counsel, materially impair the interests of the owners or
beneficial owners of the Bonds;and
(d) no amendment increasing or affecting the obligations or duties of
Improvement.Area A, the City, the Dissemination Agent or the Fiscal Agent shall be
made without the consent of such party.
If any 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
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 Improvement Area A to meet its obligations.
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.
-5-
Section 10. Default. In the event of a failure of the City to comply with any provision of
this Disclosure Certificate any Participating Underwriter or any holder or beneficial owner of
the Bonds may take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by court order, to cause the 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 Aft. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Certificate, and, if the Dissemination Agent is other than the City, Improvement Area A 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 attorneys fees) of defending against any claim of liability, but excluding liabilities
due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent
shall be paid compensation by Improvement Area A for its services provided hereunder and all
expenses, legal fees and advances made or incurred by the Dissemination Agent in the
performance of its duties hereunder. The Dissemination Agent, if the Dissemination Agent is
other than the City, shall have no duty or obligation to review any information provided to it by
the City and shall not be deemed to be acting in any fiduciary capacity for the City, the
Bondholders or any other party. The obligations of Improvement Area A under this Section
shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
-6-
Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the City, Improvement Area A, the Dissemination Agent, the Participating Underwriter and the
owners and beneficial owners from time to time of the Bonds, and shall create no rights in any
other person or entity.
Dated as of June 1,2002
CITY OF HUNTINGTON BEACH,for itself
and on behalf of IMPROVEMENT AREA A
OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.
2002-1 (MCDONNELL CENTRE BUSINESS
PARK)
r
By:
Mayor
Attest:
By:
City-Clerk
Reviewed and Approved:
By: Q
C Administrator
Reviewed and Approved as to Form:
By:
City Attorney
BNY Western Trust Company agrees to act
as Dissemination Agent pursuant to the
foregoing Continuing Disclosure
Certificate-Issuer
By:
Its:
-7-
Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the City, Improvement Area A, the Dissemination Agent, the Participating Underwriter and the
owners and beneficial owners from time to time of the Bonds, and shall create no rights in any
other person or entity.
Dated as of June 1,2002
CITY OF HUNTINGTON BEACH,for itself
and on behalf of IMPROVEMENT AREA A
OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.
2002-1 (MCDONNELL CENTRE BUSINESS
PARK)
By:
Mayor
Attest:
By:
City Clerk
Reviewed and Approved:
By:
City Administrator
Reviewed and Approved as to Form:
By:
City Attorney
BNY Western Trust Company agrees to act
as Dissemination Agent pursuant to the
foregoing Continuing Disclosure
Certificate-Issuer
By:
Its: ± /�'D
-7-
EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD
OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Huntington Beach
Name of Bond Issue: Improvement Area A of the City of Huntington Beach Community
Facilities District No. 2002-1 (McDonnell Centre Business Park)
Special Tax Bonds,Series 2002-A
Date of Issuance: July 17,2002
NOTICE IS HEREBY GIVEN that the City of Huntington Beach (the "City") has not
provided an Annual Report with respect to the above-named Bonds as required by Section 3 of
the Continuing Disclosure Certificate-Issuer dated as of June 1, 2002 executed by the City for the
benefit of the owners and beneficial owners of the above-referenced bonds. The City anticipates
that the Annual Report will be filed by
Dated:
CITY OF HUNTINGTON BEACH
By:
Its:
cc: BNY Western Trust Company
700 South Flower Street,Suite 500
Los Angeles,CA 90017-4104
Attn: Corporate Trust
A-1
s
V .
Quint&Thimmig LLP FINAL
CONTINUING DISCLOSURE CERTIFICATE— LANDOWNER
This Continuing Disclosure Certificate-Landowner (the "Disclosure Certificate") is
executed and delivered by McDonnell Douglas Corporation (the "Landowner") in connection
with the issuance of $4,900,000 Improvement Area A ("Improvement Area A") of the City of
Huntington Beach Community Facilities District No. 2002-1 (McDonnell Centre Business Park)
Special Tax Bonds, Series 2002-A (the "Bonds"). The Bonds are being issued pursuant to a
Fiscal Agent Agreement, dated as of June 1, 2002 (the "Fiscal Agent Agreement"), between the
City of Huntington Beach (the "City") and BNY Western Trust Company, as fiscal agent (the
"Fiscal Agent"). The Landowner covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the Landowner for the benefit of the owners 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:
"Affiliate" of another Person means (a) a Person directly or indirectly owning,
controlling, or holding with power to vote, 5% or more of the outstanding voting securities of
such other Person, (b) any Person 5% or more of whose outstanding voting securities are
directly or indirectly owned, controlled, or held with power to vote, by such other Person, (c)
any Person directly or indirectly controlling such other Person, and (d) with respect to any
general partner of a partnership or member of a limited liability company for purposes hereof,
control means the power to exercise a controlling influence over the management or policies of
a Person,unless such power is solely the result of an official position with such Person.
"Allocable Share of the Principal of the Bonds" means, with respect to any County
Assessor's Parcel of land within Improvement Area A, an amount equal to the then
Outstanding principal of the Bonds and any Parity Bonds, multiplied by a fraction the
numerator of which is the Special Tax levied on such parcel in the preceding Bond Year and the
denominator of which is the aggregate Special Tax levied in Improvement Area A; provided
that for any period prior to which Special Taxes have been levied in the preceding Bond Year
the numerator of such fraction shall be the acreage of such parcel and the denominator shall be
the total acreage of all parcels in Improvement Area A subject to the levy of Special Taxes.
"Assumption Agreement" means an agreement between an owner of the land located in
Improvement Area A, or an Affiliate thereof, and the Dissemination Agent containing terms
substantially similar to this Disclosure Certificate, whereby such entity or Affiliate agrees to
provide annual reports and notices of significant events to the Dissemination Agent of the
character described in Sections 3 and 4 hereof, with respect to the portion of the Property
owned by such entity and its Affiliates and which contains an assumption provision of the
character set forth in Section 6 hereof.
"City"means the City of Huntington Beach. \
"Disclosure Representative" means the Director of Business Operations of Boeing Realty
Corporation, or his designee, or such other officer, employee or agent as the Landowner or such
Disclosure Representative shall designate in writing to the Dissemination Agent and the City
from time to time.
08003.07:J6162
"Dissemination Agent" shall mean the Fiscal Agent, acting in the capacity as
Dissemination Agent under this Disclosure Certificate, or any successor Dissemination Agent
designated in writing by the City and which has filed with the Landowner, the City and the
Fiscal Agent a written acceptance of such designation.
"Event of Bankruptcy" means, with respect to a Person, that such Person files a petition or
institutes a proceeding under any act or acts, state or federal, dealing with or relating to the
subject or subjects of bankruptcy or insolvency, or under any amendment of such act or acts,
either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or
whereby such Person asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged
from any or all of such Person's debts or obligations, or offers to such Persons creditors to effect
a composition or extension of time to pay such Person's debts or asks, seeks or prays for
reorganization or to effect a plan of reorganization, or for a readjustment of such Person's debts,
or for any other similar relief, or if any such petition or any such proceedings of the same or
similar kind or character is filed or instituted or taken against such Person, or if a receiver of the
business or of the property or assets of such Person is appointed by any court, or if such Person
makes a general assignment for the benefit of such Person's creditors.
"Fiscal Year" shall mean the Landowner's fiscal year for its financial accounting
purposes.
"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.
"Participating Underwriter" shall mean Stone & Youngberg LLC, the original underwriter
of the Bonds required to comply with the Rule in connection with offering of the Bonds.
"Person" means an individual, a corporation, a partnership, a limited liability company,
an association, a joint stock company, a trust, any unincorporated organization or a government
or political subdivision thereof.
"Property" means the fee interest in the real property within the boundaries of
Improvement Area A on which Special Taxes are authorized to be levied by Improvement Area
A.
"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.
"Semiannual Report" shall mean any Semiannual Report provided by the Landowner
pursuant to, and as described in,Sections 3 and 4 of this Disclosure Certificate.
"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.
-2-
Section 3. Provision of Semiannual Reports.
(a) Until this Disclosure Certificate terminates in accordance with Section 7
below, the Landowner shall, or shall cause the Dissemination Agent to, not later than
three months after each June 30 and December 31, commencing with the report for
December 31, 2002, provide to each Repository a Semiannual Report which is consistent
with the requirements of Section 4 of this Disclosure Certificate, with a copy to the City,
the Participating Underwriter and the Fiscal Agent. Not later than fifteen (15) Business
Days prior to said date, the Landowner shall provide the Semiannual Report to the
Dissemination Agent. The Landowner shall provide a written certification with each
Semiannual Report furnished to the Dissemination Agent, the City, the Participating
Underwriter and the Fiscal Agent to the effect that such Semiannual Report constitutes
the Semiannual Report required to be furnished by the Landowner hereunder. The
Dissemination Agent, Improvement Area A, the City and the Fiscal Agent may
conclusively rely upon such certification of the Landowner, and shall have no duty or
obligation to review such Semiannual Report. The Semiannual 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(a) of this Disclosure
Certificate.
(b) If the Landowner is unable to provide to the Repositories a Semiannual
Report by a date required in the first sentence of subsection (a), the Landowner shall
send a notice to the Municipal Securities Rulemaking Board in substantially the form
attached as Exhibit A.
(c) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Semiannual
Report the name and address of each National Repository and each State
Repository,if any;and
(ii) to the extent the Semiannual Report has been provided to the
Dissemination Agent, file a report with the Landowner, the City and the Fiscal
Agent (if the Dissemination Agent is other than the Fiscal Agent) certifying that
the Semiannual 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 Semiannual Reports. The Landowner's Semiannual Report shall
contain or incorporate by reference the following:
(a) Until the completion of the public and private improvements being
constructed by the Landowner or any Affiliate thereof located within Improvement Area
A (the "Improvements") as described in the Official Statement for the Bonds, a
description of any material changes to the plan of development for the Improvements
from that described in the Official Statement.
(b) A description of the status of completion of the Improvements.
(c) Any delinquency in the payment of Special Taxes by the Landowner or any
Affiliate thereof.
-3-
(d) Any pending litigation which would adversely affect the ability of the
Landowner to complete the Improvements or to pay Special Taxes levied on the
Property.
(e) Any sale by The Boeing Company of a material interest in the Landowner,
and, if all or a substantial portion of the ownership interest of The Boeing Company in
the Landowner is sold, any subsequent material change in the ownership of the
Landowner.
(f) A description of any sales or long-term leases by the Landowner of all or any
part of the property in Improvement Area A since the last report by the Landowner
hereunder, including the identification of the purchaser or lessee, and the number of
acres sold or leased.
(g) The assumption of any obligations of the Landowner pursuant to Section 6.
In addition to any of the information expressly required to be provided as described
above, the Landowner 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 Landowner 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 Landowner 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 Landowner shall give, or
cause to be given,notice of the occurrence of any of the following events,if material:
(i) failure by the Landowner or any Affiliate thereof to pay any real
property taxes (including any Special Taxes) levied within
Improvement Area A,
(ii) material damage to or destruction of any of the Improvements,
(iii) default by the Landowner or any Affiliate thereof on any loan
with respect to the construction or permanent financing of the
Improvements,and
(iv) The occurrence of an Event of Bankruptcy with respect to the
Landowner.
(b) Whenever the Landowner obtains knowledge of the occurrence of a Listed
Event, the Landowner shall as soon as possible determine if such event would be
material under applicable Federal securities law.
(c) If the Landowner determines that knowledge of the occurrence of a Listed
Event would be material under applicable Federal securities law, the Landowner shall
promptly file, or cause the Dissemination Agent to file, a notice of such occurrence with
the Municipal Securities Rulemaking Board and each Repository, with a copy to the
City,the Participating Underwriter and the Fiscal Agent.
-4-
Section 6. Assumption of Obligations. If the Property owned by the Landowner, or any
Affiliate of the Landowner, other than Property with respect to which the assessed value of the
applicable County Assessor's Parcel is at least ten times the parcel's Allocable Share of the
Principal of the Bonds,which is responsible for the payment of twenty percent (20%) or more of
the Special Taxes levied in Improvement Area A, is to be conveyed to a Person, or following any
conveyance by the Landowner the Person will so own Property responsible for the payment of
twenty percent (20%) or more of the Special Taxes in Improvement Area A, the Landowner
shall include a provision in the conveyance agreement for such Person to agree to execute an
Assumption Agreement following the closing of escrow for the conveyance.
The Landowner shall enter into an Assumption Agreement with any Person described in
the preceding paragraph, which Assumption Agreement shall be in form and substance
satisfactory to the City, or the acquiring entity shall otherwise enter into an agreement with the
Dissemination Agent in form substantially identical to this Disclosure Certificate (except for the
identity of the "Landowner" therein). From and after the date on which an Assumption
Agreement (or replacement agreement in form substantially equivalent to this Disclosure
Certificate) is executed with respect to any Property, the Landowner shall no longer be required
to comply with the requirements of this Disclosure Certificate with respect to such Property;
provided however that if, following a conveyance by the Landowner of the character described
in the first sentence of this Section 6, an Assumption Agreement (or replacement agreement in
form substantially equivalent to this Disclosure Certificate) is not executed (other than by
reason of the willful misconduct of the Dissemination Agent), the Landowner shall continue to
comply with the requirements of this Disclosure Certificate and, for purposes of Section 3, the
term "Landowner" shall include, in addition to Landowner, the Person to whom the Property
has been conveyed.
Section 7. Termination of Reporting Obligation. The Landowner's obligations under
this Disclosure Certificate shall terminate upon the earliest to occur of: (a) the legal defeasance,
prior redemption or payment in full of all the Bonds, (b) the date on which the Landowner and
all Affiliates of the Landowner own Property in Improvement Area A, other than Property with
respect to which the assessed value of the applicable County Assessor's Parcel is at least ten
times the parcel's Allocable Share of the Principal of the Bonds, which in the aggregate is
responsible for the payment of less than twenty percent (20%) of the Special Taxes levied in
Improvement Area A (subject, however, to the last paragraph of Section 6 above), (c) the date
on which the assessed value of each County Assessor's Parcel owned by the Landowner in
Improvement Area A that is subject to the levy of Special Taxes to pay debt service on the
Bonds is at least ten times each respective parcel's Allocable Share of the Principal of the Bonds,
and (d) the date on which the Landowner delivers to the City and the Dissemination Agent an
opinion of bond counsel acceptable to the City to the effect that the continuing disclosure
provided for in this continuing Disclosure Certificate is no longer required under the Rule to
allow the Participating Underwriter to deal in the Bonds. If such termination occurs prior to the
final maturity of the Bonds, the Landowner shall give, or cause to be given, notice of such
termination in the same manner as for a Listed Event under Section 5(c).
Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a
Dissemination Agent to act as such under this Disclosure Certificate, and may discharge any
such Dissemination Agent, with or without appointing a successor Dissemination Agent. The
initial Dissemination Agent shall be the Fiscal Agent.
The Dissemination Agent may at any time resign by providing thirty days written notice
to the City, the Landowner and the Fiscal Agent, such resignation to become effective upon
acceptance of appointment by a successor Dissemination Agent. Upon receiving notice of such
resignation, the City shall promptly appoint a successor Dissemination Agent by an instrument
-5-
in writing, delivered to the Fiscal Agent and the Landowner. If no appointment of a successor
Dissemination Agent shall be made pursuant to the foregoing provisions of this Section within
forty-five (45) days after the Dissemination Agent shall have given to the City, the Landowner
and the Fiscal Agent written notice of its resignation, the Dissemination Agent may apply to
any court of competent jurisdiction to appoint a successor Dissemination Agent. Said court
may thereupon after such notice, if any, as such court may deem proper, appoint a successor
Dissemination Agent. The City shall provide the Landowner and the Fiscal Agent with written
notice of the identity of any successor Dissemination Agent appointed or engaged by the City.
Section 9. Amendment;Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Landowner 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 3,4 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;
(c) the proposed amendment or waiver either (i) is approved by owners of the
Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the
Fiscal Agent Agreement with the consent of owners, or (ii) does not, in the opinion of
nationally recognized bond counsel, materially impair the interests of the owners or
beneficial owners of the Bonds;and
(d) no amendment increasing or affecting the obligations or duties of the City,
the Dissemination Agent or the Fiscal Agent shall be made without the consent of such
party.
If any annual financial information or operating data provided in any Semi-annual
Report (it being acknowledged that Section 4 hereof does not require any financial or operating
data to be included in any Semi-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.
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be
deemed to prevent the Landowner 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 Landowner 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 Landowner
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.
-6-
Section 11. Default. In the event of a failure of the Landowner to comply with any
provision of this Disclosure�Certificate any Participating Underwriter or any owner or beneficial
owner of the Bonds may take such actions as may be necessary and appropriate, including
seeking mandate or specific performance by court order, to cause the Landowner 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 Landowner to comply with this
Disclosure Certificate shall be an action to compel performance.
Section 12. 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 Landowner 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 by
Improvement Area A for its services provided hereunder and all expenses, legal fees and
advances made or incurred by the Dissemination Agent in the performance of its duties
hereunder, promptly following receipt by the City of a written invoice therefor. The
Dissemination Agent shall have no duty or obligation to review any information provided to it
by the Landowner and shall not be deemed to be acting in any fiduciary capacity for the
Landowner, the Bondholders, or any other party. The obligations of Improvement Area A and
the Landowner under this Section shall survive resignation or removal of the Dissemination
Agent and payment of the Bonds.
-7-
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the City, Improvement Area A, the Landowner (its successors and assigns), the Fiscal Agent, the
Dissemination Agent, the Participating Underwriter and the owners and beneficial owners from
time to time of the Bonds,and shall create no rights in any other person or entity.
Dated as of June 1,2002
McDONNELL DOUGLAS CORPORATION
By: 6Gc��
Its: s6phen J.earw
thorized Signatoly
BNY Western Trust Company agrees to act
as Dissemination Agent pursuant to the
foregoing Continuing Disclosure
Certificate-Landowner
By:
Its:
-8-
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the City,Improvement Area A, the Landowner (its successors and assigns), the Fiscal Agent,the
Dissemination Agent,the Participating Underwriter and the owners and beneficial owners from,
time to time of the Bonds,and shall create no rights in any other person or entity.
Dated as of June 1,2002
McDONNELL DOUGLAS CORPORATION
By:
Its:
BNY Western Trust Company agrees to act
as Dissemination Agent pursuant to the
foregoing Continuing Disclosure
Certificate-Landowner
B
Its: rr1
-8-
r
EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF
FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Huntington Beach
Name of Bond Issue: Improvement Area A of the City of Huntington Beach Community
Facilities District No. 2002-1 (McDonnell Centre Business Park)
Special Tax Bonds,Series 2002-A
Date of Issuance: July 17,2002
NOTICE IS HEREBY GIVEN that McDonnell Douglas Corporation (the "Landowner")
has not provided an Annual Report with respect to the above-named Bonds as required by
Section 3 of the Continuing Disclosure Certificate-Landowner dated as of June 1, 2002 executed
by the Landowner for the benefit of the owners and beneficial owners of the above-referenced
bonds. The Landowner anticipates that the Annual Report will be filed by
Dated: 2002
McDONNELL DOUGLAS CORPORATION
By:
Its:
cc: City of Huntington Beach
2900 Main Street
Huntington Beach,California 92648
Attention:Director of Administrative Services
BNY Western Trust Company
700 South Flower Street,Suite 500
Los Angeles,CA 90017-4041
Attn: Corporate Trust
A-1
Quint&Mmmig LLP 7/11/02
$4,900,000
IMPROVEMENT AREA A OF THE CITY OF HUNTINGTON BEACH
COMMUNITY FACILITIES DISTRICT NO.2002-1
(MCDONNELL CENTRE BUSINESS PARK)
SPECIAL TAX BONDS,SERIES 2002-A
CERTIFICATE OF MAILING TO CDIAC
I, C. Blythe Fleet, 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: July 17, 2002
By
C.Blythe Fleet,
Closing Department,
Quint&Thimmig LLP
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#:
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: Community Facilities District No.2002-1(McDonnell Centre Business Park)Special Tax Bonds,Series 2002-A
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: June 27, 2002 PRINCIPAL SOLD: $4,900,000.00
IS ANY PORTION OF THE DEBT FOR REFUNDING?t
®No ❑Yes, refunding amount(including costs)S
Issuer Contact:
Name: David.C. Biggs
Title: Director of Economic Development
Address: 2000 Main Street, Huntington Beach, CA 92648
Phone: 714/536-5909 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: Paul 1. Thimmig
Fmn/Agency: Quint&Thimmig LLP
Address: One Embarcadero Center,Suite 2420 , San Francisco,CA 94111-3737
Phone: (415) 765-1550 E-mail: pthimmig@gtllp.com
Send acknowledgment/copies to:Paul J. Thimmig Esq.
Name of individual to whom an invoice for the CDIAC issue fee should be sent:Z
Name: Stephen E. Heaney
Title: Managing Director
Address: 15260 Ventura Boulevard, Suite 1520, Sherman Oaks,CA 91403
Phone: 818/ 528-2121
t 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.
2 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 CDIAC.
CDIAC:Report of Final Sale Page 2
FINANCING PARTICIPANTS (Firm name) OFFICE LOCATION (City/State)
FINANCIAL ADVISOR: NA
LEAD UNDERWRTIER/PURCHASER:Stone&Youngberg LLC Sherman Oaks/CA
BONDCOUNSEL: Quint&Thimmig LLP San Francisco/CA
TRUSTEE/PAYING AGENT:BNY Western Trust Company 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) ®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
® Serial and term bonds or two or more term(B) item for the purpose of alternative minimum tax? ❑Yes N No
FINAL MATURITY DATE: 9/1/2032
INTEREST TYPE: N NIC ❑TIC ❑ Variable
FIRST OPTIONAL CALL DATE: 3/1/2003
SENIOR/SUBORDINATE STRUCTURE ElYes ERNo INTEREST COST: 6.267
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)
❑Letter of Credit(L) C)Underwriter Expenses $
❑ State Intercept Program(T)
❑Other(0) Underwriter Spread or Discount $ 94,137.70
D)Bond Counsel $ 47,293.84
GUARANTOR:
E) Disclosure Counsel $ 20,000.00
ENHANCEMENT EXPIRATION DATE: $
F) Financial Advisor
INDICATE CREDIT RATING: $
G)Rating Agency
(For example,"AAA"or"Aaa")
N Not Rated H)Credit Enhancement $
❑Rated I)Trustee Fee $ 2,900.00
Standard & Poor's:
Fitch: ])Other Expenses $ 54,582.57
Moody's: $ 124,776.41
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
competitive sale. M)NET ORIGINAL ISSUE $
❑(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
❑(5)All of the above
❑(6)Other(please specify)
FEE$
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WIR
"�kiE CITY`O.F HUNTI'NGTON� BEACH
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