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Mary Casillas Salas, Mayor
Patricia Aguilar, Councilmember Gary Halbert, City Manager
Pamela Bensoussan, Councilmember Glen R. Googins, City Attomey
John McCann, Councilmember ponna R. Norris, City Clerk
Steve Miesen, Councilmember
Tuesday, April 5, 2016 5:00 PM Council Chambers
276 4th Avenue, Building A
Chula Vista, CA 91910
REGULAR MEETINGS OF THE CITY COUNCIL, SUCCESSOR AGENCY TO
THE REDEVELOPMENT AGENCY, MUNICIPAL FINANCING AUTHORITY, AND
PUBLIC FINANCING AUTHORITY OF THE CITY OF CHULA VISTA
CALL TO ORDER
ROLL CALL:
Councilmembers Aguilar, Bensoussan, McCann, Miesen and Mayor Casillas Salas
PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE
SPECIAL ORDERS OF THE DAY
A. 16-0075 PRESENTATION OF A PROCLAMATION TO CALIFORNIA
NATIVE PLANT SOCIETY SAN DIEGO OUTREACH CHAIR
BETSY CORY PROCLAIMING APRIL 16 THROUGH APRIL
24, 2016 AS CALIFORNIA NATIVE PLANT WEEK IN THE
CITY OF CHULA VISTA
B. 1 162 PRESENTATION OF A PROCLAMATION TO CSA SAN
DIEGO COUNTY EXECUTIVE DIRECTOR ESTELA
DELOSRIOS AND FAIR HOUSING COUNSELOR GLORIA
PERALTA PROCLAIMING APRIL 2016 AS FAIR HOUSING
MONTH IN THE CITY OF CHULA VISTA
cny m cnua rsn rys+ v.�mee on a�nore
April 5, 2016City Council Agenda
CONSENT CALENDAR (Items 1 - 5)
The Council will enact the Consent Calendar staff recommendations by one motion, without
discussion, unless a Councilmember, a member of the public, or staff requests that an item
be removed for discussion. If you wish to speak on one of these items, please fill out a
“Request to Speak” form (available in the lobby) and submit it to the City Clerk prior to the
meeting. Items pulled from the Consent Calendar will be discussed immediately following
the Consent Calendar.
WRITTEN COMMUNICATIONS
Letter of resignation from Christine Moore, Cultural Arts
Commission
16-01691.16-0169
Council accept the resignation. Staff Recommendation:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AGREEMENT FOR
WATER CONSUMPTION DATA AND SEWER BILLING
SERVICES BETWEEN THE CITY AND THE OTAY WATER
DISTRICT
16-01152.16-0115
Finance Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
RESOLUTION OF THE SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA AUTHORIZING THE ISSUANCE AND SALE OF TAX
ALLOCATION REFUNDING BONDS, AND APPROVING
THE FORM OF AN INDENTURE OF TRUST AND
AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
16-01253.16-0125
Finance Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Agency adopt the resolution. Staff Recommendation:
Page 2 City of Chula Vista Printed on 3/30/2016
2016-04-05 Agenda Packet Page 2
April 5, 2016City Council Agenda
A.RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA AMENDING THE COMPENSATION
SCHEDULE AND CLASSIFICATION PLAN TO REFLECT
CHANGES IN THE COMPENSATION FOR THE CBAG
EXECUTIVE DIRECTOR, CBAG DEPUTY EXECUTIVE
DIRECTOR AND FA DIRECTOR OF SD LECC
B.RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING THE REVISED FISCAL
YEAR 2015-2016 COMPENSATION SCHEDULE
EFFECTIVE APRIL 15, 2016, AS REQUIRED BY
CALIFORNIA CODE OF REGULATIONS, TITLE 2,
SECTION 570.5
16-01514.16-0151
Police Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Council adopt the resolutions. Staff Recommendation:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING RESOLUTION 2016-005 TO
REMOVE THE ELECTION OF MEMBER OF THE CITY
COUNCIL, DISTRICT 3, FROM THE JUNE 7, 2016
GENERAL ELECTION
16-01575.16-0157
City Clerk Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Council adopt the resolution. Staff Recommendation:
ITEMS REMOVED FROM THE CONSENT CALENDAR
PUBLIC COMMENTS
Persons speaking during Public Comments may address the Council on any subject matter
within the Council’s jurisdiction that is not listed as an item on the agenda. State law
generally prohibits the Council from discussing or taking action on any issue not included
on the agenda, but, if appropriate, the Council may schedule the topic for future discussion
or refer the matter to staff. Comments are limited to three minutes.
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2016-04-05 Agenda Packet Page 3
April 5, 2016City Council Agenda
PUBLIC HEARINGS
The following item(s) have been advertised as public hearing(s) as required by law. If you
wish to speak on any item, please fill out a “Request to Speak” form (available in the lobby)
and submit it to the City Clerk prior to the meeting.
CONSIDERATION OF AN APPEAL OF THE ZONING
A DMINISTRATOR’S DECISION REGARDING
CONDITIONAL USE PERMIT PCC-15-014 (Rancho Vista
Covenant Church)
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA DENYING THE APPEAL AND AFFIRMING
THE ZONING ADMINISTRATOR’S DECISION GRANTING
APPROVAL OF CONDITIONAL USE PERMIT (PCC-15-014)
FOR THE RANCHO VISTA COVENANT CHURCH AT 2088
OTAY LAKES ROAD, SUITES 101 & 201
16-01166.16-0116
Development Services Department Department:
The Project qualifies for a Class 1 Categorical Exemption pursuant to
Section 15301 (Existing Facilities) of the California Environmental
Quality Act State Guidelines.
Environmental Notice:
Council conduct the public hearing and adopt the resolution. Staff Recommendation:
CONSIDERATION OF APPROVAL TO REFINANCE 2006
AND 2010 CERTIFICATES OF PARTICIPATION
A.RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA AUTHORIZING THE EXECUTION AND
DELIVERY BY THE CITY OF A SITE LEASE, LEASE
AGREEMENT, INDENTURE, ESCROW AGREEMENTS,
CONTINUING DISCLOSURE AGREEMENT AND BOND
PURCHASE AGREEMENT IN CONNECTION WITH THE
ISSUANCE OF THE CHULA VISTA MUNICIPAL
FINANCING AUTHORITY 2016 LEASE REVENUE
REFUNDING BONDS, APPROVING THE ISSUANCE OF
SUCH BONDS IN AN AGGREGATE PRINCIPAL AMOUNT
OF NOT TO EXCEED $40,000,000, AUTHORIZING THE
DISTRIBUTION OF AN OFFICIAL STATEMENT IN
CONNECTION WITH THE OFFERING AND SALE OF
SUCH BONDS AND AUTHORIZING THE EXECUTION OF
NECESSARY DOCUMENTS AND CERTIFICATES AND
RELATED ACTIONS
16-01237.16-0123
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April 5, 2016City Council Agenda
B.RESOLUTION OF THE CHULA VISTA MUNICIPAL
FINANCING AUTHORITY AUTHORIZING THE EXECUTION
AND DELIVERY BY THE AUTHORITY OF A SITE LEASE,
LEASE AGREEMENT, INDENTURE, ASSIGNMENT
AGREEMENT AND BOND PURCHASE AGREEMENT IN
CONNECTION WITH THE ISSUANCE OF CHULA VISTA
MUNICIPAL FINANCING AUTHORITY 2016 LEASE
REVENUE REFUNDING BONDS, AUTHORIZING THE
ISSUANCE OF SUCH BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT OF NOT TO EXCEED $40,000,000,
AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL
STATEMENT IN CONNECTION WITH THE OFFERING
AND SALE OF SUCH BONDS AND AUTHORIZING THE
EXECUTION OF NECESSARY DOCUMENTS AND
CERTIFICATES AND RELATED ACTIONS
C.RESOLUTION OF THE CHULA VISTA PUBLIC
FINANCING AUTHORITY AUTHORIZING THE EXECUTION
AND DELIVERY OF ESCROW AGREEMENTS IN
CONNECTION WITH THE ISSUANCE OF CHULA VISTA
MUNICIPAL FINANCING AUTHORITY 2016 LEASE
REVENUE REFUNDING BONDS AND AUTHORIZING THE
EXECUTION OF NECESSARY DOCUMENTS AND
RELATED ACTIONS
Finance Department Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Council conduct public hearing and adopt Resolution A, Municipal
Financing Authority adopt Resolution B and Public Financing
Authority adopt Resolution C.
Staff Recommendation:
ACTION ITEMS
The Item(s) listed in this section of the agenda will be considered individually by the
Council and are expected to elicit discussion and deliberation. If you wish to speak on any
item, please fill out a “Request to Speak” form (available in the lobby) and submit it to the
City Clerk prior to the meeting.
DISCUSSION AND POSSIBLE ACTION REGARDING THE
REAPPOINTMENT PROCESS FOR MEMBERS OF CHULA
VISTA COMMISSIONS WHO ARE INTERVIEWED AND
APPOINTED BY THE COUNCIL
16-01078.16-0107
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April 5, 2016City Council Agenda
City Clerk Department:
The activity is not a “Project” as defined under Section 15378 of the
California Environmental Quality Act State Guidelines; therefore,
pursuant to State Guidelines Section 15060(c)(3) no environmental
review is required.
Environmental Notice:
Council discuss the reappointment process and provide direction to
staff.
Staff Recommendation:
CITY MANAGER’S REPORTS
MAYOR’S REPORTS
COUNCILMEMBERS’ COMMENTS
CLOSED SESSION
Announcements of actions taken in Closed Session shall be made available by noon on
Wednesday following the Council Meeting at the City Attorney’s office in accordance with
the Ralph M. Brown Act (Government Code 54957.7).
CONFERENCE WITH LEGAL COUNSEL REGARDING
EXISTING LITIGATION PURSUANT TO GOVERNMENT
CODE SECTION 54956.9 (d)(1)
Name of case:Yvette Roullier v. City of Chula Vista,
Worker’s Compensation Appeals Board, Case No.
ADJ10018442
16-01559.16-0155
CONFERENCE WITH LABOR NEGOTIATORS PURSUANT
TO GOVERNMENT CODE SECTION 54957.6
Agency designated representatives: Courtney Chase, David
Bilby, Simon Silva, Harry Muns, Gary Halbert, Glen Googins
and Kelley Bacon
Employee organization: International Association of Fire
Fighters (IAFF), Local 2180
16-017010.16-0170
ADJOURNMENT
to the Regular City Council Workshop on April 7, 2016, at 4:00 p.m., in the Council
Chambers, and thence to the Regular City Council Meeting on April 12, 2016, at 5:00 p.m.
Materials provided to the City Council related to any open-session item on this agenda are available
for public review at the City Clerk’s Office, located in City Hall at 276 Fourth Avenue, Building A,
during normal business hours.
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April 5, 2016City Council Agenda
In compliance with the
AMERICANS WITH DISABILITIES ACT
The City of Chula Vista requests individuals who require special accommodations to access, attend,
and/or participate in a City meeting, activity, or service, contact the City Clerk’s Office at (619)
691-5041(California Relay Service is available for the hearing impaired by dialing 711) at least
forty-eight hours in advance of the meeting.
Most Chula Vista City Council meetings, including public comments, are video recorded and aired live
on AT&T U-verse channel 99 (throughout the County), on Cox Cable channel 24 (only in Chula Vista),
and online at www.chulavistaca.gov. Recorded meetings are also aired on Wednesdays at 7 p.m.
(both channels) and are archived on the City's website.
Sign up at www.chulavistaca.gov to receive email notifications when City Council agendas are
published online.
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City of Chula Vista
Staff Report
File#:16-0075, Item#: A.
PRESENTATIONOFAPROCLAMATIONTOCALIFORNIANATIVEPLANTSOCIETYSANDIEGO
OUTREACHCHAIRBETSYCORYPROCLAIMINGAPRIL16THROUGHAPRIL24,2016AS
CALIFORNIA NATIVE PLANT WEEK IN THE CITY OF CHULA VISTA
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City of Chula Vista
Staff Report
File#:16-0162, Item#: B.
PRESENTATIONOFAPROCLAMATIONTOCSASANDIEGOCOUNTYEXECUTIVEDIRECTOR
ESTELADELOSRIOSANDFAIRHOUSINGCOUNSELORGLORIAPERALTAPROCLAIMING
APRIL 2016 AS FAIR HOUSING MONTH IN THE CITY OF CHULA VISTA
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City of Chula Vista
Staff Report
File#:16-0169, Item#: 1.
WRITTEN COMMUNICATIONS
Letter of resignation from Christine Moore, Cultural Arts Commission
RECOMMENDED ACTION
Council accept the resignation.
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AT&T California
101 W. Broadway
Suite 1310
San Diego, CA 92101-8215
T: 619.237.3340
F: 619.231-0758
www.att.com
Christine Moore
Director
External Affairs
March 22, 2016
Lynette Tessitore-Lopez
Interim Cultural Arts Manager
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Dear Ms. Tessitore-Lopez,
It is with great regret that I must tender my resignation from the Cultural Arts
Commission. I have very much enjoyed the experience serving as a Commissioner for the
City of Chula Vista and have been able to witness first-hand the City’s commitment to
affordable access to arts and culture for all residents.
My husband’s recent career relocation to Central California has resulted in significant
additional travel for me and I have found that I am no longer able to dedicate the time and
resources that I believe are necessary to be a successful Commissioner. During this very
important period in which the Arts Master Plan moves forward, I want to ensure that every
seat on the Commission is filled with advocates who will see this effort to fruition. I am
certain with your guidance, the City of Chula Vista will embrace this plan and rightly be
recognized as one of the region’s greatest communities of culture.
Thank you for the work you have done thus far with all of us; thank you to my fellow
commissioners for their passion and expertise; and, most of all, thank you to the Mayor and
Council for having entrusted me with this responsibility.
Warm regards,
Christine
2016-04-05 Agenda Packet Page 11
City of Chula Vista
Staff Report
File#:16-0115, Item#: 2.
RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAAPPROVINGAN
AGREEMENTFORWATERCONSUMPTIONDATAANDSEWERBILLINGSERVICESBETWEEN
THE CITY AND THE OTAY WATER DISTRICT
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
TheCityofChulaVistahashistoricallycontractedwiththeOtayWaterDistrictforcustomerwater
consumptiondataandsewerbillingservicesforChulaVistaresidentsandbusinessesintheOtay
WaterDistrict’sservicearea.TheagreementbeforeCouncilwillcontinuethisserviceforafiveyear
period with the option to extend by mutual agreement for five additional one-year terms.
ENVIRONMENTAL REVIEW
Environmental Notice
Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality
ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental
review is required.
Environmental Determination
TheDirectorofDevelopmentServiceshasreviewedtheproposedactivityforcompliancewiththe
CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthattheactivityisnota“Project”as
definedunderSection15378oftheStateCEQAGuidelinesbecauseitwillnotresultinaphysical
changeintheenvironment;therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelines,
the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
TheCityofChulaVistahashistoricallycontractedwiththeOtayWaterDistrictfortheprovisionof
customerwaterconsumptiondataandsewerbillingservicesforOtayWaterDistrictconsumersthat
arereceivingsewerservicesfromtheCityofChulaVista.Themostrecentagreementexpiredon
December5,2015andwasextendedthroughaletterofagreementuntilJune30,2016orupon
executionofamoreformalagreement.BeforeCounciltonightistheformalagreementwiththeOtay
Water District.
The agreement reflects the following:
·Services-OtaywillprovidethefollowingforallpropertiesservedbytheOtayWaterDistrict
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File#:16-0115, Item#: 2.
within the jurisdictional boundaries of the City
o On an annual basis, water consumption data
o On a monthly basis, Otay will perform billing and collection of sewer fees
·Term-thenewagreementwillbeineffectuntilJune30,2021withtheoptiontoextendthe
agreement for five additional one-year terms by mutual agreement.
·Payment-Otaywilldeductaperaccountservicefeefromeachremittanceofcollectedsewer
feesitmakestotheCity.Thecurrentservicefeeis$1.05peraccountpermonth.Theservice
feemaybeadjustedonJuly1ofeachyearinaccordancewithanychangesintheSanDiego
Consumer Price Index.
Theattachedresolutionwouldapprovetheagreement,directandauthorizetheMayortosignthe
agreement,andauthorizeCityManagertoexercisethefive,one-yearoptionstoextend.Staff
recommendsthattheCityCounciladopttheresolutioninordertocontinuationofthesebilling
services.
DECISION-MAKER CONFLICT
Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsite-
specificandconsequently,the500-footrulefoundinCaliforniaCodeofRegulationsTitle2,section
18702.2(a)(11),isnotapplicabletothisdecisionforpurposesofdeterminingadisqualifyingreal
property-relatedfinancialconflictofinterestunderthePoliticalReformAct(Cal.Gov'tCode§87100,
et seq.).
Staffisnotindependentlyaware,andhasnotbeeninformedbyanyCityCouncilmember,ofany
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy
Community,StrongandSecureNeighborhoodsandaConnectedCommunity.Thisagreement
supports Strong and Secure Neighborhoods as it facilitates the collection of sewer service revenues.
CURRENT YEAR FISCAL IMPACT
Approvaloftheagreementresultsinnonetfiscalimpactinthecurrentfiscalyear.Thecurrent
agreementsettheservicefeeat$1.05peraccountpermonth.Thenewagreementallowsforthe
service fee to be updated on an annual basis as of July 1.
ONGOING FISCAL IMPACT
OtayWaterDistrictcurrentlyprovideswaterconsumptionandsewerbillingservicesfor
approximately30,487customers(variesbymonth)onbehalfoftheCityofChulaVista.Basedona
servicefeeof$1.05,theCitywillpayOtayWaterDistrictapproximately$384,000onanannualbasis.
TheservicefeemaybeadjustedonJuly1ofeachyeartoreflectanychangesintheSanDiego
Consumer Price Index.
ATTACHMENTS
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File#:16-0115, Item#: 2.
·Agreement with Otay Water District
Staff Contact: Angelica Aguilar, Finance Department
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RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVINGAN AGREEMENT FOR WATER
CONSUMPTION DATA AND SEWER BILLING SERVICES
BETWEEN THE CITY ANDTHE OTAY WATER DISTRICT
WHEREAS, the City provides sewer collection services to property located within its
jurisdictional boundaries; and
WHEREAS, the rates for the City’s sewer fees are structured, in part, on the basis of a
customer’s metered water use and certain assumptions regarding the volume of water returned to
the sewer system; and
WHEREAS, the Otay Water District provides water service to properties located within
Otay’s jurisdictional boundaries; and
WHEREAS, the City has requested that Otay provide water consumption data for all
properties served by Otay within the jurisdictional boundaries of City and that Otay prepare the
calculation of customers’ sewer service fees (based on a formula provided by the City) in order
for the City to receive the sewer service fees for its sewer customers; and
WHEREAS, the City has requested that Otay provide billing and collection services for
all properties served by Otay within the jurisdictional boundaries of City (“City Sewer
Customers”) in order for the City to receive the sewer service fees for its sewer customers; and
WHEREAS, City staff has presented the City Council with a draft agreement regarding
the provision of water consumption data and sewer billing services by the Otay Water District to
the City; and
WHEREAS, the proposed agreement provides for the provision of such services for a
period of five years, with five, one-year extensions; and
WHEREAS, staff has recommended that the City Manager be authorized to exercise the
extension options.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the Cityof Chula
Vista, that it approves theAgreement to Provide Customer Water Consumption Data and Sewer
Billing Services, between the City andthe Otay Water District, inthe form presented, with such
minor modifications as may be required or approved by the City Attorney, a copy of which shall
be kepton file in the Office of the City Clerk,authorizesand directsthe Mayorto execute same;
and authorizes the City Manager to exercise the five, one-year extension options, at the City
Manager’s discretion.
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Presented by
David Bilby
Director of Finance
Approved as to form by
Glen R. Googins
City Attorney
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oils
THE ATTACI-IED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COLJNCIL
I
le . G og ns
ityAttomey
Dated: ' b
AGREEMENT
BETWEEN
THE CITY OF CHULA VISTA AND
OTAY WATER DISTRICT
TO PROVIDE CUSTOMER WATER CONSUMPTION DATA AND
SEWER BILLING SERV[CES
2016-04-05 Agenda Packet Page 17
AGREEMENT TO PROVIDE CUSTOMER WATER CONSUMPTION DATA AND SEWER BILLING
SERVICES
This agreement (“Agreement”) is made and entered into as of , 2016 by and between
Otay Water District, a Municipal Water District organized and existing pursuant to Water Code Section
71000 et seq, (hereinafter referred to as “Otay”) and the City of Chula Vista, a municipal chartered
corporation (“City”). Otay and the City are collectively referred to herein as the “Parties.”
WHEREAS, the City provides sewer collection services to property located within its jurisdictional
boundaries; and
WHEREAS, the rates for the City’s sewer service fees are structured, in part, on the basis of a customer’s
metered water use and certain assumptions regarding the volume of water returned to the sewer
system; and
WHEREAS, Otay provides water service to properties located within Otay’s jurisdictional boundaries;
and
WHEREAS, the City has requested that Otay provide water consumption data for all properties served
by Otay within the jurisdictional boundaries of City and that Otay prepare the calculation of customers’
sewer service fees (based on a formula provided by the City) in order for the City to receive the sewer
service fees for its sewer customers; and
WHEREAS, the City has requested that Otay provide billing and collection services for all properties
served by Otay within the jurisdictional boundaries of City (“City Sewer Customers”) in order for the City
to receive the sewer service fees for its sewer customers; and
NOW, THEREFORE, the Parties hereto agree as follows:
1. Services.
1.1. On an annual basis Otay will provide water consumption data for all properties served by Otay
within the jurisdictional boundaries of the City (“Water Consumption Data File”) using the
mutually agreed upon standard data file format. (A sample of the data file format is attached as
Exhibit 1)
1.1.1. The Water Consumption Data File will contain data for the period November through April,
and will calculate the lowest two consecutive months.
1.1.2. Otay will provide the Water Consumption Data File in an accurate manner and within one
month of receipt of the last City Sewer Customer’s meter reading for the month of April,
using reasonable, industry-standard methods and process.
2016-04-05 Agenda Packet Page 18
1.2. On a monthly basis Otay will perform the services of billing and collection sewer fees for the
City.
1.2.1. The City will provide to Otay, no later than June 1st of each year, the rates and formulas to
be used by Otay to calculate the fees to be billed to City Sewer Customers.
1.2.2. Otay will calculate the fees to be charged to City Sewer Customers utilizing the fee rates
and formulas provided by the City (“Sewer Fees”). Otay does not warranty the accuracy of
the data or formulas provided by the City.
1.2.3. Otay will include Sewer Fees in City Sewer Customer’s water bills each month.
1.2.4. The City shall be responsible for notifying Otay of any new customers or changes to
customer profiles, such as sewer strength for commercial customers. Every two months,
Otay will remit to the City billed sewer fees with the payment being due the last Monday
of the month subsequent to the two months of billing (ex. Sewer fees billed in July and
August will be remitted by the last Monday in September).
1.3. The City agrees that the water consumption data provided by Otay and the Sewer Fees are
confidential and may only be used for activities related to billing for sewer services or if
required by statute or government regulation. The water consumption data and Sewer Fees
provided by Otay must not be used for any other purposes.
1.4. Otay does not warranty the accuracy of the water consumption data or the calculation of the
Sewer Fee based on the formula provided by the City.
2. Term.
The term of this Agreement shall be from the date first stated above, and will continue in effect
until June 30, 2021. The Agreement may be extended by mutual agreement for five additional
one-year terms with an amendment to the Agreement to be executed by June 30th of the
preceding fiscal year.
3. Payment.
3.1 Otay shall deduct a per-account charge (“Service Fee”) from each remittance of
collected Sewer Fees it makes to the City. The Service Fee will be based on the number
of accounts for which Otay provides water consumption data and billing services to the
City. The Service Fee represents Otay’s costs to provide water consumption data to the
City and to perform billing and collection services for Sewer Fees for the City. The initial
Service Fee shall be $1.05 per account per month.
3.2 The Service Fee shall be adjusted from a starting figure of $1.05 per account in
December 2015 dollars, each year thereafter on July 1 of each year, in accordance with
2016-04-05 Agenda Packet Page 19
any increase or decrease in the San Diego Consumer Price Index. Any change shall be
memorialized by Otay sending a letter to the City which will include an updated cost per
account. Said letters shall be incorporated herein by reference and become part of this
Agreement.
4. Uncollectible Accounts.
The City shall be solely responsible for risk of loss associated with uncollectible accounts, up to
the total amount of Sewer Fees billed. Otay shall apply payments to water accounts first.
5. Termination.
Either party may terminate this Agreement with ninety (90) days written notice. In the event of
termination of this Agreement, payment to Otay will be made for the above-referenced fees and
costs for the current fiscal year to the date of termination. Notice of termination shall be
provided in accordance with the provisions of Section 9 below.
6. Indemnification.
6.1 Each Party shall be responsible for the willful misconduct and negligent acts or
omissions of its officers, directors, agents, employees, and subcontractors. Each Party
shall indemnify, hold harmless, and defend the other from and against all claims,
demands, and liabilities for bodily injury, property damage, or other damages caused by
the willful or negligent act or omission of the indemnifying party or its officer, directors,
agents, employees or subcontractors.
6.2 The City hereby indemnifies, holds harmless and defends Otay and Otay’s officers,
directors, agents, employees, and subcontractors from and against all claims, demands,
and liabilities for bodily injury, property damage, or other damages arising out of the
City’s business decisions relating to, or use of, the water consumption data provided by
Otay.
7. Integration.
This Agreement, including any and all exhibits to it, represent the entire understanding of both
Parties as to those matters contained in it, and supersedes and cancels any prior oral or written
understandings, promises or representations with respect to those matters covered in it. This
Agreement may not be modified or altered except in writing signed by both Parties, except as
provided for herein related to notice of increase of the Service Fee as provided for in Paragraph
3 above.
8. Laws, Venue, and Attorneys’ Fees.
2016-04-05 Agenda Packet Page 20
This Agreement shall be interpreted in accordance with the laws of the State of California. The
Parties agree that if any dispute shall arise in relation to this Agreement, they will attempt to
resolve such dispute informally, in good faith. If such good faith informal resolution does not
resolve the issue, the Parties agree that the matter will be directed to the General Manager/City
Manager of each Party for another good faith attempt at resolution. If that attempt does not
resolve the issue, the Parties agree to mediation under the rules of the American Arbitration
Association or any other neutral organization agreed upon before having recourse in a court of
law. Any agreements resulting from mediation shall be documented in writing by all Parties. All
mediation results shall be “non-binding” and inadmissible for any purpose in any legal
proceeding, unless all Parties otherwise agree in writing. If mediation is not successful, and an
action is brought to interpret or enforce any term of this Agreement, the action shall be brought
in a state or federal court situated in the County of San Diego, State of California.
2016-04-05 Agenda Packet Page 21
9. Notice.
Termination notice, proposed amendments to this Agreement, or any other notices required
herein will be delivered by United States Post Office, certified mail, and addressed to:
Otay Water District
Kevin Koeppen
2554 Sweetwater Springs Blvd.
Spring Valley, CA 91978-2004
kevin.koeppen@otaywater.gov
City of Chula Vista
Roberto Yano
276 Fourth Avenue
Chula Vista, CA 91910
ryano@chulavistaca.gov
Any notice or instrument required to be given or delivered by this Agreement may be given or
delivered by regular or electronic mail addressed to the designated representative.
10. Severability.
In the event any one of the provisions of this Agreement shall for any reason be held invalid,
illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and
the invalid, illegal or unenforceable provision(s) shall be replaced by a mutually acceptable
provision, which being valid, legal and enforceable, comes closest to the intention of the parties
underlying the invalid, illegal or unenforceable provision.
11. Assignment.
In no event shall this Agreement be assigned by either Party without first obtaining the prior
written consent of the other Party.
12. Waiver.
No covenant, term or condition of this Agreement shall be deemed to be waived by any party
hereto unless such waiver is in writing and executed by the party making the waiver. No waiver
of any breach of any of the terms, covenants, or conditions of this Agreement shall be construed
or held to be a waiver of any succeeding or preceding breach of the same or any other term,
covenant or condition contained herein.
13. Execution of Agreement.
This Agreement shall not be deemed to have been accepted and shall not be binding upon
either Party until duly authorized officers of both parties have executed it. This Agreement,
including any and all exhibits to it, represents the entire understanding of both Parties as to
those matters contained in it, and supersedes and cancels any prior oral or written
2016-04-05 Agenda Packet Page 22
understandings, promises or representations with respect to those matters covered in it. This
Agreement may not be modified or altered except in writing, signed by both Parties.
IN WITNESS WHEREOF, the Parties hereto have executed this agreement as of the date first written
above.
Otay Water District City of Chula Vista
Approved:
By: By:
Mark Watton, General Manager Mary Casillas-Salas, Mayor
Attest:
Susan Cruz, Board Secretary Donna Norris, City Clerk
Approved as to form:
General Counsel
Otay Water District
Glen R. Googins, City Attorney
City of Chula Vista
2016-04-05 Agenda Packet Page 23
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Page 24
City of Chula Vista
Staff Report
File#:16-0125, Item#: 3.
RESOLUTIONOFTHESUCCESSORAGENCYTOTHEREDEVELOPMENTAGENCYOFTHE
CITYOFCHULAVISTAAUTHORIZINGTHEISSUANCEANDSALEOFTAXALLOCATION
REFUNDINGBONDS,ANDAPPROVINGTHEFORMOFANINDENTUREOFTRUSTAND
AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
RECOMMENDED ACTION
Agency adopt the resolution.
SUMMARY
TheRedevelopmentDissolutionActallowsfortheSuccessorAgencytotheRedevelopmentAgency
oftheCityofChulaVista(SuccessorAgency)torefinanceoutstandingtaxallocationbondsto
providedebtservicesavings.TheSuccessorAgencyhastheopportunitytorefinancetheformer
RedevelopmentAgency’s2006ASeniorTaxAllocationRefundingBonds,2006BSubordinateTax
AllocationRefundingBondsand2008TaxAllocationRefundingBondsatthistime,withthedebt
service savings to be shared among the affected taxing agencies, including the City.
ENVIRONMENTAL REVIEW
Environmental Notice
Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality
ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental
review is required.
Environmental Determination
TheDirectorofDevelopmentServiceshasreviewedtheproposedactivityforcompliancewiththe
CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthattheactivityisnota“Project”as
definedunderSection15378oftheStateCEQAGuidelinesbecauseitwillnotresultinaphysical
changeintheenvironment;therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelines,
the activity is not subject to CEQA. Thus, no environmental review is required
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
Background
PriortodissolutionunderABX126andAB1484(theDissolutionAct),theRedevelopmentAgencyof
theCityofChulaVista(formerAgency)issuedtaxallocationbondsforavarietyofredevelopment
purposes.AftertheadoptionoftheDissolutionAct,theSuccessorAgencyisresponsibletopay
bond debt service until all bonds are repaid.
City of Chula Vista Printed on 3/30/2016Page 1 of 4
powered by Legistar™2016-04-05 Agenda Packet Page 25
File#:16-0125, Item#: 3.
Section34177.5oftheDissolutionActauthorizesrefinancingoftheformerAgencydebtifdebt
service savings can be achieved.
Refinancing Opportunity
The bonded debt obligations of the former Agency are shown in the table below.
Original
Principal
Outstanding
Principal
Final
Maturity
2006 Series A Bonds $13,435,000 $ 8,770,000 2027
2006 Series B Bonds $12,325,000 $ 8,245,000 2027
2008 Bonds $21,625,000 $20,450,000 2036
Uponreviewoftheseobligations,ithasbeendeterminedthatrefinancingallthreeseriesof
outstandingtaxallocationbondsisinthebestinterestoftheSuccessorAgencyandthat,basedon
currentmarketconditions,thestatutorysavingsrequirementcanbemetiftherefinancingis
approved.StaffcostsrelatedtorefundingproceedingscanberecoveredthroughtheSuccessor
Agency’s Recognized Obligation Payment Schedule as authorized by the Dissolution Act.
Refunding Analysis
ThethreeseriesofTaxAllocationBonds(PriorBonds)cancurrentlyberefinancedatthepresent
timeand,basedoncurrentmarketconditions,providedebtservicesavingstotheSuccessorAgency.
Thesesavingswillincreasetheamountof“residual”propertytaxavailabletoberedistributedtothe
affected taxing agencies, including the City.
Basedoncurrentinterestrates,theSuccessorAgencycanrefinancethePriorBondsatanaverage
interestcostofapproximately3.0%,comparedtotheaveragerateonthePriorBondstoberefunded
of4.7%.Aftertherefinancing,theSuccessorAgencywouldreducetherequestedfundingfromthe
RedevelopmentPropertyTaxTrustFund(RPTTF)fordebtservicebyanestimated$8.2million
through2036(finalmaturity).Thisrepresentsa16%reductioninnetdebtserviceover20years.The
total$8.2millionreducednetdebtservicewouldgeneratemoreresidualbalanceavailabletopay
enforceableobligationsoftheSuccessorAgencyandtodistributetoothertaxingentitiesin
furtheranceofthegoalsofredevelopmentagencydissolutionlegislation.TheCity’sshareofthe
estimatedincreasedresidualRPTTFrevenueisapproximately$1.5million(18.7%)through2036,
with the $6.7 million balance of the residual going to the other taxing agencies.
ThebondsareexpectedtocarrytheSuccessorAgency’scurrent“A+”Standard&Poor’scredit
rating.TheSuccessorAgencywillapplyforbondinsurancetoachievetheinterestrateusedinthe
savings estimates.
Authorization and Sale
TheDissolutionActhasaddedanumberofstepstothetraditionalrefinancingprocess,andrequires
moretimetoactuallygetthebondstomarket.OncetheSuccessorAgencyauthorizesthe
refinancingofthebondsbyapprovingtheresolutionpresentedwiththisreport,theSuccessor
AgencyOversightBoardwillbepresentedwithacompanionresolutionapprovingtheactiontakenby
yourBoard.ThisOversightBoardactionmustbesubmittedtoandapprovedbytheState
DepartmentofFinance(DOF).DOFcantakeupto65daysfromthetimetheOversightBoard
City of Chula Vista Printed on 3/30/2016Page 2 of 4
powered by Legistar™2016-04-05 Agenda Packet Page 26
File#:16-0125, Item#: 3.
resolution is submitted to approve the financing.
BasedonananticipatedOversightBoardapprovalonApril11,staffanticipatesthebondswouldbe
sold in June 2016.
BetweenthetimethattherefinancingisapprovedbytheSuccessorAgencyandthetimethatthe
SuccessorAgencycanactuallyenterthemarkettoselltherefundingbonds,interestratescould
increase,anddebtservicesavingsmaybereduced.Therefore,thereducednetdebtserviceof$8.2
million is an estimate at this time.
InordertoauthorizetheissuanceoftheBondstheSuccessorAgencyBoardhasbeenpresented
witharesolutionfortheirconsideration.TheSuccessorAgencyresolutionauthorizesthesaleof
refundingbondswithaminimumsavingsrequirementof5%.TheSuccessorAgencyresolutionalso
approves the following documents, in draft form:
·Indenture of Trust between the Successor Agency and U.S. Bank as Trustee,
·EscrowAgreementsforeachseriesofPriorBondsbetweentheSuccessorAgencyandU.S.
Bank as Escrow Bank,
·BondPurchaseAgreementbetweentheSuccessorAgencyandStifel,Nicolaus&Company,
Incorporated, as Underwriter,
·Preliminary Official Statement, and
·Continuing Disclosure Certificate.
TheSuccessorAgencyresolutionalsoapprovesthedistributionofthePreliminaryOfficialStatement
(POS).ThePOSisthe“offeringdocument”fortheproposed2016refundingBonds.TheSuccessor
AgencyhasanobligationtoensurethatthePOSincludesallinformationthatwouldbematerialtoa
prospective investor’s decision whether to purchase the Bonds.
Thepreliminaryofficialstatementwaspreparedbystaffandthefinancialadvisor,withinputfrom
StradlingYoccaCarlson&Rauth,theSuccessorAgency’sbondcounselanddisclosurecounsel.
TheSuccessorAgencyBoard’sreviewofthedescriptionoftheSuccessorAgencyanditsFinancial
Informationcontainedinthepreliminaryofficialstatementisrequestedpriortoprintinginadvanceof
the sale of the Bonds on or about June 15, 2016.
TheproposedResolutionauthorizesstaff,inconsultationwithbondcounsel,toreviseandfinalize
each of the documents approved by the Resolution within the parameters set forth in the Resolution.
DECISION-MAKER CONFLICT
Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsite-
specificandconsequently,the500-footrulefoundinCaliforniaCodeofRegulationsTitle2,section
18702.2(a)(11),isnotapplicabletothisdecisionforpurposesofdeterminingadisqualifyingreal
property-relatedfinancialconflictofinterestunderthePoliticalReformAct(Cal.Gov'tCode§87100,
et seq.).
Staffisnotindependentlyaware,andhasnotbeeninformedbyanyBoardMemberoftheSuccessor
AgencytotheRedevelopmentAgencyoftheCityofChulaVista,ofanyotherfactthatmayconstitute
City of Chula Vista Printed on 3/30/2016Page 3 of 4
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File#:16-0125, Item#: 3.
a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy
Community,StrongandSecureNeighborhoodsandaConnectedCommunity.Refundingthesetax
allocationbondspromotesOperationalExcellence,EconomicVitalitybyreducingdebtservice
payments in future years.
CURRENT YEAR FISCAL IMPACT
There is no fiscal impact in the current Fiscal Year 2015/16.
ONGOING FISCAL IMPACT
TheestimatedfiscalimpacttotheSuccessorAgencyistoreduceenforceableobligationsbyatotal
of$8.2million.Ifmarketconditionsremainsteady,theGeneralFundwillreceiveadditionalresidual
propertytaxasaresultoftheproposedrefundingintheamountofapproximately$125,000annually
for10yearsandanother$30,000annuallyforthefollowing10years.Theremainingsavingswillbe
realized by other taxing agencies.
ATTACHMENTS
1.Indenture
2.Bond Purchase Agreement
3.Preliminary Official Statement
4.Continuing Disclosure Certificate
5.2006 Series A Escrow Agreement
6.2006 Series B Escrow Agreement
7.2008 Escrow Agreement
8.Debt Service Savings Analysis
Staff Contact: Mike Sylvia, Finance & Purchasing Manager, Finance Department
City of Chula Vista Printed on 3/30/2016Page 4 of 4
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RESOLUTION NO. __________
RESOLUTION OF THE SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
AUTHORIZING THE ISSUANCE AND SALE OF TAX
ALLOCATION REFUNDING BONDS,AND APPROVING THE
FORM OF AN INDENTURE OF TRUST AND AUTHORIZING
CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
WHEREAS, the Redevelopment Agency of the City of Chula Vista (the “Prior Agency”) was
a public body, corporate and politic, duly created, established and authorized to transact business and
exercise its powers under and pursuant to the provisions of the Community Redevelopment Law
(Part 1 of Division 24 of the Health and Safety Code of the State of California) (the “Law”), and the
powers of the Prior Agency included the power to issue bonds for any of its corporate purposes; and
WHEREAS, an Amended and Restated Redevelopment Plan for a redevelopment project
known and designated as the “Merged Chula Vista Redevelopment Project Area” has been adopted,
approved and amended from time to time by the City Council of the City of Chula Vista (the “City
Council”), and all requirements of law for and precedent to the adoption and approval of the
Redevelopment Plan, as amended, have been duly complied with; and
WHEREAS, a Redevelopment Plan for a redevelopment project known and designated as the
“Bayfront/Town Centre Project Area” has been adopted, approved and amended from time to time by
the City Council, and all requirements of law for and precedent to the adoption and approval of the
Redevelopment Plan, as amended, have been duly complied with; and
WHEREAS, the Prior Agency has previously issued its Redevelopment Agency of the City
of Chula Vista Bayfront/Town Centre Redevelopment Project 2006 Senior TaxAllocation Refunding
Bonds, Series A, currently outstanding in the aggregate principal amount of $8,770,000 (the “2006A
Bonds”); and
WHEREAS, the Prior Agency has previously issued its Redevelopment Agency of the City
of Chula Vista Bayfront/Town Centre Redevelopment Project Area 2006 Subordinate Tax Allocation
Refunding Bonds, Series B, currently outstanding in the aggregate principal amount of $8,245,000
(the “2006B Bonds”); and
WHEREAS, the Prior Agency has previously issued its Redevelopment Agency of the City
of Chula Vista 2008 Tax Allocation Refunding Bonds (Merged Redevelopment Project), currently
outstanding in the aggregate principal amount of $20,450,000 (the “2008 Bonds”; and, together with
the 2006A Bonds and the 2006B Bonds, the “Prior Bonds”); and
WHEREAS, on June 28, 2011, the California Legislature adopted ABx1 26 (the “Dissolution
Act”) and ABx1 27 (the “Opt-in Bill”); and
WHEREAS, the California Supreme Court subsequently upheld the provisions of the
Dissolution Act and invalidated the Opt-in Bill resulting in the dissolution of the redevelopment
component of the Prior Agency as of February 1, 2012; and
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WHEREAS, the Prior Agency, including its redevelopment powers, assets and obligations,
was transferred on February 1, 2012 to the Successor Agency to the Redevelopment Agency of the
City of Chula Vista (the “Successor Agency”); and
WHEREAS, on or about June 27, 2012, AB1484 was adopted as a trailer bill in connection
with the 2012-13 California Budget; and
WHEREAS, AB1484 specifically authorizes the issuance of refunding bonds by the
Successor Agency to refund the bonds or other indebtedness of the Prior Agency to provide savings
to the Successor Agency, provided that (A) the total interest cost to maturity on the refunding bonds
plus the principal amount of the refunding bonds shall not exceed the total remaining interest cost to
maturity on the bonds to be refunded plus the remaining principal of the bonds to be refunded, and
(B) the principal amount of the refunding bonds shall not exceed the amount required to defease the
refunded bonds, to establish customary debt service reserves, and to pay related costs of issuance;
and
WHEREAS, for the corporate purposes of the Successor Agency, the Successor Agency
desires to issue at this timetax allocation refunding bonds (the “2016 Bonds”) in an aggregate
principal amount sufficient to refund all or a portion of the Prior Bonds, and to irrevocably set aside a
portion of the proceeds of such 2016 Bonds in a separate segregated trust fund which will be used to
refund the outstanding Prior Bonds being refunded, to pay costs in connection with the issuance of
the 2016 Bonds and to make certain other deposits as required by the Indenture (as defined below);
and
WHEREAS, the 2016 Bonds shall be secured by a pledge of property tax revenues
authorized by California Health and Safety Code Section 34177.5(a) and (g), pursuant to the
provisions of Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government
Code (the “Bond Law”); and
WHEREAS, the Successor Agency wishes at this time to approve matters relating to the
issuance and sale of the 2016 Bonds;
NOW, THEREFORE, BE IT RESOLVED by the Successor Agency as follows:
SECTION 1.Subject to the provisions of the Indenture referred to in Section 2 hereof, the
issuance of the 2016 Bonds in an aggregate principal amount sufficient to refund all or a portion of
the Prior Bonds for the purpose of achieving debt service savings in accordance with Health & Safety
Code Section 34177.5(a)(1), as reflected in the Debt Service Savings Analysis to be prepared by the
Successor Agency’s Municipal Advisor, and the pledge of property tax revenues to the 2016 Bonds
pursuant to the Indenture approved by Section 2 of this Resolution (as authorized by California
Health and Safety Code Section 34177.5(a) and (g)) is hereby approved on the terms and conditions
set forth in, and subject to the limitations specified in, the Indenture. The 2016 Bonds will be dated,
will bear interest at the rates, will mature on the dates, will be issued in the form, will be subject to
redemption, and will be as otherwise provided in the Indenture, as the same will be completed as
provided in this Resolution. The proceeds of the sale of the 2016 Bonds shall be applied as provided
in the Indenture. The 2016 Bonds may be issued as a single issue, or from time to time, in separate
series, as the Successor Agency shall determine. The approval of the issuance of the 2016 Bonds by
the Successor Agency and the Oversight Board shall constitute the approval of each and every
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separate series of 2016 Bonds and the sale of the 2016 Bonds at a public or private sale, without the
need for any further approval from the Oversight Board.
SECTION 2.The Indenture of Trust in substantially the form submitted at this meeting and
made a part hereof as though set forth in full herein (the “Indenture”), is hereby approved. The Chair
of the Successor Agency, the Executive Director of the Successor Agency, the Director of Finance of
the Successor Agency and, the Secretary of the Successor Agency (each, an “Authorized Officer”)
(or the designees of either) are hereby authorized and directed to execute and deliver the Indenture in
the form presented at this meeting with such changes, insertions and omissions as may be requested
by Stradling Yocca Carlson & Rauth, a Professional Corporation, as Bond Counsel, and approved by
the Authorized Officer, said execution being conclusive evidence of such approval.
SECTION 3.The Preliminary Official Statement relating to the 2016 Bonds (the
“Preliminary Official Statement”), in the form presented at this meeting and on file with the
Secretary, is hereby approved. Any Authorized Officer, acting singly, is hereby authorized to sign a
certificate pursuant to Rule 15c2 12 promulgated under the Securities Exchange Act of 1934 relating
to said Preliminary Official Statement, and each such Authorized Officer is hereby authorized and
directed to execute, approve and deliver the final Official Statement in the form of the Preliminary
Official Statement, with such changes, insertions and omissions as may be recommended by
Successor Agency general counsel or Stradling Yocca Carlson & Rauth, a Professional Corporation
(“Bond Counsel”), and approved by the Authorized Officer executing the same, said execution being
conclusive evidence of such approval. Stifel, Nicolaus & Company, Incorporated (the
“Underwriter”) is hereby authorized to distribute the Preliminary Official Statement to prospective
purchasers of the 2016Bonds and is directed to deliver copies of any final Official Statement to all
actual purchasers of the 2016 Bonds.
SECTION 4.The form of the Bond Purchase Agreement (the “Bond Purchase Agreement”)
between the Successor Agency and the Underwriter, in the form presented at this meeting and on file
with the Secretary, is hereby approved. Any Authorized Officer, acting singly, is hereby authorized
to execute the Bond Purchase Agreement with such changes, insertions and omissions as may be
recommended by general counsel or Bond Counsel, as such Authorized Officer shall deem
necessary; provided, however, that the Bond Purchase Agreement shall be signed only if the
Underwriter’s discount (exclusive of original issue discount) does not exceed 0.75% of the principal
amount of the 2016 Bonds; and provided, further, that the Bond Purchase Agreement shall be
executed only if and the net present value savings realized by the Successor Agency in terms of
reduced debt service payments, as confirmed by the Successor Agency’s Municipal Advisor, is not
less than five percent (5%) of the principal amount of the Prior Bonds to be refunded and defeased
.
SECTION 5.The forms of the Escrow Agreements in connection with each of the three
series of Prior Bonds (the “Escrow Agreements”), in the forms presented at this meeting and on file
with the Secretary, are hereby approved. Any Authorized Officer, acting singly, is hereby authorized
to execute the Escrow Agreements with such changes, insertions and omissions as may be
recommended by general counsel or Bond Counsel, as such Authorized Officer shall deem necessary.
SECTION 6.The form of the Continuing Disclosure Certificate (the “Continuing
Disclosure Certificate”), in the form presented at this meeting and on file with the Secretary, is
hereby approved. Any Authorized Officer, acting singly, is hereby authorized to execute the
Continuing Disclosure Certificate with such changes, insertions and omissions as may be
recommended by general counsel or Bond Counsel, as such Authorized Officer shall deem necessary.
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SECTION 7.The Executive Director or Director of Finance of the Successor Agency is
authorized to select a municipal bond insurer to insure payments of the principal of and interest on
the 2016 Bonds so long as the Executive Director or Director of Finance of the Successor Agency
determines that obtaining the municipal bond insurance policy provided thereby will result in a lower
interest rate or yield to maturity with respect to the 2016 Bonds. Bond Counsel is hereby directed to
make all changes to the Escrow Agreements, the Continuing Disclosure Certificate, the Bond
Purchase Agreement, the Preliminary Official Statement, the final Official Statement and the
Indenture of Trust submitted herewith as are necessary toreflect the selection of a municipal bond
insurer and the reasonable comments thereof.
SECTION 8.The Executive Director or Director of Finance of the Successor Agency is
authorized to select a municipal bond insurer to provide a reserve fund surety bondto be deposited
into the reserve fund for the 2016 Bonds so long as the Executive Director or Director of Finance of
the Successor Agency determines that obtaining the reserve fund surety bond will be cost effective to
the Successor Agency. Each Authorized Officer, acting alone, is authorized to execute and deliver
any customary agreement with the municipal bond insurer providing the reserve fund surety bond.
Bond Counsel is hereby directed to make all changes to the Escrow Agreements, the Continuing
Disclosure Certificate, the Bond Purchase Agreement, the Preliminary Official Statement, the final
Official Statement and the Indenture of Trust submitted herewith as are necessary to reflect the
reserve fund surety bond and the reasonable comments of the municipal bond insurer in connection
therewith.
SECTION 9.Any Authorized Officer of the Successor Agency, acting singly, be and each
of them hereby is authorized and directed to execute and deliver any and all documents and
instruments, relating to the 2016Bonds, and to do and cause to be done any and all acts and things
necessary or proper for carrying out the transactions contemplated by this Resolution and the
Indenture, including, as necessary, any additional agreements as may be required to carry out the
purposes hereof.
SECTION 10.U.S. Bank National Association, is hereby appointed as Trustee. Any
Authorized Officer, acting singly, is hereby authorized to enter into a contract with the Trustee for
the purpose of providing its services.
SECTION 11.Harrell & Company Advisors, LLC is hereby designated as the Municipal
Advisor to the Successor Agency for the 2016 Bonds and Stradling Yocca Carlson & Rauth, a
Professional Corporation is hereby designated as bond counsel and disclosure counsel for the 2016
Bonds, and the Authorized Officers are each hereby authorized and directed, jointly and severally, to
execute any and all contracts for services and other documents necessary to procure the services of
such firms for the execution and delivery of the Bonds.
SECTION 12.This Resolution shall take effect immediately upon its adoption.
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Presented by Approved as to form by
David Bilby, MSBA, CPFO Glen R. Googins
Treasurer Agency General Counsel
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Stradling Yocca Carlson & Rauth
Draft of 3/16/16
INDENTURE OF TRUST
Dated as of __________, 2016
by and between the
SUCCESSOR AGENCYTO THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
and
U.S. BANK NATIONALASSOCIATION,
as Trustee
Relating to
$__________
Successor Agencyto theRedevelopment Agency of the City of Chula Vista
Tax Allocation Refunding Bonds, Series 2016
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TABLE OF CONTENTS
Page
ARTICLE I
DETERMINATIONS; DEFINITIONS
Section 1.01Findings and Determinations.....................................................................................2
Section 1.02Definitions.................................................................................................................2
Section 1.03Rules of Construction..............................................................................................13
ARTICLE II
AUTHORIZATION AND TERMS
Section 2.01Authorization of 2016 Bonds...................................................................................13
Section 2.02Terms of 2016 Bonds...............................................................................................13
Section 2.03Redemption of 2016 Bonds.....................................................................................14
Section 2.04Form of 2016 Bonds................................................................................................16
Section 2.05Execution of Bonds..................................................................................................17
Section 2.06Transfer of Bonds....................................................................................................17
Section 2.07Exchange of Bonds..................................................................................................17
Section 2.08Registration of Bonds..............................................................................................18
Section 2.09Temporary Bonds....................................................................................................18
Section 2.10Bonds Mutilated, Lost, Destroyed or Stolen...........................................................18
Section 2.11Book-Entry System..................................................................................................18
Section 2.12Applicability of Provisions to Parity Debt...............................................................20
ARTICLE III
DEPOSIT AND APPLICATION; ADDITIONAL DEBT
Section 3.01Issuance of Bonds....................................................................................................20
Section 3.02Application of Proceeds of Sale and Certain Other Amounts.................................20
Section 3.03Costs of Issuance Fund............................................................................................20
Section 3.04Refunding Fund.......................................................................................................21
Section 3.05Issuance of Parity Debt............................................................................................21
Section 3.06Issuance of Subordinate Debt..................................................................................21
ARTICLE IV
SECURITY OF BONDS; FLOW OF FUNDS
Section 4.01Security of Bonds; Equal Security...........................................................................22
Section 4.02Redevelopment Obligation Retirement Fund; Special Fund; Deposit of
Pledged Tax Revenues.............................................................................................23
Section 4.03Deposit of Amounts by Trustee...............................................................................23
Section 4.04Rebate Fund.............................................................................................................26
Section 4.05Provisions Relating to 2016 Insurance Policy.........................................................27
Section 4.06Provisions Relating to 2016 Reserve Policy............................................................28
ARTICLE V
OTHER COVENANTS OF THE SUCCESSOR AGENCY
Section 5.01Punctual Payment....................................................................................................28
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Section 5.02Limitation on Additional Indebtedness; Against Encumbrances............................28
Section 5.03Extension of Payment..............................................................................................28
Section 5.04Payment of Claims...................................................................................................28
Section 5.05Books and Accounts; Financial Statements.............................................................29
Section 5.06Protection of Security and Rights of Owners..........................................................29
Section 5.07Payments of Taxes and Other Charges....................................................................29
Section 5.08Taxation of Leased Property....................................................................................29
Section 5.09Disposition of Property............................................................................................29
Section 5.10Maintenance of Pledged Tax Revenues...................................................................30
Section 5.11Tax Covenants.........................................................................................................30
Section 5.12Continuing Disclosure.............................................................................................31
Section 5.13Compliance with the Dissolution Act......................................................................31
Section 5.14Further Assurances..................................................................................................32
Section 5.15Last and Final Recognized Obligation Payment Schedule......................................32
ARTICLE VI
THE TRUSTEE
Section 6.01Duties, Immunities and Liabilities of Trustee.........................................................32
Section 6.02Merger or Consolidation..........................................................................................34
Section 6.03Liability of Trustee..................................................................................................34
Section 6.04Right to Rely on Documents and Opinions.............................................................37
Section 6.05Preservation and Inspection of Documents.............................................................37
Section 6.06Compensation and Indemnification.........................................................................37
Section 6.07Deposit and Investment of Moneys in Funds..........................................................38
Section 6.08Accounting Records and Financial Statements.......................................................39
Section 6.09Other Transactions with Agency.............................................................................39
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 7.01Amendment With And Without Consent of Owners...............................................39
Section 7.02Effect of Supplemental Indenture............................................................................40
Section 7.03Endorsement or Replacement of Bonds After Amendment....................................40
Section 7.04Amendment by Mutual Consent..............................................................................40
Section 7.05Opinion of Counsel..................................................................................................41
Section 7.06Copy of Supplemental Indenture to S&P and Moody’s..........................................41
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
Section 8.01Events of Default and Acceleration of Maturities...................................................41
Section 8.02Application of Funds Upon Acceleration................................................................43
Section 8.03Power of Trustee to Control Proceedings................................................................43
Section 8.04Limitation on Owner’s Right to Sue........................................................................43
Section 8.05Non-Waiver.............................................................................................................44
Section 8.06Actions by Trustee as Attorney-in-Fact...................................................................44
Section 8.07Remedies Not Exclusive..........................................................................................44
Section 8.08Determination of Percentage of Bondowners..........................................................45
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ARTICLE IX
MISCELLANEOUS
Section 9.01Special Obligations..................................................................................................45
Section 9.02Benefits Limited to Parties......................................................................................45
Section 9.03Successor is Deemed Included in All References to Predecessor...........................45
Section 9.04Discharge of Indenture............................................................................................45
Section 9.05Execution of Documents and Proof of Ownership by Owners................................47
Section 9.06Disqualified Bonds..................................................................................................47
Section 9.07Waiver of Personal Liability....................................................................................47
Section 9.08Destruction of Cancelled Bonds..............................................................................47
Section 9.09Notices.....................................................................................................................48
Section 9.10Partial Invalidity......................................................................................................48
Section 9.11Unclaimed Moneys..................................................................................................48
Section 9.12Execution in Counterparts.......................................................................................49
Section 9.13Governing Law........................................................................................................49
EXHIBITAFORM OF 2016BOND.........................................................................................A-1
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INDENTURE OF TRUST
THIS INDENTURE OF TRUST (this “Indenture”) is made and entered into and dated as of
__________, 2016, by and between theSUCCESSOR AGENCYTO THE REDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTA, a public entity duly existing under the laws of the
State of California (the “Successor Agency”), as successor to the redevelopment activities of the
Redevelopment Agency of the City of Chula Vista(the “Former Agency”) and U.S. BANK
NATIONALASSOCIATION, a national banking association duly organized and existing under the
laws of the United States of America, as trustee (the “Trustee”);
WITNESSETH:
WHEREAS,the Former Agency isa public body, corporate and politic, duly established and
authorized to transact business and exercise powers under and pursuant to the provisions of Part1of
Division24 of the Health and Safety Code of the State (collectively, as amended, the “Law”),
including the power to issue bonds and incur debt for any of its corporate purposes;
WHEREAS,Redevelopment Plansforthe Merged Chula VistaRedevelopment Project Area
and the Bayfront/Town Centre Project Area (collectively, the “Project Areas”) of the Former Agency
wereadopted andsubsequently amended, in compliance with all requirements of the Law, and all
requirements of law for and precedent to the adoption and approval of the Redevelopment Plans, as
amended, havebeen duly complied with;
WHEREAS,in order to finance and refinance redevelopment activities within orof benefit
to the Project Areas, the Former Agency issued certainoutstanding bonds more fully described
herein (collectively, the “RefundedBonds”);
WHEREAS,by implementation of California Assembly Bill X1 26, which amended
provisions of the Law, and the California Supreme Court’s decision in California Redevelopment
Association v. Matosantos, the redevelopment componentsof the Former Agency weredissolved on
February 1, 2012in accordance with California Assembly Bill X1 26 approved by the Governor of
the State of California on June28, 2011 (as amended, the “Dissolution Act”), and on February1,
2012, the Successor Agency, in accordance with a resolution adopted by the City Council of the City
on November 1, 2011and pursuant to the Dissolution Act, assumed certainredevelopment
components, including theredevelopment related duties and obligations,of the Former Agency as
provided in the Dissolution Act, including, without limitation, the obligations of the Former Agency
under the RefundedBonds and the related documents to which the Former Agency was a party;
WHEREAS, Section34177.5(a)(1) of the California Health and Safety Code authorizes the
Successor Agency to undertake proceedings for the refunding of outstanding redevelopment related
bonds and other obligations of the Former Agency, subject to the conditions precedent contained in
said Section34177.5;
WHEREAS, said Section34177.5 also authorizes the Successor Agency to issue bonds
pursuant to Article11 (commencing with Section53580) of Chapter3 of Part1 of Division2 of
Title5 of the Government Code (the “Refunding Law”) for the purpose of achieving debt service
savings within the parameters set forth in said Section34177.5;
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WHEREAS, in order to provide moneys to refund the Refunded Bonds (as defined herein)
for the purpose of providing debt service savings in accordance with Section34177.5(a)(1), the
Successor Agency has determined to issue its Tax Allocation Refunding Bonds, Series 2016(the
“2016 Bonds”);
WHEREAS,the 2016 Bonds will be issued pursuant to and in accordance with the
provisions of Section34177.5(a)(1) of the CaliforniaHealth and Safety Code, the Law and the
Refunding Law;
WHEREAS, in order to provide for the authentication and delivery of the 2016 Bonds, to
establish and declare the terms and conditions upon which the 2016 Bonds are to be issued and
secured and to secure the payment of the principal thereof and interest and redemption premium (if
any) thereon, the Successor Agency and the Trustee have duly authorized the execution and delivery
of this Indenture; and
WHEREAS, the Successor Agency has determined that all acts and proceedings required by
law necessary to make the 2016 Bonds when executed by the Successor Agency, and authenticated
and delivered by the Trustee, the valid, binding and legal special obligations of the Successor
Agency, and to constitute this Indenture a legal, valid and binding agreement for the uses and
purposes herein set forth in accordance with its terms, have been done or taken;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of and the interest and redemption premium (if any) on all the Bonds(as
defined below), including the 2016 Bonds, issued and Outstanding under this Indenture, according to
their tenor, and to secure the performance and observance of all the covenants and conditions therein
and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds,
including the 2016 Bonds, are to be issued and received, and in consideration of the premises and of
the mutual covenants herein contained and of the purchase and acceptance of the Bonds, including
the 2016 Bonds, by the Owners thereof, and for othervaluable considerations, the receipt of which is
hereby acknowledged, the Successor Agency and the Trustee do hereby covenant and agree with one
another, for the benefit of the respective Owners from time to time of the Bonds, including the 2016
Bonds, asfollows:
ARTICLE I
DETERMINATIONS; DEFINITIONS
Section 1.01Findings and Determinations.The Successor Agency has reviewed all
proceedings heretofore taken and, as a result of such review, hereby finds and determines that all
things, conditions and acts required by law to exist, happen or be performed precedent to and in
connection with the issuance of the 2016 Bonds do exist, have happened and have been performed in
due time, form and manner as required by law, and the Successor Agency is now duly empowered,
pursuant to eachand every requirement of law, to issue the 2016 Bonds in the manner and form
provided in this Indenture.
Section 1.02Definitions.Unless the context otherwise requires, the terms defined in this
Section 1.02 shall, for all purposes of this Indenture, of any Supplemental Indenture, and of any
certificate, opinion or other document herein mentioned, have the meanings herein specified.
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“Annual Debt Service” means all scheduled principal and interest payments coming due in a
Bond Year.
“Bonds”means the 2016 Bonds and any Parity Debt issued pursuant to a Supplemental
Indenture.
“Bond Counsel”means (a)Stradling Yocca Carlson & Rauth, a Professional Corporation, or
(b)any other attorney or firm of attorneys appointed by or acceptable to the Successor Agency, of
nationally-recognized experience in the issuance of obligations the interest on which is excludable
from gross income for federal income tax purposes under the Code.
“Bond Year”means each twelve (12) month period extending from September2 in one
calendar year to September1of the succeeding calendar year, both dates inclusive; provided that the
first Bond Year with respect to the 2016 Bonds shall commence on the Closing Date and end on
September1, 2016.
“Business Day”means any day, other than a Saturday or Sunday or a day on which
commercial banks in New York, New York, or any other city or cities where the Principal Corporate
Trust Office of the Trustee is located are required or authorized by law to close or a day on which the
Federal Reserve System is closed.
“City”means the City of Chula Vista.
“Closing Date”means the date on which a series of Bonds is delivered by the Successor
Agency to the original purchaser thereof. The Closing Date with respect to the 2016 Bonds is
________, 2016.
“Code”means the Internal Revenue Code of 1986 as in effect on the date of issuance of the
2016 Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations
issued on the date of issuance of the 2016Bonds, together with applicable proposed, temporary and
final regulations promulgated, and applicable official public guidance published, under the Code.
“Continuing Disclosure Certificate”means that certain Continuing Disclosure Certificate,
with respect to the 2016 Bonds, executed by the Successor Agency, as originally executed and as it
may be amended from time to time in accordance with the terms thereof.
“Costs of Issuance”means all items of expense directly or indirectly payable by or
reimbursable to the Successor Agency relating to the authorization, issuance, sale and delivery of the
Bonds, including but not limited to printing expenses, bond insurance and surety bond premiums, if
any, rating agency fees, filing and recording fees, initial fees and charges and first annual
administrative fee of the Trustee and fees and expenses of its counsel, fees, charges and
disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals,
fees and charges for preparation, execution and safekeeping of theBonds, administrative costs of the
Successor Agency and the City incurred in connection with the issuance of the Bonds, expenses of
the underwriters of the Bonds,and any other cost, charge or fee in connection with the original
issuance of the Bonds.
“Costs of Issuance Fund”means the fund by that name established and held by the Trustee
pursuant to Section 3.03.
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“County”means the County of San Diego.
“Debt Service Fund”means the fund by that name established and held by the Trustee
pursuant to Section 4.03.
“Defeasance Obligations”means any of the following which, at the time of investment, are
legal investments under the laws of the State for the moneys proposed to be invested therein and are
in compliance with the Successor Agency’s investment policies then in effect (provided that the
Trustee shall be entitled to rely upon any investment direction from the Successor Agency as
conclusive certification to the Trustee that investments described therein are legal and are in
compliance with the Successor Agency’s investment policies then in effect), but only to the extent
the same are acquired at Fair Market Value:
(a)Cash;
(b)Federal Securities, including direct obligations of the Treasury which have
been stripped by the Treasury itself, CATS, TIGRS andsimilar securities;
(c)The interest component of Resolution Funding Corporation strips which have
been stripped by request to the Federal Reserve Bank of New York in book-entry form;
(d)Pre-refunded municipal bonds rated “Aaa” by Moody’s and “AAA” by S&P,
provided that, if the issue is rated only by S&P (i.e., there is no Moody’s rating), then the pre-
refunded municipal bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed
obligations, or AAA rated pre-refunded municipals; and
(e)Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such obligations are backed by the
full faith and credit of the United States of America (stripped securities are only permitted if they
have been stripped by the agency itself): (i)direct obligations or fully guaranteed certificates of
beneficial ownership of the U.S. Export-Import Bank; (ii)certificates of beneficial ownership of the
Farmers Home Administration; (iii)participation certificates of the General Services Administration;
(iv)Federal Financing Bank bonds and debentures; (v)guaranteed Title XI financings of the U.S.
Maritime Administration; and (vi)project notes, local authority bonds, new communities debentures
and U.S. public housing notes and bonds of the U.S. Department of Housing and Urban
Development.
“Department of Finance”means the Department of Finance of the State of California.
“Depository”means (a)initially, DTC, and (b)any other Securities Depository acting as
Depository pursuant to Section 2.11.
“Depository System Participant”means any participant in the Depository’s book-entry
system.
“Dissolution Act”means California Assembly Bill X1 26 approved by the Governor of the
State of California on June28, 2011, as it has heretofore been amended and as it may hereafter be
amended.
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“DTC”means The Depository Trust Company, New York, New York, and its successors and
assigns.
“Escrow Agreements”means, collectively, the 2006A Bonds Escrow Agreement, the 2006B
Bonds Escrow Agreement and the 2008Bonds Escrow Agreement.
“Escrow Bank”shall mean U.S. Bank NationalAssociation.
“Event of Default”means any of the events described in Section8.01.
“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 Section1273 of the Code) and, otherwise, the
term “Fair Market Value” means the acquisition price in a bona fide arm’s length transaction (as
referenced above) if (i)the investment is a certificate of deposit that is acquired in accordance with
applicable regulations under the Code, (ii)the investment is an agreement with specifically
negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for
example, a guaranteed investment contract, a forward supply contract or other investment agreement)
that is acquired in accordance with applicable regulations under the Code, (iii)the investment is a
United States Treasury Security--State and Local Government Series thatis acquired in accordance
with applicable regulations of the United States Bureau of Public Debt, or (iv)any commingled
investment fund in which the Successor Agency and related parties do not own more than a ten
percent (10%) beneficial interest thereinif the return paid by the fund is without regard to the source
of the investment.
“Federal Securities”means any direct, noncallable general obligations of the United States
of America (including obligations issued or held in book-entry form on the books of the Department
of the Treasury of the United States of America and CATS and TGRS), or obligations the payment of
principal of and interest on which are directly or indirectly guaranteed by the United States of
America.
“Fiscal Year”means any twelve-month period beginning on July 1 in any year and
extending to the next succeeding June 30, both dates inclusive, or any other twelve month period
selected and designated by the Successor Agency to the Trustee in writing as its official fiscal year
period.
“Former Agency”means the Redevelopment Agency of the City of Chula Vista.
“Indenture”means this Indenture of Trust by and between the Successor Agency and the
Trustee, as originally entered into or as it may be amended or supplemented by any Supplemental
Indenture entered into pursuant to the provisions hereof.
“Independent Accountant”means any accountant or firm of such accountants duly licensed
or registered or entitled to practice as such under the laws of the State, appointed by the Successor
Agency, and who, or each of whom:
(a)is in fact independent and not under domination of the Successor Agency or
the City;
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(b)does not have any substantial interest, direct or indirect, with the Successor
Agency or the City; and
(c)is not connected with the Successor Agency or the City as an officer or
employee of the Successor Agency or the City, but who may be regularly retained to make reports to
the Successor Agency or the City.
“Independent Redevelopment Consultant”means any consultant or firm of such
consultants appointed by the Successor Agency, and who, or each of whom:
(a)is judged by the Successor Agency to have experience in matters relating to
the collection of Pledged Tax Revenues or otherwise with respect to the financing of redevelopment
projects;
(b)is in fact independent and not under domination of the Successor Agency or
the City;
(c)does not have any substantial interest, direct or indirect, with the Successor
Agency or the City; and
(d)is not connected with the Successor Agency or the City as an officer or
employee of the Successor Agency or the City, but who may be regularly retained to make reports to
the Successor Agency or the City.
“Information Services”means, in accordance with then current guidelines of the Securities
and Exchange Commission, such services providing information with respect to the redemption of
bonds as the Successor Agency may designate in a Written Request of the Successor Agency filed
with the Trustee.
“Insured Bonds” means those Bonds insured under a municipal bondor financial guaranty
insurance policy, including the 2016 Insured Bonds.
“Insurer”means the 2016 Insurer and, as applicable, the provider of a municipal bond or
financial guaranty insurance policy with respect to other Bonds.
“Interest Account”means the account by that name established and held by the Trustee
pursuant to Section 4.03(a).
“Interest Payment Date”means each March1and September1, commencing March1,
2017, for so long as any of the Bonds remain Outstanding hereunder.
“Last and Final ROPS”meansa Last and Final Recognized Obligation Payment Schedule
authorized by Section34191.6 of the Dissolution Act.
“Law”means the Community Redevelopment Law of the State, constituting Part1 of
Division 24 of the Health and Safety Code of the State,and the acts amendatory thereof and
supplemental thereto (including the Dissolution Act).
“Maximum Annual Debt Service”means, as of the date of calculation, the largest amount
of schedule d principal and interest payments for the current or any future Bond Year payable in such
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Bond Year. For purposes of such calculation, thereshall be excluded payments with respect to each
series ofBonds to the extent that amounts due with respect to such series ofBonds are prepaid or
otherwise discharged in accordance with this Indenture.
“Moody’s”means Moody’s Investors Service and its successors.
“Nominee”means (a)initially, Cede & Co., as nominee of DTC, and (b)any other nominee
of the Depository designatedpursuant to Section2.11(a).
“Outstanding”when used as of any particular time with reference to Bonds, means (subject
to the provisions of Section9.05) all Bonds except:
(a)Bonds theretofore canceled by the Trustee or surrendered to the Trustee for
cancellation;
(b)Bonds paid or deemed to have been paid within the meaning of Section9.03;
and
(c)Bonds in lieu of or in substitution for which other Bonds shall have been
authorized, executed, issued and delivered by the Successor Agency pursuant hereto.
“Oversight Board”means the Oversight Board of the Successor Agency established
pursuant to the Section 34179 of the Dissolution Act.
“Owner”or “Bondowner”means, with respect to any Bond, the person in whose name the
ownership of such Bond shall be registered on the Registration Books.
“Parity Debt”means any additional bonds, loans, advances or indebtedness issued or
incurred by the Successor Agency on a parity with the 2016 Bonds pursuant to Section3.05, whether
issued as Bonds under a Supplemental Indenture or issued under a Parity Debt Instrument.
“Parity Debt Instrument”means a resolution, indenture of trust, supplemental indenture of
trust, loan agreement, trust agreement or other instrument authorizing the issuance of any Parity
Debt, other than aSupplemental Indenture.
“Participating Underwriter”has the meaning ascribed thereto in the Continuing Disclosure
Certificate.
“Pass Through Agreements” means those certain agreements with taxing entities identified
as follows: (a) with respect to the Town Centre No. II Redevelopment Project: (1) agreement dated
as of September 6, 1988 among the County, the City and the Agency; (b) with respect to the Otay
Valley Road Redevelopment Project: (1) none; and (c) with respect to the Southwest Redevelopment
Project; (1) agreement dated as of November 27, 1990 among the County, the City and the Agency;
(2) agreement dated as of December 15, 1992 among the City, the Agency and the Sweetwater Union
High School District; (3) agreement dated as of December 22, 1993 among the City, the Agency and
Southwestern Community College District; (4) agreement dated as of October 12, 1990 among the
City, the Agency and San Diego County Office of Education; and (5) agreement dated as of
November 12, 1991 among the City, the Agency and Chula Vista Elementary School District.
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“Permitted Investments”means any of the following which, at the time of investment, are
legal investments under the laws of the State for the moneys proposed to be invested therein and are
in compliance with the Successor Agency’s investment policies then in effect (provided that the
Trustee shall be entitled to rely upon any investment direction from the Successor Agency as
conclusive certification to the Trustee that investments described therein are legal and are in
compliance with the Successor Agency’s investment policies then in effect), but only to the extent
the same are acquired at Fair Market Value:
(a)Federal Securities;
(b)Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such obligations are backed by the
full faith and credit of the United States of America (stripped securities are only permitted if they
have been stripped by the agency itself): (i)direct obligations or fully guaranteed certificates of
beneficial ownership of the U.S. Export-Import Bank; (ii)certificates of beneficial ownership of the
Farmers Home Administration; (iii)Federal Housing Administration debentures; (iv)participation
certificates of the General Services Administration; (v)Federal Financing Bank bondsand
debentures; (vi)guaranteed mortgage-backed bonds or guaranteed pass-through obligations of
GinnieMae (formerly known as the Government National Mortgage Association); (vii)guaranteed
Title XI financings of the U.S. Maritime Administration; and (viii)project notes, local authority
bonds, new communities debentures and U.S. public housing notes and bonds of the U.S. Department
of Housing and Urban Development;
(c)Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit U.S. government agencies (stripped
securities only as stripped by the agency itself): (i)senior debt obligations of the Federal Home Loan
Bank System; (ii)participation certificates and senior debt obligations of the Federal Home Loan
Mortgage Corporation; (iii)mortgaged-backed securities and senior debt obligations of Fannie Mae;
(iv)senior debt obligations of Sallie Mae (formerly known as the Student Loan Marketing
Association); (v)obligations of the Resolution Funding Corporation; and (vi)consolidated system-
wide bonds and notes of the Farm Credit System;
(d)Money market funds registered under the 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 at least AAAm-G, AAAm or AAm, and a rating by Moody’s of Aaa, Aa1 or Aa2 (such funds
may includethose for which the Trustee or an affiliate receives and retains a fee for services
provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise);
(e)Certificates of deposit (including those of the Trustee, its parent and its
affiliates) secured at all times by collateral described in (a) or (b) above or by collateral that may be
used by a nationalbank for purposes of satisfying its obligations to collateralize pursuant to federal
law, which have a maturity not greater than one year from the date of investment and which are
issued by commercial banks, savings and loan associations or mutual savingsbanks;
(f)Certificates of deposit, savings accounts, deposit accounts or money market
deposits (including those of the Trustee and its affiliates), but only to the extent that the amount
being invested in such certificates of deposit, savings accounts, deposit accounts or money market
deposits are fully insured by FDIC, including BIF and SAIF;
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(g)Investment agreements, including guaranteed investment contracts, forward
purchase agreements, reserve fund put agreements and collateralized investment agreements with an
entity rated “Aa” or better by Moodys’ and “AA” or better by S&P, or unconditionally guaranteed by
an entity rated “Aa” or better by Moodys’ and “AA” or better by S&P;
(h)Commercial paper rated, at the time of purchase, “Prime-1” by Moody’s and
“A-1+” or better by S&P;
(i)Bonds or notes issued by any state or municipality which are rated by
Moody’s and S&P in one of the two highest rating categories assigned by such agencies;
(j)Deposit accounts, federal funds or bankers acceptances with a maximum term
of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of
“Prime-1” or “A3” or better by Moody’s, and “A-1+” by S&P; and
(k)The Local Agency Investment Fund that is administered by the California
Treasurer for the investment of funds belonging to local agencies within the State of California,
provided that for investment of funds held by the Trustee, the Trustee is entitled to make investments
and withdrawals in its own name as Trustee.
“Pledged Tax Revenues”means all taxes (i) that were eligible for allocation to the Former
Agency with respect to the Project Areasand are allocated to the Successor Agency pursuant to
Article6 of Chapter 6 (commencing with Section33670) of the Law and Section16 of ArticleXVI
of the Constitution of the State, or pursuant to other applicable State laws and (ii) that are available
for deposit and depositedby the Auditor-Controller of the County in the Redevelopment Property
Tax Trust Fund, all as provided in Section 34172(d) of the Dissolution Act. [Carve out for prior
agreements containing pledges or negative covenants, if any]
“Principal Account”means the account by that name established and held by the Trustee
pursuant to Section 4.03(b).
“Principal Corporate Trust Office”means the corporate trust office of the Trustee in Los
Angeles, California, or such other or additional offices as the Trustee may designate in writing to the
Successor Agency from time to time as the corporate trust office for purposes of the Indenture;
except that with respect to presentation of Bonds for payment or for registration of transfer and
exchange, such term means the office or agency of the Trustee at which, at any particular time, its
corporate trust agency business is conducted.
“Project Areas”means the Merged Chula VistaRedevelopment Project Area and the
Bayfront/Town Centre Project Area.
“Qualified Reserve Account Credit Instrument”means (i)the 2016ReservePolicy,and
(ii)an irrevocable standby or direct-pay letter of credit, insurance policy, or surety bond issued by a
commercial bank or insurance company and deposited with the Trusteewith respect to other Bonds,
provided that all of the following requirements are met at the time of acceptance thereof by the
Trustee: (a)S&P or Moody’s have assigned a long-term credit rating to such bank or insurance
company at the time of issuance of such Qualified Reserve Account Credit Instrument of “A”
(without regard to modifier) or higher; (b)such letter of credit, insurance policy or surety bond has a
term of at least 12 months; (c)such letter of credit, insurance policy or surety bond has a stated
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amount at least equal to the portion of the Reserve Requirement with respect to the Bonds with
respect to which it is deposited orwith respect to which funds are proposed to be released; and
(d)the Trustee is authorized pursuant to the terms of such letter of credit, insurance policy or surety
bond to draw thereunder an amount equal to any deficiencies which may exist from time to time in
the Interest Account or the Principal Account for the purpose of making payments required pursuant
to Sections 4.03(a), 4.03(b) or 4.03(c) of this Indenture.
“Rebate Fund” is defined in Section 4.04.
“Recognized Obligation Payment Schedule”meansa Recognized Obligation Payment
Schedule, each prepared and approved from time to time pursuant to subdivision (l) of Section34177
of the California Health and Safety Code.
“Record Date”means, with respect to any Interest Payment Date, the close of business on
the fifteenth (15th) calendar day of the month preceding such Interest Payment Date, whether or not
such fifteenth (15th) calendar day is a Business Day.
“Redemption Account”means the account by that name established and held by the Trustee
pursuant to Section 4.03(d).
“Redevelopment Obligation Retirement Fund”means the fund by that name established
pursuant to California Health and Safety Code Section34170.5(b) and administered by the Successor
Agency.
“Redevelopment Plans”means, collectively,(i)the Amended and Restated Redevelopment
Plan for theMerged Chula VistaRedevelopment Project Area adopted and approved by Ordinance
No.2962,adopted by the City Council of the City on May4, 2004, and (ii)the Redevelopment Plan
for the Bayfront/Town Centre Project Area adopted and approved by Ordinance No.____,adopted
by the City Council of the City on July17, 1979, assuch Redevelopment Plans haveheretofore been
amended and as they may hereafter be amended in accordance with the law.
“Redevelopment Projects”means the undertaking of the Successor Agency pursuant to the
Redevelopment Plans and the Law for the redevelopment of the Project Areas.
“Redevelopment Property Tax Trust Fund”means the fund by that name established
pursuant to California Health & Safety Code Sections 34170.5(a) and 34172(c) and administered by
the Auditor-Controller of the County.
“Refunded Bonds”means, collectively, the 2006A Bonds, the 2006B Bonds and the 2008
Bonds.
“Refunding Law”means Article11 (commencing with Section53580) of Chapter3 of
Part 1 of Division2 of Title5 of the Government Code of the State, and the acts amendatory thereof
and supplemented thereto.
“Registration Books”means the records maintained by the Trustee pursuant to Section2.08
for the registration and transfer of ownership of the Bonds.
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“Report”means a document in writing signed by an Independent Redevelopment Consultant
and including:
(a)a statement that the person or firm making or giving such Report has read the
pertinent provisions of this Indenture to which such Report relates;
(b)a brief statement as to the nature and scope of the examination or
investigation upon which the Report is based; and
(c)a statement that, in the opinion of such person or firm, sufficient examination
or investigation was made as is necessary to enable said consultant to express an informed opinion
with respect to the subject matter referred to in the Report.
“Request for Last and Final ROPS Approval”meansa request submitted by the Successor
Agency pursuant to Section 34191.6 of the Dissolution Act for approval by the Department of
Finance of a Last and Final ROPS or any amendment to anapproved Last and Final ROPS.
“Reserve Account”means the account by that name established and held by the Trustee
pursuant to Section 4.03(c).
“Reserve Requirement”means, subject to Section4.03(c) of this Indenture, with respect to
the 2016 Bonds and each series of Bonds, the lesser of
(i)125% of the average Annual Debt Service with respect to that series of the
Bonds,
(ii)Maximum Annual Debt Service with respect to that series of the Bonds, or
(iii)with respect to an individual series of Bonds, 10% of the original principal
amount of thatseries of Bonds (or, if such series of Bonds has more than a de minimis amount of
original issue discount or premium, 10% of the issue price of such series of Bonds);
provided, that in no event shall the Successor Agency, in connection with the issuance of Bonds be
obligated to deposit an amount in the Reserve Account whichis in excess of the amount permitted by
the applicable provisions of the Code to be so deposited from the proceeds of tax-exempt bonds
without having to restrict the yield of any investment purchased with any portion of such deposit and,
in the event the amount of any such deposit into the Reserve Account is so limited, the Reserve
Requirement shall, in connection with the issuance of such Bonds, be increased only by the amount
of such deposit as permitted by the Code; and, provided further that the Successor Agency may meet
all or a portion of the Reserve Requirement by depositing a Qualified Reserve Account Credit
Instrument meeting the requirements of Section4.03(c) hereof.
“ROPSPeriod”means each annual period beginning on July1 of any calendar year and
ending on June 30 of the next calendar year, or such other period as provided in the Dissolution Act.
“S&P”means Standard & Poor’s Financial Services LLC, a division of McGraw Hill
Financial, and its successors.
“Securities Depositories”means The Depository Trust Company, New York, New York
10041-0099, Fax-(212)855-7232; or, in accordance with then current guidelines of the Securities and
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Exchange Commission, such other addresses and/or such other securities depositories as the
Successor Agency may designate in a Written Request of the Successor Agency delivered to the
Trustee.
“Serial Bonds”means all Bonds other than Term Bonds.
“Special Fund”means the fund held by the Successor Agency establishedwithin the
Redevelopment Obligation Retirement Fundpursuant to Section4.02.
“State”means the State of California.
“Supplemental Indenture”means any supplement to this Indenturewhich has been duly
adopted or entered into by the Successor Agency, but only if and to the extent that such
Supplemental Indenture is specifically authorized hereunder.
“Term Bonds”means that portion of any Bondspayable from mandatory sinking account
payments.
“Trustee”means U.S. Bank NationalAssociation, as trustee hereunder, or any successor
thereto appointed as trustee hereunder in accordance with the provisions of ArticleVI.
“Written Request of the Successor Agency”or “Written Certificate of the Successor
Agency”means a request or certificate, in writing signed by the Executive Directoror Treasurer of
the Successor Agency, or the designee of either, or by any other officer of the Successor Agency or
the City duly authorized by the Successor Agency for that purpose.
“2006A Bonds”means the Redevelopment Agency of the City of Chula Vista
Bayfront/Town Centre Redevelopment Project 2006 Senior Tax Allocation Refunding Bonds,
SeriesA, currently outstanding in the aggregate principal amount of $8,770,000.
“2006ABonds Escrow Agreement”means the escrow agreement by and between the
Successor Agency and the Escrow Bankdated the Closing Date and relating tothe 2006A Bonds.
“2006BBonds”means the Redevelopment Agency of the City of Chula Vista
Bayfront/Town Centre Redevelopment Project 2006 Subordinate Tax Allocation Refunding Bonds,
SeriesB, currently outstanding in the aggregate principal amount of $8,245,000.
“2006BBonds Escrow Agreement”means the escrow agreement by and between the
Successor Agency and the Escrow Bankdated the Closing Dateandrelating tothe 2006BBonds.
“2008Bonds”means the Redevelopment Agency of the City of Chula Vista2008 Tax
Allocation Refunding Bonds(Merged Redevelopment Project), currently outstanding in the
aggregate principal amount of $20,450,000.
“2008Bonds Escrow Agreement”means the escrow agreement by and between the
Successor Agency and the Escrow Bankdated the Closing Date and relating tothe 2008Bonds.
“2016 Bonds” means the $__________initial aggregate principal amount of Successor
Agency to the Redevelopment Agencyof the City of Chula Vista Tax Allocation Refunding Bonds,
Series 2016.
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“2016 Insurance Policy” means the Municipal Bond Insurance Policy issued by the 2016
Insurer that guarantees the scheduled payment of principal of and interest on the 2016 Insured Bonds
when due.
“2016 Insured Bonds” means the 2016 Bonds [maturing on and after September 1, 20__.]
“2016 Insurer” means _________________________, or any successor thereto.
“2016 Refunding Fund” means the 2016 Refunding Fund established and held by the
Trustee pursuant to Section 3.04.
“2016ReservePolicy”means the Municipal Bond Debt Service Reserve Insurance Policy
issued by the 2016 Insurer guaranteeing certain payments into the Reserve Account with respect to
the 2016Bonds as provided therein and subject to the limitation set forth therein.
Section 1.03Rules of Construction. All references herein to “Articles,” “Sections” and
other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture, and
the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Indenture as
a whole and not to any particular Article, Section or subdivision hereof.
ARTICLE II
AUTHORIZATION AND TERMS
Section 2.01Authorization of 2016 Bonds. One initial issueof Bonds is hereby
authorized to be issued by the Successor Agencyunder and subject to the terms of this Indenture, the
Refunding Law, the Dissolution Act and the Law. This Indenture constitutes a continuing agreement
with the Owners of all of the Bonds issued or to be issued hereunder and then Outstanding to secure
the full and final payment of principal and redemption premiums (if any) and the interest on all
Bonds which may from time to time be executed and delivered hereunder, subject to the covenants,
agreements, provisions and conditions herein contained. Such initial issues of Bonds shall be
designated the “Successor Agency to the Redevelopment Agency of the City of Chula VistaTax
AllocationRefunding Bonds, Series 2016.” The 2016Bonds shall be issued in the initial aggregate
principal amount of $__________.
Section 2.02Terms of 2016 Bonds. The 2016 Bonds shall be issued in fully registered
form without coupons. The 2016 Bonds shall be issued in denominations of $5,000 or any integral
multiple thereof, so long as no 2016 Bondshall have more than one maturity date. The2016 Bonds
shall be dated as of their Closing Date. The 2016 Bonds shall be lettered and numbered as the
Trustee shall prescribe.
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The 2016 Bonds shall mature and shall bear interest (calculated on the basis of a 360-day
year comprised of twelve 30-day months) at the rate per annum as follows:
Maturity Date
(September 1)
Principal
Amount
Interest
Rate
$%
Each 2016 Bondshall bear interest from the Interest Payment Date next preceding the date of
authentication thereof, unless (a)it is authenticated after a Record Date and on or before the
following Interest Payment Date, in which event it shall bear interest from such Interest Payment
Date; or (b)it is authenticated on or before February15, 2017, in which event it shall bear interest
from its Closing Date; provided, however, that if, as of the date of authentication of any 2016 Bond,
interest thereon is in default, such 2016 Bondshall bear interest from the Interest Payment Date to
which interest has previously been paid or made available for payment thereon.
Interest on the 2016 Bonds (including the final interest payment upon maturity or
redemption) is payable when due by check or draft of the Trustee mailed on the Interest Payment
Date to the Owner thereof at such Owner’s address as it appears on the Registration Books at the
close of business on the preceding Record Date; provided that at the written request of the Owner of
at least $1,000,000 aggregate principal amount of either the 2016Bonds, which written request is on
file with the Trustee as of any Record Date, interest on such 2016Bonds shall be paid on the
succeeding Interest Payment Dateby wireto such account in the United States as shall be specified
in such written request. The principal of the 2016 Bonds and premium, if any,upon redemption, are
payable in lawful money of the United States of America upon presentation and surrender thereof at
the Principal Corporate Trust Office of the Trustee.
Section 2.03Redemption of 2016 Bonds.
(a)Optional Redemption. The 2016 Bonds maturing on or prior to September1,
20__are not subject to optional redemption. The 2016Bonds maturing on or after September1,
20__, are subject to optional redemption prior to their respective maturity dates as a whole, or in part
by lot, on any date on or after September1, 20__, by such maturity or maturities as shall be directed
by the Successor Agency (or in absence of such direction, pro rata by maturity and by lot within a
maturity), from any source of available funds. Such optional redemption shall be at a redemption
price equal to 100% of the principal amount to be redeemed, plus accrued but unpaid interest to the
date fixed for redemption, without premium.
(b)Mandatory Sinking Fund Redemption.The 2016 Bonds that are Term Bonds
maturing September1, 20__ and September1, 20__ shall also be subject to mandatory redemption in
whole, or in part by lot, on September1 in each year, commencing September1, 20__ and
September1, 20__, respectively, as set forth below, from sinking fund payments made by the
Successor Agency to the Principal Account pursuantto Section 4.03(b), at a redemption price equal
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to the principal amount thereof to be redeemed, without premium, in the aggregate respective
principal amounts and on September1 in the respective years as set forth in the following table[s];
provided however, that (y)in lieu of redemption thereof such 2016 Term Bonds may be purchased by
the Successor Agency pursuant to Section 2.03(g) hereof, and (z)if some but not all of such 2016
Term Bonds have been redeemed pursuant to subsection (a) above, the totalamount of all future
sinking fund payments shall be reduced by the aggregate principal amount of such 2016 Term Bonds
so redeemed, to be allocated among such sinking fund payments in integral multiples of $5,000 as
determined by the Successor Agency (notice of which determination shall be given by the Successor
Agency to the Trustee).
2016 Term Bonds of 20__
September 1 Principal Amount
2016 Term Bonds of 20__
September 1 Principal Amount
(c)Notice of Redemption; Rescission. TheTrustee on behalf and at the expense
of the Successor Agency shall mail (by first class mail, postage prepaid) notice of any redemption at
least twenty (20) but not more than sixty (60) days prior to the redemption date, (i) to any Bond
Insurer and to theOwners of any Bonds designated for redemption at their respective addresses
appearing on the Registration Books, and (ii) to the Securities Depositories and one or more
Information Services designated in a Written Request of the Successor Agency filed with the
Trustee; but such mailing shall not be a condition precedent to such redemption and neither failure to
receive any such notice nor any defect therein shall affect the validity of the proceedings for the
redemption of such Bonds or the cessation of the accrual of interest thereon. Such notice shall state
the redemption date and the redemption price, shall state, in the case of a redemption pursuant to (a)
above, that such redemption is conditioned upon the timely delivery of the redemption price by the
Successor Agency to the Trustee for deposit in the Redemption Account, shall designate the CUSIP
number of the Bonds to be redeemed, shall state the individual number of each Bond to be redeemed
or shall state that all Bonds between two stated numbers (both inclusive) or all of the Bonds
Outstanding are to be redeemed, and shall require that such Bonds be then surrendered at the
Principal Corporate Trust Office of the Trustee for redemption at the redemption price, giving notice
also that further intereston such Bonds will not accrue from and after the redemption date.
The Successor Agency shall have the right to rescind any optional redemption by
written notice to the Trustee on or prior to the date fixed for redemption. Any such notice of optional
redemption shall be canceled and annulled if for any reason funds will not be or are not available on
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the date fixed for redemption for the payment in full of the Bonds then called for redemption, and
such cancellation shall not constitute an Event of Default under this Indenture. The Successor
Agency and the Trustee shall have no liability to the Owners or any other party related to or arising
from such rescission of redemption. The Trustee shall mail notice of such rescission of redemption
in the same manner and to the same recipients as the original notice of redemption was sent.
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, the Bonds being redeemed with the proceeds of such
check or other transfer.
(d)Partial Redemption of Bonds. In the event only a portion of any Bond is
called for redemption, then upon surrender of such Bond the Successor Agency shall execute and the
Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Successor Agency,
a new Bond or Bonds of the same interest rate and maturity, of authorized denominations, in
aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed.
(e)Effect of Redemption. From and after the date fixed for redemption, if funds
available for the payment of the redemption price of and interest on the Bonds so called for
redemption shall have been duly deposited with the Trustee, such Bonds so called shall cease to be
entitled to any benefit under this Indenture other than the right to receive payment of the redemption
price and accrued interest to the redemption date, and no interest shall accrue thereon from and after
the redemption date specified in such notice.
(f)Manner of Redemption. Whenever any Bonds or portions thereof are to be
selected for redemption by lot, the Trustee shall make such selection, in such manner as the Trustee
shall deem appropriate, and shall notify the Successor Agency thereof to the extent Bonds are no
longer held in book-entry form. In the event of redemption by lot of Bonds, the Trustee shall assign
to each Bond then Outstanding a distinctive number for each $5,000 of the principal amount of each
such Bond. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so
selected, but only so much of the principal amount of each such Bond of a denomination of more
than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected.
All Bonds redeemed or purchased pursuant to this Section 2.03 shall be cancelled and destroyed.
(g)Purchase in Lieu of Redemption. In lieu of redemption of the Serial or Term
Bonds pursuant to a Supplemental Indenture, amounts on deposit in the Special Fund or in the
Principal Account may also be used and withdrawn by the Successor Agency and the Trustee,
respectively, at any time, upon the Written Request of the Successor Agency, for the purchase of the
Serial or Term Bonds at public or private sale as and when and at such prices (including brokerage
and other charges, but excluding accrued interest, which is payable from the Interest Account) as the
Successor Agency may in its discretion determine. The par amount of any Serial or Term Bonds so
purchased by the Successor Agency in any twelve-month period ending on July 1 in any year shall be
credited towards and shall reduce the par amount of the Serial or Term Bonds required to be
redeemed pursuant to a Supplemental Indenture on September 1 in each year; provided that evidence
satisfactory to the Trustee of such purchase has been delivered to the Trustee by said July 1.
Section 2.04Form of 2016 Bonds. The 2016Bonds, the form of Trustee’s Certificate of
Authentication, and the form of Assignment to appear thereon, shall be substantially in the form set
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forth in ExhibitA, which is attached hereto and by this reference incorporated herein, with necessary
or appropriate variations, omissions and insertions, as permitted or required by this Indenture.
Section 2.05Execution of Bonds. The Bonds shall be executed on behalf of the
Successor Agency by the signature of its Executive Directoror its Treasurer or the written designee
of either and the signature of its Secretary who are in office on the date of execution and delivery of
this Indenture or at any time thereafter. Either or both of such signatures may be made manually or
may be affixed by facsimile thereof. If any officer whose signature appears on any Bond ceases to be
such officer before delivery of the Bonds to the purchaser, such signature shall nevertheless be as
effective as if the officer had remained in office until the delivery of the Bonds to the purchaser. Any
Bond may be signed and attested on behalf of the Successor Agency by such persons as at the actual
date of the execution of such Bond shall be the proper officers of the Successor Agency although on
the date of such Bond any such person shall not have been such officer of the Successor Agency.
Only such of the Bonds as shall bear thereon a Certificate of Authentication in the form
hereinbefore set forth, manually executed and dated by the Trustee, shall be valid orobligatory for
any purpose or entitled to the benefits of this Indenture, and such Certificate shall be conclusive
evidence that such Bonds have been duly authenticated and delivered hereunder and are entitled to
the benefits of this Indenture. In the event temporary Bonds are issued pursuant to Section2.09
hereof, the temporary Bonds may bear thereon a Certificate of Authentication executed and dated by
the Trustee, may be initially registered by the Trustee, and, until so exchanged as provided under
Section2.09 hereof, the temporary Bonds shall be entitled to the same benefits pursuant to this
Indenture as definitive Bonds authenticated and delivered hereunder.
Section 2.06Transfer of Bonds. Any Bond may, in accordance with its terms, be
transferred, upon the Registration Books, by the person in whose name it is registered, in person or
by a duly authorized attorney of such person, upon surrender of such Bond to the Trustee at its
Principal Corporate Trust Office for cancellation, accompanied by delivery of a written instrument of
transfer in a form acceptable to the Trustee, duly executed. Whenever any Bond shall be surrendered
for transfer, the Successor Agency shall execute and the Trustee shall thereupon authenticate and
deliver to the transferee a new Bond or Bonds of like series, tenor, maturity and aggregate principal
amount of authorized denominations. The Trustee shall collect from the Owner any tax or other
governmental charge on the transfer of any Bonds pursuant to this Section2.06. The cost of printing
Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer
shall be paid by the Successor Agency.
The Trustee may refuse to transfer, under the provisions of this Section2.06, either (a)any
Bonds during the period fifteen (15) days prior to the date established by the Trustee for the selection
of Bonds for redemption, or (b)any Bonds selected by the Trustee for redemption.
Section 2.07Exchange of Bonds. Bonds may be exchanged at the Principal Corporate
Trust Office of theTrustee for Bonds of the sameseries,tenor and maturity and of other authorized
denominations. The Trustee shall collect any tax or other governmental charge on the exchange of
any Bonds pursuant to this Section2.07. The cost of printing Bonds and anyservices rendered or
expenses incurred by the Trustee in connection with any exchange shall be paid by the Successor
Agency.
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The Trustee may refuse to exchange, under the provisions of this Section2.07, either (a)any
Bonds during the fifteen (15) days prior to the date established by the Trustee for the selection of
Bonds for redemption or (b)any Bonds selected by the Trustee for redemption.
Section 2.08Registration of Bonds. The Trustee will keep or cause to be kept, at its
Principal Corporate Trust Office, sufficient records for the registration and registration of transfer of
the Bonds, which shall at all times during normal business hours be open to inspection and copying
by the Successor Agency, upon reasonable prior notice to the Trustee; and, upon presentation for
such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or
transfer or cause to be registered or transferred, on the Registration Books Bonds as hereinbefore
provided.
Section 2.09Temporary 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 denominations as may be determined by the Successor
Agency, and may contain such reference to any of the provisions of this Indenture as may be
appropriate. Every temporary Bond shall be executed by the Successor Agency upon the same
conditions and in substantially the same manner as the definitive Bonds. If the Successor Agency
issuestemporary Bonds, it will execute and furnish definitive Bonds without delay, and thereupon
the temporary Bonds shall be surrendered, for cancellation, in exchange therefor at the Principal
Corporate Trust Office of the Trustee, and the Trustee shall authenticate and deliver in exchange for
such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized
denominations, interest rates and like maturities. Until so exchanged, the temporary Bonds shall be
entitled to the same benefits pursuant to this Indenture as definitive Bonds authenticated and
delivered hereunder.]
Section 2.10Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the Successor Agency, at the expense of the Owner of such Bond, shall execute, and the
Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and amount in exchange
and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so
mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it. If any Bond
shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the
Trustee and, if such evidence be satisfactory to it and indemnity satisfactory to it shall be given, the
Successor Agency, at the expense of the Owner, shall execute, and the Trustee shall thereupon
authenticate and deliver, a new Bond of like tenor and amount in lieu of and in substitution for the
Bond so lost, destroyed or stolen (or if any such Bond has maturedor has been called for redemption,
instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof upon
receipt of indemnity satisfactory to the Trustee and the Successor Agency). The Successor Agency
may require payment by the Owner of a sum not exceeding the actual cost of preparing each new
Bond issued under this Section2.10 and of the expenses which may be incurred by the Successor
Agency and the Trustee in the premises. Any Bond issued 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 Successor Agency whether or not the Bond so alleged to be lost,
destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately
entitled to the benefits of this Indenture with all other Bonds issued pursuant to this Indenture.
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Section 2.11Book-Entry System.
(a)Original Delivery. The Bonds shall be initially delivered in the form of a
separate single fully registered Bond without coupons (which may be typewritten) for each maturity
of the Bonds. Upon initial delivery, the ownership of each such Bond shall be registered on the
Registration Books in the name of the Nominee. Except as provided in subsection (c), the ownership
of all of the Outstanding Bonds shall be registered in the name of the Nominee on the Registration
Books.
With respect to Bonds the ownership of which shall be registered in the name of the
Nominee, neither the Successor Agency nor the Trustee shall have any responsibility or obligation to
any Depository System Participant or to any person on behalf of which the Depository System
Participant holds an interest in the Bonds. Without limiting the generality of the immediately
preceding sentence, neither the Successor Agency nor the Trustee shall have any responsibility or
obligation with respect to (i)the accuracy of the records of the Depository, the Nominee or any
Depository System Participant with respect to any ownership interest in the Bonds, (ii)the delivery
to any Depository System Participant or any other person, other than a Bondowner as shown in the
Registration Books, 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 Successor Agency elects to redeem the Bonds in part, (iv)the payment to any Depository
System Participant or any other person, other than a Bondowner as shown in the Registration Books,
of any amount with respect to principal, premium, if any, or interest on the Bonds or (v)any consent
given or other action taken by the Depository as Owner of the Bonds. The Successor Agency and the
Trustee may treat and consider the person in whose name each Bond is registered as the absolute
owner of such Bond for the purpose of payment of principal, premium and interest on such Bond, for
the purpose of giving notices of redemption and other matters with respect to such Bond, for the
purpose of registering transfers of ownership of such Bond, and for all other purposes whatsoever.
The Trustee shall pay the principal of and interest and premium, if any, on the Bonds only to the
respective Owners or their respective attorneys duly authorized in writing, and all such payments
shall be valid and effective to fully satisfy and discharge all obligations with respect to payment of
principal of and interest and premium, if any, on the Bonds to the extent of the sum or sums so paid.
No person other than a Bondowner shall receive a Bond evidencing the obligation of the Successor
Agency to make payments of principal, interest and premium, if any, pursuant to this Indenture.
Upon delivery by the Depository to the Nominee of written notice to the effect that the Depository
has determined to substitute a new nominee in its place, and subject to the provisions herein with
respect to Record Dates, such new nominee shall become the Nominee hereunder for all purposes;
and upon receipt of such a notice theSuccessor Agency shall promptly deliver a copy of the same to
the Trustee.
(b)Representation Letter. In order to qualify the Bonds for the Depository’s
book-entry system, the Successor Agency shall execute and deliver to such Depository a letter
representing such matters as shall be necessary to so qualify the Bonds. The execution and delivery
of such letter shall not in any way limit the provisions of subsection (a) above or in any other way
impose upon the Successor Agency or the Trustee any obligation whatsoever with respect to persons
having interests in the Bonds other than the Bondowners. The Trustee agrees to comply with all
provisions in such letter with respect to the giving of notices thereunder by the Trustee. In addition
to the execution and delivery of such letter, upon written request of the Depository or the Trustee, the
Successor Agency may take any other actions, not inconsistent with this Indenture, to qualify the
Bonds for the Depository’s book-entry program.
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(c)Transfers Outside Book-Entry System. In the event that either (i)the
Depository determines not to continue to act as Depository for the Bonds, or (ii)the Successor
Agency determines to terminate the Depository as such, then the Successor Agency shall thereupon
discontinue the book-entry system with such Depository. In such event, the Depository shall
cooperate with the Successor Agency and the Trustee in the issuance of replacement Bonds by
providing the Trustee with a list showing the interests of the Depository System Participants in the
Bonds, and by surrendering the Bonds, registered in the name of the Nominee, to the Trustee on or
before the date such replacement Bonds are to be issued. The Depository, by accepting delivery of
the Bonds, agrees to be bound by the provisions ofthis subsection (c). If, prior to the termination of
the Depository acting as such, the Successor Agency fails to identify another Securities Depository to
replace the Depository, then the Bonds shall no longer be required to be registered in the Registration
Books in the name of the Nominee, but shall be registered in whatever name or names the Owners
transferring or exchanging Bonds shall designate, in accordance with the provisions of this ArticleII.
Prior to its termination, the Depository shall furnish the Trustee with the names and addresses of the
Depository System Participants and respective ownership interests thereof.
(d)Payments to the Nominee. Notwithstanding any other provision of this
Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments
with respect to principal of and interest and premium, if any, on such Bond and all notices with
respect to such Bond shall be made and given, respectively, as provided in the letter described in
subsection (b) of this Section or as otherwise instructed by the Depository.
Section 2.12Applicability of Provisions to Parity Debt. Unless otherwise provided in a
Supplemental Indenture, the provisions of Sections2.03(c)through (g)and 2.05 through 2.11 shall
apply to allBonds.
ARTICLE III
DEPOSIT AND APPLICATION; ADDITIONAL DEBT
Section 3.01Issuance of Bonds. Upon the execution and delivery of this Indenture, the
Successor Agency shall execute and deliver to the Trustee the 2016Bonds in the aggregate principal
amount of $__________, and the Trusteeshall authenticate and deliver the 2016Bonds upon the
Written Request of the Successor Agency.
Section 3.02Application of Proceeds of Sale and Certain Other Amounts. On the
Closing Date with respect to the 2016Bonds, the proceeds of sale of the 2016Bondsreceivedbythe
Trustee shall beapplied as follows:
(i)The Trusteeshall deposit the amount of $___________in the Costs
of Issuance Fund.
(ii)The Trustee shall deposit $___________, being the remaining amount
of proceeds of the 2016Bonds, in the 2016 Refunding Fund.
Section 3.03Costs of Issuance Fund. There is hereby established a separate fund to be
known as the “Costs of Issuance Fund”, which shall be held by the Trustee in trust. The moneys in
the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time totime to pay the
Costs of Issuance with respect to the 2016 Bonds upon submission of a Written Request of the
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Successor Agency stating the person to whom payment is to be made, the amount to be paid, the
purpose for which the obligation was incurred and that such payment is a proper charge against said
fund. Each such Written Request of the Successor Agency shall be sufficient evidence to the Trustee
of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts.
On the date which is six (6) months following the Closing Date with respect to the 2016 Bonds, or
upon the earlier Written Request of the Successor Agency, all amounts (if any) remaining in the
Costs of Issuance Fund shall be withdrawn therefrom by the Trusteeand transferred to the Interest
Account within the DebtService Fund, and the Costs of Issuance Fund shall be closed.
Section 3.04Refunding Fund.
(a)There shall be established a separate and segregated fund to be known as the
“2016Refunding Fund” (the “2016 Refunding Fund”).
(b)On the Closing Date with respect to the 2016 Bonds, the Trustee shall
disburse the $___________on deposit in the 2016 Refunding Fund as follows:
(i)$___________shall be transferred to the Escrow Bank fordeposit
pursuant to the 2006ABonds Escrow Agreement;
(ii)$___________shall be transferred to the Escrow Bank fordeposit
pursuant to the 2006BBonds Escrow Agreement; and
(iii)$__________ shall be transferred to the Escrow Bank for deposit
pursuant to the 2008 Bonds Escrow Agreement.
Upon making such transfers, the Trustee shall close the 2016 Refunding Fund.
Section 3.05Issuance of Parity Debt. In addition to the 2016 Bonds, the Successor
Agency may issue Parity Debt to refund any outstanding 2016 Bonds or other Parity Debt in such
principal amount as shall be determined by the Successor Agency. The Successor Agency may issue
and deliver any such Parity Debt subject to the following specific conditions all of which are hereby
made conditions precedent to the issuance and delivery of such Parity Debt:
(a)No Event of Default hereunder or an event of default under any Parity Debt
Instrument shall have occurred and be continuing unless cured by the issuance of such Parity Debt;
(b)The Parity Debtshall provide savings to the Successor Agency in compliance
with Health and Safety Code section 34177.5;
(c)In the event the Successor Agency issues Parity Debtas Bondspursuant to a
Supplemental Indenture, the Successor Agency shall cause the amount on deposit in the Reserve
Account to equal the Reserve Requirement; and
(d)The Successor Agency shall deliver to the Trustee a Written Certificate of the
Successor Agency certifying that the conditions precedent to the issuance of such Parity Debt set
forth above have been satisfied.
Section 3.06Issuance of Subordinate Debt. Notwithstanding the foregoing, no provision
herein shall prevent the Successor Agency from issuing additional bonds or incurringother loans,
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advances or indebtedness payable from Pledged Tax Revenues on a subordinate basis to the 2016
Bonds and the Bonds.
ARTICLE IV
SECURITY OF BONDS; FLOW OFFUNDS
Section 4.01Security of Bonds; Equal Security. Subject to the provisions of Section
4.02 and Section 6.06 hereof allowing for the application of Pledged Tax Revenues, all Pledged Tax
Revenuesandthe Redevelopment Obligation Retirement Fund, including the Special Fund therein
and all amounts in the Redevelopment Property Tax Trust Fund, [including without limitation any
override tax revenues attributable to tax rate overrides levied by taxing agencies within the Project
Areas that were pledged to the Refunded Bonds], are irrevocably pledged under this Indenture to
secure the payment of the principal of and interest or redemption premium (if any) on the 2016
Bonds and all Parity Debt without preference or priority for series, issue, number, dated date, sale
date,date of execution or date of delivery. Such pledge shall constitute a first and exclusive lien on
and security interest in the Pledged Tax Revenuesandthe Redevelopment Obligation Retirement
Fund, including the Special Fund therein, and all amounts in the Redevelopment Property Tax Trust
Fund, [including without limitation any override tax revenues attributable to tax rate overrides levied
by taxing agencies within the Project Areas that were pledged to the Refunded Bonds], and will
attach, be perfected and be valid and binding against all parties having claims of any kind in tort,
contract or otherwise against the Successor Agency, irrespective of whether such parties have notice
of this Indenture; provided however, the parties hereto acknowledge that theAuditor-Controller of
the County is authorized by Section 34183(a) of the Dissolution Act to use Pledged Tax Revenues to
pay the County’s administrative costs allowed under Section 34182 and Section 95.3 of the Revenue
and Taxation Codeand is required bySection 34183(a)(1)of the Dissolution Act to pay Pledged Tax
Revenues to taxing entities pursuant to the Pass-Through Agreements and Sections33607.5,33607.7
and 33676 of the Law (unless such payments are subordinated to payments on the 2016 Bonds and
Parity Debtpursuant to Section 33607.5(e) of the Law and 34177.5(c) of the Dissolution Act).
Except for the Pledged Tax Revenues, such amounts and such funds and accounts, no other moneys,
funds, accounts or properties of the Successor Agency arepledgedto, or otherwise liable for, the
payment of principal of or interest or redemption premium (if any) on the 2016 Bonds or Parity Debt
except as provided in the following paragraphwith respect to the 2016 Bonds and other Bonds.
The Debt Service Fund and any fund or account created under this Indenture (except the
Rebate Fund), including amounts on deposit therein (including proceeds of the 2016 Bonds), are
irrevocably pledged under this Indenture to secure the payment of the principal of and interest or
redemption premium (if any) on the 2016 Bonds and other Bonds without preference or priority for
series issue, number, dated date, sale date, date of execution or date of delivery. Such pledge shall
constitute a first and exclusive lien on and security interest in the Debt Service Fund and any other
fund or account created under this Indenture (except the Rebate Fund), and including amounts on
deposit therein (including proceeds of the 2016 Bonds), and will attach, be perfected and be valid and
binding against all parties having claims of any kind in tort, contract or otherwise against the
Successor Agency, irrespective of whether such parties have notice of this Indenture.
The parties acknowledge that Section 34177.5(g) of the Dissolution Act provides that the
2016 Bonds and Parity Debt are further secured by a pledge of, and lien on moneys deposited in the
Redevelopment Property Tax Trust Fund held by the Auditor Controller of the County related to the
Successor Agency, which moneys, subject to the payment bythe Auditor Controller of the County of
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certain amounts to the County for administrative costs allowed under Section 34182 and Section 95.3
of the Revenue and Taxation Codeand to taxing entities pursuant to the Pass-Through Agreements
and Sections33607.5,33607.7and 33676of the Law, constitute Pledged Tax Revenues as defined
herein.
In consideration of the acceptance of the 2016 Bonds and other Bonds by those who shall
hold the same from time to time, this Indenture shall be deemed to be and shall constitute a contract
between the Successor Agency and the Owners from time to time of the Bonds, and the covenants
and agreements herein set forth to be performed on behalf of the Successor Agency shall be for the
equal and proportionate benefit, security andprotection of all Owners of the 2016 Bonds and other
Bonds without preference, priority or distinction as to security or otherwise of any of the 2016 Bonds
and other Bonds over any of the others by reason of the number or date thereof or the time of sale,
execution and delivery thereof, or otherwise for any cause whatsoever, except as expressly provided
therein or herein.
Section 4.02Redevelopment Obligation Retirement Fund; Special Fund; Deposit of
Pledged Tax Revenues. There is hereby established a special fund to be known as the “Special
Fund” which is to be held by the Successor Agency within the Redevelopment Obligation Retirement
Fund. The Special Fund shall be held by the Successor Agency separate and apart from other funds
of the Successor Agency.
The Successor Agency shall deposit all of the Pledged Tax Revenues received with respect to
any ROPSPeriod in accordance with Section5.13hereofin the Redevelopment Obligation
Retirement Fund. Immediately upon such deposit, the Successor Agency shall transfer into the
Special Fund all Pledged Tax Revenues allocable to the payment of the principal of and interest or
redemption premium if any on 2016 Bonds and other Bonds. All Pledged Tax Revenues remaining
in the Redevelopment Obligation Retirement Fund andin excess of the amount required to make the
transfersrequired herein to the Special Fund and to make any other payments due hereunder, and
except as may be provided to the contrary in this Indenture or in any Supplemental Indenture or
Parity Debt Instrument, shall be released from the pledge and lien hereunder whenapplied by the
Successor Agency in accordance with the Law, including to the payment of other obligations on a
Recognized Obligation Payment Schedule payable after payment of the Bonds as requiredby Section
34183(a)(2) of the Dissolution Act.
Prior to the payment in full of the principal of and interest and redemption premium (if any)
on the Bonds and the payment in full of all other amounts payable hereunder and under any
Supplemental Indentures or under a Parity Debt Instrument, the Successor Agency shall not have any
beneficial right or interest in the moneys on deposit in the Special Fund, except as may be provided
in this Indenture and in any Supplemental Indenture or in a Parity Debt Instrument.
Section 4.03Deposit of Amounts by Trustee. There is hereby established a trust fund to
be known as the Debt Service Fund, which shall be held by the Trustee hereunder in trust. Moneys
in the Special Fund shall be transferred by the Successor Agency to the Trustee in the following
amounts, at the following times, and deposited by the Trustee in the following respective special
accounts, which are hereby established in the Debt Service Fund, and in the following order of
priority (provided further that, if on thefifth (5th) Business Day prior to the date the Successor
Agency is required to transfer amounts on deposit in the Special Fund to the Trustee there are not
amounts on deposit therein sufficient to make the following deposits, taking into accountamounts
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required to be transferred with respect to Bondsother than the 2016 Bonds, the Successor Agency
shall immediately notify the Trustee of the amount of any such insufficiency):
(a)Interest Account. On or before the fifth (5th) Business Day preceding each
Interest Payment Date, commencing with the Interest Payment Date of March1, 2017, the Successor
Agency shall withdraw from the Special Fund and transfer to the Trustee, for deposit in the Interest
Account an amount which when added to the amount contained in the Interest Account on that date,
will be equal to the aggregate amount of the interest becoming due and payable on the Outstanding
Bonds on such Interest Payment Date. No such transfer and deposit need be made to the Interest
Account if the amount contained therein is at least equal to the interest to become due on the next
succeeding Interest Payment Date upon all of the Outstanding Bonds. All moneys in the Interest
Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on
the Bonds as it shall become due and payable (including accrued interest on any Bonds redeemed
prior to maturity pursuant to this Indenture).
(b)Principal Account. On or before the fifth (5th) Business Day preceding
September1in each year beginning September 1, 2017, the Successor Agency shall withdraw from
the Special Fund and transfer to the Trustee for deposit in the Principal Account an amount which,
when added to the amount then contained in the Principal Account, will be equal to the principal
becoming due and payable on the Outstanding Serial Bonds and Outstanding Term Bonds, including
pursuant to mandatory sinking account redemption, on the next September1.No such transfer and
deposit need be made to the Principal Account if the amount contained therein is at least equal to the
principal to become due on the next September1on all of the Outstanding Serial Bonds and Term
Bonds. All moneys in the Principal Account shall be used and withdrawn by the Trustee solely for
the purpose of paying the principal of the Serial Bonds and the Term Bonds, including by mandatory
sinking account redemption, as the same shall become due and payable.
(c)Reserve Account. There is hereby established in the Debt Service Fund a
separate account known as the “Reserve Account” solelyas security for payments payable by the
Successor Agency pursuant to this Section4.03 and pursuant to any Supplemental Indenture, which
shall be held by the Trustee in trust for the benefit of the Owners of the Bonds. The Reserve
Requirement for the 2016 Bonds will be satisfied by the delivery of the 2016Reserve Policyby the
2016 Insurer on the Closing Date with respect to the 2016 Bonds.
Except as provided in the preceding paragraph and as may be provided in a
Supplemental Indenture, in the event that the amount on deposit in the Reserve Account at any time
becomes less than the Reserve Requirement, the Trustee shall promptly notify the Successor Agency
of such fact. Upon receipt of any such notice and as promptly as is permitted by the Law, the
Successor Agency shall transfer to the Trustee an amount from the Special Fund sufficient to
maintain the Reserve Requirement on deposit in the Reserve Account.
The amounts available under the 2016Reserve Policy shall be used and withdrawn
by the Trustee solely for the purpose of making transfers to the Interest Account and the Principal
Account in such order of priority, in the event of any deficiency at any time in any of such accounts
with respect to the payment of debt service on the 2016Bonds.
Except as provided above, the amount on deposit in the Reserve Account shall be
maintained at the Reserve Requirement at all times prior to the payment of the Bonds in full. If there
shall then not be sufficient Pledged Tax Revenues to transfer an amount sufficientto maintain the
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Reserve Requirement on deposit in the Reserve Account, the Successor Agency shall be obligated to
continue making transfers as Pledged Tax Revenues become available until there is an amount
sufficient to maintain the Reserve Requirement ondeposit in the Reserve Account. No such transfer
and deposit need be made to the Reserve Account so long as there shall be on deposit therein a sum
at least equal to the Reserve Requirement.
All money in the Reserve Account shall be used and withdrawn by the Trustee solely
for the purpose of making transfers hereunder to the Interest Account, the Principal Account and the
Sinking Account, in the event of any deficiency at any time in any of such accounts or for the
retirement of all the Bonds then Outstanding, except that so long as the Successor Agency is not in
default hereunder or under any Parity Debt Instrument, any amount in the Reserve Account in excess
of the Reserve Requirement shall be withdrawn from the Reserve Account semiannually on or before
two (2) Business Days preceding each March1and September1by the Trustee and deposited in the
Special Fund. All amounts in the Reserve Account on the Business Day preceding the final Interest
Payment Date shall be withdrawn from the Reserve Account and shall be transferred to the Interest
Account and the Principal Account, in such order, to the extent required to make the deposits then
required to be made pursuant to this Section4.03.
The Successor Agency shall have the right at any time to direct the Trustee to release
funds from the Reserve Account, in whole or in part, by tendering to the Trustee: (i)a Qualified
Reserve Account Credit Instrument, and (ii)an opinion of Bond Counsel stating that neither the
release of such funds nor the acceptanceof such Qualified Reserve Account Credit Instrument will
cause interest on the Bonds the interest on which is excluded from gross income of the owners
thereof for federal income tax purposes to become includable in gross income for purposes of federal
income taxation. Upon tender of such items to the Trustee, and upon delivery by the Successor
Agency to the Trustee of written calculation of the amount permitted to be released from the Reserve
Account (upon which calculation the Trustee may conclusively rely), the Trustee shall transfer such
funds from the Reserve Account to the Successor Agency to be applied in accordance with the Law.
The Trustee shall comply with all documentation relating to a Qualified Reserve
Account Credit Instrument as shall be required to maintain such Qualified Reserve Account Credit
Instrument in full force and effect and as shall be required to receive payments thereunder in the
event and to the extent required to make any payment when and as required under this paragraph (c).
Upon the expiration of any Qualified Reserve Account Credit Instrument, the Successor Agency
shall either (i)replace such Qualified Reserve Account Credit Instrument with a new Qualified
Reserve Account Credit Instrument, or (ii)deposit or cause to be deposited with the Trustee an
amount of funds equal to the Reserve Requirement, to be derived from the first legally available
Pledged Tax Revenues.
If the Reserve Requirement for a series of Bonds is being maintained partially in cash
and partially with a Qualified Reserve Account Credit Instrument, the cash shall be first used to meet
any deficiency which may exist from time to time in the Interest Account or the Principal Account
for the purpose of making payments required pursuant to Sections 4.03(a) or 4.03(b) of this Indenture
with respect to such series of Bonds. If the Reserve Requirement for a series of Bonds is being
maintained with two or more Qualified Reserve Account Credit Instruments, any draw to meet a
deficiency which may exist from time to time in the Interest Account or the Principal Account for the
purpose of making payments required pursuant to Sections4.03(a), 4.03(b) or 4.03(c) of this
Indenture shall be made in accordance with the terms of such Qualified Reserve Account Credit
Instruments. If the Reserve Requirement with respect to a particular series of Bonds is secured by a
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Qualified Reserve Account Credit Instrument that relates only to such series of Bonds, the
calculation of Reserve Requirement for such series of Bonds shall be calculated on a stand alone
basis.
The Reserve Account may be maintained in the form of one or more separate sub-
accounts which are established for the purpose of holding the proceeds of separate issues of the
Bonds in conformity with applicable provisions of the Code to the extent directed by the Successor
Agency in writing tothe Trustee.
(d)Redemption Account. All moneys in the Redemption Account shall be used
and withdrawn by the Trustee solely for the purpose of paying the principal of and premium, if any,
on Bonds to be redeemed pursuant to any optional redemptionprovision of a Supplemental Indenture
on the date set for such redemption. Interest due on such other Bonds to be redeemed on the date set
for redemption shall, if applicable, be paid from funds available therefor in the Interest Account.
Notwithstanding the foregoing, at any time prior to giving notice of redemption of any such other
Bonds, the Trustee may, at the direction of the Successor Agency, apply amounts deposited or
otherwise to be deposited in the Redemption Account to the purchase of Bonds at public or private
sale, as and when and at such prices (including brokerage and other charges, but excluding accrued
interest on such Bonds, which is payable from the Interest Account) as shall be directed by the
Successor Agency.
Section 4.04Rebate Fund. The Trustee shall establish a separate fund for the 2016Bonds
designated the “Rebate Fund.” Absent an opinion of Bond Counsel that the exclusion from gross
income for federal income tax purposes of interest on the 2016Bonds will not be adversely affected,
the Agency shall cause to be deposited in the Rebate Fund such amounts as are required to be
deposited therein pursuant to this Section and the Tax Certificate. All money at any time deposited
in the Rebate Fund shall be held by the Trustee in trust, for payment to the United States Treasury.
All amounts on deposit in the Rebate Fund for the 2016Bonds shall be governed by this Section and
the Tax Certificate, unless the Successor Agency obtains and delivers to the Trustee an opinion of
Bond Counsel that the exclusion from gross income of interest on the 2016Bonds will not be
adversely affected for federal income tax purposes if such requirements are not satisfied.
Notwithstanding anything to the contrary contained herein or in the Tax Certificate, the Trustee shall
be deemed conclusively to have complied with the provisions of this Section and the Tax Certificate
if the Trustee follows the directions of the Agency, and the Trustee shall have no independent
responsibility to or liability resulting from failure of the Trustee to enforce compliance by the
Agency with the Tax Certificate or the provisions of this Section.
(a)Excess Investment Earnings.
(i)Computation. Within 55 days of the end of each fifth Computation
Year with respect to the 2016Bonds, the Successor Agency shall calculate or cause to be calculated
the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section
1.148-3 of the Rebate Regulations (taking into account any applicable exceptions with respect to the
computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g. the
temporary investments exception of Section 148(f)(4)(B) and the construction expenditure exception
of Section 148(f)(4)(C) of the Code), for this purpose treating the last day of the applicable
Computation Year as a computation date, within the meaning of Section 1.148-1(b) of the Rebate
Regulations (the “Rebatable Arbitrage”). The Successor Agency shall obtain expert advice as to the
amount of the Rebatable Arbitrage to comply with this Section.
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(ii)Transfer. Within 55 days of the end of each fifth Computation Year
with respect to the 2016Bonds, upon the Director of Finance’s written direction, an amountshall be
deposited to the Rebate Fund by the Trustee from any legally available funds, including the other
funds and accounts established herein, so that the balance in the Rebate Fund shall equal the amount
of Rebatable Arbitrage so calculated in accordance with clause (i) of this Section 4.04(a). In the
event that immediately following the transfer required by the previous sentence, the amount then on
deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon
written instructions from the Directorof Finance, the Trustee shall withdraw the excess from the
Rebate Fund and then credit the excess to the Debt Service Fund.
(iii)Payment to the Treasury. The Successor Agency shall direct the
Trustee in writing to pay to theUnited States Treasury, out of amounts in the Rebate Fund.
(X)Not later than 60 days after the end of (A) the fifth
Computation Year with respect to the 2016Bonds, and (B) each applicable fifth Computation Year
thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of
such Computation Year; and
(Y)Not later than 60 days after the payment of all the 2016
Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such
applicable Computation Year, and any income attributable to the Rebatable Arbitrage, computed in
accordance with Section 148(f) of the Code.
(b)In the event that, prior to the time of any payment required to be made from
the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such
payment is due, the Successor Agency shall calculate or cause to be calculated the amount of such
deficiency and deposit an amount received from any legally available source, including the other
funds and accounts established herein, equal to such deficiency in the Rebate Fund prior to the time
such payment is due. Each payment required to be made pursuant to this Section 4.04(a)(iii) shall be
made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which
such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T prepared
by the Successor Agency, or shall be made in such other manner as provided under the Code.
(c)Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund
after redemptionandpayment of the 2016Bonds,the payments described in Section 4.04(a)(iii), and
payments of all fees and expenses of the Trustee shall be transferred by the Trustee to the Successor
Agency at the written direction of the Successor Agency and utilized in any manner by the Successor
Agency.
(d)Survival of Defeasance. Notwithstanding anything in this Section 4.04 or this
Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive
the defeasance of the 2016Bonds and any Parity Bonds.
(e)Trustee Responsible. The Trustee shall have no obligations or responsibilities
under this Section other than to follow the written directions of the Successor Agency. The Trustee
shall have no responsibility to make any calculations of rebate or to independently review or verify
such calculations.
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Section 4.05Provisions Relating to 2016Insurance Policy. Notwithstanding any other
provision herein to the contrary, the provisions in this Section 4.05shall apply so long as the 2016
Insurance Policy is in effect.
[TO COME FROM INSURER]
Section 4.06Provisions Relating to 2016Reserve Policy.Notwithstanding any other
provision herein to the contrary, the provisions in this Section 4.06shall apply so long as the 2016
Reserve Policy is in effect.
[TO COME FROM INSURER]
ARTICLE V
OTHER COVENANTS OF THE SUCCESSOR AGENCY
Section 5.01Punctual Payment. The Successor Agency shall punctually pay or cause to
be paid the principal and interest to become due in respect of all the Bonds togetherwith the
premium thereon, if any, in strict conformity with the terms of the Bonds and of this Indenture. The
Successor Agency shall faithfully observe and perform all of the conditions, covenants and
requirements of this Indenture, all Supplemental Indentures and the Bonds. Nothing herein contained
shall prevent the Successor Agency from making advances of its own moneys howsoever derived to
any of the uses or purposes referred to herein.
Section 5.02Limitation on Additional Indebtedness; Against Encumbrances. The
Successor Agency hereby covenants that, so long as the Bonds are Outstanding, the Successor
Agency shall not issue any bonds, notes or other obligations, enter into any agreement or otherwise
incur any indebtedness, which is in any case payable from all or any part of the Pledged Tax
Revenues(i) on a basis senior to the Bonds or (ii) on a parity with the Bondsexcept for Parity Debt
issued to refund any of the Bonds or otherParity Debt, and thenonly if the requirements of
Section3.05 are met. The Successor Agency will not otherwise encumber, pledge or place any
charge or lien upon any of the Pledged Tax Revenues or other amounts pledged to the Bonds superior
or equal to the pledge and lien herein created for the benefit of the Bonds.
Section 5.03Extension of Payment. The Successor Agency will not, directly or
indirectly, extend or consent to the extension of the time for the payment of any Bond or claim for
interest on any of the Bonds and will not, directly or indirectly, be a party to or approve any such
arrangement by purchasing or funding the Bonds or claims for interest in any other manner. In case
the maturity of any such Bond or claim for interest shall be extended or funded, whether or not with
the consent of the Successor Agency, such Bond or claim for interest so extended or funded shall not
be entitled, in case of default hereunder, to the benefits of this Indenture, 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 been so extended or funded.
Section 5.04Payment of Claims. The Successor Agency shall promptly pay and
discharge, or cause to be paid and discharged, any and all lawful claims for labor, materials or
supplies which, if unpaid, might become a lien or charge upon the properties owned by the Successor
Agency or upon the Pledged Tax Revenues or other amounts pledged to the payment of the Bonds,or
any part thereof, or upon any funds in the hands of the Trustee, or which might impair the security of
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the Bonds. Nothing herein contained shall require the Successor Agency to make any such payment
so long as the Successor Agency in good faith shall contest the validity of said claims.
Section 5.05Books and Accounts; Financial Statements.The Successor Agency shall
keep, orcause to be kept, proper books of record and accounts, separate from all other records and
accounts of the Successor Agency and the City, in which complete and correct entries shall be made
of all transactions relating to the Redevelopment Projects, the Pledged Tax Revenues and the Special
Fund. Such books of record and accounts shall at all times during business hours be subject to the
inspection of the 2016 Insurer, any other Insurer and the Owners of not less than ten percent (10%) in
aggregate principal amount of the Bonds then Outstanding, or their representatives authorized in
writing.
The Successor Agency will cause to be prepared, within twohundred and seventy(270) days
after the close of each Fiscal Year so long as the Bonds are Outstanding, complete audited financial
statements with respect to such Fiscal Year showing the Pledged Tax Revenues, all disbursements of
Pledged Tax Revenues and the financial condition of the Redevelopment Projects, including the
balances in all funds and accounts relating to the Redevelopment Projects, as of the end of such
Fiscal Year. The Successor Agency shall promptly furnish a copy of such financial statements to the
Trustee, the 2016 Insurer and any other Insurer at no expense and to any Owner upon reasonable
request and at the expense of such Owner. The Trustee shall have no obligation to review any
financial statements provided to it by the Successor Agency.
The Successor Agency agrees, consents and will cooperate in good faith to provide
information reasonablyrequested by the 2016 Insurer and will further provide appropriately
designated individuals and officers to discuss the affairs, finances and accounts of the Successor
Agency or any other matter as the 2016 Insurer may reasonably request.
Section 5.06Protection of Security and Rights of Owners. The Successor Agency will
preserve and protect the security of the Bonds and the rights of the Owners. From and after the
Closing Date with respect to Bonds, the Bonds shall be incontestable by the Successor Agency.
Section 5.07Payments of Taxes and Other Charges. Except as otherwise provided
herein, the Successor Agency will pay and discharge, or cause to be paid and discharged, all taxes,
service charges, assessments and other governmental charges which may hereafter be lawfully
imposed upon the Successor Agency or the properties then owned by the Successor Agency in the
ProjectAreas, or upon the revenues therefrom when the same shall become due. Nothing herein
contained shall require the Successor Agency to make any such payment so long as the Successor
Agency in good faith shall contest the validity of said taxes, assessments or charges. The Successor
Agency will duly observe and conform with all valid requirements of any governmental authority
relative to the ProjectAreasor any part thereof.
Section 5.08Taxation of Leased Property. All amounts derived by the Successor
Agency pursuant to Section 33673 of the Law with respect to the lease of property for redevelopment
shall be treated as Tax Revenues for all purposes of this Indenture.
Section 5.09Disposition of Property.The Successor Agency will not participate in the
disposition of any land or real property in a Project Area to anyone which will result in such property
becoming exempt from taxation because of public ownership or use or otherwise (except property
dedicated for public right-of-way and except property planned for public ownership or use by the
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Redevelopment Plansin effect on the date of issuance of the 2016 Bonds) so that such disposition
shall, when taken together with other such dispositions, aggregate more than ten percent (10%) of the
land area in the applicable Project Area unless such disposition is permitted as hereinafter provided
in this Section5.09. If the Successor Agency proposes to participate in such a disposition, it shall
thereupon appoint an Independent Redevelopment Consultant to report on the effect of said proposed
disposition. If the Report of the Independent Redevelopment Consultant concludes that the security
of the Bonds, or the rights of the Successor Agency, theBondowners and the Trustee hereunder will
not be materially impaired by said proposed disposition, the Successor Agency may thereafter make
such disposition. If said Report concludes that such security will be materially impaired by said
proposed disposition, the Successor Agency shall disapprove said proposed disposition.
Section 5.10Maintenance of Pledged Tax Revenues. The Successor Agency shall
comply with all requirements of the Law and the Dissolution Act to ensure the allocation and
payment to it of the Pledged Tax Revenuesas provided in the Dissolution Act.
Section 5.11Tax Covenants. In connection with the 2016Bonds, the Successor Agency
covenants and agrees to contest by court action or otherwise any assertion by the United States of
America or any departments or agency thereof that the interest received by the Bondowners is
includable in gross income of the recipient under federal income tax laws on the date of issuance of
the 2016Bonds. Notwithstanding any other provision of this Indenture, absent an opinion of Bond
Counsel that the exclusion from gross income of interest with respect to the 2016Bonds and Parity
Bonds will not be adversely affected for federal income tax purposes, the Successor Agency
covenants to comply with all applicable requirements of the Code necessary to preserve such
exclusion from gross income and specifically covenants, without limiting the generality of the
foregoing, as follows:
(a)Private Activity. The Successor Agency will take no action or refrain from
taking any action or make any use of the proceeds of the 2016Bonds or Parity Bonds or of any other
monies or property which would cause the 2016Bonds or Parity Bonds to be “private activity bonds”
within the meaning of Section 141 of the Code;
(b)Arbitrage. The Successor Agency will make no use of the proceeds of the
2016Bonds or Parity Bonds or of any other amounts or property, regardless of the source, or take
any action or refrain from taking any action which will cause the Bonds or Parity Bonds to be
“arbitrage bonds” within the meaning of Section 148 of the Code;
(c)Federal Guaranty. The Successor Agency will make no use of the proceeds
of the 2016Bonds or Parity Bonds or take or omit to take any action that would cause the 2016
Bonds or the Parity Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the
Code;
(d)Information Reporting. The Successor Agency will take or cause to be taken
all necessary action to comply with the informational reporting requirement of Section 149(e) of the
Code;
(e)Hedge Bonds. The Successor Agency will make no use of the proceeds of the
2016Bonds or any Parity Bonds or any other amounts or property, regardless of the source, or take
any action or refrain from taking any action that would cause either any 2016Bonds or the Parity
Bonds to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the
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Successor Agency takes all necessary action to assure compliance with the requirements of Section
149(g) of the Code to maintain the exclusion from gross income of interest on the 2016Bonds and
any Parity Bonds for federal income tax purposes; and
(f)Miscellaneous. The Successor Agency will take no action or refrain from
taking any action inconsistent with its expectations stated in that certain Tax Certificate executed by
the Successor Agency in connection with each issuance of 2016Bonds and Parity Bonds and will
comply with the covenants and requirements stated therein and incorporated by reference herein.
Section 5.12Continuing Disclosure.The Successor Agency hereby covenants and agrees
that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Indenture, failure of the Successor Agency to comply
with the Continuing Disclosure Certificate shall not be considered an Event of Default; however, the
Trustee at the request of any Participating Underwriter (as defined in the Continuing Disclosure
Certificate) or the holders of at least 25% aggregate principalamount of Outstanding Bonds, shall,
but only to the extent the Trustee has been indemnified from and against any loss, liability, cost or
expense, including, without limitation, fees and expenses of its attorneys and advisors and additional
fees and expenses of the Trustee, take such actions as may be necessary and appropriate to compel
performance, including seeking mandate or specific performance by court order.
Section 5.13Compliance with the Dissolution Act. The Successor Agency shall comply
with all of the requirements of the Law and the Dissolution Act. Without limiting the generality of
the foregoing, the Successor Agency covenants and agrees to file all required statements and hold all
public hearings required under the Dissolution Act to assure compliance bythe Successor Agency
with its covenants hereunder.
Further, it will take all actions required under the Dissolution Act to include:
(i)scheduled debt service on the 2016 Bonds and any Parity Debt and
any amount required under this Indenture to replenish the Reserve Account established hereunder or
the reserve account established under any Parity Debt Instrument, and
(ii)amounts due to any Insurer under an insurance or surety bond
agreement,
in Recognized Obligation Payment Schedules for each ROPS Period so as to enable the Auditor-
Controller of the County to distribute from the Redevelopment Property Tax Trust Fund to the
Successor Agency’s Redevelopment Obligation Retirement Fund on each January2 and June1
amounts required for the Successor Agency to pay principal of, and interest on, the Bonds coming
due in the respective ROPSPeriod and to pay amounts owed to any Insurer, as well as the other
amounts set forth above.
In order to accomplish the foregoing, on or before each February1(or at such earlier time as
may be required by the Dissolution Act), for so long as any Parity Debt isoutstanding, the Successor
Agency shall submit an Oversight Board-approved Recognized Obligation Payment Schedule to the
State Department of Finance andto the Auditor-Controller of the Countythatshall include, from the
first available Pledged Tax Revenues [for each Bond Year] (subject to prior payments described in
Section4.01):(i)all debt service due on all Outstanding Parity Debtcoming due during the
applicable ROPS Period as well as all amounts due and owing to the 2016 Insurer hereunder or to
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any other Insurer, and (ii)any amount required to cure any deficiency in the Reserve Account
pursuant to this Indentureor a reserve account established under any Parity DebtInstrument
(including any amounts required due to a draw on the Qualified Reserve Account Credit Instrument
as well as all amounts due and owing to the 2016 Insurer hereunder). [Update based on Successor
Agency practice and preference.]
In the event the provisions set forth in the Dissolution Act as of the Closing Date of the 2016
Bonds that relate to the filing of Recognized Obligation Payment Schedules are amended or modified
in any manner, the Successor Agency agrees to take all such actions as are necessary to comply with
such amended or modified provisions so as to ensure the timely payment of debt service on the 2016
Bonds and other Parity Debtand, if the timing of distributions of the Redevelopment Property Tax
Trust Fund is changed, the receipt of (i)not less than one half of the debt service due during each
calendar year on all Outstanding Bonds prior to March1of such calendar year, and (ii)the remainder
of debt service due during such calendar year on all Outstanding Bonds prior to the next succeeding
September1.
Section 5.14Further Assurances. The Successor Agency 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 Indenture, and
for the better assuring and confirming unto the Owners of the Bonds the rights and benefits provided
in this Indenture.
Section 5.15Last and Final Recognized Obligation Payment Schedule.The Successor
Agency shall provide the Trustee and each Insurer of Outstanding 2016 Bonds or Parity Debt with
copies of (a)any Request for Last and Final ROPS Approval submitted by the Successor Agency and
(b)any and all correspondence received from the Department of Finance regarding a Request for
Last and Final ROPS Approval, upon receipt thereof. In the event that the Successor Agency and the
Department of Finance schedule a meeting or telephone conference to discuss a written denial by the
Departmentof Finance of a Request for Last and Final ROPS Approval, the Successor Agency shall
timely notify the Trustee and each Insurer of Outstanding 2016 Bonds or Parity Debt of such meeting
or telephone conference. The Trustee shall, and, if the subject of the meet and confer could impact
the payment of or security for Insured Bonds or Policy Costs, each potentially affected Insurer shall,
have the right to participate in the meeting or telephone conference either by appearance with the
Successor Agency or through written submission as determined by the Trustee and such Insurer. In
the event the Successor Agency receives a denial of a Request for Last and Final ROPS Approval,
whether relating to Insured Bonds or not, and such denial could delay the receipt of tax revenues
necessary to pay debt service, Policy Costs, or other amounts owing to an Insurer, the Successor
Agency agrees to cooperate in good faith with the Insurer and the Insurer shall receive prompt notice
of any such event and shall be permitted to attend any meetings with the Successor Agency and the
Department of Finance relating to such event and to discuss such matters with the Department of
Finance directly. [Discuss]
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ARTICLE VI
THE TRUSTEE
Section 6.01Duties, Immunities and Liabilities of Trustee.
(a)The Trustee shall, prior to the occurrence of an Event of Default, and after the
curing or waiver of all Events of Default which may have occurred, perform such duties and only
such duties as are specifically set forth in this Indenture and no implied covenants, duties or
obligations shall be read into this Indenture against the Trustee. The Trustee shall, during the
existence of any Event of Default (which has not been cured or waived), exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
(b)The Successor Agency may remove the Trustee at any time,but only with the
consent of allInsurers, upon thirtydays’ prior written notice,unless an Event of Default shall have
occurred and then be continuing, and shall remove the Trustee (i)if at any time requested to do so by
an instrument or concurrent instruments in writing signed by the Owners of not less than a majority
in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in
writing) or (ii)if at any time the Successor Agency has knowledge that the Trustee shall cease to be
eligible in accordance with subsection (f) of this Section, or shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be
appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation. In each case such removal shall be
accomplished by the giving of written notice of such removal by the Successor Agency to the
Trustee, with a copy to any Insurer, whereupon the Successor Agency shall appoint a successor
Trustee by an instrument in writing.
(c)The Trustee may at any time resign by giving written notice of such
resignation to the Successor Agency and by giving the Owners and any Insurer notice of such
resignation by first class mail, postage prepaid, at their respective addresses shown on the
Registration Books. Upon receiving such notice of resignation, the Successor Agency shall promptly
appoint a successor Trustee by an instrument in writing, with notice of such appointment to be
furnished to any Insurer.
(d)Any removal or resignation of the Trustee and appointment of a successor
Trustee shall become effective only upon acceptance of appointment by the successor Trustee. If no
successor Trustee shall have been appointed and have accepted appointment within forty-five (45)
days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any
Owner (on behalf of such Owner and all other Owners) may petition any court of competent
jurisdiction at the expense of the Successor Agency for the appointment of a successor Trustee, and
such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor
Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such
appointment by executing, acknowledging and delivering to the Successor Agency and to its
predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights,
powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally
named Trustee herein; but, nevertheless at the Written Request of the Successor Agency or the
request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all
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instruments of conveyance or further assurance and do such other things as may reasonably be
required for more fully and certainly vesting in and confirmingto such successor Trustee all the
right, title and interest of such predecessor Trustee in and to any property held by it under this
Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other
property subject tothe trusts and conditions herein set forth. Upon request of the successor Trustee,
the Successor Agency shall execute and deliver any and all instruments as may be reasonably
required for more fully and certainly vesting in and confirming to such successor Trustee all such
moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of
appointment by a successor Trustee as provided in this subsection, the Successor Agency shall cause
either the predecessor Trustee or the successor Trustee to mail a notice of the succession of such
Trustee to the trusts hereunder to each rating agency which then has a current rating on the Bonds
and to the Owners at their respective addresses shown on the Registration Books.
(e)If an Event of Default hereunder occurs with respect to any Bonds of which
the Trustee has been given or is deemed to have notice, as provided in Section6.03(d) hereof, then
the Trustee shall immediately give written notice thereof, by first-class mail to the any Insurerand
the Owner of each such Bond, unless such Event of Default shall have been cured before the giving
of such notice; provided, however, that unless such Event of Default consists of the failure by the
Successor Agency to make any payment when due, the Trustee shall, within thirty (30) days of the
Trustee’s knowledge thereof, give such notice to any Insurer, and the Trustee, with the consent of
any Insurer may elect not to give such notice if and so long as the Trustee in good faith determines
that it is in the best interests of the Bondowners not to give such notice.
(f)The Successor Agency agrees that, so long as any Bonds are Outstanding, the
Trustee shall be: (i)a financial institution having a trust office in the State, having (or in the case of a
corporation, national banking associationor trust company included in a bank holding company
system, the related bank holding company shall have) a combined capital and surplus of at least
$250,000,000, and subject to supervision or examination by federal or state authority; (ii) a state-
chartered commercial bank that is a member of the Federal Reserve System having at least
$1,000,000,000 of assets; or (iii) an entity otherwise approved by all Insurers in writing. If such
financial institution 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 purpose of this
subsection the combined capital and surplus of such financial institution shall be deemed tobe its
combined capital and surplus as set forth in its most recent report of condition so published. In case
at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection
(f), the Trustee shall resign immediately in the manner and with the effect specified in this Section.
Section 6.02Merger or Consolidation. Any bank,nationalbanking associationor trust
company into which the Trustee may be merged or converted or with which may be consolidated or
any bank,nationalbanking associationor trust company resulting from any merger, conversion or
consolidation to which it shall be a party or any bank,nationalbanking associationor trust company
to which the Trustee may sell or transfer all or substantially all of its corporate trust business,
provided such bank,nationalbanking associationor trust company shall be eligible under subsection
(f) of Section6.01, shall be the successor to such Trustee without the execution or filing of any paper
or any further act, anything herein to the contrary notwithstanding.
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Section 6.03Liability of Trustee.
(a)The recitals of facts herein and in the Bonds contained shall be taken as
statements of the Successor Agency, and the Trustee shall not assume responsibility for the
correctness of the same, nor make any representations as to the validity or sufficiency of this
Indenture or of the security for the Bonds or the tax status of interest thereon nor shall incur any
responsibility in respect thereof, other than as expressly stated herein. The Trustee shall, however, be
responsible for its representations contained in its certificate of authentication on the Bonds. The
Trustee shall not be liable in connection with the performance of its duties hereunder, except for its
own negligence or misconduct. TheTrustee shall not be liable for the acts of any agents of the
Trustee selected by it with due care. The Trustee and its officers and employees may become the
Owner of any Bonds with the same rights it would have if they were not Trustee and, to the extent
permitted by law, may act as depository for and permit any of its officers or directors to act as a
member of, or in any other capacity with respect to, any committee formed to protect the rights of the
Owners, whether or not such committee shall represent the Owners of a majority in principal amount
of the Bonds then Outstanding.
(b)The Trustee shall not be liable with respect to any action taken or omitted to
be taken by it in accordance with the direction of the Owners of not less than a majority in aggregate
principal amount of the Bonds at the time Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Indenture.
(c)The Trustee shall not be liable for any action taken by it and believed by it to
be authorized or within the discretion or rights or powers conferred upon it by this Indenture, except
for actions arising from the negligence or misconduct of the Trustee. Wherethe Trustee is given the
permissive right to do things enumerated in this Indenture, such right shall not be construed as a
mandatory duty.
(d)The Trustee shall not be deemed to have knowledge of any Event of Default
hereunder unless and until a responsible officer shall have actual knowledge thereof, or shall have
received written notice thereof from the Successor Agency at its Principal Corporate Trust Office. In
the absence of such actual knowledge or notice, the Trustee may conclusively assume that no Event
of Default has occurred and is continuing under this Indenture. Except as otherwise expressly
provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or
observance by any other party of any of the terms, conditions, covenants or agreements herein or of
any of the documents executed in connection with the Bonds, or as to the existence of an Event of
Default thereunder. The Trustee shall not be responsible for the validity or effectiveness of any
collateral given toor held by it. Without limiting the generality of the foregoing, the Trustee may
rely conclusively on the Successor Agency’s certificates to establish the Successor Agency’s
compliance with its financial covenants hereunder, including, without limitation, its covenants
regarding the deposit of Pledged Tax Revenues into the Special Fund and the investment and
application of moneys on deposit in the Special Fund (other than its covenants to transfer such
moneys to the Trustee when due hereunder).
(e)The Trustee shall have no liability or obligation to the Bondowners with
respect to the payment of debt service on the Bonds by the Successor Agency or with respect to the
observance or performance by the Successor Agency of the other conditions, covenants and terms
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contained in this Indenture, or with respect to the investment of any moneys in any fund or account
established, held or maintained by the Successor Agency pursuant to this Indenture or otherwise.
(f)No provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers. The Trustee shall be entitled to interest on all
amounts advanced by it at the maximum rate permitted by law.
(g)The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, attorneys or receivers and the Trustee
shall not be responsible for any intentional misconduct or negligence on the part of any agent,
attorney or receiver appointed with due care by it hereunder.
(h)The Trustee shall have no responsibility, opinion, or liability with respect to
any information, statements or recital in any offering memorandum or other disclosure material
prepared or distributed with respect to the issuance of the Bonds.
(i)Before taking any action under ArticleVIII or this Article at the request of
the Owners or any Insurer, the Trustee may require that a satisfactory indemnity bondbe furnished
by the Owners or any Insurer for the reimbursement of all expenses to which it may be put and to
protect it against all liability, except liability which is adjudicated to have resulted from its
negligence or willful misconduct in connection with any action so taken.
(j)The Trustee shall have the right to accept and act upon instructions, including
funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using
Electronic Means (“Electronic Means” shall mean the following communications methods: e-mail,
facsimile transmission, secure electronic transmission containing applicable authorization codes,
passwords and/or authentication keys issued by the Trustee, or another method or system specified
by the Trustee as available for use in connection with its services hereunder); provided, however, that
the Successor Agency shall provide to the Trustee an incumbency certificate listing officers with the
authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of
such Authorized Officers, which incumbency certificate shall be amended by the Successor Agency
whenever a person is to be added or deleted from the listing.If the Successor Agency elects to give
the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon
such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling.The
Successor Agency understands and agrees that the Trustee cannot determine the identity of the actual
sender of such Instructions and that the Trustee shall conclusively presume that directions that
purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to
the Trustee have been sent by such Authorized Officer.The Successor Agency shall be responsible
for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the
Successor Agency and all Authorized Officers are solely responsible to safeguard the use and
confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon
receipt by the Successor Agency. The Trustee shall not be liable for any losses, costs or expenses
arising directly or indirectly from the Trustee’s relianceupon and compliance with such Instructions
notwithstanding such directions conflict or are inconsistent with a subsequent written
instruction.The Successor Agency agrees: (i) to assume all risks arising out of the use of Electronic
Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee
acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that
it is fully informed of the protections and risks associated with the various methods of transmitting
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Instructions to the Trustee and that there may be more secure methods of transmitting Instructions
than the method(s) selected by the Successor Agency; (iii) that the security procedures (if any) to be
followed in connection with its transmission of Instructions provide to it a commercially reasonable
degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee
immediately upon learning of any compromise or unauthorized use of the security procedures.
(k)The Trustee shall not be liable to the parties hereto or deemed in breach or
default hereunder if and to the extent its performance hereunder is prevented by reason of force
majeure. The term “force majeure” means an occurrence that is beyond the control of the Trustee
and could not have been avoided by exercising due care. Force majeure shall include but not be
limited to acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other
similar occurrences.
(l)The Trustee shall not be responsible for or accountable to anyone for the
subsequent use or application of any moneys which shall be released or withdrawn in accordance
with the provisions hereof.
Section 6.04Right to Rely on Documents and Opinions. The Trustee shall have no
liability in acting upon any notice, resolution, request, consent, order, certificate, report, opinion,
facsimile transmission, electronic mail, or other paper or document reasonably believed by it to be
genuine and to have been signed or prescribed by the proper party or parties, and shall not be
required to make any investigation into the facts or matters contained thereon. The Trustee may
consult with counsel, including, without limitation, counsel of or to the Successor Agency, with
regard to legal questions, and, in the absence of negligence or intentional misconduct by the Trustee,
the opinion of such counsel shall be full and complete authorization and protection in respect of any
action taken or suffered by the Trustee hereunder in accordance therewith.
The Trustee 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 is established to the
satisfaction of the Trustee.
Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering
any action hereunder, such matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the
Successor Agency, which shall be full warrant to the Trustee for any action taken or suffered under
the provisions of this Indenture in reliance upon such Written Certificate, but in its discretion the
Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional
evidence as it may deem reasonable. The Trustee may conclusively rely on any certificate or report
ofany Independent Accountant or Independent Redevelopment Consultant appointed by the
Successor Agency.
Section 6.05Preservation and Inspection of Documents.All documents received by the
Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject
at all reasonable times upon reasonable notice to the inspection of and copying by the Successor
Agency and any Insurer and any Owner, and their agents and representatives duly authorized in
writing, during regular business hours and under reasonable conditions.
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Section 6.06Compensation and Indemnification. The Successor Agency shall pay to
the Trustee from time to time reasonable compensation for all services rendered under this Indenture
in accordance with the letter proposal from the Trusteeapproved by the Successor Agency and also
all reasonable expenses, charges, legal and consulting fees and other disbursements and those of its
attorneys (including the allocated costs and disbursement of in-house counsel to the extent such
services are not redundant with those provided by outside counsel), agents and employees, incurred
in and about the performance of its powers and duties under this Indenture. The Trustee shall have a
lien on the Pledged Tax Revenues and all funds and accounts held by the Trustee hereunder to secure
the payment to the Trustee of all fees, costs and expenses, including reasonable compensation to its
experts, attorneys and counsel (including the allocated costs and disbursement of in-house counsel to
the extent such services are not redundant with those provided by outside counsel).
The Successor Agency further covenants and agrees to indemnify, defend and save the
Trustee and its officers, directors, agents and employees, harmless against any loss, expense,
including legal fees and expenses,and liabilities which it may incur to the extent arising out of or in
connection with the exercise and performance of its powers and duties hereunder, including the costs
and expenses of defending against any claim of liability, but excluding any and all losses, expenses
and liabilities which are due to the negligence or misconduct of the Trustee, its officers, directors,
agents or employees. The obligations of the Successor Agency and the rights of the Trustee under
this Section6.06 shall survive resignation or removal of the Trustee under this Indenture and
payment of the Bonds and discharge of this Indenture.
Section 6.07Deposit and Investment of Moneys in Funds. Moneys in the Debt Service
Fund, the Interest Account, the Principal Account, the Reserve Account, the Redemption Account
and the Costs of Issuance Fund shall be invested by the Trustee in Permitted Investments as directed
by the Successor Agency in the Written Request of the Successor Agency filed with the Trustee,
except that moneys inthe Reserve Account shall not be invested in Permitted Investments having a
maturity of more than five (5) years, unless any such Permitted Investment is described in clause (g)
of the definition thereof. In the absence of any such Written Request of theSuccessor Agency, the
Trustee shall hold any such moneys uninvested. The Trustee shall be entitled to rely conclusively
upon the written instructions of the Successor Agency directing investments in Permitted
Investments as to the fact that each such investment is permitted by the laws of the State, and shall
not be required to make further investigation with respect thereto. With respect to any restrictions set
forth in the above list which embody legal conclusions (e.g., the existence, validity and perfection of
security interests in collateral), the Trustee shall be entitled to rely conclusively on an opinion of
counsel or upon a representation of the provider of such Permitted Investment obtained at the
Successor Agency’s expense. Moneys in the Special Fund may be invested by the Successor Agency
in any obligations in which the Successor Agency is legally authorized to invest its funds.
Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such
fund or account. All interest or gain derived from the investment of amounts in any of the funds or
accounts held by the Trustee hereunder shall be deposited in the Interest Account; provided,
however, that all interest or gain from the investment of amounts in the Reserve Account shall be
deposited by the Trustee in the Interest Account only to the extent not required to cause the balance
in the Reserve Account to equal the Reserve Requirement. The Trustee may act as principal or agent
in the acquisition or disposition of any investment and may impose its customary charges therefor.
The Trustee shall incur no liability for losses arising from any investments made at the direction of
the Successor Agency or otherwise made in accordance with this Section. For investment purposes
only, the Trustee may commingle the funds and accounts established hereunder, but shall account for
each separately.
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The Successor Agency acknowledges that to the extent regulations of the Comptroller of the
Currency or other applicable regulatory entity grant the Successor Agency the right to receive
brokerage confirmations of security transactions as they occur, the Successor Agency specifically
waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the
Successor Agency monthly cash transaction statements which shall include detail for all investment
transactions made by the Trustee hereunder.
All moneys held by the Trustee shall be held in trust, but need not be segregated from other
funds unless specifically required by this Indenture. Except as specifically provided in this
Indenture, the Trustee shall not be liable to pay interest on any moneys received by it, but shall be
liable only to account to the Successor Agency for earnings derived from funds that have been
invested.
The Successor Agency covenants that all investments of amounts deposited in any fund or
account created by or pursuant to this Indenture, or otherwise containing gross proceeds of the Bonds
(within the meaning of Section148 of the Code)shall be acquired, disposed of, and valued (as of the
date that valuation is required by this Indenture or the Code) at Fair Market Value. The Trustee shall
have no duty in connection with the determination of Fair Market Value other than to follow its
normal practice in determining the value of Permitted Investments, which may include utilizing
computerized securities pricing services that may be available to it including those available through
its regular accounting system.
Investments in funds or accounts (or portions thereof) that are subject to a yield restriction
under applicable provisions of the Code shall be valued by the Successor Agency at their present
value (within the meaning of Section148 of the Code). Investments on deposit in the Reserve
Account shall be valued semiannually two (2) Business Days preceding each March1and
September1at their Fair Market Value.
Section 6.08Accounting Records and Financial Statements. The Trustee shall at all
times keep, or cause to be kept, proper books of record and account, prepared in accordance with
corporate trust industry standards, in which accurate entries shall be made of all transactions relating
to the proceeds of the Bonds made by it and all funds and accounts held by the Trustee established
pursuant to this Indenture. Such books of record and account shall be available for inspection by the
Successor Agency upon reasonable prior notice, at reasonable hours and under reasonable
circumstances. The Trustee shall furnish to the Successor Agency, on at least a monthly basis, an
accounting of all transactions in the form of its customary statements relating to the proceeds of the
Bonds and all funds and accounts held by the Trustee pursuant to this Indenture.
Section 6.09Other Transactions with Agency.The Trustee, either as principal or agent,
may engage in or be interested in any financial or other transaction with the Successor Agency.
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 7.01Amendment With And Without Consent of Owners.This Indenture and
the rights and obligations of the Successor Agency and of the Owners may be modified or amended
at any time by a Supplemental Indenture which shall become binding upon adoption without the
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consent of any Ownersor anyInsurer, to the extent permitted by law, but only for any one or more of
the following purposes –
(a)to add to the covenants and agreements of the Successor Agency in this
Indenture contained, other covenants and agreements thereafter to be observed, including any
covenant or agreement that provides for additional security for the Bonds, or to limit or surrender any
rights or powers herein reserved to or conferred upon the Successor Agency; or
(b)to make such provisions for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provision contained in this Indenture, or in any
other respect whatsoever as the Successor Agency may deem necessary or desirable, provided under
any circumstances that such modifications or amendments shall not, in the reasonable determination
of the Successor Agency, materially adversely affect the interests of the Owners; or
(c)to provide for the issuance of Parity Debt in accordance with Section3.05; or
(d)to amend any provision hereof relating to the requirements of or compliance
with the Code, to any extent whatsoever but only if and to the extent such amendment will not
adversely affect the exemption from federal income taxation of interest on any of the Bonds, in the
opinion of Bond Counsel; or
(e)to comply with amendments or supplements to the Dissolution Act; or
(f)to comply with the requirements of a provider of a Qualified Reserve
Account Credit Instrument.
Except as set forth in the preceding paragraph, this Indenture and the rights and obligations of
the Successor Agency and of the Owners may be modified or amended at any time by a
Supplemental Indenture which shall become binding when the written consent of eachInsurer (but
only with respect to any Bonds insured by such Insurer) and the Owners of a majority in aggregate
principal amount of the Bonds then Outstanding are filed with the Trustee. No such modification or
amendment shall (a)extend the maturity of or reduce the interest rate on any Bond or otherwise alter
or impair the obligation of the Successor Agency to pay the principal, interest, or redemption
premiums (if any) at the time and place and at the rate and in the currency provided therein of any
Bond without the express written consent of any Insurer or the Owner of such Bond, or (b)reduce the
percentage of Bonds required for the written consent to any such amendment or modification. In no
event shall any Supplemental Indenture modify any of the rights or obligations of the Trustee without
its prior written consent. In no event shall any Supplemental Indenture modify any of the rights or
obligations of any Insurer without its prior written consent.
Section 7.02Effect of Supplemental Indenture. From and after the time any
Supplemental Indenture becomes effective pursuant to this ArticleVII, this Indenture shall be
deemed to be modified and amended in accordance therewith, the respective rights, duties and
obligations of the parties hereto or thereto and all Owners, as the case may be, shall thereafter be
determined, exercised and enforced hereundersubject in all respects to such modification and
amendment, and all the terms and conditions of any Supplemental Indenture shall be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
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Section 7.03Endorsement or Replacement of Bonds After Amendment. After the
effective date of any amendment or modification hereof pursuant to this ArticleVII, the Successor
Agency may, with the prior written consent of any Insurer, determine that any or all of the Bonds
shall bear a notation, by endorsement in form approved by the Successor Agency, as to such
amendment or modification and in that case upon demand of the Successor Agency the Owners of
such Bonds shall present such Bonds for that purpose at the Principal Corporate Trust Office of the
Trustee, and thereupon a suitable notation as to such action shall be made on such Bonds. In lieu of
such notation, the Successor Agency may determine that new Bonds shall be prepared at the expense
of the Successor Agency and executed in exchange for anyor all of the Bonds, and in that case, upon
demand of the Successor Agency, the Owners of the Bonds shall present such Bonds for exchange at
the Principal Corporate Trust Office of the Trustee, without cost to such Owners.
Section 7.04Amendment by Mutual Consent. The provisions of this ArticleVII shall
not prevent any Owner from accepting any amendment as to the particular Bond held by such Owner,
provided that due notation thereof is made on such Bond and, provided further that written consent to
such amendment shall first be obtained from any Insurer.
Section 7.05Opinion of Counsel. Prior to executing any Supplemental Indenture, the
Trustee shall be furnished an opinion of counsel, upon which it may conclusively rely to the effect
that all conditions precedent to the execution of such Supplemental Indenture under this Indenture
have been satisfied and such Supplemental Indenture is authorized and permitted under this Indenture
and does not adversely affect the exclusion of interest on the 2016Bonds from gross income for
federal income tax purposes or adversely affect the exemption of interest on the Bonds from personal
income taxation by the State.
Section 7.06Copy of Supplemental Indenture to S&P and Moody’s. The Successor
Agency shall provide to S&P and Moody’s, for so long as S&P and Moody’s, as the case may be,
maintain a rating on any of the Bonds (without regard to any municipal bond or financial guaranty
insurance), a copy of any Supplemental Indenture at least fifteen (15) days prior to its proposed
effective date.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OFOWNERS
Section 8.01Events of Default and Acceleration of Maturities. The following events
shall constitute Events of Default hereunder:
(a)if default shall be made by the Successor Agencyin the due and punctual
payment of the principal of or interest or redemption premium (if any) on any Bond when and as the
same shall become due and payable, whether at maturity as therein expressed, by declaration or
otherwise;
(b)if default shall be made by the Successor Agency in the observance of any of
the covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, other
than a default described in the preceding clause (a), and such default shall have continued for a
period of thirty (30) days following receipt by the Successor Agency of written notice from the
Trustee or any Insurer or written notice from any Owner (with a copy of said notice delivered to the
Trustee and any Insurer) of the occurrence of such default, provided that if in the reasonable opinion
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of the Successor Agency the failure stated in the notice can be corrected, but not within such thirty
(30) day period, such failure will not constitute an event of default if corrective action is instituted by
the Successor Agency (with the prior written consent of any Insurer) within such thirty (30) day
period and the Successor Agency thereafter diligently and in good faith cures such failure in a
reasonable period of time as approved by any Insurer;
(c)If the Successor Agency files a petition seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the United States of
America, or if a court of competent jurisdiction will approve a petition by the Successor Agency
seeking reorganization under the federal bankruptcy laws or any otherapplicable law of the United
States of America, or, if under the provisions of any other law for the relief or aid of debtors, any
court of competent jurisdiction will approve a petition by the Successor Agency, seeking
reorganization under the federal bankruptcy laws or any other applicable law of the United States of
America, or, if under the provisions of any other law for the relief or aid of debtors, any court of
competent jurisdiction will assume custody or control of the Successor Agency or of the whole or
any substantial part of its property; or
(d)The principal of any Parity Obligation shall be declared immediately dueand
payable under the terms of aParity Debt Instrument.
In determining whether an Event of Default has occurred under (a) above, no effect shall be
given to payments made under any municipal bond insurance policy, financial guaranty insurance
policy or Qualified Reserve Account Credit Instrument.
If an Event of Default has occurred under this Section and is continuing, the Trustee, may,
and, if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds
then Outstanding the Trustee shall, (y)declare the principal of the Bonds, together with the accrued
interest thereon, to be due and payable immediately, and upon any such declaration the same shall
become immediately due and payable, anything in this Indenture or in the Bonds to the contrary
notwithstanding, and (z)subject to the provisions of Section8.06, exercise any other remedies
available to the Trustee and the Bondowners in law or at equity.
Immediately upon receiving notice or actual knowledge of the occurrence of an Event of
Default, the Trustee shall give notice of such Event of Default to eachInsurer and to the Successor
Agency by telephone promptly confirmed in writing. Such notice shall also state whether the
principal of the Bonds shall have been declared to be or have immediately become due and payable.
With respect to any Event of Default described in subsections (a) or (c) above the Trustee shall, and
with respect to any Event of Default described in subsection (b) above the Trustee in its sole
discretion may, also give such notice to the Owners by mail, which shall include the statement that
interest on the Bonds shall cease to accrue from and after the date, if any, on which the Trustee shall
have declared the Bonds to become due and payable pursuant to the preceding paragraph (but only to
the extent that principal and any accrued, but unpaid, interest on the Bonds is actually paid on such
date).
This provision, however, is subject to the condition that if, at any time after the principal of
the Bonds shall have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered, the Successor Agency shall, with the
written consent of a majority in aggregate principal amount of the Owners of the Bonds then
Outstanding, deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior
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to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest
on such overdue installments of principal and interest (to the extent permitted by law), and the
reasonable fees and expenses of the Trustee, (including the allocated costs and disbursements of its
in-house counsel to the extent such services are not redundant with those provided by outside
counsel) and any and all other defaults known to the Trustee (other than in the payment of principal
of and interest on the Bondsdue and payable solely by reason of such declaration) shall have been
made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be
adequate shall have been made therefor, then, and in every such case, the Trustee shall promptly give
written notice of the foregoing to any Insurer and the Owners of all Bonds then Outstanding, and
with the prior written approval of the Owners of at least a majority in aggregate principal amount of
the Bonds then Outstanding, by written noticeto the Successor Agency and to the Trustee, may, on
behalf of the Owners of all of the Bonds then Outstanding, rescind and annul such declaration and its
consequences. However, no such rescission and annulment shall extend to or shall affect any
subsequent default or shall impair or exhaust any right or power consequent thereon.
Section 8.02Application of Funds Upon Acceleration. All amounts received by the
Trustee pursuant to any right given or action taken by the Trustee under the provisions of this
Indenture (including the Trustee’s share of any Pledged Tax Revenues) and all sums in the funds and
accounts established and held by the Trustee hereunder upon the date of the declaration of
acceleration as provided in Section8.01, and all sums thereafter received by the Trustee hereunder,
shall be applied by the Trustee in the following order upon presentation of the Bonds, and the
stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid:
First,to the payment of the fees, costs and expenses of the Trustee in declaring such Event of
Default and in exercising the rights and remedies set forth in this ArticleVIII, including reasonable
compensation to its agents, attorneys (including the allocated costs and disbursements of its in-house
counsel to the extent such services are not redundant with those provided by outside counsel) and
advisorsand any outstanding fees and expenses of the Trustee; and
Second,to the payment of the whole amount then owing and unpaid upon the 2016 Bonds
and Parity Debt for principal and interest, as applicable, with interest on the overdue principal, and
installments of interest at the net effective rate then borne by the Outstanding 2016 Bonds or Parity
Debt (to the extent that such interest on overdue installments of principal and interest shall have been
collected), and in case such moneys shall be insufficient to pay in full the whole amount so owing
and unpaid upon the 2016 Bonds and Parity Debt, then to the payment of such principal and interest
without preference or priority, ratably to the aggregate of such principal and interest.
Section 8.03Power of Trustee to Control Proceedings. In the event that the Trustee,
upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or
otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of
the Owners of a majority in principal amount of the Bonds then Outstanding, it shall have full power,
in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the
continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action;
provided, however, thatthe Trustee shall not, unless there no longer continues an Event of Default,
discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or
in equity, if at the time there has been filed with it a written request signed by the Owners of a
majority in principal amount of the Outstanding Bonds hereunder opposing such discontinuance,
withdrawal, compromise, settlementor other disposal of such litigation.
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Section 8.04Limitation on Owner’s Right to Sue. No Owner of any Bond issued
hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any
remedy under or upon this Indenture, unless (a)such Owner shall have previously given to the
Successor Agency, the Trustee and any Insurer written notice of the occurrence of an Event of
Default; (b)the Owners of a majority in aggregate principal amount of all the Bonds then
Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore
granted or to institute such action, suit or proceeding in its own name; (c)said Owners shall have
tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses
and liabilities to be incurred in compliance with such request; and (d)the Trustee shall have refused
or omitted to comply with such request for a period of sixty (60) days after such written request shall
have been received by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby declared,
in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder; it
being understood and intended that no one or more Owners shall have any right in any manner
whatever by his or their action to enforce any right under this Indenture, except in the manner herein
provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall
be instituted, had and maintained in the manner herein provided and for the equal benefit of all
Owners of the Outstanding Bonds.
The right of any Owner of any Bond to receive payment of the principal of (and premium, if
any) and interest on such Bond as herein provided, shall not be impaired or affected without the
written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other
provision of this Indenture.
Section 8.05Non-Waiver. Nothing in this ArticleVIII or in any other provision of this
Indenture or in the Bonds, shall affect or impair the obligation of the Successor Agency, which is
absolute and unconditional, to pay from the Pledged Tax Revenues and other amounts pledged
hereunder, the principal of and interest and redemption premium (if any) on the Bonds to the
respective Owners on the respective Interest Payment Dates, as herein provided, or affect or impair
the right of action, which is also absolute and unconditional, of the Owners or the Trustee to institute
suit to enforce such payment by virtue of the contract embodied in the Bonds.
A waiver of any default by any Owner or the Trustee shall not affect any subsequent default
or impair any rights or remedies on the subsequent default. No delay or omission of any Owner to
exercise any right or power accruing upon any default shall impair any such right or power or shall
be construed to be a waiver of any such default or an acquiescence therein, and every power and
remedy conferred upon the Owners and the Trustee by the Law or by this ArticleVIII may be
enforced and exercised from time to time and as often as shall be deemed expedientby the Owners
and the Trustee.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned
or determined adversely to the Owners or the Trustee, the Successor Agency, the Trustee and the
Owners shall be restored to theirformer positions, rights and remedies as if such suit, action or
proceeding had not been brought or taken.
Section 8.06Actions by Trustee as Attorney-in-Fact. Any suit, action or proceeding
which any Owner shall have the right to bring to enforce any right or remedyhereunder may be
brought by the Trustee for the equal benefit and protection of all Owners similarly situated and the
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Trustee is hereby appointed (and the successive respective Owners by taking and holding the Bonds
shall be conclusively deemed so to haveappointed it) the true and lawful attorney-in-fact of the
respective Owners for the purpose of bringing any such suit, action or proceeding and to do and
perform any and all acts and things for and on behalf of the respective Owners as a class or classes,
as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact, provided,
however, the Trustee shall have no duty or obligation to exercise any such right or remedy unless it
has been indemnifiedto its satisfaction from any loss,liability or expense (including fees and
expenses of its outside counsel and the allocated costs and disbursements of its in-house counsel to
the extent such services are not redundant with those provided by outside counsel).
Section 8.07Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or
in equity or by statute or otherwise, and may be exercised without exhausting and without regard to
any other remedy conferred by the Law or any other law.
Section 8.08Determination of Percentage of Bondowners. Whenever in this Indenture
the consent, direction or other action is required or permitted to be given or taken by a percentage of
the Owners of an aggregate principal amount of Outstanding Bonds (including by the Owners of a
majority in aggregate principal amount of the Outstanding Bonds), such percentage shall be
calculated on the basis of the principal amount of the Outstanding Bonds determined as of the next
succeeding Interest Payment Date.
ARTICLE IX
MISCELLANEOUS
Section 9.01Special Obligations. The Bonds are special obligations of the Successor
Agency secured by a pledge and lien as describedin Section 4.01 hereof. The Bonds are not debts,
liabilities or obligations of the City of Chula Vista, the State of California, or any of its political
subdivisions, and neither said City, said State, nor any of its political subdivisions is liable thereon,
nor in any event shall the Bonds be payable out of any funds or properties other than those pledged
by the Successor Agency. The Bonds do not constitute an indebtedness in contravention of any
constitutional or statutory debt limitation or restriction.
Section 9.02Benefits Limited to Parties. Nothing in this Indenture, expressed or
implied, is intended to give to any person other than the Successor Agency, eachInsurer, the Trustee
and the Owners, any right, remedy or claim under or by reason of this Indenture. Any covenants,
stipulations, promises or agreements in this Indenture contained by and on behalf of the Successor
Agency shall be for the sole and exclusive benefit of the Trustee, suchInsurersand the Owners. To
the extent that this Indenture confers upon or gives any Insurer any right, remedy or claim under or
by reason of this Indenture, eachInsureris hereby explicitly recognized as being third-party
beneficiaries hereunder and may enforce any such right remedy or claim conferred, given or granted
hereunder.
Section 9.03Successor is Deemed Included in All References to Predecessor.
Whenever in this Indenture or any Supplemental Indenture either the Successor Agency or the
Trustee 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 Indenture contained by or on behalf of the
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Successor Agency or the Trustee shall bind and inure to the benefit of the respective successors and
assigns thereof whether so expressed or not.
Section 9.04Discharge of Indenture.
(a)If the Successor Agency shall pay and discharge the entire indebtedness on all
Bonds or any portion thereof in any one or more of the following ways:
(i)by well and truly paying or causing to be paid the principal of and
interest and premium (if any) on all or the applicable portion ofOutstanding Bonds, as and when the
same become due and payable;
(ii)by irrevocably depositing with the Trustee or an escrow agent, in
trust, at or before maturity, money which, together with the available amounts then on deposit in the
funds and accounts established pursuant to this Indenture, is fully sufficient to pay all or the
applicable portion ofOutstanding Bonds, including all principal, interest and redemption premiums,
or;
(iii)by irrevocably depositing with the Trustee or an escrow agent, in
trust, Defeasance Obligations in such amount as an Independent Accountant shall determine will,
together with the interest to accrue thereon and available moneys then on deposit in the funds and
accounts established pursuant to this Indenture, be fully sufficient to pay and discharge the
indebtedness on all Bonds or theapplicable portion thereof(including all principal, interest and
redemption premiums) at or before maturity;
and, if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given pursuant to Section2.03(c) or provision satisfactory to the Trustee shall have been
made for the giving of such notice, then, at the election of the Successor Agency, and
notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the
Pledged Tax Revenues and other amounts, funds and accounts described in Section 4.01 hereofand
all other obligations of the Trustee and the Successor Agency under this Indenture shall cease and
terminate with respect to all Outstanding Bonds or, if applicable, with respectto that portion of the
Bonds which has been paid and discharged, except only (A)the covenants of the Successor Agency
hereunder with respect to the Code, (B)the obligation of the Trustee to transfer and exchange Bonds
hereunder, (C)the obligations of the Successor Agency under Section6.06 hereof, and (D)the
obligation of the Successor Agency to pay or cause to be paid to the Owners (or any Insurer), from
the amounts so deposited with the Trustee, all sums due thereon and to pay the Trustee and any
Insurer all fees, expenses and costs of the Trustee and any Insurer. In the event the Successor
Agency shall, pursuant to the foregoing provision, pay and discharge any portion or all of the Bonds
then Outstanding, the Trustee shall be authorized to take such actions and execute and deliver to the
Successor Agency all such instruments as may be necessary or desirable to evidence such discharge,
including, without limitation, selection by lot of Bonds of any maturity of the Bonds that the
Successor Agency has determined to pay and discharge in part.
In the case of a defeasance or payment of all of the Bonds Outstanding, any funds
thereafter held by the Trustee which are not required for said purpose or for payment of amounts due
the Trustee pursuant to Section6.06 shall be paid over to the Successor Agency.
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Notwithstanding anything herein to the contrary, to accomplish the defeasance of
Insured Bonds, at least three Business Days prior to any defeasance, the Successor Agencyshall
deliver to anyInsurerof suchInsured Bondsdraft copies of an escrow agreement, and opinion of
Bond Counsel regarding the validity and enforceability of the escrow agreement and the defeasance
of such Insured Bonds, and a verification report (a “Verification Report”) prepared by a nationally
recognized independent financial analyst or firm of certified public accountants regarding the
sufficiency of the escrow fund. Such opinion and Verification Report shall be addressed to such
Insurerand shall be in form and substance satisfactory to such Insurer. In addition, the escrow
agreement shall provide that: a) any substitution of securities shall require the delivery of a
verification report, an opinion of Bond Counsel that such substitution will not adversely affect the
exclusion (if interest on the Insured Bonds is excludable) from gross income of the holders of the
Insured Bonds of the interest on the Insured Bonds for federal income tax purposes and the prior
written consent of suchInsurer; and b) the Successor Agencyshall not amend the escrow agreement
or enter into a forward purchase agreement or other agreement with respect to rights in the escrow
without the prior written consent of suchInsurer.
(b)Notwithstanding anything herein to the contrary, in the event that the
principal and/or interest due of the Bonds is paid by any Insurer, such Bonds shall remain
Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the
Successor Agency, and the assignment and pledge of the Pledged Tax Revenues and other assets
hereunder and all covenants, agreements and other obligations of the Successor Agency to the
Bondowners so paid shall continue to exist and shall run to the benefit of such Insurer, and such
Insurer shall be subrogated to the rights of such Bondowners, as applicable.
Section 9.05Execution of Documents and Proof of Ownership by Owners. Any
request, consent, declaration or other instrument which this Indenture may require or permit to be
executed by any Owner may be in one or more instruments of similar tenor, and shall be executed by
such Owner in person or by such Owner’s 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.
Theownership of Bonds and the amount, maturity, number and date of ownership thereof
shall be proved by the Registration Books.
Any demand, request, direction, consent, declaration or other instrument or writing of the
Owner of any Bond shall bind all futureOwners of such Bond in respect of anything done or suffered
to be done by the Successor Agency or the Trustee and in accordance therewith, provided, however,
that the Trustee shall not be deemed to have knowledge that any Bond is owned by or for the account
of the Successor Agency unless the Successor Agency is the registered Owner or the Trustee has
received written notice that any other registered Owner is such an affiliate.
Section 9.06Disqualified Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or
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waiver under this Indenture, Bonds which are owned or held by or for the account of the Successor
Agency or the City (but excluding Bonds held in any employees’ retirement fund) shall be
disregarded and deemed not to be Outstanding for the purpose of any such determination. Upon
request of the Trustee, the Successor Agency and the City shall specify in a certificate to the Trustee
those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such
certificate.
Section 9.07Waiver of Personal Liability. No member, officer, agent or employee of the
Successor Agency shall be individually or personally liable for the payment of the principal or
interest or any premium on the Bonds; but nothing herein contained shall relieve any such member,
officer, agent or employee from the performance of any official duty provided by law.
Section 9.08Destruction of Cancelled Bonds. Whenever in this Indenture provision is
made for the surrender to the Trustee of any Bonds which have been paid or cancelled pursuant to the
provisions of this Indenture, the Trustee shall destroy such bonds and upon request of the Successor
Agency provide the Successor Agency a certificate of destruction. The Successor Agency shall be
entitled to rely upon any statement of fact contained in any certificate with respect to the destruction
of any such Bonds therein referred to.
Section 9.09Notices. Any notice, request, demand, communication or other paper shall be
sufficiently given and shall be deemed given when delivered or upon receipt when mailed by first
class, registered or certified mail, postage prepaid, or sent by facsimile, addressed as follows:
If to the Successor Agency:Successor Agency to the RedevelopmentAgency
of the City ofChula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Attention: Directorof Finance
If to the Trustee:U.S. Bank NationalAssociation
633 W. Fifth Street, 24th Floor
Los Angeles, CA 90071
Attention: Global Corporate Trust Services
The Successor Agency and the Trustee may designate any further or different addresses to
which subsequent notices, certificates or other communications shall be sent.
Section 9.10Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of
this Indenture shall for any reason be held illegal, invalid or unenforceable, such holding shall not
affect the validity of the remaining portions of this Indenture. The Successor Agency hereby
declares that it would have adopted this Indenture 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 Indenture
may be held illegal, invalid or unenforceable. If, by reason of the judgment of any court, the Trustee
is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of
the Trustee hereunder shall, pending appointment of a successor Trustee in accordance with the
provisions of Section6.01 hereof, be assumed by and vest in the Treasurer of the Successor Agency
in trust for the benefit of the Owners. The Successor Agency 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 Trustee
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hereunder, and shall assume all of the responsibilities and perform all of the duties of the Trustee
hereunder, in trust for the benefit of the Bonds, pending appointment of a successor Trustee in
accordance with the provisions of Section6.01 hereof.
Section 9.11Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding, any money held by the Trustee in trust for the payment and discharge of the interest
or premium (if any) on or principal of the Bonds which remains unclaimed for two (2) years after the
date when the payments of such interest, premium and principal have become payable, if such money
was held by the Trustee at such date, or for two (2) years after the date of deposit of such money if
deposited with the Trustee after the date when the interest and premium (if any) on and principal of
such Bonds have become payable, shall be repaid by the Trustee to the Successor Agency as its
absolute property free from trust, and the Trustee shall thereupon be released and discharged with
respect thereto and the Bondowners shall look only to the Successor Agency for the payment of the
principal of and interest and redemption premium (if any) on of such Bonds.
Section 9.12Execution in Counterparts. This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
Section 9.13Governing Law. This Indenture shall be construed and governed in
accordance with the laws of the State.
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IN WITNESS WHEREOF, the SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTAhas caused this Indenture to be signed in its name by
its Chairman, and U.S. BANK NATIONALASSOCIATION, in token of its acceptance of the trusts
created hereunder, has caused this Indenture to be signed in its corporate name by its officer
thereunto duly authorized, all as of the day and year first above written.
SUCCESSOR AGENCYTO THE
REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA
By:
Chairman
ATTEST:
Secretary
U.S. BANK NATIONALASSOCIATION,as Trustee
By:
Authorized Officer
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[TO BE CONFORMED]
EXHIBIT A
(FORM OF 2016BOND)
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
SUCCESSOR AGENCYTO THEREDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTA
TAX ALLOCATIONREFUNDINGBONDS, SERIES 2016
INTEREST RATE:MATURITY DATE:DATED DATE:CUSIP:
September1, ______
REGISTERED OWNER:CEDE & CO.
PRINCIPAL SUM:DOLLARS
The SUCCESSOR AGENCYTO THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA, a public entity duly existing under and by virtue of the laws of the State of
California (the “Successor Agency”), for value received hereby promises to pay to the Registered
Owner stated above, or registered assigns (the “Registered Owner”), on the Maturity Date stated
above (subject to any right of prior redemption hereinafter provided for, if any), the Principal Sum
stated above and to pay interest thereon from the Interest Payment Date (as hereinafter defined) next
preceding the date of authentication of this 2016Bond, unless (i)this 2016Bond is authenticated
after the close of business on the fifteenth (15th) calendar day of the month preceding suchInterest
Payment Date, whether or not such fifteenth (15th) calendar day is a Business Day(the “Record
Date”)and on or before the following Interest Payment Date, in which event it shall bear interest
from such Interest Payment Date, or (ii)this 2016Bondis authenticated on or beforeFebruary15,
2017, in which event it shall bear interest from the Dated Date above; provided however, that if at the
time of authentication of this 2016Bond, interest is in default on this 2016Bond, this 2016Bond
shall bear interest from theInterest Payment Date to which interest has previously been paid or made
available for payment on this 2016Bond, until payment of such Principal Sum in full, at the Interest
Rate per annum stated above, payable semiannually on March1and September1in each year,
commencing March 1, 2017(each an “Interest Payment Date”), calculated on the basis of 360-day
year comprised of twelve 30-day months. Principal hereof and premium, if any, upon redemption
hereof, if any,are payablein lawful money of the United States of Americaupon presentation and
surrender of this 2016Bond at the corporate trust office (the “Principal Corporate Trust Office”) of
U.S. Bank NationalAssociation,in Los Angeles, California, as trustee (the “Trustee”). Interest
hereon (including the final interest payment upon maturity or redemption) is payablewhen dueby
checkor draftof the Trustee mailed on the Interest Payment Date to the Registered Owner hereof at
the Registered Owner’s address as it appears on the Registration Books maintained by the Trustee at
the close of business on the preceding Record Date; provided however, that at the written request of
anyRegistered Owner of at least $1,000,000aggregate principal amountof the 2016Bonds (as
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defined below), which written request is on file with the Trustee on any Record Date, interesthereon
shall be paid by wire to such account in the United States as is specified in such written request.
This 2016Bond is one of a duly authorized issue of bonds of the Successor Agency
designated as “Successor Agency to the Redevelopment Agency of the City of Chula VistaTax
Allocation Bonds, Series 2016” (the “2016Bonds”), of an aggregate principal amount of
$__________, all of like tenor and date (except for such variation, if any, asmay be required to
designate varying series, numbers, maturities, interest rates, or redemption, if any,and other
provisions) and all issued pursuant to the provisions of Article11 (commencing with Section53580)
of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State (the “Refunding
Law”), the Dissolution Act (as such term is defined in the Indenture), and the Community
Redevelopment Law, constituting Part1of Division 24 of the California Health and Safety Code (the
“Law”),and pursuant to an Indenture of Trust, dated as of ___________1, 2016, entered into by and
between the Successor Agency and the Trustee (the “Indenture”), providing for the issuance of the
2016Bonds.
The 2016Bonds are being issued in the form of registered 2016Bonds without coupons.
Additional Parity Debtmay be issued on a parity with the 2016Bonds, but only subject to the terms
of the Indenture. Reference is hereby made to the Indenture (copies of which are on file at the office
of the Successor Agency) and all indentures supplemental thereto and to the Law for a description of
the terms on which the 2016Bonds are issued, the provisions with regard to the nature and extent of
the Pledged Tax Revenues (as that term is defined in the Indenture), and the rights thereunder of the
Registered Owners of the 2016Bonds and the rights, duties and immunities of the Trustee and the
rights and obligations of the Successor Agency thereunder, to all of the provisions of which
Indenture the Registered Owner of this 2016Bond, by acceptance hereof, assents and agrees.
Capitalized terms not otherwise defined herein shall have the meanings given them in the Indenture.
The 2016Bonds have been issued by the Successor Agency for the purpose of providing
funds to refinance certain bonds with respect to the Project Areas(as such term is defined in the
Indenture) and to pay certain expenses of the Successor Agency in issuing the 2016Bonds.
The 2016Bonds are special obligations of the Successor Agency and this 2016Bond and the
interest hereon and on all other 2016Bonds and the interest thereon (to the extent set forth in the
Indenture), are secured by a statutory pledge of, and lien on, Pledged Tax Revenues deposited in the
Redevelopment Property Tax Trust Fund held by the Auditor-Controller of the County, subject to the
payment of the County’s administrative charges and certain amounts to taxing entities pursuant to the
Dissolution Act,and a pledge of, security interest in and lien on the Pledged Tax Revenues,as more
fully described in the Indenture,on deposit inthe Redevelopment Obligation Retirement Fund,
including the Special Fund therein, and the Debt Service Fund and any fund or account created under
the Indenture (other than the Rebate Fund), and are payable from Pledged Tax Revenues remaining
after payment of certain amountsto certain taxing entities asprovided in the Dissolution Actand the
Indenture.
There has been created, and will be maintained by, the Successor Agency the Special Fund
(as defined in the Indenture) into which Pledged Tax Revenues deposited by the Auditor-Controller
of the County inthe Redevelopment Obligation Retirement Fund shall be transferredand from which
the Successor Agency shall transfer amounts to the Trustee for payment, when due, of the principal
of and the interest and redemption premium, if any, on the 2016Bondsand any Parity Debt(as
defined in the Indenture).
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[The 2016Bonds are subject to optional redemption prior to their stated maturitiesin
accordance with the Indenture.]
If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds may
be declared due and payable upon the conditions, in the manner and with the effect provided in the
Indenture, but such declaration and its consequences may be rescinded and annulled as further
provided in the Indenture.
The 2016Bonds are issuable as fully registered 2016Bonds without coupons in
denominations of $5,000 and any integral multiple thereof. Subject to the limitations and conditions
and upon payment of the charges, if any, as provided in the Indenture, 2016Bonds may be
exchangedfor a like aggregate principal amount of 2016Bonds of other authorized denominations
and of the sameseries, tenor andmaturity.
This 2016Bond is transferable upon the Registration Books, by the person in whose name it
is registered, in person or by aduly authorizedattorney of suchperson, upon surrender to the Trustee
at the Principal Corporate Trust Office for cancellation, but only in the manner and subject to the
limitations provided in the Indenture. Upon registration of such transfer a new fullyregistered 2016
Bond or 2016Bonds, of any authorized denomination or denominations, for the same aggregate
principal amount and of the sameseries, tenor andmaturity will be issued to the transferee in
exchange herefor. The Trustee may refuse to transfer or exchange (a)any2016Bond during the
fifteen (15) days prior to the date established for the selection of 2016Bonds for redemption, if any,
or (b)any 2016Bond selected for redemption, if any.
The Successor Agency and the Trustee may treat the Registered Owner hereof as the absolute
owner hereof for all purposes, and the Successor Agency and the Trustee shall not be affected by any
notice to the contrary.
The rights and obligations of the Successor Agency and the Registered Owners of the 2016
Bonds may be modified or amended at any time in the manner, to the extent and upon the terms
provided in the Indenture, but no such modification or amendment shall (a)extend the maturity of or
reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Successor
Agency to pay the principal, interest or redemption premiums (if any) at the time and place and at the
rate and in the currency provided herein of any Bond without the express written consent of the
respective Insurerand the Registered Owner of such Bond, or (b)reduce the percentage of Bonds
required for the written consent to any such amendment or modification. In no event shall a
Supplemental Indenturemodify any of the rights or obligations of the Trusteewithout its prior
written consent. In no event shall any Supplemental Indenture modify any of the rights or
obligations of any Issuer without its prior written consent.
Unless this 2016Bond is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”), to the Successor Agency or the Trustee for registration
of transfer, exchange, or payment, and any 2016Bond issued is registered in the name of Cede & Co.
or in such other name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the Registered Owner hereof, Cede & Co., has an
interest herein.
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This 2016Bond is not a debt, liability or obligation of the City of Chula Vista, the State of
California, or any of its political subdivisions, and neither said City, said State, nor any of its political
subdivisions is liable hereon, nor in any event shall this 2016Bond be payable out of any funds or
properties other than those pledged by the Successor Agency. The 2016Bonds do not constitute an
indebtedness in contraventionof any constitutional or statutory debt limitation or restriction.
It is hereby certified that all of the things, conditions and acts required to exist, to have
happened or to have been performed precedent to and in the issuance of this 2016Bond do exist,
have happened or have been performed in due and regular time and manner as required by the Law
and the laws of the State of California, and that the amount of this 2016Bond, together with all other
indebtedness of the Successor Agency, does not exceed any limit prescribed by theLaw or any laws
of the State of California, and is not in excess of the amount of 2016Bonds permitted to be issued
under the Indenture.
This 2016Bond shall not be entitled to any benefit under the Indenture or become valid or
obligatory for any purpose until the Trustee’s Certificate of Authentication hereon shall have been
manually signed by the Trustee.
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IN WITNESS WHEREOF, the Successor Agency to the Redevelopment Agency of the City
of Chula Vistahas caused this 2016Bond to be executed in its name and on its behalf with the
facsimile signature of its Executive Director and attested by the facsimile signature of its Secretary,
all as of the Dated Date set forth above.
SUCCESSOR AGENCYTO THE
REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA
By:
Executive Director
ATTEST:
Secretary
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STATEMENT OF INSURANCE
[TO COME FROM INSURER]
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TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the 2016Bonds described in the within-mentioned Indenture.
Authentication Date: _________, 2016
U.S. BANK NATIONALASSOCIATION,
as Trustee
By:
Authorized Signatory
2016-04-05 Agenda Packet Page 94
A-8
(FORM OF ASSIGNMENT)
For value received the undersigned hereby sells, assigns and transfers unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within-registered Bond and hereby irrevocably constitute(s) and appoints(s)
attorney,
to transfer the same on the registration books of the Trustee with full power of substitution in the
premises.
Dated: __________________________
Signatures Guaranteed:
Note:Signature(s) must be guaranteed by an
eligible guarantor.
Note:The signatures(s) on this Assignment must
correspond with the name(s) as written on
the face of the within Bond in every
particular without alteration or
enlargement or any change whatsoever.
2016-04-05 Agenda Packet Page 95
29079-280 CKL:MMB JH Draft 3.3.16
$__________
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Tax Allocation Refunding Bonds, Series 2016
BOND PURCHASE AGREEMENT
___________, 2016
Successor Agency to the Redevelopment Agency of the City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated (the “Underwriter”),offers to enter into this
Bond Purchase Agreement (the “Bond Purchase Agreement”) with the Successor Agency to
the Redevelopment Agency of the City of Chula Vista(the “Successor Agency”), which will be
binding upon the Successor Agency and the Underwriterupon the acceptance hereof by the
Successor Agency. This offer is made subject to its acceptance by the Successor Agency by
execution of this Bond Purchase Agreement and its delivery to the Underwriteron or before
5:00 P.M., California time, on the date hereof.
The Successor Agency acknowledges and agrees that: (i) the purchase and sale of the
Bonds (as hereinafter defined) pursuant to this Bond Purchase Agreement is an arm’s-length
commercial transaction between the Successor Agency and the Underwriter; (ii) in connection
therewith and with the discussions, undertakings and procedures leading up to the
consummation of such transaction, the Underwriterisand hasbeen acting solely as principal
and isnot acting as Municipal Advisors (as defined in Section 15B of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and hasnot assumed a fiduciary responsibility
in favor of the Successor Agency with respect to the offering of the Bonds or the process
leading thereto (whether or not the Underwriterhasadvised or iscurrently advising the
Successor Agency on other matters); (iii) the only obligations the Underwriterhasto the
Successor Agency with respect to the transaction contemplated hereby expressly are set forth
in this Bond Purchase Agreement; (iv) the Successor Agency has consulted its own legal,
financial and other advisors to the extent it has deemed appropriate; (v) the Underwriterhas
financial interests that may differ from and be adverse to those of the Successor Agency; and
(vi) the Underwriterhasprovided the Successor Agency with certain disclosures required under
the rules of the Municipal Securities Rulemaking Board (the “MSRB”).
The Successor Agency hereby acknowledges receipt from the Underwriterof
disclosures required by the MSRBRule G-17, relating to disclosures concerning the
Underwriter’s role in the transaction, disclosures concerning the Underwriter’s compensation,
conflict disclosures, if any, and disclosures concerning complex municipal securities financing, if
any.
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Terms not otherwise defined herein shall have the same meanings as set forth in the
Indenture, described below.
1. Purchase and Sale; Use of Proceeds. Upon the terms and conditions and in reliance
upon the representations, warranties and covenants herein, the Successor Agency hereby
agrees to sell to the Underwriterand the Underwriterhereby agreesto purchase from the
Successor Agency for offering to the public, all (but not less than all) ofthe $________
Successor Agency to the Redevelopment Agency of the City of Chula VistaTax Allocation
Refunding Bonds, Series 2016(the “Bonds”), at the purchase price of $_______(the
“Purchase Price”) (being the principal amount of the Bonds of $_______,less an Underwriter’s
discount of $______, and [plus/less]anet[premium/discount]of $________)
As an accommodation to the Successor Agency, the Underwriterwill pay, to
___________(the “Municipal Bond Insurer”),from the purchase priceof the Bonds, (a) the
premium for its municipal bond insurance policy (the “Insurance Policy”) issued for the Bonds
maturing on September 1, 20__through and including September 1, 20__(the “Insured
Bonds”),and (b) the premium for its reserve fund municipal bond insurancepolicyissued for
the Bonds (the “ReservePolicy”).
The Purchase Price and the amounts described in the preceding paragraph areto be
paid on the Closing Date (as defined in Section 6 below). The Bonds shall be dated the Closing
Date, and shall bear interest at the rates,shall mature on the dates and in the principal amounts
and shall be subject to redemption, all as set forth in the attached Exhibit A.
The Bonds are being issued for the purpose of providing funds to the Successor Agency
to refundthe outstanding bonds listed below (the “Former Agency Bonds”) issuedby the
former Redevelopment Agency of the City of Chula Vista(the “Former Agency”), which Former
Agency Bonds were payable from tax increment revenue generated in the Former Agency’s
Merged Chula Vista Redevelopment Project Areaand the Bayfront/Town Centre Project Area
(together, the “Project Area”). The Bonds will refund the following Former Agency Bonds:
(i)the Former Agency’s previously issued Bayfront/Town Centre Redevelopment Project
2006 Senior Tax Allocation Refunding Bonds, Series A(the “2006ABonds”), currently
outstanding in the principal amount of $___________,
(ii)the Former Agency’s previously issued Bayfront/Town Centre Redevelopment Project
2006 Subordinate Tax Allocation Refunding Bonds, Series B(the “2006BBonds”)
currently outstanding in the principal amount of $____________, and
(iii)the Former Agency’s previously issued 2008 Tax Allocation Refunding Bonds (Merged
Redevelopment Project)(the “2008 Bonds”), currently outstanding in the principal amount
of $____________.
The Bonds are also being issued tofund a reserve policy andpay the costs of issuing the
Bonds.
The Bonds are special, limited obligations of the Successor Agency, payable from, and
secured by a first and exclusive lien on Pledged Tax Revenues,as such term is defined in that
certain Indenture of Trust, dated as of _______ 1, 2016(the “Indenture”), by and between the
Successor Agency and U.S. Bank, National Association, as trustee (the “Trustee”). The
Indenture further providesthat the County is authorized by Section 34183(a) of the Dissolution
Act to use Pledged Tax Revenues to pay the County’s administrative costsallowed under
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Section 34182 and Section 95.3 of the Revenue and Taxation Code, and is required by Section
34183 of the Dissolution Act to pay Pledged Tax Revenues to taxing entities pursuant to
Sections 33607.5 and 33607.7 of the Law.
The payment of principal of and interest on the Insured Bonds, when due, will be insured
by the Municipal Bond Insurance Policy issued by the Municipal Bond Insurer concurrently with
the delivery of the Bonds.
The refundings described above will be accomplished pursuant to separate escrow
agreements(together, the “Escrow Agreements”)with U.S. Bank, National Association,acting
as escrow bank (the “Escrow Bank”).
Issuance of the Bonds was authorized by a resolution of the Successor Agency,adopted
on April 5, 2016(the “Successor Agency Resolution”), and a resolution of the Oversight
Board of the Successor Agency to the Redevelopment Agency of the City of Chula Vista,
adopted on April __, 2016(the “Oversight Board Resolution”).
2. Bona Fide Public Offering. The Underwriteragreesto make a bona fide public offering
of all of the Bonds, at prices not in excess of the initial public offering yields or prices set forth on
the cover page of the Official Statement.
3. Official Statement. The Successor Agency shall deliver or cause to be delivered to the
Underwriterpromptly after acceptance of this Bond Purchase Agreement copies of the Official
Statement relating to the Bonds, dated the date hereof (which, together with all exhibits and
appendices included therein or attached thereto and with such amendments or supplements
thereto which shall be approved by the Underwriter, the “Official Statement”). The Successor
Agency authorizes the Official Statement, including the cover page and Appendices thereto and
the information contained therein, to be used in connection with the sale of the Bonds and
ratifies, confirms and approves the use and distribution by the Underwriterfor such purpose,
prior to the date hereof, of the Preliminary Official Statement dated _______, 2016(the
“Preliminary Official Statement”). The Successor Agency deems such Preliminary Official
Statement final as of its date for purposes of Rule 15c2-12 under the Securities Exchange Act of
1934, as amended (“Rule 15c2-12”), except for information allowed to be omitted by Rule 15c2-
12 and except information relating to the Municipal Bond Insurer andthe Insurance Policy. The
Successor Agency also agrees to deliver to the Underwriter, at the Successor Agency’s sole
cost and at such address as the Underwritershall specify, as many copies of the Official
Statement as the Underwritershall reasonably request as necessary to comply with paragraph
(b)(4) of Rule 15c2-12 with Rule G-32 and all other applicable rules of the Municipal Securities
Rulemaking Council. The Successor Agency agrees to deliver such copies of the Official
Statement within seven (7) business days after the date hereof. Such Official Statement shall
contain all information previously permitted to be omitted by Rule 15c2-12. The Underwriter
agreesto give written notice to the Successor Agency of the date after which the Underwriter
shall no longer be obligated to deliver Official Statements pursuant to paragraph (b)(4) of Rule
15c2-12 which shall be no later than 25 days after the end of the Underwriting Period(as such
term is defined in 4(q) below).
The Underwriteragrees to promptly file a copy of the final Official Statement, including
any supplements prepared by the Successor Agency, in compliance with MSRB Rule G-32, and
to take any and all other actions necessary to comply with applicable Securities and Exchange
Commission rules and Municipal Securities Rulemaking Council rules governing the offering,
sale and delivery of the Bonds to the ultimate purchasers thereof.
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4. Representations, Warranties and Agreements of the Successor Agency. The
Successor Agency represents and warrants to the Underwriterthat, as of the Closing Date:
(a) The Successor Agency is a public entityexisting under the laws of the State
of California (the “State”), and is authorized, among other things, (i) to issue the Bonds,
and (ii) to secure the Bonds in the manner contemplated by the Indenture.
(b)The Successor Agency has assumed in accordance with all applicable laws,
including, but not limited tothe Dissolution Act, the community redevelopment powers of
the Former Agency with respect to the Project Area.
(c) The Successor Agency has the full right, power and authority (i) to enter into
the Indenture, the EscrowAgreements, the Disclosure Certificate (as defined
hereinafter),and this Bond Purchase Agreement, (ii) to issue, sell and deliver the Bonds
to the Underwriteras provided herein, and (iii) to carry out and consummate all other
transactions on its part contemplated by each of the aforesaid documents, and the
Successor Agency has complied with all provisions of applicable law in all matters
relating to such transactions.
(d) The Successor Agency has duly authorized (i) the execution and delivery of
the Bonds and the execution, delivery and due performance by the Successor Agency of
the EscrowAgreements, the Disclosure Certificate, this Bond Purchase Agreement and
the Indenture, (ii) the distribution and use of the “deemed final”Preliminary Official
Statement and the execution, delivery and distribution of the final Official Statement, and
(iii) the taking of any and all such actionas may be required on the part of the Successor
Agency to carry out, give effect to and consummate the transactions on its part
contemplated by such instruments. All consents or approvals necessary to be obtained
by the Successor Agency in connection withthe foregoing have been received, and the
consents or approvals so received are still in full force and effect.
(e) The information contained in the Preliminary Official Statement (excluding
therefrom for any information relating to the Municipal Bond Insurer, the Municipal Bond
Insurance Policy, the Reserve Fund Municipal Bond Insurance Policy,DTC and its book-
entry system included therein,the information therein under the caption “CONCLUDING
INFORMATION -Underwriting”)was, as of its date,true and correct in all material
respects, and the Preliminary Official Statement did not on the date thereof contain any
untrue or misleading statement of a material fact relating to the Successor Agency or the
Cityor omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(f) The information contained in the Official Statement (excluding therefrom for
any information relating to the Municipal Bond Insurer, the Municipal Bond Insurance
Policy, the Reserve Fund Municipal Bond Insurance Policy,DTC and its book-entry
system included therein,the information therein under the caption “CONCLUDING
INFORMATION -Underwriting”)is true and correct in all material respects, and the
Official Statement does not contain any untrue or misleading statement of a material fact
relating to the Successor Agency or the Cityor omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(g) Neither the execution and delivery by the Successor Agency of the Indenture,
the EscrowAgreements, the Disclosure Certificate, this Bond Purchase Agreement and
of the Bonds nor the consummation of the transactions on the part of the Successor
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Agency contemplated herein or therein or the compliance with the provisions hereof or
thereof will conflict with, or constitute on the part of the Successor Agency a violation of,
or a breach of or default under, (i) any statute, indenture, mortgage, note or other
agreement or instrument to which the Successor Agency 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 the Successor Agency (or the
members of the Successor Agency or any of its officers in their respective capacities as
such) is subject.
(h) The Successor Agency has never been in default at any time, as to principal
of or interest on any obligation which it has issued except as otherwise specifically
disclosed in the Official Statement; and the Successor Agency has not entered into any
contract or arrangement ofany kind which might give rise to any lien or encumbrance on
the Pledged Tax Revenues(as defined in the Indenture) pledged to the payment of the
Bonds except as is specifically disclosed in the Official Statement.
(i) Except as will be specifically disclosed in the Official Statement, there is no
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, which has been served on the Successor Agency or, to the
best knowledge of the Successor Agency, threatened, which in any way questions the
powers of the Successor Agency referred to in paragraph (b) above, or the validity of
any proceeding taken by the Successor Agency in connection with the issuance of the
Bonds, or wherein an unfavorable decision, ruling or finding could materially adversely
affect the transactions contemplated by the EscrowAgreements, the Disclosure
Certificate, this Bond Purchase Agreement or the Indenture, or which, in any way, could
adversely affect the validity or enforceability of the Indenture, the Bonds, the Escrow
Agreements, the Disclosure Certificate,or this Bond Purchase Agreement or, to the
knowledge of the Successor Agency, which in any way questions the exclusion from
gross income of the recipients thereof 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 regulationsor which in any way could materially adversely affect the
availability of Pledged Tax Revenues.
(j) Any certificate signed by any official of the Successor Agency and delivered to
the Underwriterin connection with the offer or sale of the Bonds shall be deemed a
representation and warranty by the Successor Agency to the Underwriteras to the truth
of thestatements therein contained.
(k) The Successor Agency has not been notified of any listing or proposed listing
by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
(l)The Successor Agency will furnish such information, execute such instruments
and take such other action in cooperation with the Underwriterand at the expense of the
Underwriteras the Underwritermay reasonably request in order (i) to qualify the Bonds
for offer andsale under the Blue Sky or other securities laws and regulations of such
states and other jurisdictions of the United States as the Underwritermay designate and
(ii) to determine the eligibility of the Bonds for investment under the laws of such states
and other jurisdictions, and will use its best efforts to continue such qualifications in
effect so long as required for the distribution of the Bonds, provided; however, that the
Successor Agency will not be required to execute a special or general consentto service
of process or qualify as a foreign corporation in connection with any such qualification in
any jurisdiction.
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(m) All authorizations, approvals, licenses, permits, consents, elections, and
orders of or filings with any governmental authority, legislative body, board, agency or
commission having jurisdiction in the matters which are required by the Closing Date for
the due authorization of, which would constitute a condition precedent to or the absence
of which would adversely affect the due performance by the Successor Agency of, its
obligations in connection with the Indenture have been duly obtained or made and are in
full force and effect.
(n)Between the date of this Bond Purchase Agreement and the Closing Date,
the Successor Agency will not offer or issue any bonds, notes or other obligations for
borrowed money not previously disclosed to the Underwriter.
(o) The Successor Agency will apply the proceeds of the Bonds in accordance
with the Indenture.
(p) Except as otherwise described in the Official Statement, as of the Closing
Date, the Successor Agency will not have outstanding any indebtedness which
indebtedness is secured by a lien on thePledged Tax Revenuesof the Successor
Agency on a parity with or senior to the lien provided for in the Indenture on the Pledged
Tax Revenues.
(q) Except as described in the Official Statement, neither the Former Agency nor
the Successor Agency has failed, within the last five years,to comply in all material
respects with any undertaking of the Successor Agency pursuant to Rule 15c2-12.
(r) If between the date hereof and the date which is 25 days after the End of the
Underwriting Period, as defined herein,for the Bonds, an event occurs which would
cause the information contained in the Official Statement, as then supplemented or
amended, to contain an untrue statement of a material fact or to omit to state a material
fact required to be stated therein or necessary to make such information herein, in the
light of the circumstances under which it was presented, not misleading, the Successor
Agency will notify the Underwriter, and, if in the opinion of the Underwriteror the
Successor Agency, or respectivecounsel, such event requires the preparation and
publication of a supplement or amendment to the Official Statement, the Successor
Agency will cooperate in the preparation of an amendment or supplement to the Official
Statement in a form and manner approved by the Underwriter, and shall pay all
expenses thereby incurred. For the purposes of this subsection, between the date hereof
and the date which is 25 days after the End of the Underwriting Period for the Bonds, the
Successor Agency will furnish such information with respect to itself as the Underwriter
may from time to time reasonably request. As used herein, the term “End of the
Underwriting Period”means the later of such time as: (i) the Successor Agency delivers
the Bonds to the Underwriter; or (ii) the Underwriterdoesnot retain, directly or as a
member of an underwriting syndicate, an unsold balance of the Bonds for sale to the
public. Notwithstanding the foregoing, unless the Underwritergives notice to the
contrary, the “End of the Underwriting Period”shall be the ClosingDate.
(s) If the information contained in the Official Statement is amended or
supplemented pursuant to paragraph (r) hereof, at the time of each supplement or
amendment thereto and (unless subsequently again supplemented or amended
pursuant to such subparagraph) at all times subsequent thereto up to and including the
date which is 25 days after the End of the Underwriting Period for the Bonds, the
portions of the Official Statement so supplemented or amended (including any financial
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and statistical data contained therein) will not contain any untrue statement of a material
fact required to be stated therein or necessary to make such information therein in the
light of the circumstances under which it was presented, notmisleading.
(t) The Oversight Board has duly adopted the Oversight Board Resolution
approving the issuance of the Bonds and no further Oversight Board approval or consent
is required for the issuing of the Bonds or the consummation of the transactions
described in the Preliminary Official Statement.
(u) The Department of Finance of the State (the “Department of Finance”) has
issued a letter, dated ______, 2016,approving the issuance of the Bonds. No further
Department of Finance approval or consent is required for the issuance of the Bonds or
the consummation of the transactions described in the Preliminary Official Statement.
The Successor Agency has received its Finding of Completion from the Department of
Finance. Except as disclosed in the Official Statement, the Successor Agency is not
aware of the Department of Finance directing or having any basis to direct the County
Auditor-Controller to deduct unpaid unencumbered funds from future allocations of
property tax to the Successor Agency pursuant to Section34183 of the Dissolution Act.
(v) As of the time of acceptance hereof and as of the date of the Closing, except
as described in the Preliminary Official Statement, the Successor Agency has complied
with the filing requirements of the Law, including, without limitation, the filing of all
Recognized Obligation Payment Schedules, as required by the Law.
(w) Except as disclosed in the Official Statement or otherwise disclosed in writing
to the Underwriter, the Successor Agencyhas not previously failed to comply in all
material respects with any undertakings under Rule 15c2-12 in the past five years.
5. Covenants of the Successor Agency. The Successor Agency covenants with the
Underwriteras of the Closing Date as follows:
(a) The Successor Agency covenants and agrees that it will execute a continuing
disclosure certificate, constituting an undertaking to provide ongoing disclosure about
the Successor Agency, for the benefit of the owners of the Bonds as required by Section
(b)(5)(i) of Rule 15c2-12, substantially in the form attached to the Preliminary Official
Statement (the “Disclosure Certificate”).
(b) The Successor Agency agrees to cooperate with the Underwriterin the
preparation of any supplement or amendment to the Official Statement deemed
necessary by the Underwriterto comply with the Rule and any applicable rule of the
Municipal Securities Rulemaking Board.
(c) If at any time prior to the Closing Date, any event occurs with respect to the
Successor Agency as a result of which the 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 Successor Agency shall promptly
notify the Underwriterin writing of such event. Any information supplied by the
Successor Agency for inclusion in any amendments or supplements to the Official
Statement will not contain any untrue or misleading statement of a material fact relating
to the Successor Agency or omit to state any such fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.
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(d) The Successor Agency will not knowingly take or omit to take any action,
which action or omission will in any way cause the proceeds from the sale of the tax-
exempt Bonds to be applied in a manner other than as provided in the Indenture or
which would cause the interest on the Bonds to be includable in gross income for federal
income tax purposes.
6. Closing. On ______, 2016, or at such other date and times as shall have been
mutually agreed upon by the Successor Agency and the Underwriter(the “Closing Date”), the
Successor Agency will deliver or cause to be delivered the Bonds to the Underwriter, and the
Successor Agency shall deliver or cause to be delivered to the Underwriterthe certificates,
opinions and documents hereinafter mentioned, each of which shall be dated as of the Closing
Date. The activities relating to the execution and delivery of the Bonds, opinions and other
instruments as described in Section 7of this Bond Purchase Agreement shall occur on the
Closing Date. The delivery of the certificates, opinions and documents as described herein shall
be made at the offices Stradling Yocca Carlson & Rauth, a Professional Corporation, in Newport
Beach, California (“Bond Counsel”), or at such other place as shall have been mutually agreed
upon by the Successor Agency and the Underwriter. Such delivery is herein called the
“Closing.”
The Bonds will be prepared and physically delivered to the Trustee on the Closing Date
in the form of a separate single fully registered bond for each of the maturities of the Bonds. The
Bonds shall be registered in the name of Cede & Co., as registered owner and nominee for The
Depository Trust Company (“DTC”), New York, New York. The Bonds will be authenticated by
the Trustee in accordance with the terms and provisions of the Indenture and shall be delivered
to DTC prior to the Closing Date as required by DTC to assure delivery of the Bondson the
Closing Date. It is anticipated that CUSIP identification numbers will be printed on the Bonds,
but neither the failure to print such number on any Bonds nor any error with respect thereto shall
constitute cause for a failure or refusal by the Underwriterto accept delivery of and pay for the
Bonds in accordance with the terms of this Bond Purchase Agreement.
At or before 8:00 a.m., DaylightSavingstime, on the Closing Date, the Successor
Agency will deliver, or cause to be delivered, the Bonds to DTC, in definitive form duly executed
and authenticated by the Trustee, and the Underwriterwill pay the Purchase Price of the Bonds
by delivering to the Trustee, for the account of the Successor Agency a wire transfer in federal
funds of the Purchase Price payable to the order of the Trustee.
7. Closing Conditions. The obligations of the Underwriterhereunder shall be subject to
the performance by the Successor Agency of its obligations hereunder at or prior to the Closing
Date and are also subject to the following conditions:
(a) the representations, warranties and covenants of the Successor Agency
contained herein shall be true and correct in all material respects as of the Closing Date;
(b) as of the Closing Date, there shall have been no material adverse change in
the financial condition of the Successor Agencythat is not disclosed in the Preliminary
Official Statement or the Official Statement;
(c) as of the Closing Date, all official action of the Successor Agency relating to
this Bond Purchase Agreement, the Disclosure Certificate and the Indenture shall be in
full force and effect;
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(d) as of the Closing Date, the Underwritershall receive the following certificates,
opinions and documents, in each case satisfactory in form and substance to the
Underwriter:
(i) a copy of the Indenture, as duly executed and delivered by the
Successor Agency and the Trustee;
(ii) a copy of the Disclosure Certificate, as duly executed and delivered by
the Successor Agency;
(iii) copies of the EscrowAgreements, duly executed and delivered bythe
Successor Agency and the Escrow Bank;
(iv) opinionsof Bond Counselfor the Bonds,dated the Closing Date and
addressed to the Underwriter, in the formsattached as Appendix Cto the Official
Statement;
(v) a certificate, dated the Closing Date, of the Successor Agency
executed by the Executive Director(or other duly appointed officer of the
Successor Agency authorized by the Successor Agency by resolution of the
Successor Agency) to the effect that (A) there is no action, suit, proceeding or
investigation at law or in equity before or by any court, public board or body
which has been served on the Successor Agency or, to the knowledge of the
Successor Agency, threatened against or affecting the Successor Agency to
restrain or enjoin the Successor Agency’s participation in, or in any way
contesting the existence of the Successor Agency or the powers of the
Successor Agency with respect to, the transactions contemplated by the Escrow
Agreements, this Bond Purchase Agreement or the Indenture, and
consummation of such transactions; (B) the representations and warranties of
the Successor Agency contained in this Bond Purchase Agreement are true and
correct in all material respects, and the Successor Agency has complied with all
agreements and covenants and satisfied all conditions to be satisfied at or prior
to the Closing Date as contemplated by the Indenture and this Bond Purchase
Agreement;(C) no event affecting the Successor Agency has occurred since the
date of the Official Statement which has not been disclosed therein or in any
supplement or amendment thereto which event should be disclosed in the Official
Statement in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;and(D)no further
consent is required to be obtained for the inclusion of the financial statement with
respect to the Successor Agency for the Fiscal Year Ending June 30, 2015,
which is contained inthe audited City of Chula Vista, California, Year End June
30, 2015Comprehensive Annual Financial Report, as Appendix Eto the Official
Statement.
(vi) an opinion of the City Attorney, as counsel to the Successor Agency,
dated the Closing Date and addressed to the Successor Agency and the
Underwriterto the effect that:
(A) the Successor Agency is a public body, organized and existing
under the laws of the State;
(B) The Successor Agency has assumed in accordance with all
applicable laws, including, but not limited to the Dissolution Act, the
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community redevelopment powers of the Former Agency with respect to
the Project Area.
(C) the Successor Agency has full legal power and lawful authority
to enter into the Indenture, the EscrowAgreementsand this Bond
Purchase Agreement, and to execute and deliver the Disclosure
Certificate;
(D) the Successor Agency Resolution approving and authorizing
the execution and delivery of the Bonds, the Indenture, the Escrow
Agreements, the Disclosure Certificate, this Bond Purchase Agreement
and the Official Statement has been duly adopted at a meeting of the
governing body of the Successor Agency, which was called and held
pursuant to the law and with all public notice required by law and at which
a quorum was present and acting throughout and the Successor Agency
Resolutionis in full force and effect and has not been modified, amended
or rescinded;
(E) the Indenture, the Escrow Agreements, the Disclosure
Certificate,and this Bond Purchase Agreement have been duly
authorized, executed and delivered by the Successor Agency and,
assuming due authorization, execution and delivery by the other parties
thereof, constitute the valid, legal and binding agreements of the
Successor Agency enforceable in accordance with their terms;
(F) The information in the Official Statement under the captions
“SECURITYFOR THE BONDS,”“THE SUCCESSOR AGENCY,”“THE
PROJECT AREAS,” insofar as such statements purport to summarize
information with respect to the Successor Agencyand its tax sharing
obligations, fairly and accurately summarizes the information presented
therein; and
(G) Except as otherwise disclosed in the Official Statement, there
is no litigation, action, suit, proceeding or investigation (or any basis
therefor) at law or in equity before or by any court, governmental agency
or body, pending by way of a summons served against the Successor
Agency or, to our knowledge, threatened against the Successor Agency,
challenging the creation, organization or existence of the Successor
Agency, or the validity of the Indenture, the Escrow Agreementsor this
Bond Purchase Agreement or seeking to restrain or enjoin any of the
transactions referred to therein or contemplated thereby or contesting the
authority of the Successor Agency to enter into or perform its obligations
under the Indenture, the Escrow Agreementsor this Bond Purchase
Agreement, or under which a determination adverse to the Successor
Agency would have a material adverse effect upon theavailability of
Pledged Tax Revenues, or which, in any manner, questions the right of
the Successor Agency to enter into, and perform under, the Indenture, the
Escrow Agreementsor this Bond Purchase Agreement;
(vii) an opinion of counsel to the Trustee, dated the Closing Date and
addressed to the Successor Agency and the Underwriter, to the effect that:
2016-04-05 Agenda Packet Page 105
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(A) The Trustee is a national banking association organized and
existing under the laws of the United States of America, having full power
to enter into, accept and administer the trust created under the Indenture;
(B) The Indenture has been duly authorized, executed and
delivered by the Trustee and the Indenture constitutes a legal, valid and
binding obligation of the Trustee enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
or other laws affecting the enforcement of creditors’rights generally and
by the application of equitable principles, if equitable remedies are
sought; and
(C) No consent, approval, authorization or other action by any
governmental or regulatory authority having jurisdiction over the Trustee
that has not been obtained is or will be required for the execution and
delivery of the Indenture or the consummation of the transactions
contemplated by the Indenture;
(viii) an opinionor opinionsof counsel to the Escrow Bank, dated the
Closing Date and addressed to the Successor Agency,and the Underwriter, to
the effect that:
(A) The Escrow Bank is a national banking association organized
and existing under the laws of the United States of America, having full
power to enter into, accept and administer the trusts created under the
EscrowAgreements;
(B) The EscrowAgreementshave been duly authorized, executed
and delivered by the Escrow Bank and the EscrowAgreementsconstitute
the legal, valid and binding obligations of the Escrow Bank enforceable in
accordance with their respective terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors’rights generally and by the application of
equitable principles, if equitable remedies are sought; and
(C) No consent, approval, authorization or other action by any
governmental or regulatory authority having jurisdiction over the Escrow
Bank that has not been obtained is or will be required for the execution
and delivery of the EscrowAgreementsor the consummation of the
transactions on the part of the Escrow Bank with respect to the Escrow
Agreementscontemplated by the EscrowAgreements;
(ix) a certificate, dated the Closing Date, of the Trustee, signed by a
duly authorized officer of the Trustee, to the effect that (A) the Trustee is duly
organized and validly existing as a national banking association, with full
corporate power to undertake the trust of the Indenture; (B) the Trustee has duly
authorized, executed and delivered the Indenture and by all proper corporate
action has authorized the acceptance of the trust of the Indenture; and (C) to the
best of such officer’s knowledge, there is no action, suit, proceeding or
investigation at law or in equity before or by any court, public board or body
which has been served on the Trustee (either in state or federal courts), or to the
knowledge of the Trustee which would restrain or enjoin the execution or delivery
of the Indenture, or which would affect the validity or enforceability of the
2016-04-05 Agenda Packet Page 106
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Indenture, or the Trustee’s participation in, or in any way contesting the powers
or the authority of the Trustee with respect to, the transactions contemplated by
the Indenture, or any other agreement, document orcertificate related to such
transactions;
(x) a certificateor certificates, dated the Closing Date, of the Escrow
Bank, signed by a duly authorized officer of the Escrow Bank, to the effect that
(A) the Escrow Bank is duly organized and validly existingas a national banking
association, with full corporate power to undertake the trust of the Escrow
Agreements; (B) the Escrow Bank has duly authorized, executed and delivered
the EscrowAgreementsand by all proper corporate action has authorized the
acceptance of the trusts of the EscrowAgreements; and (C) to the best of such
officer’s knowledge, there is no action, suit, proceeding or investigation at law or
in equity before or by any court, public board or body which has been served on
the Escrow Bank (either in state or federal courts), or to the knowledge of the
Escrow Bank which would restrain or enjoin the execution or delivery of the
EscrowAgreements, or which would affect the validity or enforceability of the
EscrowAgreementsor the Escrow Bank’sparticipation in, or in any way
contesting the powers or the authority of the Escrow Bank with respect to, the
transactions contemplated by the EscrowAgreements, or any other agreement,
document or certificate related to such transactions;
(xi) a supplemental opinion of Bond Counsel, dated the Closing Date and
addressed to the Successor Agency and the Underwriter, in the form attached to
this Bond Purchase Agreement as Exhibit B;
(xii) an opinion of Stradling Yocca Carlson & Rauth, Newport Beach,
California, as disclosure counsel to the Successor Agency, dated the Closing
Date and addressed to the Underwriter, in the form attached to this Bond
Purchase Agreement as Exhibit C;
(xiii) the opinion of Underwriter’scounsel satisfactory to the Underwriter;
(xiv) a tax certificate related to the Bondsin the form satisfactory to Bond
Counsel;
(xv) the final Official Statement executed by an authorized officer of the
Successor Agency;
(xvi) certified copies of the Successor Agency Resolution and the
Oversight Board Resolution;
(xvii) specimen Bonds;
(xviii) evidence that the federal tax information form 8038-G with respect
to the Bonds has been prepared by Bond Counsel for filing;
(xix) a verification report of Grant Thornton, LLP(the “Verification
Agent”) as to the sufficiency of the moneys and the investment earnings and
maturing escrow securities, if any, in the EscrowAgreements;
(xx) a copyof the InsurancePolicy;
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(xxi) a copyof the Reserve Policy;
(xxii) an opinion of counsel to the Municipal Bond Insurer, addressed to
the Successor Agency and the Underwriterto the effect that:
(A) the descriptions of the Municipal Bond Insurer, the Insurance
Policyand the Reserve Policyincluded in the Official Statement are
accurate;
(B) the Insurance Policyand the Reserve Policyconstitute legal,
valid and binding obligations of the Municipal Bond Insurer, enforceable in
accordance with their respective terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting
creditor’s rights generally and by the application of equitable principles if
equitable remedies are sought, and
(C) as to such other matters as the Successor Agency or the
Underwritermay reasonably request;
(xxiii) a certificate of the Municipal Bond Insurer, signed by an authorized
officer of the Municipal Bond Insurer, to the effect that:
(A) the information contained in the Official Statement relating to
the Municipal Bond Insurer, the Insurance Policyand the Reserve Policy
is true and accurate and
(B) as to such other matters as the Successor Agency or the
Underwritermay reasonably request;
(xxiv) satisfactory evidence that the Bonds have been assigned the
ratings disclosed in the Official Statement;
(xxv)a certificate of an officer of [HdL, Coren & Cone], dated the date of
the Closing, addressed to the Successor Agency and the Underwriter, to the
effect that, to the best of its knowledge, the assessed valuations and other fiscal
information contained in the Official Statement, including such firm’s Fiscal
Consultant’s Report attached thereto as Appendix A, are presented fairly and
accurately, and consenting to the use of itsreport as Appendix Ato the
Preliminary Official Statement and the Official Statement;
(xxvi) evidence of required filings with the California Debt and Investment
Advisory Commission;
(xxvii) defeasance opinions of Bond Counsel with respect to the Former
Agency Bondsand the related indentures, each dated the Closing Date and
addressed to the Successor Agency, the Trustee, the Escrow Bank and the
Underwriter, in form and substance satisfactory to the Underwriter;
(xxviii) a copy of the Letter of the Department of Finance, dated _______,
2016, approving the issuance of the Bonds.
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(xxix) A certificate, dated the Closing Date, signed by a duly authorized
official of Harrell & Company Advisors, LLC, the Agency’s Financial Advisor (the
“Financial Advisor”) addressed to the Underwriter and the Successor Agency to
the effect that:(i) in connection with its participation in the preparation of the
Official Statement and without undertaking any independent investigation and
without having undertaken to determine independently the fairness, accuracy or
completeness of the statements contained in the Official Statement, nothing has
come to the attention of the Financial Advisor that would lead it to believe that the
statements and information contained in the Official Statement as of the date
thereof and the Closing Date contains an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary tomake
the statements therein, in light of the circumstances in which they were made,
not misleading, and (ii) with respect to each of the Former Agency Bonds, the
savings test set forth in Section 34177.5(a) of the Dissolution Act has been met;
and
(xxx) such additional legal opinions, certificates, instruments and other
documents as the Underwritermay reasonably deem necessary to evidence the
truth and accuracy as of the time of the Closing Date of the representations and
warranties of the Successor Agency contained in this Bond Purchase Agreement
and the due performance or satisfaction by the Successor Agency at or prior to
such time of all agreements then to be performed and all conditions then to be
satisfied by the Successor Agency pursuant to this Bond Purchase Agreement.
8. Termination.The Underwritershall have the right to cancel its obligations to purchase
the Bonds if between the date hereof and the Closing Date:
(a) a 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 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 offering circular 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, or an executive order of the President of the
United States of America has been issued,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 Successor Agency or by any similar
body under the Indenture or similar documents or upon interest received on obligations
of the general character of the Bondswhich, in the reasonable opinion of the
Underwriter, materially adversely affects the market price of or market for the Bonds; or
(b) legislation shall have been enacted, or considered for enactment with an
effective date prior to the Closing Date, or a decision by a court of the United States
shall have been rendered, the effect of which is that of the Bonds, including any
underlying obligations, or the Indenture, as the case may be, arenot 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
2016-04-05 Agenda Packet Page 109
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as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect;
or
(c) a stop order, ruling, regulation or offering circular 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 of the Indenture, as contemplated hereby or by the Official
Statement, is or would be inviolation of any provisions 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
(d) any event shall have occurred or any information shall have become known to
the Underwriterwhich causes the Underwriterto reasonably believe that the 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
(e) 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
(f) 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
(g) a general banking moratorium shall have been declared by federal, New York
or California authorities; or
(h) any proceeding shall be pending or threatened by the Securities and
ExchangeCommission against the Successor Agency; or
(i) 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
(j)the New York Stock Exchange or other national securities exchange, or any
governmental or regulatory 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 the Underwriter; or
(k) any rating of the Bonds shall have been downgraded, suspended or
withdrawn by a national rating service, which, in the Underwriter’sreasonable opinion,
materially adversely affects the marketability or market price of the Bonds;
(l) any change, which in the reasonable opinion of the Underwriter, materially
adversely affects the marketability of the Bonds or, the financial condition of the
Successor Agency.
2016-04-05 Agenda Packet Page 110
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9. Contingency of Obligations.The obligations of the Successor Agency hereunder are
subject to the performance by the Underwriterof itsobligations hereunder.
10. Duration of Representations, Warranties, Agreements and Covenants.All
representations, warranties, agreements and covenants of the Successor Agency shall remain
operative and in full force and effect, regardless of any investigations made by or on behalf of
the Underwriteror the Successor Agencyand shall survive the Closing Date.
11. Expenses.The Successor Agency will pay or cause to be paid all reasonable
expenses incident to the performance of its obligations under this Bond Purchase Agreement,
including, but not limited to, mailing or delivery of the Bonds, costs of printing the Bonds,
printing, distribution and delivery of the Preliminary Official Statement, the Official Statement
and any amendment or supplement thereto, the fees and disbursements of Bond Counsel,
Disclosure Counsel, and counsel to the Successor Agency, the fees and expenses of the
Successor Agency’s accountants and fiscal consultants, fees of the Financial Advisor, any fees
charged by investment rating agencies for the rating of the Bondsand fees of the Trustee, and
fees and expenses related to the Successor Agency’s staff time. In the event this Bond
Purchase Agreement shall terminate because of the default of the Underwriter, the Successor
Agency will, nevertheless, pay, or cause to be paid, all of the expenses specified above.
The Underwritershall pay the fees and expenses of any counsel retained by it, all
advertising expenses incurred in connection with the public offering of the Bonds, CDIAC fees,
CUSIP fees and all other expenses incurred by it in connection with the public offering and
distribution of the Bonds(including out-of-pocket expenses and related regulatory expenses).
12. Notices.Any notice or other communication to be given to the Successor Agency
under this Bond Purchase Agreement may be given bydelivering the same in writing to the
FinanceDirector, Successor Agency to the Redevelopment Agency of the City of Chula Vista,
276 Fourth Avenue,Chula Vista, CA 91910, and any notice or other communication to be given
to the Underwriterunder this Bond Purchase Agreement may be given by delivering the same in
writing to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San
Francisco, California 94104 Attention: Sara Brown.
13. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of
the Successor Agency 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 byvirtue hereof.
14. Governing Law. This Bond Purchase Agreement shall be governed by and construed
in accordance with the laws of the State of California applicable to contracts made and
performed in California.
15. Headings. The headings of the paragraphs of this Bond Purchase Agreement are
inserted for convenience of reference only and shall not be deemed to be a part hereof.
16. Severability. In case any one or more of the provisions contained herein shall for any
reason be held to be invalid,illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof.
17. Effectiveness. This Bond Purchase Agreement shall become effective upon
acceptance hereof by the Successor Agency.
2016-04-05 Agenda Packet Page 111
29079-280 CKL:MMB JH Draft 3.3.16
18. Counterparts. This Bond Purchase Agreement may be executed in several
counterparts which together shall constitute one and the same instrument.
Very truly yours,
STIFEL, NICOLAUS & COMPANY,
INCORPORATED, ASUNDERWRITER
By: ___________________________
Authorized Officer
Accepted and agreed to as of
the date first above written, and the time
identified below:
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA
By
Name
Title
Time of Execution: _____________________
2016-04-05 Agenda Packet Page 112
Exhibit A
Page 1
EXHIBIT A TO THE
BOND PURCHASE AGREEMENT
$____________
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
Tax Allocation Refunding Bonds, Series 2016
MATURITY SCHEDULE
Maturity Date Principal Interest Reoffering
(September1)Amount Rate Yield Price
* Insured Bonds
REDEMPTION PROVISIONS
Optional Redemption. The Bonds maturing on or prior to September 1, 20__ are not subject to
optional redemption. The Bonds maturing on or after September 1, 20__, are subject to optional
redemption prior to their respective maturity dates as a whole, or in part by lot, on any date on or after
September 1, 20__, by such maturity or maturities as shall be directed by the Successor Agency (or in
absence of such direction, pro rata by maturity and by lot within a maturity), from any source of available
funds. Such optional redemption shall be at a redemption price equal to 100% of the principal amount to
be redeemed, plus accrued but unpaid interest to the date fixed for redemption, without premium.
Mandatory Sinking Fund Redemption. The Bonds that are Term Bonds (as defined in the
Indenture) maturing September 1, 20__ shall also be subject to mandatory redemption in whole, or in part
by lot, on September 1 in each year, commencing September 1, 20__ as set forth below, from sinking
fund payments made by the Successor Agency to the Principal Account pursuant to the Indenture, at a
redemption price equal to the principal amount thereof to be redeemed, without premium, in the
aggregate respective principal amounts and that on September 1 in the respective years as set forth in
the following table:
2016-04-05 Agenda Packet Page 113
Exhibit B
Page 1
EXHIBIT BTO THE
BOND PURCHASE AGREEMENT
_________, 2016
Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 37th Floor
San Francisco, California 94101
Re:$_______Successor Agency to the Redevelopment Agency of the City of Chula
VistaTax Allocation Refunding Bonds, Series 2016
Ladies and Gentlemen:
We have acted as Bond Counsel to the Successor Agency to the Redevelopment
Agency of the City of Chula Vista(the “Agency”) in connection with the issuance and sale by the
Agency of the above-referenced bonds (collectively, the “Bonds”). The Bonds are being
purchased by you pursuant to a Bond Purchase Agreement, dated ________, 2016 (the
“Purchase Agreement”), by and between the Successor Agency and you, as underwriter of the
Bonds. All capitalized terms used herein and not defined herein shall have the meanings
ascribed thereto in the Purchase Agreement.
In rendering the advice contained herein, we have examined originals or copies certified
or otherwise identified to our satisfaction of: (i) the Purchase Agreement; (ii) the Escrow
Agreements; and (iii) such other documents, certificates, instructions and records as we have
considered necessary or appropriate asa basis for such advice.
The conclusions expressed herein are based on an analysis of existing laws,
regulations, rulings and court decisions and cover certain matters not directly addressed by
such authorities. Such conclusions may be affected by actions taken or omitted or events
occurring after the date hereof. We have not undertaken to determine, or to inform you or any
other person, whether any such actions are taken or omitted or whether such events do occur or
any other matters come to our attention after the date hereof. We have assumed, but not
independently verified, that the signatures on all documents, letters, opinions and certificates
which we have examined are genuine, that all documents submitted to us are authentic and
were duly and properly executed by the parties thereto and that all representations made in the
documents that we have reviewed are true and accurate. We have assumed, without
independent verification, the accuracy of the factual matters represented, warranted or certified
in the documents, and of the legal conclusions contained in any opinions referenced in the
Purchase Agreement.
By delivering this letter, we are not expressing any opinion with respect to any
indemnification, contribution, liquidated damages, penalty (including any remedy deemed to
constitute a penalty), right of set-off, arbitration, judicial reference, choice of law, choice of
forum, choice of venue, non-exclusivity of remedies, waiver or severability provisions contained
in the Purchase Agreement, the Escrow Agreements or any document referenced in the
Purchase Agreement, nor are we expressing any opinion with respect to the state or quality of
title to or interest in any assets described in or as subject to the lien of the Indenture or the
accuracy or sufficiency of the description contained therein of, or the remedies available to
2016-04-05 Agenda Packet Page 114
Exhibit B
Page 2
enforce liens on, any such assets. Our services as Bond Counsel to the Successor Agency did
not involve the rendering of financial or other non-legal advice to you, the Successor Agency or
any other party to the transaction.
Based upon our examination of the foregoing, and in reliance thereon and on all matters
of fact as we deem relevant under the circumstances, and upon consideration of applicable
laws, we are of the opinion that:
1.The Purchase Agreement and the Escrow Agreements have been duly
authorized, executed and delivered by the Agency, and, assuming due authorization, execution
and delivery by the other parties thereto, constitute the legal, valid and binding obligations of the
Agency, enforceable in accordance with their terms.
2.The statements contained in the Official Statement on the cover and under the
captions “THE BONDS,” “SECURITY FOR THE BONDS” and “TAX MATTERS,” and in
“APPENDIX A–SUMMARY OF THE INDENTURE” and “APPENDIX F–FORMS OF BOND
COUNSEL OPINIONS,” insofar as such statements expressly summarize provisions of the
Bonds, the Indenture, the Escrow Agreements and Bond Counsel’s final opinions concerning
certain federal tax matters relating to the Bonds, are fair and accurate (provided we express no
opinion with respect to (i) any material that may be treated as included under such captions and
appendices by any cross-reference; (ii) the expressions of opinion, the assumptions, the
projections, estimates and forecasts, the charts, the financial statements or other financial,
numerical, economic, demographic or statistical data, or assessed valuations contained in the
Official Statement; (iii) any CUSIP numbers or information relating thereto; (iv) any information
with respect to The Depository Trust Company and its book-entry system; or (v) any information
with respect to __________, its insurance policyand reserve policy).
With respect to the opinions expressed herein, the rights and obligations under the
Purchase Agreement and the Escrow Agreements are subject to bankruptcy, insolvency,
moratorium and other laws affecting the enforcement of creditors’ rights, to the application of
equitable principles if equitable remedies are sought, to the limitations on legal remedies against
public agencies in the State of California and to limitations on rights of indemnity by principles of
public policy.
This letter is being furnished to you solely for your benefit in connection with your
purchase of the Bonds in accordance with Section 7(d)(xi) of the Purchase Agreement and is
not to be used, circulated, quoted or otherwise referred to for any other purpose without our
prior written consent. This letter is not intended to and may not be relied upon by owners of the
Bonds. No attorney-client relationship has existed or exists between our firm and you in
connection with the issuance of the Bonds or by virtue of this letter. We note you were
represented by separate counsel retained by you in connection with the transaction described in
the Purchase Agreement.
Our engagement with respect to the Bonds terminates as of the date hereof, and we
have not undertaken any duty, and expressly disclaim any responsibility, to advise you as to
events occurring after the date hereof with respect to the Bonds, the Purchase Contract, the
Escrow Agreement or other matters discussed herein.
Our opinion is limited to matters governed by the laws of the State of California and
federal law. We assume no responsibility with respectto the applicability or the effect of the
laws of any other jurisdiction.
2016-04-05 Agenda Packet Page 115
Exhibit B
Page 3
We express no opinion herein as to the accuracy, completeness or sufficiency of the
Official Statement relating to the Bonds or other offering material relating to the Bonds and
expressly disclaim any duty to advise the owners of the Bonds with respect to matters contained
in the Official Statement.
Respectfully submitted,
2016-04-05 Agenda Packet Page 116
Exhibit C
Page 1
EXHIBIT CTO THE
BOND PURCHASE AGREEMENT
___________, 2016
Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 37th Floor
San Francisco, California 94101
Re:$_______Successor Agency to the Redevelopment Agency of the City of Chula
VistaTax Allocation Refunding Bonds, Series 2016
Ladies and Gentlemen:
We have acted as disclosure counsel for the Successor Agency to the Redevelopment
Agency of the City of Chula Vista(the “Successor Agency”) in connection with the issuance of
the above-referenced bonds (the “Bonds”). The Bonds are being purchased by you pursuant to
a Bond Purchase Agreement, dated ________, 2016 (the “Purchase Agreement”), by and
between the Successor Agency and you, as underwriter of the Bonds. All capitalized terms
used herein and not defined herein shall have the meanings ascribed thereto in the Purchase
Agreement.
In rendering the advice contained herein, we have examined originals or copies certified
or otherwise identified to our satisfaction of: (i)the Official Statement, dated ______, 2016 (the
“Official Statement”) relating to the Bonds; (ii)the letters, certificates, and opinions delivered to
you pursuant to the provisions of the Purchase Agreement, including, but not limited to,
Section7(d) thereof; and (iii) such other documents, certificates, instructions and records as we
have considered necessary or appropriate as a basis for such advice. We have not reviewed,
and we do not assume any responsibility for any electronic version of the Official Statement and
for all purposes of this letter, we have assumed that any electronic version of the Official
Statement conforms in all respects to the printed version of the Official Statement.
The conclusions expressed herein are based on an analysis of existing laws,
regulations, rulings and court decisions and cover certainmatters not directly addressed by
such authorities. Such conclusions may be affected by actions taken or omitted or events
occurring after the date hereof. We have not undertaken to determine, or to inform you or any
other person, whether any such actions are taken or omitted or whether such events do occur or
any other matters come to our attention after the date hereof. We have assumed, but not
independently verified, that the signatures on all documents, letters, opinions and certificates
which we have examined are genuine, that all documents submitted to us are authentic and
were duly and properly executed by the parties thereto and that all representations made in the
documents that we have reviewed are true and accurate. We have assumed, without
independent verification, the accuracy of the factual matters represented, warranted or certified
in the documents, and of the legal conclusions contained in any opinions referenced in the
Official Statement.
2016-04-05 Agenda Packet Page 117
Exhibit C
Page 2
By delivering this letter, we are not expressing any opinion with respect to any
indemnification, contribution, liquidated damages, penalty (including any remedy deemed to
constitute a penalty), right of set-off, arbitration, judicial reference, choice of law, choice of
forum, choice of venue, non-exclusivity of remedies, waiver or severability provisions contained
in any document referenced in the Official Statement, nor are we expressing any opinion with
respect to the state or quality of title to or interest in any assets described in or as subject to the
lien of the Indenture or the accuracy or sufficiency of the description contained therein of, or the
remedies available to enforce liens on, any such assets. Our services as disclosure counsel to
the Successor Agency did not involve the rendering of financial or other non-legal advice to you,
the Successor Agency or any other party to the transaction.
Although we have not undertaken to determine independently or verify and are not
passing upon and do not assume responsibility for, the accuracy, completeness or fairness of
the statements contained in the Official Statement, and are therefore unable to make any
representation to you in that regard, we have participated in conferences prior to the date of the
Official Statement with your representatives, including separate counsel retained by you, and
representatives of the Successor Agency, including the Successor Agency’s General Counsel,
the Successor Agency’s financial advisor, Harrell & Company Advisors, LLC, and others, during
which conferences thecontents of the Official Statement and related matters were discussed.
Based upon the information made available to us in the course of our participation in such
conferences as disclosure counsel to the Successor Agency, our review of the documents
referred to above, our reliance on the oral and written statements of the Successor Agency and
others, the documents, certificates, instructions and records and the opinions of counsel
described above and our understanding of applicable law, and subject to the limitations on our
role as disclosure counsel to the Successor Agency, we advise you as a matter of fact but not
opinion that no information has come to the attention of the attorneys in the firm representing
the Successor Agency as disclosure counsel on this matter which caused us to believe that the
Official Statement as of its date contained, or as of the date hereof contains, any untrue
statement of a material fact, or as of its date omitted, or as of the date hereof omits, to state a
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading in any material respect
(except that we express no view with respect to: (i) the expressions of opinion, the assumptions,
the projections, estimates and forecasts, the charts, the financial statements or other financial,
numerical, economic, demographic or statistical data, or assessed valuations contained in the
Official Statement; (ii) any CUSIP numbers or information relating thereto; (iii) any information
with respect to The Depository Trust Company and its book-entry system; (iv) any information
contained in the appendices to the Official Statement; (v) any information incorporated by
reference into the OfficialStatement; (vi) the Successor Agency’s compliance with its
obligations to provide notice of the events described in part (b)(5)(i)(C) of Rule 15c2-12
promulgated under the Securities Act of 1934 (“Rule 15c2-12”) or to file annual reports
described in part(b)(5)(i)(A) of Rule 15c2-12, review of which matters we understand has been
undertaken by Willdan Financial Services; (vii) any information with respect to the underwriter or
underwriting matters with respect to the Bonds, including but not limited to information under the
caption “CONCLUDING INFORMATION—Underwriting”; (viii)information under the caption
“LEGAL MATTERS—No Litigation”; (ix) any information with respect to ________, its insurance
policy, reserve policy, and under the caption “MUNICIPAL BOND INSURANCE” and Appendix
H; and (x) any information with respect to the ratings on the Bonds and the rating agencies
referenced therein, including but not limited to information under the caption “CONCLUDING
INFORMATION—Ratingson the Bonds”) Finally,we advise you that, other than reviewing the
various certificates and opinions required by Section7(d) of the Purchase Agreement, we have
not taken any steps since the date of the Official Statement to verify the accuracy of the
2016-04-05 Agenda Packet Page 118
Exhibit C
Page 3
statements contained in the Official Statement as of the date hereof. No responsibility is
undertaken or opinion rendered with respect to any other disclosure document, materials or
activity, or as to any information from another document or source referred to by, or
incorporatedby reference in, the Official Statement.
By acceptance of this letter you recognize and acknowledge that: (i) the negative
assurance above is not an opinion and is based on certain limited activities performed by
specific attorneys in our firm in our roleas disclosure counsel to the Successor Agency; (ii) the
scope of the activities performed by such attorneys in our role as disclosure counsel to the
Successor Agency and for purposes of delivering such negative assurances were inherently
limited and do not purport to encompass all activities necessary for compliance by you or others
in accordance with applicable state and federal securities laws; and (iii) the activities performed
by such attorneys in our role as disclosure counsel to the Successor Agency rely in part by
representations, warranties, certifications and opinions of other parties to the transaction,
including representations, warranties and certifications made by the Successor Agency.
This letter is being furnished to you solely for your benefit in connection with your
purchase of the Bonds in accordance with the Purchase Agreement and is not to be used,
circulated, quoted or otherwise referred to for any other purpose without our prior written
consent. No attorney-client relationship has existed or exists between our firm and you in
connection with the issuance of the Bonds or by virtue of this letter. We note you were
represented by separate counsel retained by you in connection with the transaction described in
the Official Statement. Thisletter is limited to matters governed by the laws of the State of
California and federal securities laws, and we assume no responsibility with respect to the
applicability or the effect of the laws of any other jurisdiction.
Our engagement as disclosurecounsel to the Successor Agency terminates as of the
date hereof, and we have not undertaken any duty, and expressly disclaim any responsibility, to
advise you as to events occurring after the date hereof with respect to the Bonds or other
matters discussed in the Official Statement. This letter is not intended to, and may not, be relied
upon by owners of the Bonds, the owners of any beneficial ownership interest in the Bonds or
by any other party to whom it is not addressed.
Respectfully submitted,
2016-04-05 Agenda Packet Page 119
PRELIMINARY OFFICIAL STATEMENT DRAFT DATED MARCH 21, 2016
NEW ISSUE – BOOK-ENTRY RATINGS
INSURED BONDS RATING: S&P: ___
UNDERLYING RATING: S&P: ___
(See “CONCLUDING INFORMATION - Ratings on the Bonds” herein)
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel, subject,
however to certain qualifications described herein, under existing law, the interest on the Bonds is excludable from gross income of the
owners thereof for federal income tax purposes and such interest is not included as an item of tax preference in computing the alternative
minimum tax for individuals and corporations under the Internal Revenue Code of 1986, as amended, but is taken into account in
computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In the further opinion of
Bond Counsel, such interest is exempt from California personal income taxes. See “TAX MATTERS” herein.
SAN DIEGO COUNTY STATE OF CALIFORNIA
$30,000,000*
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
TAX ALLOCATION REFUNDING BONDS, SERIES 2016
Dated: Date of Delivery Due: September 1 as Shown on the inside cover page
The cover page contains certain information for quick reference only. It is not a summary of the issue. Potential investors must
read the entire Official Statement to obtain information essential to the making of an informed investment decision. See “RISK
FACTORS” herein for a discussion of special risk factors that should be considered in evaluating the investment quality of the
Bonds.
Proceeds from the sale of the Successor Agency to the Redevelopment Agency of the City of Chula Vista (the “Successor Agency”) Tax
Allocation Refunding Bonds, Series 2016 (the “Bonds”) will be used to refinance certain outstanding obligations of the former
Redevelopment Agency of the City of Chula Vista (the “Former Agency”), to fund a reserve fund for the Bonds, and to pay costs of
issuance.
The Bonds will be issued under an Indenture of Trust dated as of June 1, 2016 (the “Indenture”), by and between the Successor Agency
and U.S. Bank National Association, as trustee (the “Trustee”). The Bonds are special obligations of the Successor Agency and are
payable solely from and secured by a pledge of certain tax increment revenues of the Former Agency’s Merged Redevelopment Project
Area and Bayfront/Town Centre Project Area (the “Project Areas”) and a pledge of amounts in certain funds and accounts established
under the Indenture (see “SECURITY FOR THE BONDS” and “RISK FACTORS”).
Interest on the Bonds is payable semiannually on each March 1 and September 1 until maturity, commencing March 1, 2017. The Bonds
are subject to optional redemption and mandatory sinking account redemption prior to maturity. See “THE BONDS - General Provisions”
herein.
The Bonds do not constitute a debt or liability of the City of Chula Vista, the County of San Diego, the State of California or of
any political subdivision thereof, other than the Successor Agency. The Successor Agency shall only be obligated to pay the
principal of the Bonds, or the interest thereon, from the funds described herein, and neither the faith and credit nor the taxing
power of the City of Chula Vista, the County of San Diego, the State of California or any of its political subdivisions is pledged to
the payment of the principal of or the interest on the Bonds. The Successor Agency has no taxing power.
The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be issued
concurrently with the delivery of the Bonds by _____________________. See “MUNICIPAL BOND INSURANCE” and “APPENDIX H -
SPECIMEN MUNICIPAL BOND INSURANCE POLICY.”
[LOGO]
The Bonds are being offered when, as and if issued, subject to the approval as to their legality by Stradling Yocca Carlson & Rauth, a
Professional Corporation, Newport Beach, California. Certain legal matters will also be passed on for the Successor Agency by Stradling
Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel, and by Glen R. Googins, City
Attorney. Certain legal matters will be passed on for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, San
Francisco, California. It is anticipated that the Bonds will be available for delivery through the facilities of The Depository Trust
Company on or about ________, 2016 (see “APPENDIX G - THE BOOK-ENTRY SYSTEM” herein).
The date of the Official Statement is _________, 2016.
__________________________
* Preliminary, subject to change.
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2016-04-05 Agenda Packet Page 120
$30,000,000*
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
TAX ALLOCATION REFUNDING BONDS, SERIES 2016
MATURITY SCHEDULE
Maturity Date Principal Interest CUSIP®†
September 1 Amount Rate Yield Price (______)
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
__________________________
* Preliminary, subject to change.
† Copyright 2016, American Bankers Association. CUSIP® is a registered trademark of the American Bankers
Association. CUSIP data herein is provided by CUSIP Global Services Bureau, operated by Standard & Poor’s.
This data is not intended to create a database and does not serve in any way as a substitute for CUSIP Global
Services. CUSIP numbers have been assigned by an independent company not affiliated with the Successor
Agency and are included solely for the convenience of the holders of the Bonds. None of the Successor Agency,
the Municipal Advisor or the Underwriter takes any responsibility for the selection or uses of these CUSIP
numbers, and no representation is made as to their correctness on the Bonds or as included herein. The CUSIP
number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various
subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement
of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a
portion of certain maturities of the Bonds.
2016-04-05 Agenda Packet Page 121
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has
been authorized to give any information or to make any representations with respect to the Bonds other than as
contained in this Official Statement, and if given or made, such other information or representation must not be
relied upon as having been authorized.
No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation
of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or
solicitation.
Effective Date. This Official Statement speaks only as of its date and the information and expressions of opinion
contained in this Official Statement are subject to change without notice. Neither the delivery of this Official
Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no
change in the affairs of the Successor Agency or the Project Areas since the date of this Official Statement.
Use of this Official Statement. This Official Statement is submitted in connection with the sale of the Bonds
referred to in this Official Statement and may not be reproduced or used, in whole or in part, for any other purpose.
This Official Statement is not a contract with the purchasers of the Bonds.
Preparation of this Official Statement. The information contained in this Official Statement has been obtained
from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness.
The information and expressions of opinions herein are subject to change without notice and neither the delivery of
this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the Successor Agency since the date hereof. This Official Statement is
submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole
or in part, for any other purpose, unless authorized in writing by the Successor Agency. All summaries of the Bonds,
the Indenture and other documents, are made subject to the provisions of such documents and do not purport to be
complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the
Successor Agency for further information. See “INTRODUCTION - Summary Not Definitive.”
The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has
reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors
under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter
does not guarantee the accuracy or completeness of such information.
Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or
maintain the market price of the Bonds at levels above that which might otherwise prevail in the open market. If
commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and
sell the Bonds to certain dealers, dealer banks and banks acting as agent at prices lower than the public offering
prices stated on the inside cover page of this Official Statement, and those public offering prices may be changed
from time to time by the Underwriter.
Bonds are Exempt from Securities Laws Registration. The Bonds have not been registered under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the
issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section
3(a)(12) of the Securities Exchange Act of 1934.
Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement
constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation
Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section
27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the
terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words.
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH
FORWARD LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS
DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE
SUCCESSOR AGENCY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE
FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR
CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.
Website. The City of Chula Vista maintains an Internet website, but the information on the website is not
incorporated in this Official Statement.
2016-04-05 Agenda Packet Page 122
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
CHULA VISTA, CALIFORNIA
SUCCESSOR AGENCY BOARD
Mary Casillas Salas, Chair
John McCann, Vice Chair
Patricia Aguilar, Director
Pamela Bensoussan, Director
Steve Miesen, Director
______________________________________________
CITY STAFF
Gary Halbert, City Manager
Maria Kachadoorian, Deputy City Manager/Chief Financial Officer
Kelley Bacon, Deputy City Manager
David Bilby, Director of Finance/Treasurer
Mike Sylvia, Finance and Purchasing Manager
Glen R. Googins, City Attorney
Donna Norris, CMC, City Clerk
__________________________________________
PROFESSIONAL SERVICES
Bond Counsel and Disclosure Counsel
Stradling Yocca Carlson & Rauth,
a Professional Corporation
Newport Beach, California
Municipal Advisor
Harrell & Company Advisors, LLC
Orange, California
Trustee and Escrow Bank
U.S. Bank National Association
Los Angeles, California
Verification Agent
Grant Thornton LLP
Minneapolis, Minnesota
2016-04-05 Agenda Packet Page 123
TABLE OF CONTENTS
INTRODUCTION ...................................................... 1
The Successor Agency and the Former Agency ......... 1
The City ..................................................................... 2
Authority and Purpose ............................................... 2
Tax Allocation Financing Under the Dissolution
Act .......................................................................... 2
The Project Areas ....................................................... 3
Security for the Bonds ............................................... 4
Municipal Bond Insurance and Reserve Account
Surety Policy ........................................................... 4
Legal Matters ............................................................. 5
Professional Services ................................................. 5
Offering of the Bonds ................................................ 5
Summary Not Definitive ............................................ 6
THE BONDS ............................................................... 6
General Provisions ..................................................... 6
Redemption ................................................................ 7
Scheduled Debt Service on the Bonds ....................... 9
THE FINANCING PLAN ........................................ 10
The Refunding Plan ................................................. 10
Estimated Sources and Uses of Funds ..................... 11
SECURITY FOR THE BONDS .............................. 12
Tax Allocation Financing ......................................... 12
Pledged Tax Revenues ............................................. 12
Redevelopment Property Tax Trust Fund ................ 13
Recognized Obligation Payment Schedules ............ 15
Pledge of Pledged Tax Revenues ............................. 17
Reserve Account ...................................................... 18
No Additional Debt Other Than Refunding Bonds .. 18
MUNICIPAL BOND INSURANCE ........................ 19
THE SUCCESSOR AGENCY ................................. 20
Government Organization ........................................ 20
Successor Agency Powers ....................................... 20
Redevelopment Plans ............................................... 21
Plan Limitations ....................................................... 21
THE PROJECT AREAS .......................................... 22
Description of the Project Areas .............................. 22
Assessed Valuations and Pledged Tax Revenues ..... 24
Major Taxpayers ...................................................... 26
Assessment Appeals ................................................. 27
FINANCIAL INFORMATION ............................... 28
Successor Agency Accounting Records and
Financial Statements ............................................. 28
Property Taxation in California ............................... 28
No Other Outstanding Bonded Indebtedness .......... 30
Flow of Funds .......................................................... 31
Projected Pledged Tax Revenues and Debt
Service Coverage .................................................. 31
RISK FACTORS ...................................................... 34
Factors Which May Affect Pledged Tax Revenues .. 34
Real Estate and General Economic Risks ................ 37
Recognized Obligation Payment Schedule .............. 38
Loss of Tax Exemption ............................................ 38
IRS Audit of Tax-Exempt Bond Issues .................... 39
Risks Related to Insured Bonds ............................... 39
Secondary Market .................................................... 39
TAX MATTERS ....................................................... 40
LEGAL MATTERS .................................................. 40
Enforceability of Remedies ..................................... 40
Approval of Legal Proceedings ............................... 40
No Litigation ........................................................... 40
CONCLUDING INFORMATION .......................... 41
Ratings on the Bonds ............................................... 41
The Municipal Advisor ............................................ 41
Continuing Disclosure ............................................. 41
Underwriting ........................................................... 42
References ............................................................... 42
Execution ................................................................. 42
APPENDIX A - SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE
APPENDIX B - CITY OF CHULA VISTA
INFORMATION STATEMENT
APPENDIX C – PROJECTED TAX REVENUES
APPENDIX D - AUDITED FINANCIAL
STATEMENTS FOR THE FISCAL YEAR ENDED
JUNE 30, 2015
APPENDIX E - FORM OF CONTINUING
DISCLOSURE CERTIFICATE
APPENDIX F - PROPOSED FORM OF BOND
COUNSEL OPINION
APPENDIX G - THE BOOK-ENTRY SYSTEM
APPENDIX H - SPECIMEN MUNICIPAL BOND
INSURANCE POLICY
2016-04-05 Agenda Packet Page 124
1
OFFICIAL STATEMENT
$30,000,000*
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
TAX ALLOCATION REFUNDING BONDS, SERIES 2016
This Official Statement, which includes the cover page, inside cover page and appendices (the “Official
Statement”), is provided to furnish certain information concerning the sale of the Successor Agency to the
Redevelopment Agency of the City of Chula Vista Tax Allocation Refunding Bonds, Series 2016 (the
“Bonds”).
INTRODUCTION
This Introduction contains only a brief description of this issue and does not purport to be complete. The
Introduction is subject in all respects to more complete information in the entire Official Statement and
the offering of the Bonds to potential investors is made only by means of the entire Official Statement and
the documents summarized herein. Potential investors must read the entire Official Statement to obtain
information essential to the making of an informed investment decision (see “RISK FACTORS” herein).
For definitions of certain capitalized terms used herein and not otherwise defined, and the terms relating
to the Bonds, see the summary included in “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE
INDENTURE” herein.
The Successor Agency and the Former Agency
The Redevelopment Agency of the City of Chula Vista (the “Former Agency”) was established in 1972 by
the City Council (the “City Council”) of the City of Chula Vista (the “City”) pursuant to the Community
Redevelopment Law (the “Redevelopment Law”), constituting Part 1 of Division 24 (commencing with
Section 33000) of the Health and Safety Code of the State of California (the “State”). On June 29, 2011,
Assembly Bill No. 26 (“AB X1 26”) was enacted as Chapter 5, Statutes of 2011, together with a
companion bill, Assembly Bill No. 27 (“AB X1 27”). A lawsuit was brought in the California Supreme
Court, California Redevelopment Association, et al. v. Matosantos, et al., 53 Cal. 4th 231 (Cal. 2011),
challenging the constitutionality of AB X1 26 and AB X1 27. In its December 29, 2011 decision, the
California Supreme Court largely upheld AB X1 26, invalidated AB X1 27, and held that AB X1 26 may
be severed from AB X1 27 and enforced independently. As a result of AB X1 26 and the decision of the
California Supreme Court in the California Redevelopment Association case, as of February 1, 2012, all
redevelopment agencies in the State were dissolved, including the Former Agency, and successor agencies
were designated as successor entities to the former redevelopment agencies to expeditiously wind down
the affairs of the former redevelopment agencies.
The primary provisions enacted by AB X1 26 relating to the dissolution and wind down of former
redevelopment agency affairs are Parts 1.8 (commencing with Section 34161) and 1.85 (commencing
with Section 34170) of Division 24 of the Health and Safety Code of the State, as amended on June 27,
2012 by Assembly Bill No. 1484 (“AB 1484”), enacted as Chapter 26, Statutes of 2012, and as further
amended on September 22, 2015 by Senate Bill No. 107 (“SB 107”) enacted as Chapter 325, Statutes of
2015. The provisions of Part 1.85 as amended by AB 1484 and SB 107 are referred to in this Official
Statement as the “Dissolution Act.” The Redevelopment Law, as amended by the Dissolution Act, is
sometimes referred to herein as the “Law.”
__________________________
* Preliminary, subject to change.
2016-04-05 Agenda Packet Page 125
2
Pursuant to Section 34173 of the Dissolution Act, the City Council serves as the governing board of the
successor agency to the Former Agency and since the February 1, 2012 dissolution of the Former Agency,
has served as the Successor Agency to the Chula Vista Redevelopment Agency of the City of Chula Vista
(the “Successor Agency”). The Successor Agency is governed by a five-member board consisting of the
Mayor and the members of the City Council. The City Manager acts as the Successor Agency’s
Executive Director (see “THE SUCCESSOR AGENCY” herein).
Section 34173(g) of the Dissolution Act expressly affirms that the Successor Agency is a separate public
entity from the City, that the two entities shall not merge, and that the liabilities of the Successor Agency
will not be transferred to the City nor will the assets of the Successor Agency become assets of the City
(see “THE SUCCESSOR AGENCY” herein).
The City
Chula Vista is located on San Diego Bay in Southern California, 8 miles south of the City of San Diego
and 7 miles north of the Mexico border in an area generally known as “South Bay.” The City
encompasses approximately 50 square miles. Based on population, Chula Vista is the second largest city
in San Diego County. See “APPENDIX B - CITY OF CHULA VISTA INFORMATION STATEMENT.”
Authority and Purpose
The Bonds are being issued pursuant to the Constitution and laws of the State, including Article 11
(commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code
of the State (the “Refunding Law”), the Law and an Indenture of Trust dated as of June 1, 2016 (the
“Indenture”) by and between the Successor Agency and U.S. Bank National Association, as trustee (the
“Trustee”).
The Bonds are being issued to refinance the following obligations of the Former Agency:
Bayfront/Town Centre Redevelopment Project 2006 Senior Tax Allocation Refunding Bonds,
Series A (the “2006 Series A Bonds”), currently outstanding in the principal amount of
$8,770,000;
Bayfront/Town Centre Redevelopment Project 2006 Subordinate Tax Allocation Refunding
Bonds, Series B (the “2006 Series B Bonds”), currently outstanding in the principal amount of
$8,245,000; and
2008 Tax Allocation Refunding Bonds (Merged Redevelopment Project) (the “2008 Bonds”),
currently outstanding in the principal amount of $20,450,000.
The 2006 Series A Bonds, the 2006 Series B Bonds and the 2008 Bonds are sometimes collectively
referred to herein as the “Refunded Bonds.” See “THE FINANCING PLAN” herein.
Other than the Refunded Bonds, the Former Agency had no other bonded indebtedness.
Tax Allocation Financing Under the Dissolution Act
Prior to the enactment of AB X1 26, the Redevelopment Law authorized the financing of redevelopment
projects through the use of tax increment revenues. This method provided that the taxable valuation of
the property within a redevelopment project area on the property tax roll last equalized prior to the
effective date of the ordinance which adopted the redevelopment plan became the base year valuation.
Assuming the taxable valuation never drops below the base year level, the Taxing Agencies, as defined
herein, thereafter received that portion of the taxes produced by applying then current tax rates to the base
2016-04-05 Agenda Packet Page 126
3
year valuation, and the redevelopment agency was allocated the remaining portion produced by applying
then current tax rates to the increase in valuation over the base year. Such incremental pledged tax
revenues allocated to a redevelopment agency were authorized to be pledged to the payment of agency
obligations.
Under the Dissolution Act, moneys will be deposited from time to time in a Redevelopment Property Tax
Trust Fund (the “Redevelopment Property Tax Trust Fund” or “RPTTF”) held by a county auditor-
controller with respect to a successor agency, which are equivalent to the tax increment revenues that
were formerly allocated under the Redevelopment Law to the redevelopment agency and formerly
authorized under the Redevelopment Law to be used for the financing of redevelopment projects using
current assessed values on the last equalized roll on August 20 each year. See “SECURITY FOR THE
BONDS - Tax Allocation Financing” herein for additional information.
The Dissolution Act authorizes refunding bonds, including the Bonds, to be secured by a pledge of
moneys deposited from time to time in the Redevelopment Property Tax Trust Fund. Pledged Tax
Revenues, as defined herein, pledged to pay the Bonds consist of a portion of the amounts deposited from
time to time in the Redevelopment Property Tax Trust Fund established pursuant to and as provided in the
Dissolution Act (see “Security for the Bonds” below).
The Dissolution Act provides that any bonds authorized thereunder to be issued by the Successor Agency
will be considered indebtedness incurred by the Former Agency, with the same legal effect as if the bonds
had been issued prior to the effective date of AB X1 26, in full conformity with the applicable provision
of the Redevelopment Law that existed prior to that date, and will be included in the Successor Agency’s
Recognized Obligation Payment Schedules (each a “Recognized Obligation Payment Schedule”) (see
“APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE - Definitions” and
“SECURITY FOR THE BONDS - Recognized Obligation Payment Schedules”).
The Project Areas
Bayfront/Town Centre Project Area
The Bayfront/Town Centre Project Area (the “Bayfront/Town Centre Project Area”) was created through
an amendment of the Redevelopment Plans for the Former Agency’s Bayfront Redevelopment Project and
Town Centre Redevelopment Project in 1979. The Bayfront Redevelopment Project component (the
“Bayfront Redevelopment Project”) was originally created in 1974 (the “Original Bayfront Area”). The
Former Agency amended the Bayfront Redevelopment Project in 1998 to add additional acres to the
Project Area (the “Bayfront Amended Area”). The Town Centre Redevelopment Project component (the
“Town Centre Redevelopment Project”) was created in 1976. The Bayfront/Town Centre Project Area
encompasses a total 1,173 acres.
Merged Redevelopment Project Area
The Merged Redevelopment Project Area (the “Merged Redevelopment Project Area”) was created in
August 2000. Through an amendment of the Redevelopment Plans for the Former Agency’s Town Centre
No. II Project Area, the Otay Valley Road Project Area and the Southwest Project Area, as described
below, the merger created a project area with a combined 2,082 acres.
The Redevelopment Plan for the Town Centre No. II Project Area (the “Town Centre No. II
Redevelopment Project”) was adopted by the City Council in 1978. The Redevelopment Plan for the
Otay Valley Road Project Area (the “Otay Valley Road Redevelopment Project”) was adopted by the City
Council in 1983. The Redevelopment Plan for Southwest Project Area (the “Southwest Redevelopment
Project”) was adopted by the City Council in 1990. In May 2004, the City Council amended the
Redevelopment Plan for the Merged Redevelopment Project Area, adding 494 acres to the Merged
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Redevelopment Project Area (the “Amendment Area”). After the addition of the Amendment Area, the
Merged Redevelopment Project Area contains a total 2,576 acres.
The Bayfront/Town Centre Project Area and the Merged Redevelopment Project Area are collectively
referred to herein as the “Project Areas,” an individual redevelopment project is referred to herein as a
“Redevelopment Project” or when referring to more than one individual redevelopment project,
“Redevelopment Projects,” and the Redevelopment Plans for all the individual redevelopment projects
comprising the Project Areas are referred to herein as the “Redevelopment Plans.”
Security for the Bonds
For the security of the Bonds, the Successor Agency grants a pledge of and lien on all of the Pledged Tax
Revenues. “Pledged Tax Revenues” are defined under the Indenture as all taxes (i) that were eligible for
allocation to the Former Agency with respect to the Project Areas and are allocated to the Successor
Agency pursuant to Article 6 of Chapter 6 (commencing with Section 33670) of the Law and Section 16
of Article XVI of the Constitution of the State, or pursuant to other applicable State laws and (ii) that are
deposited by the Auditor-Controller of the County of San Diego in the Redevelopment Property Tax Trust
Fund, all as provided in Section 34172(d) of the Dissolution Act.
By definition, under the Dissolution Act, Pledged Tax Revenues exclude County administrative costs
allowed under Section 34182 of the Law and Section 95.3 of the California Revenue and Taxation Code,
and payments due under Pass-Through Agreements and as Statutory Tax Sharing.
See “FINANCIAL INFORMATION - Property Taxation in California” and “APPENDIX C - PROJECTED
TAX REVENUES” for additional information regarding the Pass-Through Agreements and the Statutory
Tax Sharing applicable to the Successor Agency and the revenues derived from the Project Areas.
Taxes levied on the property within the Project Areas on that portion of the taxable valuation over and
above the taxable valuation of the base year property tax roll of the applicable Redevelopment Project,
will be deposited in the Redevelopment Property Tax Trust Fund for transfer by the County Auditor-
Controller to the Successor Agency’s Redevelopment Obligation Retirement Fund, as defined herein, on
January 2 and June 1 of each year to the extent required for payments listed in the Successor Agency’s
Recognized Obligation Payment Schedule in accordance with the requirements of the Dissolution Act.
Moneys transferred by the County Auditor-Controller to the Successor Agency will be deposited into the
Successor Agency’s Redevelopment Obligation Retirement Fund and will be transferred by the Successor
Agency to the Trustee for deposit in the Debt Service Fund established under the Indenture. See
“SECURITY FOR THE BONDS - Recognized Obligation Payment Schedules” herein.
The Successor Agency may issue additional bonds payable from Pledged Tax Revenues on a parity with
the Bonds (“Parity Debt”) to refinance the Bonds. See “SECURITY FOR THE BONDS - No Additional
Debt Other Than Refunding Bonds” herein.
The Bonds are special obligations of the Successor Agency. The Bonds do not constitute a debt or
liability of the City, the County, the State or of any political subdivision thereof, other than the
Successor Agency. The Successor Agency shall only be obligated to pay the principal of the Bonds,
or the interest thereon, from the funds described herein, and neither the faith and credit nor the
taxing power of the City, the County, the State or any of its political subdivisions is pledged to the
payment of the principal of or the interest on the Bonds. The Successor Agency has no taxing
power.
Municipal Bond Insurance and Reserve Account Surety Policy
Concurrently with the issuance of the Bonds, _________________________________ (“____”) will
issue its Municipal Bond Insurance Policy (the “Policy”) for the Bonds. The Policy guarantees the
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scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the
Policy included as “APPENDIX H – SPECIMEN MUNICIPAL BOND INSURANCE POLICY.”
In order to further secure the payment of the principal of and interest on the Bonds, a Reserve Account
has been established by the Indenture. The Reserve Account will be funded by the purchase of a
Municipal Bond Debt Service Reserve Insurance Policy (the “Reserve Policy”) issued by ____ in an
amount equal to the Reserve Requirement as defined in the Indenture. The Reserve Policy secures only
the Bonds and would not secure any future Parity Debt. See “SECURITY FOR THE BONDS - Reserve
Account - Reserve Insurance Policy.”
Legal Matters
All legal proceedings in connection with the issuance of the Bonds are subject to the approving opinion of
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Bond
Counsel. Such opinion, and certain tax consequences incident to the ownership of the Bonds, including
certain exceptions to the tax treatment of interest, are described more fully under the heading “TAX
MATTERS” herein. Certain legal matters will also be passed on for the Successor Agency by Stradling
Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel
and by Glen R. Googins, City Attorney. Certain legal matters will be passed on for the Underwriter by its
counsel, Jones Hall, A Professional Law Corporation, San Francisco, California.
Professional Services
U.S. Bank National Association will act as Trustee for the Bonds.
Harrell & Company Advisors, LLC, Orange, California (the “Municipal Advisor”) advised the Successor
Agency as to the financial structure and certain other financial matters relating to the Bonds, assisted the
Successor Agency with the preparation of this Official Statement and prepared the Projected Tax
Revenues included in “APPENDIX C.”
Fees payable to Bond Counsel, Disclosure Counsel, Underwriter’s Counsel and the Municipal Advisor are
contingent upon the sale and delivery of the Bonds.
Offering of the Bonds
Authority for Issuance. The Bonds are to be issued and secured pursuant to the Indenture, as authorized
by Resolution No. ____ of the Successor Agency adopted on _______, 2016, the Refunding Law and the
Law. The Successor Agency to the Redevelopment Agency of the City of Chula Vista Oversight Board
(the “Oversight Board”) approved the action taken by the Successor Agency to refinance the Refunded
Bonds on _______, 2016. The State Department of Finance approved the Oversight Board action by
letter dated _________, 2016.
Offering and Delivery of the Bonds. The Bonds are being sold to Stifel, Nicolaus & Company,
Incorporated (the “Underwriter”). The Bonds are offered, when, as and if issued, subject to the approval
as to their legality by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, as
Bond Counsel. It is anticipated that the Bonds, in book-entry form, will be available for delivery through
the facilities of The Depository Trust Company on or about __________, 2016.
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Summary Not Definitive
The summaries and references contained herein with respect to the Indenture, the Bonds and other statutes
or documents do not purport to be comprehensive or definitive and are qualified by reference to each such
document or statute, and references to the Bonds are qualified in their entirety by reference to the form
thereof included in the Indenture. Copies of these documents may be obtained after delivery of the Bonds
from the Successor Agency at 276 Fourth Avenue, Chula Vista, California 91910.
THE BONDS
General Provisions
Repayment of the Bonds. Interest on the Bonds is payable at the rates per annum set forth on the inside
cover page hereof. Interest on the Bonds will be computed on the basis of a year consisting of 360 days
and twelve 30-day months.
The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any
integral multiple thereof and will be dated as of the date of delivery (the “Closing Date”).
Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication
thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment
Date, in which event it shall bear interest from such Interest Payment Date; or (b) it is authenticated on or
before February 15, 2017 in which event it shall bear interest from its Closing Date; provided, however,
that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear
interest from the Interest Payment Date to which interest has previously been paid or made available for
payment thereon.
Interest on the Bonds (including the final interest payment upon maturity or redemption) is payable when
due to the Owner thereof at such Owner’s address as it appears on the Registration Books at the close of
business on the preceding Record Date; provided that at the written request of the Owner of at least
$1,000,000 aggregate principal amount of either the Bonds, which written request is on file with the
Trustee as of any Record Date, interest on such Bonds shall be paid on the succeeding Interest Payment
Date by wire to such account in the United States as shall be specified in such written request.
Book-Entry System. The Depository Trust Company (“DTC”) will act as securities depository for the
Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co.
(DTC’s partnership nominee) or such other name as may be requested by an authorized representative of
DTC. Interest on and principal of the Bonds will be payable when due by wire of the Trustee to DTC
which will in turn remit such interest and principal to DTC Participants, which will in turn remit such
interest and principal to Beneficial Owners of the Bonds (see “APPENDIX G - THE BOOK-ENTRY
SYSTEM” herein). As long as DTC is the registered owner of the Bonds and DTC’s book-entry method is
used for the Bonds, the Trustee will send any notices to Bond Owners only to DTC.
DTC may discontinue providing its services as securities depository with respect to the Bonds at any time
by giving reasonable notice to the Successor Agency or the Trustee. Under such circumstances, if a
successor securities depository is not obtained, Bonds are required to be printed and delivered as
described in the Indenture. The Successor Agency may decide to discontinue use of the system of book-
entry transfers through DTC (or a successor securities depository). In that event, the Bonds will be
printed and delivered as described in the Indenture.
Transfer or Exchange of Bonds. So long as the Bonds are in the book-entry system of DTC as
described above, the rules of DTC will apply for the transfer and exchange of Bonds.
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Redemption
Optional Redemption. The Bonds maturing on or prior to September 1, 20__ are not subject to optional
redemption. The Bonds maturing on or after September 1, 20__, are subject to optional redemption prior
to their respective maturity dates as a whole, or in part by lot, on any date on or after September 1, 20__,
by such maturity or maturities as shall be directed by the Successor Agency (or in absence of such
direction, pro rata by maturity and by lot within a maturity), from any source of available funds. Such
optional redemption shall be at a redemption price equal to 100% of the principal amount to be redeemed,
plus accrued but unpaid interest to the date fixed for redemption, without premium.
Mandatory Redemption From Sinking Fund Payments. The Bonds that are Term Bonds maturing
September 1, 20__ shall also be subject to mandatory redemption in whole, or in part by lot, on
September 1 in each year, commencing September 1, 20__, as set forth below, from sinking fund
payments made by the Successor Agency to the Principal Account, at a redemption price equal to the
principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts
and on September 1 in the respective years as set forth in the following table; provided however, that
(y) in lieu of redemption thereof such Term Bonds may be purchased by the Successor Agency pursuant
to the Indenture, and (z) if some but not all of such Term Bonds have been redeemed pursuant to
subsection (a) above, the total amount of all future sinking fund payments shall be reduced by the
aggregate principal amount of such Term Bonds so redeemed, to be allocated among such sinking fund
payments in integral multiples of $5,000 as determined by the Successor Agency (notice of which
determination shall be given by the Successor Agency to the Trustee).
SINKING ACCOUNT PAYMENT SCHEDULE FOR
TERM BOND MATURING SEPTEMBER 1, ____
Redemption Date
September 1
Principal Amount
Notice of Redemption; Rescission of Notice. The Trustee on behalf of and at the expense of the
Successor Agency will mail (by first class mail, postage prepaid) notice of any redemption at least 30 but
not more than 60 days prior to the redemption date, to (i) the Owners of any Bonds designated for
redemption at their respective addresses appearing on the Registration Books, and (ii) to the Securities
Depositories and to the Information Services designated in a Written Request of the Successor Agency
filed with the Trustee at the time the Successor Agency notifies the Trustee of its intention to redeem
Bonds; but such mailing will not be a condition precedent to such redemption and neither failure to
receive any such notice nor any defect therein will affect the validity of the proceedings for the
redemption of such Bonds or the cessation of the accrual of interest thereon. Such notice will state the
redemption date and the redemption price, will designate the CUSIP number of the Bonds to be
redeemed, state the individual number of each Bond to be redeemed or state that all Bonds between two
stated numbers (both inclusive) or all of the Bonds Outstanding (or all Bonds of a maturity) are to be
redeemed, and will require that such Bonds be then surrendered at the Trust Office of the Trustee for
redemption at the said redemption price, giving notice also that further interest on such Bonds will not
accrue from and after the redemption date.
Notwithstanding the foregoing, in the case of any optional redemption of the Bonds described above, the
notice of redemption shall state that the redemption is conditioned upon receipt by the Trustee of
sufficient moneys to redeem the Bonds on the anticipated redemption date, and that the optional
redemption shall not occur if, by no later than the scheduled redemption date, sufficient moneys to
redeem the Bonds have not been deposited with the Trustee. In the event that the Trustee does not receive
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sufficient funds by the scheduled optional redemption date to so redeem the Bonds to be optionally
redeemed, such event shall not constitute an Event of Default; the Trustee shall send written notice to the
Owners to the effect that the redemption did not occur as anticipated, and the Bonds for which notice of
optional redemption was given shall remain Outstanding for all purposes of the Indenture.
Manner of Redemption. Whenever any Bonds or portions thereof are to be selected for redemption by
lot, the Trustee shall make such selection, in such manner as the Trustee shall deem appropriate, and shall
notify the Successor Agency thereof.
Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment
of the redemption price of and interest on the Bonds so called for redemption shall have been duly
deposited with the Trustee, such Bonds so called shall cease to be entitled to any benefit under the
Indenture other than the right to receive payment of the redemption price and accrued interest to the
redemption date, and no interest shall accrue thereon from and after the redemption date specified in such
notice The Indenture contains no provisions requiring any publication of notice of redemption, and
Bondholders must maintain a current address on file with the Trustee to receive any notice of redemption.
So long as the Bonds are maintained in the book-entry system of DTC, redemption notice will be given in
accordance with DTC’s procedures which are discussed above.
Partial Redemption. In the event only a portion of any Bond is called for redemption, then upon
surrender of such Bond the Successor Agency will execute and the Trustee will authenticate and deliver to
the Owner thereof, at the expense of the Successor Agency, a new Bond or Bonds of the same interest rate
and maturity, of authorized denominations in an aggregate principal amount equal to the unredeemed
portion of the Bond to be redeemed.
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Scheduled Debt Service on the Bonds
The following is the scheduled semi-annual and annual Debt Service on the Bonds.
Payment Date
Principal
Interest
Semi-Annual
Debt Service
Annual
Debt Service
March 1, 2017
September 1, 2017
March 1, 2018
September 1, 2018
March 1, 2019
September 1, 2019
March 1, 2020
September 1, 2020
March 1, 2021
September 1, 2021
March 1, 2022
September 1, 2022
March 1, 2023
September 1, 2023
March 1, 2024
September 1, 2024
March 1, 2025
September 1, 2025
March 1, 2026
September 1, 2026
March 1, 2027
September 1, 2027
March 1, 2028
September 1, 2028
March 1, 2029
September 1, 2029
March 1, 2030
September 1, 2030
March 1, 2031
September 1, 2031
March 1, 2032
September 1, 2032
March 1, 2033
September 1, 2033
March 1, 2034
September 1, 2034
March 1, 2035
September 1, 2035
March 1, 2036
September 1, 2036
Total
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THE FINANCING PLAN
The Refunding Plan
Redemption of Prior Bonds. On the Closing Date, a portion of the proceeds will be transferred to the
Trustee as escrow bank (“Escrow Bank”) for deposit pursuant to separate Escrow Agreements for each
series of the Refunded Bonds, each dated as of June 1, 2016 (the “Escrow Agreements”) between the
Successor Agency and the Escrow Bank.
The amount deposited under the Escrow Agreements, together with other available moneys, will be held
uninvested, or invested in certain federal securities and irrevocably pledged for the payment of the
Refunded Bonds as follows:
to the redemption in full of the outstanding 2006 Series A Bonds on July 1, 2016, at a redemption
price equal to 100% of the principal amount of the 2006 Series A Bonds to be redeemed together
with accrued interest thereon to the date fixed for redemption, without premium,
to the redemption in full of the outstanding 2006 Series B Bonds on July 1, 2016, at a redemption
price equal to 100% of the principal amount of the 2006 Series B Bonds to be redeemed together
with accrued interest thereon to the date fixed for redemption, without premium, and
to the payment of the principal and interest on the 2008 Bonds through and including September
1, 2018 and to the redemption in full on September 1, 2018 of the outstanding 2008 Bonds, at a
redemption price equal to 100% of the principal amount of the 2008 Bonds to be redeemed
together with accrued interest thereon to the date fixed for redemption, without premium.
Amounts so deposited under the Escrow Agreements will be pledged to the payment of principal and
interest on the 2008 Bonds and to the redemption price of the Refunded Bonds on the respective
redemption dates and the sufficiency of the amounts deposited in the under the Escrow Agreements for
such purpose will be verified by the Verification Agent as described below. The lien of the Refunded
Bonds will be discharged, terminated and of no further force and effect upon the deposit with the Escrow
Bank of the amounts required pursuant to the Escrow Agreements.
Neither the funds deposited in the redemption account for the Refunded Bonds nor the interest on the
invested funds will be available for the payment of debt service on the Bonds.
Verifications of Mathematical Computations. Grant Thornton LLP (the “Verification Agent”) will
verify from the information provided to them the mathematical accuracy as of the date of the closing on
the Bonds of (1) the computations contained in the provided schedules to determine that the cash and
investments, together with investment earnings thereon, listed in the schedules prepared by the Municipal
Advisor, to be held in escrow, will be sufficient to pay, when due, the principal and interest requirements
of the Refunded Bonds, and (2) the computation of yield on the Bonds contained in the provided
schedules used by Bond Counsel in its determination that the interest with respect to the Bonds is exempt
from federal taxation.
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Estimated Sources and Uses of Funds
Under the provisions of the Indenture, the Trustee will receive the proceeds from the sale of the Bonds
and other available funds and will apply them as shown below.
Sources of Funds
Par Amount of Bonds
Original Issue Premium
Debt Service Funds on Deposit With the Refunded Bonds Trustee
Reserve Funds on Deposit With the Refunded Bonds Trustee
Total Source of Funds
Uses of Funds
Transfer to Escrow Bank
Underwriter’s Discount
Costs of Issuance Fund (1)
Total Use of Funds
______________________________
(1) Costs of issuance include fees and expenses of Bond Counsel, the Municipal Advisor, Disclosure Counsel,
Verification Agent, Trustee and Escrow Bank, costs of printing the Official Statement, rating fees, premiums for
the Policy and the Reserve Policy and other costs of issuance of the Bonds.
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SECURITY FOR THE BONDS
Tax Allocation Financing
Prior to the enactment of the Dissolution Act, the Redevelopment Law authorized the financing of
redevelopment projects through the use of tax increment revenues. First, the assessed valuation of the
taxable property in a project area, as last equalized prior to adoption of the redevelopment plan, was
established and became the base roll. Thereafter, except for any period during which the assessed
valuation drops below the base year level, the Taxing Agencies, on behalf of which taxes are levied on
property within the project area, receive the taxes produced by the levy of the then current tax rate upon
the base roll. Taxes collected upon any increase in the assessed valuation of the taxable property in a
project area over the levy upon the base roll could be pledged by a redevelopment agency to the
repayment of any indebtedness incurred in financing the redevelopment project. Redevelopment agencies
themselves had no authority to levy taxes on property.
The Dissolution Act now requires the County Auditor-Controller to determine the amount of property
taxes that would have been allocated to the Former Agency had the Former Agency not been dissolved
using current assessed values on the last equalized roll on August 20, and to deposit that amount in the
Redevelopment Property Tax Trust Fund for the Successor Agency established and held by the County
Auditor-Controller pursuant to the Dissolution Act. Such funds, or portions thereof distributed to the
Successor Agency, are deposited by the Successor Agency in its Recognized Obligation Retirement Fund
(the “Recognized Obligation Retirement Fund”). The Dissolution Act provides that any bonds authorized
thereunder to be issued by the Successor Agency will be considered indebtedness incurred by the
dissolved Agency, with the same legal effect as if the bonds had been issued prior to effective date of AB
X1 26, in full conformity with the applicable provision of the Redevelopment Law that existed prior to
that date, and will be included in the Successor Agency’s Recognized Obligation Payment Schedules (see
“Recognized Obligation Payment Schedules” herein).
The Dissolution Act authorizes refunding bonds, including the Bonds, to be secured by a pledge of
moneys deposited from time to time in a Redevelopment Property Tax Trust Fund held by a county
auditor-controller with respect to a successor agency, which are equivalent to the tax increment revenues
that were formerly allocated under the Redevelopment Law to the redevelopment agency and formerly
authorized under the Redevelopment Law to be used for the financing of redevelopment projects, less
amounts deducted pursuant to Section 34183(a) of the Dissolution Act for permitted administrative costs
of the county auditor-controller and payments made under Sections 33401, 33676, 33607.5 and 33607.7
(among others) of the Redevelopment Law.
Successor agencies have no power to levy property taxes but must receive an allocation of taxes as
described above. See “RISK FACTORS.”
Pledged Tax Revenues
As provided in the respective Redevelopment Plans for the Project Areas and pursuant to Article 6 of
Chapter 6 of the Redevelopment Law, and Section 16 of Article XVI of the Constitution of the State,
taxes levied upon taxable property in the Redevelopment Projects each year by or for the benefit of the
State, for cities, counties, districts or other public corporations (collectively, the “Taxing Agencies”) for
fiscal years beginning after the effective date of the ordinance approving the respective Redevelopment
Plans, will be divided as follows:
(a) To Taxing Agencies: That portion of the taxes which would be produced by the rate upon which
the tax is levied each year by or for each of the Taxing Agencies upon the total sum of the
assessed value of the taxable property in the respective Redevelopment Project as shown upon the
assessment roll used in connection with the taxation of such property by such Taxing Agency last
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equalized prior to the effective date of the ordinance adopting the Redevelopment Plan, or the
respective effective dates of ordinances approving amendments to the Redevelopment Plan that
added territory, as applicable (each, a “base year valuation”), will be allocated to, and when
collected will be paid into, the funds of the respective Taxing Agencies as taxes by or for the
Taxing Agencies on all other property are paid; and
(b) To the Former Agency/Successor Agency: Except for that portion of the taxes in excess of the
amount identified in (a) above which are attributable to a tax rate levied by a Taxing Agency for
the purpose of producing revenues in an amount sufficient to make annual repayments of the
principal of and the interest on, any bonded indebtedness approved by the voters of the Taxing
Agency on or after January 1, 1989 for the acquisition or improvement of real property, which
portion shall be allocated to, and when collected shall be paid into, the fund of that Taxing
Agency, that portion of the levied taxes each year in excess of such amount, annually allocated
within the Redevelopment Plan limit, when collected will be paid into a special fund of the
Former Agency/Successor Agency. Section 34183 of the Dissolution Act effectively eliminated
the January 1, 1989 date from this paragraph. Additionally, effective September 22, 2015, debt
service override revenues approved by the voters for the purpose of supporting pension programs,
capital projects, or programs related to the State Water Project, that are not pledged to or needed
for debt service on successor agency obligations are allocated and paid to the entity that levies the
override and will not be deposited into the Redevelopment Property Tax Trust Fund. Further, also
effective September 22, 2015, Redevelopment Plan limits relating to the amount of taxes that
could be paid to the Former Agency/Successor Agency and the time that such taxes could be paid
was eliminated for the purpose of paying debt service on bonds of the Former Agency or the
Successor Agency.
Pledged Tax Revenues generated as set forth under (b) above and allocated to the Successor Agency
constitute Tax Increment Revenues, as that term is used herein.
Pledged Tax Revenues. For the security of the Bonds, the Successor Agency grants a pledge of and lien
on all of the Pledged Tax Revenues. “Pledged Tax Revenues” are defined under the all taxes (i) that were
eligible for allocation to the Former Agency with respect to the Project Areas and are allocated to the
Successor Agency pursuant to Article 6 of Chapter 6 (commencing with Section 33670) of the Law and
Section 16 of Article XVI of the Constitution of the State, or pursuant to other applicable State laws and
(ii) that are deposited by the Auditor-Controller of the County of San Diego in the Redevelopment
Property Tax Trust Fund, all as provided in Section 34172(d) of the Dissolution Act.
By definition, under the Dissolution Act, Pledged Tax Revenues exclude County administrative costs
allowed under Section 34182 of the Law and Section 95.3 of the California Revenue and Taxation Code
and payments due under Pass-Through Agreements and as Statutory Tax Sharing.
See “APPENDIX C - PROJECTED TAX REVENUES” herein.
Redevelopment Property Tax Trust Fund
Deposits to the Redevelopment Property Tax Trust Fund. Section 34172 of the Dissolution Act
provides that, for purposes of Section 16 of Article XVI of the State Constitution, the Redevelopment
Property Tax Trust Fund shall be deemed to be a special fund of the Successor Agency to pay the debt
service on indebtedness incurred by the Former Agency or the Successor Agency to finance or refinance
the redevelopment projects of the Former Agency.
Disbursements from the Redevelopment Property Tax Trust Fund. The Redevelopment Law
authorized redevelopment agencies to make payments to Taxing Agencies to alleviate any financial
burden or detriments to such Taxing Agencies caused by a redevelopment project. The Former Agency
entered into a number of agreements with the Taxing Agencies for this purpose (the “Pass-Through
Agreements”). Additionally, Sections 33607.5 and 33607.7 of the Redevelopment Law required
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mandatory tax sharing applicable to redevelopment projects adopted on or after June 1, 1994 or amended
after January 1, 1994 in a manner specified in such section (the “Statutory Tax Sharing”). Because the
Redevelopment Plans for certain of the Redevelopment Projects were amended after June 1, 1994, and the
Amendment Area and the Bayfront Amended Area were created after June 1, 1994, the Successor Agency
is obligated to make Statutory Tax Sharing payments. See “APPENDIX C - PROJECTED TAX
REVENUES” herein.
Typically, under the Redevelopment Property Tax Trust Fund distribution provisions of the Dissolution
Act, a county auditor-controller is to distribute funds for each six-month period in the following order
specified in Section 34183 of the Dissolution Act:
(i) first, subject to certain adjustments (as described below) for subordinations to the extent
permitted under the Dissolution Act (if any, as described in “APPENDIX C - PROJECTED TAX
REVENUES”) and no later than each January 2 and June 1, to each local taxing agency and school
entity, to the extent applicable, amounts required for pass-through payments such entity would
have received under provisions of the Redevelopment Law, as those provisions read on January 1,
2011, including negotiated pass-through agreements and statutory pass-through obligations;
(ii) second, on each January 2 and June 1, to the successor agency for payments listed in its
Recognized Obligation Payment Schedule, with debt service payments (and amounts required to
replenish the related reserve funds, if any) scheduled to be made for tax allocation bonds having
the highest priority over payments scheduled for other debts and obligations listed on the
Recognized Obligation Payment Schedule;
(iii) third, on each January 2 and June 1, to the successor agency for the administrative cost
allowance, as defined in the Dissolution Act; and
(iv) fourth, on each January 2 and June 1, to taxing entities any moneys remaining in the
Redevelopment Property Tax Trust Fund after the payments and transfers authorized by clauses
(i) through (iii), in an amount proportionate to such taxing entity’s share of property tax revenues
in the tax rate area in that fiscal year (without giving effect to any pass-through obligations that
were established under the Redevelopment Law).
The Dissolution Act requires county auditor-controllers to distribute from the Redevelopment Property
Tax Trust Fund amounts required to be distributed under any Tax Sharing Agreements and Statutory Tax
Sharing to the Taxing Agencies on each January 2 and June 1 before amounts are distributed by the
County Auditor-Controller from the Redevelopment Property Tax Trust Fund to the Successor Agency’s
Redevelopment Obligation Retirement Fund, unless: (i) pass-through payment obligations have been
made subordinate to debt service payments for the bonded indebtedness of the Former Agency, as
succeeded to by the Successor Agency; (ii) the Successor Agency has reported, no later than the
December 1 and May 1 preceding the applicable January 2 or June 1 distribution date, that the total
amount available to the Successor Agency from the Redevelopment Property Tax Trust Fund allocation to
the Successor Agency’s Redevelopment Obligation Retirement Fund, from other funds transferred from
the Former Agency and from funds that have or will become available through asset sales and all
redevelopment operations is insufficient to fund the Successor Agency’s enforceable obligations, pass-
through payments and the Successor Agency’s administrative cost allowance for the applicable
Recognized Obligation Payment Schedule period; and (iii) the State Controller has concurred with the
Successor Agency that there are insufficient funds for such purposes.
If the requirements set forth in clauses (i) through (iii) of the foregoing paragraph have been met, the
Dissolution Act provides for certain modifications in the distributions otherwise calculated to be
distributed on the applicable January 2 or June 1 property tax distribution date (as adjusted for weekends
and holidays). To provide for calculated shortages to be paid to the Successor Agency for enforceable
obligations, the amount of the deficiency will first be deducted from the residual amount otherwise
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calculated to be distributed to the taxing entities under the Dissolution Act after payment of the Successor
Agency’s enforceable obligations, pass-through payments and the Successor Agency’s administrative cost
allowance. If such residual amount is exhausted, the amount of the remaining deficiency will be deducted
from amounts available for distribution to the Successor Agency for administrative costs for the
applicable Recognized Obligation Payment Schedule period in order to fund the enforceable obligations.
Finally, funds required for servicing bond debt may be deducted from the amounts to be distributed under
subordinated Tax Sharing Agreements, in order to be paid to the Successor Agency for enforceable
obligations, but only after the amounts described in the previous two sentences have been exhausted.
The Dissolution Act provides for a procedure by which the Successor Agency may make statutory pass-
through payments subordinate to the Bonds. The Successor Agency has not undertaken any procedures to
obtain such subordination of the Statutory Tax Sharing payments and, therefore, Statutory Tax Sharing
payments due to all Taxing Agencies are senior to the Bonds.
Recognized Obligation Payment Schedules
Enforceable Obligations. The Dissolution Act requires successor agencies to prepare and approve, and
submit to the successor agency’s oversight board and the State Department of Finance for approval, a
Recognized Obligation Payment Schedule pursuant to which enforceable obligations (as defined in the
Dissolution Act) of the successor agency are listed, together with the source of funds to be used to pay for
each enforceable obligation. As defined in the Dissolution Act, “enforceable obligation” includes bonds,
including the required debt service, reserve set-asides, and any other payments required under the
indenture or similar documents governing the issuance of the outstanding bonds of the former
redevelopment agency, as well as other obligations such as loans, judgments or settlements against the
former redevelopment agency, any legally binding and enforceable agreement that is not otherwise void
as violating the debt limit or public policy, contracts necessary for the administration or operation of the
successor agency, and amounts borrowed from the Low and Moderate Income Housing Fund and from
the city. A reserve may be included on the Recognized Obligation Payment Schedule and held by the
successor agency when required by the bond indenture or when the next property tax allocation will be
insufficient to pay all obligations due under the provisions of the bond for the next payment due in the
following six-month period (see “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE
INDENTURE - Covenants of the Successor Agency”). The Successor Agency has covenanted to request
such reserves as described below.
Under the Dissolution Act, the categories of sources of payments for enforceable obligations listed on a
Recognized Obligation Payment Schedule are the following: (i) the Low and Moderate Income Housing
Fund, (ii) bond proceeds, (iii) reserve balances, (iv) administrative cost allowance, (v) the Redevelopment
Property Tax Trust Fund (but only to the extent no other funding source is available or when payment
from property tax revenues is required by an enforceable obligation or otherwise required under the
Dissolution Act), or (vi) other revenue sources (including rents, concessions, asset sale proceeds, interest
earnings, and any other revenues derived from the former redevelopment agency, as approved by the
oversight board). Other than amounts deposited in the Redevelopment Property Tax Trust Fund allocable
to the Project Areas and amounts held in funds and accounts under the Indenture, the Successor Agency
does not expect to have any other funds available to pay the Bonds.
The Dissolution Act provides that only those payments listed in the Recognized Obligation Payment
Schedule may be made by the Successor Agency from the funds specified in the Recognized Obligation
Payment Schedule.
Required Approvals. As provided in SB 107, the Recognized Obligation Payment Schedule, with
respect to each Fiscal Year, and segregated into each six-month period beginning July 1 and January 1,
must be submitted by the Successor Agency, after approval by the Oversight Board, the County Auditor-
Controller, the State Department of Finance, and the State Controller by each February 1. For
information regarding procedures under the Dissolution Act relating to late Recognized Obligation
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Payment Schedules and implications thereof on the Bonds, see “RISK FACTORS - Recognized Obligation
Payment Schedule.”
Commencing on September 22, 2015, successor agencies that have received a Finding of Completion and
the concurrence of the Department of Finance as to the items that qualify for payment, among other
conditions, may at their option, file a “Last and Final” Recognized Obligation Payment Schedule. If
approved by the Department of Finance, the Last and Final Recognized Obligation Payment Schedule
will be binding on all parties, and the Successor Agency will no longer submit a Recognized Obligation
Payment Schedule to the Department of Finance or the Oversight Board. The County Auditor-Controller
will remit the authorized funds to the Successor Agency in accordance with the approved Last and Final
Recognized Obligation Payment Schedule until each remaining enforceable obligation has been fully
paid. A Last and Final Recognized Obligation Payment Schedule may only be amended twice, and only
with approval of the Department of Finance and the County Auditor-Controller. The Successor Agency
currently has no plans to file a Last and Final Recognized Obligation Payment Schedule and has
covenanted in the Indenture to not do so without the consent of the Bond Insurer.
Determination of Available Funding. In connection with the allocation and distribution by the County
Auditor-Controller of property tax revenues deposited in the Redevelopment Property Tax Trust Fund,
under the Dissolution Act the County Auditor-Controller must prepare estimates of the amounts of (i)
property tax to be allocated and distributed, and (ii) the amounts of pass-through payments to be made in
the upcoming six-month period, and provide those estimates to the entities receiving the distributions and
the State Department of Finance no later than April 1 and October 1 of each year, as applicable.
If, after receiving such estimate from the County Auditor-Controller, the Successor Agency determines
and reports, no later than December 1 or May 1, as applicable, that the total amount available to the
Successor Agency from the Redevelopment Property Tax Trust Fund allocation to the Successor Agency’s
Redevelopment Obligation Retirement Fund, from other funds transferred from the Former Agency, and
from funds that have or will become available through asset sales and all redevelopment operations, is
insufficient to fund the payment of pass-through obligations, of the Successor Agency’s enforceable
obligations listed on the Recognized Obligation Payment Schedule, and of the Successor Agency’s
administrative cost allowance, the County Auditor-Controller must notify the State Controller and the
State Department of Finance no later than 10 days from the date of the Successor Agency’s notification.
If the State Controller concurs that there are insufficient funds to pay required debt service, the
Dissolution Act provides for certain adjustments to be made to the estimated distributions, as described in
more detail under “Redevelopment Property Tax Trust Fund” above.
Debt Service. In the Indenture, the Successor Agency covenants to comply with all of the requirements
of the Dissolution Act, including taking all actions required under the Dissolution Act to prepare and file
Recognized Obligation Payment Schedules for each Fiscal Year so as to enable the County Auditor-
Controller to distribute from the Redevelopment Property Tax Trust Fund for deposit in the
Redevelopment Obligation Retirement Fund all amounts as shall be required to enable the Successor
Agency to pay timely principal of, and interest on, the Bonds and all Outstanding Parity Debt coming due
in such Bond Year, including any amounts due and owing to the Bond Insurer in respect of the Reserve
Policy, or required to replenish the Reserve Account, and the respective reserve accounts established for
any Parity Debt.
Pursuant to the Indenture, without limiting the generality of the foregoing covenant, the Successor
Agency will take all actions required under the Dissolution Act to file a Recognized Obligation Payment
Schedule by February 1 in each year, commencing February 1, 2017, in accordance with Section
34177(0) of the Redevelopment Law. For the semiannual period ending each June 30, the Recognized
Obligation Payment Schedule which includes such period shall request the payment to the Successor
Agency of an amount of Pledged Tax Revenues which is at least equal to the following:
(a) 100% of the amount of principal of and interest on the any Bonds and any Parity Debt coming
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due and payable on the next succeeding March 1 and September 1,
(b) any amount then required to replenish the full amount of the Reserve Requirement in the Reserve
Account and to replenish the amount in any reserve account established for Parity Debt if any,
and
(c) any amount then required to make payments due to the Bond Insurer in respect of the Policy or
the Reserve Policy.
For the semiannual period ending each December 31, the Recognized Obligation Payment Schedule
which includes such period shall request the payment to the Successor Agency of an amount of Pledged
Tax Revenues which is at least equal to the following:
(a) the remaining principal and interest due on the Bonds and all Outstanding Parity Debt coming
due and payable on the next succeeding September 1, to the extent not reserved in the period
ending June 30, and
(b) reserves and amounts due to any bond insurer as described under (d) and (e) above.
The foregoing actions will include, without limitation, placing on the periodic Recognized Obligation
Payment Schedule for approval by the Oversight Board and the Department of Finance, to the extent
required, the amounts to be held by the Successor Agency as a reserve for the timely payment of principal
of and interest on the Bonds and all Outstanding Parity Debt coming due in the succeeding Fiscal Year.
See “Recognized Obligation Payment Schedules” above and “RISK FACTORS - Recognized Obligation
Payment Schedule.”
The Successor Agency further agrees (a) to the extent permitted by law, to amend any Recognized
Obligation Payment Schedule filing for any period during which amounts owed to the Bond Insurer either
with respect to the Bond Insurance Policy or the Reserve Policy are not included on such Recognized
Obligation Payment Schedule filing, and (b) not to submit a Last and Final Recognized Obligation
Payment Schedule under the Dissolution Act without the prior written consent of the Bond Insurer.
The Successor Agency has no power to levy and collect taxes, and various factors beyond its control
could affect the amount of Pledged Tax Revenues available in any six-month period (or otherwise) to pay
the principal of and interest on the Bonds. See “RISK FACTORS.”
Pledge of Pledged Tax Revenues
The Bonds are payable from and secured by a pledge of, security interest in and lien on all of the Pledged
Tax Revenues to be derived from the Project Areas. In addition, the Bonds are secured by all of the
moneys in the Redevelopment Obligation Retirement established and held by the Successor Agency
pursuant to the Dissolution Act, and all of the moneys in the Debt Service Fund (including the Interest
Account, the Principal Account, and the Reserve Account therein) established and held by the Trustee
under the Indenture.
The Pledged Tax Revenues are pledged to the payment of principal of and interest on the Bonds pursuant
to the Indenture until the Bonds have been paid, or until moneys have been set-aside irrevocably for that
purpose. The Trustee will covenant to exercise such rights and remedies as may be necessary to enforce
the payment of the Pledged Tax Revenues when due under the Indenture, and otherwise to protect the
interests of the Bondholders in the event of default by the Successor Agency.
The Bonds are special obligations of the Successor Agency. The Bonds do not constitute a debt or
liability of the City, the County, the State or of any political subdivision thereof, other than the
Successor Agency. The Successor Agency shall only be obligated to pay the principal of the Bonds,
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or the interest thereon, from the funds described herein, and neither the faith and credit nor the
taxing power of the City, the County, the State or any of its political subdivisions is pledged to the
payment of the principal of or the interest on the Bonds. The Successor Agency has no taxing
power.
The State Legislature has amended the Dissolution Act several times. The Successor Agency expects, but
cannot guarantee, that the processes for funding of enforceable obligations prescribed by any new
legislative change in the Dissolution Act will not interfere with its administering of the Pledged Tax
Revenues in accordance with the Indenture and will effectively result in adequate Pledged Tax Revenues
for the timely payment of principal of and interest on the Bonds when due.
Reserve Account
A Reserve Account has been established under the Indenture to be held by the Trustee to further secure
the timely payment of principal of and interest on the Bonds. The Successor Agency must maintain an
aggregate balance in the Reserve Account equal to lessor of 10% of the original principal amount of the
Bonds, maximum annual debt service on the Bonds or 125% of average annual debt service on the Bonds
(the “Reserve Requirement”). In the event that the Successor Agency fails to deposit with the Trustee the
full amount required by the Indenture to pay principal and interest due on the Bonds when due on any
date, the Trustee will withdraw from the Reserve Account the difference between the amount required to
be on deposit and the amount available on such date.
The Reserve Account established for the Bonds secures only the Bonds and not any other series of parity
bonds that may be issued under the Indenture (see “No Additional Debt Other Than Refunding Bonds”
below).
Reserve Insurance Policy. Concurrently with the issuance of the Bonds, the Bond Insurer will issue the
Reserve Policy with respect to the Bonds. The Reserve Policy provides that the Bond Insurer will make
payment to the Trustee on the later of the Business Day on which principal and interest becomes due for
Payment or the Business Day next following the Business Day on which the Bond Insurer shall have
received Notice of Nonpayment, not to exceed the Policy Limit of $______.
Over the last 7 years, rating agencies have downgraded or withdrawn the ratings on the claims-paying
ability and financial strength of most of the nation’s bond insurance companies. Deterioration in the
financial condition of the provider of the Reserve Policy or a failure to honor a draw by any provider
under its Reserve Policy could occur. The Successor Agency is not required under the Indenture to
replace the Reserve Policy with cash or a replacement instrument in the event the ratings of its provider
decline or are withdrawn. If circumstances should ever cause the Reserve Policy to be canceled or
discharged, such cancellation or discharge could be determined to create a deficiency in the Reserve
Requirement previously satisfied by such Reserve Policy. Under the Indenture, in the event that the
amount on deposit in the Reserve Account is less than the Reserve Requirement, the Successor Agency is
required to transfer to the Trustee an amount of available Pledged Tax Revenues sufficient to maintain the
amount in such Reserve Account at such Reserve Requirement. Should the amount of Pledged Tax
Revenues then available to maintain such Reserve Account at the Reserve Requirement be insufficient for
such purpose, such insufficiency would not result in an event of default under the Indenture, but the
requirement of the Successor Agency to transfer available Pledged Tax Revenues to the Trustee would
continue.
No Additional Debt Other Than Refunding Bonds
The Successor Agency has covenanted that, so long as the Bonds are Outstanding, the Successor Agency
shall not issue any additional bonds, notes or other obligations, enter into any agreement or otherwise
incur any indebtedness, which is in any case payable from all or any part of the Pledged Tax Revenues;
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provided, however, that the Successor Agency may issue and sell refunding bonds payable from Pledged
Tax Revenues on a parity with Outstanding Bonds for the purpose of refunding the Bonds if (a) annual
debt service on such refunding bonds is lower than annual debt service on the Bonds being refunded over
the term of the refunding bonds and (b) the final maturity of any such refunding bonds does not exceed
the final maturity of the Bonds being refunded.
The documents providing for the issuance of any parity obligations under the Indenture shall provide that:
(a) Interest on such parity obligations is payable on March 1 and September 1 in each year of the
term thereof, except the first twelve month period, during which interest may be payable on any
date;
(b) The principal of such parity obligations is payable on September 1 in any year in which principal
is payable;
(c) The trustee for such parity obligations is the same entity which performs the duties of Trustee for
the Bonds; and
(d) A reserve account shall be established for such parity obligations in an amount equal to the least
of 10% of the par amount of such parity obligations, maximum annual debt service on such parity
obligations, or 125% of average annual debt service on such parity obligations, and which may be
funded in cash or in the form of a surety bond or other credit facility issued by a financial
institution having a rating at least equal to the rating then applicable to the Bonds, provided that
such reserve account shall only secure the repayment of such parity obligations and shall not
secure the Bonds or any other issue of parity obligations.
MUNICIPAL BOND INSURANCE
[to be completed]
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THE SUCCESSOR AGENCY
Government Organization
The Former Agency was established by the City Council in 1972 pursuant to the Redevelopment Law.
On June 29, 2011, AB X1 26 was enacted, together with a companion bill, AB X1 27. A lawsuit was
brought in the California Supreme Court, California Redevelopment Association, et al. v. Matosantos, et
al., 53 Cal. 4th 231 (Cal. Dec. 29, 2011), challenging the constitutionality of AB X1 26 and AB X1 27. In
its December 29, 2011 decision, the California Supreme Court largely upheld AB X1 26, invalidated AB
X1 27, and held that AB X1 26 may be severed from AB X1 27 and enforced independently. As a result
of AB X1 26 and the decision of the California Supreme Court in the California Redevelopment
Association case, as of February 1, 2012, all redevelopment agencies in the State were dissolved,
including the Former Agency, and successor agencies were designated as successor entities to the former
redevelopment agencies to expeditiously wind down the affairs of the former redevelopment agencies.
Pursuant to Section 34173 of the Dissolution Act, the City Council serves as the governing board of the
successor agency to the Former Agency and thus, since the February 1, 2012 dissolution of the Former
Agency, the City has acted in such capacity. The Successor Agency is governed by a five-member board
which consists of the Mayor and the members of the City Council. The Mayor serves as the presiding
officer of the Successor Agency.
Section 34173(g) of the Dissolution Act, added by AB 1484, expressly affirms that the Successor Agency
is a separate public entity from the City, that the two entities shall not merge, and that the liabilities of the
Successor Agency will not be transferred to the City nor will the assets of the Successor Agency become
assets of the City.
The City performs certain general administrative functions for the Successor Agency. The City Manager
serves as the Successor Agency’s Executive Director, the City Clerk serves as the Successor Agency
secretary and the City Treasurer serves as the Successor Agency treasurer. The costs of such functions, as
well as additional services performed by City staff are allocated annually to the Successor Agency, within
certain limitations established by the Dissolution Act. Such reimbursement is subordinate to payment on
any outstanding bonds of the Successor Agency.
Successor Agency Powers
All powers of the Successor Agency are vested in its members, who are the elected Mayor and members
of the City Council. Pursuant to the Dissolution Act, the Successor Agency is a separate public body
from the City and succeeds to the organizational status of the Former Agency but without any legal
authority to participate in redevelopment activities, except to complete any work related to an approved
enforceable obligation. The Successor Agency is tasked with expeditiously winding down the affairs of
the Former Agency, pursuant to the procedures and provisions of the Dissolution Act. Under the
Dissolution Act, many Successor Agency actions are subject to approval by the Oversight Board, as well
as review by the State Department of Finance. California has strict laws regarding public meetings
(known as the Ralph M. Brown Act) which generally make all Successor Agency and Oversight Board
meetings open to the public in similar manner as City Council meetings.
Section 34179.5 of the Dissolution Act established a due diligence review process for determining the
unobligated balances that redevelopment agencies had available as of June 30, 2012 to remit to their
respective county auditor-controllers for distribution to affected Taxing Agencies within project areas of
the former redevelopment agencies. The Successor Agency has remitted to the County Auditor-Controller
all of the unobligated balances as determined by the State Department Finance. On May 7, 2013, the
Successor Agency received its Finding of Completion from the State Department of Finance. Receipt of
the Finding of Completion allows the Successor Agency to do several things, among them, developing a
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plan for the disposition of any properties held by the Successor Agency and spending proceeds of bonds
issued prior to December 31, 2010, all requiring approval of the Oversight Board.
After receiving the finding of completion, each successor agency is required to submit a Long Range
Property Management Plan (a “Long Range Property Management Plan”) detailing what it intends to do
with its inventory of properties. Successor agencies are not required to immediately dispose of their
properties but are limited in terms of what they can do with the retained properties. Permissible uses
include: sale of the property, use of the property to fulfill an enforceable obligation, retention of the
property for future redevelopment, and retention of the property for governmental use. These plans must
be filed by successor agencies with the State Department of Finance within six months of receiving a
finding of completion. The State Department of Finance approved the Successor Agency’s Long Range
Property Management Plan on July 15, 2014.
Redevelopment Plans
The Bayfront/Town Centre Project Area was created by adoption of an Ordinance of the City Council on
July 17, 1979. The merger combined the Bayfront Redevelopment Project and Town Centre
Redevelopment Project. The Redevelopment Plan for the Bayfront Redevelopment Project was approved
by Ordinance No. 1541 adopted by the City Council on July 16, 1974 and amended on July 7, 1998 to add
the Bayfront Amended Area. The Redevelopment Plan for the Town Centre Redevelopment Project was
approved by Ordinance No. 1691 adopted by the City Council on July 6, 1976. Both Redevelopment
Plans were amended several times to add financial and other limits required by the Redevelopment Law.
The Merged Redevelopment Project Area was created on May 4, 2004 by the adoption by the City
Council of Ordinance Nos. 2187, 2818 and 2819. The merger combined the Former Agency’s Town
Centre No. II Redevelopment Project, the Otay Valley Road Redevelopment Project and the Southwest
Redevelopment Project. The Redevelopment Plan for the Town Centre No. II Redevelopment Project
was approved by Ordinance No. 1827 adopted by the City Council on August 15, 1978. The
Redevelopment Plan for the Otay Valley Road Redevelopment Project was approved by Ordinance No.
2059 adopted by the City Council on December 27, 1983. The Redevelopment Plan for the Southwest
Redevelopment Project was approved by Ordinance No. 2420 adopted by the City Council on November
27, 1990 and amended to add additional territory on July 9, 1991. On May 4, 2004, the City Council
adopted Ordinance No. 2962 amending and restating the Merged Redevelopment Project Area
Redevelopment Plan, and adding 494 acres, known as the Amendment Area, to the Merged
Redevelopment Project Area. Before and after the merger, the Redevelopment Plans were amended
several times to add financial and other limits required by the Redevelopment Law.
Plan Limitations
In accordance with the Redevelopment Law, redevelopment plans were required to include certain limits
on the financing of redevelopment projects. These limits could include a time limit on the life of the
redevelopment plan, a time limit to incur debt, a time limit on the receipt of Tax Increment Revenues and
the repayment of debt, and a limit on the amount of bonded indebtedness outstanding at any time. SB 107
clarifies that the former tax increment limits in redevelopment plans no longer apply for purposes of
paying approved enforceable obligations such as the Bonds.
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THE PROJECT AREAS
Description of the Project Areas
Bayfront/Town Centre Project Area
The Project Area is comprised of the Former Agency’s Bayfront Redevelopment Project and Town Centre
Redevelopment Project. The relative acreage from each of the constituent redevelopment projects
comprising the Project Area is shown below:
Original Bayfront Area 637 Acres
Bayfront Amended Area 398 Acres
Town Centre 138 Acres
1,173 Acres
National Wildlife Refuge (513) Acres
Net Developable Acres 660 Acres
As shown below, commercial and industrial development, comprise __% of total current assessed value of
the Bayfront/Town Centre Project Area.
Land Use
% of 2015/16
Assessed Value
100.0%
________________________________
Source: Municipal Advisor.
The Bayfront Redevelopment Project. The Original Bayfront Area, formed in 1974, is comprised of
637 acres of property located between Interstate 5 and the mean high tide line along the Chula Vista
Bayfront. The Bayfront Amended Area was created in 1998 and encompasses 398 acres of property west
of the mean high tide line to the water line. Of the total property in the Bayfront Redevelopment Project,
45 acres are developed with a marina, and 513 acres are designated the Sweetwater Marsh National
Wildlife Refuge. The Successor Agency does not expect these 513 acres to be developed with property
that will generate Tax Revenues. The goal of the Successor Agency is to encourage development along
the City’s bayfront while maintaining recreational access to the waterfront.
The San Diego Unified Port District (the “Port District”) administers 420 acres of state public tidelands
within the Bayfront Redevelopment Project under a Tidelands Trust that guides how the land is to be
used. The Port District and the City have been working together on developing the waterfront under the
Chula Vista Bayfront Master Plan (“CVBMP”). The objectives of the CVBMP are to create an active
commercial harbor with public space at the water’s edge, redevelop underutilized and vacant areas on
Port tidelands with, among other things, a convention center and resort hotels, provide a continuous
shoreline pedestrian walkway, and establish ecological buffers to protect environmentally sensitive
resources.
Although the City and the Successor Agency have reasonable basis for the expectations that the CVBMP
development will occur, the Successor Agency cannot provide specific assurance that such developments
will actually be completed or the timing of any such development. For the purposes of the projections for
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future Tax Revenues contained herein, no value has been added to the tax rolls as a result of new
construction associated with the CVBMP.
The Town Centre Redevelopment Project. The Town Centre Redevelopment Project is an area of
approximately 138 acres encompassing the City’s central business district. The Town Centre
Redevelopment Project is not contiguous with the Bayfront Redevelopment Project. The Town Centre
Redevelopment Project is urbanized and developed with a mix of public and private uses. Such uses
include the San Diego South County Superior and Municipal Court Complex, the Norman Park Senior
Center, Memorial Park as well as a variety of commercial office space, retail, retail service and residential
uses.
The City developed an Urban Core Specific Plan which encompasses a 690-acre “focus area,” which
includes development in the Town Centre Redevelopment Project as well as surrounding areas. The
Urban Core has three components –multi-family housing, the primary commercial corridor, and a
pedestrian-oriented retail area. For the purposes of the projections for future Tax Revenues contained
herein, no value has been added to the tax rolls as a result of new construction associated with the Urban
Core Specific Plan.
Merged Redevelopment Project Area
The Merged Redevelopment Project Area is comprised of 4 sub-areas totaling 2,576 acres, or
approximately 8% of the land within the City’s boundaries.
Sub-Area Acres
Town Centre No. II 212
Otay Valley Road 770
Southwest 1,100
Amendment Area 494
Total 2,576
The Merged Redevelopment Project Area is developed a mix of residential and commercial.
Land Use
% of 2015/16
Assessed Value
100.0%
________________________________
Source: Municipal Advisor.
Town Centre No. II Redevelopment Project. The Town Centre No. II Redevelopment Project
encompasses approximately 212 acres of commercial, institutional and municipal uses in eleven non-
contiguous areas of the City’s central core. The Chula Vista Center, a sixty-five acre regional shopping
mall, is located in the Town Centre II Project Area, as well as Scripps Memorial Hospital and the City’s
Civic Center Complex.
Otay Valley Road Redevelopment Project. The Otay Valley Road Redevelopment Project is an area of
approximately 770 acres located in the southeastern corner of the City, just to the east of the I-805
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Freeway. The 20,000 seat outdoor Sleep Train Amphitheatre and Aquatica Water Park are located just
outside the Otay Valley Road Redevelopment Project boundaries.
The Otay Valley Road Project Area was established in 1983 and is comprised primarily of auto center,
light industrial, warehouse uses and retail development. A portion of an existing landfill overlaps the
boundaries of the Otay Valley Road Project Area.
Southwest Redevelopment Project. The Southwest Redevelopment Project is an area of approximately
1,100 acres. It was created in 1990 and is zoned primarily for limited industrial and thoroughfare
commercial projects. Existing commercial development is generally neighborhood retail and existing
industrial development uses include mini-storage, auto-related uses and light manufacturing. The
majority of residential uses are market rate and affordable apartments units, with some condominiums.
Amendment Area. The Amendment Area consisting of approximately 494 acres was created in 2004 to
encompass major commercial and industrial roadways in the western area of Chula Vista, and some
commercial pockets in the northern section of the City. The Amendment Area was formed to provide
continuity to the Former Agency’s redevelopment efforts with respect to infrastructure and capital
improvement projects, as it connects the various non-contiguous redevelopment project subareas located
throughout the City.
The area is characterized by one-and two-story office and retail uses, built between 1950 and 1980,
apartments and motor inns. New developments in the Amendment Area include a four-story medical
office building and adjacent medical-related uses, and large retail uses such as WalMart, Costco, Target
and Michael’s.
Prior to dissolution, the Former Agency focused its redevelopment effort in the Amendment Area near the
intersection of Fourth Avenue and H Street, as H Street is a major east-west transportation corridor
between the I-5 and I-805 Freeways and represents one of the gateways to the Third Avenue downtown
business district section of the Urban Core. In 2014, the City completed an extension of H Street to the
Chula Vista Harbor.
Assessed Valuations and Pledged Tax Revenues
Historical assessed value and Tax Increment Revenues are shown in the tables below.
TABLE NO. 1
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
BAYFRONT/TOWN CENTRE PROJECT AREA
HISTORICAL ASSESSED VALUATIONS (1) (2)
Fiscal Year Assessed Value Base Year Value Incremental Value
2011/12 $562,330,741 $(252,585,488) $309,745,253
2012/13 523,801,476 (252,585,488) 271,215,988
2013/14 607,358,081 (252,585,488) 354,772,593
2014/15 599,950,439 (252,585,488) 347,364,951
2015/16 623,001,603 (252,585,488) 370,416,115
______________________________
(1) Includes secured and unsecured valuation; exclusive of homeowner’s exemptions. All other exemptions have
been deducted.
(2) See Appendix C for historical assessed value information through Fiscal Year 2005/06.
Source: San Diego County Auditor-Controller, compiled by the Municipal Advisor.
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TABLE NO. 2
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
MERGED REDEVELOPMENT PROJECT AREA
HISTORICAL ASSESSED VALUATIONS (1) (2)
Fiscal Year Assessed Value Base Year Value Incremental Value
2011/12 $1,619,711,199 $(702,901,853) $916,809,346
2012/13 1,592,338,855 (702,901,853) 889,437,002
2013/14 1,619,306,332 (702,901,853) 916,404,479
2014/15 1,615,590,883 (702,901,853) 912,689,030
2015/16 1,677,354,839 (702,901,853) 974,452,986
______________________________
(1) Includes secured and unsecured valuation; exclusive of homeowner’s exemptions. All other exemptions have
been deducted.
(2) See Appendix C for historical assessed value information through Fiscal Year 2005/06.
Source: San Diego County Auditor-Controller, compiled by the Municipal Advisor.
TABLE NO. 3
REDEVELOPMENT PROPERTY TAX TRUST FUND DEPOSITS
2012/13 2013/14 2014/15
January RPTTF Deposit $ 5,416,437 $ 5,416,166 $ 5,996,916
June RPTTF Deposit 8,032,582 9,559,912 8,220,635
Gross RPTTF Deposits 13,449,019 14,976,079 14,217,551
County Administrative Fees (293,216) (287,265) (314,934)
Tax Sharing (3) (2,386,446) (2,912,205) (2,823,002)
RPTTF Available $10,769,358 $11,776,608 $11,079,616
______________________________________
Source: San Diego County Auditor-Controller, compiled by the Municipal Advisor.
The estimated net Redevelopment Property Tax Trust Fund deposit available for 2015/16, based on the
2015/16 assessed value, is calculated as follows:
Bayfront/Town Merged
Centre Project Project Area Total
Incremental Assessed Value $370,416,000$974,454,000 $1,344,870,000
Tax Rate 1.00% 1.00% 1.00%
Tax Increment Revenues 3,704,000 9,745,000 13,449,000
Unitary Revenues 1,432,000 75,000 1,507,000
Total Deposit to RPTTF 5,136,000 9,820,000 14,956,000
County Administrative Fees (113,000) (216,000) (329,000)
Tax Sharing (423,200) (2,548,400) (2,971,600)
Net RPTTF Deposit $ 4,599,800 $ 7,055,600 $ 11,655,400
___________________________
Source: Muncipal Advisor.
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Major Taxpayers
The ten largest property taxpayers represent 60.4% of the 2015/16 assessed value of the Bayfront/Town
Centre Project Area and __ % of the 2015/16 assessed value of the Merged Redevelopment Project Area.
TABLE NO. 4
BAYFRONT/TOWN CENTRE PROJECT AREA
TEN LARGEST TAXPAYERS
Property Owner
Land Use
2015-16
Assessed Value
% of
Total
Rohr Inc. Industrial/Manufacturing $234,306,153 37.6%
Bear Garden Investments LLC Commercial 24,078,056 3.9%
Wachovia Bank Commercial Mortgage Commercial 23,470,000 3.8%
M M G E R Partnership Apartments 22,550,046 3.6%
Chula Vista Marina R V Park Lt R V Park 16,447,124 2.6%
Chula Vista 344 Office LLC Commercial 11,883,378 1.9%
Marine Group Boat Works LLC Industrial 11,624,871 1.9%
North C V Waterfront LP Commercial 11,250,603 1.8%
E A S LLC Commercial 10,713,160 1.7%
630 660 Bay Blvd LLC Commercial/industrial 9,833,926 1.6%
$376,157,317 60.4%
______________________________________
(1) Appeal pending for current and/or prior years. See “Assessment Appeals” below.
Source: Municipal Advisor.
TABLE NO. 5
MERGED REDEVELOPMENT PROJECT AREA
TEN LARGEST TAXPAYERS’
Property Owner
Land Use
2015-16
Assessed Value
% of
Total
Chula Vista Center LP Commercial
Scripps Health Commercial/Institutional
Price REIT Inc. Commercial
Cypress Creek Co LP Commercial
G & E H C REIT II Chula Vista MOB LLC Commercial
Costco Wholesale Corporation Commercial
Big Rock LLC Commercial
Sears Roebuck & CO. Commercial
Main Plaza LP Commercial/Residential
Wal-Mart Real Estate Business Trust Commercial
______________________________________
(1) Appeal pending for current and/or prior years. See “Assessment Appeals” below.
Source: Municipal Advisor.
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Assessment Appeals
As of January 2016, there were a total ___ pending appeals filed in the last 5 years by property owners in
the Project Areas. Appeals have been filed with respect to several of the largest property owners included
in Table Nos. 4 and 5. The total value of property under appeal for all years is $___ million. Some
appeals have been filed for multiple years for the same property, totaling $___ million. A summary of all
pending appeals is shown below.
Project Area
Bayfront/Town
Centre
Project Area
Merged
Redevelopment
Project Area
Total
Total No. of Appeals
No. of Resolved Appeals
No. of Successful Appeals
Average Reduction on Successful Appeals
No. of Pending Appeals
Total Value under Appeal
Estimated No. of Appeals Allowed
Estimated Reduction in Value on Pending Appeals
___________________________
Source: Municipal Advisor.
The Successor Agency cannot predict the outcome of any pending appeals.
The projected Pledged Tax Revenues have not been reduced for an average appeal value reduction based
on average number of appeals granted historically. Reductions in revenue for refunds resulting from
successful appeals or current or prior year appeals have also not been incorporated into the projections.
The success rate of appeals, reductions granted and refunds may vary from historical averages.
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FINANCIAL INFORMATION
Successor Agency Accounting Records and Financial Statements
The activities of the Successor Agency are reported as a fiduciary trust fund as part of the City’s basic
financial statements, which is in accordance with guidance issued by the State Department of Finance on
September 19, 2012 and available on its website relating to redevelopment dissolution
(www.dof.ca.gov/redevelopment) under the category of “Common RDA Dissolution Questions and
Answers,” interpreting Section 34177(n) of the California Health and Safety Code concerning certain
successor agency postaudit obligations. The Successor Agency does not prepare separate financial
statements. The State Department of Finance’s website is not in any way incorporated into this Official
Statement, and the Successor Agency cannot take any responsibility for, nor make any representation
whatsoever as to, the continued accuracy of the Internet address or the accuracy, completeness, or
timeliness of information posted there. In addition, from time to time, the State Department of Finance
changes its guidance without notice.
The City’s financial statements for the Fiscal Year ended June 30, 2015, attached hereto as “APPENDIX
D” have been audited by Lance, Soll & Lunghard, LLP, Certified Public Accountants, Brea, California.
The City’s audited financial statements are public documents and are included within this Official
Statement without the prior approval of the auditor. Lance, Soll & Lunghard, LLP has not been
engaged to perform, and has not performed, since the date of its report included herein, any
procedures on the financial statements addressed in that report. Lance, Soll & Lunghard, LLP also
has not performed any procedures relating to this Official Statement.
Property Taxation in California
Manner in Which Property Valuations and Assessments are Determined (Article XIIIA). On June 6,
1978, California voters approved an amendment (commonly known as both Proposition 13 and the Jarvis-
Gann Initiative) to the State Constitution which imposes certain limitations on taxes that may be levied
against real property. This amendment, which added Article XIIIA to the State Constitution, among other
things, defines full cash value of property to mean “the county assessor’s valuation of real property as
shown on the 1975/76 tax bill under ‘full cash value,’ or, thereafter, the appraised value of real property
when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.”
This full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or
any reduction in the consumer price index or comparable local data, or any reduction in the event of
declining property value caused by substantial damage, destruction or other factors. The amendment
further limits the amount of any ad valorem tax on real property to 1% of the full cash value of that
property, except that additional taxes may be levied to pay debt service on indebtedness approved by the
voters prior to July 1, 1978 and on any bonded indebtedness for the acquisition or improvement of real
property which is approved after July 1, 1978 by two-thirds of the votes cast by voters voting on such
indebtedness. However, pursuant to an amendment to the State Constitution, redevelopment agencies
were prohibited from receiving any of the tax increment revenue attributable to tax rates levied to finance
bonds approved by the voters on or after January 1, 1989 for the acquisition or improvement of real
property. Moreover, Section 34183 of the Dissolution Act effectively eliminates the January 1, 1989 date
from such prohibitions and SB 107 further states that pre-1989 tax override rates are no longer distributed
to successor agencies except in limited circumstances (see “SECURITY FOR THE BONDS - Pledged Tax
Revenues,” “Property Tax Rate” below and “RISK FACTORS - Factors Which May Affect Pledged Tax
Revenues - Reduction in Inflationary Rate”).
In the general election held November 4, 1986, voters in the State approved two measures, Propositions
58 and 60, which further amend the terms “purchase” and “change of ownership,” for purposes of
determining full cash value of property under Article XIIIA, to not include the purchase or transfer of (1)
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real property between spouses and (2) the principal residence and the first $1,000,000 of other property
between parents and children. Proposition 60 amends Article XIIIA to permit the Legislature to allow
persons over age 55 who sell their residence and buy or build another of equal or lesser value within two
years in the same county (or in certain cases, another county), to transfer the old residence’s assessed
value to the new residence.
Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real
property at the lesser of its originally determined (base year) full cash value compounded annually by the
inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to
damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based
on Proposition 8 do not establish new base year values, and the property may be reassessed as of the
following lien date up to the lower of the then-current fair market value or the factored base year value.
The State Board of Equalization has approved this reassessment formula and such formula has been used
by county assessors statewide, and such methodology has been upheld by the California courts. During
the recent recession, the County made significant blanket assessed value reductions throughout the
County pursuant to Proposition 8 from the maximum amount that could be assessed on property. As a
result, the Former Agency saw a reduction in property values of _____________. Successor Agency
attributes the increases in assessed value in the last __ years primarily to recovery of a portion of the
Proposition 8 reductions.
Unsecured and Secured Property. In California, property which is subject to ad valorem taxes is
classified as “secured” or “unsecured.” The secured classification includes property on which any
property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does
not become a lien against the taxed unsecured property, but may become a lien on certain other property
owned by the taxpayer. Every tax which becomes a lien on secured property, arising pursuant to State
law, has priority over all other liens on the secured property, regardless of the time of the creation of the
other liens.
Property in the Project Areas is assessed by the San Diego County Assessor except for public utility
property which is assessed by the State Board of Equalization.
The valuation of secured property is determined as of January 1 each year for taxes owed with respect to
the succeeding Fiscal Year. The tax rate is equalized during the following September of each year, at
which time the tax rate is determined. Secured and unsecured property is entered on separate parts of the
assessment roll maintained by the county assessor. The method of collecting delinquent taxes is
substantially different for the two classifications of property.
Property taxes on the secured roll are due in two installments, on November 1 and February 1 of the fiscal
year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10%
penalty attaches to any delinquent payment in addition to a $20 cost on the second installment. On July 1
of each fiscal year any property which is delinquent will become defaulted. Such property may thereafter
be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a redemption penalty
of l½% per month to the time of redemption, together with any other charges permitted by law. If taxes
are unpaid for a period of five years or more, the property is subject to sale by the County Tax Collector.
The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured
roll is the sale of the property securing the taxes for the amount of taxes which are delinquent.
Property taxes on the unsecured roll become delinquent, if unpaid on August 31. A 10% penalty attaches
to delinquent taxes on property on the unsecured roll, and an additional penalty of l½% per month begins
to accrue on November 1 of the fiscal year. The County has four ways of collecting delinquent unsecured
personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the
County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the
taxpayer; (3) filing a certificate of delinquency for record in the County Recorder’s Office, in order to
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obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property,
improvements or possessory interests belonging or assessed to the assessee.
Supplemental Assessments. Legislation adopted in 1984 (Section 75, et seq. of the Revenue and
Taxation Code of the State of California) provides for the supplemental assessment and taxation of
property at its full cash value as of the date of a change of ownership or the date of completion of new
construction (the “Supplemental Assessments”). To determine the amount of the Supplemental
Assessment the County Auditor applies the current year’s tax rate to the supplemental assessment roll and
computes the amount of taxes that would be due for the full year. The taxes due are then adjusted by a
proration factor to reflect the portion of the tax year remaining as determined by the date on which the
change in ownership occurred or the new construction was completed. Supplemental Assessments
become a lien against the real property on the date of the change of ownership or completion of new
construction.
Unitary Property. Commencing in the 1988/89 Fiscal Year, the Revenue and Taxation Code of the State
of California changed the method of allocating property tax revenues derived from state assessed utility
properties. It provides for the distribution of state assessed values to tax rate areas by a county-wide
mathematical formula rather than assignment of state assessed value according to the location of those
values in individual tax rate areas.
Commencing with the 1988/89 Fiscal Year, each county has established one county-wide tax rate area.
The assessed value of all unitary property in the county has been assigned to this tax rate area and one tax
rate is levied against all such property (“Unitary Revenues”).
The property tax revenue derived from the assessed value assigned to the county-wide tax rate area shall
be allocated as follows: (1) each jurisdiction will be allocated up to 2% of the increase in Unitary
Revenues on a pro rata basis county-wide; and (2) any decrease in Unitary Revenues or increases less
than 2%, or any increase in Unitary Revenues above 2% will be allocated among jurisdictions in the same
proportion of each jurisdiction’s Unitary Revenues received in the prior year to the total Unitary
Revenues county-wide.
Legislation adopted in 2006 (SB 1317, Chapter 872) provides that, commencing with Fiscal Year
2007/08, certain property related to new electrical facilities shall be allocated entirely to the county in
which such property is located and property tax revenues derived from such property shall be allocated to
such county and certain Taxing Agencies within such county.
Property Tax Rate. The difference between the $1.00 general tax levy provided under Article XIIIA tax
rate and those actually levied (referred to as the “tax override rate”) represents the tax levied by
overlapping entities to pay debt service on bonded indebtedness approved by the voters.
Section 34183 of the Dissolution Act effectively eliminated the tax override rate from the calculation of
tax increment revenues with respect to tax override rates authorized by voters for the purpose of repaying
bonded indebtedness for the acquisition or improvement of real property. Future Tax Increment Revenues
have been projected by the Fiscal Consultant by applying a tax rate of $1.00 per $100 of taxable value
general levy to incremental taxable values.
No Other Outstanding Bonded Indebtedness
After refinancing the Refunded Bonds with the proceeds of the Bonds, no bonded indebtedness of the
Former Agency will remain outstanding.
The Successor Agency has other enforceable obligations payable from amounts deposited in the
Redevelopment Obligation Retirement Fund on a basis subordinate to the Bonds.
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Flow of Funds
Under the Indenture, in the Recognized Obligation Payment Schedule period beginning January 2 of each
year, the Successor Agency is required to request funding of the interest due on the Bonds on March 1 and
September 1 of such year, as well as 100% of the principal on the Bonds due on September 1. Other
enforceable obligations may be paid in such Recognized Obligation Payment Schedule period to the
extent those amounts are transferred to the trustee for the Bonds and reserved for such debt service.
In the Recognized Obligation Payment Schedule period beginning July 1 of each year, the Indenture also
requires the Successor Agency to request funding of any remaining unfunded principal and interest
payable on the Bonds on September 1 of such year (in the event of a shortfall in the amount of funds
available in the Redevelopment Property Tax Trust Fund on January 2 of such year.). Other enforceable
obligations may be paid in such Recognized Obligation Payment Schedule period to the extent those
amounts are transferred to the Trustee and reserved for such debt service.
Projected Pledged Tax Revenues and Debt Service Coverage
Receipt of projected Tax Revenues shown in Table No. 6 in the amounts and at the times projected by the
Successor Agency depends on the realization of certain assumptions relating to the Tax Increment
Revenues. The Municipal Advisor provided projections of taxable valuation and Pledged Tax Revenues
in the Project Areas. The Successor Agency believes the assumptions (set forth in “APPENDIX C -
PROJECTED TAX REVENUES”) upon which the projections are based are reasonable; however, some
assumptions may not materialize and unanticipated events and circumstances may occur (see “RISK
FACTORS ”). Therefore, the actual Pledged Tax Revenues received during the forecast period may vary
from the projections and the variations may be material, affecting the Successor Agency’s ability to timely
pay principal of and interest on the Bonds.
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TABLE NO. 6
PROJECTED PLEDGED TAX REVENUES
Bond Year Ending
September 1
Bayfront/Town Centre
Project Area (1)
Merged Redevelopment
Project Area (1)
Total
2016 $4,599,800 $ 7,055,600 $11,655,400
2017 4,681,300 7,246,100 11,927,400
2018 4,760,900 7,440,700 12,201,600
2019 4,843,200 7,638,300 12,481,500
2020 4,924,800 7,841,200 12,766,000
2021 5,007,200 8,046,500 13,053,700
2022 5,091,300 8,251,700 13,343,000
2023 5,176,800 8,432,900 13,609,700
2024 5,263,200 8,646,700 13,909,900
2025 5,352,500 8,864,700 14,217,200
2026 5,443,500 9,087,100 14,530,600
2027 5,536,700 9,314,500 14,851,200
2028 5,630,600 9,546,400 15,177,000
2029 5,725,400 9,782,600 15,508,000
2030 5,821,400 10,023,800 15,845,200
2031 5,912,200 10,269,000 16,181,200
2032 6,003,500 10,519,800 16,523,300
2033 6,088,700 10,775,600 16,864,300
2034 6,175,300 11,036,200 17,211,500
2035 6,263,800 11,290,400 17,554,200
2036 6,354,000 11,528,000 17,882,000
___________________________________
Source: Municipal Advisor, see “APPENDIX C - PROJECTED TAX REVENUES” for a description of assumptions.
(1) Based on the tax year, not adjusted for RPTTF distribution. See “SECURITY FOR THE BONDS -
Redevelopment Property Tax Trust Fund - Deposits to the Redevelopment Property Tax Trust Fund.”
The projected Pledged Tax Revenues shown above are subject to several variables described herein. See
“RISK FACTORS” herein. The Successor Agency provides no assurance that the projected Pledged Tax
Revenues will be achieved.
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Table No. 7 shows the projected debt service coverage for the Bonds.
TABLE NO. 7
SUCCESSOR AGENCY TO THE CHULA VISTA REDEVELOPMENT AGENCY
PROJECTED TAX REVENUES AND DEBT SERVICE COVERAGE
Bond Bonds
Year Tax Debt Debt Service
September 1 Revenues (1) Service* Coverage*
2016 $11,655,400
2017 11,927,340 $2,890,000 413%
2018 12,201,600 2,890,000 422%
2019 12,481,500 2,890,000 432%
2020 12,766,000 2,890,000 442%
2021 13,053,700 2,890,000 452%
2022 13,343,000 2,890,000 462%
2023 13,609,700 2,890,000 471%
2024 13,909,900 2,890,000 481%
2025 14,217,200 2,890,000 492%
2026 14,530,600 2,160,000 673%
2027 14,851,200 2,160,000 688%
2028 15,177,000 1,360,000 1,116%
2029 15,508,000 1,360,000 1,140%
2030 15,845,200 1,360,000 1,165%
2031 16,181,200 1,360,000 1,190%
2032 16,523,300 1,360,000 1,215%
2033 16,864,300 1,360,000 1,240%
2034 17,211,500 1,360,000 1,266%
2035 17,554,200 1,360,000 1,291%
2036 17,882,000 1,360,000 1,315%
__________________________________________
Source: Municipal Advisor.
(1) See Table No. 6.
* Preliminary, subject to change.
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RISK FACTORS
The purchase of the Bonds involves investment risk. If a risk factor materializes to a sufficient degree, it
could delay or prevent payment of principal of and/or interest on the Bonds. Such risk factors include,
but are not limited to, the following matters and should be considered, along with other information in
this Official Statement, by potential investors.
Factors Which May Affect Pledged Tax Revenues
The ability of the Successor Agency to pay principal of and interest on the Bonds depends on the timely
receipt of Pledged Tax Revenues as projected herein (see “FINANCIAL INFORMATION - Projected
Pledged Tax Revenues and Debt Service Coverage” herein). Projections of Pledged Tax Revenues are
based on the underlying assumptions relating to Tax Increment Revenues of the Project Areas. Pledged
Tax Revenues allocated to the Successor Agency (which constitute the ultimate source of payment of
principal of and interest on the Bonds, as discussed herein) are determined by the amount of incremental
valuation of taxable property in the Project Areas, taxed at a rate of $1.00 per $100 of assessed value (1%)
and the percentage of taxes collected in the Project Areas, adjusted to reflect prior claims on the Tax
Increment Revenues. A number of factors which may affect Tax Increment Revenues, and consequently,
Pledged Tax Revenues, are outlined below.
Reductions in Assessed Value. Tax Increment Revenues allocated to the Redevelopment Property Tax
Trust Fund are determined by the amount of incremental taxable value in the Project Areas taxed at a rate
of $1.00 per $100 of assessed value (1%). The reduction of taxable values of property in the Project
Areas caused by economic factors beyond the Successor Agency’s control, such as relocation out of a
Redevelopment Project by one or more major property owners, sale of property to a non-profit
corporation exempt from property taxation, or the complete or partial destruction of such property caused
by, among other eventualities, earthquake or other natural disaster, could cause a reduction in the Pledged
Tax Revenues that provide for the repayment of and secure the Bonds. Such reduction of Pledged Tax
Revenues could have an adverse effect on the Successor Agency’s ability to make timely payments of
principal of and interest on the Bonds.
Article XIIIA. Pursuant to the California voter initiative process, on June 6, 1978, California voters
approved Proposition 13 which added Article XIIIA to the California Constitution. This amendment
imposed certain limitations on taxes that may be levied against real property to 1% of the full cash value
of the property, adjusted annually for inflation at a rate not exceeding 2% annually. Full cash value is
determined as of the 1975/76 assessment year, upon change in ownership (acquisition) or when newly
constructed (see “FINANCIAL INFORMATION - Property Taxation in California” herein for a more
complete discussion of Article XIIIA). Article XIIIA has subsequently been amended to permit reduction
of the “full cash value” base in the event of declining property values caused by substantial damage,
destruction or other factors, and to provide that there would be no increase in the “full cash value” base in
the event of reconstruction of property damaged or destroyed in a disaster and in other special
circumstances.
Reduction in Inflationary Rate. The annual inflationary adjustment, while limited to 2%, is determined
annually and may not exceed the percentage change in the California Consumer Price Index (CCPI).
Because the Revenue and Taxation Code does not distinguish between positive and negative changes in
the CCPI used for purposes of the inflation factor, there was a decrease of 0.237% in 2009/10 – applied to
the 2010/11 tax roll – reflecting the actual change in the CCPI, as reported by the State Department of
Finance. For each fiscal year since Article XIIIA has become effective (the 1978/79 fiscal year), the
annual increase for inflation has been at least 2% except in nine fiscal years as shown below:
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Tax Roll Percentage
1981/82 1.000%
1995/96 1.190
1996/97 1.110
1998/99 1.853
2004/05 1.867
2010/11 (0.237)
2011/12 0.753
2014/15 0.454
2015/16 1.998
Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real
property at the lesser of its originally determined (base year) full cash value compounded annually by the
inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to
damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based
on Proposition 8 do not establish new base year values, and the property may be reassessed as of the
following lien date up to the lower of the then-current fair market value or the factored base year value.
The State Board of Equalization has approved this reassessment formula and such formula has been used
by county assessors statewide. This methodology has been approved by the Fourth District Court of
Appeals in a case in which the California Supreme Court declined further review. See “FINANCIAL
INFORMATION - Property Taxation in California - Proposition 8 Adjustments” herein.
If Proposition 8 adjustments are made by the County Assessor in future years because of declines in the
fair market value of properties caused by the lack of real estate development in the area generally,
Pledged Tax Revenues may be adversely affected and as a possible consequence may have an adverse
effect on the Successor Agency’s ability to pay debt service on the Bonds.
Assessment Appeals. Assessment appeals may be filed by property owners seeking a reduction in the
assessed value of their property. After the property owner files an appeal, the County’s Appeals Board
will hear the appeal and make a determination as to whether or not there should be a reduction in assessed
value for a particular property and the amount of the reduction, if any. To the extent that any reductions
are made to the assessed valuation of such properties with appeals currently pending, or appeals
subsequently filed, Tax Increment Revenues, and correspondingly, Pledged Tax Revenues will be
reduced. Such reductions may have an adverse effect on the Successor Agency’s ability to pay debt
service on the Bonds. As of ___________, there were ___ pending appeals filed within the last five years
by property owners within the Project Areas relating to $___ million of current year or prior years’
assessed value (see “THE PROJECT AREAS - Assessment Appeals” herein). To the extent these appeals
are resolved in favor of the property owner, Pledged Tax Revenues will be reduced.
Earthquake, Flood and Other Risks. Any natural disaster or other physical calamity, including
earthquake, may have the effect of reducing Tax Increment Revenues through reduction in the aggregate
assessed valuation within the boundaries of the Project Areas.
According to the Public Safety Element of the City’s General Plan, the City is located in a seismically
active region and could be impacted by a major earthquake originating from the numerous faults in the
area. Traces of the potentially active La Nacion fault zone are known to cross the City in a generally
north-south direction within the central portion of the City. The nearest active faults are the Rose Canyon
fault, located approximately 14 miles northwest of the City, and the Coronado Bank fault, located
approximately 30 miles from the City. Other active faults in the region are located more than 60 miles
from the City. Seismic hazards encompass potential surface rupture, ground shaking, liquefaction and
landslides.
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Strong vibrations due to earthquakes can cause liquefaction of certain soil types. Areas of Chula Vista in
close proximity to San Diego Bay and the Sweetwater and Otay River Valley have shallow groundwater
tables and poorly consolidated granular sediments potentially subject to seismically-induced liquefaction.
This area encompasses the Bayfront Redevelopment Project, the Bayfront Amended Area, the Southwest
Redevelopment Project and some portion of the Otay Valley Road Redevelopment Project. A small
portion of the Otay Valley Road Project is also subject to landslides in the event of an earthquake. A
major earthquake could cause widespread destruction and significant loss of life in a populated area such
as the City. If an earthquake were to substantially damage or destroy taxable property within the City or
any of the Redevelopment Projects, a reduction in taxable values of property in the Redevelopment
Projects and a reduction in Pledged Tax Revenues available to pay debt service on the Bonds would be
likely to occur.
Portions of the Town Centre No. II Redevelopment Project and the Bayfront Redevelopment Project, and
most of the Southwest Redevelopment Project, are located in a 100-Year flood plain. Areas of the
Southwest Redevelopment Project are in a potential zone of inundation due to dam failure.
Risk of wildfire is not a significant hazard within the boundaries of the Project Areas due to the urbanized
nature of the immediate area.
The City has adopted a Natural Hazards Mitigation Plan. This plan includes a hazard analysis for
earthquake, flood, landslide and fire risk and is required to comply with FEMA requirements for disaster
relief funding. A major earthquake could cause widespread destruction and significant loss of life in a
populated area such as the City. If an earthquake were to substantially damage or destroy taxable
property within the Project Areas, a reduction in taxable values of property in the Project Areas and a
reduction in Pledged Tax Revenues available to pay debt service on the Bonds would be likely to occur.
A reduction in taxable values of property in certain portions of the Project Areas and a reduction in
Pledged Tax Revenues available to pay debt service on the Bonds would also be likely in the event of
flooding.
Hazardous Substances. An additional environmental condition that may result in the reduction in the
assessed value of parcels would be the discovery of a hazardous substance that would limit the beneficial
use of a property within the Project Areas. In general, the owners and operators of a property may be
required by law to remedy conditions of the property relating to releases or threatened releases of
hazardous substances. The owner (or operator) may be required to remedy a hazardous substance
condition of property whether or not the owner (or operator) has anything to do with creating or handling
the hazardous substance. The effect, therefore, should any of the property within the Project Areas be
affected by a hazardous substance would be to reduce the marketability and value of the property, perhaps
by an amount in excess of the costs of remedying the condition. The Successor Agency can give no
assurance that future development will not be limited by these conditions.
Development Risks. The Successor Agency’s collection of Pledged Tax Revenues is directly affected by
the economic strength of the Project Areas. Potential development within the Project Areas will be
subject to all the risks generally associated with real estate development projects, including unexpected
delays, disruptions and changes. Real estate development operations may be adversely affected by
changes in general economic conditions, fluctuations in real estate market and interest rates, unexpected
increases in development costs and other similar factors. Further, real estate development operations
within the Project Areas could be adversely affected by future governmental policies, including
governmental policies to restrict or control development. If future development in the Project Areas is
delayed or halted, the economy of the Project Areas could be affected, causing a reduction in Pledged Tax
Revenues available to pay debt service on the Bonds.
Certain Bankruptcy Risks. The enforceability of the rights and remedies of the Owners of the Bonds
and the obligations of the Successor Agency may become subject to the following: the federal bankruptcy
code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or
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affecting the enforcement of creditors’ rights generally, now or hereafter in effect; usual equitable
principles which may limit the specific enforcement under state law of certain remedies; the exercise by
the United States of America of the powers delegated to it by the federal Constitution; and the reasonable
and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty
of the State of California and its governmental bodies in the interest of servicing a significant and
legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state
government, if initiated, could subject the Owners of the Bonds to judicial discretion and interpretation of
their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or
modification of their rights.
Limited Obligations. The Successor Agency has no power to levy and collect property taxes, and any
property tax limitation, legislative measure, voter initiative or provision of additional sources of income to
Taxing Agencies having the effect of reducing the property tax rate must necessarily reduce the amount of
Tax Increment Revenues, and consequently, Pledged Tax Revenues that would otherwise be available to
pay the principal of, and interest on the Bonds.
Interpretation of and Future Changes in the Law; Voter Initiatives. The Redevelopment Law and the
Dissolution Act are complex bodies of law and their application to the Successor Agency, the
Redevelopment Plan and the Project Areas may be subject to different interpretations by the Successor
Agency, the Department of Finance, the County Auditor-Controller, Taxing Agencies and other interested
parties, including with respect to Tax Sharing Agreements and Statutory Tax Sharing obligations and
enforceable obligations. Since the effectiveness of the Dissolution Act, the State Department of Finance
and various successor agencies have from time to time disagreed about the interpretation of different
language contained in the Dissolution Act, as well as whether or not the State Department of Finance has
exceeded its authority in rejecting items from Recognized Obligation Payment Schedules submitted by
successor agencies, as evidenced by numerous lawsuits. While the Successor Agency has covenanted in
the Indenture to preserve and protect the security of the Bonds and the rights of the Bondholders (see
“APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE - Covenants of the
Successor Agency”), any such action taken by the Successor Agency could incur substantial time and cost
that may have a detrimental effect on the Successor Agency’s ability to timely pay debt service on the
Bonds. Moreover, the Successor Agency cannot guarantee the outcome of any such action taken by the
Successor Agency to preserve and protect the security of the Bonds and the rights of the Bondholders.
In addition to the existing limitations on Tax Increment Revenues described in this Official Statement
under “FINANCIAL INFORMATION - Property Taxation in California,” the California electorate or
Legislature could adopt future limitations with the effect of reducing Tax Increment Revenues payable to
the Successor Agency.
Real Estate and General Economic Risks
Tax Increment Revenues as presented herein as available for payment of any indebtedness of the
Successor Agency are based upon the latest actual assessed values for the 2015/16 Fiscal Year.
Redevelopment of real property within the Project Areas by the City, as well as private development in
the Project Areas, may be adversely affected by changes in general economic conditions, fluctuations in
the real estate markets and interest rates, unexpected increases in development costs, changes in or new
governmental policies including governmental policies to restrict or control certain kinds of development
and by other similar factors. If development and redevelopment activities in the Project Areas encounter
significant obstacles of the kind described herein or other impediments, the economy of the area in and
around the Project Areas could be adversely affected, causing reduced taxable valuation of property in the
Project Areas, a reduction of the Tax Increment Revenues and a consequent reduction in Pledged Tax
Revenues available to repay the Bonds. Due to the decline in the general economy of the region, owners
of property within the Project Areas may be less able or less willing to make timely payments of property
taxes, causing a delay or reduction of Tax Increment Revenues and consequently a reduction in Pledged
Tax Revenues available to repay the Bonds.
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Recognized Obligation Payment Schedule
The Dissolution Act provides that only those payments listed in the Recognized Obligation Payment
Schedule may be made by the Successor Agency from the funds specified in the Recognized Obligation
Payment Schedule. The Dissolution Act requires successor agencies to prepare and approve, and submit
to the successor agency’s oversight board and the State Department of Finance for approval, a Recognized
Obligation Payment Schedule pursuant to which enforceable obligations (as defined in the Dissolution
Act) of the successor agency are listed, together with the source of funds to be used to pay for each
enforceable obligation. Pledged Tax Revenues will not be distributed from the Redevelopment Property
Tax Trust Fund by the County Auditor-Controller to the Successor Agency’s Redevelopment Obligation
Retirement Fund without a duly approved and effective Recognized Obligation Payment Schedule
obtained in sufficient time prior to the January 2 or June 1 distribution dates, as applicable. See
“SECURITY FOR THE BONDS - Recognized Obligation Payment Schedules.” In the event the Successor
Agency were to fail to file a Recognized Obligation Payment Schedule with respect to any six-month
period, the availability of Pledged Tax Revenues to the Successor Agency could be adversely affected for
such period.
The Successor Agency has covenanted to take all actions required under the Dissolution Act to include
scheduled debt service on the Bonds as well as any amount required under the Indenture to replenish the
Reserve Account of the Debt Service Fund, in Recognized Obligation Payment Schedules for each six-
month period of a Fiscal Year and to enable the County Auditor-Controller to distribute from the
Redevelopment Property Tax Trust Fund to the Successor Agency’s Redevelopment Obligation
Retirement Fund on each January 2 and June 1 amounts required for the Successor Agency to pay
principal of, and interest on, the Bonds coming due in the respective six-month period of a Fiscal Year,
including listing a reserve on the Recognized Obligation Payment Schedule to the extent required by the
Indenture or when the next property tax allocation is projected to be insufficient to pay all obligations due
under the provisions of the Bonds for the next payment due in the following six-month period (see
“APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE - Covenants of the
Successor Agency”).
The Dissolution Act also contains certain penalties in the event the Successor Agency does not timely
submit a Recognized Obligation Payment Schedule for a Fiscal Year. Specifically, a Recognized
Obligation Payment Schedule must be submitted by the Successor Agency, after approval by the
Oversight Board, the County Auditor-Controller, the State Department of Finance, and the State
Controller no later than February 1 of each year. If the Successor Agency does not submit an Oversight
Board-approved Recognized Obligation Payment Schedule by such deadlines, the City will be subject to a
civil penalty equal to $10,000 per day for every day the schedule is not submitted to the State Department
of Finance. Additionally, the Successor Agency’s administrative cost allowance is reduced by 25% if the
Successor Agency does not submit an Oversight Board-approved Recognized Obligation Payment
Schedule by the 10th day after the February 1 deadline with respect to a Recognized Obligation Payment
Schedule for the subsequent annual period.
The Successor Agency has submitted all Recognized Obligation Payment Schedules, duly approved by
the Oversight Board, in a timely manner.
Loss of Tax Exemption
As discussed under the caption “TAX MATTERS” herein, interest on the Bonds could become includable
in gross income for purposes of federal income taxation retroactive to the date the Bonds were executed
and delivered as a result of future acts or omissions of the Successor Agency in violation of its covenants
contained in the Indenture. Should such an event of taxability occur, the Bonds are not subject to special
redemption or any increase in interest rate and will remain outstanding until maturity.
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In addition, Congress has considered in the past, is currently considering and may consider in the future,
legislative proposals, including some that carry retroactive effective dates, that, if enacted, would alter or
eliminate the exclusion from gross income for federal income tax purposes of interest on municipal
bonds, such as the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors
regarding any pending or proposed federal tax legislation. The Successor Agency can provide no
assurance that federal tax law will not change while the Bonds are outstanding or that any such changes
will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income
tax purposes. If the exclusion of the interest on the Bonds from gross income for federal income tax
purposes were amended or eliminated, it is likely that the market price for the Bonds would be adversely
impacted.
IRS Audit of Tax-Exempt Bond Issues
The Internal Revenue Service has initiated an expanded program for the auditing of tax-exempt bond
issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit
by the Internal Revenue Service. It is also possible that the market value of the Bonds might be affected
as a result of such an audit of the Bonds (or by an audit of similar bonds).
Risks Related to Insured Bonds
(to be completed)
Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market
exists, that such Bonds can be sold for any particular price. Occasionally, because of general market
conditions or because of adverse history or economic prospects connected with a particular issue,
secondary marketing practices in connection with a particular issue are suspended or terminated.
Additionally, prices of issues for which a market is being made will depend upon then prevailing
circumstances. Such prices could be substantially different from the original purchase price.
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TAX MATTERS
[to be provided by Bond Counsel]
The complete text of the final opinion that Bond Counsel expects to deliver upon the issuance of the
Bonds is set forth in “APPENDIX F - PROPOSED FORM OF BOND COUNSEL OPINION.”
LEGAL MATTERS
Enforceability of Remedies
The remedies available to the Trustee and the Owners of the Bonds upon an event of default under the
Indenture or any other document described herein are in many respects dependent upon regulatory and
judicial actions which are often subject to discretion and delay. Under existing law and judicial decisions,
the remedies provided for under such documents may not be readily available or may be limited. The
various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified to the
extent that the enforceability of certain legal rights related to the Bonds and the Indenture are subject to
limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of
creditors generally and by equitable remedies and proceedings generally.
Approval of Legal Proceedings
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Bond
Counsel, will render an opinion which states that the Indenture is a valid and binding obligation of the
Successor Agency and enforceable in accordance with its terms. The legal opinion of Bond Counsel will
be subject to the effect of bankruptcy, insolvency, moratorium and other similar laws affecting creditors’
rights and to the exercise of judicial discretion in accordance with general principles of equity. See
“APPENDIX F” for the proposed form of Bond Counsel’s opinion.
The Successor Agency has no knowledge of any fact or other information which would indicate that the
Indenture is not so enforceable against the Successor Agency, except to the extent such enforcement is
limited by principles of equity and by state and federal laws relating to bankruptcy, reorganization,
moratorium or creditors’ rights generally.
Certain legal matters will be passed on for the Successor Agency by Glen R. Googins, City Attorney.
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, will also pass
on certain legal matters for the Successor Agency as Disclosure Counsel. Certain legal matters will be
passed on for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, San Francisco,
California. Fees payable to Bond Counsel, Disclosure Counsel and Underwriter’s Counsel are contingent
upon the sale and delivery of the Bonds. At times, Bond Counsel represents the Underwriter in matters
unrelated to the Bonds.
No Litigation
There is no action, suit or proceeding known to the Successor Agency to be pending and notice of which
has been served upon and received by the Successor Agency, or threatened, restraining or enjoining the
execution or delivery of the Bonds or the Indenture or in any way contesting or affecting the validity of
the foregoing or any proceedings of the Successor Agency taken with respect to any of the foregoing.
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CONCLUDING INFORMATION
Ratings on the Bonds
Standard & Poor’s has assigned its municipal bond rating of “__” with the understanding that the Policy
insuring the payment when due of the principal of and interest on the Bonds will be issued concurrently
by the Bond Insurer with the delivery of the Bonds. The Bonds have received the underlying rating of
“__” by Standard & Poor’s. Such ratings reflect only the views of Standard & Poor’s, and any desired
explanation of the significance of such ratings may be obtained from such rating agency at the following
address: Standard & Poor’s Ratings Services, 55 Water Street, New York, New York 10041, (212) 438-
2000. Generally, a rating agency bases its rating on the information and materials furnished to it and on
investigations, studies and assumptions of its own.
There is no assurance such ratings will continue for any given period of time or that such ratings will not
be revised downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency,
circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an
adverse effect on the market price of the Bonds. Except as otherwise required in the Continuing
Disclosure Certificate, the Successor Agency undertakes no responsibility either to bring to the attention
of the owners of any Bonds any downward revision or withdrawal of any rating obtained or to oppose any
such revision or withdrawal. A rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time.
The Municipal Advisor
The material contained in this Official Statement was prepared by the Successor Agency with the
assistance of Harrell & Company Advisors, LLC, Orange, California, an independent financial consulting
firm, which advised the Successor Agency as to the financial structure and certain other financial matters
relating to the Bonds. The information set forth herein has been obtained by the Successor Agency from
sources which are believed to be reliable, but such information is not guaranteed by the Municipal
Advisor as to accuracy or completeness, nor has it been independently verified. Fees paid to the
Municipal Advisor are contingent upon the sale and delivery of the Bonds.
Continuing Disclosure
The Successor Agency will covenant to provide certain annual financial information (the “Annual
Reports”) and notices of the occurrence of certain enumerated events in accordance with Rule 15c2-12 of
the Securities Exchange Act of 1934 as amended (the “Rule”) by not later than March 31 in each year.
Willdan Financial Services will act as Dissemination Agent. The specific nature of the information to be
contained in the Annual Report or the notices of listed events and certain other terms of the continuing
disclosure obligation are found in the form of the Successor Agency’s Disclosure Certificate attached in
“APPENDIX E - FORM OF CONTINUING DISCLOSURE CERTIFICATE.” The City will assist the
Successor Agency in complying with its continuing disclosure obligations.
The City and certain other entities related to the City, including the Former Agency, various community
facilities districts and joint powers authorities (together, the “City Entities”), have entered into previous
undertakings pursuant to the Rule. Within the last five years, the City and certain of the City Entities
have failed to comply with their respective prior undertakings in the following respects: pursuant to the
undertakings for the City’s five series of Certificates of Participation (collectively, the “Certificates”)
issued prior to 2011, the City’s audit for Fiscal Year 2009-10 was timely filed on EMMA (by February 1,
2011) and referenced in the annual reports as being filed, however, the audit was not linked by CUSIP
number to two series of Certificates until May 2011 and to the three other series of Certificates until
February 2014; (ii) pursuant to the undertakings for certain of the community facilities districts, such
community facilities districts were twelve days late in filing the City’s audited financial statements in
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2013; (iii) pursuant to the undertakings for three series of the Former Agency’s bonds, the former
Agency’s annual reports due in February and March 2012 were not filed until July 2012 and financial
statements due in February and March 2011 were not filed until February 2014, although financial
statements were timely filed for all other years since 2011; (iv) notice of certain ratings changes resulting
from changes in ratings on municipal bond insurance companies were not promptly filed and one notice
of an underlying rating change was filed 37 days after the rating change occurred; and (v) in certain cases
information was timely filed on EMMA under the applicable base CUSIP number for the issuer but not
linked to all of the individual CUSIP numbers for a series of bonds.
The City has adopted policies and procedures regarding compliance with undertakings made by the City
and the City Entities pursuant to the Rule and has retained the services of outside consultants to assist in
the reporting process. The City’s Finance Department has assigned a specific person to coordinate with
the outside consultants and to monitor compliance.
Underwriting
The Bonds were sold to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), who is offering
the Bonds at the prices set forth on the inside cover page hereof. The initial offering prices may be
changed from time to time and concessions from the offering prices may be allowed to dealers, banks and
others.
The Underwriter has purchased the Bonds at a price equal to $_______, which amount represents the
principal amount of the Bonds plus a net original issue premium of $_____, less an Underwriter’s
discount of $______. The Underwriter will pay certain of its expenses relating to the offering from the
Underwriter’s discount.
References
All statements in this Official Statement involving matters of opinion, whether or not expressly so stated,
are intended as such and not as representations of fact. This Official Statement is not to be construed as a
contract or agreement between the Successor Agency and the purchasers or Owners of any of the Bonds.
Execution
The execution and delivery of this Official Statement by the Executive Director of the Successor Agency
has been duly authorized by the Successor Agency.
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
By: ________________________________
Executive Director
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APPENDIX A
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
[TO BE PROVIDED BY BOND COUNSEL]
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APPENDIX B
CITY OF CHULA VISTA INFORMATION STATEMENT
The following information concerning the City of Chula Vista is presented as general background data.
The Bonds are payable solely from Pledged Tax Revenues as described in the Official Statement. The
Bonds are not an obligation of the City, and the taxing power of the City is not pledged to the payment of
the Bonds.
General Information
Chula Vista is located on San Diego Bay in Southern California, 8 miles south of the City of San Diego
and 7 miles north of the Mexico border, in an area generally known as “South Bay.” Chula Vista’s city
limits cover approximately 50 square miles. Neighboring communities include the City of San Diego and
National City to the north and the City of Imperial Beach and the communities of San Ysidro and Otay
Mesa to the south. With a January 2015 estimated population of 257,989, Chula Vista is the second
largest city in the County.
The City maintains an internet website (www.chulavistaca.gov) for various purposes, however, none of
the information on that website is intended to assist investors in making any investment decision or to
provide any continuing information with respect to the Certificates or any other bonds or obligations of
the City.
Government Organization
Chula Vista was incorporated as a general law city on March 17, 1911, and operates under the
council/manager form of government. It became a charter city in 1949. The City is governed by a five-
member council consisting of four members and a Mayor, each elected at large for four-year alternating
terms. The City Attorney is also elected at large. Beginning in 2016, City Council members will be
elected by geographic districts. The positions of City Manager and City Clerk are filled by appointments
of the Council. In Fiscal Year 2015/16, the City had 966 authorized full-time staff positions including
sworn officers and fire personnel. Including part-time personnel, the City employs approximately 1,150
staff.
Governmental Services
Public Safety and Welfare
For Fiscal Year 2015/16, the City of Chula Vista Police Department has authorized total positions of 323,
including sworn officers and non-sworn personnel providing patrol, traffic, animal control and
investigations. There are nine fire stations located in and operated by the City, staffed by 27 fire
personnel.
Community Services
Services provided by the City include building permit and inspection, planning and zoning, landscape and
public infrastructure maintenance, street cleaning, traffic signal maintenance and municipal code
compliance.
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Public Services
Water is supplied to Chula Vista by the Otay Water District and the Sweetwater Water District. Sewer
service is provided by the City. Electric power and natural gas are provided by San Diego Gas and
Electric.
The Chula Vista Public Library is comprised of three individual libraries connected by a wide-area
network. The Library’s circulation is nearing 1 million. The Library delivers books in English and
Spanish, videos and CDs, and community programming to the City’s residents nearly every day of the
year. The Library contains an Office of Cultural Arts dedicated to advancing the arts and culture in a
manner designed to preserve the diverse cultures of the area.
Culture and Leisure
Chula Vista is the home to a variety of cultural and educational facilities such as the Chula Vista Heritage
Museum, Onstage Playhouse, and the San Diego Junior Theater.
The Chula Vista Recreation Department provides citizens with a variety of park and recreational services
on a year round basis. Facilities include nine community and recreation centers, including a youth
community center and a senior center. The City also has two community pools open year round, 43
community and neighborhood parks, and a Memorial Bowl with seating for 700 at which the City’s
Summer Concert Series is hosted. The City also has after-school recreation programs throughout the
community.
Community Information
Public educational instruction for kindergarten through high school is provided by the Chula Vista
Elementary School District and Sweetwater Union High School District. There are also four adult
education schools and numerous private schools. In addition to Southwestern College, a two year
Community College, there are seven universities or colleges within 30 minutes commuting distance from
Chula Vista in the San Diego metropolitan area.
There are two acute-care hospitals, two psychiatric hospitals and three convalescent hospitals in Chula
Vista.
Transportation
U.S. Highways 5 (along the coast) and 805 (inland) provide full freeway access from Chula Vista north to
San Diego and south to the Mexican border. Commuter rail service is provided by the San Diego Trolley,
a light rail system. Eleven bus routes serve Chula Vista.
The City established Chula Vista Express, a three-part commuting program to promote public
transportation, carpooling, vanpooling, biking and walking to work as alternatives to driving alone. It
offers free bus service from the eastern part of the City to downtown San Diego, and a free shuttle from
the eastern part of the City to the H Street Trolley Station to a cash incentive for riding or joining a
vanpool or carpool.
Air cargo and passenger flight services are provided at San Diego’s Lindbergh International Airport, 12
miles west, which is served by all major airlines. Cargo shipping is available at the Unified Port of San
Diego, which serves as a transshipment facility for the region, which includes San Diego, Orange,
Riverside, San Bernardino and Imperial counties, plus northern Baja California, Arizona and points east.
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Population
Table No. B-1 summarizes population growth between 2011 and 2015 for the City and the County.
TABLE NO. B-1
CHANGE IN POPULATION
CITY OF CHULA VISTA AND SAN DIEGO COUNTY
2011 – 2015
CHULA VISTA SAN DIEGO COUNTY
January 1 Percentage Percentage
Year Population Change Population Change
2011 245,958 3,115,810
2012 248,044 0.8% 3,128,387 0.4%
2013 252,586 1.8% 3,164,818 1.2%
2014 255,580 1.2% 3,192,457 0.9%
2015 257,989 0.9% 3,227,496 1.1%
% Change Between 2011 - 2015 4.9% 3.6%
__________________________________
Source: State of California, Department of Finance, “E-4 Population Estimates for Cities, Counties and the State,
2011-2015, with 2010 Census Benchmark” Sacramento, California, May 2015.
Per Capita Personal Income
Per capita personal income information for the City, the County, the State and the United States are
summarized in the following table.
TABLE NO. B-2
PER CAPITA PERSONAL INCOME
CITY OF CHULA VISTA, SAN DIEGO COUNTY,
CALIFORNIA AND UNITED STATES (1)
2010 – 2014
Year City of Chula Vista San Diego County State of California United States
2010 $41,840 $44,563 $42,411 $40,277
2011 43,000 47,095 44,852 42,453
2012 43,720 48,990 47,614 44,266
2013 43,240 49,907 48,125 44,438
2014 43,150 51,459 49,985 46,049
__________________________________
(1) For San Diego County, State of California and United States, per capita personal income was computed using
Census Bureau midyear population estimates. Estimates for 2010-2014 reflect county population estimates
available as of March 2015.
Note: All dollar estimates are in current dollars (not adjusted for inflation).
Last updated: November 19, 2015, new estimates for 2014; revised estimates for 2010-2013.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, City of Chula Vista Comprehensive Annual
Financial Report.
2016-04-05 Agenda Packet Page 170
B-4
Employment
As of December 2015, the civilian labor force for the City was approximately 119,800 of whom 112,600
were employed. The unadjusted unemployment rate as of December 2015 was 6.0% for the City as
compared to 4.7% for the County and 5.8% for the State. Civilian labor force, employment and
unemployment statistics for the City, County, the State and the nation, for the years 2010 through 2014
are shown in the following table:
TABLE NO. B-3
CITY OF CHULA VISTA
CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT
ANNUAL AVERAGES
Civilian Unemployment
Year Labor Force Employment Unemployment Rate
2010
City of Chula Vista 117,700 102,000 15,700 13.3%
San Diego County 1,516,000 1,353,100 162,900 10.7%
California 18,336,300 16,091,900 2,244,300 12.2%
United States 153,889,000 139,064,000 14,825,000 9.6%
2011
City of Chula Vista 118,300 103,200 15,100 12.8%
San Diego County 1,526,000 1,368,700 157,300 10.3%
California 18,419,500 16,260,100 2,159,400 11.7%
United States 153,617,000 139,869,000 13,747,000 8.9%
2012
City of Chula Vista 119,400 105,800 13,600 11.4%
San Diego County 1,544,600 1,403,600 141,000 9.1%
California 18,554,800 16,630,100 1,924,700 10.4%
United States 154,975,000 142,469,000 12,506,000 8.1%
2013
City of Chula Vista 119,100 107,500 11,600 9.7%
San Diego County 1,546,200 1,425,800 120,400 7.8%
California 18,671,600 17,002,900 1,668,700 8.9%
United States 155,389,000 143,929,000 11,460,000 7.4%
2014
City of Chula Vista 118,600 109,100 9,500 8.0%
San Diego County 1,546,400 1,447,100 99,200 6.4%
California 18,811,400 17,397,100 1,414,300 7.5%
United States 155,922,000 146,305,000 9,617,000 6.2%
__________________________________
Source: California State Employment Development Department.
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B-5
Industry
The City is located in the San Diego-Carlsbad Metropolitan Statistical Area. As of December 2015, six
major job categories constitute 82.0% of the work force. They are professional and business services
(17.1%), government (16.9%), service producing (14.2%), educational and health services (14.1%),
leisure and hospitality (12.7%), and manufacturing (7.0%). The number of wage and salary workers by
industry for each of the years 2011 through 2015 in the Metropolitan Statistical Area is presented in Table
No. B-4 below.
TABLE NO. B-4
SAN DIEGO-CARLSBAD METROPOLITAN STATISTICAL AREA
WAGE AND SALARY WORKERS BY INDUSTRY (1)
2011 - 2015
(in Thousands)
Industry 2011 2012 2013 2014 2015
Government 229.8 231.2233.1236.6 240.3
Other Services 47.448.949.954.1 51.6
Leisure and Hospitality 155.4162.2170.9178.8 180.9
Educational and Health Services 165.5177.6184.0191.1 201.3
Professional and Business Services 212.3221.8230.7237.2 244.2
Financial Activities 68.871.771.170.6 73.6
Information 24.324.624.724.9 25.8
Transportation, Warehousing and Utilities 26.828.527.227.5 27.8
Service Producing
Retail Trade 143.3147.4152.4152.4 156.3
Wholesale Trade 42.144.444.044.0 45.3
Manufacturing
Nondurable Goods 22.523.524.724.7 25.0
Durable Goods 71.472.271.772.7 74.2
Goods Producing
Construction 55.158.362.663.4 69.2
Natural Resources and Mining 0.4 0.4 0.4 0.4 0.4
Total Nonfarm 1,265.11,312.71,347.41,378.4 1,415.9
Farm 8.8 8.7 8.9 9.6 9.4
Total (all industries) 1,273.9 1,321.4 1,356.3 1,388.0 1,425.3
__________________________________
(1) Annually, as of December.
Note: The unemployment rate is calculated using unrounded data. Data may not add due to rounding.
Source: State of California Employment Development Department, Labor Market Information Division, “Industry
Employment & Labor Force - by month, March 2014 Benchmark.”
2016-04-05 Agenda Packet Page 172
B-6
The largest employers operating within the City and their respective number of employees as of June
2015 are as follows:
TABLE NO. B-5
CITY OF CHULA VISTA
LARGEST EMPLOYERS
Name of Company Employment Type of Business/Service
Sweetwater Union High School District 4,121 Education
Chula Vista Elementary School District 3,135 Education
Rohr Inc./Goodrich Aerospace 2,468 Aerospace Manufacturing
Southwestern Community College 1,918 Education
Sharp Chula Vista Medical Center 1,878 Hospital
Wal-Mart 1,239 General Merchandise
City of Chula Vista 1,178 Government
Scripps Mercy Hospital Chula Vista 1,058 Hospital
Costco 597 General Merchandise
24 Hour Fitness 559 Health Club
_________________________________
Source: City of Chula Vista Comprehensive Annual Financial Report.
Commercial Activity
The following table summarizes the volume of retail sales and taxable transactions for the City of Chula
Vista for 2009 through 2013 (the most recent year for which statistics are available from the State Board
of Equalization for the full year).
TABLE NO. B-6
CITY OF CHULA VISTA
TOTAL TAXABLE TRANSACTIONS
(in $ Thousands)
2009 – 2013
Retail and Retail and Total Taxable
Food Services Food Services Transactions Issued Sales
Year ($000’s) % Change Permits ($000’s) % Change Permits
2009 $1,976,176 2,543 $2,199,592 4,005
2010 2,070,662 4.8% 2,649 2,303,400 4.7% 4,064
2011 2,184,654 5.5% 2,714 2,421,666 5.1% 4,095
2012 2,258,846 3.4% 2,778 2,501,497 3.3% 4,149
2013 2,333,365 3.3% 2,835 2,589,379 3.5% 4,182
_________________________________
Source: California State Board of Equalization, “Taxable Sales in California.”
2016-04-05 Agenda Packet Page 173
B-7
Taxable transactions by type of business for the City of Chula Vista for 2009 through 2013 (the most
recent year for which statistics are available from the State Board of Equalization for the full year) are
summarized in Table No. B-7.
TABLE NO. B-7
CITY OF CHULA VISTA
TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
(in $ Thousands)
2009 – 2013
2009 2010 2011 2012 2013
Retail and Food Services
Clothing and Clothing
Accessories Stores $ 118,759 $ 134,611 $ 139,282 $ 147,168 $ 150,789
General Merchandise Stores 617,638 649,020 657,146 668,390 675,819
Food and Beverage Stores 117,144 117,923 124,929 131,846 139,157
Food Services and Drinking Places 280,806 287,698 297,506 317,320 338,183
Home Furnishings and
Appliance Stores 145,785 146,805 150,305 150,541 153,461
Building Materials and Garden
Equipment and Supplies 94,134 94,588 99,766 105,472 109,437
Motor Vehicle and Parts Dealers 188,516 185,847 209,121 230,345 246,160
Gasoline Stations 218,397 255,746 303,189 305,217 304,968
Other Retail Group 194,997 198,423 203,410 202,547 215,390
Total Retail and Food Services 1,976,176 2,070,661 2,184,654 2,258,846 2,333,365
All Other Outlets 223,416 232,738 237,013 242,651 256,014
Total All Outlets $2,199,592 $2,303,399 $2,421,667 $2,501,497 $2,589,379
_________________________________
Note: Detail may not compute to total due to rounding.
Source: California State Board of Equalization, “Taxable Sales in California.”
2016-04-05 Agenda Packet Page 174
B-8
Building Activity
Table No. B-8 summarizes building activity valuations for the City for the five-year period from 2010/11
through 2014/15.
TABLE NO. B-8
CITY OF CHULA VISTA
BUILDING ACTIVITY AND VALUATION
2010/11 – 2014/15
Residential Building Non-Residential Building
Permits Issued Permits Issued
Fiscal Year Units Valuation Buildings Valuation
2010/11 861 $144,615,239 23 $14,834,350
2011/12 479 120,416,023 12 4,281,013
2012/13 954 226,972,213 13 22,328,114
2013/14 571 116,869,207 26 53,222,385
2014/15
_________________________________
Source: City of Chula Vista.
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C-1
APPENDIX C
PROJECTED TAX REVENUES
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D-1
APPENDIX D
AUDITED FINANCIAL STATEMENTS FOR THE FISCAL
YEAR ENDED JUNE 30, 2015
2016-04-05 Agenda Packet Page 177
E-1
APPENDIX E
FORM OF CONTINUING DISCLOSURE CERTIFICATE
[to be provided by Disclosure Counsel]
2016-04-05 Agenda Packet Page 178
F-1
APPENDIX F
PROPOSED FORM OF BOND COUNSEL OPINION
[to be provided by Bond Counsel]
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G-1
APPENDIX G
THE BOOK-ENTRY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record
keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and
other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of
beneficial ownership interest in the Bonds and other related transactions by and between DTC, the DTC
Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no
representations can be made concerning these matters and neither the DTC Participants nor the
Beneficial Owners should rely on the foregoing information with respect to such matters, but should
instead confirm the same with DTC or the DTC Participants, as the case may be.
Neither the issuer of the Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent
appointed with respect to the Bonds (the “Agent”) take any responsibility for the information contained in
this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute
to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds,
(b) certificates representing ownership interest in or other confirmation or ownership interest in the
Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered
owner of the Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC
Indirect Participants will act in the manner described in this Appendix. The current “Rules” applicable
to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC
to be followed in dealing with DTC Participants are on file with DTC.
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository
for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered
in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully-registered Security certificate will be issued for each issue
of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC.
If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be
issued with respect to each $500 million of principal amount, and an additional certificate will be issued
with respect to any remaining principal amount of such issue.
2. DTC, the world’s largest securities depository, is a limited-purpose trust company
organized under the New York Banking Law, a “banking organization” within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the
meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset
servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt
issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct
Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants
of sales and other securities transactions in deposited securities, through electronic computerized book-
entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical
movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers
and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a
wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the
holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated
subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or
maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect
2016-04-05 Agenda Packet Page 180
G-2
Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its
Participants are on file with the Securities and Exchange Commission. More information about DTC can
be found at www.dtcc.com. The information contained on such Internet site is not incorporated herein by
reference.
3. Purchases of Securities under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of
each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and
Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Securities, except in the event that use of the book-entry system for the Securities is
discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with
DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may
be requested by an authorized representative of DTC. The deposit of Securities with DTC and their
registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records
reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which
may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take
certain steps to augment the transmission to them of notices of significant events with respect to the
Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents.
For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the
Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the
alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request
that copies of notices be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue
are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI
Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after
the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct
Participants to whose accounts Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be
made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC.
DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding
detail information from Issuer or Agent, on payable date in accordance with their respective holdings
shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for the accounts of customers in
2016-04-05 Agenda Packet Page 181
G-3
bearer form or registered in “street name,” and will be the responsibility of such Participant and not of
DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time
to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such
other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer
or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect
Participants.
9. DTC may discontinue providing its services as depository with respect to the Securities at
any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a
successor depository is not obtained, Security certificates are required to be printed and delivered.
10. Issuer may decide to discontinue use of the system of book-entry transfers through DTC
(or a successor securities depository). In that event, Security certificates will be printed and delivered to
DTC.
11. The information in this section concerning DTC and DTC’s book-entry system has been
obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the
accuracy thereof.
2016-04-05 Agenda Packet Page 182
H-1
APPENDIX H
SPECIMEN MUNICIPAL BOND INSURANCE POLICY
2016-04-05 Agenda Packet Page 183
Stradling Yocca Carlson & Rauth
Draft of 2/25/2016
1
CONTINUING DISCLOSURE CERTIFICATE
$__________*
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE
CITY OF CHULA VISTA
TAX ALLOCATION REFUNDING BONDS,
SERIES 2016
This CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) is executed and
delivered by the Successor Agency to the Redevelopment Agency of the City of Chula Vista(the “Successor
Agency”) in connection with the execution and delivery of the above-referenced bonds (the “Bonds”). The
Bonds are being executed and delivered pursuant to an Indenture of Trust, dated as of __________, 2016, by
and between the Successor Agency and U.S. Bank National Association, as trustee (the “Indenture”).
The Successor Agency covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and
delivered by the Successor Agency 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 above and in the Indenture, which apply
to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the
following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the Successor Agency pursuant to, and as
described in, Sections 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means each April1, commencing April1, 2017, or the date that is the first day
of the tenth month following the end of the Successor Agency’s fiscal year if the Successor Agency’s fiscal
year is changed (the Successor Agency’s fiscal year currently ends June 30).
“Dissemination Agent” meansWilldan Financial Services, or any successor Dissemination Agent
designated in writing by the Successor Agency and which has filed with the Successor Agency a written
acceptance of such designation.
“Listed Events” means any of the events listed in Section5(a) of this Disclosure Certificate.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the
Securities and Exchange Commission as the sole repository ofdisclosure information for purposes of the Rule,
or any other repository of disclosure information that may be designated by the Securities and Exchange
Commission as such for purposes of the Rule in the future.
“Official Statement” means the final official statement executed by the Successor Agency in
connection with the issuance of the Bonds.
“Participating Underwriter” means Stifel, Nicolaus & Company, Inc., the original underwriter of the
Bonds required to comply with the Rule in connection with offering of the Bonds.
“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as it may be amended from time to time.
*Preliminary, subject to change.
2016-04-05 Agenda Packet Page 184
2
Section 3. Provision of Annual Reports.
(a)The Successor Agency shall, or shall cause the Dissemination Agent to, not later than the
Annual Report Date, commencing April1, 2017 with the report for the 2015-16 fiscal year, provide to the
MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the
requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual
Report Date, the Successor Agency shall provide the Annual Report to the Dissemination Agent (if other than
the Successor Agency). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if
other than the Successor Agency) has not received a copy of the Annual Report, the Dissemination Agent shall
contact the Successor Agency to determine if the Successor Agency is in compliance with the previous
sentence. The Annual Report may be submitted as a single document or as separate documents comprising a
package, and may include by reference other information as provided in Section 4 of this Disclosure
Certificate; provided that the audited financial statements of the Successor Agency may be submitted
separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by
that date. If the Successor Agency’s fiscal year changes, it shall give notice of such change in the same
manner as for a Listed Event under Section 5(c). The Successor Agency shall provide a written certification
with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report
constitutes the Annual Report required to be furnished by the Successor Agency hereunder.
(b)If the Successor Agency does not provide (or cause the Dissemination Agent to provide) an
Annual Report by the Annual Report Date, the Successor Agency shall provide (or cause the Dissemination
Agent to provide) to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially
the form attached as Exhibit A.
(c)With respect to each Annual Report, the DisseminationAgent shall:
(i)determine each year prior to the Annual Report Date the then-applicable rules and
electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii)if the Dissemination Agent is other than the Successor Agency, file a report with the
Successor Agency certifying that the Annual Report has been provided pursuant to this Disclosure Certificate,
and stating the date it was provided.
Section 4. Content of Annual Reports. The Annual Report shall contain or incorporate by reference
the following:
(a)The Successor Agency’s audited financial statements prepared in accordance with generally
accepted accounting principles as promulgated to apply to governmental entities from time to time by the
Governmental Accounting Standards Board. If the Successor Agency’s audited financial statements are not
available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a
format similar to the financial statements contained in the final Official Statement, and the audited financial
statements shall be filed in the same manner as the Annual Report when they become available.
(b)Unless otherwise provided in the audited financial statements filed on or before the Annual
Report Date, financial information and operating data with respect to the Successor Agency, substantially
similar to that provided in the corresponding tables in the Official Statement:
(i)Principal amount of Bonds outstanding.
(ii)Description of issuance by the Successor Agency of any debt payable from or
secured by a pledge of Pledged Tax Revenues in the Project Areas (as defined in the Official Statement) in the
current fiscal yearonly(including details as to date, amount, term, rating, insurance).
2016-04-05 Agenda Packet Page 185
3
(iii)The assessed value of property in the combined Project Areasfor the current fiscal
year only in the form of [Table1]in the Official Statement.
(iv)The ten largest local property taxpayers in the combined Project Areas the current
fiscal year only in the form of [Table3]to the Official Statement.
(v)The coverage ratio provided by Pledged Tax Revenues in the combined Project
Areaswith respect to debt service on the Bonds and any Parity Debtfor the current fiscal year only, in the
form of [Table9]in the Official Statement without any requirement to update any projected Pledged Tax
Revenues set forth in [Table9].
(c)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 Successor Agency or related public entities, which are
available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission.
The Successor Agency shall clearly identify each such other document so included by reference.
Section 5. Reporting of Significant Events.
(a)The Successor Agency shall give, or cause to be given, notice of the occurrence of any of the
following Listed Events with respect to the Bonds:
(1)Principal and interest payment delinquencies.
(2)Non-payment related defaults, if material.
(3)Unscheduled draws on debt service reserves reflecting financial difficulties.
(4)Unscheduled draws on credit enhancements reflecting financial difficulties.
(5)Substitution of credit or liquidity providers, or their failure to perform.
(6)Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB)
or other material notices or determinations with respect to the tax status of the
security, or other material events affecting the tax status of the security.
(7)Modifications to rights of security holders, if material.
(8)Bond calls, if material, and tenderoffers.
(9)Defeasances.
(10)Release, substitution, or sale of property securing repayment of the securities, if
material.
(11)Rating changes.
(12)Bankruptcy, insolvency, receivership or similar event of the Successor Agency or
other obligated person.
(13)The consummation of a merger, consolidation, or acquisition involving the Successor
Agency or an obligated person, or the sale of all or substantially all of the assets of
the Successor Agency or an obligated person (other than in the ordinary courseof
2016-04-05 Agenda Packet Page 186
4
business), the entry into a definitive agreement to undertake such an action, or the
termination of a definitive agreement relating to any such actions, other than
pursuant to its terms, if material.
(14)Appointment of a successor or additional trustee or the change of name of a trustee,
if material.
(b)Whenever the Successor Agency obtains knowledge of the occurrence of a Listed Event, the
Successor Agency shall, or shall cause the Dissemination Agent (if not the Successor Agency) to, file a notice
of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not
in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice
of Listed Events described in subsections (a)(8) and (9) above need not be given under this subsection any
earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the
Indenture.
(c)The Successor Agency acknowledges that the events described in subparagraphs (a)(2),
(a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), and (a)(14) of this Section 5 contain the qualifier “if
material” and that subparagraph (a)(6) also contains the qualifier “material” with respect to certain notices,
determinations or other events affecting the tax status of the Bonds. The Successor Agency shall cause a
notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it
determines the event’s occurrence is material for purposes of U.S. federal securities law. Whenever the
Successor Agency obtains knowledge of the occurrence of any of these Listed Events, the Successor Agency
will as soon as possible determine if such event would be material under applicable federal securities law. If
such event is determined to be material, the Successor Agency will cause a notice to be filed as set forth in
paragraph (b) above.
(d)For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar
officer for the Successor Agency in a proceeding under the United States Bankruptcy Code or in any other
proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over
substantially all of the assets or business of the Successor Agency, or if such jurisdiction has been assumed by
leaving the existing governing body and officials or officers in possession but subject to the supervision and
orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization,
arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the Successor Agency.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB
under the Disclosure Certificate shall be accompanied by identifying information as prescribed bythe MSRB.
Section 7. Termination of Reporting Obligation. The Successor Agency’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 Successor Agency shall give
notice of such termination in the same manner as for a Listed Event under Section 5(c).
Section 8. Dissemination Agent. The Successor Agency may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may
discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial
Dissemination Agent shall beWilldan Financial Services.Any Dissemination Agent may resign by providing
30 days’ written notice to the Successor Agency.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate,
the Successor Agency may amend this Disclosure Certificate, and any provision of this Disclosure Certificate
may be waived, provided that the following conditions are satisfied:
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(a)if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be
made in connection with a change in circumstances that arises from a change in legal requirements, change in
law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of
business conducted;
(b)the undertakings herein, as proposed to be amended or waived, would, in the opinion of
nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the
primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well
as any change in circumstances; and
(c)the proposed amendment or waiver either (i) is approved by holders of the Bonds in the
manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not,
in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial
owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is amended
pursuant to the provisions hereof, the first Annual Report filed pursuant hereto containing the amended
operating data or financial information shall explain, in narrative form, the reasons for the amendment and the
impact of the change in the type of operating data or financial information being provided.
If an amendment is made to this Disclosure Certificate modifying the accounting principles to be
followed in preparing financial statements, the Annual Report for the year in which the change is made shall
present a comparison between the financial statements or information prepared on the basis of the new
accounting principles and those prepared on the basis of the former accounting principles. The comparison
shall include a qualitative discussion of the differences in the accounting principles and the impact of the
change in the accounting principles on the presentation of the financial information, in order to provide
information to investors to enable them to evaluate the ability of the Successor Agency to meet itsobligations.
To the extent reasonably feasible, the comparison shall be quantitative.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a
Listed Event under Section 5(c).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent
the Successor Agency 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 Successor Agency 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 Successor Agency shall have no obligation under this Disclosure Certificate to update such
information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 11. Default. If the Successor Agency fails to comply with any provision of this Disclosure
Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions
as may be necessary and appropriate, including seeking mandate or specific performance by court order, to
cause the Successor Agency to comply with its obligations under this Disclosure Certificate. A default under
this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy
under this Disclosure Certificate in the event of any failure of the Successor Agency to comply with this
Disclosure Certificate shall be an action to compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent.
(a)The Dissemination Agent shall have only such duties as are specifically set forth in this
Disclosure Certificate, and the Successor Agency agrees to indemnify and save the Dissemination Agent, its
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officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may
incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs
and expenses (including attorneys’fees) of defending against any claim of liability, but excluding liabilities
due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no
duty or obligation to review any information provided to it by the Successor Agency hereunder, and shall not
be deemed to be acting in any fiduciary capacity for the Successor Agency, the Bond holders or any other
party. The obligations of the Successor Agency under this Section shall survive resignation or removal of the
Dissemination Agent and payment of the Bonds.
(b)The Dissemination Agent shall be paid compensation by the Successor Agency for its
services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be
reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the
performance of its duties hereunder.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the
Successor Agency, the Dissemination Agent, the Participating Underwriter and the holders and beneficial
owners from time to time of the Bonds, and shall create no rights in any other person or entity.
Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each
of which shall be regarded as an original, and all of which shall constitute one and the same instrument.
Date: __________, 2016
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCYOF THE CITY OF
CHULA VISTA
By:
Name:
Title:
AGREED AND ACCEPTED:
WILLDAN FINANCIAL SERVICES,
as Dissemination Agent
By:
Name:
Title:
2016-04-05 Agenda Packet Page 189
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EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Successor Agency to the Redevelopment Agency of the City of Chula Vista
Name of Issue: Successor Agency to the Redevelopment Agency of the City of Chula Vista
Tax Allocation Refunding Bonds, Series 2016
Date of Issuance: __________, 2016
NOTICE IS HEREBY GIVEN that the Successor Agency has not provided an Annual Report with
respect to the above-named Bonds as required by the Indenture of Trust, dated as of __________, 2016, by and
between the Successor Agency and U.S. Bank National Association, as trustee. The Successor Agency
anticipates that the Annual Report will be filed by ________________.
Dated: __________
DISSEMINATION AGENT:
_________________
By:
Its:
2016-04-05 Agenda Packet Page 190
Stradling Yocca Carlson & Rauth
Draft of 2/25/16
2006A BONDSESCROW AGREEMENT
THIS 2006A BONDSESCROW AGREEMENTdated as of __________, 2016(the
“Agreement”), by and between the Successor Agency to the Redevelopment Agencyof the City of
Chula Vista(the “Agency”) and U.S. Bank National Association, as escrow bank (the “Escrow
Bank”), is entered into in accordance with a Resolutionof the Agency, adopted on April5, 2016and
that certain Indenture of Trust dated as of July1, 2006(the “Indenture”), by and between the
dissolved Redevelopment Agency of the City of Chula Vista(the “Former Agency”) and U.S. Bank
National Association(the “Prior Trustee”), to refund all of the outstanding Redevelopment Agency
of the City of Chula Vista Bayfront/Town Centre Redevelopment Project 2006 Senior Tax Allocation
Refunding Bonds, SeriesA(the “Refunded Bonds”).
W I T N E S S E T H :
WHEREAS, the Former Agency previously issued the Refunded Bonds pursuant to the
Indenture;
WHEREAS, the Agency has determined that a portion of the proceeds of the $_________
aggregate principal amount of the Successor Agency to the Redevelopment Agency of the City of
Chula VistaTax Allocation Refunding Bonds, Series 2016A(the “2016 Bonds”)issued pursuant to
the Indenture of Trust, dated as of __________, 2016, by and between the Agencyand U.S. Bank
National Association, as trustee,will be used to provide the funds to redeem on __________, 2016
the principal of the Refunded Bonds maturing after September1, 2015 without premium, along with
interest accrued to such date(the “Redemption Price”); and
WHEREAS, the moneys deposited with the Escrow Bankwill be sufficient, along with
certain other moneys deposited with the Escrow Bankat the same time pursuant to this Agreement,
to redeem and discharge the Refunded Bonds;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the Agencyand the Escrow Bankagree as follows:
SECTION 1.Deposit of Moneys. The Agencyhereby instructs the Escrow Bankto deposit
$_________ received from the Trustee from the net proceeds ofthe sale of the 2016Bondsin the
Escrow Fund established hereunder. The Escrow Bankshall hold all such amounts in cash in an
irrevocable escrow separate and apart from other funds of the Agencyand the Escrow Bankin a fund
hereby created and established to be known as the “Escrow Fund” and to be applied solely as
provided in this Agreement.
SECTION 2.Sufficiencyof Moneys. The Escrow Bankacknowledges receipt of the
moneys described in Section1 and agrees immediately to deposit such moneysin the Escrow Fund.
The Escrow Bankshall be entitled to rely upon the conclusion of [Grant Thornton, LLP](the
“Verification Agent”), that the cash on deposit in the Escrow Fundwill be sufficient to pay the
Redemption Price of the Refunded Bonds maturingafter September1, 2015on _________, 2016.
SECTION 3.Payment of Refunded Bonds.
(a)Payment. From the moneys on deposit in the Escrow Fund, the Escrow Bank
shall, on _________, 2016, apply the amounts on deposit in the Escrow Fund to pay the Redemption
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2
Price of the Refunded Bonds maturing after September1, 2015. Upon the complete redemption of
the Refunded Bonds, the Escrow Bankshall close the Escrow Fund and transfer any remaining
proceeds therein to the Agency.
(b)Irrevocable Instructions to Provide Notice. The forms of the notice required
to be mailed pursuant to Sections2.04(c)(redemption) and 10.03(defeasance) of the Indenture are
attached hereto as Exhibits A and B. The Agency hereby irrevocably instructs the Escrow Bank to
mail a notice of redemption and a notice of defeasance of the Refunded Bonds inaccordance with
Sections2.04(c)and10.03, respectively, of the Indenture, as required to provide for the redemption
of the Refunded Bonds in accordance with this Section3. The Trustee shall give to the Bond Insurer
(as defined in the Indenture) all notices given to Owners of Refunded Bonds hereunder. The Agency
hereby irrevocably instructs the Escrow Bank to file on the Municipal Securities Rulemaking Board’s
Electronic Municipal Market Access system (“EMMA”) the notices attached hereto as ExhibitsA
and Bno later than 10 days after the deposit of the moneys as set forth in Section1 hereof.
(c)Unclaimed Moneys. Anymoneys which remain unclaimed for sixty (60)
daysafter _________, 2016shall be repaid by the Escrow Bankto the Agency.
(d)Priority of Payments. The owners of the Refunded Bonds shall have a first
and exclusive lien on all moneys in the Escrow Fund until such moneys are used and applied as
provided in this Agreement.
(e)Termination of Obligation. As provided in the Indenture, upon deposit of
moneys with the Escrow Bankin the Escrow Fund as set forth in Section1 hereof all obligations of
the Agencyunder the Indenture with respect to the Refunded Bonds shall cease, terminate and
become void except as set forth in the Indenture.
SECTION 4.Application of Certain Terms of the Indenture. All of the terms of the
Indenture relating to the making of payments of principal of and interest on the Refunded Bonds and
relating to the exchange or transfer of the Refunded Bonds are incorporated in this Agreement as if
set forth in full herein. The procedures set forth in ArticleVIIIof the Indenturerelating to the
resignation and removal and merger of the Trustee under the Indentureare also incorporated in this
Agreement as if set forth in full herein and shall be the procedures to be followed with respect to any
resignation or removal of the Escrow Bankhereunder.
SECTION 5.Performance of Duties. The Escrow Bankagrees to perform only the duties
set forth herein and shall have no responsibility to take any action or omit to take any action not set
forth herein.
SECTION 6.Escrow Bank’s Authority to Make Investments. The Escrow Bankshall have
no power or duty to invest any funds held under this Agreement or to sell, transfer or otherwise
dispose of the moneys held hereunder.
SECTION 7.Indemnity. The Agency hereby assumes liability for, and hereby agrees
(whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect,
save and keep harmless the Escrow Bank and its respective successors, assigns, agents, employees
and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims,
actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements)
of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the
2016-04-05 Agenda Packet Page 192
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Escrow Bank at any time (whether or not also indemnified against thesame by the Agency or any
other person under any other agreement or instrument, but without double indemnity) in any way
relating to or arising out of the execution, delivery and performance of this Agreement, the
establishment hereunder of the Escrow Fund, the acceptance of the funds deposited therein, the
retention of the funds and any payment, transfer or other application of moneys by the Escrow Bank
in accordance with the provisions of this Agreement; provided, however, that the Agency shall not be
required to indemnify the Escrow Bank against the Escrow Bank’s own negligence or willful
misconduct or the negligence or willful misconduct of the Escrow Bank’s respective employees or
the willful breach by the Escrow Bank of the terms of this Agreement. In no event shall the Agency
or the Escrow Bank be liable to any person by reason of the transactions contemplated hereby other
than to each other as set forth in this Section. The indemnities contained in this Section shall survive
the termination of thisAgreement and the resignation or removal of the Escrow Bank.
SECTION 8.Responsibilities of Escrow Bank. The Escrow Bank and its agents and
servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in
connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund,
the acceptance of the moneys deposited therein, transfer or other application of moneys or
obligations by the Escrow Bank in accordance with the provisions of this Agreement or by reason of
any non-negligent act, non negligent omission or non-negligent error of the Escrow Bank made in
good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein
shall be taken as the statements of the Agency, and the Escrow Bank assumes no responsibility for
the correctness thereof. The Escrow Bank makes no representation as to the sufficiency of the
proceeds to accomplish the refunding of the RefundedBonds or to the validity of this Agreement as
to the Agency and, except as otherwise provided herein, the Escrow Bank shall incur no liability in
respect thereof. The Escrow Bank shall not be liable in connection with the performance of its duties
under this Agreement except for its own negligence, willful misconduct or default, and the duties and
obligations of the Escrow Bank shall be determined by the express provisions of this Agreement.
The Escrow Bank may consult with counsel, who may or may not be counsel to the Agency, and in
reliance upon the writtenopinion of such counsel shall have full and complete authorization and
protection in respect of any action taken, suffered or omitted by it in good faith in accordance
therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matterbe proved
or established prior to taking, suffering, or omitting any action under this Agreement, such matter
may be deemed to be conclusively established by a certificate signed by an officer of the Agency.
No provision of this Agreement shall require the Escrow Bank to expend or risk its own
funds or otherwise incur any financial liability in the performance or exercise of any of its duties
hereunder, or in the exercise of its rights or powers.
The Escrow Bank shall have the right to accept and act upon instructions, including funds
transfer instructions (“Instructions”) given pursuant to this Agreement and delivered using Electronic
Means (“Electronic Means” shall mean the following communications methods: e-mail, facsimile
transmission, secure electronic transmission containing applicable authorization codes, passwords
and/or authentication keys issued by the Escrow Bank, or another method or system specified by the
Escrow Bank as available for use in connection with its services hereunder); provided, however, that
the Agency shall provide to the Escrow Bank an incumbency certificate listing officers with the
authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of
such Authorized Officers, which incumbency certificate shall be amended by the Agency whenever a
person is to be added or deleted from the listing. If the Agency elects to give the Escrow Bank
Instructions using Electronic Means and the Escrow Bank in its discretion elects to act upon such
2016-04-05 Agenda Packet Page 193
4
Instructions, the Escrow Bank’s understanding of such Instructions shall be deemed controlling. The
Agency understands and agrees that the Escrow Bank cannot determine the identity of the actual
sender of such Instructions and that the Escrow Bank shall conclusivelypresume that directions that
purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to
the Escrow Bank have been sent by such Authorized Officer. The Agency shall be responsible for
ensuring that only Authorized Officers transmit such Instructions to the Escrow Bank and that the
Agency and all Authorized Officers are solely responsible to safeguard the use and confidentiality of
applicable user and authorization codes, passwords and/or authentication keys upon receipt by the
Agency. The Escrow Bank shall not be liable for any losses, costs or expenses arising directly or
indirectly from the Escrow Bank’s reliance upon and compliance with such Instructions
notwithstanding such directions conflict or are inconsistent with a subsequent written instruction.
The Agency agrees: (i) to assume all risks arising out of the use of Electronic Means to submit
Instructions to the Escrow Bank, including without limitation the risk of the Escrow Bank acting on
unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully
informed of the protections and risks associated with the various methods of transmitting Instructions
to the Escrow Bank and that there may be more secure methods oftransmitting Instructions than the
method(s) selected by the Agency; (iii) that the security procedures (if any) to be followed in
connection with its transmission of Instructions provide to it a commercially reasonable degree of
protection in light of its particular needs and circumstances; and (iv) to notify the Escrow Bank
immediately upon learning of any compromise or unauthorized use of the security procedures.
Any company into which the Escrow Bank may be merged or converted or with which it may
be consolidated or any company resulting from any merger, conversion or consolidation to which it
shall be a party or any company to which the Escrow Bank may sell or transfer all or substantially all
of its corporate trust business shall be the successor to the Escrow Bank without the execution or
filing of any paper or further act, anything herein to the contrary notwithstanding.
SECTION 9.Amendments. This Agreement is made for the benefit of the Agency and the
owners from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered or
amended without the written consent of all such owners, the Escrow Bank and the Agency; provided,
however, that the Agency and the Escrow Bank may, without the consent of, or notice to, such
owners, amend this Agreement or enter into such agreements supplemental to this Agreement as shall
not adversely affect the rights of such owners and as shall not be inconsistent with the terms and
provisions of this Agreement or the Indenture, for any one or more of the following purposes: (i) to
cure any ambiguity or formal defect or omission in this Agreement; (ii) to grant to, or confer upon,
the Escrow Bank for the benefit of the owners of the Refunded Bonds, any additional rights,
remedies, powers or authority that may lawfully be granted to, or conferred upon, such owners or the
Escrow Bank; and (iii) to include under this Agreement additional funds. The Escrow Bank shall be
entitled to rely conclusively upon an unqualified opinion of Stradling Yocca Carlson & Rauth, A
Professional Corporation, with respect to compliance with this Section, including the extent, if any,
to which any change, modification, addition or elimination affects the rights of the owners of the
various RefundedBonds or that any instrument executed hereunder complies with the conditions and
provisions of this Section.
SECTION 10.Term. This Agreement shall commence upon its execution and delivery and
shall terminate on the later to occur of either: (i)the date upon which the Refunded Bonds have been
paid in accordance with this Agreement; or (ii)the date upon which no unclaimed moneys remain on
deposit with the Escrow Bankpursuant to Section3(c) of this Agreement.
2016-04-05 Agenda Packet Page 194
5
SECTION 11.Compensation. The Escrow Bank shall receive its reasonable fees and
expenses as previously agreed to by the Escrow Bank and the Agency and any other reasonable fees
and expenses of the Escrow Bank approved by the Agency; provided, however, that under no
circumstances shall the Escrow Bank be entitled to any lien or assert any lien whatsoever on any
moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered
or expenses incurred by the Escrow Bank under this Agreement.
SECTION 12.Severability. If any one or more of the covenants or agreements provided in
this Agreement on the part of the Agencyor the Escrow Bankto be performed should be determined
by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null
and void and shall be deemed separate from the remaining covenants and agreements herein
contained and shall in no way affect the validity of the remaining provisions of this Agreement.
SECTION 13.Counterparts. This Agreement may be executed in several counterparts, all or
any of which shall be regarded for all purposes as an original butall of which shall constitute and be
but one and the same instrument.
SECTION 14.Governing Law. THIS AGREEMENT SHALL BE CONSTRUED UNDER
THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 15.Insufficient Funds. If at any time the Escrow Bankhas actual knowledge that
the moneys in the Escrow Fund, including the anticipated proceeds of and earnings thereon, will not
be sufficient to make all payments required by this Agreement, the Escrow Bankshall notify the
Agencyin writing, of the amount thereof and the reason therefor to the extent known to it. The
Escrow Bankshall have no responsibility regarding any such deficiency.
SECTION 16.Notice to Agencyand Escrow Bank. Any notice to or demand upon the
Escrow Bank may be served or presented, and such demand may be made, at the office of the Escrow
Bank at U.S. Bank National Association, 633 West Fifth Street, 24th Floor, Los Angeles, CA 90071,
Attention: Global Corporate Trust Services. Any notice to or demand upon the Agency shall be
deemed to have been sufficiently given or served for all purposes by being mailed by registered or
certified mail, and deposited, postage prepaid, in a post office letter box, addressed to the Agency at
276 Fourth Avenue, Chula Vista, CA 91910, Attention: Executive Director (or such other address as
may have beenfiled in writing by the Agency with the Escrow Bank).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
2016-04-05 Agenda Packet Page 195
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers and attested as of the date first above written.
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCYOF THE CITY
OF CHULA VISTA
By:
Executive Director
U.S. BANK NATIONAL ASSOCIATION,
as EscrowBank and Prior Trustee
By:
Authorized Officer
2016-04-05 Agenda Packet Page 196
ExhibitA-1
EXHIBIT A
NOTICE OF REDEMPTION
REDEVELOPMENT AGENCYOF THE CITY OF CHULAVISTA
BAYFRONT/TOWN CENTRE REDEVELOPMENT PROJECT
2006 SENIOR TAX ALLOCATION REFUNDING BONDS, SERIES A
BASE CUSIP†NO. _____
NOTICE IS HEREBY GIVEN to the owners of the above-captioned $_________
outstanding aggregate principal amountof the Redevelopment Agency of the City of Chula Vista
Bayfront/Town Centre Redevelopment Project 2006 Senior Tax Allocation Refunding Bonds,
SeriesA(the “Refunded Bonds”) pursuant to the Indentureof Trust, dated as of July1, 2006(the
“Indenture”), by and between the dissolved Redevelopment Agency of the City of Chula Vista(the
“Former Agency”) and U.S. Bank National Association (the “Prior Trustee”), that all of the
Refunded Bondshave been called for redemptionon _________, 2016(the “RedemptionDate”).
Refunded Bonds
CUSIP
Bond Payment
Date
(September 1)Rate Amount Price
The Refunded Bondswill be payable on the RedemptionDate at a redemptionprice of 100%
of the principal amount plus accrued interest to such date (the “RedemptionPrice”).Subject to prior
rescission as referenced below, the RedemptionPrice of the Refunded Bondswill become due and
payable on the RedemptionDate. Interest with respect to the Refunded Bondsto be redeemedwill
cease to accrue on and after the RedemptionDate, and such Refunded Bondswill be surrendered to
the Prior Trustee.
Redemption of the Refunded Bonds is conditional upon the receipt by the Trustee on or prior
to the Redemption Date of moneys sufficient to pay the principal of and interest on the Refunded
Bonds and, if such moneys have not been so received, this notice shall be of no force and effect and
the Trustee shall not be required to redeem such Refunded Bonds. In such event, the Trustee has the
right to rescind this notice.
†Copyright 2016, American Bankers Association. CUSIP data herein is provided by Standard &Poor’s, CUSIP Service
Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any
way as a substitute for the CUSIP Services. None of the Agency, the City of Chula Vistanor the Trustee guarantees the accuracy
of the CUSIP data.
2016-04-05 Agenda Packet Page 197
Exhibit A-3
All Refunded Bondsare required to be surrendered to the corporate office of the Refunded
Bonds Trustee, on the RedemptionDate at the following location. If the Refunded Bondsare mailed,
the use of registered, insured mail is recommended:
By Hand:By Registered or Certified Mail:By Air Courier:
U.S. Bank National Association
Corporate Trust Services
__________________
____________
_____________________
U.S. Bank National Association
Corporate Trust Services
__________________
____________
_____________________
U.S. Bank National Association
Corporate Trust Services
__________________
____________
_____________________
If the Ownerof any Refunded Bondsubject to optional redemptionfails to deliver such
Refunded Bondto the Prior Trusteeon the RedemptionDate, such Refunded Bondshall nevertheless
be deemed redeemedon the RedemptionDate and the Ownerof such Refunded Bondshall have no
rights in respect thereof except to receive payment of the RedemptionPrice fromfunds held by the
Prior Trustee for such payment.
A form W-9 must be submitted with the Refunded Bonds. Failure to provide a completed
form W-9, or certify the proper tax identification numberwill result in backup withholding under
Section3406 of the Internal Revenue Code of 1986, as amended.
U.S. Bank National Association,as Trustee
DATED this __day of _______, 2016.
2016-04-05 Agenda Packet Page 198
ExhibitB-1
EXHIBIT B
NOTICE OF DEFEASANCE
REDEVELOPMENT AGENCYOF THE CITYOF CHULA VISTA
BAYFRONT/TOWN CENTRE REDEVELOPMENT PROJECT
2006 SENIOR TAX ALLOCATION REFUNDING BONDS, SERIES A
BASE CUSIP†NO. _____
NOTICE IS HEREBY GIVEN to the owners of the above-captioned bonds (as further
defined below, the “Refunded Bonds”), of theRedevelopment Agency of the City of Chula Vistathat
the Successor Agencyto the Redevelopment Agencyof the City of Chula Vista(the “Agency”) has
deposited with U.S. Bank National Association, as trustee(the “Trustee”) under that certain
Indenture of Trust dated as of July1, 2006(the “Indenture”), cash which will provide moneys
sufficient to redeem on _________, 2016, the principal of the Refunded Bonds maturing on and after
September1, 2015, along with interest accrued to such date.
The Refunded Bonds to be defeased are as follows:
CUSIP†
Maturity
(September1)Rate Amount
%$
In accordance with the Indenture, the Refunded Bonds are deemed to have been paid in
accordance with Section10.03thereof and the obligations of the Agencyunder the Indenture shall
thereupon cease, terminate and become void and be discharged and satisfied.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
Dated this ____day of __________, 2016.
†Copyright 2016, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s, CUSIP Service
Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any
way as a substitute for the CUSIP Services. None of the Agency, the City of Chula Vistanor the Trustee guarantees the accuracy
of the CUSIP data.
2016-04-05 Agenda Packet Page 199
Stradling Yocca Carlson & Rauth
Draft of 3/22/16
2006BBONDSESCROW AGREEMENT
THIS 2006BBONDSESCROW AGREEMENTdated as of __________, 2016(the
“Agreement”), by and between the Successor Agency to the Redevelopment Agencyof the City of
Chula Vista(the “Agency”) and U.S. Bank National Association, as escrow bank (the “Escrow
Bank”), is entered into in accordance with a Resolutionof the Agency, adopted on April5, 2016and
that certain Indenture of Trust dated as of July1, 2006(the “Indenture”), by and between the
dissolved Redevelopment Agency of the City of Chula Vista(the “Former Agency”) and U.S. Bank
National Association(the “Prior Trustee”), to refund all of the outstanding Redevelopment Agency
of the City of Chula Vista Bayfront/Town Centre Redevelopment Project 2006 SubordinateTax
Allocation Refunding Bonds, Series B(the “Refunded Bonds”).
W I T N E S S E T H :
WHEREAS, the Former Agency previously issued the Refunded Bonds pursuant to the
Indenture;
WHEREAS, the Agency has determined that a portion of the proceeds of the $_________
aggregate principal amount of the Successor Agency to the Redevelopment Agency of the City of
Chula VistaTax Allocation Refunding Bonds, Series 2016A(the “2016 Bonds”)issued pursuant to
the Indenture of Trust, dated as of __________, 2016, by and between the Agencyand U.S. Bank
National Association, as trustee,will be used to provide the funds to redeem on __________, 2016
the principal of the Refunded Bonds maturing after September1, 2015 without premium, along with
interest accrued to such date(the “Redemption Price”); and
WHEREAS, the moneys deposited with the Escrow Bankwill be sufficient, along with
certain other moneys deposited with the Escrow Bankat the same time pursuant to this Agreement,
to redeem and discharge the Refunded Bonds;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the Agencyand the Escrow Bankagree as follows:
SECTION 1.Deposit of Moneys. The Agencyhereby instructs the Escrow Bankto deposit
$_________ received from the Trustee from the net proceeds ofthe sale of the 2016Bondsin the
Escrow Fund established hereunder. The Escrow Bankshall hold all such amounts in cash in an
irrevocable escrow separate and apart from other funds of the Agencyand the Escrow Bankin a fund
hereby created and established to be known as the “Escrow Fund” and to be applied solely as
provided in this Agreement.
SECTION 2.Sufficiencyof Moneys. The Escrow Bankacknowledges receipt of the
moneys described in Section1 and agrees immediately to deposit such moneysin the Escrow Fund.
The Escrow Bankshall be entitled to rely upon the conclusion of [Grant Thornton, LLP](the
“Verification Agent”), that the cash on deposit in the Escrow Fundwill be sufficient to pay the
Redemption Price of the Refunded Bonds maturingafter September1, 2015on _________, 2016.
SECTION 3.Payment of Refunded Bonds.
(a)Payment. From the moneys on deposit in the Escrow Fund, the Escrow Bank
shall, on _________, 2016, apply the amounts on deposit in the Escrow Fund to pay the Redemption
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Price of the Refunded Bonds maturing after September1, 2015. Upon the complete redemption of
the Refunded Bonds, the Escrow Bankshall close the Escrow Fund and transfer any remaining
proceeds therein to the Agency.
(b)Irrevocable Instructions to Provide Notice. The forms of the notice required
to be mailed pursuant to Sections2.04(c)(redemption) and 9.03(defeasance) of the Indenture are
attached hereto as Exhibits A and B. The Agency hereby irrevocably instructs the Escrow Bank to
mail a notice of redemption and a notice of defeasance of the Refunded Bonds inaccordance with
Sections2.04(c)and9.03, respectively, of the Indenture, as required to provide for the redemption of
the Refunded Bonds in accordance with this Section3. The Trustee shall give to the Bond Insurer
(as defined in the Indenture) all notices given to Owners of Refunded Bonds hereunder. The Agency
hereby irrevocably instructs the Escrow Bank to file on the Municipal Securities Rulemaking Board’s
Electronic Municipal Market Access system (“EMMA”) the notices attached hereto as ExhibitsA
and Bno later than 10 days after the deposit of the moneys as set forth in Section1 hereof.
(c)Unclaimed Moneys. Any moneys which remain unclaimed for sixty (60)
daysafter _________, 2016shall be repaid by the Escrow Bankto the Agency.
(d)Priority of Payments. The owners of the Refunded Bonds shall have a first
and exclusive lien on all moneys in the Escrow Fund until such moneys are used and applied as
provided in this Agreement.
(e)Termination of Obligation. As provided in the Indenture, upon deposit of
moneys with the Escrow Bankin the Escrow Fund as set forth in Section1 hereof all obligations of
the Agencyunder the Indenture with respect to the Refunded Bonds shall cease, terminate and
become void except as set forth in the Indenture.
SECTION 4.Application of Certain Terms of the Indenture. All of the terms of the
Indenture relating to the making of payments of principal of and interest on the Refunded Bonds and
relating to the exchange or transfer of the Refunded Bonds are incorporated in this Agreement as if
set forth in full herein. The procedures set forth in ArticleVIIIof the Indenturerelating to the
resignation and removal and merger of the Trustee under the Indentureare also incorporated in this
Agreement as if set forth in full herein and shall be the procedures to be followed with respect to any
resignation or removal of the Escrow Bankhereunder.
SECTION 5.Performance of Duties. The Escrow Bankagrees to perform only the duties
set forth herein and shall have no responsibility to take any action or omit to take any action not set
forth herein.
SECTION 6.Escrow Bank’s Authority to Make Investments. The Escrow Bankshall have
no power or duty to invest any funds held under this Agreement or to sell, transfer or otherwise
dispose of the moneys held hereunder.
SECTION 7.Indemnity. The Agency hereby assumes liability for, and hereby agrees
(whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect,
save and keep harmless the Escrow Bank and its respective successors, assigns, agents, employees
and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims,
actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements)
of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the
2016-04-05 Agenda Packet Page 201
3
Escrow Bank at any time (whether or not also indemnified against the same by the Agency or any
other person under any other agreement or instrument, but without double indemnity) in any way
relating to or arising out of the execution, delivery and performance of this Agreement, the
establishment hereunder of the Escrow Fund, the acceptance of the funds deposited therein, the
retention of the funds and any payment, transfer or other application of moneys by the Escrow Bank
in accordance with the provisions of this Agreement; provided, however, that the Agency shall not be
required to indemnify the Escrow Bank against the Escrow Bank’s own negligence or willful
misconduct or the negligence or willful misconduct of the Escrow Bank’s respective employees or
the willful breach by the Escrow Bank of the terms of this Agreement. In no event shall the Agency
or the Escrow Bank be liable to any person by reason of the transactions contemplated hereby other
than to each other as set forth in this Section. The indemnities contained in this Section shall survive
the termination of this Agreement and the resignation or removal of the Escrow Bank.
SECTION 8.Responsibilities of Escrow Bank. The Escrow Bank and its agents and
servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in
connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund,
the acceptance of the moneys deposited therein, transfer or other application of moneys or
obligations by the Escrow Bank in accordance with the provisions of this Agreement or by reason of
any non-negligent act, non negligent omission or non-negligent error of the Escrow Bank made in
good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein
shall be taken as the statements of the Agency, and the Escrow Bank assumes no responsibility for
the correctness thereof. The Escrow Bank makes no representation as to the sufficiency of the
proceeds to accomplish the refunding of the RefundedBonds or to the validity of this Agreement as
to the Agency and, except as otherwise provided herein, the Escrow Bank shall incur no liability in
respect thereof. The Escrow Bank shall not be liable in connection with the performance of its duties
under this Agreement except for its own negligence, willful misconduct or default, and the duties and
obligations of the Escrow Bank shall be determined by the express provisions of this Agreement.
The Escrow Bank may consult with counsel, who may or may not be counsel to the Agency, and in
reliance upon the written opinion of such counsel shall have full and complete authorization and
protection in respect ofany action taken, suffered or omitted by it in good faith in accordance
therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved
or established prior to taking, suffering, or omitting any action under this Agreement, such matter
may be deemed to be conclusively established by a certificate signed by an officer of the Agency.
No provision of this Agreement shall require the Escrow Bank to expend or risk its own
funds or otherwise incur any financial liability in the performance or exercise of any of its duties
hereunder, or in the exercise of its rights or powers.
The Escrow Bank shall have the right to accept and act upon instructions, including funds
transfer instructions (“Instructions”) given pursuant to this Agreement and delivered using Electronic
Means (“Electronic Means” shall mean the following communications methods: e-mail, facsimile
transmission, secure electronic transmission containing applicable authorization codes, passwords
and/or authentication keys issued by the Escrow Bank, or another method or system specified by the
Escrow Bank as available for use in connection with its services hereunder); provided, however, that
the Agency shall provide to the Escrow Bank an incumbency certificate listing officers with the
authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of
such Authorized Officers, which incumbency certificate shall be amended by the Agency whenever a
person is to be added or deleted from the listing. If the Agency elects to give the Escrow Bank
Instructions using Electronic Means and the Escrow Bank in its discretion elects to act upon such
2016-04-05 Agenda Packet Page 202
4
Instructions, the Escrow Bank’s understanding of such Instructions shall be deemed controlling. The
Agencyunderstands and agrees that the Escrow Bank cannot determine the identity of the actual
sender of such Instructions and that the Escrow Bank shall conclusively presume that directions that
purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to
the Escrow Bank have been sent by such Authorized Officer. The Agency shall be responsible for
ensuring that only Authorized Officers transmit such Instructions to the Escrow Bank and that the
Agency and all Authorized Officers are solely responsible to safeguard the use and confidentiality of
applicable user and authorization codes, passwords and/or authentication keys upon receipt by the
Agency. The Escrow Bank shall not be liable for any losses, costs or expenses arising directly or
indirectly from the Escrow Bank’s reliance upon and compliance with such Instructions
notwithstanding such directions conflict or are inconsistent with a subsequent written instruction.
The Agency agrees: (i) to assume all risks arising out of the use of Electronic Means to submit
Instructions to the Escrow Bank, including without limitation the risk of the Escrow Bank acting on
unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully
informed of the protections and risks associated with the various methods of transmitting Instructions
to the Escrow Bank and that there may be more secure methods of transmitting Instructions than the
method(s) selected by the Agency; (iii) that the security procedures (if any) to be followed in
connection with its transmission of Instructions provide to it a commercially reasonable degree of
protection in light of its particular needs and circumstances; and (iv) to notify the Escrow Bank
immediately upon learning of any compromise or unauthorized use of the security procedures.
Any company into which the Escrow Bank may be merged or converted or with which it may
be consolidated or any company resulting from any merger, conversion or consolidation to which it
shall be a party or any company to which the Escrow Bank may sell or transfer all or substantially all
of its corporate trust business shall be the successor to the Escrow Bank without the execution or
filing of any paper or further act, anything herein to the contrary notwithstanding.
SECTION 9.Amendments. This Agreement is made for the benefit of the Agency and the
owners from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered or
amended without the written consent of all such owners, the Escrow Bank and the Agency; provided,
however, that the Agency and the Escrow Bank may, without the consent of, or notice to, such
owners, amend this Agreement or enter into such agreements supplemental to this Agreement as shall
not adversely affect the rights of such owners and as shall not be inconsistent with the terms and
provisions of this Agreement or the Indenture, for any one or more of the following purposes: (i) to
cure any ambiguity or formal defect or omission in this Agreement; (ii) to grant to, or confer upon,
the Escrow Bank for the benefit of the owners of the Refunded Bonds, any additional rights,
remedies, powers or authority that may lawfully be granted to, or conferred upon, such owners or the
Escrow Bank; and (iii) to include under this Agreement additional funds. The Escrow Bank shall be
entitled to rely conclusively upon an unqualified opinion of Stradling Yocca Carlson & Rauth, A
Professional Corporation, with respect to compliance with this Section, including the extent, if any,
to which any change, modification, addition or elimination affects the rights of the owners of the
various RefundedBonds or that any instrument executed hereunder complies with the conditions and
provisions of this Section.
SECTION 10.Term. This Agreement shall commence upon its execution and delivery and
shall terminate on the later to occur of either: (i)the date upon which the Refunded Bonds have been
paid in accordance with this Agreement; or (ii)the date upon which no unclaimed moneys remain on
deposit with the Escrow Bankpursuant to Section3(c) of this Agreement.
2016-04-05 Agenda Packet Page 203
5
SECTION 11.Compensation. The Escrow Bank shall receive its reasonable fees and
expenses as previously agreed to by the Escrow Bank and the Agency and any other reasonable fees
and expenses of the Escrow Bank approved by the Agency; provided, however, that under no
circumstances shall the Escrow Bank be entitled to any lien or assert any lien whatsoever on any
moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered
or expenses incurred by the Escrow Bank under this Agreement.
SECTION 12.Severability. If any one or more of the covenants or agreements provided in
this Agreement on the part of the Agencyor the Escrow Bankto be performed should be determined
by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null
and void and shall be deemed separate from the remaining covenants and agreements herein
contained and shall in no way affect the validity of the remaining provisions of this Agreement.
SECTION 13.Counterparts. This Agreement may be executed in several counterparts, all or
any of which shall be regarded for all purposes as an original but all of which shall constitute and be
but one and the same instrument.
SECTION 14.Governing Law. THIS AGREEMENT SHALL BE CONSTRUED UNDER
THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 15.Insufficient Funds. If at any time the Escrow Bankhas actual knowledge that
the moneys in the Escrow Fund, including the anticipated proceeds of and earnings thereon, will not
be sufficient to make all payments required by this Agreement, the Escrow Bankshall notify the
Agencyin writing, of the amount thereof and the reason therefor to the extent known to it. The
Escrow Bankshall have no responsibility regarding any such deficiency.
SECTION 16.Notice to Agencyand Escrow Bank. Any notice to or demand upon the
Escrow Bank may be served or presented, and such demand may be made, at the office of the Escrow
Bank at U.S. Bank National Association, 633 West Fifth Street, 24th Floor, Los Angeles, CA 90071,
Attention: Global Corporate Trust Services. Any notice to or demand upon the Agency shall be
deemed to have been sufficiently given or served for all purposes by being mailed by registered or
certified mail, and deposited, postage prepaid, in a postoffice letter box, addressed to the Agency at
276 Fourth Avenue, Chula Vista, CA 91910, Attention: Executive Director (or such other address as
may have been filed in writing by the Agency with the Escrow Bank).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
2016-04-05 Agenda Packet Page 204
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers and attested as of the date first above written.
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCYOF THE CITY
OF CHULA VISTA
By:
Executive Director
U.S. BANK NATIONAL ASSOCIATION,
as Escrow Bank and Prior Trustee
By:
Authorized Officer
2016-04-05 Agenda Packet Page 205
ExhibitA-1
EXHIBIT A
NOTICE OF REDEMPTION
REDEVELOPMENT AGENCYOF THE CITY OF CHULAVISTA
BAYFRONT/TOWN CENTRE REDEVELOPMENT PROJECT
2006 SUBORDINATETAX ALLOCATION REFUNDING BONDS, SERIES B
BASE CUSIP†NO. _____
NOTICE IS HEREBY GIVEN to the owners of the above-captioned $_________
outstanding aggregate principal amountof the Redevelopment Agency of the City of Chula Vista
Bayfront/Town Centre Redevelopment Project 2006 SubordinateTax Allocation Refunding Bonds,
Series B(the “Refunded Bonds”) pursuant to the Indentureof Trust, dated as of July1, 2006(the
“Indenture”), by and between the dissolved Redevelopment Agency of the City of Chula Vista(the
“Former Agency”) and U.S. Bank National Association (the “Prior Trustee”), that all of the
Refunded Bondshave been called for redemptionon _________, 2016(the “RedemptionDate”).
Refunded Bonds
CUSIP
Bond Payment
Date
(September 1)Rate Amount Price
The Refunded Bondswill be payable on the RedemptionDate at a redemptionprice of 100%
of the principal amount plus accrued interest to such date (the “RedemptionPrice”).Subject to prior
rescission as referenced below, the RedemptionPrice of the Refunded Bondswill become due and
payable on the RedemptionDate. Interest with respect to the Refunded Bondsto be redeemedwill
cease to accrue on and after the RedemptionDate, and such Refunded Bondswill be surrendered to
the Prior Trustee.
Redemption of the Refunded Bonds is conditional upon the receipt by the Trustee on or prior
to the Redemption Date of moneys sufficient to pay the principal of and interest on the Refunded
Bonds and, if such moneys have not been so received, this notice shall be of no force and effect and
the Trustee shall not be required to redeem such Refunded Bonds. In such event, the Trustee has the
right to rescind this notice.
†Copyright 2016, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s, CUSIP Service
Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any
way as a substitute for the CUSIP Services. None of the Agency, the City of Chula Vistanor the Trustee guarantees the accuracy
of the CUSIP data.
2016-04-05 Agenda Packet Page 206
Exhibit A-3
All Refunded Bondsare required to be surrendered to the corporate office of the Refunded
Bonds Trustee, on the RedemptionDate at the following location. If the Refunded Bondsare mailed,
the use of registered, insured mail is recommended:
By Hand:By Registered or Certified Mail:By Air Courier:
U.S. Bank National Association
Corporate Trust Services
__________________
____________
_____________________
U.S. Bank National Association
Corporate Trust Services
__________________
____________
_____________________
U.S. Bank National Association
Corporate Trust Services
__________________
____________
_____________________
If the Ownerof any Refunded Bondsubject to optional redemptionfails to deliver such
Refunded Bondto the Prior Trusteeon the RedemptionDate, such Refunded Bondshall nevertheless
be deemed redeemedon the RedemptionDate and the Ownerof such Refunded Bondshall have no
rights in respect thereof except to receive payment of the RedemptionPrice from funds held by the
Prior Trustee for such payment.
A form W-9 must be submitted with the Refunded Bonds. Failure to provide a completed
form W-9, or certify the proper tax identification numberwill result in backup withholding under
Section3406 of the Internal Revenue Code of 1986,as amended.
U.S. Bank National Association,as Trustee
DATED this __day of _______, 2016.
2016-04-05 Agenda Packet Page 207
ExhibitB-1
EXHIBIT B
NOTICE OF DEFEASANCE
REDEVELOPMENT AGENCYOF THE CITY OF CHULAVISTA
BAYFRONT/TOWN CENTRE REDEVELOPMENTPROJECT
2006 SUBORDINATETAX ALLOCATION REFUNDING BONDS, SERIES B
BASE CUSIP†NO. _____
NOTICE IS HEREBY GIVEN to the owners of the above-captioned bonds (as further
defined below, the “Refunded Bonds”), of the Redevelopment Agency of the City of Chula Vistathat
the Successor Agencyto the Redevelopment Agencyof the City of Chula Vista(the “Agency”) has
deposited with U.S. Bank National Association, as trustee(the “Trustee”) under that certain
Indenture of Trust dated as of July1, 2006(the “Indenture”), cash which will provide moneys
sufficient to redeem on _________, 2016, the principal of the Refunded Bonds maturing on and after
September1, 2015, along with interest accrued to such date.
The Refunded Bonds to be defeased are as follows:
CUSIP†
Maturity
(September1)Rate Amount
%$
In accordance with the Indenture, the Refunded Bonds are deemed to have been paid in
accordance with Section9.03thereof and the obligations of the Agencyunder the Indenture shall
thereupon cease, terminate and become void and be discharged and satisfied.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
Dated this ____day of __________, 2016.
†Copyright 2016, AmericanBankers Association. CUSIP data herein is provided by Standard & Poor’s, CUSIP Service
Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any
way as a substitute for the CUSIP Services. None of the Agency, the City of Chula Vistanor the Trustee guarantees the accuracy
of the CUSIP data.
2016-04-05 Agenda Packet Page 208
Stradling Yocca Carlson & Rauth
Draft of 3/22/16
2008BONDSESCROW AGREEMENT
THIS 2008BONDSESCROW AGREEMENTdated as of __________, 2016(the
“Agreement”), by and between the Successor Agency to the Redevelopment Agencyof the City of
Chula Vista(the “Agency”) and U.S. Bank National Association, as escrow bank (the “Escrow
Bank”), is entered into in accordance with a Resolutionof the Agency, adopted on April5, 2016and
that certain Indenture of Trust dated as of July1, 2008(the “Indenture”), by and between the
dissolved Redevelopment Agency of the City of Chula Vista(the “Former Agency”) and U.S. Bank
National Association(the “Prior Trustee”), to refund all of the outstanding Redevelopment Agency
of the City of Chula Vista 2008 Tax Allocation Refunding Bonds(Merged Redevelopment Project)
(the “Refunded Bonds”).
W I T N E S S E T H :
WHEREAS, the Former Agency previously issued the Refunded Bonds pursuant to the
Indenture;
WHEREAS, the Agency has determined that a portion of the proceeds of the $_________
aggregate principal amount of the Successor Agency to the Redevelopment Agency of the City of
Chula VistaTax Allocation Refunding Bonds, Series 2016A(the “2016 Bonds”)issued pursuant to
the Indenture of Trust, dated as of __________, 2016, by and between the Agencyand U.S. Bank
National Association, as trustee,will be used to provide the funds to provide the funds to pay all
regularly scheduled payments of principal and interest, as they accrue, through and including
September 1, 2018 and to pay all principal and accrued interest on the Refunded Bonds maturing on
or after September 1, 2019 on September 1, 2018(the “Redemption Price”); and
WHEREAS, by irrevocably depositing with the Escrow Bank moneys (as permitted by, in the
manner prescribed by, and all in accordance with the Indenture), which moneys will be used to
purchase securities satisfying the criteria set forth in Section 9.03 of the Indenture as described on
Schedule A hereto (the “Federal Securities”), provided the principal of and the interest on the Federal
Securities when paid will provide money, which moneys, together with the moneys deposited with
the Escrow Bank at the same time pursuant to this Agreement, will be fully sufficient to pay and
discharge the Refunded Bonds;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the Agencyand the Escrow Bankagree as follows:
SECTION 1.Deposit of Moneys. The Agencyhereby instructs the Escrow Bankto deposit
$_________ received from the Trustee from the net proceeds ofthe sale of the 2016Bondsin the
Escrow Fund established hereunder. The Escrow Bankshall hold all such amounts in cash in an
irrevocable escrow separate and apart from other funds of the Agencyand the Escrow Bankin a fund
hereby created and established to be known as the “Escrow Fund” and to be applied solely as
provided in this Agreement.The Agency hereby instructs the Escrow Bank to apply $___________
of the moneys set forth above to purchase the Federal Securities listed in Schedule A hereto and to
hold $__________uninvested as cash.
SECTION 2.Sufficiencyof Moneys. The Escrow Bankacknowledges receipt of the
moneys described in Section1 and agrees immediately to invest such money identified on
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2
ScheduleA to be invested in the Federal Securities listed on Schedule A hereto and to hold such
other money uninvested and to deposit such Federal Securities and cash in the Escrow Fund as
provided in Section 1 above. The Escrow Bank shall be entitled to rely upon the conclusion of Grant
Thornton, LLP (the “Verification Agent”), that the Federal Securities listed on Schedule A hereto
mature and bear interest payable in such amounts and at such times as, together with cash on deposit
in the Escrow Fund, will be sufficient to pay the Redemption Price with respect to the Refunded
Bondswhen due, as shown on Schedule B attached hereto; and concurrently therewith.
SECTION 3.Investment of Any Remaining Moneys. At the written direction of the
Agency, the Escrow Bank shall reinvestany other amount of principal and interest, or any portion
thereof, received from the Federal Securities prior to the date on which such payment is required for
the purposes set forth herein, in noncallable Federal Securities maturing not later than the date on
which such payment or portion thereof is required for the purposes set forth in Section5, at the
written direction of the Successor Agency, as verified in a report prepared by an independent
certified public accountant or firm of certified public accountants of favorable national reputation
experienced in the refunding of obligations of political subdivisions to the effect that the
reinvestment described in said report will not adversely affect the sufficiency of the amounts of
securities, investments and money in the Escrow Fund to pay when due, all Redemption Price with
respect to the Refunded Bonds.
SECTION 4.Substitution of Securities. Upon the written request of the Agency, and
subject to the conditions and limitations herein set forth and applicable governmental rules and
regulations, the Escrow Bank shall sell, redeem or otherwise dispose of the Federal Securities,
provided that there are substituted therefor from the proceeds of the Federal Securities other Federal
Securities, but only after the Agencyhas obtained and delivered to the Escrow Bank a report by a
firm of independent certified publicaccountants to the effect that the reinvestment described in said
report will not adversely affect the sufficiency of the amounts of securities, investments and money
in the Escrow Fund to pay when due, all Redemption Price with respect to the Refunded Bonds. The
Escrow Bank shall not be liable or responsible for any loss resulting from any reinvestment made
pursuant to this Agreement and in full compliance with the provisions hereof.
SECTION 5.Payment of Refunded Bonds.
(a)Payment. From the maturing principal of the Federal Securities and the
investment income and other earnings thereon and other moneys on deposit in the Escrow Fund, the
Escrow Bank shall apply the amounts on deposit in the Escrow Fund to pay when due, all
Redemption Price with respect to the Refunded Bonds. Upon the complete redemption of the
Refunded Bonds, the Escrow Bankshall close the Escrow Fund and transfer any remaining proceeds
therein to the Agency.
(b)Irrevocable Instructions to Provide Notice. The forms of the notice required
to be mailed pursuant to Sections2.3(d)(redemption) and 9.3(defeasance) of the Indenture are
attached hereto as Exhibits A and B. The Agency hereby irrevocably instructs the Escrow Bank to
mail a notice of redemption and a notice of defeasance of the Refunded Bonds inaccordance with
Sections2.3(d)and9.3, respectively, of the Indenture, as required to provide for the redemption of
the Refunded Bonds in accordance withthis Section3. The Trustee shall give to the Bond Insurer
(as defined in the Indenture) all notices given to Owners of Refunded Bonds hereunder. The Agency
hereby irrevocably instructs the Escrow Bank to file on the Municipal Securities Rulemaking Board’s
2016-04-05 Agenda Packet Page 210
3
Electronic Municipal Market Access system (“EMMA”) the notices attached hereto as ExhibitsA
and Bno later than 10 days after the deposit of the moneys as set forth in Section1 hereof.
(c)Unclaimed Moneys. Any moneys which remain unclaimed for sixty (60)
daysafter _________, 2018shall be repaid by the Escrow Bankto the Agency.
(d)Priority of Payments. The owners of the Refunded Bonds shall have a first
and exclusive lien on all moneys in the Escrow Fund until such moneys are used and applied as
provided in this Agreement.
(e)Termination of Obligation. As provided in the Indenture, upon deposit of
moneys with the Escrow Bankin the Escrow Fund as set forth in Section1 hereof all obligations of
the Agencyunder the Indenture with respect to the Refunded Bonds shall cease, terminate and
become void except as set forth in the Indenture.
SECTION 6.Application of Certain Terms of the Indenture. All of the terms of the
Indenture relating to the making of payments of principal of and interest on the Refunded Bonds and
relating to the exchange or transfer of the Refunded Bonds are incorporated in this Agreement as if
set forth in full herein. The procedures set forth in ArticleVIof the Indenturerelating to the
resignation and removal and merger of the Trustee under the Indentureare also incorporated in this
Agreement as if set forth in full herein and shall be the procedures to be followed with respect to any
resignation or removal of the Escrow Bankhereunder.
SECTION 7.Performance of Duties. The Escrow Bankagrees to perform only the duties
set forth herein and shall have no responsibility to take any action or omit to take any action not set
forth herein.
SECTION 8.Escrow Bank’s Authority to Make Investments. Except as provided in
Sections 2, 3, 4, and 5 hereof, the Escrow Bank shall have no power or duty to invest any funds held
under this Agreement or to sell, transfer or otherwise dispose of the moneys or Federal Securities
held hereunder.
SECTION 9.Indemnity. The Agency hereby assumes liability for, and hereby agrees
(whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect,
save and keep harmless the Escrow Bank and its respective successors, assigns, agents, employees
and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims,
actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements)
of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the
Escrow Bank at any time (whether or not also indemnified against the same by the Agency or any
other person under any other agreement or instrument, but without double indemnity) in any way
relating to or arisingout of the execution, delivery and performance of this Agreement, the
establishment hereunder of the Escrow Fund, the acceptance of the funds deposited therein, the
retention of the funds and any payment, transfer or other application of moneys by the Escrow Bank
in accordance with the provisions of this Agreement; provided, however, that the Agency shall not be
required to indemnify the Escrow Bank against the Escrow Bank’s own negligence or willful
misconduct or the negligence or willful misconduct of the Escrow Bank’s respective employees or
the willful breach by the Escrow Bank of the terms of this Agreement. In no event shall the Agency
or the Escrow Bank be liable to any person by reason of the transactions contemplated hereby other
2016-04-05 Agenda Packet Page 211
4
than to each other as set forth in this Section. The indemnities contained in this Section shall survive
the termination of this Agreement and the resignation or removal of the Escrow Bank.
SECTION 10.Responsibilities of Escrow Bank. The Escrow Bank and its agents and
servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in
connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund,
the acceptance of the moneys deposited therein, transfer or other application of moneys or
obligations by the Escrow Bank in accordance with the provisions of this Agreement or by reason of
any non-negligent act, non negligent omission or non-negligent error of the Escrow Bank made in
good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein
shall be taken as the statements of the Agency, and the Escrow Bank assumes no responsibility for
the correctness thereof. The Escrow Bank makes no representation as to the sufficiency of the
proceeds to accomplish the refunding of the RefundedBonds or to the validity of this Agreement as
to the Agency and, except as otherwise provided herein, the Escrow Bank shall incur no liability in
respect thereof. The Escrow Bank shall not be liablein connection with the performance of its duties
under this Agreement except for its own negligence, willful misconduct or default, and the duties and
obligations of the Escrow Bank shall be determined by the express provisions of this Agreement.
The Escrow Bank may consult with counsel, who may or may not be counsel to the Agency, and in
reliance upon the written opinion of such counsel shall have full and complete authorization and
protection in respect of any action taken, suffered or omitted by it in good faith in accordance
therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved
or established prior to taking, suffering, or omitting any action under this Agreement, such matter
may be deemed to be conclusively established by a certificate signed by an officer of the Agency.
No provision of this Agreement shall require the Escrow Bank to expend or risk its own
funds or otherwise incur any financial liability in the performance or exercise of any of its duties
hereunder, or in the exercise of its rights or powers.
The Escrow Bank shall have the right to accept and act upon instructions, including funds
transfer instructions (“Instructions”) given pursuant to this Agreement and delivered using Electronic
Means (“Electronic Means” shall mean the following communications methods: e-mail, facsimile
transmission, secure electronic transmission containing applicable authorization codes, passwords
and/or authentication keys issued by the Escrow Bank, or another method or system specified by the
Escrow Bank as available for use in connection with its services hereunder); provided, however, that
the Agency shall provide to the Escrow Bank an incumbency certificate listing officers with the
authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of
such Authorized Officers, which incumbency certificate shall be amended by the Agency whenever a
person is to be added or deleted from the listing. If the Agency elects to give the Escrow Bank
Instructions using Electronic Means and the Escrow Bank in its discretion elects to act upon such
Instructions, the Escrow Bank’s understanding of such Instructions shall be deemed controlling. The
Agency understands and agrees that the Escrow Bank cannot determine the identity of the actual
sender of such Instructions and that the Escrow Bank shall conclusively presume that directions that
purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to
the Escrow Bank have been sent by such Authorized Officer. The Agency shall be responsible for
ensuring that only Authorized Officers transmit such Instructions to the Escrow Bank and that the
Agency and all Authorized Officers are solely responsible to safeguard the use and confidentiality of
applicable user and authorization codes, passwords and/or authentication keys upon receipt by the
Agency. The Escrow Bank shall not be liable for any losses, costs or expenses arising directly or
indirectly from the Escrow Bank’sreliance upon and compliance with such Instructions
2016-04-05 Agenda Packet Page 212
5
notwithstanding such directions conflict or are inconsistent with a subsequent written instruction.
The Agency agrees: (i) to assume all risks arising out of the use of Electronic Means to submit
Instructions to the Escrow Bank, including without limitation the risk of the Escrow Bank acting on
unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully
informed of the protections and risks associated with the various methods of transmitting Instructions
to the Escrow Bank and that there may be more secure methods of transmitting Instructions than the
method(s) selected by the Agency; (iii) that the security procedures (if any) to be followed in
connection with its transmission of Instructions provide to it a commercially reasonable degree of
protection in light of its particular needs and circumstances; and (iv) to notify the Escrow Bank
immediately upon learning of any compromise or unauthorized use of the security procedures.
Any company into which the Escrow Bank may be merged or converted or with which it may
be consolidated or any company resulting from any merger, conversion or consolidation to which it
shall be a party or any company to which the Escrow Bank may sell or transfer all or substantially all
of its corporate trust business shall be the successor to the Escrow Bank without the execution or
filing of any paper or further act, anything herein to the contrary notwithstanding.
SECTION 11.Amendments. This Agreement is made for the benefit of the Agency and the
owners from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered or
amended without the written consent of all such owners, the Escrow Bank and the Agency; provided,
however, that the Agency and the Escrow Bank may, without the consent of, or notice to, such
owners, amend this Agreement or enter into such agreements supplemental to this Agreement as shall
not adversely affect the rights of such owners and as shall not be inconsistent with the terms and
provisions of this Agreement or the Indenture, for any one or more of the following purposes: (i) to
cure any ambiguity or formal defect or omission in this Agreement; (ii) to grant to, or confer upon,
the Escrow Bank for the benefit of the owners of the Refunded Bonds, any additional rights,
remedies, powers or authority that may lawfully be granted to, or conferred upon, such owners or the
Escrow Bank; and (iii) to include under this Agreement additional funds. The Escrow Bank shall be
entitled to rely conclusively upon an unqualified opinion of Stradling Yocca Carlson & Rauth, A
Professional Corporation, with respect to compliance with this Section, including the extent, if any,
to which any change, modification, addition or elimination affects the rights of the owners of the
various RefundedBonds or that any instrument executed hereunder complies with the conditions and
provisions of this Section.
SECTION 12.Term. This Agreement shall commence upon its execution and delivery and
shall terminate on the later to occur of either: (i)the date upon which the Refunded Bonds have been
paid in accordance with this Agreement; or (ii)the date upon which no unclaimed moneys remain on
deposit with the Escrow Bankpursuant to Section5(c) of this Agreement.
SECTION 13.Compensation. The Escrow Bank shall receive its reasonable fees and
expenses as previously agreed to by the Escrow Bank and the Agency and any other reasonable fees
and expenses of the Escrow Bank approved by the Agency; provided, however, that under no
circumstances shall the Escrow Bank be entitled to any lien or assert any lien whatsoever on any
moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered
or expenses incurred by the Escrow Bank under this Agreement.
SECTION 14.Severability. If any one or more of the covenants or agreements provided in
this Agreement on the part of the Agencyor the Escrow Bankto be performed should be determined
by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null
2016-04-05 Agenda Packet Page 213
6
and void and shall be deemed separate from the remaining covenants and agreements herein
contained and shall in no way affect the validity of the remaining provisions of this Agreement.
SECTION 15.Counterparts. This Agreement maybe executed in several counterparts, all or
any of which shall be regarded for all purposes as an original but all of which shall constitute and be
but one and the same instrument.
SECTION 16.Governing Law. THIS AGREEMENT SHALL BE CONSTRUED UNDER
THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 1.Holidays. If the date for making any payment or the last date for performance
of any act or the exercising of any right, as provided in this Agreement, shall be a legal holiday or a
day on which banking institutions in the city in whichis located the principal office of the Escrow
Bank are authorized by law to remain closed, such payment may be made or act performed or right
exercised on the next succeeding day not a legal holiday or a day on which such banking institutions
are authorized by law to remain closed, with the same force and effect as if done on the nominal date
provided in this Agreement, and no interest shall accrue for the period from and after such nominal
date.
SECTION 2.Assignment. This Agreement shall not be assigned by the Escrow Bank or
any successor thereto without the prior written consent of the Agency.
SECTION 17.Reorganization of Escrow Bank. Notwithstanding anything to the contrary
contained in this Agreement, any company into which the Escrow Bank may be merged or converted
or with which it may be consolidated or any company resulting from any merger, conversion or
consolidation to which the Escrow Bank is a party, or any company to which the Escrow Bank may
sell or transfer all or substantially all of its corporate trust businessshall be the successor to the
Escrow Bank without execution or filing of any paper or any paper or further act, if such company is
eligible to serve as Escrow Bank.
SECTION 18.Insufficient Funds. If at any time the Escrow Bankhas actual knowledge that
the moneys in the Escrow Fund, including the anticipated proceeds of and earnings thereon, will not
be sufficient to make all payments required by this Agreement, the Escrow Bankshall notify the
Agencyin writing, of the amount thereof and the reason therefor to the extent known to it. The
Escrow Bankshall have no responsibility regarding any such deficiency.
SECTION 19.Notice to Agencyand Escrow Bank. Any notice to or demand upon the
Escrow Bank may be served or presented, and such demand may be made, at the office of the Escrow
Bank at U.S. Bank National Association, 633 West Fifth Street, 24th Floor, Los Angeles, CA 90071,
Attention: Global Corporate Trust Services. Any notice to or demand upon the Agency shall be
deemed to have been sufficiently given or served for all purposes by being mailed by registered or
certified mail, and deposited, postage prepaid, in a post office letter box, addressed to the Agency at
276 Fourth Avenue, Chula Vista, CA 91910, Attention: Executive Director (or such other address as
may have been filed in writing by the Agency with the Escrow Bank).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
2016-04-05 Agenda Packet Page 214
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers and attested as of the date first above written.
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCYOF THE CITY
OF CHULA VISTA
By:
Executive Director
U.S. BANK NATIONAL ASSOCIATION,
as Escrow Bank and Prior Trustee
By:
Authorized Officer
2016-04-05 Agenda Packet Page 215
ScheduleA-1
SCHEDULE A
Federal Securities
SecurityMaturity
Principal
Amount
Interest
Rate Price
2016-04-05 Agenda Packet Page 216
Schedule B-1
SCHEDULE B
Escrow Fund Cash Flow
Date
Total Cash Receipt
from Federal
Securities
Cash Disbursement
from EscrowCash Balance
Beginning Balance:
2016-04-05 Agenda Packet Page 217
Schedule B-1
EXHIBIT A
NOTICE OF REDEMPTION
REDEVELOPMENT AGENCYOF THE CITY OF CHULAVISTA
2008 TAX ALLOCATION REFUNDING BONDS
(MERGED REDEVELOPMENT PROJECT)
BASE CUSIP†NO. _____
NOTICE IS HEREBY GIVEN to the owners of the above-captioned $_________
outstanding aggregate principal amountof the Redevelopment Agency of the City of Chula Vista
2008 Tax Allocation Refunding Bonds(Merged Redevelopment Project)(the “Refunded Bonds”)
pursuant to the Indentureof Trust, dated as of July1, 2008(the “Indenture”), by and between the
dissolved Redevelopment Agency of the City of Chula Vista(the “Former Agency”) and U.S. Bank
National Association (the “Prior Trustee”), that all of the Refunded Bondshave been called for
redemptionon _________, 2016(the “RedemptionDate”).
Refunded Bonds
CUSIP
Bond Payment
Date
(September 1)Rate Amount Price
The Refunded Bondswill be payable on the RedemptionDate at a redemptionprice of 100%
of the principal amount plus accrued interest to such date (the “RedemptionPrice”).Subject to prior
rescission as referenced below, the RedemptionPrice of the Refunded Bondswill become due and
payable on the RedemptionDate. Interest with respect to the Refunded Bondsto be redeemedwill
cease to accrue on and after the RedemptionDate, and such Refunded Bondswill be surrendered to
the Prior Trustee.
Redemption of the Refunded Bonds is conditional upon the receipt by the Trustee on or prior
to the Redemption Date of moneys sufficient to pay the principal of and interest on the Refunded
Bonds and, if such moneys have not been so received, this notice shall be of no force and effect and
the Trustee shall not be required to redeem such Refunded Bonds. In such event, the Trustee has the
right to rescind this notice.
†Copyright 2016, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s, CUSIP Service
Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any
way as a substitute for the CUSIP Services. None of the Agency, the City of Chula Vistaorthe Trustee guarantees the accuracy
of the CUSIP data.
2016-04-05 Agenda Packet Page 218
Exhibit A-5
All Refunded Bondsare required to be surrendered to the corporate office of the Refunded
Bonds Trustee, on the RedemptionDate at the following location. If the Refunded Bondsare mailed,
the use of registered, insured mail is recommended:
By Hand:By Registered or Certified Mail:By Air Courier:
U.S. Bank National Association
Corporate Trust Services
__________________
____________
_____________________
U.S. Bank National Association
Corporate Trust Services
__________________
____________
_____________________
U.S. Bank National Association
Corporate Trust Services
__________________
____________
_____________________
If the Ownerof any Refunded Bondsubject to optional redemptionfails to deliver such
Refunded Bondto the Prior Trusteeon the RedemptionDate, such Refunded Bondshall nevertheless
be deemed redeemedon the RedemptionDate and the Ownerof such Refunded Bondshall have no
rights in respect thereof except to receive payment of the RedemptionPrice from funds held by the
Prior Trustee for such payment.
A form W-9 must be submitted with the Refunded Bonds. Failure to provide a completed
form W-9, or certify the proper tax identification numberwill result in backup withholding under
Section3406 of the Internal Revenue Code of 1986, as amended.
U.S. Bank National Association,as Trustee
DATED this __day of _______, 2016.
2016-04-05 Agenda Packet Page 219
ExhibitB-1
EXHIBIT B
NOTICE OF DEFEASANCE
REDEVELOPMENT AGENCYOF THE CITY OF CHULAVISTA
2008 TAX ALLOCATION REFUNDING BONDS
(MERGED REDEVELOPMENT PROJECT)
BASE CUSIP†NO. _____
NOTICE IS HEREBY GIVEN to the owners of the above-captioned bonds (as further
defined below, the “Refunded Bonds”), of the Redevelopment Agency of the City of Chula Vistathat
the Successor Agencyto the Redevelopment Agencyof the City of Chula Vista(the “Agency”) has
deposited with U.S. Bank National Association, as trustee(the “Trustee”) under that certain
Indenture of Trust dated as of July1, 2008(the “Indenture”), cash and Federal Securities (as defined
in the Indenture) sufficient to pay with respect to the Refunded Bonds, all regularly scheduled
payments of principal and interest throughand including September 1, 2018 and to pay on
September1, 2018the principalmaturing on and after September 1, 2019, plus interest with respect
thereto accrued to such date, without premium.
The Refunded Bonds to be defeased are as follows:
CUSIP†
Maturity
(September1)Rate Amount
%$
In accordance with the Indenture, the Refunded Bonds are deemed to have been paid in
accordance with Section9.3thereof and the obligations of the Agencyunder the Indenture shall
thereupon cease, terminate and become void and be discharged and satisfied.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
Dated this ____day of __________, 2016.
†Copyright 2016, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s, CUSIP Service
Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any
way as a substitute for the CUSIP Services. None of the Agency, the City of Chula Vistanor the Trustee guarantees the accuracy
of the CUSIP data.
2016-04-05 Agenda Packet Page 220
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 1
SOURCES AND USES OF FUNDS
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds
Dated Date07/13/2016
Delivery Date07/13/2016
2016 Tax2016 Tax
AllocationAllocation2016 Tax
RefundingRefundingAllocation
Bonds BondsRefunding
Allocable toAllocable to Bonds
2006A 2006BAllocable to
Sources:RefundingRefunding2008 Refunding Total
Bond Proceeds:
Par Amount6,260,000.005,830,000.00 17,085,000.0029,175,000.00
Premium 976,586.20909,744.50 3,001,791.004,888,121.70
7,236,586.20 6,739,744.50 20,086,791.00 34,063,121.70
Other Sources of Funds:
Debt Service Fund830,398.00780,865.001,074,209.002,685,472.00
Debt Service Reserve Fund1,013,275.001,004,365.001,528,761.003,546,401.00
1,843,673.00 1,785,230.00 2,602,970.00 6,231,873.00
9,080,259.208,524,974.5022,689,761.0040,294,994.70
2016 Tax2016 Tax
AllocationAllocation2016 Tax
RefundingRefundingAllocation
BondsBondsRefunding
Allocable toAllocable toBonds
2006A 2006BAllocable to
Uses:RefundingRefunding2008 Refunding Total
Refunding Escrow Deposits:
Cash Deposit8,926,653.948,382,060.040.3417,308,714.32
SLGS Purchases22,268,757.0022,268,757.00
8,926,653.94 8,382,060.04 22,268,757.34 39,577,471.32
Delivery Date Expenses:
Cost of Issuance42,913.4539,965.72117,120.83200,000.00
Underwriter's Discount32,865.0030,607.5089,696.25153,168.75
Bond Insurance59,859.9855,748.19163,371.86278,980.03
Surety Bond17,191.4016,010.5246,919.3380,121.25
152,829.83 142,331.93 417,108.27 712,270.03
Other Uses of Funds:
Rounding Amount775.43582.533,895.395,253.35
9,080,259.208,524,974.5022,689,761.0040,294,994.70
Notes:
Debt Service Savings Analysis as of March 2, 2016
Rates provided by Stifel Nicolaus
2016-04-05 Agenda Packet Page 221
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 2
SAVINGS
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds
Prior Prior PriorRefunding
DateDebt ServiceReceiptsNet Cash FlowDebt ServiceSavings
10/01/20162,699,132.512,685,472.0013,660.51 13,660.51
10/01/20173,563,475.02 3,563,475.022,908,204.17655,270.85
10/01/20183,564,993.78 3,564,993.782,912,050.00652,943.78
10/01/20193,561,906.28 3,561,906.282,912,050.00649,856.28
10/01/20203,564,391.28 3,564,391.282,909,450.00654,941.28
10/01/20213,561,660.02 3,561,660.022,909,250.00652,410.02
10/01/20223,563,307.50 3,563,307.502,911,250.00652,057.50
10/01/20233,562,750.00 3,562,750.002,910,250.00652,500.00
10/01/20243,566,227.50 3,566,227.502,911,250.00654,977.50
10/01/20253,568,396.26 3,568,396.262,913,500.00654,896.26
10/01/20262,598,493.76 2,598,493.762,180,500.00417,993.76
10/01/20272,604,166.26 2,604,166.262,183,750.00420,416.26
10/01/20281,540,351.26 1,540,351.261,373,000.00167,351.26
10/01/20291,538,431.26 1,538,431.261,373,750.00164,681.26
10/01/20301,539,175.00 1,539,175.001,372,250.00166,925.00
10/01/20311,537,606.26 1,537,606.261,373,500.00164,106.26
10/01/20321,538,725.00 1,538,725.001,372,250.00166,475.00
10/01/20331,540,775.00 1,540,775.001,373,500.00167,275.00
10/01/20341,539,975.00 1,539,975.001,372,000.00167,975.00
10/01/20351,536,325.00 1,536,325.001,372,750.00163,575.00
10/01/20361,539,825.00 1,539,825.001,375,500.00164,325.00
53,830,088.952,685,472.0051,144,616.9542,920,004.178,224,612.78
Savings Summary
Savings PV date 07/13/2016
Savings PV rate 2.469280%
PV of savings from cash flow 6,911,084.66
Less: Prior funds on hand (3,546,401.00)
Plus: Refunding funds on hand 5,253.35
Net PV Savings 3,369,937.01
Notes:
Debt Service Savings Analysis as of March 2, 2016
Rates provided by Stifel Nicolaus
2016-04-05 Agenda Packet Page 222
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 3
SAVINGS
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds Allocable to 2006A Refunding
PriorPriorPriorRefunding
DateDebt ServiceReceiptsNet Cash FlowDebt ServiceSavings
10/01/2016833,135.00830,398.00 2,737.002,737.00
10/01/20171,025,030.001,025,030.00796,298.33228,731.67
10/01/20181,027,598.761,027,598.76798,700.00228,898.76
10/01/20191,023,061.261,023,061.26796,900.00226,161.26
10/01/20201,027,461.261,027,461.26799,300.00228,161.26
10/01/20211,024,430.001,024,430.00795,700.00228,730.00
10/01/20221,024,890.001,024,890.00796,300.00228,590.00
10/01/20231,022,990.001,022,990.00795,900.00227,090.00
10/01/20241,024,515.001,024,515.00799,500.00225,015.00
10/01/20251,024,240.001,024,240.00795,000.00229,240.00
10/01/2026536,230.00536,230.00419,000.00117,230.00
10/01/2027538,690.00538,690.00420,000.00118,690.00
11,132,271.28830,398.0010,301,873.288,012,598.332,289,274.95
Savings Summary
Savings PV date 07/13/2016
Savings PV rate 2.469280%
PV of savings from cash flow 2,009,673.71
Less: Prior funds on hand (1,013,275.00)
Plus: Refunding funds on hand 775.43
Net PV Savings 997,174.14
2016-04-05 Agenda Packet Page 223
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SAVINGS
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds Allocable to 2006B Refunding
PriorPriorPriorRefunding
DateDebt ServiceReceiptsNet Cash FlowDebt ServiceSavings
10/01/2016787,679.38780,865.00 6,814.386,814.38
10/01/20171,001,608.761,001,608.76743,546.67258,062.09
10/01/20181,001,358.761,001,358.76741,200.00260,158.76
10/01/2019999,608.76999,608.76741,000.00258,608.76
10/01/20201,000,693.761,000,693.76740,000.00260,693.76
10/01/2021999,993.76999,993.76743,200.00256,793.76
10/01/20221,002,325.001,002,325.00745,400.00256,925.00
10/01/20231,001,637.501,001,637.50741,600.00260,037.50
10/01/20241,003,850.001,003,850.00742,000.00261,850.00
10/01/20251,003,700.001,003,700.00745,000.00258,700.00
10/01/2026526,187.50526,187.50391,250.00134,937.50
10/01/2027526,250.00526,250.00388,500.00137,750.00
10,854,893.18780,865.0010,074,028.187,462,696.672,611,331.51
Savings Summary
Savings PV date 07/13/2016
Savings PV rate 2.469280%
PV of savings from cash flow 2,271,749.00
Less: Prior funds on hand (1,004,365.00)
Plus: Refunding funds on hand 582.53
Net PV Savings 1,267,966.53
2016-04-05 Agenda Packet Page 224
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SAVINGS
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds Allocable to 2008 Refunding
PriorPriorPriorRefunding
DateDebt ServiceReceiptsNet Cash FlowDebt ServiceSavings
10/01/20161,078,318.131,074,209.004,109.13 4,109.13
10/01/20171,536,836.26 1,536,836.261,368,359.17168,477.09
10/01/20181,536,036.26 1,536,036.261,372,150.00163,886.26
10/01/20191,539,236.26 1,539,236.261,374,150.00165,086.26
10/01/20201,536,236.26 1,536,236.261,370,150.00166,086.26
10/01/20211,537,236.26 1,537,236.261,370,350.00166,886.26
10/01/20221,536,092.50 1,536,092.501,369,550.00166,542.50
10/01/20231,538,122.50 1,538,122.501,372,750.00165,372.50
10/01/20241,537,862.50 1,537,862.501,369,750.00168,112.50
10/01/20251,540,456.26 1,540,456.261,373,500.00166,956.26
10/01/20261,536,076.26 1,536,076.261,370,250.00165,826.26
10/01/20271,539,226.26 1,539,226.261,375,250.00163,976.26
10/01/20281,540,351.26 1,540,351.261,373,000.00167,351.26
10/01/20291,538,431.26 1,538,431.261,373,750.00164,681.26
10/01/20301,539,175.00 1,539,175.001,372,250.00166,925.00
10/01/20311,537,606.26 1,537,606.261,373,500.00164,106.26
10/01/20321,538,725.00 1,538,725.001,372,250.00166,475.00
10/01/20331,540,775.00 1,540,775.001,373,500.00167,275.00
10/01/20341,539,975.00 1,539,975.001,372,000.00167,975.00
10/01/20351,536,325.00 1,536,325.001,372,750.00163,575.00
10/01/20361,539,825.00 1,539,825.001,375,500.00164,325.00
31,842,924.491,074,209.0030,768,715.4927,444,709.173,324,006.32
Savings Summary
Savings PV date 07/13/2016
Savings PV rate 2.469280%
PV of savings from cash flow 2,629,661.95
Less: Prior funds on hand (1,528,761.00)
Plus: Refunding funds on hand 3,895.39
Net PV Savings 1,104,796.34
2016-04-05 Agenda Packet Page 225
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Ma
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Page 228
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 9
BOND DEBT SERVICE
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds
Period
EndingPrincipalCouponInterestDebt Service
10/01/20171,280,0004.000%1,628,204.172,908,204.17
10/01/20181,625,0004.000%1,287,050.002,912,050.00
10/01/20191,690,0004.000%1,222,050.002,912,050.00
10/01/20201,755,0004.000%1,154,450.002,909,450.00
10/01/20211,825,0004.000%1,084,250.002,909,250.00
10/01/20221,900,0004.000%1,011,250.002,911,250.00
10/01/20231,975,0004.000%935,250.002,910,250.00
10/01/20242,055,0005.000%856,250.002,911,250.00
10/01/20252,160,0005.000%753,500.002,913,500.00
10/01/20261,535,0005.000%645,500.002,180,500.00
10/01/20271,615,0005.000%568,750.002,183,750.00
10/01/2028885,0005.000%488,000.001,373,000.00
10/01/2029930,0005.000%443,750.001,373,750.00
10/01/2030975,0005.000%397,250.001,372,250.00
10/01/20311,025,0005.000%348,500.001,373,500.00
10/01/20321,075,0005.000%297,250.001,372,250.00
10/01/20331,130,0005.000%243,500.001,373,500.00
10/01/20341,185,0005.000%187,000.001,372,000.00
10/01/20351,245,0005.000%127,750.001,372,750.00
10/01/20361,310,0005.000%65,500.001,375,500.00
29,175,000 13,745,004.1742,920,004.17
Notes:
Debt Service Savings Analysis as of March 2, 2016
Rates provided by Stifel Nicolaus
2016-04-05 Agenda Packet Page 229
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 10
BOND DEBT SERVICE BREAKDOWN
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds
2016 Tax 2016 Tax 2016 Tax
AllocationAllocationAllocation
Refunding BondsRefunding BondsRefunding Bonds
Period Allocable toAllocable toAllocable to
Ending2006A Refunding2006B Refunding2008 Refunding Total
10/01/2017 796,298.33743,546.671,368,359.172,908,204.17
10/01/2018 798,700.00741,200.001,372,150.002,912,050.00
10/01/2019 796,900.00741,000.001,374,150.002,912,050.00
10/01/2020 799,300.00740,000.001,370,150.002,909,450.00
10/01/2021 795,700.00743,200.001,370,350.002,909,250.00
10/01/2022 796,300.00745,400.001,369,550.002,911,250.00
10/01/2023 795,900.00741,600.001,372,750.002,910,250.00
10/01/2024 799,500.00742,000.001,369,750.002,911,250.00
10/01/2025 795,000.00745,000.001,373,500.002,913,500.00
10/01/2026 419,000.00391,250.001,370,250.002,180,500.00
10/01/2027 420,000.00388,500.001,375,250.002,183,750.00
10/01/2028 1,373,000.001,373,000.00
10/01/2029 1,373,750.001,373,750.00
10/01/2030 1,372,250.001,372,250.00
10/01/2031 1,373,500.001,373,500.00
10/01/2032 1,372,250.001,372,250.00
10/01/2033 1,373,500.001,373,500.00
10/01/2034 1,372,000.001,372,000.00
10/01/2035 1,372,750.001,372,750.00
10/01/2036 1,375,500.001,375,500.00
8,012,598.337,462,696.6727,444,709.1742,920,004.17
Notes:
Debt Service Savings Analysis as of March 2, 2016
Rates provided by Stifel Nicolaus
2016-04-05 Agenda Packet Page 230
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 11
ESCROW REQUIREMENTS
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds Allocable to 2006A Refunding
2006 A Bonds
Period Principal
Ending InterestRedeemedTotal
07/27/2016156,653.948,770,000.008,926,653.94
156,653.948,770,000.008,926,653.94
2016-04-05 Agenda Packet Page 231
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 12
ESCROW REQUIREMENTS
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds Allocable to 2006B Refunding
2006 A Bonds
Period Principal
Ending InterestRedeemedTotal
07/27/2016137,060.048,245,000.008,382,060.04
137,060.048,245,000.008,382,060.04
2016-04-05 Agenda Packet Page 232
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 13
ESCROW REQUIREMENTS
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds Allocable to 2008 Refunding
2006 A Bonds
Period Principal
Ending PrincipalInterestRedeemed Total
09/01/2016620,000.00458,318.13 1,078,318.13
03/01/2017 445,918.13 445,918.13
09/01/2017645,000.00445,918.13 1,090,918.13
03/01/2018 433,018.13 433,018.13
09/01/2018670,000.00433,018.1318,515,000.0019,618,018.13
1,935,000.002,216,190.6518,515,000.0022,666,190.65
2016-04-05 Agenda Packet Page 233
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 14
SUMMARY OF BONDS REFUNDED
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds Allocable to 2006A Refunding
2006 A Bonds
MaturityInterest ParCall Call
Bond Date Rate AmountDate Price
2006 Senior Refunding Bonds, Series A:
BONDS09/01/20164.100%640,000.0007/27/2016100.000
09/01/20174.125%665,000.0007/27/2016100.000
09/01/20184.250%695,000.0007/27/2016100.000
09/01/20194.250%720,000.0007/27/2016100.000
09/01/20204.375%755,000.0007/27/2016100.000
09/01/20214.400%785,000.0007/27/2016100.000
09/01/20224.500%820,000.0007/27/2016100.000
09/01/20234.500%855,000.0007/27/2016100.000
09/01/20244.500%895,000.0007/27/2016100.000
09/01/20254.600%935,000.0007/27/2016100.000
09/01/20264.600%490,000.0007/27/2016100.000
09/01/20274.600%515,000.0007/27/2016100.000
8,770,000.00
2016-04-05 Agenda Packet Page 234
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 15
SUMMARY OF BONDS REFUNDED
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds Allocable to 2006B Refunding
2006 A Bonds
MaturityInterest ParCall Call
Bond Date Rate AmountDate Price
2006 Subordinate Refunding Bonds, Series B:
BONDS10/01/20165.000%575,000.0007/27/2016100.000
10/01/20175.000%605,000.0007/27/2016100.000
10/01/20185.000%635,000.0007/27/2016100.000
10/01/20195.100%665,000.0007/27/2016100.000
10/01/20205.100%700,000.0007/27/2016100.000
10/01/20215.125%735,000.0007/27/2016100.000
TERM10/01/20275.250%4,330,000.0007/27/2016100.000
8,245,000.00
2016-04-05 Agenda Packet Page 235
Mar 21, 2016 1:11 pm Prepared by Harrell & Company Advisors Page 16
SUMMARY OF BONDS REFUNDED
Successor Agency to the Redevelopment Agency of the City of Chula Vista
2016 Tax Allocation Refunding Bonds Allocable to 2008 Refunding
2006 A Bonds
MaturityInterest ParCall Call
Bond Date Rate AmountDate Price
2008 Tax Allocation Bonds:
SERIAL09/01/20164.000%620,000.00
09/01/20174.000%645,000.00
09/01/20184.000%670,000.00
09/01/20194.000%700,000.0009/01/2018100.000
09/01/20204.000%725,000.0009/01/2018100.000
09/01/20214.125%755,000.0009/01/2018100.000
09/01/20224.200%785,000.0009/01/2018100.000
09/01/20234.300%820,000.0009/01/2018100.000
09/01/20244.375%855,000.0009/01/2018100.000
09/01/20254.400%895,000.0009/01/2018100.000
09/01/20264.500%930,000.0009/01/2018100.000
09/01/20274.500%975,000.0009/01/2018100.000
09/01/20284.600%1,020,000.0009/01/2018100.000
TERM09/01/20314.625%3,345,000.0009/01/2018100.000
TERM0209/01/20364.750%6,710,000.0009/01/2018100.000
20,450,000.00
2016-04-05 Agenda Packet Page 236
City of Chula Vista
Staff Report
File#:16-0151, Item#: 4.
A.RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAAMENDINGTHE
COMPENSATIONSCHEDULEANDCLASSIFICATIONPLANTOREFLECTCHANGESIN
THECOMPENSATIONFORTHECBAGEXECUTIVEDIRECTOR,CBAGDEPUTY
EXECUTIVE DIRECTOR AND FA DIRECTOR OF SD LECC
B.RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAAPPROVINGTHE
REVISEDFISCALYEAR2015-2016COMPENSATIONSCHEDULEEFFECTIVEAPRIL15,
2016, AS REQUIRED BY CALIFORNIA CODE OF REGULATIONS, TITLE 2, SECTION 570.5
RECOMMENDED ACTION
Council adopt the resolutions.
SUMMARY
PerHIDTA(HighIntensityDrugTraffickingArea)policy,theCBAGExecutiveDirector,CBAGDeputy
ExecutiveDirectorandFA(FiscalAgent)DirectorofSDLECC(SanDiegoLawEnforcement
CoordinationCenter)positionsaretiedtotheFederalGeneralSchedule(GS)SalaryTable.The
ChulaVistaCompensationplanneedstobeupdatedtoreflecteligiblestepincreasesbaseduponthe
Federal General Schedule salary guidelines for these three positions.
ENVIRONMENTAL REVIEW
Environmental Notice
Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality
ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental
review is required.
Environmental Determination
ThisproposedactivityhasbeenreviewedforcompliancewiththeCaliforniaEnvironmentalQuality
Act(CEQA)andithasbeendeterminedthattheactivityisnota“Project”asdefinedunderSection
15378oftheStateCEQAGuidelinesbecauseitwillnotresultinaphysicalchangeinthe
environment;therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelines,theactivityis
not subject to CEQA. Thus, no environmental review is necessary.
BOARD/COMMISSION RECOMMENDATION
Not Applicable.
DISCUSSION
ThePoliceDepartmententeredintoanagreementwiththeOfficeofNationalDrugControlPolicyin
1996tobethefiscalagentfortheCaliforniaBorderAllianceGroup(CBAG),whichisnowreferredas
theSanDiego/ImperialHighIntensityDrugTraffickingArea(HIDTA).Inessence,theCityreceives
fullfunding,plusa4%administrativefee,tohireandadministersalaryandbenefitsforHIDTA
City of Chula Vista Printed on 3/30/2016Page 1 of 3
powered by Legistar™2016-04-05 Agenda Packet Page 237
File#:16-0151, Item#: 4.
fullfunding,plusa4%administrativefee,tohireandadministersalaryandbenefitsforHIDTA
positions.Todate,therearecurrently17HIDTApositionswiththeCityofChulaVistathatarefully
funded from the Office of National Drug Control Policy (ONDCP).
PerHIDTApolicy,theCBAGExecutiveDirector,CBAGDeputyExecutiveDirectorandFADirectorof
SDLECCpositionsaretiedtotheFederalGeneralScheduleSalaryTable.Approvalofthis
resolutionwillamendtheCity’sCompensationPlantoreflecteligiblestepincreasesbaseduponthe
Federal General Schedule salary guidelines, as indicated in the table below.
Title Unclassified Bargaining
Group
Current E
Step Salary
(biweekly)
Proposed E
Step Salary
(biweekly)
CBAG Executive Director Yes EXEC $5,501.14 $5,580.88
CBAG Deputy Executive
Director
Yes SM $4,676.66 $4,744.50
FA Director of SD LECC Yes SM $5,501.13 $5,580.88
CaliforniaCodeofRegulations,Title2,Section570.5requiresthat,forpurposesofdetermininga
retiringemployee'spensionallowance,thepayratebelimitedtotheamountlistedonapayschedule
thatmeetscertainrequirementsandbeapprovedbythegoverningbodyinaccordancewiththe
requirementsoftheapplicablepublicmeetinglaws.TheFiscalYear2015-2016Compensation
Schedule("CompensationSchedule")waslastapprovedbytheCityCouncilattheirmeetingof
February23,2016.ApprovalofResolutionBwillapprovetherevisedCompensationScheduleto
reflectthesalaryadjustmentforCBAGExecutiveDirector,CBAGDeputyExecutiveDirectorandFA
Director of SD LECC.
DECISION-MAKER CONFLICT
Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsitespecificand
consequentlythe500-footrulefoundinCaliforniaCodeofRegulationssection18704.2(a)(1)isnotapplicabletothis
decision.Staffisnotindependentlyaware,norhasstaffbeeninformedbyanyCityCouncilmember,ofanyotherfactthat
may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,HealthyCommunity,Strong
andSecureNeighborhoodsandaConnectedCommunity.AmendingtheCity’scompensationschedulesupportsthe
goal of Operational Excellence by complying with HIDTA policies of these grant-funded positions.
CURRENT YEAR FISCAL IMPACT
TheCityisfullyreimbursedforHIDTApositionsandreceivesa4%administrativefeetoactasafiscalagent.Thecosts
ofthecompensationadjustmentsfortheCBAGExecutiveDirector,CBAGDeputyExecutiveDirectorandFADirectorof
SDLECCpositionswillbecompletelyoffsetbypersonnelsavingsofcurrentHIDTAvacantpositions,resultinginnonet
fiscal impact in the current fiscal year.
ONGOING FISCAL IMPACT
Thereisnoongoingfiscalimpactapprovingthecompensationofthesethreegrant-fundedpositions.TheproposedFY
2017budgetwillincorporateanticipatedsalaryadjustmentsforHIDTApositions,andthefundingfromONDCPwillfully
offset these costs.
ATTACHMENTS
City of Chula Vista Printed on 3/30/2016Page 2 of 3
powered by Legistar™2016-04-05 Agenda Packet Page 238
File#:16-0151, Item#: 4.
None.
Staff Contact: Joseph Walker
City of Chula Vista Printed on 3/30/2016Page 3 of 3
powered by Legistar™2016-04-05 Agenda Packet Page 239
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING THE COMPENSATION
SCHEDULE AND CLASSIFICATION PLAN TO REFLECT
CHANGES IN THE COMPENSATION FOR THE CBAG
EXECUTIVE DIRECTOR, CBAG DEPUTY EXECUTIVE
DIRECTOR AND FA DIRECTOR OFSD LECC
WHEREAS, the Police Department entered into an agreement with the Office of National
Drug Control Policy in 1996to be the fiscal agent for theCalifornia Border Alliance Group
(CBAG), which is now referred as the San Diego/Imperial High Intensity Drug Trafficking Area
(HIDTA); and
WHEREAS, per HIDTApolicy, the CBAG ExecutiveDirector, CBAG Deputy
ExecutiveDirector and FA (Fiscal Agent) Director of SD LECC (San Diego Law Enforcement
Coordination Center)positionsare tied to the Federal General ScheduleSalary Table; and
WHEREAS, the Chula Vista Compensation plan needs to be updated to reflect eligible
step increases based upon the Federal General Schedule salary guidelines for these three
positions; and
WHEREAS, the full costsof all HIDTApositionsare reimbursed by the Office of
National Drug Control Policy.
NOW, THEREFORE, BE IT RESOLVED with the above findings incorporated herein,
the City Council of the City of Chula Vista does hereby approve the biweekly E-step
compensation of the CBAGExecutive Director at $5,580.88, CBAG Deputy Executive Director
at $4,744.50 and FA Director of SD LECC at $5,580.88.
Presented by:Approved as to form by:
____________________________________________
David Bejarano Glen R. Googins
Police Chief City Attorney
2016-04-05 Agenda Packet Page 240
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE REVISED FISCAL YEAR
2015-2016 COMPENSATION SCHEDULEEFFECTIVE APRIL
15, 2016,AS REQUIRED BY CALIFORNIA CODE OF
REGULATIONS, TITLE 2, SECTION 570.5
WHEREAS, California Code of Regulations, Title 2, Section 570.5 requires that, for
purposes of determining a retiring employee's pension allowance, the pay rate be limited to the
amount listed on a pay schedule that meets certain requirements and be approved by the
governing body in accordance with the requirements of the applicable public meeting laws; and
WHEREAS, therevisedFiscal Year 2015-2016Compensation Schedule ("Compensation
Schedule") waslastapproved by the City Council at their meeting ofFebruary 23, 2016; and
WHEREAS, any changes including but not limited to, across-the-board increases,
classification changes and salary adjustments approved subsequent to this date, will be reflected
on a revised Compensation Schedule and submitted to Council approval; and
WHEREAS, the Compensation Schedule will be revised to reflect the salary adjustment
forCBAG Executive Director, CBAG DeputyExecutive Director and FADirector of SD LECC.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City ofChula
Vista, that it hereby does adopt, as required by California Code of Regulations Title 2, Section
570.5, the revised Fiscal Year 2015-2016Compensation Schedule, a copy of which is available
in the City Clerk’s Office.
Presented by Approved as to form by
David Bejarano Glen R. Googins
Chief of Police City Attorney
2016-04-05 Agenda Packet Page 241
Fiscal Year 2015‐2016 Compensation Schedule
Effective June 26, 2015
POSITION TITLE PCNBARGStep AStep BStep CStep DStep EStep AStep BStep CStep DStep E
ACCOUNTANT 3633CONF$31.92$33.52$35.20$36.95$38.80$2,553.84$2,681.54$2,815.61$2,956.39$3,104.21
ACCOUNTING ASSISTANT 3641CVEA$19.53$20.50$21.53$22.60$23.73$1,562.12$1,640.23$1,722.24$1,808.35$1,898.77
ACCOUNTING ASSISTANT (HRLY)3640UCHR$19.53$20.50$21.53$22.60$23.73$1,562.13$1,640.23$1,722.25$1,808.35$1,898.77
ACCOUNTING TECH (HOURLY)3676UCHR$24.70$25.94$27.23$28.59$30.02$1,976.09$2,074.90$2,178.63$2,287.57$2,401.95
ACCOUNTING TECHNICIAN 3643CONF$24.70$25.94$27.23$28.59$30.02$1,976.09$2,074.89$2,178.64$2,287.57$2,401.95
ACCOUNTING TECHNICIAN 3675CVEA$24.70$25.94$27.23$28.59$30.02$1,976.09$2,074.89$2,178.64$2,287.57$2,401.94
ACCOUNTS PAYABLE SUPERVISOR3645CVEA$28.41$29.83$31.32$32.88$34.53$2,272.50$2,386.13$2,505.44$2,630.70$2,762.24
ADMIN SECRETARY (MAYOR,ATWILL)0154CONF$24.13$25.34$26.60$27.93$29.33$1,930.44$2,026.96$2,128.31$2,234.73$2,346.46
ADMIN SERVICES MANAGER 0215SM$43.72 ‐‐‐‐‐‐$53.14$3,497.53 ‐‐‐‐‐‐$4,251.27
ADMINISTRATIVE SECRETARY 0149CONF$24.13$25.34$26.60$27.93$29.33$1,930.44$2,026.96$2,128.31$2,234.73$2,346.46
ADMINISTRATIVE SECRETARY 0179CVEA$24.13$25.34$26.60$27.93$29.33$1,930.44$2,026.96$2,128.31$2,234.73$2,346.46
ADMINISTRATIVE TECH (HOURLY)0127UCHR$24.13$25.34$26.60$27.93$29.33$1,930.44$2,026.96$2,128.31$2,234.73$2,346.46
ADMINISTRATIVE TECHNICIAN 0147CONF$24.13$25.34$26.60$27.93$29.33$1,930.44$2,026.96$2,128.31$2,234.73$2,346.46
ADMINISTRATIVE TECHNICIAN 0181CVEA$24.13$25.34$26.60$27.93$29.33$1,930.44$2,026.96$2,128.31$2,234.73$2,346.46
ANIMAL ADOPTION COUNSELOR5310CVEA$20.88$21.92$23.02$24.17$25.38$1,670.45$1,753.97$1,841.68$1,933.76$2,030.44
ANIMAL CARE AIDE (HRLY)5316UCHR$11.32$11.91$12.55$13.20$13.90$905.56$953.01$1,003.78$1,056.21$1,111.98
ANIMAL CARE FAC ADMINISTRATOR5327SM$50.94$53.49$56.16$58.97$61.92$4,075.15$4,278.90$4,492.85$4,717.49$4,953.37
ANIMAL CARE SPECIALIST 5343CVEA$17.51$18.38$19.30$20.27$21.28$1,400.70$1,470.74$1,544.28$1,621.49$1,702.56
ANIMAL CARE SPECIALIST (HRLY)5344UCHR$17.51$18.38$19.30$20.27$21.28$1,400.70$1,470.74$1,544.27$1,621.49$1,702.57
ANIMAL CARE SUPERVISOR 5319CVEA$24.31$25.53$26.81$28.15$29.55$1,945.04$2,042.29$2,144.40$2,251.63$2,364.20
ANIMAL CONTROL OFFICER 5303CVEA$21.01$22.06$23.16$24.32$25.54$1,680.84$1,764.88$1,853.13$1,945.78$2,043.07
ANIMAL CONTROL OFFICER (HRLY)5305UCHR$21.01$22.06$23.16$24.32$25.54$1,680.83$1,764.88$1,853.12$1,945.78$2,043.07
ANIMAL CTRL OFFCR SUPERVISOR5304CVEA$24.16$25.37$26.64$27.97$29.37$1,932.95$2,029.61$2,131.09$2,237.64$2,349.53
ANIMAL SERVICES SPECIALIST 5309CVEA$19.10$20.06$21.06$22.11$23.22$1,528.03$1,604.44$1,684.66$1,768.89$1,857.34
APPLICATIONS SUPP SPEC HRLY 3078UCHR$32.53$34.16$35.87$37.66$39.54$2,602.54$2,732.67$2,869.29$3,012.76$3,163.40
APPLICATIONS SUPPORT MANAGER3083MM$40.56$42.58$44.71$46.95$49.30$3,244.49$3,406.72$3,577.06$3,755.91$3,943.70
APPLICATIONS SUPPORT SPECIALIST3088PROF$32.53$34.16$35.87$37.66$39.54$2,602.54$2,732.67$2,869.29$3,012.76$3,163.40
AQUARIST 7741CVEA$21.75$22.84$23.98$25.18$26.44$1,739.91$1,826.91$1,918.25$2,014.16$2,114.87
AQUATIC SUPERVISOR I 7579CVEA$22.31$23.42$24.59$25.82$27.11$1,784.42$1,873.63$1,967.31$2,065.68$2,168.97
AQUATIC SUPERVISOR II 7577CVEA$24.54$25.76$27.05$28.40$29.82$1,962.85$2,061.00$2,164.05$2,272.25$2,385.86
AQUATIC SUPERVISOR III 7575CVEA$28.22$29.63$31.11$32.66$34.30$2,257.28$2,370.15$2,488.66$2,613.09$2,743.75
ASSISTANT CITY CLERK 2210SM$36.95$38.80$40.73$42.77$44.91$2,955.81$3,103.60$3,258.78$3,421.71$3,592.80
ASSISTANT DIR OF DEV SERVICES4040SM$64.42 ‐‐‐‐‐‐$78.30$5,153.44 ‐‐‐‐‐‐$6,264.04
ASSOC ACCOUNTANT 3635CONF$35.12$36.87$38.71$40.65$42.68$2,809.21$2,949.68$3,097.16$3,252.02$3,414.62
ASSOC ENGINEER 6017WCE$38.45$40.37$42.39$44.51$46.73$3,075.77$3,229.56$3,391.03$3,560.59$3,738.61
ASSOC LAND SURVEYOR 6287WCE$38.45$40.37$42.39$44.51$46.73$3,075.77$3,229.56$3,391.03$3,560.58$3,738.61
ASSOC PLAN CHECK ENGINEER 4747WCE$38.45$40.37$42.39$44.51$46.73$3,075.77$3,229.56$3,391.03$3,560.58$3,738.61
ASSOC PLANNER 4437CVEA$31.65$33.24$34.90$36.64$38.47$2,532.19$2,658.80$2,791.74$2,931.32$3,077.89
ASSOC PLANNER (HOURLY)4438UCHR$31.65$33.24$34.90$36.64$38.47$2,532.19$2,658.80$2,791.73$2,931.32$3,077.89
ASST CHIEF OF POLICE 5011SM$63.19 ‐‐‐‐‐‐$76.81$5,055.32 ‐‐‐‐‐‐$6,144.76
ASST CITY ATTORNEY 2405SM$67.47$70.84$74.39$78.06$82.01$5,397.59$5,667.47$5,950.84$6,245.07$6,560.80
ASST CITY MANAGER/ADMIN 2707EXEC$87.29 ‐‐‐‐‐‐$105.45$6,983.54 ‐‐‐‐‐‐$8,435.75
ASST DIR HUMAN RESOURCES 3304SM$58.77 ‐‐‐‐‐‐$70.53$4,701.74 ‐‐‐‐‐‐$5,642.09
ASST DIR OF DEV SVCS (INTERIM)4044SM$64.42 ‐‐$70.89 ‐‐$78.30$5,153.44 ‐‐$5,671.54 ‐‐$6,264.04
ASST DIR OF FINANCE 3604SM$58.42 ‐‐‐‐‐‐$70.53$4,673.34 ‐‐‐‐‐‐$5,642.09
ASST DIR OF PUBLIC WORKS 6322SM$58.42 ‐‐‐‐$68.96$70.53$4,673.34 ‐‐‐‐$5,517.17$5,642.09
ASST DIR OF RECREATION 7401SM$48.26 ‐‐‐‐‐‐$58.66$3,860.47 ‐‐‐‐‐‐$4,692.42
ASST DIRECTOR OF ENGINEERING6008SM$58.42 ‐‐‐‐‐‐$70.53$4,673.34 ‐‐‐‐‐‐$5,642.09
ASST ENGINEER 6015WCE$33.43$35.10$36.86$38.70$40.64$2,674.58$2,808.31$2,948.72$3,096.17$3,250.97
ASST LAND SURVEYOR 6289WCE$33.43$35.10$36.86$38.70$40.64$2,674.58$2,808.31$2,948.72$3,096.16$3,250.97
ASST PLAN CHECK ENGINEER 4749WCE$33.43$35.10$36.86$38.70$40.64$2,674.58$2,808.30$2,948.73$3,096.16$3,250.96
ASST PLANNER 4439CVEA$28.77$30.21$31.72$33.31$34.98$2,301.98$2,417.08$2,537.94$2,664.84$2,798.09
AUTOMATED FINGERPRINT TECH5123CVEA$19.10$20.06$21.06$22.11$23.22$1,528.04$1,604.44$1,684.65$1,768.89$1,857.34
BENEFITS MANAGER 3404MMCF$43.09$45.24$47.50$49.88$52.37$3,446.87$3,619.21$3,800.17$3,990.18$4,189.70
BLDG PROJECT MANAGER 6412PROF$38.49$40.42$42.44$44.56$46.79$3,079.37$3,233.33$3,395.00$3,564.75$3,742.99
BUDGET & ANALYSIS MANAGER 2222SM$54.69 ‐‐‐‐‐‐$66.00$4,375.46 ‐‐‐‐‐‐$5,280.01
BUILDING INSPECTION MGR 4769MM$40.54$42.56$44.69$46.92$49.27$3,242.84$3,404.97$3,575.22$3,753.99$3,941.69
BUILDING INSPECTOR I 4771CVEA$27.86$29.26$30.72$32.24$33.87$2,229.13$2,340.59$2,457.62$2,579.32$2,709.52
BUILDING INSPECTOR II 4773CVEA$30.65$32.18$33.79$35.48$37.26$2,452.05$2,574.66$2,703.39$2,838.56$2,980.49
BUILDING INSPECTOR II HRLY 4774UCHR$30.65$32.18$33.79$35.48$37.26$2,452.05$2,574.66$2,703.39$2,838.56$2,980.49
BUILDING INSPECTOR III 4775CVEA$33.72$35.40$37.17$39.03$40.98$2,697.26$2,832.12$2,973.73$3,122.41$3,278.53
BUILDING OFFICIAL/CODE ENF MGR4780SM$61.35 ‐‐‐‐‐‐$74.57$4,908.03 ‐‐‐‐‐‐$5,965.75
BUILDING PROJECT COORDINATOR6407CVEA$30.65$32.18$33.79$35.48$37.26$2,452.05$2,574.66$2,703.39$2,838.56$2,980.49
BUSINESS LICENSE REP 4505CVEA$19.53$20.50$21.53$22.60$23.73$1,562.12$1,640.23$1,722.24$1,808.35$1,898.77
Hourly Rate Bi‐Weekly Rate
All position titles designated as Executive (“EXEC”) or Senior Management (“SM”) have salary bands with a minimum (“Step A”) and maximum (“Step E”) salary; salary appointments and subsequent
adjustments within the approved salary range may be made by the position’s appointing authority.
Approved and Adopted:
Resolution No.:Page 12016-04-05 Agenda Packet Page 242
Fiscal Year 2015‐2016 Compensation Schedule
Effective June 26, 2015
POSITION TITLE PCNBARGStep AStep BStep CStep DStep EStep AStep BStep CStep DStep E
Hourly Rate Bi‐Weekly Rate
CARPENTER 6444CVEA$24.31$25.53$26.81$28.15$29.55$1,945.19$2,042.45$2,144.58$2,251.80$2,364.39
CBAG DEPUTY DIRECTOR SD LECC5269SM$45.09 ‐‐‐‐$52.19$54.80$3,606.94 ‐‐‐‐$4,175.48$4,384.26
CBAG DEPUTY EXECUTIVE DIRECTOR5273SM $48.79 ‐‐‐‐‐‐$59.31$3,903.31 ‐‐‐‐‐‐$4,744.50
CBAG EXECUTIVE DIRECTOR 5272EXEC $57.39 ‐‐$63.28 ‐‐$69.76$4,591.40 ‐‐$5,062.02 ‐‐$5,580.88
CBAG PROGRAM MANAGER 5285MM$45.08$47.34$49.70$52.19$54.80$3,606.59$3,786.91$3,976.26$4,175.07$4,383.83
CHIEF OF POLICE 5001EXEC$81.77 ‐‐‐‐$97.32$99.39$6,541.23 ‐‐‐‐$7,785.95$7,950.91
CHIEF OF STAFF 2011MMUC$29.84$31.34$32.90$34.55$36.28$2,387.49$2,506.87$2,632.21$2,763.82$2,902.02
CHIEF SUSTAINABILITY OFFICER 2729SM$58.42 ‐‐‐‐$68.96$70.53$4,673.34 ‐‐‐‐$5,517.17$5,642.09
CITY ATTORNEY (ELECTED)2400CATY ‐‐‐‐‐‐‐‐$90.89 ‐‐‐‐‐‐‐‐$7,270.81
CITY CLERK 2201CCLK ‐‐‐‐‐‐‐‐$70.06 ‐‐‐‐‐‐‐‐$5,604.53
CITY ENGINEER 6010SM$58.83 ‐‐‐‐‐‐$71.51$4,706.70 ‐‐‐‐‐‐$5,721.02
CITY MANAGER 2710CMGR ‐‐‐‐‐‐‐‐$116.37 ‐‐‐‐‐‐‐‐$9,309.26
CIVIL BCKGRND INVEST (HOURLY)5430UCHR$23.11$24.27$25.48$26.75$28.09$1,848.92$1,941.37$2,038.43$2,140.35$2,247.38
CIVILIAN BACKGROUND INVEST 5429CVEA$23.11$24.27$25.48$26.75$28.09$1,848.92$1,941.37$2,038.43$2,140.35$2,247.37
CIVILIAN POLICE INVESTIGATOR 5431UCHR$25.79$27.08$28.43$29.85$31.35$2,063.15$2,166.32$2,274.63$2,388.36$2,507.78
CLERICAL AIDE 0241UCHR$10.55$11.07$11.63$12.21$12.82$843.66$885.84$930.14$976.64$1,025.47
CODE ENF OFFICER I 4777CVEA$24.20$25.41$26.68$28.02$29.42$1,936.25$2,033.05$2,134.72$2,241.45$2,353.52
CODE ENF OFFICER I (HOURLY)4776UCHR$24.20$25.41$26.68$28.02$29.42$1,936.25$2,033.05$2,134.72$2,241.45$2,353.53
CODE ENF OFFICER II 4779CVEA$26.62$27.95$29.35$30.82$32.36$2,129.87$2,236.37$2,348.19$2,465.59$2,588.87
CODE ENF OFFICER II (HOURLY)4778UCHR$26.62$27.95$29.35$30.82$32.36$2,129.87$2,236.36$2,348.19$2,465.60$2,588.88
CODE ENFORCEMENT TECHNICIAN4789CVEA$21.05$22.10$23.20$24.36$25.58$1,683.70$1,767.88$1,856.27$1,949.09$2,046.54
COLLECTIONS SUPERVISOR 3683MM$33.65$35.34$37.10$38.96$40.91$2,692.22$2,826.83$2,968.18$3,116.59$3,272.41
COMMUNITY SERV OFFICER 5141CVEA$19.10$20.06$21.06$22.11$23.22$1,528.03$1,604.44$1,684.66$1,768.89$1,857.34
CONSERVATION SPECIALIST I 6200CVEA$22.00$23.10$24.26$25.47$26.74$1,760.22$1,848.23$1,940.64$2,037.68$2,139.57
CONSERVATION SPECIALIST II 6202CVEA$24.20$25.41$26.68$28.02$29.42$1,936.25$2,033.05$2,134.72$2,241.45$2,353.52
CONSTITUENT SERVICES MANAGER2038PRUC$27.43$28.80$30.24$31.75$33.34$2,194.45$2,304.17$2,419.37$2,540.35$2,667.36
CONSTRUCTION & REPAIR SUPVSR6427CVEA$33.76$35.45$37.23$39.09$41.04$2,701.14$2,836.20$2,978.01$3,126.91$3,283.26
COUNCIL ASSISTANT 2023UCHR$22.91$24.06$25.26$26.52$27.85$1,832.86$1,924.50$2,020.73$2,121.76$2,227.85
COUNCILPERSON 2003CL ‐‐‐‐‐‐‐‐$23.99 ‐‐‐‐‐‐‐‐$1,919.49
CRIME LABORATORY MANAGER 5101MM$43.58$45.76$48.04$50.45$52.97$3,486.24$3,660.56$3,843.59$4,035.77$4,237.55
CULTURAL ARTS PROGRAM MGR4435PROF$36.52$38.35$40.27$42.28$44.39$2,921.75$3,067.83$3,221.23$3,382.29$3,551.41
CUSTODIAL SUPERVISOR 6667CVEA$22.34$23.46$24.63$25.86$27.15$1,787.13$1,876.49$1,970.31$2,068.82$2,172.27
CUSTODIAN 6661CVEA$17.66$18.54$19.47$20.44$21.47$1,412.75$1,483.38$1,557.55$1,635.43$1,717.20
CUSTODIAN (HOURLY)6662UCHR$17.66$18.54$19.47$20.44$21.47$1,412.74$1,483.39$1,557.55$1,635.43$1,717.20
DELIVERY DRIVER 7191CVEA$16.19$17.00$17.85$18.74$19.68$1,295.02$1,359.77$1,427.76$1,499.15$1,574.11
DELIVERY DRIVER (HOURLY)7192UCHR$16.19$17.00$17.85$18.74$19.68$1,295.02$1,359.77$1,427.76$1,499.15$1,574.10
DEP CITY MANAGER 2705EXEC$90.29 ‐‐‐‐‐‐$99.55$7,223.45 ‐‐‐‐‐‐$7,963.85
DEPUTY CITY ATTORNEY I 2410PRUC$40.33$42.34$44.46$46.68$49.02$3,226.12$3,387.42$3,556.79$3,734.63$3,921.36
DEPUTY CITY ATTORNEY II 2408PRUC$48.39$50.81$53.35$56.02$58.82$3,871.33$4,064.90$4,268.15$4,481.55$4,705.63
DEPUTY CITY ATTY III 2411SM$60.74$63.77$66.96$70.31$73.82$4,858.83$5,101.77$5,356.86$5,624.70$5,905.90
DEPUTY CITY CLERK I 2245PRUC$24.94$26.18$27.49$28.87$30.31$1,994.95$2,094.69$2,199.43$2,309.40$2,424.86
DEPUTY CITY CLERK II 2243PRUC$27.43$28.80$30.24$31.75$33.34$2,194.44$2,304.16$2,419.37$2,540.34$2,667.36
DEPUTY FIRE CHIEF 5505SM$60.72 ‐‐‐‐‐‐$73.81$4,857.83 ‐‐‐‐‐‐$5,904.72
DEPUTY FIRE CHIEF (INTERIM)5504SM$60.72 ‐‐‐‐‐‐$73.81$4,857.83 ‐‐‐‐‐‐$5,904.72
DETENTION FACILITY MANAGER 5130MM$43.58$45.76$48.04$50.45$52.97$3,486.24$3,660.56$3,843.59$4,035.77$4,237.55
DEVELOPMENT SERVICES TECH I 4542CVEA$19.91$20.90$21.95$23.05$24.20$1,592.66$1,672.29$1,755.91$1,843.70$1,935.89
DEVELOPMENT SVCS DEPT DIR 4039EXEC$75.39 ‐‐‐‐$90.19$91.64$6,030.87 ‐‐‐‐$7,214.88$7,331.54
DEVELOPMENT SVCS TECH II 4541CVEA$21.90$22.99$24.14$25.35$26.62$1,751.93$1,839.52$1,931.50$2,028.07$2,129.48
DEVELOPMENT SVCS TECH III 4543CVEA$25.18$26.44$27.77$29.15$30.61$2,014.71$2,115.45$2,221.22$2,332.28$2,448.90
DEVLPMENT SVCS TECH II (HRLY)4544UCHR$21.90$22.99$24.14$25.35$26.62$1,751.92$1,839.53$1,931.50$2,028.07$2,129.48
DEVLPMT SVCS COUNTER MGR 4547MM$42.04$44.14$46.35$48.66$51.10$3,363.03$3,531.18$3,707.74$3,893.13$4,087.79
DIR OF ECON DEVELOPMENT 2734EXEC$70.53 ‐‐‐‐‐‐$85.07$5,642.50 ‐‐‐‐‐‐$6,805.71
DIR OF ENG/CITY ENGINEER 6006EXEC$66.80 ‐‐‐‐‐‐$81.20$5,344.15 ‐‐‐‐‐‐$6,495.84
DIR OF FINANCE 3601EXEC$75.93 ‐‐$85.07 ‐‐$91.63$6,074.29 ‐‐$6,805.73 ‐‐$7,330.56
DIR OF HUMAN RESOURCES 3303EXEC$65.89 ‐‐‐‐‐‐$80.09$5,271.23 ‐‐‐‐‐‐$6,407.22
DIR OF INFO TECH SVCS 3001EXEC$65.89 ‐‐$72.64 ‐‐$80.09$5,271.24 ‐‐$5,811.54 ‐‐$6,407.21
DIR OF LIBRARY 7002EXEC$70.53 ‐‐‐‐‐‐$85.07$5,642.50 ‐‐‐‐‐‐$6,805.71
DIR OF PUBLIC WORKS 6320EXEC$74.72 ‐‐$88.09 ‐‐$91.63$5,977.82 ‐‐$7,047.51 ‐‐$7,330.56
DIR OF RECREATION 7405EXEC$60.92$63.97$67.17$70.53$74.05$4,873.84$5,117.53$5,373.41$5,642.08$5,924.19
ELECTRICIAN 6438CVEA$25.53$26.81$28.15$29.56$31.03$2,042.46$2,144.58$2,251.81$2,364.40$2,482.62
ELECTRONIC/EQUIP INSTALLER 6492CVEA$23.21$24.37$25.59$26.87$28.21$1,856.78$1,949.62$2,047.10$2,149.45$2,256.93
ELECTRONICS TECH SUPERVISOR 6472CVEA$32.30$33.91$35.61$37.39$39.26$2,583.76$2,712.95$2,848.60$2,991.03$3,140.58
ELECTRONICS TECHNICIAN 6475CVEA$28.08$29.49$30.96$32.51$34.14$2,246.75$2,359.09$2,477.04$2,600.89$2,730.94
EMERGENCY SVCS COORDINATOR5564PROF$36.31$38.13$40.04$42.04$44.14$2,905.11$3,050.36$3,202.88$3,363.03$3,531.18
EMS NURSE COORDINATOR 5567PROF$45.93$48.23$50.64$53.17$55.83$3,674.62$3,858.35$4,051.27$4,253.83$4,466.52
ENGINEERING TECH I 6081CVEA$24.23$25.44$26.71$28.05$29.45$1,938.37$2,035.30$2,137.06$2,243.92$2,356.11
ENGINEERING TECH II 6071CVEA$26.65$27.99$29.38$30.85$32.40$2,132.22$2,238.83$2,350.77$2,468.31$2,591.72
ENVIRON SUSTAINABILITY MGR 6207MM$45.66$47.94$50.34$52.85$55.50$3,652.54$3,835.17$4,026.92$4,228.27$4,439.68
Approved and Adopted:
Resolution No.:Page 22016-04-05 Agenda Packet Page 243
Fiscal Year 2015‐2016 Compensation Schedule
Effective June 26, 2015
POSITION TITLE PCNBARGStep AStep BStep CStep DStep EStep AStep BStep CStep DStep E
Hourly Rate Bi‐Weekly Rate
ENVIRONMENTAL HLTH SPECIALIST6129CVEA$32.04$33.65$35.33$37.09$38.95$2,563.51$2,691.69$2,826.27$2,967.59$3,115.97
ENVIRONMENTAL SERVICES MGR6205MM$45.66$47.94$50.34$52.85$55.50$3,652.54$3,835.17$4,026.92$4,228.27$4,439.68
EQUIPMENT MAINTENANCE MANAGER6505MM$35.97$37.77$39.65$41.64$43.72$2,877.39$3,021.26$3,172.32$3,330.93$3,497.48
EQUIPMENT MECHANIC 6542CVEA$24.09$25.30$26.56$27.89$29.28$1,927.36$2,023.73$2,124.91$2,231.16$2,342.72
EQUIPMENT OPERATOR 6361CVEA$25.64$26.92$28.27$29.68$31.17$2,051.31$2,153.88$2,261.57$2,374.65$2,493.38
EXECUTIVE SECRETARY 0187CONF$29.20$30.66$32.19$33.80$35.49$2,335.83$2,452.62$2,575.25$2,704.02$2,839.22
FA ACCOUNTING TECHNICIAN 5270CONF$24.70$25.94$27.23$28.59$30.02$1,976.09$2,074.89$2,178.64$2,287.57$2,401.95
FA ADMIN ANALYST I 5297CONF$27.13$28.49$29.91$31.41$32.98$2,170.45$2,278.96$2,392.92$2,512.56$2,638.20
FA ADMIN ANALYST II 5296CONF$29.84$31.34$32.90$34.55$36.28$2,387.50$2,506.88$2,632.21$2,763.82$2,902.02
FA ANALYST 5277CONF$20.73$21.77$22.86$24.00$25.20$1,658.60$1,741.53$1,828.60$1,920.03$2,016.03
FA DIRECTOR OF SD LECC 5274SM $57.39 ‐‐‐‐‐‐$69.76$4,591.40 ‐‐‐‐‐‐$5,580.88
FA EXECUTIVE ASSISTANT 5286CONF$26.56$27.89$29.28$30.75$32.29$2,124.96$2,231.20$2,342.76$2,459.90$2,582.90
FA FINANCIAL MANAGER 5493MMUC$44.53$46.76$49.09$51.55$54.12$3,562.30$3,740.41$3,927.43$4,123.80$4,329.99
FA GEOSPATIAL INTEL ANALYST 5439PRUC$38.65$40.58$42.61$44.74$46.98$3,091.77$3,246.38$3,408.70$3,579.13$3,758.09
FA GRAPHIC DESIGNER/WBMSTR5289CONF$28.06$29.47$30.94$32.49$34.11$2,245.17$2,357.43$2,475.14$2,599.07$2,729.02
FA INFO SECURITY PROGRAM MGR5453MMUC$45.08$47.34$49.70$52.19$54.80$3,606.59$3,786.91$3,976.26$4,175.07$4,383.83
FA INTELLIGENCE ANALYST 5485CONF$28.06$29.47$30.94$32.49$34.11$2,245.17$2,357.43$2,475.13$2,599.07$2,729.02
FA IVDC‐LECC EXEC DIRECTOR 5491SM$49.03$51.49$54.06$56.76$59.60$3,922.79$4,118.92$4,324.87$4,541.11$4,768.17
FA LECC IT MANAGER 5440MMUC$41.22$43.29$45.45$47.72$50.11$3,297.90$3,462.80$3,635.95$3,817.74$4,008.63
FA MANAGEMENT ASSISTANT 5278CONF$25.30$26.56$27.89$29.28$30.75$2,023.77$2,124.96$2,231.21$2,342.77$2,459.91
FA MICROCOMPUTER SPECIALIST5443PRUC$33.52$35.19$36.95$38.80$40.74$2,681.40$2,815.47$2,956.24$3,104.06$3,259.26
FA NTWRK ADMINISTRATOR I 5292PRUC$33.73$35.42$37.19$39.05$41.00$2,698.53$2,833.46$2,975.13$3,123.88$3,280.08
FA NTWRK ADMINISTRATOR II 5294PRUC$37.10$38.96$40.91$42.95$45.10$2,968.38$3,116.80$3,272.64$3,436.28$3,608.09
FA PROGRAM ANALYST 5444PRUC$39.99$41.99$44.09$46.29$48.61$3,199.00$3,358.95$3,526.90$3,703.25$3,888.41
FA PROGRAM ASSISTANT 5451CONF$20.21$21.22$22.28$23.39$24.56$1,616.62$1,697.45$1,782.32$1,871.44$1,965.01
FA PROGRAM MANAGER 5445SM$45.09$47.34$49.71$52.19$54.80$3,606.94$3,787.29$3,976.65$4,175.48$4,384.26
FA RCFL NETWRK ENGINEER 5284CONF$32.57$34.20$35.91$37.70$39.59$2,605.45$2,735.72$2,872.51$3,016.14$3,166.94
FA SR FINANCIAL ANALYST 5495PRUC$31.34$32.90$34.55$36.28$38.09$2,506.87$2,632.22$2,763.83$2,902.02$3,047.13
FA SR INTELLIGENCE ANALYST 5483PRUC$33.00$34.65$36.38$38.20$40.11$2,640.02$2,772.00$2,910.61$3,056.14$3,208.94
FA SR SECRETARY 5477CONF$20.79$21.83$22.92$24.06$25.27$1,663.04$1,746.20$1,833.51$1,925.18$2,021.43
FA SUPV INTELLIGENCE ANALYST5481PRUC$36.30$38.12$40.02$42.02$44.12$2,904.00$3,049.20$3,201.66$3,361.75$3,529.83
FACILITIES MANAGER 6425MM$40.97$43.01$45.17$47.42$49.79$3,277.30$3,441.16$3,613.23$3,793.89$3,983.58
FACILITY & SUPPLY SPECIALIST 5648CVEA$20.76$21.80$22.89$24.03$25.23$1,660.76$1,743.80$1,830.99$1,922.54$2,018.67
FACILITY & SUPPLY SPEC (HRLY)5646UCHR$20.76$21.80$22.89$24.03$25.23$1,660.76$1,743.80$1,830.99$1,922.54$2,018.67
FAMILY & YOUTH LITERACY COORD7035CVEA$24.54$25.76$27.05$28.40$29.82$1,962.85$2,061.00$2,164.05$2,272.25$2,385.86
FIELD MAINTENANCE SPECIALIST7471CVEA$18.87$19.82$20.81$21.85$22.94$1,509.79$1,585.28$1,664.54$1,747.77$1,835.16
FINANCE & PURCHASING MGR 3625SM$54.30 ‐‐‐‐‐‐$66.00$4,343.88 ‐‐‐‐‐‐$5,280.02
FIRE APPARATUS MECH 6521CVEA$28.90$30.34$31.86$33.45$35.12$2,311.63$2,427.21$2,548.57$2,676.00$2,809.80
FIRE BATTALION CHIEF (112 HR)5511IAFF$34.55$36.27$38.09$39.99$41.99$3,869.24$4,062.70$4,265.84$4,479.13$4,703.09
FIRE BATTALION CHIEF (80 HR)5513IAFF$48.37$50.78$53.32$55.99$58.79$3,869.24$4,062.70$4,265.84$4,479.13$4,703.09
FIRE BATTALION CHIEF (INTERIM)5540IAFF$34.55$36.27$38.09$39.99$41.99$3,869.23$4,062.70$4,265.84$4,479.12$4,703.09
FIRE CAPTAIN (112 HR)5583IAFF$27.73$29.12$30.57$32.10$33.71$3,105.91$3,261.21$3,424.26$3,595.47$3,775.25
FIRE CAPTAIN (80 HR)5581IAFF$38.82$40.77$42.80$44.94$47.19$3,105.91$3,261.21$3,424.26$3,595.47$3,775.25
FIRE CAPTAIN (INTERIM)5580IAFF$27.73$29.12$30.57$32.10$33.71$3,105.91$3,261.21$3,424.25$3,595.48$3,775.25
FIRE CHIEF 5501EXEC$72.87 ‐‐$86.37 ‐‐$88.57$5,829.39 ‐‐$6,909.80 ‐‐$7,085.66
FIRE DIVISION CHIEF 5507MMUC$55.36$58.13$61.03$64.09$67.29$4,428.80$4,650.24$4,882.75$5,126.89$5,383.24
FIRE ENG (112 HR)5603IAFF$23.64$24.83$26.07$27.37$28.74$2,648.16$2,780.58$2,919.60$3,065.58$3,218.86
FIRE ENG (80 HR)5601IAFF$33.10$34.76$36.50$38.32$40.24$2,648.16$2,780.58$2,919.60$3,065.58$3,218.86
FIRE ENGINEER (INTERIM)5602IAFF$23.64$24.83$26.07$27.37$28.74$2,648.16$2,780.58$2,919.61$3,065.58$3,218.86
FIRE INSP/INVEST I 5530IAFF$28.00$29.40$30.86$32.41$34.03$2,239.63$2,351.60$2,469.19$2,592.65$2,722.28
FIRE INSP/INVEST I (HRLY)5534UCHR$28.00$29.40$30.86$32.41$34.03$2,239.63$2,351.60$2,469.19$2,592.65$2,722.28
FIRE INSP/INVEST II 5531IAFF$30.79$32.33$33.95$35.65$37.43$2,463.59$2,586.76$2,716.10$2,851.90$2,994.50
FIRE INSP/INVEST II HRLY 5532UCHR$30.79$32.33$33.95$35.65$37.43$2,463.59$2,586.76$2,716.10$2,851.90$2,994.50
FIRE PREV ENG/INVEST 5528IAFF$37.14$39.00$40.95$43.00$45.15$2,971.37$3,119.95$3,275.94$3,439.74$3,611.73
FIRE PREVENTION AIDE 5535CVEA$13.70$14.38$15.10$15.85$16.65$1,095.60$1,150.38$1,207.90$1,268.30$1,331.71
FIRE PREVENTION AIDE (HRLY)5533UCHR$13.70$14.38$15.10$15.85$16.65$1,095.60$1,150.38$1,207.90$1,268.30$1,331.71
FIREFIGHTER (112 HR)5623IAFF$20.10$21.10$22.15$23.26$24.43$2,250.66$2,363.19$2,481.35$2,605.42$2,735.69
FIREFIGHTER (80 HR)5621IAFF$28.13$29.54$31.02$32.57$34.20$2,250.66$2,363.19$2,481.35$2,605.42$2,735.69
FIREFIGHTER/PARAMEDIC (112 HR)5613IAFF$23.11$24.26$25.48$26.75$28.09$2,588.26$2,717.67$2,853.56$2,996.24$3,146.04
FIREFIGHTER/PARAMEDIC (80 HR)5611IAFF$32.35$33.97$35.67$37.45$39.33$2,588.26$2,717.67$2,853.56$2,996.24$3,146.04
FISCAL & MANAGEMENT ANALYST0216PRCF$41.30$43.36$45.53$47.81$50.20$3,303.72$3,468.90$3,642.35$3,824.46$4,015.69
FISCAL OFFICE SPEC (HOURLY)0170UCHR$18.04$18.94$19.89$20.88$21.93$1,443.13$1,515.29$1,591.05$1,670.61$1,754.14
FISCAL OFFICE SPECIALIST 0169CVEA$18.04$18.94$19.89$20.88$21.93$1,443.14$1,515.29$1,591.06$1,670.61$1,754.14
FLEET INVENTORY CONTROL SPEC6513CVEA$23.87$25.07$26.32$27.64$29.02$1,909.88$2,005.37$2,105.64$2,210.92$2,321.47
FLEET MANAGER 6501MM$39.96$41.95$44.05$46.25$48.57$3,196.46$3,356.29$3,524.10$3,700.30$3,885.32
FORENSICS SPECIALIST 5114CVEA$28.61$30.04$31.54$33.12$34.77$2,288.60$2,403.03$2,523.17$2,649.34$2,781.81
GARDENER (SEASONAL)6629UCHR$17.66$18.54$19.47$20.44$21.47$1,412.74$1,483.39$1,557.55$1,635.43$1,717.20
GARDENER I 6627CVEA$17.66$18.54$19.47$20.44$21.47$1,412.75$1,483.38$1,557.55$1,635.43$1,717.20
Approved and Adopted:
Resolution No.:Page 32016-04-05 Agenda Packet Page 244
Fiscal Year 2015‐2016 Compensation Schedule
Effective June 26, 2015
POSITION TITLE PCNBARGStep AStep BStep CStep DStep EStep AStep BStep CStep DStep E
Hourly Rate Bi‐Weekly Rate
GARDENER II 6623CVEA$19.43$20.40$21.42$22.49$23.61$1,554.03$1,631.73$1,713.31$1,798.98$1,888.93
GIS MANAGER 3079MM$40.96$43.01$45.16$47.41$49.78$3,276.62$3,440.46$3,612.48$3,793.10$3,982.76
GIS SPECIALIST 3081CVEA$28.81$30.25$31.76$33.35$35.02$2,304.68$2,419.91$2,540.91$2,667.95$2,801.35
GIS SPECIALIST (HOURLY)3092UCHR$28.81$30.25$31.76$33.35$35.02$2,304.68$2,419.92$2,540.91$2,667.95$2,801.35
GRAFFITI ABATEMENT COORDINATOR6339CVEA$29.32$30.78$32.32$33.94$35.64$2,345.44$2,462.72$2,585.85$2,715.14$2,850.90
GRAPHIC DESIGNER 2775CVEA$25.52$26.80$28.14$29.54$31.02$2,041.63$2,143.71$2,250.90$2,363.44$2,481.62
GYMNASTIC SPECIALIST 7543UCHR$15.10$15.86$16.65$17.48$18.36$1,208.09$1,268.50$1,331.92$1,398.52$1,468.44
HOUSING MANAGER 4093SM$50.43 ‐‐‐‐‐‐$60.81$4,034.01 ‐‐‐‐‐‐$4,864.98
HR ANALYST 3310PRCF$31.88$33.47$35.14$36.90$38.75$2,550.11$2,677.61$2,811.49$2,952.07$3,099.67
HR OPERATIONS MANAGER 3317SM$46.39 ‐‐‐‐‐‐$56.38$3,711.02 ‐‐‐‐‐‐$4,510.76
HR TECHNICIAN 3315CONF$22.92$24.07$25.27$26.54$27.86$1,833.92$1,925.61$2,021.90$2,122.99$2,229.14
HVAC TECHNICIAN 6430CVEA$25.53$26.81$28.15$29.56$31.03$2,042.46$2,144.58$2,251.81$2,364.40$2,482.62
INFO TECH MANAGER 5104SM$49.84 ‐‐‐‐‐‐$59.80$3,986.86 ‐‐‐‐‐‐$4,784.24
INFO TECH SUPPORT SPECIALIST 3014PROF$33.52$35.19$36.95$38.80$40.74$2,681.40$2,815.47$2,956.24$3,104.06$3,259.26
INTERN, GRADUATE 0269UCHR$13.33$14.00$14.70$15.43$16.20$1,066.42$1,119.74$1,175.73$1,234.51$1,296.24
INTERN, UNDERGRADUATE 0267UCHR$12.12$12.72$13.36$14.03$14.73$969.47$1,017.95$1,068.84$1,122.29$1,178.40
IT SUPPORT SPECIALIST (HOURLY)3002UCHR$32.86$34.50$36.23$38.04$39.94$2,628.83$2,760.26$2,898.28$3,043.19$3,195.35
LANDSCAPE ARCHITECT 4480PROF$36.52$38.35$40.27$42.28$44.39$2,921.75$3,067.84$3,221.23$3,382.30$3,551.41
LANDSCAPE INSPECTOR 6291CVEA$27.86$29.26$30.72$32.26$33.87$2,229.14$2,340.60$2,457.63$2,580.51$2,709.54
LANDSCAPE PLANNER I 4482CVEA$28.77$30.21$31.72$33.31$34.98$2,301.99$2,417.09$2,537.94$2,664.84$2,798.08
LANDSCAPE PLANNER II 4483CVEA$31.65$33.24$34.90$36.64$38.47$2,532.19$2,658.80$2,791.74$2,931.32$3,077.89
LATENT PRINT EXAMINER 5111CVEA$32.90$34.54$36.27$38.08$39.99$2,631.89$2,763.49$2,901.66$3,046.74$3,199.08
LATENT PRINT EXAMINER HRLY 5112UCHR$32.90$34.54$36.27$38.08$39.99$2,631.90$2,763.49$2,901.66$3,046.74$3,199.08
LAW OFFICE MANAGER 2465MMUC$33.58$35.26$37.02$38.88$40.82$2,686.60$2,820.93$2,961.98$3,110.08$3,265.58
LEAD CUSTODIAN 6663CVEA$19.43$20.40$21.42$22.49$23.61$1,554.03$1,631.73$1,713.31$1,798.98$1,888.93
LEGAL ASSISTANT 0183CONF$24.37$25.59$26.87$28.21$29.62$1,949.55$2,047.03$2,149.38$2,256.85$2,369.70
LIBRARIAN I 7075CVEA$23.14$24.30$25.51$26.79$28.13$1,851.10$1,943.66$2,040.84$2,142.88$2,250.02
LIBRARIAN I (HOURLY)7076UCHR$23.14$24.30$25.51$26.79$28.13$1,851.10$1,943.65$2,040.84$2,142.88$2,250.02
LIBRARIAN II 7073CVEA$25.45$26.73$28.06$29.46$30.94$2,036.21$2,138.02$2,244.92$2,357.17$2,475.03
LIBRARIAN II (HOURLY)7074UCHR$25.45$26.73$28.06$29.46$30.94$2,036.22$2,138.02$2,244.93$2,357.17$2,475.03
LIBRARIAN III 7071CVEA$28.00$29.40$30.87$32.41$34.03$2,239.83$2,351.83$2,469.42$2,592.89$2,722.53
LIBRARY AIDE 7181UCHR$10.55$11.07$11.63$12.21$12.82$843.66$885.84$930.14$976.64$1,025.47
LIBRARY ASSISTANT 7157CVEA$16.64$17.48$18.35$19.27$20.23$1,331.46$1,398.04$1,467.93$1,541.34$1,618.40
LIBRARY ASSOCIATE 7091CVEA$21.04$22.09$23.19$24.35$25.57$1,682.82$1,766.96$1,855.31$1,948.07$2,045.48
LIBRARY ASSOCIATE (HOURLY)7092UCHR$21.04$22.09$23.19$24.35$25.57$1,682.82$1,766.96$1,855.31$1,948.08$2,045.47
LIBRARY DIGITAL SERVICES MGR 7025MM$39.70$41.69$43.77$45.96$48.26$3,176.36$3,335.18$3,501.93$3,677.03$3,860.88
LIBRARY OPERATIONS MANAGER7029MM$45.68$47.96$50.36$52.88$55.53$3,654.45$3,837.17$4,029.03$4,230.49$4,442.01
LIBRARY TECHNICIAN 7121CVEA$19.14$20.10$21.10$22.16$23.26$1,531.19$1,607.75$1,688.14$1,772.55$1,861.17
LIBRARY TECHNICIAN (HOURLY)7122UCHR$19.14$20.10$21.10$22.16$23.26$1,531.19$1,607.75$1,688.14$1,772.55$1,861.17
LIBRARY VISITOR ASSISTANT 7185UCHR$13.25$13.92$14.61$15.34$16.11$1,060.32$1,113.34$1,169.01$1,227.46$1,288.83
LIFEGUARD I 7587UCHR$13.82$14.52$15.24$16.00$16.80$1,105.96$1,161.26$1,219.33$1,280.29$1,344.31
LIFEGUARD II 7585UCHR$15.21$15.97$16.77$17.60$18.48$1,216.59$1,277.42$1,341.29$1,408.36$1,478.77
LOCKSMITH 6443CVEA$24.31$25.53$26.81$28.15$29.55$1,945.19$2,042.45$2,144.58$2,251.80$2,364.39
MAINTENANCE WORKER I 6377CVEA$17.66$18.54$19.47$20.44$21.47$1,412.75$1,483.38$1,557.55$1,635.43$1,717.20
MAINTENANCE WORKER I (HRLY)6379UCHR$17.66$18.54$19.47$20.44$21.47$1,412.74$1,483.39$1,557.55$1,635.43$1,717.20
MAINTENANCE WORKER II 6373CVEA$19.43$20.40$21.42$22.49$23.61$1,554.03$1,631.73$1,713.31$1,798.98$1,888.93
MAINTENANCE WORKER II HRLY 6381UCHR$19.43$20.40$21.42$22.49$23.61$1,554.02$1,631.73$1,713.31$1,798.98$1,888.93
MANAGEMENT ANALYST 0225CVEA$29.84$31.34$32.90$34.55$36.28$2,387.49$2,506.88$2,632.22$2,763.83$2,902.02
MARKTNG & COMMUNICATIONS MGR2781SM$53.12 ‐‐$54.62 ‐‐$64.57$4,249.69 ‐‐$4,369.56 ‐‐$5,165.53
MAYOR 2001MY ‐‐‐‐‐‐‐‐$59.98 ‐‐‐‐‐‐‐‐$4,798.73
MECHANIC ASSISTANT 6550CVEA$19.40$20.37$21.39$22.46$23.58$1,552.27$1,629.88$1,711.37$1,796.94$1,886.79
MUSEUM ATTENDANT 7215UCHR$10.94$11.49$12.06$12.67$13.30$875.38$919.15$965.11$1,013.36$1,064.02
OFFICE SPECIALIST 0161CVEA$17.18$18.04$18.94$19.89$20.88$1,374.41$1,443.13$1,515.29$1,591.05$1,670.58
OFFICE SPECIALIST (HOURLY)0160UCHR$17.18$18.04$18.94$19.89$20.88$1,374.41$1,443.13$1,515.29$1,591.05$1,670.58
OFFICE SPECIALIST (MYR/@WILL)0162CVEA$17.18$18.04$18.94$19.89$20.88$1,374.42$1,443.14$1,515.29$1,591.06$1,670.58
OFFICE SPECIALIST (MYR/AW/HR)0156UCHR$17.18$18.04$18.94$19.89$20.88$1,374.42$1,443.13$1,515.29$1,591.05$1,670.58
OPEN SPACE INSPECTOR 6311CVEA$27.86$29.26$30.72$32.26$33.87$2,229.14$2,340.60$2,457.63$2,580.51$2,709.54
OPEN SPACE MANAGER 6302MM$38.73$40.67$42.70$44.83$47.08$3,098.35$3,253.26$3,415.92$3,586.72$3,766.05
OPS&TELECOM MGR 3025MM$40.96$43.01$45.16$47.41$49.78$3,276.62$3,440.45$3,612.47$3,793.10$3,982.75
PAINTER 6434CVEA$23.21$24.37$25.59$26.87$28.21$1,856.78$1,949.62$2,047.10$2,149.46$2,256.93
PARK RANGER 7434UCHR$13.25$13.91$14.61$15.34$16.10$1,059.90$1,112.89$1,168.53$1,226.96$1,288.31
PARK RANGER SUPERVISOR 7441CVEA$29.61$31.09$32.64$34.28$35.99$2,368.51$2,487.07$2,611.43$2,742.00$2,879.10
PARKING ENFORCEMENT OFFICER5154CVEA$17.36$18.23$19.14$20.10$21.11$1,389.13$1,458.58$1,531.51$1,608.08$1,688.49
PARKING METER TECH (HOURLY)3694UCHR$19.10$20.06$21.06$22.11$23.22$1,528.04$1,604.44$1,684.65$1,768.89$1,857.34
PARKING METER TECHNICIAN 3693CVEA$19.10$20.06$21.06$22.11$23.22$1,528.04$1,604.44$1,684.65$1,768.89$1,857.34
PARKS MANAGER 6604MM$38.73$40.67$42.70$44.84$47.08$3,098.55$3,253.48$3,416.15$3,586.96$3,766.31
PARKS OPERATIONS MANAGER 6610MM$45.42$47.69$50.08$52.58$55.21$3,633.86$3,815.54$4,006.32$4,206.64$4,416.97
PARKS SUPERVISOR 6605CVEA$29.61$31.09$32.64$34.28$35.99$2,368.64$2,487.07$2,611.43$2,742.00$2,879.10
Approved and Adopted:
Resolution No.:Page 42016-04-05 Agenda Packet Page 245
Fiscal Year 2015‐2016 Compensation Schedule
Effective June 26, 2015
POSITION TITLE PCNBARGStep AStep BStep CStep DStep EStep AStep BStep CStep DStep E
Hourly Rate Bi‐Weekly Rate
PEACE OFFICER 5061POA$34.30$36.02$37.82$39.71$41.69$2,744.04$2,881.24$3,025.30$3,176.57$3,335.39
PERFORMANCE & ORG DEV MGR2758SM$50.68 ‐‐‐‐‐‐$60.81$4,054.18 ‐‐‐‐‐‐$4,864.98
PLAN CHECK SUPERVISOR 4731MM$44.73$46.97$49.32$51.78$54.37$3,578.54$3,757.46$3,945.34$4,142.61$4,349.74
PLAN CHECK TECHNICIAN 4753CVEA$26.65$27.99$29.38$30.85$32.40$2,132.22$2,238.83$2,350.77$2,468.31$2,591.73
PLANNING MANAGER 4727SM$52.35 ‐‐‐‐‐‐$63.15$4,187.70 ‐‐‐‐‐‐$5,051.79
PLANNING TECHNICIAN 4527CVEA$21.90$22.99$24.14$25.35$26.62$1,751.93$1,839.52$1,931.50$2,028.07$2,129.48
PLUMBER 6432CVEA$25.53$26.81$28.15$29.55$31.03$2,042.45$2,144.58$2,251.80$2,364.39$2,482.61
POLICE ADMIN SVCS ADMINISTRATO5025SM$51.25 ‐‐‐‐‐‐$62.30$4,100.08 ‐‐‐‐‐‐$4,983.67
POLICE AGENT 5051POA$37.77$39.66$41.64$43.72$45.91$3,021.63$3,172.71$3,331.35$3,497.91$3,672.81
POLICE CADET 5427UCHR$11.22$11.78$12.37$12.98$13.63$897.24$942.10$989.20$1,038.66$1,090.60
POLICE CAPTAIN 5022SM$63.80 ‐‐‐‐‐‐$77.54$5,103.71 ‐‐‐‐‐‐$6,203.59
POLICE COMM REL SPECIALIST 5258CVEA$22.42$23.54$24.72$25.96$27.25$1,793.74$1,883.44$1,977.61$2,076.49$2,180.31
POLICE COMM SYSTEMS MANAGER5185MM$40.96$43.01$45.16$47.42$49.79$3,277.00$3,440.85$3,612.89$3,793.53$3,983.21
POLICE DATA SPECIALIST 0163CVEA$17.18$18.04$18.94$19.89$20.88$1,374.41$1,443.13$1,515.29$1,591.05$1,670.61
POLICE DISPATCHER 5181CVEA$25.78$27.07$28.43$29.85$31.34$2,062.69$2,165.83$2,274.12$2,387.83$2,507.22
POLICE DISPATCHER (HOURLY)5180UCHR$25.78$27.07$28.43$29.85$31.34$2,062.70$2,165.83$2,274.12$2,387.83$2,507.22
POLICE DISPATCHER SUPERVISOR5183CVEA$29.65$31.13$32.69$34.33$36.04$2,372.10$2,490.70$2,615.24$2,746.00$2,883.30
POLICE DISPATCHER TRAINEE 5179CVEA$23.44$24.61$25.84$27.13$28.49$1,875.17$1,968.93$2,067.38$2,170.75$2,279.29
POLICE LIEUTENANT 5031POA$52.14$54.75$57.49$60.36$63.38$4,171.25$4,379.81$4,598.80$4,828.74$5,070.18
POLICE REC & SUPPORT SUPV 5203CVEA$22.72$23.86$25.05$26.30$27.62$1,817.66$1,908.54$2,003.96$2,104.17$2,209.38
POLICE REC TRANSCRIPT (HRLY)0168UCHR$16.84$17.69$18.57$19.50$20.47$1,347.46$1,414.84$1,485.58$1,559.86$1,637.85
POLICE RECORDS SPEC (HOURLY)0166UCHR$17.18$18.04$18.94$19.89$20.88$1,374.41$1,443.13$1,515.29$1,591.05$1,670.61
POLICE RECORDS SPECIALIST 0165CVEA$17.18$18.04$18.94$19.89$20.88$1,374.41$1,443.13$1,515.29$1,591.05$1,670.61
POLICE RECRUIT 5071CVEA$25.29$26.55$0.00$0.00$0.00$2,023.01$2,124.16$0.00$0.00$0.00
POLICE SERGEANT 5041POA$43.45$45.62$47.90$50.30$52.81$3,475.78$3,649.57$3,832.04$4,023.65$4,224.83
POLICE SERVICES OFF (HOURLY)5133UCHR$23.11$24.27$25.48$26.75$28.09$1,848.92$1,941.37$2,038.43$2,140.35$2,247.38
POLICE SERVICES OFFICER 5131CVEA$23.11$24.27$25.48$26.75$28.09$1,848.92$1,941.37$2,038.43$2,140.35$2,247.37
POLICE SERVICES TECHNICIAN 5415CVEA$22.05$23.15$24.31$25.52$26.80$1,763.94$1,852.14$1,944.75$2,041.98$2,144.08
POLICE SUPPORT SERVICES MGR 5205MM$39.65$41.63$43.71$45.90$48.19$3,171.79$3,330.38$3,496.90$3,671.75$3,855.33
POLICE SVCS OFFICER SUPERVISOR5132CVEA$26.58$27.92$29.30$30.77$32.31$2,126.26$2,233.63$2,344.19$2,461.40$2,584.47
POLICE SVCS TECH (HOURLY)5416UCHR$22.05$23.15$24.31$25.52$26.80$1,763.94$1,852.14$1,944.74$2,041.99$2,144.08
POLICE TECH SPECIALIST (HRLY)5108UCHR$34.86$36.60$38.43$40.35$42.37$2,788.66$2,928.09$3,074.49$3,228.22$3,389.63
POLICE TECHNOLOGY SPECIALIST5107CVEA$34.86$36.60$38.43$40.35$42.37$2,788.66$2,928.09$3,074.49$3,228.22$3,389.63
POLICY AIDE 2013PRUC$24.13$25.34$26.60$27.93$29.33$1,930.44$2,026.96$2,128.29$2,234.73$2,346.46
PRINCIPAL CIVIL ENGINEER 6021MM$49.10$51.56$54.13$56.84$59.68$3,928.12$4,124.54$4,330.76$4,547.29$4,774.66
PRINCIPAL ECONOMIC DEV SPEC2724PROF$45.66$47.94$50.34$52.85$55.50$3,652.54$3,835.16$4,026.92$4,228.27$4,439.68
PRINCIPAL HR ANALYST 3305MMCF$42.34$44.46$46.68$49.01$51.46$3,387.19$3,556.55$3,734.39$3,921.10$4,117.16
PRINCIPAL LANDSCAPE ARCHITECT4486MM$43.58$45.76$48.04$50.45$52.97$3,486.24$3,660.56$3,843.59$4,035.76$4,237.55
PRINCIPAL LIBRARIAN 7051MM$39.70$41.69$43.77$45.96$48.26$3,176.36$3,335.18$3,501.93$3,677.03$3,860.88
PRINCIPAL MANAGEMENT ANALYST0208PROF$37.91$39.80$41.79$43.88$46.07$3,032.46$3,184.09$3,343.29$3,510.46$3,685.99
PRINCIPAL MGMT ANALYST (CONF)0214PRCF$37.91$39.80$41.79$43.88$46.07$3,032.46$3,184.09$3,343.29$3,510.46$3,685.99
PRINCIPAL PLANNER 4431MM$45.66$47.94$50.34$52.85$55.50$3,652.54$3,835.16$4,026.92$4,228.27$4,439.68
PRINCIPAL PROJECT COORDINATOR4212PROF$45.66$47.94$50.34$52.85$55.50$3,652.54$3,835.16$4,026.92$4,228.27$4,439.68
PRINCIPAL RECREATION MANAGER7410MM$38.73$40.67$42.70$44.84$47.08$3,098.54$3,253.46$3,416.13$3,586.94$3,766.29
PROCUREMENT SPECIALIST 3721CVEA$27.09$28.45$29.87$31.36$32.93$2,167.37$2,275.74$2,389.53$2,509.00$2,634.45
PROGRAMMER ANALYST 3090PROF$33.18$34.84$36.58$38.41$40.33$2,654.59$2,787.32$2,926.68$3,073.02$3,226.67
PROJECT COORDINATOR I 4217CVEA$28.77$30.21$31.72$33.31$34.98$2,301.99$2,417.08$2,537.95$2,664.83$2,798.08
PROJECT COORDINATOR I (HRLY)4218UCHR$28.78$30.21$31.72$33.31$34.98$2,302.00$2,417.08$2,537.94$2,664.83$2,798.08
PROJECT COORDINATOR II 4215CVEA$31.65$33.23$34.90$36.64$38.47$2,532.19$2,658.79$2,791.73$2,931.32$3,077.89
PROJECT COORDINATOR II (HRLY)4216UCHR$31.65$33.23$34.90$36.64$38.47$2,532.19$2,658.79$2,791.73$2,931.32$3,077.89
PROPERTY & EVIDENCE SPECIALIST5127CVEA$19.10$20.06$21.06$22.11$23.22$1,528.04$1,604.44$1,684.66$1,768.89$1,857.34
PUB WORKS SPECIALIST 6712CVEA$22.21$23.32$24.49$25.71$27.00$1,776.85$1,865.69$1,958.97$2,056.92$2,159.77
PUBLIC INFORMATION SPECIALIST2782CONF$27.27$28.64$30.07$31.57$33.15$2,181.81$2,290.90$2,405.45$2,525.71$2,652.00
PUBLIC SAFETY ANALYST 5254CVEA$29.84$31.34$32.90$34.55$36.28$2,387.50$2,506.88$2,632.22$2,763.83$2,902.02
PUBLIC SAFETY ANALYST (HRLY)5256UCHR$29.84$31.34$32.90$34.55$36.28$2,387.50$2,506.87$2,632.22$2,763.84$2,902.03
PUBLIC WORKS INSP I 6123CVEA$27.86$29.26$30.72$32.26$33.87$2,229.14$2,340.60$2,457.63$2,580.51$2,709.54
PUBLIC WORKS INSP II 6121CVEA$30.65$32.18$33.79$35.48$37.26$2,452.05$2,574.66$2,703.39$2,838.56$2,980.49
PUBLIC WORKS MANAGER 6336MM$38.73$40.67$42.70$44.83$47.08$3,098.35$3,253.26$3,415.92$3,586.72$3,766.05
PUBLIC WORKS SUPERVISOR 6337CVEA$29.61$31.09$32.64$34.28$35.99$2,368.64$2,487.07$2,611.43$2,742.00$2,879.10
PUMP MAINT TECHNICIAN 6396CVEA$25.29$26.56$27.89$29.28$30.75$2,023.55$2,124.72$2,230.96$2,342.51$2,459.63
PUMP MAINTENANCE SUPERVISOR6392CVEA$29.64$31.12$32.68$34.31$36.03$2,371.39$2,489.96$2,614.46$2,745.18$2,882.44
PURCHASING AGENT 3711SM$46.39 ‐‐‐‐‐‐$56.38$3,711.02 ‐‐‐‐‐‐$4,510.76
RANGE MASTER 5417CVEA$21.01$22.06$23.16$24.32$25.54$1,680.84$1,764.88$1,853.13$1,945.78$2,043.07
RANGE MASTER (HOURLY)5418UCHR$20.60$21.63$22.71$23.85$25.04$1,647.88$1,730.27$1,816.79$1,907.63$2,003.01
RCFL NETWORK ENGINEER 5450UCHR$31.93$33.53$35.20$36.96$38.81$2,554.37$2,682.08$2,816.19$2,956.99$3,104.84
REAL PROPERTY MANAGER 6037MMUC$42.51$44.64$46.87$49.21$51.68$3,401.09$3,571.14$3,749.70$3,937.18$4,134.04
REC AIDE 7605UCHR$10.00$10.50$11.03$11.58$12.16$800.32$840.34$882.36$926.48$972.80
REC SPECIALIST 7601UCHR$15.80$16.59$17.42$18.30$19.21$1,264.33$1,327.55$1,393.92$1,463.62$1,536.80
Approved and Adopted:
Resolution No.:Page 52016-04-05 Agenda Packet Page 246
Fiscal Year 2015‐2016 Compensation Schedule
Effective June 26, 2015
POSITION TITLE PCNBARGStep AStep BStep CStep DStep EStep AStep BStep CStep DStep E
Hourly Rate Bi‐Weekly Rate
REC SUPERVISOR I (HOURLY)7426UCHR$22.31$23.42$24.59$25.82$27.11$1,784.41$1,873.64$1,967.32$2,065.68$2,168.96
RECORDS MANAGER 2211MM$31.57$33.15$34.81$36.55$38.38$2,525.79$2,652.09$2,784.69$2,923.92$3,070.12
RECORDS SPECIALIST 2217CVEA$18.90$19.84$20.84$21.88$22.97$1,511.86$1,587.46$1,666.83$1,750.17$1,837.67
RECREATION LEADER I 7609UCHR$11.45$12.02$12.63$13.26$13.92$916.16$961.97$1,010.07$1,060.57$1,113.60
RECREATION LEADER II 7607UCHR$13.17$13.83$14.52$15.25$16.01$1,053.72$1,106.40$1,161.72$1,219.81$1,280.80
RECREATION SUPERVISOR I 7425CVEA$22.31$23.42$24.59$25.82$27.11$1,784.41$1,873.63$1,967.31$2,065.68$2,168.96
RECREATION SUPERVISOR II 7423CVEA$24.54$25.76$27.05$28.40$29.82$1,962.85$2,061.00$2,164.05$2,272.25$2,385.86
RECREATION SUPERVISOR III 7422CVEA$28.22$29.63$31.11$32.66$34.30$2,257.28$2,370.15$2,488.66$2,613.09$2,743.75
RECYCLING SPECIALIST I 2742CVEA$22.00$23.10$24.26$25.47$26.74$1,760.22$1,848.23$1,940.64$2,037.68$2,139.56
RECYCLING SPECIALIST II 2744CVEA$24.20$25.41$26.68$28.02$29.42$1,936.25$2,033.05$2,134.72$2,241.45$2,353.52
REGISTERED VET TECH (HOURLY)5312UCHR$21.01$22.06$23.16$24.32$25.54$1,680.83$1,764.88$1,853.12$1,945.78$2,043.07
REGISTERED VETERINARY TECH 5307CVEA$21.01$22.06$23.16$24.32$25.54$1,680.84$1,764.88$1,853.13$1,945.78$2,043.07
RESERVE OFFICER 5081UCHR$14.24$14.95$15.69 ‐‐‐‐$1,139.42$1,195.85$1,255.53 ‐‐‐‐
RISK MANAGEMENT SPECIALIST 3367PRCF$31.87$33.47$35.14$36.90$38.74$2,549.99$2,677.49$2,811.37$2,951.94$3,099.53
RISK MANAGER 3361SM$46.85 ‐‐‐‐‐‐$56.95$3,748.13 ‐‐‐‐‐‐$4,555.86
SCHOOL CROSSING GUARD 5143UCHR$10.05$10.55$11.08$11.64$12.22$804.19$844.39$886.62$930.94$977.49
SEASONAL ASSISTANT 0231UCHR$9.55$10.03$10.53$11.06$11.61$764.21$802.42$842.54$884.67$928.90
SECRETARY 0171CVEA$18.90$19.84$20.84$21.88$22.97$1,511.86$1,587.45$1,666.82$1,750.16$1,837.67
SECRETARY (HOURLY)0152UCHR$18.90$19.84$20.84$21.88$22.97$1,511.85$1,587.45$1,666.83$1,750.17$1,837.68
SIGNAL SYSTEMS ENGINEER I 6169CVEA$32.03$33.64$35.32$37.08$38.94$2,562.73$2,690.87$2,825.41$2,966.69$3,115.02
SIGNAL SYSTEMS ENGINEER II 6170CVEA$35.24$37.00$38.85$40.79$42.83$2,819.01$2,959.95$3,107.96$3,263.35$3,426.52
SIGNING&STRIPING SUPERVISOR6355CVEA$29.61$31.09$32.64$34.28$35.99$2,368.64$2,487.07$2,611.43$2,742.00$2,879.10
SPECIAL EVENTS COORDINATOR 2799PRUC$36.43$38.25$40.16$42.17$44.28$2,914.38$3,060.09$3,213.09$3,373.75$3,542.44
SPECIAL PLANNING PROJ MGR 4101SM$43.75 ‐‐‐‐‐‐$53.17$3,499.74 ‐‐‐‐‐‐$4,253.96
SR ACCOUNTANT 3630MMCF$38.83$40.77$42.81$44.95$47.20$3,106.35$3,261.66$3,424.76$3,595.99$3,775.79
SR ACCOUNTING ASST 3651CVEA$22.46$23.58$24.76$26.00$27.29$1,796.45$1,886.27$1,980.58$2,079.61$2,183.59
SR ADMINISTRATIVE SECRETARY 0145CONF$26.54$27.87$29.26$30.73$32.26$2,123.49$2,229.66$2,341.15$2,458.20$2,581.11
SR ADMINISTRATIVE SECRETARY 0185CVEA$26.54$27.87$29.26$30.73$32.26$2,123.49$2,229.66$2,341.15$2,458.20$2,581.11
SR ANIMAL CARE SPECIALIST 5345CVEA$20.14$21.14$22.20$23.31$24.47$1,610.80$1,691.35$1,775.91$1,864.70$1,957.93
SR APPL SUPPORT SPEC (HRLY)3099UCHR$36.87$38.71$40.65$42.68$44.81$2,949.54$3,097.02$3,251.87$3,414.47$3,585.19
SR APPLICATIONS SUPPORT SPEC3089PROF$36.87$38.71$40.65$42.68$44.81$2,949.54$3,097.02$3,251.87$3,414.47$3,585.19
SR ASST CITY ATTORNEY 2403EXEC$72.87 ‐‐‐‐‐‐$88.57$5,829.39 ‐‐‐‐‐‐$7,085.66
SR BUILDING INSPECTOR 4781CVEA$35.25$37.01$38.86$40.80$42.84$2,819.86$2,960.85$3,108.89$3,264.34$3,427.55
SR BUSINESS LICENSE REP 4507CVEA$22.46$23.58$24.76$26.00$27.29$1,796.45$1,886.27$1,980.58$2,079.61$2,183.59
SR CIVIL ENGINEER 6019WCE$44.21$46.42$48.75$51.18$53.74$3,537.13$3,713.99$3,899.69$4,094.68$4,299.40
SR CODE ENF OFF (HOURLY)4764UCHR$33.68$35.36$37.13$38.99$40.94$2,694.28$2,829.01$2,970.45$3,118.98$3,274.93
SR CODE ENFORCEMENT OFF 4763CVEA$33.68$35.36$37.13$38.99$40.94$2,694.29$2,829.00$2,970.45$3,118.97$3,274.92
SR CONSERVATION SPECIALIST 6204CVEA$27.83$29.23$30.69$32.22$33.83$2,226.69$2,338.03$2,454.93$2,577.68$2,706.56
SR COUNCIL ASST 2027CONF$20.72$21.76$22.84$23.99$25.18$1,657.56$1,740.44$1,827.46$1,918.83$2,014.78
SR COUNCIL ASST 2025UCHR$25.45$26.73$28.06$29.47$30.94$2,036.31$2,138.13$2,245.03$2,357.28$2,475.15
SR DEPUTY CITY CLERK 2208PRUC$31.55$33.12$34.78$36.52$38.34$2,523.60$2,649.79$2,782.27$2,921.38$3,067.45
SR ELECTRICIAN 6442CVEA$29.36$30.83$32.37$33.99$35.69$2,348.83$2,466.27$2,589.58$2,719.06$2,855.01
SR ELECTRONICS TECHNICIAN 6471CVEA$32.30$33.91$35.61$37.39$39.26$2,583.76$2,712.96$2,848.59$2,991.03$3,140.58
SR ENGINEERING TECHNICIAN 6059CVEA$30.65$32.18$33.79$35.48$37.26$2,452.05$2,574.65$2,703.38$2,838.55$2,980.49
SR EQUIPMENT MECHANIC 6512CVEA$27.71$29.09$30.55$32.07$33.68$2,216.46$2,327.29$2,443.65$2,565.84$2,694.13
SR FIRE INSP/INVEST 5529IAFF$35.77$37.56$39.44$41.41$43.48$2,861.73$3,004.83$3,155.06$3,312.82$3,478.47
SR FISCAL OFF SPEC (HRLY)0176UCHR$19.84$20.84$21.88$22.97$24.12$1,587.45$1,666.82$1,750.16$1,837.67$1,929.55
SR FISCAL OFFICE SPECIALIST 0141CONF$19.84$20.84$21.88$22.97$24.12$1,587.45$1,666.82$1,750.16$1,837.67$1,929.55
SR FISCAL OFFICE SPECIALIST 0175CVEA$19.84$20.84$21.88$22.97$24.12$1,587.45$1,666.82$1,750.16$1,837.67$1,929.55
SR GARDENER 6621CVEA$23.31$24.48$25.70$26.98$28.33$1,864.84$1,958.08$2,055.98$2,158.78$2,266.72
SR GIS SPECIALIST 3080CVEA$31.69$33.27$34.94$36.68$38.52$2,535.15$2,661.90$2,795.00$2,934.75$3,081.49
SR GRAPHIC DESIGNER 2764PROF$33.01$34.66$36.39$38.21$40.12$2,640.70$2,772.74$2,911.37$3,056.94$3,209.78
SR HR ANALYST 3308PRCF$36.66$38.49$40.42$42.44$44.56$2,932.62$3,079.25$3,233.22$3,394.88$3,564.62
SR HUMAN RESOURCES TECHNICIAN3316CONF$26.37$27.68$29.07$30.52$32.05$2,109.23$2,214.70$2,325.43$2,441.71$2,563.79
SR HVAC TECHNICIAN 6441CVEA$29.36$30.83$32.37$33.99$35.69$2,348.83$2,466.27$2,589.58$2,719.06$2,855.01
SR INFO TECH SUPPORT SPEC 3012PROF$36.87$38.71$40.65$42.68$44.81$2,949.54$3,097.02$3,251.87$3,414.47$3,585.19
SR LAND SURVEYOR 6285WCE$44.21$46.42$48.75$51.18$53.74$3,537.13$3,713.99$3,899.69$4,094.67$4,299.40
SR LANDSCAPE INSPECTOR 6295CVEA$32.04$33.65$35.33$37.09$38.95$2,563.51$2,691.69$2,826.28$2,967.59$3,115.96
SR LEGAL ASSISTANT 2463CONF$26.81$28.15$29.55$31.03$32.58$2,144.51$2,251.74$2,364.32$2,482.54$2,606.67
SR LIBRARIAN 7053MM$30.96$32.51$34.13$35.84$37.63$2,476.74$2,600.58$2,730.61$2,867.14$3,010.50
SR LIFEGUARD 7589UCHR$16.72$17.55$18.43$19.35$20.32$1,337.40$1,404.27$1,474.48$1,548.21$1,625.62
SR MAINTENANCE WORKER 6371CVEA$23.31$24.48$25.70$26.98$28.33$1,864.84$1,958.08$2,055.98$2,158.78$2,266.72
SR MANAGEMENT ANALYST 0206PROF$34.46$36.18$37.99$39.89$41.89$2,756.78$2,894.61$3,039.35$3,191.32$3,350.88
SR OFFICE SPECIALIST 0173CVEA$18.90$19.84$20.84$21.88$22.97$1,511.86$1,587.45$1,666.82$1,750.16$1,837.67
SR OFFICE SPECIALIST (HOURLY)0174UCHR$18.90$19.84$20.84$21.88$22.97$1,511.85$1,587.45$1,666.83$1,750.17$1,837.68
SR OPEN SPACE INSPECTOR 6309CVEA$32.04$33.65$35.33$37.09$38.95$2,563.51$2,691.69$2,826.27$2,967.59$3,115.97
SR PARK RANGER 7439CVEA$23.31$24.48$25.70$26.98$28.33$1,864.84$1,958.08$2,055.99$2,158.78$2,266.72
SR PLAN CHECK ENGINEER 4746WCE$42.29$44.41$46.63$48.96$51.41$3,383.35$3,552.51$3,730.14$3,916.65$4,112.48
Approved and Adopted:
Resolution No.:Page 62016-04-05 Agenda Packet Page 247
Fiscal Year 2015‐2016 Compensation Schedule
Effective June 26, 2015
POSITION TITLE PCNBARGStep AStep BStep CStep DStep EStep AStep BStep CStep DStep E
Hourly Rate Bi‐Weekly Rate
SR PLAN CHECK TECHNICIAN 4751CVEA$30.65$32.18$33.79$35.48$37.26$2,452.06$2,574.66$2,703.40$2,838.56$2,980.49
SR PLANNER 4432PROF$36.52$38.35$40.27$42.28$44.39$2,921.75$3,067.84$3,221.23$3,382.30$3,551.41
SR PLANNING TECHNICIAN 4529CVEA$25.18$26.44$27.77$29.15$30.61$2,014.71$2,115.45$2,221.22$2,332.28$2,448.90
SR POLICE DATA SPECIALIST 0164CVEA$19.76$20.75$21.78$22.87$24.02$1,580.58$1,659.61$1,742.59$1,829.72$1,921.21
SR POLICE TECHNOLOGY SPEC 5109PROF$40.09$42.09$44.20$46.41$48.73$3,206.96$3,367.31$3,535.68$3,712.46$3,898.08
SR PROCUREMENT SPECIALIST 3728PROF$29.96$31.46$33.03$34.68$36.41$2,396.61$2,516.45$2,642.27$2,774.38$2,913.10
SR PROGRAMMER ANALYST 3091PROF$37.94$39.84$41.83$43.92$46.12$3,035.40$3,187.17$3,346.53$3,513.86$3,689.55
SR PROJECT COORDINATOR 4214PROF$36.52$38.35$40.27$42.28$44.39$2,921.76$3,067.84$3,221.24$3,382.29$3,551.41
SR PROP & EVIDENCE SPECIALIST5125CVEA$21.97$23.06$24.22$25.43$26.70$1,757.25$1,845.11$1,937.36$2,034.23$2,135.94
SR PUBLIC SAFETY ANALYST 5260PROF$33.00$34.65$36.38$38.20$40.11$2,640.02$2,772.03$2,910.63$3,056.16$3,208.97
SR PUBLIC WORKS INSP 6101CVEA$35.25$37.01$38.86$40.80$42.84$2,819.86$2,960.85$3,108.90$3,264.34$3,427.56
SR PUBLIC WORKS SPECIALIST 6702CVEA$26.65$27.99$29.38$30.85$32.40$2,132.22$2,238.83$2,350.77$2,468.31$2,591.72
SR RECORDS SPECIALIST 2215CVEA$21.73$22.82$23.96$25.16$26.42$1,738.63$1,825.57$1,916.84$2,012.69$2,113.32
SR RECREATION MGR 7421MM$31.82$33.41$35.08$36.84$38.68$2,545.67$2,672.95$2,806.60$2,946.93$3,094.28
SR RECYCLING SPECIALIST 2746CVEA$27.83$29.23$30.69$32.22$33.83$2,226.69$2,338.03$2,454.93$2,577.68$2,706.56
SR RISK MANAGEMENT SPECIALIST3365PRCF$36.66$38.49$40.42$42.44$44.56$2,932.62$3,079.25$3,233.22$3,394.88$3,564.62
SR SECRETARY 0139CONF$20.79$21.83$22.92$24.06$25.27$1,663.04$1,746.19$1,833.50$1,925.18$2,021.44
SR SECRETARY 0177CVEA$20.79$21.83$22.92$24.06$25.27$1,663.04$1,746.19$1,833.50$1,925.18$2,021.44
SR SECRETARY (HOURLY)0178UCHR$20.79$21.83$22.92$24.06$25.27$1,663.04$1,746.19$1,833.51$1,925.18$2,021.43
SR TREE TRIMMER 6573CVEA$25.64$26.92$28.27$29.68$31.17$2,051.31$2,153.88$2,261.57$2,374.65$2,493.38
SR WEBMASTER 2779PROF$33.13$34.79$36.53$38.35$40.27$2,650.38$2,782.90$2,922.03$3,068.14$3,221.55
STOREKEEPER 3734CVEA$19.43$20.40$21.42$22.49$23.61$1,554.03$1,631.73$1,713.31$1,798.98$1,888.93
STOREKEEPER SUPERVISOR 3732CVEA$23.31$24.48$25.70$26.98$28.33$1,864.84$1,958.08$2,055.98$2,158.78$2,266.72
STORMWTR COMPLNCE INSP I 6127CVEA$25.33$26.60$27.93$29.32$30.79$2,026.49$2,127.82$2,234.20$2,345.91$2,463.21
STORMWTR COMPLNCE INSP II 6125CVEA$27.86$29.26$30.72$32.26$33.87$2,229.15$2,340.60$2,457.63$2,580.51$2,709.54
SURVEY TECHNICIAN I 6151CVEA$24.23$25.44$26.71$28.05$29.45$1,938.37$2,035.30$2,137.06$2,243.92$2,356.11
SURVEY TECHNICIAN II 6141CVEA$26.65$27.99$29.38$30.85$32.40$2,132.22$2,238.83$2,350.77$2,468.31$2,591.72
SYSTEMS/DATABASE ADMINISTRATR3015PROF$36.87$38.71$40.65$42.68$44.81$2,949.30$3,096.77$3,251.60$3,414.19$3,584.89
TELECOMMUNICATIONS SPECIALIST3027CVEA$22.42$23.55$24.72$25.96$27.26$1,793.91$1,883.60$1,977.78$2,076.67$2,180.51
TINY TOT AIDE 7503UCHR$13.17$13.83$14.52$15.25$16.01$1,053.72$1,106.40$1,161.72$1,219.81$1,280.80
TINY TOT SPECIALIST 7505UCHR$15.80$16.59$17.42$18.30$19.21$1,264.33$1,327.55$1,393.92$1,463.62$1,536.80
TRAFFIC CONTROL ASSISTANT 5155UCHR ‐‐‐‐‐‐‐‐$15.69 ‐‐‐‐‐‐‐‐$1,255.20
TRAFFIC DEVICES TECH 6177CVEA$28.08$29.49$30.96$32.51$34.14$2,246.75$2,359.09$2,477.04$2,600.89$2,730.94
TRAFFIC DEVICES TECH SUPV 6175CVEA$32.30$33.91$35.61$37.39$39.26$2,583.76$2,712.95$2,848.60$2,991.03$3,140.58
TRAFFIC ENGINEER 6024PROF$38.12$40.02$42.02$44.12$46.33$3,049.25$3,201.71$3,361.80$3,529.89$3,706.38
TRAFFIC OFFICER (HOURLY)5293UCHR$14.24$14.95$15.69$0.00$0.00$1,139.42$1,195.84$1,255.53$0.00$0.00
TRAINING PROGRAM SPEC (HRLY)5250UCHR$22.42$23.54$24.72$25.96$27.25$1,793.74$1,883.44$1,977.61$2,076.49$2,180.31
TRAINING PROGRAMS SPECIALIST5262CVEA$22.42$23.54$24.72$25.96$27.25$1,793.74$1,883.44$1,977.61$2,076.49$2,180.31
TRANS ENGINEER W/ CERT 6031WCE$44.21$46.42$48.75$51.18$53.74$3,537.13$3,713.99$3,899.69$4,094.67$4,299.40
TRANS ENGINEER W/O CERT 6033WCE$42.11$44.21$46.42$48.75$51.18$3,368.69$3,537.13$3,713.98$3,899.68$4,094.67
TRANSIT MANAGER 6218MMUC$45.69$47.97$50.37$52.89$55.54$3,655.16$3,837.92$4,029.82$4,231.31$4,442.87
TREASURY AND BUSINESS MANAGER3611SM$54.30 ‐‐‐‐‐‐$66.00$4,343.88 ‐‐‐‐‐‐$5,280.02
TREE TRIMMER 6575CVEA$21.37$22.44$23.56$24.74$25.97$1,709.43$1,794.90$1,884.64$1,978.88$2,077.82
TREE TRIMMER SUPERVISOR 6572CVEA$29.49$30.96$32.51$34.14$35.84$2,359.02$2,476.97$2,600.81$2,730.86$2,867.40
VETERINARIAN 5321PROF$37.42$39.29$41.26$43.32$45.48$2,993.57$3,143.25$3,300.41$3,465.43$3,638.71
VETERINARIAN (HOURLY)5308UCHR$45.85$48.15$50.56$53.09$55.74$3,667.78$3,852.02$4,044.62$4,246.85$4,459.19
VETERINARIAN (PERMITTED)5331PROF$52.69$55.32$58.09$60.99$64.04$4,214.95$4,425.70$4,646.98$4,879.33$5,123.30
VETERINARIAN‐PERMITTED 5322UCHR$64.84$68.08$71.48$75.06$78.81$5,186.99$5,446.34$5,718.66$6,004.59$6,304.82
VETERINARY ASSISTANT 5325CVEA$17.51$18.38$19.30$20.27$21.28$1,400.70$1,470.74$1,544.28$1,621.49$1,702.56
VETERINARY ASSISTANT (HOURLY)5323UCHR$17.51$18.38$19.30$20.27$21.28$1,400.70$1,470.74$1,544.27$1,621.49$1,702.57
VOLUNTEER COORD (DEPT)7131CVEA$19.14$20.10$21.10$22.16$23.26$1,531.19$1,607.75$1,688.14$1,772.55$1,861.17
VOLUNTEER COORD (DEPT)(HOURLY)7132UCHR$19.14$20.10$21.10$22.16$23.26$1,531.19$1,607.75$1,688.14$1,772.55$1,861.17
WASTEWATER COLLECTIONS MGR6334MM$41.80$43.89$46.09$48.39$50.81$3,344.08$3,511.29$3,686.85$3,871.19$4,064.76
WEBMASTER 2777CVEA$28.81$30.25$31.76$33.35$35.02$2,304.68$2,419.91$2,540.91$2,667.95$2,801.35
WEBMASTER (HOURLY)2790UCHR$28.81$30.25$31.76$33.35$35.02$2,304.68$2,419.92$2,540.91$2,667.95$2,801.35
Revised:
July 21, 2015
September 15, 2015
October 6, 2015 (Effective October 2, 2015)
November 3, 2015 (Effective October 30, 2015)
November 10, 2015
December 15, 2015 (Effective December 25, 2015)
December 15, 2015 (Effective January 8, 2016)
February 23, 2016
April 5, 2016
Approved and Adopted:
Resolution No.:Page 72016-04-05 Agenda Packet Page 248
City of Chula Vista
Staff Report
File#:16-0157, Item#: 5.
RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAAMENDING
RESOLUTION2016-005TOREMOVETHEELECTIONOFMEMBEROFTHECITYCOUNCIL,
DISTRICT 3, FROM THE JUNE 7, 2016 GENERAL ELECTION
RECOMMENDED ACTION
Council adopt the resolution.
SUMMARY
OnJanuary12,2016,theCounciladoptedResolutionNo.2016-005tosetJune7,2016asthedate
oftheGeneralMunicipalElectiontoelecttwomembersoftheCityCouncil,representingDistricts3
and4.AdoptionoftheattachedresolutionremovestheDistrict3CityCouncilpositionfromthe
GeneralMunicipalElectionsinceonlytwocandidatesqualifiedforplacementontheballot.Thetwo
qualifiedcandidatesforDistrict3willbeplacedontheballotfortheNovemberrunoffelection,
pursuant to Chula Vista Charter section 300.A.3.
ENVIRONMENTAL REVIEW
Environmental Notice
Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality
ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental
review is required.
Environmental Determination
TheDirectorofDevelopmentServiceshasreviewedtheproposedactivityforcompliancewiththe
CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthattheactivityisnota“Project”as
definedunderSection15378oftheStateCEQAGuidelinesbecauseitwillnotresultinaphysical
changeintheenvironment;therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelines,
the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable.
DISCUSSION
TheCityCouncilonJanuary12,2016adoptedResolution2016-005tocallforaJune2016General
MunicipalElectiontoelecttwomembersoftheCityCouncil,representingDistricts3and4,eachfora
fulltermcommencingDecember2016.OnlytwocandidatesforDistrict3submittedsufficient
nominationpapersandqualifiedforplacementontheballot.InaccordancewithSection300.A.3of
theChulaVistaCharter,itisrecommendedthattheCityCouncilremovetheDistrict3Memberofthe
CityCouncilpositionfromtheJune2016ballot.Becausethereareonlytwoqualifiedcandidates,the
election to the position will occur at the November runoff election.
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File#:16-0157, Item#: 5.
Section 300.A.3 of the Chula Vista Charter provides that:
“IfonlytwoqualifiedcandidatesfromaCouncildistrictfilenominationpapersto
participateinthegeneralmunicipalelectioninthatdistrict,nogeneralelectionshallbe
heldandthetwocandidatesshallbecandidatesattherun-offelectionfortheofficeof
City Councilmember from that district.”
Related Issues For Future Consideration
Althoughnotagendizedfordiscussiontonight,thecancellationoftheJuneelectionforDistrict3has
ripple effects that may warrant future Council consideration and action.
Write-in Candidates
Thefirstrippleeffectistheimpactonwrite-incandidacy.SincetheJuneelectionforDistrict3willnot
beheld,therecanbenoopportunityforwrite-incandidatesinJune.AsforNovember,theCharter,as
amendedin2012,doesnotdirectlyaddresswhetherwrite-incandidateswouldbepermittedinthe
Novemberrun-offelection.TheplainlanguageoftheCharterdoes,however,clearlyindicatethatthe
Novemberelectionwasintendedtobearun-offelectionbetweenthetwotopvote-getters,only.As
such,theCityClerkandtheCityAttorneyagreethatoverallstructureofthissystemsuggeststhat
write-incandidatesinNovemberwerenotintendedtobeallowed.TheCityCouncilcouldproposea
CharteramendmentoradoptanordinancesupplementingtheCharterifitwishestoaddressthis
issuewithrespecttofutureelections.StaffmaybringthisitemforwardforCityCouncilconsideration
if a clarifying ordinance becomes necessary.
Campaign Contributions
AnotherrippleeffectthathasariseninlightofthecancellationoftheDistrict3electionrelatesto
campaigncontributions.Chapter2.52oftheCity’sMunicipalCodeplacescertainlimitsoncampaign
contributionsforCityelectioncontests.Itprovidesthatacandidatemayreceiveupto$320.00froma
personand$1,080fromaPoliticalPartycommittee(bothlimitsareadjustedbiannually)ineachof
thegeneralandspecialelectioncontests.Itfurtherprovidesthatacandidatemaynotsolicitfunds
morethanelevenmonthspriortoanelectioncontestandmaynotsolicitfundsforthespecial
(November)electionpriortotheholdingofthegeneral(June)election.TheCodedoesnotaddress
whatoccursiftheJuneelectioniscancelled.Basedonthisordinance,thecontributionsthathave
beenraisedbythecandidatesto-date,couldonlyhavebeenraisedfortheJuneelectioncontest.
Candidatesarepermittedtosolicitfundsfromthesamesourceforeachelectioncontest.Thus,our
interpretationoftheordinanceisthatthecandidatesforDistrict3shouldbepermittedtosolicitfunds
fortheNovemberelectioncontestoncetheJuneelectioniscancelled,evenifthesourceofthefunds
hasalreadycontributedtotheircampaign.Thecandidateshavebeenapprisedofthisinterpretation.
Inthefuture,wewillbebringingforwardproposalsforanupdatedcampaigncontributionordinance
fortheCouncil’sconsiderationwhichwilladdressthisandotherissuesthathaverecentlycometo
light.
DECISION-MAKER CONFLICT
Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsite
specificandconsequently,the500-footrulefoundinCaliforniaCodeofRegulationssection18704.2
(a)(1),isnotapplicabletothisdecision.Staffisnotindependentlyaware,andhasnotbeeninformedCity of Chula Vista Printed on 3/30/2016Page 2 of 3
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File#:16-0157, Item#: 5.
(a)(1),isnotapplicabletothisdecision.Staffisnotindependentlyaware,andhasnotbeeninformed
byanyCityCouncilmember,ofanyotherfactthatmayconstituteabasisforadecisionmaker
conflict of interest in this matter.
LINK TO STRATEGIC GOALS
TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy
Community,StrongandSecureNeighborhoodsandaConnectedCommunity.Whileconductingthe
electionisnotspecificallyassociatedwithoneoftheCity’sstrategicgoals,carryingoutthisimportant
functioninanethical,impartial,transparentmanneralignswiththeCity’sgoalsofOperational
Excellence and Connected Community.
CURRENT YEAR FISCAL IMPACT
Removingapositionfromtheballotisanticipatedtosaveanestimated$20,000to$30,000.The
finalelectioncostswillnotbeknownuntilaftertheelectionisconducted.Nobudgetaryamendment
is recommended at this time.
ONGOING FISCAL IMPACT
There are no ongoing costs associated with adoption of this resolution.
ATTACHMENTS
None
Staff Contact: Kerry Bigelow
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RESOLUTION NO. 2016-___
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA AMENDING RESOLUTION 2016-005 TO REMOVE THE
ELECTION OF MEMBER OF THE CITY COUNCIL,DISTRICT 3,
FROM THE JUNE 7, 2016GENERALELECTION
WHEREAS, on January 12, 2016, in accordance with the provisions of the Chula Vista
Charter and State law, the City Council, through Resolution No. 2016-005, called a General
Municipal Election to be held on June 7, 2016 for the purpose of electing two Members of the
City Council, representing Districts 3 and 4, for the full term of four years, commencing in
December 2016; and
WHEREAS, only two candidates submitted sufficient nomination papers and qualified
for placement on the ballot for the General Municipal Election for the position ofMember of the
City Council, District 3; and
WHEREAS, Chula Vista Charter Section 300.A.3 provides that in this situation no
General Municipal Election shall be held for the position and, instead, the qualified candidates
should be considered for election to the position of Member of the City Council, District 3 at the
November runoff election; and
WHEREAS, in accordance with the Chula Vista Charter and State law, the two qualified
candidates for the position of Member of the City Council, District 3 shall therefore be placed on
the ballot for the November runoff election; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
as follows:
SECTION 1. All of the foregoing recitals are true and correct.
SECTION 2.This resolution amends City Council Resolution No. 2016-005 to remove
the Member of the City Council, District 3 from the ballot for the Tuesday, June 7, 2016 General
Municipal Election because only two candidates submitted sufficient nomination papers and
qualified for placement on the ballot for that position. In accordance with the Chula Vista
Charter and State law, the General Municipal Election for the Member of the City Council,
District 3 called for in Resolution No. 2016-005 will not be held and the two qualified candidates
for the position shall be placed on the ballot for the November runoff election.
SECTION 3. The City Clerk is hereby directed to provide a copy of this resolution to the
Registrar of Voters.
SECTION 4. The City Clerk shall certify to the passage and adoption of this resolution
and file it with the City’s original resolutions.
2016-04-05 Agenda Packet Page 252
Presented by Approved as to form by
Donna R. Norris, CMC Glen R. Googins
City Clerk City Attorney
2016-04-05 Agenda Packet Page 253
City of Chula Vista
Staff Report
File#:16-0116, Item#: 6.
CONSIDERATIONOFANAPPEALOFTHEZONINGADMINISTRATOR’SDECISION
REGARDING CONDITIONAL USE PERMIT PCC-15-014 (Rancho Vista Covenant Church)
RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTADENYINGTHEAPPEAL
ANDAFFIRMINGTHEZONINGADMINISTRATOR’SDECISIONGRANTINGAPPROVALOF
CONDITIONALUSEPERMIT(PCC-15-014)FORTHERANCHOVISTACOVENANTCHURCHAT
2088 OTAY LAKES ROAD, SUITES 101 & 201
RECOMMENDED ACTION
Council conduct the public hearing and adopt the resolution.
SUMMARY
TheApplicant,PastorJohnRosefortheRanchoVistaCovenantChurch,submittedaConditional
UsePermit(CUP)applicationrequestingapprovaltorelocatetheirchurchfromtemporaryfacilitiesto
2088OtayLakesRoad,Suites101&201(Project)(SeeAttachment2-LocatorMap).OnJanuary
13,2016,theZoningAdministrator(ZA)approvedtheCUPNoticeofDecision(NOD)(see
Attachment6)withtherequiredCUPfindingsandconditionsnecessaryfortheproposal.TheZA
consideredallthefactssurroundingtheproposalpriortoapprovingtheProject.ChulaVista
MunicipalCodeSection19.14.100requirestheZANODtobepostedforanappealperiodof10
businessdaysfromthedateonwhichthedecisionwasmade.TheZANODwaspostedonthe
City’swebsiteonJanuary15,2016andtheappealapplicationwassubmittedbyBenjaminGreen,
EsquireonbehalfofFrankCarrillotheappellantonthetenthbusinessday,i.e.,February1,2016,in
accordance with Chula Vista Municipal Code Section 19.14.100.
ENVIRONMENTAL REVIEW
Environmental Notice
TheProjectqualifiesforaClass1CategoricalExemptionpursuanttoSection15301(Existing
Facilities) of the California Environmental Quality Act State Guidelines.
Environmental Determination
TheDirectorofDevelopmentServiceshasreviewedtheProjectforcompliancewiththeCalifornia
EnvironmentalQualityAct(CEQA)andhasdeterminedthattheProjectqualifiesforaClass1
CategoricalExemptionpursuanttoSection15301(ExistingFacilities)oftheStateCEQAGuidelines.
Thus, no further environmental review is required.
BOARD/COMMISSION RECOMMENDATION
OnJanuary13,2016,afterconsideringallreportsandevidenceincludingtheissuesraisedinthe
objectionletter(SeeAttachment5),theZoningAdministratorapprovedtheProject,subjecttothe
findings and conditions noted in the Notice of Decision PCC15-014 (See Attachment 6).
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DISCUSSION
Project Description:
TheRanchoVistaCovenantChurchproposestorelocatetheirchurchfromtemporaryfacilitiesto
2088OtayLakesRoad,Suites101&201.Thisprojectsiteisanofficecondominiumbuilding
complexlocatedsouthofOtayLakesRoadandwestofandadjacenttotheSR-125tollway,ina
Professional&Administrative(PA)zonedplanningareaoftheEastlakeIISectionalPlanningArea
(SPA)Plan.Thetwosuitesarepartofatwo-storybuildingprovidingapproximately7,000-squarefeet
ofgrossfloorareaonbothfloors.Thesuiteswillprovideforalobby,auditoriumandrestroomson
thefirstfloor,andclassrooms,anursery,anofficeandcounselingspaceonthesecondfloor.The
1,330-squarefootauditoriumwillbeutilizedforservicesonSundaysonlyfrom7:00a.m.to10:00
p.m.,andwillprovideseatingcapacityforupto150persons.Thesuitesareallocated26parking
spacessevendaysaweek,andanadditional20parkingspacesareprovidedbyaparking
agreementforanadditional20parkingspacesonSundays,when43parkingspacesarerequiredto
meet the seating capacity of 150 persons.
Background:
InJanuary2015,aninquirywasmadeonbehalfofanapplicantwishingtoestablishachurchatthe
proposedProjectlocation.ThePAzoneexpresslyprohibitsreligiousinstitutions;however,the
ApplicantbelievedthatFederalLaw(TheReligiousLandUseandInstitutionalizedPersonsAct,or
RLUIPA;42U.S.C.A2000cc,etseq.)tookprecedenceovertheprovisionsofthesubjectPAZone
becauseothernon-secularassemblyuseswerepermittedwiththeapprovalofaCUPinthePA
Zone.TheApplicantfurtheropinedthatareligiousinstitutionshouldalsobepermittedviaaCUP.
TheDirectorofDevelopmentServicesconsideredtheApplicant’spositionandagreedwiththe
ApplicantthatareligiousinstitutionshouldbepermittedinthesubjectPAZoneviaaCUP.The
DevelopmentServicesDepartment(DSD)receivedaCUPapplicationforcompletenessreviewon
March 2, 2015.
ThecompletenessreviewwaslimitedtoareviewoftheCUPapplicationchecklistrequirementsfor
conformancetodevelopmentstandardssuchasparking;thereviewalsotookintoaccountthe
previousdecisionbytheDirectorofDevelopmentServicestopermitthesubjectchurchviaaCUP.
The completeness review letter also stated that the CUP would be limited to three (3) years.
OnAugust25,2015aformalCUPapplicationsubmittalwasmadefortheRanchoVistaCovenant
Church.AfterworkingwiththeEastlakeProfessionalCenterOwnersAssociation,thechurch
obtainedaparkingagreement(SeeAttachment3)thatwouldguarantee20additionalparkingspaces
inadditiontothe26allocatedtotheirownofficecondominiumbuildingsuitestomeettheirparking
demandforuptoa150seatcapacityonSundays.TheNoticeofApplication(NOA)wassent
September1,2015describingtheProjectasachurchonly,andthePublicNoticesentOctober1,
2015statedthattheProjectwasa“ProposedchurchfacilityforSundayServices,andMonday
throughSaturdaysmallgroupmeetings.Nopre-schoolordaycareusesareproposedaspartofthisCity of Chula Vista Printed on 3/30/2016Page 2 of 7
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throughSaturdaysmallgroupmeetings.Nopre-schoolordaycareusesareproposedaspartofthis
permit application.”
OnOctober15,2015aletterwasreceivedfromattorneyBenjaminGreen,representingFrank
CarrilloCommercialPropertiesLLC,locatedat2088OtayLakesRoad,Suites102and202,whichis
thebusinessofficecondominiumabuttingtheproposedchurchsuites(Suites101and201),where
SIMNSAhealthcareadministrativeofficesarelocated.SIMNSArepresentativespreviouslymade
inquiriestotheMayor'sofficeinApril2015andthoseinquirieswereforwardedtoDSDregardingtheir
awarenessoftheMarch2015completenessreviewapplicationforachurch.Theletter(See
Attachment5)raisedconcernsregardingparking,traffic,andnoise,aswellasthepotentialfor
weekdayusesoutsidetheSundayonlyusesproposed.Stafftookintoconsiderationtheissues
raisedintheobjectionletterbyrecognizingthatmostparking,trafficandnoisehadtodowith
potentialimpactsfromSundayservices.TheseconcernsareaddressedintheCUPfindings,
conditionsofapprovalandtheparkingagreement,bylimitingthechurchassemblyusestoSundays
only, when most Professional and Administrative business offices in the complex are closed.
ANALYSIS
Appeal:
TheappellantisaskingtheCityCounciltoapprovetheirappealrequestanddenytherequestforthe
subjectCUPbasedoninformationtheysetforthintheirappealrequest(SeeAttachment4).These
concerns are identified as enumerated in the appeal request and responses are provided below:
AppellantAllegation#1:Theappellantallegesthat“[t]hefindingthattheproposeduseisnecessary
ordesirableinthisareaisnotsupportedbytheinformationavailableintheSPA[Plan]”because“[r]
eligious institutions are expressly not permitted in the PA land use district.”
ThisfactwasnotoverlookedbytheZoningAdministrator.Indeed,religiousinstitutionsareexpressly
notpermittedinthePAZone.Thisexpressprohibition,however,probablywouldrunafoulofthe
RLUIPA.TheRLUIPAstatesthat“Nogovernmentshallimposeorimplementalanduseregulation
inamannerthatimposesasubstantialburdenonthereligiousexerciseofaperson,includinga
religiousassemblyorinstitution,unlessthegovernmentdemonstratesthattheimpositionofthe
burdenonthatperson,assembly,orinstitution(A)isinfurtheranceofacompellinggovernment
interest;and(B)istheleastrestrictivemeansoffurtheringthatcompellinggovernmentinterest.”42
U.S.C.(USCode)Section2000cc(a)(1).Assuch,prohibitingchurchesentirelywithinazoneis
highlyproblematicbecauseanagencymeetingtheaforementionedUSCodeSection(whichis
referredtoasthe“StrictScrutinyTest”)isverydifficult,ifatmosttimes,impossibletodo.Andinthis
instance(i.e.,withthisdatedSPAPlan),becausethereisvirtuallynosubstantialevidenceinthe
recordthatcreatedtheSPAPlanthatprohibitingchurchesinthePAZonedoesserveacompelling
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recordthatcreatedtheSPAPlanthatprohibitingchurchesinthePAZonedoesserveacompelling
governmentinterestandistheleastrestrictivewayoffurtheringthatcompellinggovernmentinterest,
thenarguably,thischurchshouldbepermittedinthesubjectPAZone.Inaddition,othernon-secular
assemblyuseshavebeenpermittedinthePAZonethroughtheCUPprocess;assuch,thisfact
leadstoanotherprongoftheRLUIPA.RLUIPAsection(b)(1)statesthat“Nogovernmentshall
imposeorimplementalanduseregulationinamannerthattreatsareligiousassemblyorinstitution
onlessthanequaltermswithanonreligiousassemblyorinstitution.”42USCA2000cc(b)(1).Case
lawholdsthatagovernmentagencyisinviolationofthis“equalterms”provisionwhenasecular
competitoristreatedinalessthanequalwaywiththechurch.Therefore,denyingasimilarassembly
typeuse,particularlyonethatwouldonlyoccuronedayperweekwhenthemajorityoftheotherPA
Zoneusesarenotinoperationfurtheradsacredibleargumenttoallowthesubjectchurchviaa
CUP.Lastly,thistypeofassemblyusecanalsobeviewedasnecessarybeinglocatednearthe
communityitservesanddesirableoperatingonadaywhenothernearbybusinessesandassembly
uses are not in operation.
Staff’sviewpriortotheappealfilingwasthattheEastlakeIISPA,approvedpriorto2000,wouldnot
haveincludedthereligiousprohibitionifithadbeenwrittenaftertheRLUIPAlegislation.Inaddition,
thefindingoffactmadebytheZoningAdministratorpriortotheappealwasthatthechurchassembly
usewouldonlybeofferedonSundays,whileMondaythroughSaturdayusewouldonlybefor
administrativeandsmallgroupmeetings.Theconcernsintheobjectionletterregardingpossible
impactsoftraffic,parkingandthepotentialfornoisearemitigatedbytheconditionsprohibitinglarge
assembly gatherings during the work week as well as on Saturdays.
AppellantAllegation#2:TheappellantallegesthattheApplicantproposessevendaysofoperation,
butthattheCityisonlyrequiringtheApplicanttoprovide43parkingspacesonSundayandalesser
amount of parking Monday through Saturday.
TheApplicantproposestohaveadministrativeofficeactivityandsmallgroupmeetingslimitedto25
persons,basedon26permanentlyassignedparkingspaces(smallgroupmeetingsand/orbible
study)sixdaysaweek(MondaythroughSaturday).TheApplicanthasrightsto26parkingspaces
sevendaysaweekundertheParkingAgreementpursuanttotheCC&RsforParkingAllocation(See
Attachment3)tomeettheparkingdemandforadministrativeofficeactivityandsmallgroup
meetings.TheApplicant’sCUPrequestforactualchurchuseactivitiesisonlyforSundaysfrom10
amto7pm.TheApplicantenteredintoaParkingAgreementwiththeEastlakeProfessionalCenter
OwnersAssociationfor20additionalparkingspacesonSundays,foratotalof46parkingspaces.
Thechurchassemblyareaallowsfor150persons.Theparkingrequirementis1spaceper3.5
seats,requiring43parkingspacestobeavailableonSundays.The46spacesgrantedrepresent20-
percentofthe230parkingspacesintheEastlakeBusinessCenter,mostofwhichwillbeavailable
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percentofthe230parkingspacesintheEastlakeBusinessCenter,mostofwhichwillbeavailable
on Sundays.
AppellantAllegation#3:Theappellantallegesthat“[t]heusedoesnotcomplywiththeregulations…
specifiedinthecode”andthatonlyproviding43parkingspacesonSundayamountstotheApplicant
onlyprovidingatemporaryparkingallocationforonedayoftheweek,andassuch,theCUPshould
not be granted for a use if the use cannot comply with parking requirements seven days a week.
TherearenumerousCUPswithparkingagreementsthatallowforsharedparking,wherevarying
hoursanddaysofoperationofaparticularusearetakenintoconsiderationinordertoallowfor
shareduseofadjacentornearbyparkingspaces,andtoaccordinglylimitthehoursanddaysof
operation.ThepurposeoftheproposedchurchCUPistoensurecompliancewiththerequestfora
churchuseonSundaysonly,andtolimitfunctionstoonlyadministrativeofficeandsmallgroup
meetingusesfromMondaythroughSaturday,otherwisetheCUPmayberevoked.TheZoning
Code(CVMC19.62.040)providesforalternativeparkingarrangementsbetweenprivateparties,
providedthatthesharedparkingison-site,oroff-sitewithin200-feet.Theparkingagreementsare
basedonananalysisoftheparkingdemandduringcertaindaysandhours,andareapprovedbythe
City through the CUP process, and/or by the City Engineer and Development Services Director.
AppellantAllegation#4:TheappellantallegesthattheZoningAdministratorattemptstodisposeof
thereligiousinstitutionprohibitioninthesubjectPAZonebecausetheprohibitionisunenforceable
underfederallaw(i.e.,RLUIPA),andthattheZoningAdministrator’sdeterminationisincorrect
becausethesubjectprohibitiondoesnotplaceasubstantialburdenontheexerciseofreligion.The
appellantstatesthatthethresholdof“substantialburden”hasnotbeenmetintheexerciseofreligion
withregardstoRLUIPAthatisinvokedtodisposeofthesubjectEastlakeIISPAplanreligious
institution prohibition in the PA zone.
AsdiscussedaboveinAppellantAllegation#1,itisstaff’sopinionthat,withthestateofthesubject
SPAPlan,itwouldbeextremelydifficulttomeetthe“substantialburdentest”becausethereis
virtuallynosubstantialevidenceintherecordthatcreatedtheSPAPlanthatprohibitingchurchesin
thePAZoneservesacompellinggovernmentinterestandistheleastrestrictivewayoffurthering
thatcompellinggovernmentinterestandtherefore,inthisinstance,disposingofthePAZone
prohibition against religious institutions is legally appropriate.
Conditions:TheappellantstateshereandintheoverviewthattheProjectconditionsofapprovaldo
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Conditions:TheappellantstateshereandintheoverviewthattheProjectconditionsofapprovaldo
not prevent the applicant from operating a pre-school or day care.
ThefirstfindingforapprovaloftheCUPisexplicitindescribingtheonlyauthorizedusesMonday
throughSaturdayareforsmallgroupmeetings,biblestudy,andgeneraladministrativeuses.
Sundaysaretheonlydayauthorizedforassemblyandworshipservices,whichiswhenthenursery,
classrooms,andcounselingspaceonthesecondfloorwillbeused.Condition#7memorializesthe
factthattheCUPauthorizationisonlyforsmallgroupmeetings,biblestudy,andgeneral
administrativeusesMondaythroughSaturday,andthatthechurchassemblyuseonSundaysinthe
auditoriumislimitedto150personsbasedontheseatingcapacity.Theclassrooms,nursery,and
counselingspace,liketherestrooms,arepartofthebasicfunctionalcomponentsofthebuildingsfor
Sundayservices.TheproposedCUPdoesnotauthorizeanypre-schoolordaycareusesatthesite.
Inaddition,apre-schoolordaycarelicensewouldrequiretheprovisionofanoutdoorplayarea,
which is not possible at this location.
Conclusion:
Basedontheanalysisoftheappellant’sallegations,staffdoesnotfindmeritfortheappealtodeny
theCUP.Therefore,staffrecommendsdenialoftheappealandaffirmationoftheZoning
AdministratorsapprovaloftheproposedProject,basedonthefindingsandsubjecttotheconditions
oftheZoningAdministrator’sNoticeofDecision,PCC-15-014,whichareattachedtotheCityCouncil
Resolution.
DECISION-MAKER CONFLICT
No Property within 500 feet
StaffhasreviewedthepropertyholdingsoftheCityCouncilmembersandhasfoundnoproperty
holdingswithin500feetoftheboundariesofthepropertywhichisthesubjectofthisaction.
Consequently,thisitemdoesnotpresentadisqualifyingrealproperty-relatedfinancialconflictof
interestunderCaliforniaCodeofRegulationsTitle2,section18702.2(a)(11),forpurposesofthe
Political Reform Act (Cal. Gov’t Code §87100,et seq.).
Staffisnotindependentlyaware,andhasnotbeeninformedbyanyCityCouncilmember,ofany
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy
Community,StrongandSecureNeighborhoodsandaConnectedCommunity.TheProject
implementstheStrongandSecureNeighborhoodsStrategicgoalbyprovidingconstructionofa
developmentprojectinamannerthatensurescodecompliance,publichealthandsafetyofthe
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developmentprojectinamannerthatensurescodecompliance,publichealthandsafetyofthe
community.
CURRENT YEAR FISCAL IMPACT
Therearenofiscalimpactsduringthecurrentfiscalyearfromtheprocessingoftheproject.Allcosts
forthisappealarecoveredbythedepositaccountpaidforbytheapplicant.TheAppellantpaidthe
requiredfilingfeefortheappeal.Costsassociatedwiththeprocessingoffutureimplementing
permits, will also be covered by permit fees or deposit accounts.
ONGOING FISCAL IMPACT
TheProjectisprivatelyownedandoperatedandwillnotcreatefutureexpendituresfortheCity
associated with approval of the item, including facility maintenance and operations.
ATTACHMENTS
1.City Council Resolution
2.Locator Map
3.AgreementforAssignmentofParkingSpacesJuly28,2015,includingreferencedportionsof
CC&Rs(Article2OwnershipandEasements,Section2.6.3ParkingAllocation,andArticle6
Use Restrictions, Section 6.2 Permitted Uses)
4.Appeal Submitted by Benjamin Green February 1, 2016
5.Objections Letter Submitted by Benjamin Green October 15, 2015
6.Zoning Administrator CUP Notice of Decision PCC-15-014
7.Chronology of RVCC 10-year search for a church site in Chula Vista
Staff Contact: Harold Phelps, Associate Planner
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RESOLUTION NO. 2016-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA DENYING THE APPEAL AND
AFFIRMING THE ZONING ADMINISTRATOR’S
DECISION GRANTING APPROVAL OF CONDITIONAL
USE PERMIT (PCC-15-014) FOR THE RANCHO VISTA
COVENANT CHURCH, LOCATED AT 2088 OTAY LAKES
ROAD, SUITES 101 & 201
WHEREAS, the parcel of land which is the subject matter of this Resolution is depicted
in Exhibit “1,” attached hereto and incorporated herein by this reference, and for the purpose of
general description consists of acondominium office buildinglocated at 2088Otay LakesRoad,
Suites 101 & 201, APN 595-070-73-11, (Project Site); and
WHEREAS, on August 25, 2015, a duly verified application requesting approval of a
Conditional UsePermit was filed with the City of Chula Vista Development Services
Department by Pastor John Rose for the Rancho Vista Covenant Church(Applicant); and
WHEREAS, said Applicant requestedapproval of a Conditional UsePermit to allow the
Applicant to remodel the office building for church use,including an assembly area for Sunday
worship services(Project) on said Project Site; and
WHEREAS, notice of Zoning Administrator consideration of the Project was given by its
mailing to property owners within 500 feet of the exterior boundary of the Project Site at least 10
days prior to the decision;and
WHEREAS, the Zoning Administrator considered all reportsand evidence, and on
January13, 2016, approved Conditional UsePermit PCC-15-014, in accordance with the
findings and subject to the conditions contained in the Final Notice of Decision for PCC-15-014;
and
WHEREAS, Frank Carrillofiled an appeal of the Zoning Administrator’s Decision to
Approve Conditional UsePermit PCC-15-014 on February 1, 2016; and
WHEREAS, the City Clerk set the time and place for the public hearing on the appeal;
and notice of said hearing, together with its purpose, was given by its publication in a newspaper
of general circulation in the City, its mailing to property owners within 500 feet of the exterior
boundary of the Project Site at least 10 days prior to the hearing; and
WHEREAS, the Chula Vista City Council held a duly noticed public hearing to consider
said appeal at the time and place as advertised, namely April 5, 2016,at 5:00 p.m. in the Council
Chambers, 276 Fourth Avenue; and
WHEREAS, the Director of Development Services has reviewed the proposed Project for
compliance with the California Environmental Quality Act (CEQA) and has determined that the
project qualifies for a Class 1 Categorical Exemption pursuant to 15301 (Existing Facilities) of
2016-04-05 Agenda Packet Page 261
Resolution No. 2016-______
Page 2
the State CEQA Guidelines. The Project qualifies for a Class 1 Categorical Exemption because
the Project proposes remodeling of an existing commercial building involving negligible or no
expansion of the existing commercial use. Thus, no further environmental review is required.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does hereby find and determine that under the provisions of Chula Vista Municipal Code
(CVMC) Section 19.14.100, the appeal of Conditional Use Permit PCC-15-014is hereby
DENIED based upon the Findings of Fact made by the Zoning Administrator, under the
provisions of CVMC Section 19.14.030.A.2 and CVMC Section 19.14.080, for approving the
Conditional UsePermit Notice of Decision, noted as follows:
1.That the proposed use at this location is necessary or desirable to provide a service or
facility which will contribute to the general well-being of the neighborhood or community.
As an assembly-type use, the churchwill be located convenient to Chula Vista residents
living in nearby neighborhoods and contribute to the general well-being of the surrounding
communities. The Rancho VistaCovenant Churchwill occupy floor space within the
existing building Monday through Saturday for small group meetings, bible study, and
general administrative uses, but assembly for worship services will only be offered on
Sundays.
2. That such use will not, under the circumstances of the particular case, be detrimental to the
health, safety or general welfare of persons residing or working in the vicinity or injurious to
property or improvements in the vicinity.
The Church will be located in an existing 7,000-square foot building (2088 Otay Lakes Road
Suites 101 & 201) that includes a 1,330-square foot auditorium that can provide seating for
up to 150 people on Sundays. Suites 101 & 201 are allocated 26 parking spaces in the
adjacent business center parking lot, and an additional 20 parking spaces have been allocated
for church use on Sundays via an agreement with the Eastlake Professional Center Owners
Association, for a total of 46 parking spaces. Although not all of the parking spaces for the
center are allocated to the Project, there are a total of 230 parking spaces provided in the
Eastlake Business Center, and most tenants will be closed on Sundays. In addition, since
most tenants are closed on Sundays, there will be minimal to no adverse impacts to the other
tenants of the business center related to traffic and noise on Sundays. For these reasons, the
proposed use will not adversely impact the operation of adjacent businesses and will not be
detrimental to the health, safety, and welfare of the persons, property and improvements in
the vicinity.
3.That the use will comply with the regulations and conditions specified in the code for such
use.
In accordance with CVMC Section 19.62.050 (9), churches are required to provide one
parking space per each 3.5 seats in the auditorium. Therefore, the Projectis required to
provide 43 parking spaces based on a seating capacity of up to 150 seats. As noted above,
2016-04-05 Agenda Packet Page 262
Resolution No. 2016-______
Page 3
the center has allocated 26 parking spaces to the suites and an additional 20 parking spaces
are available for church use on Sundays via the above noted parking agreement, for a total of
46 parking spaces. The property has a total of 230 on-site parking spaces available for all
tenants. The remaining 184 parking spaces within the business center are sufficient for the
other tenants who may conduct business on Sunday.
The approval of this Conditional Use Permit is contingent on the Applicant’s and Property
Owner’s commitment to satisfy all conditions of approval and to comply with all applicable
regulations and standards specified in the CVMC. The Applicant has committed to
implement and satisfy all conditions of approval for the proposed use, and will comply with
all applicable CVMC regulations.
4. That the granting of the Conditional Use Permit will not adversely affect the General Plan of
the City or the adopted plan of any governmental agency.
Assembly-type uses areallowed with a Conditional Use Permit in the Professional and
Administrative (PA) zone in accordance with the Eastlake II SPA Plan District Regulations,
consistent with the Professional & OfficeGeneral Plan Land Use Designation.
As a Conditional Use Permit, the Project is subject to review for compliance with conditions
of approval related to any adverse impacts such as noise related to assembly-type activities or
inadequate parking. The Conditional Use Permit will expire and require renewal after a
period of three (3) years as a condition of approval. Thus, the approval will not affect the
long range goals and objectives of the General Plan for Professional & Office land uses and
the Eastlake II SPA Plan Professional and Administrative (PA) zone.
While Religious Institution uses are identified as not permitted in the Professional and
Administrative zone of the Eastlake II SPA Plan, federal law (the Religious Land Use and
Institutionalized Persons Act) generally requires that Religious Institutions be permitted in
zones that allow other assembly type uses under a similar permitting process. Many assembly
type uses are permitted in the PA zone (and include, but are not limited to, nurseries, day care
schools, YMCA, YWCA, libraries and educational institutions) with the approval of an
administrative Conditional Use Permit, and under federal law, Religious Institutions should
be subject to the same regulations.
BE IT FURTHER RESOLVED to avoid the preemptive force of U.S.C. 2000cc, pursuant
to the authority contained in U.S.C. 2000-3(e),the City Council of the City of Chula Vistadoes
hereby find and determine that the Project is exempt from Chapter II, Section III.4 (C)(8) of the
Eastlake II Sectional Planning Area (SPA) Plan, as to the “Not Permitted” Land Use District
designation. Notwithstandingthe foregoing, the City Council also finds and determinesthat all
remaining portions of Chapter II, Section III.4 of the Eastlake II SPA Plan are hereby retained in
full force and effectas to approval of the Project via the approved Conditional Use Permit
(CUP).
2016-04-05 Agenda Packet Page 263
Resolution No. 2016-______
Page 4
BE IT FURTHER RESOLVED that the City Council of the City of Chula Vista does
hereby find and determine that the determination of the Zoning Administrator is hereby
AFFIRMED, in accordance with the applicable Conditional UsePermit Findings of Fact and the
Conditions of Approval specified in the Zoning Administrator Final Notice of Decision dated
January13, 2016, attached hereto and incorporated herein by this reference (Exhibit “2”).
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF CHULA
VISTA, CALIFORNIA, this 5thday of April, 2016, by the following vote, to-wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Presented by:Approved as to form by:
________________________________________________________
Kelly Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney
J:\Attorney\MichaelSh\RLUIPA\Eastlake -RanchoVista Church\Appeal\CC\CC-Reso-PCC15014-Appeal-3.29.16-FINAL.doc
2016-04-05 Agenda Packet Page 264
LA
FITNESS
PROJECT
LOCATION
CHULA VISTADEVELOPMENT SERVICES DEPARTMENT
LOCATOR PROJECT
APPLICANT:
PROJECT
ADDRESS:
SCALE:
No Scale
Rancho Vista Church
2088 Otay Lakes Rd. 101
FILE NUMBER:
PCC-15-014NORTH
L:\Gabe Files Arcmap Locator Template\Locators\PCC15014.ai.09.01.15
PROJECT DESCRIPTION:MISCELLANEOUS
Project Summary: Proposing a Church assembly and preschool.
Related cases:
2016-04-05 Agenda Packet Page 265
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2016-04-05 Agenda Packet Page 266
(
EASTLAKE PROFESSIONAL CENTER OWNERS ASSOCIATION
Agreement for Assignment of Parking Spaces
This agreement is entered into by and between the following parties:/
;ts or , Ol_Wa ee: of the real property/office
only known ray Road, Unit ao t ,, Chula Vista, CA
91915 ("Assignor's Property") and ,.=t 0 ,,,,','z,tt("Assignee"), owner of the real
property/office condominium commonly known as'zO...$_ Otay Lakes Road, Unit iol$..o(
Chula Vista, CA 91915 ("Assignee's Property").
Pursuant to Article 2, Section 2.6.3, of the Amended and Restated Declaration of
Covenants, Conditions and Restdctions and Reservation of Easements for Eastlake
Professional Center recorded September 20, 2013, as Document No. 2013-0577049 in
the Official Records of San Diego County ("Declaration"), Assignor presently has a
parking allocation of "z-, parking spaces ("Assignor's Parking Spaces").
For valuable consideration, receipt of which is hereby acknowledged, Assignor
assigns its right to use z-o of Assignor's Parking Spaces to Assignee for use by
Assignee and its guests on the following specified days of the week and at the specified
times:
Sundays from to /o #__rI
Mondays from to
Tuesdays from to
Wednesdays from to
Thursdays from to
Fridays from to
Saturdays from to A
Assignee understands and agrees that its right to use the Parking Spaces
subject to this Agreement does not constitute the right to park in any particular Parking
Space. Assignee acknowledges that the Board of Directors for Eastlake Professional
Center Owners Association ("Association") has the authority, pursuant to Article 2,
Section 2.10.6, of the Declaration, to control parking. Assignee agrees to abide by any
and all parking rules that have been adopted or that may be adopted by the Association.
The effective period of this Assignment shall commence when the Association
acknowledges that its records have been changed to reflect this Assignment and shall
expire on #,b ,. (..f t 'l r oU Assignee acknowledges that its use of Assignee's
D -rE.
2623854vl
2016-04-05 Agenda Packet Page 267
i
- ,Jeda.a o,, Upoe e:.£;"al'e.r sfths AssJgnmer,,t f ;!,;, (3% o Chula V sta rc<lu es more pa,W q spar'er f'a- ',t',e se (',&ss gnee s Prol eqy ti:au \ss gnee -,as Ir e r, ghl to b'se AssJqne,,- may be £,bi,,aled 1,,],term naba 'tS use o As.tt.gn(s PTope ly
shall (w etau <d ,n lhe Assoc aboN s r ecords a ]d that . sha!nure 1o lhe ben 6 Of I!e
.ul re @ a-ers Ot A S !?n rs Prc,'p tdy ar 41 Assignee s Properly as Pro,aden1 r ,&i C e 2
-::;,cllon 6 3 of the Dec!a[at on
IT IS SO AGREED AND APPROVED D a ed
A rr
8? Robyn KeHering r i-: .......................
2016-04-05 Agenda Packet Page 268
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2016-04-05 Agenda Packet Page 269
OR ,O RST ,O ISTEWART TITLE OF CALIFORNIA, INC,
SAN DIEGO DIVISION
DOC tt 2013-0577049
I IiIIH Ill liill fill1 Itlil Illtl $1 Illll Lflll IIIII Iilll $ IIII Illl
SEP 20, 2013 8:00 AM
AND WHEN RECORDED MAIL TO:
Pathfinder Partners, LLC
4380 La Jolla Village Drive, Suite 250
San Diego, CA 92122
OFFICIAL RECORDS
SAN OIEGO COUNTY RECORDER'S OFFICE
Ernest J. Dronenbufg, J=., COUNTY RECORDERFEES: 249.00
8 . 5 PAGES: 79
I IIIHIIIIIlfl I IIIIlllllllllllllllllllllllllllllllllllllllllllllllllllllfillllll
ORDER NO.: 7034- 467572
[THIS SPACE FOR RECORD ONLY]
AMENDED AND RESTATED DECLARATION OF
COVENANTS CONDITIONS AND RESTR!CTIONS AND
RESERVATION OF EASEMENTS FOR
EASTLAKE P_ROFESSIONAL CENTER
(Document Title)
THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING
INFORMATION
(ADDITIONAL RECORDING FEE APPLIES)
2016-04-05 Agenda Packet Page 270
I
2.6.2 Non-Exclusive Easements for Access and Use of Association Property
Within Condominium Buildings. Deelarant hereby grants to each Owner for the benefit of the Owner
and the Owner's Condominium, non-exclusive easements over those portions of the Association Property
located within the Building in which the Owner's Unit is located for ingress and egress to such Owner's
Unit and/or as may be otherwise necessary for an Owner to exercise its rights under this Declaration and
the Governing Documents.
2.6.3 P rkin Allocation. In conjunction with the initial conveyance of a Unit by
Declarant, Deelarant will allocate a certain number of Parking Spaces to each Owner, which allocation
shall be on file in the records of the Association. The Parking Allocation allocates a certain number of
Parking Spaces to an Owner but does not constitute the right to park in any particular parking space. If an
Owner desires to assign its right to use a certain number of Parking Spaces to another Owner, and
provided the two Owners sign an agreement in a form prepared by the Association agreeing to the
assignment, the Association shall then change its records to reflect the assignment requested by the two
Owners. The Association shall retain in its records the written agreement of the two Owners. Upon the
change to the records of the Association, then the new Parking Allocation shall inure to the benefit of the
future Owners of such Condominiums. If an Owner leases a portion of the Owner's Condominium, the
Owner may allocate a portion of its Parking Allocation to its Lessees so long as the total Parking
Allocation of such Owner is not exceeded.
2.6.4 Assigned Parking Soaces. To the extent Declarant assigns the right to park in a
specific Parking Space pursuant to Section 2.8,3, then the Owner that is assigned a Parking Space shall
have the exclusive right to use such Parking Space. Upon conveyance of a Condominium by an Owner to
another Owner, the right to the Assigned Parking Spaces assigned to such Owner in the records of the
Association shall automatically inure to the benefit of the new Owner. If an Owner desires to exchange
his or her Assigned Parking Space with another Owner who has been assigned an Assigned Parking
Space, and provided the two Owners sign an agreement in a form prepared by the Association agreeing to
the assignment or exchange, the Association may then change its records to reflect the exchange
requested by the two Owners, as applicable. The Association shall retain in its records the written
agreement of the two Owners. Upon the change to the records of the Association, then the new Assigned
Parking Spaces shall inure to the benefit of the future Owners of such Units.
2.6.5 Assi ned Sin aces. Each Owner shall have the exclusive right to have its
name panel or sign on the Owner's Assigned Sign Space, subject to the installation restrictions set forth in
this Declaration, and the other Governing Documents. Upon conveyance of a Condominium by an
Owner to another Owner, the rights to a name panel or name space assigned to such Owner in the records
of the Association shall automatically inure to the benefit of the new Owner. Each Owner who has an
Assigned Sign Space shall be obligated to pay the costs for fabricating and installing the name panel or
sign, as applicable. If an Owner vacates its Unit for a period of more than thirty (30) days, then the
Association may require the Owner to remove the name panel and/or sign.
2.6,6 Exclusive Use Demising Wall Easement Areas. So long as two or more
contiguous Units are owned or acquired by the same Owner, any existing demising wall may be removed
by such Owner subject to the limitations set forth below. In addition, the Owner of two contiguous Units
which have a demising wall, floor or ceiling between them may construct, at such Owner's expense and
in accordance with all Applicable Laws, a means of access (such as a doorway or stairway) between said
Units. The Owner of contiguous Units who has removed or penetrated a demising wall, floor or ceiling
or connected them as described above shall have an easement for ingress, egress and passage through that
portion of the Association Property which has been pierced in the process of connecting the contiguous
Units or constructing said means of access, The easement shall exist only for so long as the connected
Units continue to be owned by the same Owner. If and when the Owner of such connected Units sells,
101569253.12
Eastlake Professional Center
139709-00001. Amended and Restated CC&Rs
12
2016-04-05 Agenda Packet Page 271
t t 851
which is twenty-four (24) months after the conveyance of the first Condominium to an Owner by
Deelarant or (b) the conveyance by Declarant to Owner of more than seventy-five percent (75%) of the
Condominiums in the Project.
5.21 Insoection of Books and Records. Upon request, any Owner shall be entitled to inspect
the books, records and financial statements of the Association and the Governing Documents during
normal business hours or under other reasonable circumstances.
5.22 el Certificate. The Association shall furnish or cause an appropriate officer to
furnish within fifteen (15) Business Days after written request therefore by any Owner, a certificate
signed by an officer of the Association setting forth whether the assessments on a specified Condominium
have been paid. A properly signed certificate of the Association with respect to the status of assessments
on a Condominium is binding upon the Association as of the date of its issuance.
5.23 Initial Cal ital Contribution. Upon acquisition of record title to a Condominium from
Deelarant, each Owner shall contribute to the capital of the Association an amount equal to three (3)
times the then current monthly Regular Assessment for each Condominium acquired by an Owner. This
amount shall be deposited by the Owner into the purchase and sale escrow for such Owner's
Condominium and disbursed therefrom to the Association.
ARTICLE 6
USE RESTRICTIONS
6.1 Eastlake Declaration. Each Owner shall comply with the use restrictions set forth in
Article 4 of the Eastlake Declaration. To the extent any of the permitted uses or use restrictions in this
Article 6 conflict with the permitted uses or use restrictions set forth in the Eastlake Declaration, the
provisions set forth in the Eastlake Declaration shall control unless the provisions of this Declaration are
more restrictive, in which event the more restrictive provisions in this Declaration shall apply.
6.2 Permitted Uses. Condominiums in the Project may only be used for office, warehouse,
retail, school and religious institution purposes, including without limitation medical office uses,
restaurant uses, research and development uses, any other uses commonly found in an office, medical
office, warehouse, retail, school and religious institution development. All such uses shall comply with
Applicable Laws, including without limitation City zoning requirements.
6.3 Prohibited Uses. No use or operation shall be made, conducted or permitted on or with
respect to all or any part of the Project that violates Applicable Laws, Governmental Entitlements, the
provisions of this Declaration or the provisions of the Eastlake Declaration. In addition to the foregoing,
no Condominium or any part of the Project shall be used for the following purposes unless specifically
authorized by Declarant in a Supplementary Declaration while Declarant or a Declarant Party owns any
portion of the Project, which authorization shall be obtained before any application is submitted to the
City in connection with such proposed use:
6.3.1 Any use involving the use or storage of Hazardous Materials in violation of
Environmental Laws;
6.3.2 Use or storage of any fire, explosion or other damaging or dangerous hazard,
including the storage or sale of explosives or fireworks;
6.3,3 Any distillation or refinery facility;
101569253.12
Eastlake Professional Center
139709-00001. Amended and Restated CC&Rs
29
2016-04-05 Agenda Packet Page 272
JJ •
UNITS 2088-101 & 2088-201 892
21.6'
LEVEL I
LEVEL 2
SCALE:
rq,PROJECT DESIGN CONSULTANTS
SHEET I OF I SHEET
i
RECIPROCAL ACCESS EASEMENTS OVER
UNIT8 2088-101 AND 2088-20! OF
AMENDED AND RESTA TED CONDOMINIUM PLAN
FOR EASTLAKE PROFE8810NAL CENTER
P: \JI82\MAPPiNG\CONDO\I8 Unit Condo Plon - Eostloke Professionol Center\Exhibits\Exhlbit - Unit 2088.dw9 ;ep 06, 2013
2016-04-05 Agenda Packet Page 273
CI'IY OF
CI4ULA VISTA
D evelo pm e n t Services Department
Planning Division I Development Processing
APPEAL APPLICATION FORM
Appeal the decision of the:
[] Zoning Administrator
[] Planning Commission
Application Information
, -i s
?
Name of Appellant CARRILLO COMMERCIAL PROPERTIES LLC Phone 619-407-4082
Address 2088 OTAY LAKES ROAD UNIT #102, CHULA VISTA, CALIFORNIA, 91915
Business Address SAME
Project Address 2088 OTAY LAKES ROAD, SUITES 101 & 201
Project Description RANCHO VISTA COVENANT CHURCH / CONDITIONAL USE PERMIT
(Example: variance, conditional use permit, design review, etc.)
Please use the space below to provide a response to the decision you are appealing. Attach additional sheets, if necessary.
Grounds for an appeal must be based on at least one of the following:
(I) Factual Error. The statements or evidence relied upon by the decision maker when approving, conditionally
approving, or denying a permit, map, or other matter was inaccurate;
(2) New Information. New information is available to the applicant or the interested person that was not available
through that person's reasonable efforts or due diligence at the time of the decision; or
(3) Findings Not Supported. The decision maker's stated findings to approve, conditionally approve, or deny the
permit, map, or other matter are not supported by the information provided to the decision maker.
In order for an appeal to be valid, detailed responses must be included which cite at least one of the above reasons for the appeal
along with substantiation of the facts and circumstances on which the claim of theappeal is based. If an appeal is filed within the
time limit specified, and determined to be valid, it automaticallystays proceedings in the matter until a determination is made by
the City Council.
SEE ATTACHMENT
Appeal Form Directions
Pursuant to the Chula Vista Zoning Ordinance Chapter 19.14, an interested party may appeal the decision of the Zoning Administrator,
or Planning Commission to the City Council. The appellant must be an interested party. An interested party means a person who was
present at a public hearing from which an appeal arose and who had filed a speaker slip with the decision maker at that public hearing,
or a person who expressed an interest in the project in writing to that decision maker before the close of the public hearing or a decision
on an action from which an appeal may be filed. The appellant must file a complete appeal application form within the specified appeal
period (I 0 business days after the decision has been made), complete the Disclosure Statement, and pay the required fee. Once a valid
appeal form is filed, the appeal will be scheduled for a hearing by the City Council within 30 days.
Signature of Appellant Date.
DO NOT WRITE IN THIS SPACE
The above matter has been scheduled for public hearing before the: [] City Council On __L__L__
lofl 276 Fourth Avenue l Chula Vista I California 1 91910 [ (619) 691.5101
Development Services Department City Clerk
2016-04-05 Agenda Packet Page 274
ATTACHMENT TO APPEAL APPLICATION
RE: CASE NO. PCC-15-014
This is an appeal of the Notice of Decision by the Zoning Administrator dated January
13, 2016 regarding Rancho Vista Covenant Church (the "Applicant") / Case No. PCC-15-014.
Carrillo Commercial Properties LLC, a California Limited Liability Company (the "Appellant")
is an interested party with standing to appeal the decision because: (1) Appellant timely filed a
written objection with the City of Chula Vista Project Planner, Harold Phelps on October 16,
2015 and (2) Appellant owns the building unit adjacent to the property which is the subject of the
above conditional use permit application.
Overview. The decision of the Zoning Administrator to issue the Conditional Use Permit
to the Applicant should be revoked and no conditional use permit should be issued. The project
site for the Applicant is located within the Professional & Administrative (PA) land use district
and is located in a professional center which was designed for business offices. Under the SPA
plan religious institutions are not-permitted in the PA land use district, meaning they are not
eligible for consideration for a conditional use permit without an amendment to the SPA.
The City of Chula Vista attempts to brush aside the requirements of the SPA with the
argument that the SPA would be unenforceable anyways under Federal Law (under the Religious
Land Use and Institutionalized Persons Act) because other similar assembly type uses are
permitted in the area. However, in order for Federal Law to control, the land use regulations
promulgated under the SPA would need to be shown to place a substantial burden on the exercise
of religion. Because religious institutions are permitted in several other neighboring zones, the
City and the Applicant have failed to show that the SPA indeed creates this substantial burden.
Consequently, the zoning requirements under the SPA need to be followed.
The zoning decision and building permits also authorize construction of both classrooms
and a nurserj , which violate the CC&Rs of the project and are not protected by Federal law as a
religious use. These findings are also not supported because the classrooms and nursery were
not disclosed in the CUP Application and the public notice of consideration sent by the Zoning
Administrator expressly states: "No pre-school or day care uses are proposed as part of this
permit application."
Finding #1. The timing that the proposed use is necessary or desirable in this area is not
supported by information available in the SPA. Religious institutions are expressly not permitted
in the PA land use district. While it is true, that a religious institution is desirable for residents of
eastern Chula Vista, there are several other land use districts covered by the SPA where the
Church would actually be allowed by conditional use permit such as the residential land use
districts and would still be just as convenient and desirable for Chula Vista residents.
Finding #2. The Applicant proposes seven days of operations at the proposed locations
but the City of Chula Vista has only required the Applicant to meet the 43 parking space
allocation for one day of the week (Sunday). Despite only occupying 10.00% of the square
footage in the professional center, the Applicant will use more than 20.00% of the available
parking at peak times, increasing traffic to the property. Once the CUP has been issued, the City
of Chula Vista will have a difficult time monitoring whether the Applicant is exceeding its
2016-04-05 Agenda Packet Page 275
parking allocation only on Sundays, or in practice is reaching its peak occupancy on other days
of the week, days on which it does not have the 43 parking space allocation.
Finding #3. The use does not comply with the regulations and conditions specified in the
code. The code requires 43 parking spaces which represent approximately twenty percent of the
parking space in the development. The Applicant has only provided a temporary parking
allocation for one day of the week. The code does not state that meeting the parking requirement
on 1/7 of the days is sufficient and once the CUP is issued there is no reliable enforcement
mechanism for prohibiting the applicant from exceeding its 26 space parking allocation on the
other six days of the week.
Finding #4. The SPA prohibits religious institutions in the PA land use district. The
City of Chula Vista attempts to dispose with this requirement, by finding the SPA unenforceable
under Federal Law because other similar assembly type uses are permitted in the PA land use
district. This analysis is incorrect on multiple grounds.
It is factually incorrect, because the other assembly type uses which are cited: nurseries,
libraries, day care schools, etc. are not expressly permitted in the PA land use district, instead
they might be considered a case by case basis for a conditional use permit.
The findings are also not supported by the law. The zoning restrictions set forth under
the SPA are not being followed and the standard provided by the Zoning Administrator regarding
the Federal Law (Religious Land Use and Institutionalized Persons Act) was not correct. The
threshold under Federal Law for limiting local zoning authority is where the land use regulation
places a "substantial burden" on the exercise of religion. This burden has typically been found
where the land use regulation is oppressive and imposes a significant restriction on where
religion can be practiced. The SPA contemplated the need for land for religious purposes by
permitting religious institutions in several other land use districts within a 5 square mile radius of
the proposed location of the applicant. Land use regulations have generally been upheld and not
been found to place a substantial burden on the exercise of religion where the religious activity is
permitted in other neighboring zones.
Conditions. There is no limiting condition contained in the proposed CUP to prevent the
Applicant from operating a pre-school or a daycare. The CUP Application submitted by the
Applicant on August 24, 2015 does not mention daycare or a nursery school as part of the
project. The Notice of Consideration sent by the project planner specifically describes the
project as containing no pre-school or day care uses under the project description. The zoning
decision authorizes construction of both classrooms and a nurserj, neither of which were
disclosed in the conditional use permit application, violate the CC&Rs of the project, and are not
protected by Federal law as a religious use.
2016-04-05 Agenda Packet Page 276
CITY OF
CHULA VISTA DISCLOSURE STATEMENT***
Pursuant to City Council Policy 101-01, prior to any action on a matter that requires discretionary action by the City Council,
Planning Commission or other official legislative body of the City, a statement of disclosure of certain ownerships, financial
interests, payments, and campaign contributions must be filed. The following information nmst be disclosed:
.List the names of all persons* having a financial interest in the project that is the
subject of the application, project or contract (e.g. owner, applicant, contractor,
subcontractor, material supplier).
Carrillo Commercial Properties LLC (Appellant in CUP Case No. PCC-15-014)
.If any person* identified in section 1. is a corporation or partnership, list the names of
all individuals with an investment of $2000 or more in the entity.
Frank Carrillo
.If any person* identified in section 1. is a non-profit organization or trust, list the names
of any person who is the director of the non-profit organization or the names of the
trustee, beneficiary and trustor of the trust.
N/A
.Please identify every person,* including any agents, employees, consultants, or
independent contractors, whom you have authorized to represent you before the City in
this matter.
Beniamin S. Green Esq./Green & Green LLP
Fral Carrillo Christina Suggett
°Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this
contract, project or application, had any financial dealings with an official** of the City
of Chula Vista as it relates to this contract, project or application within the past 12
months? Yes No X
If Yes, briefly describe the nature of the financial interest the official** may have in
this contract.
6. Has any person* anyone identified in 1., 2., 3., or 4., above, or otherwise associated
with this contract, project or application, made a campaign contribution of more than
276 Fourth Avenue C$ula Vista CalifOrnia 91910 [ I (619) 585-5722
Revised 010714.DTD
2016-04-05 Agenda Packet Page 277
CITY OF
CHULAVISTA DIscLosu STATEMENT***
$250 within the past twelve (12) months to an official of the City of Chula Vista?
Yes No X__ If yes, which official?
o Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this
contract, project or application, provided more than $460 (or an item of equivalent
value) to an official** of the City of Chula Vista in the past twelve (12) months? (This
includes any payment that confers a personal benefit on the recipient, a rebate or
discount in the price of anything of value, money to retire a legal debt, gift, loan, etc.)
Yes No X
If Yes, which official** and what was the nature of item provided?
,Has any person* identified in 1., 2., 3., or 4., above, or otherwise associated with this
contract, project or application, been a source of income of $500 or more to an
official** of the City of Chula Vista in the past twelve (12) months?
Yes No X
If Yes, identify the official** and the nature of the income provided?
Date: 1/27/16
Signature of Contractor/Applicant
Can'illo Commercial Properties, LLC, a California
Limited Liability Company
By Frank Carrillo, Manager
Print or type name of Contractor/Applicant
This Disclosure Statement must be completed at the time the project application, or contract, is submitted to City staff for
processing, and updated within one week prior to consideration by the legislative body.
* Person is defined as: any individual, firm, co-partnership, joint venture, association, social club, fraternal organization,
corporation, estate, trust, receiver, syndicate, any other county, city, municipality, district, o1" other political subdivision, or
any other group or combination acting as a unit.
** Official includes, but is not limited to: Mayor, Council member, Planning Commissioner, Member of a board,
commission, or committee of the City, and City employees or staff members.
ourt Ave.ue 4uloV s . ali+i. I
Revised 010714.DTD
2016-04-05 Agenda Packet Page 278
CI]Y OFCHU[A VISTA
FEE RECEIPT
DEVELOPMENT SERVICES DEPARTMENT
PRINTED ON: 02/01/2016
RECEIPT NUMBER: 677027
APD #: PCC-15-014
SITE ADDRESS: 2088 OTAY LAKES RD 101
PARCEL: 5950707311
TYPE: Conditional Use Permit/NA
TRANSACTION DATE: 02/01/2016 TOTAL PAYMENT: $250.00
TOTAL PAID FROM TRUST: $0.00
TRANSACTION LIST
Type Method Amount
Payment
ACCOUNT ITEM LIST:
Item #
Quadrant
Description
$250.00
Acct Code Fee Amt Cur. Pmt
CUP090 Appeal Filing Fee 2000 $250.00
TOTAL:
$250.00
$250.00
Receipt Issued by: AAC Receipt Date: 2/1/2016 10:43 AM
Development Services Department - 276 Fourth Ave Chula Vista, CA 91910 - (619) 691-5007
2016-04-05 Agenda Packet Page 279
GREEN & GREEN LLP
227 3RD AVENUE
CHULA VISTA, CALIFORNIA 91910-2710
(619) 425-4020
FAX (619) 425-9709
MIcnAt;L A. GREEN, ESQ.BENJAMIN S. Gm?EN, ESQ.
October 15, 2015
City of Chula Vista
Development Services Department
Attn: Harold Phelps, Project Planner
276 Fourth Avenue
Chula Vista, California, 91910
Sent Via Electronic Mail
75Z ......
OCT 16 2815
Re:Rancho Vista Church ("Rancho Vista")
CUP Application
Case Number: PCC-15-014
OEVELOPMSNT SERVICES DEPARTME!
Dear Mr. Phelps:
This law firm represents Carrillo Commercial Properties LLC, a California Limited
Liability Company (our "Client"). Our Client is the owner of the office condominium units at
2088 Otay Lakes Road #102 and #202, Chula Vista, California, 91915. Rancho Vista has
applied for the above referenced conditional use permit with the City of Chula Vista in order to
purchase the office condominium units which are directly adj acent to and share a common wall
with our Client's units.
Our Client does not believe Rancho Vista's conditional use permit should be approved by
the City of Chula Vista because of the following expected problems: lack of parking, increased
traffic, and excessive noise.
There are 236 parking spaces available under the condominium plan. The CUP
application for Rancho Vista contemplates a max occupancy for the building of 150 people
which will result in 100 vehicles present at certain times. The units purchased by Rancho Vista
are comprised of only 6,919 square feet, whereas the entire development consists of
approximately 68,000 square feet of usable building space. As a result at any given time,
Rancho Vista, despite owning only 10.00% of the square footage in the center may be using as
much as 50.00% of the center's available parking.
The CUP application has a requirement of 43 parking spaces required for the permitted
use. Rancho Vista is only entitled to use 23 spaces on a permanent basis pursuant to the original
parking allocation from the developer. How the City of Chula Vista or Rancho Vista determined
Page 1 of 2
2016-04-05 Agenda Packet Page 280
that 43 spaces were sufficient for this project is unclear given the probable high traffic impact of
the use. Rancho Vista received an allocation of an additional 20 parking spaces from the
developer on a very limited basis in order to attempt to meet the 43 space requirement. The
parking allocation from the developer is for Sundays only and does not apply on any other day.
However, Rancho Vista contemplates full time operation seven days a week with hours ranging
from 7:00 am to 8:30pm.
The CUP application attempts to address the parking issue by limiting the hours and
times where the project would be impacted by increased traffic. However, if the CUP is issued
to Rancho Vista and they are permitted to open, it is quite likely that on certain holidays and
other busy times (in addition to Sundays), Rancho Vista will indeed end up using more than the
23 parking spaces that it has been permanently allocated and should be limited to using 6 out of 7
days of the week. In practice, this can result in circumventing the CUP requirements and further
infringe upon the other unit owners parking allocation.
In summary, if the CUP requirement is for 43 parking spaces, our Client does not believe
that a parking allocation of 43 spaces for one day a week and 23 spaces for the other six days
achieves substantial compliance with this important requirement.
The impact of Rancho Vista using up to five times its permanent parking allocation will
increase traffic in and out of the center, amplify the risk of car accidents, and accelerate the wear
and tear on the parking lots and access roads.
Another concern of our Client involves the noise from the expected use. The typical
occupancy of similar sized units in the Center range from 10-30 occupants. Rancho Vista will
have up to 150 occupants and disproportionately higher the noise level due to the intended use.
The activities of Rancho Vista, which would likely include choir practice, sermons, and other
religious activities will need to be broadcast through some type of public address system which
would amplify the noise level in our Client's unit and other units in the center.
Our Client understands the importance of freedom of association and freedom of religion
and hopes that Rancho Vista is able to find a suitable home, but they do not believe a center
designed for medical and executive office uses is an appropriate location for a church. The name
of the entire development is the Eastlake "Professional" Center and our Client would like to see
the center maintain the appearance and image of a "Professional" location for meetings with its
clients and vendors.
Sincerely,
GREEN & GREEN LLP
By: ...........
Benjamin S. Green, Esq., Partner
cc: Client
Page 2 of 2
2016-04-05 Agenda Packet Page 281
Ci]Y OF
CHULA VISTA
ZONING ADMINISTRATOR
NOTICE OF DECISION
Date:
Applicant:
Case No.:
Address:
Proj ect Planner:
January 13, 2016
Rancho Vista Covenant Church
PCC-15-014
2088 Otay Lakes Road, Suites 101 & 201
Harold Phelps, AICP
Notice is hereby given that on Janua13 13, 2016 the Zoning Administrator considered
Conditional Use Pelanit (CUP) application PCC-15-014, filed by the Rancho Vista
Covenant Church ("Applicant"). The Applicant requests to establish the Rancho Vista
Chm'ch within an existing building in the Eastlake Professional Center ("Project"). The
Project is located at 2088 Otay Lakes Road, Suites 101 & 201 ("Project Site"). The
Eastlake Professional Center is owned and managed by Pathfinder Otay Holdings, LLC, and
the business condominium Suites 101 & 201 will be owned by the Rancho Vista Church
("Property Owner"). The Project Site is zoned Professional & Administrative (PA) in the
Eastlake II Sectional Planning Area (SPA) Plan. The General Plan Land Use Designation is
Professional & Office. The Project is more specifically described as follows:
The Rancho Vista Covenant Church will utilize two suites within a two-story building
providing approximately 7,000-square feet of gross floor area. The suites will provide
for a lobby, auditorium and restrooms on the first floor, and classrooms, a nursery, an
office and counseling space on the second floor. The 1,330-square foot auditorium will
be utilized on Sundays only from 7:00 a.m. to 10:00 p.m. and provide a seating capacity
for up to 150 persons, which requires 43 parldng spaces in accordance with Chula Vista
Municipal Code (CVMC) Section 19.62.050 (9). Suites 101 & 201 have an allotment of
26 parldng spaces for small group meetings, bible study, and general administrative uses
Monday through Saturday. An additional 20 parldng spaces will provide 46 parking
spaces to exceed the 43 parking spaces required on Sundays and are made available by a
Parldng Agreement signed and approved by the Eastlake Professional Center Owners
Association managed by Pathfinder Otay Holdings, LLC. This Conditional Use Permit
will be valid for three (3) years.
The Project has been reviewed for compliance with the California Environmental Quality
Act (CEQA), and it has been determined that the Project qualifies for a Class 1 categorical
exemption pursuant to Section 15301 (existing facilities) in accordance with the State
CEQA Guidelines. No further environmental review is required.
The Zoning Administrator, under the provisions of CVMC Section 19.14.030.A.2 and
CVMC Section 19.14.080, has been able to make the findings for approval of this
conditional use permit based upon the following findings of facts:
2016-04-05 Agenda Packet Page 282
lo That the proposed use at this location is necessary or desirable to provide a service
or facility which will contribute to the general well being of the neighborhood or
community.
As an assembly-type use, the church will be located convenient to Chula Vista residents
living in nearby neighborhoods and contlibute to the general well-being of the
surrounding communities. The Rancho Vista Covenant Church will occupy floor space
within the existing building Monday through Saturday for small group meetings, bible
study, and general administrative uses, but assembly for worship services will only be
offered on Sundays.
o That such use will not, under the circumstances of the particular case, be
detrimental to the health, safety or general welfare of persons residing or worldng
in the vicinity or injurious to property or improvements in the vicinity.
The Church will be located in an existing 7,000-square foot building (2088 Otay Lakes
Road Suites 101 & 201) that includes a 1,330-square foot auditorium that can provide
seating for up to 150 people on Sundays. Suites 101 & 201 are allocated 26 parking
spaces in the adjacent business center parldng lot, and an additional 20 parking spaces
have been allocated for church use on Stmdays via an agreement with the Eastlake
Professional Center Owners Association, for a total of 46 parking spaces. Although not
all of the parldng spaces for the center are allocated to the Project, there are a total of
230 parking spaces provided in the Eastlake Business Center, and most tenants will be
closed on Sundays. In addition, since most tenants are closed on Sundays, there will be
minimal to no adverse impacts to the other tenants of the business center related to
traffic and noise on Sundays. For these reasons, the proposed use will not adversely
impact the operation of adjacent businesses and will not be detrimental to the health,
safety, and welfare of the persons, property and improvements in the vicinity.
3. That the use will comply with the regulations and conditions specified in the code
for such use.
In accordance with CVMC Section 19.62.050 (9), churches are required to provide one
parking space per each 3.5 seats in the auditorium. Therefore, the Project is required to
wovide 43 parking spaces based on a seating capacity of up to 150 seats. As noted
above, the center has allocated 26 parking spaces to the suites and an additional 20
parking spaces are available for church use on Sundays via the above noted parldng
agxeement, for a total of 46 parldng spaces. The property has a total of 230 on-site
parking spaces available for all tenants. The remaining 184 parldng spaces within the
business center are sufficient for the other tenants who may conduct business on
Sunday.
The approval of this Conditional Use Permit is contingent on the Applicant's and
PropelV Owner's commitment to satisfy all conditions of approval and to comply with
all applicable regulations and standards specified in the CVMC. The Applicant has
committed to implement and satisfy all conditions of approval for the proposed use, and
will comply with all applicable CVMC regulations.
2016-04-05 Agenda Packet Page 283
4. That the granting of the Conditional Use Permit will not adversely affect the
General Plan of the City or the adopted plan of any governmental agency.
Assembly-type uses are allowed with a Conditional Use Permit in the Professional and
Administrative (PA) zone in accordance with the Eastlake II SPA Plan District
Regulations, consistent with the Professional & Office General Plan Land Use
Designation.
As a Conditional Use Permit, the Project is subject to review for compliance with
conditions of approval related to any adverse impacts such as noise related to assembly
type activities or inadequate parldng. The Conditional Use Permit will expire and
require renewal after a period of three (3) years as a condition of approval. Thus, the
approval will not affect the long range goals and objectives of the General Plan for
Professional & Office land uses and the Eastlake II SPA Plan Professional and
Administrative (PA) zone.
Note: While Religious Institution uses are identified as not pernaitted in the Professional
and Administrative zone of the Eastlake II SPA Plan, federal law (the Religious Land
Use and Institutionalized Persons Act) generally requires that Religious Institutions be
permitted in zones that allow other assembly type uses trader a similar permitting
process. Many assembly type uses are pelmitted in the PA zone (and include, but are not
limited to, nurseaies, day care schools, YMCA, YWCA, libraries and educational
institutions) with the approval of an administrative Conditional Use Permit, and under
federal law, Religious Institutions should be subject to the same regulations.
BASED ON THE FINDINGS ABOVE, THE ZONING ADMINISTRATOR hereby
approves Conditional Use Permit PCC-15-014, as described above, subject to the following
conditions of approval in Sections I, II and III:
go The following conditions of approval shall be satisfied prior to issuance of the
building permit for the project:
.The Property Owner and the Applicant shall execute this document by making a true
copy of this Notice of Decision and signing both this original notice and the copy on
the lines provided below, said execution indicating that the Property Owner and
Applicant have each read, understood and agreed to the conditions contained herein,
and will implement same. Upon execution, the true copy with original signatures
shall be returned to the Development Services Department. Failure to return the
signed true copy of this document within 30 days shall indicate the Property
Owner/Applicant's desire that the project, and the corresponding application for
building permits and/or a business license, be held in abeyance without approval.
Signature of Representative Date
2016-04-05 Agenda Packet Page 284
Signature of Authorized Property Owner Date
Building Division Condition:
.The Applicant shall comply with the current edition of the California Building Code
(CBC), California Mechanical Code (CMC), Califol a Plumbing Code (CPC),
California Electrical Code (CEC), California Fire Code (CFC), California Energy
Code, and the Green Building Ordinance (CVMC 15.12) and all other locally
adopted City and state requirements.
II. The following conditions shall be satisfied prior to occupancy:
Fire Department Conditions:
3. The proposed church use requires a change of occupancy through the building
permit process prior to occupancy of the building for church assembly use.
III.The following on-going conditions shall apply to the subject property as long as
it relies upon this approval.
°The Applicant shall maintain the Project in accordance with the approved plans for
PCC-15-014 date stamped on Janual y 13, 2016, which includes a site plan, floor
plan and elevations on file in the Planning Division, the conditions contained herein,
Title 19, and the Eastlake II SPA Plan.
°Church worship services shall only be held on Sundays, between 7 a.m. to 10 p.m.
The Project must maintain 26 required parldng spaces for non-worship selMce
activities Monday through Saturday. In addition, via an approved Parking
Agreement between the Applicant and the Eastlake Professional Center Owners
Association, the provision of an additional 20 parking spaces must be provided and
be in full force and effect concm:rently with this subject Conditional Use Permit. The
Applicant shall submit the subject Parking Agreement to the City Planning Division
which will be retained on file in order to meet the required parking for church
worship services on Sunday. The Applicant hereby aclmowledges and agrees that if
the required additional 20 parldng spaces cannot be maintained for the Project, that
this subject Conditional Use Permit may be revoked.
.Approval of this Conditional Use Permit shall not waive compliance with any
sections of Title 19 (Zoning) of the Municipal Code nor any other applicable City
Ordinances in effect at the time of building permit issuance.
°This Conditional Use Permit authorizes only the uses specified in the application for
PCC-15-014, which is for small group meetings, bible study, and general
administrative uses Monday through Saturday, and a church assembly-type use on
Sundays in an auditorium that provides a seating capacity for up to 150 persons.
2016-04-05 Agenda Packet Page 285
,This Conditional Use Pelanit shall expire in three years on January 13, 2019 unless a
request for extension is approved by the Zoning Administrator. Any new use or
modification/expansion of uses authorized under PCC- 15-014 shall be subject to the
review and approval of the Zoning Administrator.
,The Applicant/Operator shall and does hereby agree to indemnify, protect, defend
and hold harmless City, its Council members, officers, employees, agents and
representatives, from and against any and all liabilities, losses, damages, demands,
claims and costs, including court costs and attorneys' fees (collectively, "liabilities")
incun'ed by the City arising, directly or indirectly, from (a) City's approval and
issuance of this Conditional Use Permit, (b) City's approval or issuance of any other
permit or action, whether discretionary or non-discretionary, in connection with the
use contemplated herein. Applicant/Operator shall acknowledge their agreement to
this provision by executing a copy of this conditional use permit where indicated,
above. Applicant's/Operator's compliance with this provision is an express
condition of this conditional use pelanit and this provision shall be binding on any
and all of Applicant's/Operator's successors and assigns.
10.
11.
12.
This Conditional Use Permit shall become void and ineffective if not utilized or
extended within the time allotted in Section 19.14.260 of the Municipal Code.
Any violations of the terms and conditions of this permit may result in the
imposition of civil or criminal penalties and/or the revocation or modification of this
pelanit.
If any of the foregoing conditions fails to occur, or if they are, by their texans, to be
implemented and maintained over time, if any of such conditions fail to be so
implemented and maintained according to their terms, the City shall have the right to
revoke or modify all approvals herein granted, deny, or further condition issuance of
all future building permits, deny, revoke, or further condition all certificates of
occupancy issued under the authority of approvals herein granted, institute and
prosecute litigation to compel their compliance with said conditions or seek damages
for their violation. Applicant or a successor in interest gains no vested fights by the
City's approval of this conditional use permit.
APPROVED BY ZONING ADMINISTRATOR OF THE CITY OF CHULA VISTA,
CALIFORNIA, this 13th day of Janumy 2016.
Michael Walker, Zoning Administrator
2016-04-05 Agenda Packet Page 286
Our ten-year quest for a church location
April, 2006 - Pastor John Rose and various RVC leaders meet with City of Chula Vista staff members
Harold Phelps, Kimberly Vander Bie, and Scott Donaghe to inquire about available properties in Otay
Ranch area. CPF properties were described as follows:
1695 Discovery Falls, Chula Vista 91915 – in process with Concordia Lutheran Church
1420 E Palomar St, Chula Vista, CA 91913 – sold to La Roca Church
May, 2007 – Meetings with McMillan company regarding large CPF property
• 1771 E Palomar St, Chula Vista, CA 91913 – already sold to Calvary Chapel
January, 2007 – December 2009 – Various meetings with Otay Ranch Company
February 2007 several meetings and discussions with Otay Ranch Company’s Rod Cameron
March-May various property tours and discussions with Otay Ranch Company representative
Frank Hahn.
o Possible small property available in Santa Rita community of Otay Ranch. This property
was later removed from master plan. RVC was informed Baldwin company
accommodated a land swap regarding water rights.
o Bank representatives for Rancho Vista church fly out from Chicago for a special meeting
on a very small parcel directly adjoining the North/Western section of the Otay Ranch
Center. RVC commits to work within any price structure and to conduct a 15-day
escrow. Otay Ranch Company later declares no interest in this deal.
Spring, 2011 – Otay Real Estate company is contracted to search for properties in area for church
Broker Frank Ohrmund charts local property market and consistently reports back to City.
November, 2011 – Calvary Chapel owned lot on corner of East Palomar and Santa Rosa Drive in Otay
Ranch is pursued by church
Size and price of lot is perfect, and deal looks promising
RVC is told by seller that neighbors have successfully fought placement of a church at this
location
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April, 2012 – an offer is made and earnest money deposit given for 2381 Boswell Rd, Chula Vista, CA
91914
Offer is never countered and shortly removed from the market by owner.
September, 2012 – Review of property available at 816 Starboard St, Chula Vista, CA 91914
Property too small for a church
January 2013 – CPF property 1420 E Palomar St, Chula Vista, CA 91913 – (La Roca Eterna church) is
foreclosed on, giving Rancho Vista Church a second opportunity at a very rare CPF property that meets
church’s needs.
• RVC makes contact with the Bank that owns property
• RVC discusses project with city and is informed City has other plans for that lot.
• Property is quickly sold to St. Paul’s senior services.
March 2013 – Broker Frank Ohrmund discusses property at 125 and Eastlake Drive with City
Though less than ideal RVC invests 6 months researching feasibility of project.
Traffic patterns make ingress onto property nearly impossible
July, 2014 – Intense searching and communications with various owners in design district
• Inquiries to Vogt properties regarding raw land in the area. Price of raw land far beyond
churches budget.
• Various conversations with independent owners in the design center. Most need to sell more
square footage than church can afford (average is around 20,000 sq. feet).
November, 2015 – 2088 Otay Lakes Road property is discovered, a perfect property for churches
needs
Size of 7000 square ft. size and price is perfectly within churches budget
CC&R’s specifically allow for church usage (section 6.2)
Owners are amicable to sell to a church
Parking allotment is feasible as most business do not operate on Sundays
City planning departments confirms that SPA plan “Non church usage” is contradicted by
Federal Law and that a fast track “administrative process” would be appropriate.
Project is unanimously supported by church members, members of the community, other
neighbors in the business park except one loan neighbor who opposes project.
January 13th, 2016 CUP Notice of Approval is given.
o City Attorney, City Staff, and Zoning Administrator support project.
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City of Chula Vista
Staff Report
File#:16-0123, Item#: 7.
CONSIDERATION OF APPROVAL TO REFINANCE 2006 AND 2010 CERTIFICATES OF
PARTICIPATION
A.RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAAUTHORIZING
THEEXECUTIONANDDELIVERYBYTHECITYOFASITELEASE,LEASEAGREEMENT,
INDENTURE,ESCROWAGREEMENTS,CONTINUINGDISCLOSUREAGREEMENTAND
BONDPURCHASEAGREEMENTINCONNECTIONWITHTHEISSUANCEOFTHECHULA
VISTAMUNICIPALFINANCINGAUTHORITY2016LEASEREVENUEREFUNDING
BONDS,APPROVINGTHEISSUANCEOFSUCHBONDSINANAGGREGATEPRINCIPAL
AMOUNTOFNOTTOEXCEED$40,000,000,AUTHORIZINGTHEDISTRIBUTIONOFAN
OFFICIALSTATEMENTINCONNECTIONWITHTHEOFFERINGANDSALEOFSUCH
BONDSANDAUTHORIZINGTHEEXECUTIONOFNECESSARYDOCUMENTSAND
CERTIFICATES AND RELATED ACTIONS
B.RESOLUTIONOFTHECHULAVISTAMUNICIPALFINANCINGAUTHORITY
AUTHORIZINGTHEEXECUTIONANDDELIVERYBYTHEAUTHORITYOFASITELEASE,
LEASEAGREEMENT,INDENTURE,ASSIGNMENTAGREEMENTANDBONDPURCHASE
AGREEMENTINCONNECTIONWITHTHEISSUANCEOFCHULAVISTAMUNICIPAL
FINANCINGAUTHORITY2016LEASEREVENUEREFUNDINGBONDS,AUTHORIZING
THEISSUANCEOFSUCHBONDSINANAGGREGATEPRINCIPALAMOUNTOFNOTTO
EXCEED$40,000,000,AUTHORIZINGTHEDISTRIBUTIONOFANOFFICIALSTATEMENT
INCONNECTIONWITHTHEOFFERINGANDSALEOFSUCHBONDSAND
AUTHORIZINGTHEEXECUTIONOFNECESSARYDOCUMENTSANDCERTIFICATES
AND RELATED ACTIONS
C.RESOLUTIONOFTHECHULAVISTAPUBLICFINANCINGAUTHORITYAUTHORIZING
THEEXECUTIONANDDELIVERYOFESCROWAGREEMENTSINCONNECTIONWITH
THEISSUANCEOFCHULAVISTAMUNICIPALFINANCINGAUTHORITY2016LEASE
REVENUEREFUNDINGBONDSANDAUTHORIZINGTHEEXECUTIONOFNECESSARY
DOCUMENTS AND RELATED ACTIONS
RECOMMENDED ACTION
CouncilconductpublichearingandadoptResolutionA,MunicipalFinancingAuthorityadopt
Resolution B and Public Financing Authority adopt Resolution C.
SUMMARY
TheCityhasanopportunitytorefinanceitsoutstandingCityofChulaVista2006Certificatesof
ParticipationandCityofChulaVista2010CertificatesofParticipationandreduceannualpayments,
basedoncurrentfinancialmarketconditions.Therefinancingwouldbeaccomplishedbythe
issuance of Chula Vista Municipal Financing Authority Lease Revenue Refunding Bonds.
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ENVIRONMENTAL REVIEW
Environmental Notice
Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality
ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental
review is required.
Environmental Determination
TheDirectorofDevelopmentServiceshasreviewedtheproposedactivityforcompliancewiththe
CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthattheactivityisnota“Project”as
definedunderSection15378oftheStateCEQAGuidelinesbecauseitwillnotresultinaphysical
changeintheenvironment;therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelines,
the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not Applicable
DISCUSSION
Background
In2006,theCitydelivered$20,235,0002006CertificatesofParticipation(2006COPs)tofinancethe
costofthe2nd phaseoftheCivicCenterconstructionandtheNatureCenter.TheGeneralFund’s
shareoftheannualdebtserviceonthe2006COPsisapproximately22%,withthebalancepaidfrom
thePublicFacilitiesDevelopmentImpactFee(PFDIF)Fund.Marketconditionsinsummer2015
allowedtheCitytorefinanceaportionofthe2006COPsandrealizeadebtservicesavingsinyears
2016-2026. The current balance outstanding is $8,755,000.
In2010,theCitydelivered$29,355,0002010CertificatesofParticipation(2010COPs)toreimburse
theGeneralFundandPFDIFFundfortheconstructioncostofthe3rd phaseoftheCivicCenter
construction,andtorefinancetheoriginalconstructionoftheCorporationYardimprovements.The
GeneralFund’sshareoftheannualdebtserviceonthe2010COPsisapproximately28%,withthe
balance paid from PFDIF. The current balance outstanding is $26.2 million.
Refinancing Opportunity
TheCityhastheopportunitytorefinanceeachseriesofCOPsattoday’sfavorableinterest
rates,andreducetheannualpaymentspayablefromtheGeneralFundandthePFDIFfund.
Currently,staffexpectsthattheremaining2006COPsmaturingbetween2027and2036can
berefinancedtoproduceatotalnetsavingsof$800,000,ora6.4%reductionintotalpayments
overthoseyears.Thepresentvalueofthesavingsfromrefinancingis7.5%,whichishigher
than the City’s debt policy 5% savings minimum requirement.
Staffexpectsthat2010COPscanberefinancedtosave$230,000annuallyfor15years,
reducingdebtservicepaymentsby9.5%inthoseyears.Someofthesesavingsresultfrom
beingabletoeliminateareservefundforthebondsbecauseoftheCity’sAA-creditrating.
Thereservefundthatcurrentlyexistswouldhaveoffsetthefinalpaymentonthe2010COPs,
butnowthesavingsthatwouldhavebeenrealizedonlyinthefinalyearwillnowreducedebt
serviceovertimeinsteadofatfinalmaturity.Basedontoday’sratesthepresentvalueofthe
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serviceovertimeinsteadofatfinalmaturity.Basedontoday’sratesthepresentvalueofthe
savings from this refinancing is 5.6%.
ThesavingsfromtherefinancingwillbesharedbetweentheGeneralFundandthePFDIF
Fundinthesameratioasthecurrentfunding.TheGeneralFundshareoftheannualsavingsis
estimatedat$64,000for15years,withanadditional$41,000ofsavingseachyearbetween
2027and2036,foratotal$1.33millionover20years.Thebalanceofthesavingswillaccrue
to the PFDIF Fund.
No extension of existing maturity of either series of COPs is contemplated.
Financing Structure
The2006COPsweresecuredbyleasepaymentspayabletotheChulaVistaPublicFinancing
Authority(PFA)withrespecttoaleaseoftheCivicCenterProperty.Whenthe2010COPs
wereissued,thepaymentsweresecuredbyaleasewiththePFAofseveraldifferentproperties
-theCorporateYardand3firestations.Aspartoftherefinancing,thenewLeaseRevenue
RefundingBonds(Bonds)tobeissuedbytheChulaVistaMunicipalFinancingAuthority
(Authority)willbesecuredbyaleaseoftheCorporateYardproperty,andthefirestations
currentlysecuringthe2010financing.Becausethe2006COPsrefinancingcanbecombined
with the 2010 COPs refinancing, this eliminates the need to issue two separate series of bonds.
BecausetheBondsarebeingsoldthroughtheAuthority,theCity,asthejurisdictionwherethe
facilitiesbeingrefinancedarelocated,isrequiredtoholdapublichearingbeforetheAuthority
mayapprovearesolutionauthorizingthesaleoftheBonds.Afterthepublichearing,theCity
CouncilmustfindthattherewillbesignificantpublicbenefittotheCityfromtheissuanceand
saleofBondsbytheAuthorityforthepurposeofrefinancingtheimprovements.“Significant
publicbenefit”includesademonstrablesavingsineffectiveinterestrate,bondpreparation,
bond underwriting, or bond issuance costs.
Authorization and Sale
InordertoauthorizetheissuanceoftheBondsandprovidefortheleasepaymentstosecure
them,theCityCouncil,theAuthorityBoardandthePFABoardhavebeenpresentedwith
resolutionsfortheirconsideration.Theresolutionsapprovetheformofthefollowing
documents in connection with the financing:
·Indenture between the Authority and U.S. Bank (as Trustee);
·Lease Agreement between the City and the Authority;
·Site Lease Agreement between the City and the Authority;
·2006EscrowAgreementbetweentheCity,thePFAandtheU.S.Bank(asEscrow
Bank);
·2010 Escrow Agreement between the City, the PFA and the Escrow Bank;
·Assignment Agreement between the Authority and the Trustee;
·BondPurchaseAgreementbetweentheCity,theAuthorityandStifelNicolaus&
Company, Incorporated;
·Preliminary Official Statement;
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·Continuing Disclosure Agreement
·2006 Termination Agreement between the City and the PFA; and
·2010 Termination Agreement between the City and the PFA.
TheCityandAuthorityresolutionsalsoapprovethedistributionofthepreliminaryofficialstatement
relatingtotheBondsandauthorizetheexecutionoftheBondPurchaseAgreementbytheCity
ManagerorDeputyCityManagerandAuthorityExecutiveDirectororChiefFinancialOfficer,aswell
asprovidecertainsaleparameters.Theseparametersare:(1)theparamountoftheBondscannot
exceed$40,000,000,(2)thepresentvaluesavingsmustbeatleast5%and(3)theunderwriters’
discount cannot exceed 0.6% of the par amount of the Bonds.
Thepreliminaryofficialstatementwaspreparedbystaffandthefinancialadvisor,withinputfromthe
City’sbondcounselanddisclosurecounsel.TheCityCouncil’sreviewofthedescriptionoftheCity
andtheCity’sFinancialInformationcontainedinthepreliminaryofficialstatementisrequestedprior
toprintinginadvanceofthesaleoftheBondsonoraboutApril13,2016.Anychangesrequestedby
theCityCouncilwillbeincorporatedintothepreliminaryofficialstatementasappropriatepriortoits
distribution to prospective investors.
DECISION-MAKER CONFLICT
Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitwillnotaffect
realpropertyvalueand,consequently,the500-footrulefoundinCaliforniaCodeofRegulationsTitle
2,section18702.2(a)(11),isnotapplicabletothisdecisionforpurposesofdetermininga
disqualifyingrealproperty-relatedfinancialconflictofinterestunderthePoliticalReformAct(Cal.
Gov't Code § 87100, et seq.).
Staffisnotindependentlyaware,andhasnotbeeninformedbyanyCityCouncil/BoardMember,of
any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy
Community,StrongandSecureNeighborhoodsandaConnectedCommunity.Refundingthe
CertificatesofParticipationwiththeproposedrefinancingstructurewillreducedebtservice
payments, thus enhancing both Operational Excellence and Economic Vitality.
CURRENT YEAR FISCAL IMPACT
There is no fiscal impact in the current Fiscal Year 2015/16.
ONGOING FISCAL IMPACT
Theon-goingfiscalimpacttotheGeneralFundandthePFDIFFundwillbetoreduceannualdebt
paymentsbyapproximately$230,000for15yearsandanother$180,000fora9yearperiod
beginningin2027.Basedonthepaymentratios,theGeneralFundsavingsisestimatedat$64,000
annuallyfor15yearstogetherwith$41,000annuallyfor9yearsbeginningin2027.ThePFDIFFund
savingsisestimatedat$166,000annuallyfor15yearstogetherwith$139,000annuallyfor9years
beginning in 2027.
ATTACHMENTS
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1.Indenture
2.Lease Agreement
3.Site Lease Agreement
4.2006 Escrow Agreement
5.2010 Escrow Agreement
6.Assignment Agreement
7.Bond Purchase Agreement
8.Preliminary Official Statement
9.Continuing Disclosure Agreement
10.2010 Termination Agreement
Staff Contact: Mike Sylvia, Finance & Purchasing Manager, Finance Department
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CITY COUNCIL
CITY OF CHULA VISTA
RESOLUTION NO. _________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF A SITE
LEASE, LEASE AGREEMENT, INDENTURE, ESCROW AGREEMENTS,
CONTINUING DISCLOSURE AGREEMENT AND BOND PURCHASE
AGREEMENT IN CONNECTION WITH THE ISSUANCE OF THE CHULA
VISTA MUNICIPAL FINANCING AUTHORITY 2016 LEASE REVENUE
REFUNDING BONDS, APPROVING THE ISSUANCE OF SUCH BONDS IN AN
AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $40,000,000,
AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN
CONNECTION WITH THE OFFERING AND SALE OF SUCH BONDS AND
AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND
CERTIFICATES AND RELATED ACTIONS
WHEREAS, the City of Chula Vista, California (the “City”) is a municipal corporation and
chartered city duly organized and existing under and pursuant to the Constitution and laws of the
State of California (the “State”);
WHEREAS, the City previously financed a portion of the costs of the acquisition,
construction and installation of certain capital improvements in the City, as more fully described in
the proceedings for the issuance of the 2006Certificates (defined below) (the “2006Project”)and for
the issuance of the 2010Certificates (defined below) (the “2010Project”);
WHEREAS, in order to accomplish such financings, the City determined to provide the funds
necessary to finance and refinance the acquisition, construction and installation of the 2006Project
and the 2010 Projectthrough the execution and delivery of theChula Vista PublicFinancing
Authority 2006Certificates of Participation (Civic Center Project –Phase 2) (the “2006 Certificates”)
and the City of Chula Vista 2010 Certificates of Participation (Capital Facilities Refunding Projects) (the
“2010 Certificates”);
WHEREAS, the City is a member of theChula Vista Municipal FinancingAuthority(the
“Authority”)and the 2006Projectand the 2010 Projectarelocated within the boundaries of the City;
WHEREAS, in 2015 the City refinanced a portion ofthe 2006Project originally financed
with the proceeds of the 2006Certificates;
WHEREAS, the City desires to refinance the remaining portion of the 2006Project originally
financed with the proceeds of the 2006Certificatesand to refinance the 2010Project previously
refinanced with the proceeds of the 2010Certificates;
WHEREAS, the City and the Authority have determined that demonstrable debt service
savings in effective interest rate can be achieved by the prepayment and defeasance of the 2006
Certificatesand the 2010 Certificates;
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2
WHEREAS, on the date hereof the CityCouncilheld a public hearing regarding the
refinancing of the remaining portion of the 2006Projectand the 2010 Projectin all respects in
accordance with Section 6586.5 of the Marks-Roos Local Bond Pooling Act of 1985, commencing with
Section6584 of the California Government Code (the “Act”);
WHEREAS, the Authority and the City have determined that it would be in the best interests
of the City and residents of the City to authorize the preparation, sale and delivery of the “Chula
VistaMunicipalFinancing Authority 2016Lease Revenue RefundingBonds” (the “Bonds”) for the
purpose of refinancing the remaining portion of the 2006Project, the 2010 Projectand the City’s
related lease paymentsby defeasing and prepaying the 2006 Certificates and the 2010 Certificates;
WHEREAS, in order to facilitate the issuance of the Bonds, the City andthe Authority desire
to enter into a Site Leasebetween the City and the Authority (the “Site Lease”) pursuant to which the
City will lease certain real property described therein(the “Leased Assets”), subject to adjustment as
described in Section 2 below) to the Authority, and a Lease Agreement between the City and the
Authority (the “Lease Agreement”), pursuant to which the City will lease the Leased Assets back
from the Authority, and pay certain Base Rental Payments (as defined in the Lease Agreement),
which will bepledged to the owners of the Bonds by the Authority pursuant to an Indenture by and
among U.S. Bank National Association (the “Trustee”), the City and the Authority (the “Indenture”)
the formsof which havebeen presented to this City Council at the meeting at which this Resolution
is being adopted;
WHEREAS, the defeasance of the 2006Certificates to be prepaid will be accomplished by
means of an Escrow Agreement (the “2006 Escrow Agreement”) by and among U.S. Bank National
Association, as escrow agent (the “Escrow Agent”), the City and the Authority, the form of which
has been presented to this City Council at the meeting at which this Resolution is being adopted;
WHEREAS, the defeasance of the 2010Certificates to be prepaid will be accomplished by
means of an Escrow Agreement (the “2010 Escrow Agreement”) by and among the Escrow Agent,
the City and the Authority, the form of which has been presented to this City Council at the meeting
at which this Resolution is being adopted;
WHEREAS, theBonds will be issued pursuant to the Act;
WHEREAS, the City and the Authority desire to provide for the negotiated sale of the Bonds;
WHEREAS, the City and the Authority have selected Stifel, Nicolaus & Company,
Incorporated to act as underwriter (the “Underwriter”) to purchase the Bonds from the Authority
pursuant to a Bond Purchase Agreementby and among the City, the Authority and the Underwriter
(the “Bond Purchase Agreement”)the form of which has been presented to this City Council at the
meeting at which this Resolution is being adopted;
WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule
15c2-12”) requires that, in order to be able to purchase or sell the Bonds, the underwriter thereof
must have reasonably determined that the City has undertaken in a written agreement or contract for
the benefit of the holders of the Bonds to provide disclosure of certain financial information and
certain events on an ongoing basis;
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3
WHEREAS, in order to cause such requirement to be satisfied, the City desires to execute
and deliver a Continuing Disclosure Agreement (the “Continuing Disclosure Agreement”)the form
of which has been presented to this City Council at the meeting at which this Resolution is being
adopted;
WHEREAS, a formof the Preliminary Official Statementfor the Bonds(the “Preliminary
Official Statement”) has been preparedthe form of which has been presented to this City Council at
the meeting at which this Resolution is being adopted;
WHEREAS, the City Council has been presented with the form of each document referred to
herein(collectively, the “City Documents”)relating to the refinancing contemplated hereby, and the
City Council has examined and approved each document and desires to authorize and direct the
execution of such documents and the consummation of therefinancingof a portion of the 2006
Project and the 2010 Project; and
WHEREAS, all acts, conditions and things required by the laws of the State of California to
exist, to have happened and to have been performed precedent to and in connection with the
consummation of such refinancing authorized hereby do exist, have happened and have been
performed in regular and due time, form and manner as required by law, and the City is now duly
authorized and empowered, pursuant to each and every requirement of law, to consummate such
refinancing for the purpose, in the manner and upon the terms herein provided;
NOW, THEREFORE, the City Council of the City of Chula Vistadoes hereby resolve as
follows:
SECTION 1.Each of the above recitals is true and correct. The City Council hereby
approves the financing and refinancing described in this Resolution and further finds and determines
that there are significant public benefits to the citizens of the City through the approval of the Bonds
and other documents described herein pursuant to the Act and otherwise hereunder within the
meaning of Section 6586(a) through (d), inclusive, of the Act, in that the delivery of the Bonds and
related transactions will result in demonstrable savings in effective interest rate to the City.
SECTION 2.The forms of the Site Leaseand Lease Agreement, on file with the City
Clerk, are hereby approved, and each of the Mayor of the City (the “Mayor”), the City Manager of
the City (the “City Manager”), the Deputy City Manager of the City (the “Deputy City Manager”)
and the Director of Finance of the City (the “Director of Finance”) or their designees (collectively,
the “Authorized Officers”), acting alone, is hereby authorized and directed, for and in the name and
on behalf of the City, to execute and deliver the Site Leaseand Lease Agreement in substantially said
forms, with such changes, insertions and omissions therein as the Authorized Officer executing the
same may require or approve, such approval to be conclusively evidenced by the execution and
delivery thereof; provided, however, that the term of the Site Leaseand Lease Agreement shall
terminate no later than May 1, 2036(provided that such term may be extended as provided therein).
The Leased Assets to be included in the Lease Agreement and the Site Lease shall be designated by
the City Manager or the Deputy City Manager, or their designees, and may include all or a portion of
the Leased Assets listed in the Lease Agreement and the Site Lease on file with the City Clerk, or
such additional real property assets of the City as one of such officers determines is necessary in
order to satisfy any legal requirements to enter into the Lease Agreement, based on the advice of
bond counsel, or rating agency requirements to rate the Bonds, with such designation to be
conclusively evidenced by the execution and delivery of the Site Lease and Lease Agreement by one
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4
or more of the Authorized Officers. The City Council hereby finds and determines that the annual lease
payments and additional payments due in each fiscal year under the Lease Agreement will not exceed the
fair rental value of the Leased Assetsduring any fiscal year.
SECTION 3.The form of Indenture, on file with the City Clerk, is hereby approved, and
each of the Authorized Officers, acting alone, is hereby authorized and directed, for and in the name
and on behalf of the City, to execute and deliver the Indenture in substantially said form, with such
changes, insertions and omissions therein as the Authorized Officer executing the same may require
or approve, such approval to be conclusively evidenced by the execution and delivery thereof;
provided, however, that the aggregate principal amount of the Bonds shall not exceed $40,000,000,
the final maturity date of the Bonds shall be no later than May1, 2036and, provided, further, that
such changes, insertions and omissions shall be consistent with the terms of the Bonds established at
negotiated sale pursuant to the Bond Purchase Agreement.
SECTION 4.The Bond Purchase Agreement, on file with the City Clerk, is hereby
approved and each of the Authorized Officers, acting alone, is hereby authorized and directed, for
and in the name and on behalf of the City, to execute and deliver the acceptance thereof set forth in
the Bond Purchase Agreement, with such changes, insertions and omissions as the Authorized
Officer executing the same may require or approve, such requirement or approval to be conclusively
evidenced by the execution of the Bond Purchase Agreement by such Authorized Officer; provided,
however, that such changes, insertions and omissions shall not result in an aggregate underwriter’s
discount (not including any original issue discount paid by the Underwriter) from the principal
amount of the Bonds in excess of six-tenths of one percent (0.6%) of the aggregate principal amount
of the Bonds; and provided, further, that the Bond Purchase Agreement shall be executed only if the
net present value savings realized by the City in terms of reduced lease payments, as confirmed by the
City’s Municipal Advisor, is not less than five percent (5%) of the principal amount of the 2006
Certificatesand the 2010 Certificatesdefeased and prepaid.
SECTION 5.The issuance of not to exceed $40,000,000aggregate principal amount of the
Bonds, in the principal amounts, bearing interest at therates and maturing on the dates as specified in
the Indenture as finally executed, is hereby approved.
SECTION 6.The form of Preliminary Official Statement, on file with the City Clerk, with
such changes, insertions and omissions therein as may be approved by an Authorized Officer, is
hereby approved, and the use of the Preliminary Official Statement in connection with the offering
and sale of the Bonds is hereby authorized and approved. The Authorized Officers are each hereby
authorized to certify on behalf of theCity that the Preliminary Official Statement is deemed final as
of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing,
rating and related information as permitted by Rule 15c2-12).
SECTION 7.The preparation and delivery of an Official Statement, and its use in
connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official
Statement shall be in substantially the form of the Preliminary Official Statement with such changes,
insertions and omissions as may be approved by an Authorized Officer, such approval to be
conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each
hereby authorized and directed, for and in the name of and on behalf of the City, to execute the final
Official Statement and any amendment or supplement thereto for and in the name and on behalf of
the City.
2016-04-05 Agenda Packet Page 297
5
SECTION 8.The formsof the 2006 Escrow Agreementand the 2010 Escrow Agreement,
on file with the City Clerk, arehereby approved, and each of the Authorized Officers, acting alone, is
hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver
the 2006 Escrow Agreementand the 2010 Escrow Agreementin substantially said forms, with such
changes, insertions and omissions therein as the Authorized Officer executing the same may require
or approve, such approval to be conclusively evidenced by the execution and delivery thereof.
SECTION 9.The form of Continuing Disclosure Agreement, on file with the City Clerk, is
hereby approved, and each of the Authorized Officers, acting alone, is hereby authorized and
directed, for and in the name and on behalf of the City, to execute and deliver the Continuing
Disclosure Agreement in substantially said form, with such changes, insertions and omissions therein
as the Authorized Officer executing the same may require or approve, such approval to be
conclusively evidenced to the execution and delivery thereof.
SECTION 10.Selection of Professionals. Harrell & Company Advisors, LLC is hereby
designated as the Municipal Advisor to the City and the Authority for the Bonds and Stradling Yocca
Carlson & Rauth, a Professional Corporation is hereby designated as bond counsel and disclosure
counsel for the Bonds, and the Authorized Officers are each hereby authorized and directed, jointly
and severally, to execute any and all contracts for services and other documents necessary to procure
the services of such firms for the execution and delivery of the Bonds.
SECTION 11.The officers, employees and agents of the City are hereby authorized and
directed, jointly and severally, to do any and all things which they may deem necessary or advisable
in order to consummate the transactions herein authorized and otherwise to carry out, give effect to
and comply with the termsand intent of this Resolution, including, but not limited to, the execution
and delivery of agreements terminating the leasehold and subleasehold interests securing the 2006
Certificatesand the 2010 Certificates(including, but not limited to, the Termination Agreementfor
the 2010 Certificates substantially in the formon file with the City Clerkand any amendment to the
site lease and the lease agreement for the 2006 Certificates to reflect the prepayment and defeasance
of the 2006 Certificates). Anything to the contrary herein notwithstanding, the Director ofFinance,
or his designee,is authorized and directed to solicit and accept bids for bond insurance and/or reserve
surety for the Bonds, provided he determines acceptance of the best bid will result in further debt
service savings, and appropriate changes to each of the documents referenced herein to evidence such
bond insurance and/or reserve surety and the terms thereof, are hereby authorized and approved. All
actions heretofore taken bythe officers, employees and agents of the City with respect to the
transactions set forth above are hereby approved, confirmed and ratified.
SECTION 12.This Resolution shall take effect immediately upon its passage.
2016-04-05 Agenda Packet Page 298
6
Presented by Approved as to form by
David Bilby, MSBA, CPFO Glen R. Googins
Director of Finance/Treasurer City Attorney
2016-04-05 Agenda Packet Page 299
3.14.16
$[________]
CHULA VISTA MUNICIPALFINANCING AUTHORITY
Lease RevenueRefundingBonds, Series 2016
BOND PURCHASE AGREEMENT
[______], 2016
Chula Vista Municipal Financing Authority
276 Fourth Avenue
Chula Vista, California91910
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated(the “Underwriter”) offers to enter into
this Bond Purchase Agreement (this “Purchase Contract”) with the Chula Vista
MunicipalFinancing Authority(the “Authority”) and the City of Chula Vista(the “City”).
This offer is made subject to the Authority’s and the City’s acceptance by execution of
this Purchase Contract and delivery of the same to the Underwriter on or before 11:59
p.m.Pacific Timeon the date hereof, and, if not so accepted, will be subject to
withdrawal by the Underwriter upon notice delivered to the Authority and the City at any
time prior to such acceptance. Upon the Authority’s and the City’s acceptance hereof,
the Purchase Contract will be binding upon the Authority, the City and the Underwriter.
The Authority and the City acknowledge and agreethat: (i) the primary role of the
Underwriter, as an underwriter, is to purchase securities, for resale to investors, in an
arm’s length commercial transaction between the Authority, the City, and the Underwriter
and the Underwriter has financial and other interests that differ from those of the
Authority and the City; (ii) the Underwriter is acting solely as a principal and is not acting
as a Municipal Advisor(as defined in Section 15B of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), financial advisor or fiduciary to the Authority
and the City, and has not assumed any advisory or fiduciary responsibility to the
Authority and the Citywith respect to the transaction contemplated hereby and the
discussions, undertakings and procedures leading thereto (irrespective of whether the
Underwriter has provided other services or is currently providing other services to the
Authority and the Cityon other matters); (iii) the only obligations the Underwriterhasto
the Authority and the Citywith respect to the transaction contemplated hereby expressly
are set forth in this Purchase Contract; and (iv) the Authority and the City have consulted
theirown municipal, legal, accounting, tax, financial and other advisors, as applicable,to
the extent they havedeemed appropriate.
Capitalized terms used in this Purchase Contract and not otherwise defined
herein willhave the respective meanings set forth for such terms in the Indenture
(defined below).
2016-04-05 Agenda Packet Page 300
2
Section 1. Purchase and Sale.Upon the terms and conditions and upon the
basis of the representations set forth in this Purchase Contract, the Underwriter agrees
to purchase from the Authority, and the Authority agrees to sell and deliver to the
Underwriter, all (but not less than all) of the bonds captioned above (the “Bonds”) at a
purchase price of $[_______](being an amount equal to the principal amount of the
Bonds ($[_____]), plus a net original issue premium of $[____], and less an underwriter’s
discount of $[_____]). The obligations of the Underwriter to purchase, accept delivery of
and pay for the Bonds willbe conditioned on the sale and delivery of all of the Bonds by
the Authority to the Underwriter at Closing(hereafter defined).
Section 2. Bond Terms; Authorizing Instruments; Purpose. The Bonds will
be dated their date of delivery and willmature and bear interest as shown on Exhibit A.
The Bonds willbe as described in, and willbe issued and secured under, anIndenture,
dated as of May1, 2016(the “Indenture”), among the Authority, the Cityand U.S. Bank
National Association, as trustee (the “Trustee”). The Bonds are payable and subject to
redemption as shown in Exhibit A.
The Bonds will be issued pursuant to the Marks-RoosLocal Bond Pooling Act of
1985, commencing with Section6584 of the California Government Code,and are
payable from and secured by the Authority’s pledge of(i)“Base Rental Payments”
under and as defined in the Indenture, which will bemade by the City under a Lease
Agreement, dated as of May 1, 2016, between the Authority, as lessor, and the City, as
lessee (the “Lease Agreement”)and (ii) moneys in certain funds and accounts held by
the Trustee under the Indenture.
The City and the Authority are also entering intoa SiteLeasedated as of May1,
2016(the “SiteLease”). Under the SiteLease,the Cityleasesthe real property
described therein to the Authorityand, under the Lease Agreement, the Authority leases
the same real property back to the City.
The Authority will assign to the Trustee its right to receive the Base Rental
Payments pursuant to an Assignment Agreement, dated as of May1, 2016(the
“Assignment Agreement”).
The Authority is issuing the Bonds to (i) provide funds to prepayin whole the
City’s2006Certificates of Participation(Civic Center Project -Phase 2) (the “2006
Certificates”)and the lease obligations of the City in connection therewith, (ii) provide
funds to defease and prepay in whole the 2010 Certificates of Participation (Capital
Facilities Refunding Projects) (the “2010 Certificates”)and the lease obligations of the
City in connection therewith, (iii) pay the costs of issuing the Bonds, and (iv) [fund a debt
service reserve fund for the Bonds].
The 2006Certificateswere executed and delivered pursuant to an Amended and
RestatedTrust Agreement, dated as of March1, 2006(the “2006Trust Agreement”),
by and betweenthe Authorityand U.S. Bank National Associationas successor to The
Bank of New York Trust Company, N.A.(the “2006Trustee”).The 2006Certificatesare
payable fromlease payments(the “2006Lease Payments”)made by the City pursuant
to a Lease/Purchase Agreement, dated as of September 1, 2004, by and between the
City and the Authority, as amended by the First Amendment to Lease/Purchase
Agreement, dated as of March 1, 2006(the “2006Lease/PurchaseAgreement”). In
connection with the issuance of the Bonds, theCity, the Authority,and the 2006Trustee
2016-04-05 Agenda Packet Page 301
3
will enter into an Escrow Agreement, dated as of May1, 2016(the “2006 Escrow
Agreement”).
The 2010Certificates were executed and delivered pursuant to a Trust
Agreement, dated as of February 1, 2010(the “2010Trust Agreement”), by and
between the Authority and U.S. Bank National Association (the “2010Trustee”). The
2010 Certificates arepayable from lease payments (the “2010Lease Payments”) made
by the City pursuant to a Lease/Purchase Agreement, dated as of February 1, 2010, by
and between the City and the Authority (the “2010Lease/PurchaseAgreement”). In
connection with the issuance of the Bonds, theCity, the Authority, and the 2010Trustee
will enter into an Escrow Agreement, dated as of May 1, 2016(the “2010 Escrow
Agreement”and togetherwith the 2006 Escrow Agreement, the “Escrow
Agreements”).
Section 3. Public Offering. The Underwriter agrees to make an initial bona fide
public offering of all of the Bonds, at not in excess of the initial public offering yields or
prices set forth on Exhibit A. Following the initial public offering of the Bonds, the
offering prices maybe changed from time to time by the Underwriter, provided that the
Underwriter shall not change any of the principal amounts or the interest rates set forth
on Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than
such initial public offering prices.
The Bonds are subject to redemption as set forth in ExhibitA.
Section 4. Official Statement; Continuing Disclosure. The Authority and the
City have delivered to the Underwriter the Preliminary Official Statement dated [_____],
2016(the “Preliminary Official Statement”) and will deliver to the Underwriter a final
official statement dated the date of this Purchase Contract (as amended and
supplemented from time to time pursuant to Section 5(i) of this Purchase Contract, the
“Official Statement”). Subsequent to its receipt of the Authority’s and the City’s 15c2-12
Certificate, in substantially the form attached hereto as Exhibit B, deeming the
Preliminary Official Statement final for purposes of Rule 15c2-12 of the Securities and
Exchange Commission (“Rule 15c2-12”), the Underwriter has distributed copies of the
Preliminary Official Statement. The Authority and the City hereby ratifythe use by the
Underwriter of the Preliminary Official Statement and authorize the Underwriter touse
and distribute in printed and/or electronic format the Official Statement (including all
information previously permitted to have been omitted by Rule 15c2-12, and any
supplements and amendments thereto as have been approved by the Authority and the
City as evidenced by the execution and delivery of such document by an officer of the
Authority and the City), the Indenture, the Site Lease, the Escrow Agreements, the
Assignment Agreement, the Lease Agreement, this Purchase Contract, the Continuing
Disclosure Agreement(hereinafter defined) and all information contained therein, and all
other documents, certificates and written statements furnished by the Authority and the
City to the Underwriter in connection with the transactions contemplated by this
Purchase Contract, in connection with the offer and sale of the Bonds by the
Underwriter.
The Underwriter hereby agrees to deliver a copy of the Official Statement to the
Municipal Securities Rulemaking Board (the “MSRB”)through the Electronic Municipal
Marketplace Access website of the MSRB on or before the Closing Date and otherwise
to comply with all applicable statutes and regulations in connection with the offering and
2016-04-05 Agenda Packet Page 302
4
sale of the Bonds, including, without limitation, MSRB Rule G-32 and Rule 15c2-12.The
Authority and the City agree to deliver to the Underwriter as many copies of the Official
Statement as the Underwriter willreasonably request as necessary to comply with
paragraph (b)(4) of Rule 15c2-12. The Authority and the City agree to deliver the final
Official Statement within seven business days after the execution hereof, or such earlier
date identified by the Underwriter to be necessary to allow the Underwriter to meet its
obligations under Rule15c2-12and Rule G-32 of the MSRB.
The Underwriter agrees to: (1) provide the Authority with final pricing information
on the Bonds on a timely basis prior to the Closing and (2) take any and all other actions
necessary to comply with applicable Securities and Exchange Commission rules and
MSRB rules governing the offering, sale and delivery of the Bonds to ultimate
purchasers.
In connection with issuance of the Bonds, and in order to assist the Underwriter
with complying with the provisions of Rule 15c2-12, the City, on behalf of itself and the
Authority, will execute a continuing disclosure agreement(the “Continuing Disclosure
Agreement”)withW illdan Financial Services,as dissemination agent (the
“Dissemination Agent”), under which the City will undertake to provide certain financial
and operating data as required by Rule 15c2-12. The form of the Continuing Disclosure
Agreementisattached as an appendix to the Preliminary Official Statement and will be
attached as an appendix to the final Official Statement.
Section 5. Representations, Warranties and Covenants of the Authority.
The Authority hereby represents, warrants and agrees with the Underwriter that:
(a)The Authority is a joint exercise of powers authority duly organized and
existing under the laws of the State of California (the “State”) and has all necessary
power and authority to adopt the Authority Resolution, to enter into and perform its
duties under the Indenture, the Assignment Agreement, the Lease Agreement, the Site
Lease, the Escrow Agreementsand this Purchase Contract (the “Authority
Agreements”) and, when executed and delivered by therespective parties thereto, each
Authority Agreement willconstitute a legal, valid and binding obligation of the Authority
enforceable in accordancewith its respective terms.
(b)The board of directors (the “Board”) of the Authority has taken official
action by a resolution adopted on [_____], 2016(the “Authority Resolution”) adopted
by a majority of the members of the Board at a regular meeting duly called, noticed and
conducted, at which a quorum was present and acting throughout, authorizing the
execution, delivery and due performance of the Authority Agreementsand the Official
Statement and the taking of any and all such action as may be required on the part of
the Authority to carry out, give effect to and consummate the transactions contemplated
hereby.
(c)By all necessary official action, the Authority has duly authorized the
preparation and delivery of the Preliminary Official Statement and the preparation,
execution and delivery of the Official Statement, has duly authorized and approved the
execution and delivery of, and the performance of its obligations under, the Bonds and
the Authority Agreements, and the consummation by it of all other transactions
contemplated by the Authority Resolution, the Authority Agreements, the Preliminary
Official Statement and the Official Statement. When executed and delivered by their
2016-04-05 Agenda Packet Page 303
5
respective parties, the Authority Agreements (assuming due authorization, execution
and delivery by and enforceability against the other parties thereto) will be in full force
and effect and each will constitute legal, valid and binding agreements or obligations of
the Authority, enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting creditors rights
generally, the application of equitable principles, the exercise ofjudicial discretion and
the limitations on legal remedies against public entities in the State.
(d)The statements and information contained in the Official Statement (other
than information relating to DTCand its book-entry only system) are correct and
complete in all material respects, and the information contained in the Final Official
Statement (other than information relating to DTC and its book-entry only system) does
not contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make such statements therein, in the light of the circumstances
under which they were made, not misleading.
(e)As of the date hereof, there is no action, suit, proceeding or investigation
before or by any court, public board or body pending against the Authority or, to the best
knowledge of the Authority, threatened, wherein an unfavorable decision, ruling or
finding would: (i)affect the creation, organization, existence or powers of the Authority,
or the titles of its members or officers; (ii) in any way question or affect the validity or
enforceability of Authority Agreements or the Bonds, or (iii) in any way question or affect
the Authority Agreementsor the transactions contemplated by the Authority Agreements,
the Official Statement, or any other agreement or instrument to which the Authority is a
party relating to the Bonds.
(f)There is no consent, approval, authorization or other order of, or filing or
registration with, or certification by, any regulatory authority having jurisdiction over the
Authority required for the execution and delivery of this Purchase Contract or the
consummation by the Authority of the other transactions contemplated by the Official
Statement or the Authority Agreements.
(g)Any certificatesigned by any official of the Authority authorized to do so will
be deemed a representation and warranty by the Authority to the Underwriter as to the
statements made therein.
(h)Except as previously disclosed to the Underwriter, the Authority is not in
default, and at no time has the Authority defaulted in any material respect, on any bond,
note or other obligation for borrowed money or any agreement under which any such
obligation is or was outstanding.
(i)If between the date of this Purchase Contract and the date which is 25 days
following the End of the Underwriting Period (as defined below), any event willoccur
which might or would cause the Official Statement, as then supplemented or amended,
to contain any untrue statement of a material fact or to omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, the Authority will
immediately notify the Underwriter, and if, in the opinion of the Underwriter, such event
requires the preparation and publication of a supplement or amendment to the Official
Statement, the Authority will at its expense supplement or amend the Official Statement
2016-04-05 Agenda Packet Page 304
6
in a form and in a manner approved by the Underwriter. “End of the Underwriting
Period” willmean the later of: (i)the Closing Date, and (ii)the date the Underwriter does
not directly retain an unsold balance of the Bonds for sale to the public, provided that
unless the Underwriter notifies the Authority on or prior to the Closing Date that itdirectly
retains an unsold balance of the Bonds for sale to the public, the End of the Underwriting
Period willbe deemed to have occurred on the Closing Date.
(j)After the Closing, the Authority will notparticipate in the issuance of any
amendment of or supplement to the Official Statement to which, after being furnished
with a copy, the Underwriter reasonably objects in writing or which is disapproved by
Underwriter’s Counsel(hereinafter defined). If any event relating to or affecting the
Authority occurs as a result of which it is necessary, in the opinion of the Underwriter, to
amend or supplement the Official Statement in order to make the Official Statement not
misleading in the light of the circumstances existing at the time it is delivered to a
purchaser, the Authority will use its best efforts to assist the Underwriter in preparing (at
the expense of the Authority for 90 days after the date of the Closing, and thereafter at
the expense of the Underwriter) a reasonable number of copies of an amendment of or
supplement to the Official Statement (in form and substance satisfactory to the
Underwriter) which will amend or supplement the Official Statement so that it will not
contain an untrue statementof a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances existing at the
time the Official Statement is delivered to a purchaser, not misleading. For the purposes
of this subsection, the Authority will furnish such information with respect to itself as the
Underwriter may from time to time reasonably request.
(k)Except as disclosed in the Official Statement, the Authority has not
previously failed to comply in all material respects with any undertakings under Rule
15c2-12during the past five years.
Section 6. Representations, Warranties and Covenants of the City. The
City hereby represents, warrants and agrees with the Underwriter that:
(a)The City is a municipal corporation, organized and existing under the laws
of the State of California (the “State”) and has all necessary power and authority to
adopt its resolution adopted on [____],2016(the “City Resolution”), to enter into and
perform its duties under the Site Lease, the Lease Agreement, the Indenture, the
Continuing Disclosure Agreement, the Escrow Agreementsand this Purchase Contract
(the “City Agreements”) and, when executed and delivered by the respective parties
thereto, the City Agreements will each constitute legal, valid and binding obligation of the
City enforceable in accordance with its respective terms.
(b)The city council (the “City Council”) of the City has taken official action by
adopting the City Resolutionby a majority of the members ofthe City Council at a
meeting duly called, noticed and conducted, at which a quorum was present and acting
throughout, authorizing the execution, delivery and due performance of the City
Agreementsand the Official Statement and the taking of any and all such action as may
be required on the part of the City to carry out, give effect to and consummate the
transactions contemplated hereby.
(c)By all necessary official action, the City has duly adopted the City
Resolution, has duly authorized the preparation and delivery of the Preliminary Official
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Statement and the preparation, execution and delivery of the Official Statement, has duly
authorized and approved the execution and delivery of, and the performance of its
obligations under, the City Agreements, and the consummation by it of all other
transactions contemplated by the City Resolution, the City Agreements, the Preliminary
Official Statement and the Official Statement. When executed and delivered by their
respective parties, the City Agreements (assuming due authorization, execution and
delivery by and enforceability against the other parties thereto) will be in full force and
effect and each will constitute legal, valid and binding agreements or obligations of the
City, enforceable in accordance with their respective terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws or equitable principles relating to or limiting creditors rights generally, the
application of equitable principles, the exercise of judicial discretion and the limitations
on legal remedies against public entities in the State.
(d)At the time of the City’s acceptance hereof and at all times subsequent
thereto up to and including the time of the Closing, the information and statements in the
Official Statement (other than any information concerning the Depository Trust Company
and the book-entry system for the Bondsor provided by the Underwriter) do not and will
not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(e)As of the date hereof, there is no action, suit, proceeding or investigation
before or by any court, public board or body pending against the City or, to the best
knowledge of the City, threatened, wherein an unfavorable decision, ruling or finding
would: (i)affect the creation, organization, existence or powers of the City, or the titles
of its members or officers; (ii) in any way question or affect the validity or enforceability
of City Agreements or the Bonds, or (iii) in any way question or affect the Purchase
Contract or the transactions contemplated by the Purchase Contract, the Official
Statement, or any other agreement or instrument to which the City is a party relating to
the Bonds.
(f)There is no consent, approval, authorization or other order of, or filing or
registration with, or certification by, any regulatory authority having jurisdiction over the
City required for the execution and delivery of this Purchase Contract or the
consummation by the City of the other transactions contemplated by the Official
Statement or the City Agreements.
(g)Any certificate signed by any official of the City authorized to do so willbe
deemed a representation and warranty by the City to the Underwriter as to the
statements made therein.
(h)Except as previously disclosed to the Underwriter, the City is not in default,
and atno time has the City defaulted in any material respect, on any bond, note or other
obligation for borrowed money or any agreement under which any such obligation is or
was outstanding.
(i)Except as disclosed in the Official Statement or otherwise disclosed in
writing to the Underwriter, there has not been any materially adverse change in the
financial condition of the City since June 30, 2015,and there has been no occurrenceor
2016-04-05 Agenda Packet Page 306
8
circumstance or combination thereof that is reasonably expected to result inany such
materially adverse change.
(j)If between the date of this Purchase Contract and the date which is 25 days
following the End of the Underwriting Period(as defined above), any event willoccur
which might or would cause the Official Statement, as then supplemented or amended,
to contain any untrue statement of a material fact or to omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, the City will
immediately notify the Underwriter, and if, in the opinion of the Underwriter, such event
requires the preparation and publication of a supplement or amendment to the Official
Statement, the City will at its expense supplementor amend the Official Statement in a
form and in a manner approved by the Underwriter.
(k)After the Closing, the City will not participate in the issuance of any
amendment of or supplement to the Official Statement to which, after being furnished
witha copy, the Underwriter reasonably objects in writing or which is disapproved by
Underwriter’s Counsel. If any event relating to or affecting the City occurs as a result of
which it is necessary, in the opinion of the Underwriter, to amend or supplement the
Official Statement in order to make the Official Statement not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, the City will use its
best efforts to assist the Underwriter in preparing (at the expense of the City for 90 days
after the date of the Closing, and thereafter at the expense of the Underwriter) a
reasonable number of copies of an amendment of or supplement to the Official
Statement (in form and substance satisfactory to the Underwriter) which will amend or
supplement the Official Statement so that it will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time theOfficial Statement is
delivered to a purchaser, not misleading. For the purposes of this subsection, the City
will furnish such information with respect to itself as the Underwriter may from time to
time reasonably request.
(l)Except as disclosed in the Official Statement or otherwise disclosed in
writing to the Underwriter, the City has not previously failed to comply in all material
respects with any undertakings under Rule 15c2-12in the past five years.The report of
Willdan Financial Servicesdated [_____], 2016(the “Continuing Disclosure Due
Diligence Report”) identifies all of theissues for which the Authority, the City and other
related entities were obligated to provide continuing disclosure under Rule 15c2-12
during the past five years andall of thematerial event filings that wererequired with
respect to such issues during the five-year period.
(m)The City does not need the consent of its auditor to include its
comprehensive annual financial reportfor the fiscal year ended June 30, 2015as an
appendix to the Official Statement.
(n)The City will comply with the defeasance and redemption provisions ofthe
2006Trust Agreementandthe 2010 Trust Agreementand thesecurity deposit and
prepayment provisions of the2006Lease/PurchaseAgreementand the2010
Lease/Purchase Agreement in connection with the refinancing of the 2006 Certificates
and the 2010 Certificates.
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(o)The City covenants with the Underwriter that the City will cooperate with the
Underwriter (at the cost and written directions of the Underwriter), in qualifying the
Bonds for offer and sale under the securities or Blue Sky laws of such jurisdiction of the
United States as the Underwriter may reasonably request; provided, however, that the
City shall not be required to consent to suit or to service of process, or to qualify to do
business, in any jurisdiction. The City consents to the use by the Underwriter of the City
Agreements, the Preliminary Official Statement and the Final Statement in the course of
its compliance withthe securities or Blue Sky laws of the various jurisdictions related to
the offering and sale of the Bonds.
Section 7. The Closing. At 8:00 A.M., Pacifictime, on[_____], 2016, or on
such earlier or later time or date as may be agreed upon by the Underwriter, the
Authority and the City (the “Closing”), the Authority willdeliver the Bonds to the
Underwriter, through the book-entry system of The Depository Trust Company(“DTC”).
Prior to the Closing, the Authority and the City willdeliver, at the offices of Stradling
Yocca Carlson & Rauth, a ProfessionalCorporation (“Bond Counsel”)in Newport
Beach, California, or such other place as ismutually agreed upon by the Underwriter
and the Authority, the other documents described in this Purchase Contract. On the
date of the Closing, the Underwriter willpay the purchase price of the Bonds as set forth
in Section1 of this Purchase Contract in immediately available funds to the order of the
Trustee.
The Bonds willbe issued in fully registered form andwillbe prepared and
delivered as one Bond for each maturity registered in the name of a nominee of DTC. It
is anticipated that CUSIP identification numbers will be inserted on the Bonds, but
neither the failure to provide such numbers nor any error withrespect thereto will
constitute a cause for failure or refusal by the Underwriter to accept delivery of the
Bonds in accordance with the terms of this Purchase Contract.
Section 8. Conditions to Underwriter’s Obligations. The Underwriter has
entered into this Purchase Contract in reliance upon the representations and warranties
of the Authority and the City contained herein and to be contained in the documents and
instruments to be delivered on the date of the Closing, and upon the performance by the
Authority and the City of their respective obligations to be performed hereunder and
under such documents and instruments to be delivered at or prior to the date of the
Closing. The Underwriter’s obligations under this Purchase Contract are and willalso be
subject to the sale, issuance and delivery of the Bonds as well as the following
conditions:
(a)The representations and warranties of the Authority and the City contained
in this Agreement willbe true and correct in all material respects on the date ofthis
Purchase Contract and on and as of the date of the Closing as if made on the date of the
Closing;
(b)As of the date of the Closing, the Official Statement may not have been
amended, modified or supplemented, except in any case as may have been agreed to
by the Underwriter;
(c)(i) As of the date of the Closing, the Authority Resolution, the City
Resolution, the Authority Agreements and the City Agreements willbe in full force and
effect, and willnot have been amended, modified or supplemented, except as may have
2016-04-05 Agenda Packet Page 308
10
been agreed to by the Underwriter, (ii) the Authority willperform or have performed all of
its obligations required under or specified in the Authority Resolution, the Authority
Agreements and this Purchase Contract to be performed at or prior to the date of the
Closing; and (iii) the City willperform or have performed all of its obligations required
under or specified in the City Resolution, the City Agreements and this Purchase
Contract to be performed at or prior to the date of the Closing;
(d)As of the date of the Closing, all necessary official action of the Authority
relating to the Authority Agreements, the Authority Resolution and the Official Statement,
and all necessary official action of the City relating to the City Agreements, the City
Resolution, and the Official Statement, willhave been taken and willbe in full force and
effect and willnot have been amended, modified or supplemented in any material
respect, except as may have been agreed to by the City and Underwriter;and
(e)As of or prior to the date of the Closing, the Underwriter willhave received
each of the following documents:
(1)Certified copies of the Authority Resolution and the City Resolution.
(2)Duly executed copies of the Indenture, the Assignment Agreement,
the Lease Agreement, the Site Lease, the Escrow Agreements, the
Continuing Disclosure Agreementand this Purchase Contract.
(3)The Preliminary Official Statement and the Official Statement, with
the Official Statement duly executedon behalf of the Authority and
the City.
(4)An approving opinion of Bond Counsel, dated as of the Closing, as
to the validity of the Bonds and the exclusion of interest on the
Bonds from federal gross income and State income taxation,
addressed to the Authority and the City substantially in the form
attached as an appendix to the Official Statement, and a reliance
letter with respect thereto addressed to the Underwriter.
(5)A supplemental opinion of Bond Counsel, addressed to the
Underwriter, to the effect that:
(i)The Purchase Contract has been duly executed and delivered
by the Authority and the City and is valid and binding upon the
Authority and the City, subject to laws relating to bankruptcy,
insolvency, reorganization or creditors’ rights generally and to
the application of equitable principles;
(ii)The Bonds are exempt from registration pursuant to the
Securities Act of 1933, as amended (the “Securities Act”),
and the Indentureis exempt from qualification pursuant to the
Trust Indenture Actof 1939, as amended; and
(iii)The statements contained in the Official Statement on the
cover and under the headings “INTRODUCTION,”
“THEBONDS,” “SOURCES OF PAYMENT FOR THE BONDS”
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and “TAX MATTERS,” and in “APPENDIX A-SUMMARY OF
PRINCIPAL LEGAL DOCUMENTS” and “APPENDIX D–
PROPOSED FORM OFBOND COUNSELOPINION,” insofar
as such statements purport to describe certain provisions of
the Bonds, the Site Lease, the Lease Agreement, the
Assignment Agreement, the Escrow Agreementsand the
Indenture, or to state legal conclusions and the opinion of
Bond Counsel regarding the tax-exempt nature of the Bonds,
present a fair and accurate summary of the provisions thereof.
(6)An opinionof Stradling Yocca Carlson & Rauth, a Professional
Corporation, as disclosure counsel to the City, addressed to the
Underwriter, to the effect that: During the course of our work on this
matter, no facts have come to our attention that cause us to believe
that the Official Statement (excluding therefrom the financial
statements, any financial or statistical data, or forecasts, charts,
numbers, estimates, projections, assumptions or expressions of
opinion included in the Official Statement and the appendices to the
Official Statement)as of the date of the Official Statement contains
any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(7)An opinion of the City Attorney, dated as of the Closing addressed
to the Authority, the City and the Underwriter, in form and substance
acceptable to the Underwriter, to the effect that:
(i)The City is a municipal corporation duly organized and validly
existing under the laws of the State of California. The City
Council is the governing body of the City.
(ii) The Cityhas all necessary power and authority to adopt the
CityResolution, to enter into and perform its duties under the
City Agreements,and, when executed and delivered by the
respective parties thereto, the CityAgreements will each
constitute a legal, valid and binding obligation of the City
enforceable in accordance with its respective terms, except as
such enforcement may be limited by bankruptcy, moratorium
and the exercise of equitable principles where equitable
remedies are sought.
(iii)The City Resolution was duly adopted at a meeting of the City
Council, which was called and held pursuant to law and with
all public notice required by law and at which a quorum was
present and acting throughout and the City Resolution is in full
force and effect and has not been modified, amended or
rescinded since the date of its adoption.
(iv) The execution and delivery by the City of the City Agreements,
the Official Statement and the other instruments contemplated
by any of such documents to which the City is a party, and
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compliance with the provisions of each thereof, will not conflict
with or constitute a breach of or default under any applicable
law or administrative rule or regulation of the State of
California, the United States or any department, division,
agency or instrumentality of either thereof, or any applicable
court or administrative decree or order or any loan agreement,
note, resolution, indenture, contract, agreement or other
instrument to which the City is a party or is otherwise subject
or bound in a manner which would materially adversely affect
the City’sperformance under the CityAgreements.
(v)All approvals, consents, authorizations, elections and orders of
or filings or registrations with any governmental authority,
board, agency or commission having jurisdiction which would
constitute a condition precedent to, or the absence of which
would materially adversely affect, the performance by the City
of its obligations under the CityAgreements have been
obtained and are in full force and effect.
(vi)To the best of the City Attorney’s knowledge, no action, suit,
proceeding, inquiry or investigation, at law or in equity, before
or by any court, public board or body, is pending or threatened
in any way against the City (A) affecting the existence of the
City or the titles of its City Council members or its officers to
their respective offices, (B) affecting the existence of the City,
(C) seeking to restrain or to enjoin the issuance or sale of the
Bonds, (D) in any way contesting or affecting the validity or
enforceability of the City Resolution or the City Agreements,
(E) in any way contesting the powers of the City to issue or
sell the Bonds or its authority with respect to the City
Resolution or the City Agreements, (F) in any way contesting
or affecting any of the rights, powers, duties or obligations of
the City with respect to the money or property pledged or to be
pledged under the Indenture, the Lease Agreementor the Site
Leaseor (G) in any way questioning the accuracy of the
statements in the Official Statement.
(vii) The Authority is a joint exercise of powers authority organized
and validly existing under the laws of the State of California.
The Board of Directorsof the Authority is the governing body
of the Authority.
(viii) The Authority has all necessary power and authority to adopt
the Authority Resolution, to enter into and perform its duties
under the Authority Agreements and, when executed and
delivered by the respective parties thereto, the Authority
Agreements will each constitute legal, valid and binding
obligation of the Authority enforceable in accordance with its
respective terms, except as such enforcement may be limited
by bankruptcy, moratorium and the exercise of equitable
principles where equitable remedies are sought.
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(ix)The Authority Resolution was duly adopted at a regular
meeting of the Boardof Directors, which was called and held
pursuant to law and with all public notice required by law and
at which a quorum was present and acting throughout and the
Authority Resolution isin full force and effect and has not been
modified, amended or rescinded since the date of its adoption.
(x) To the best of the City Attorney’s knowledge, no action, suit,
proceeding, inquiry or investigation, at law or in equity, before
or by any court, public board or body, is pending or threatened
in any way against the Authority (A) affecting the existence of
the Authority or the titles of its Board members or its officers to
their respective offices, (B) affecting the existence of the
Authority, (C) seeking to restrain or to enjoin the issuance or
sale of the Bonds, (D) in any way contesting or affecting the
validity or enforceability of the Authority Resolution or the
Authority Agreements, (E) in any way contesting the powers of
the Authority to issue or sell the Bonds or its authority with
respect to the Authority Resolution or the Authority
Agreements, (F) in any way contesting or affecting any of the
rights, powers, duties or obligations of the Authority with
respect to the money or property pledged or to be pledged
under the Indenture, the Lease Agreementor the Site Lease
or (G) in any way questioning the accuracy of the statements
in the Official Statement.
(xi) The execution and delivery by the Authority of the Authority
Agreements, the Official Statement and the other instruments
contemplated by any of such documents to which the Authority
is a party, and compliance with the provisions of each thereof,
will not conflict with or constitute a breach of or default under
any applicable law or administrative rule or regulation of the
State of California, the United States orany department,
division, agency or instrumentality of either thereof, or any
applicable court or administrative decree or order or any loan
agreement, note, resolution, indenture, contract, agreement or
other instrument to which the Authority is a party or is
otherwise subject or bound in a manner which would
materially adversely affect the Authority’s performance under
the Authority Agreements.
(xii) All approvals, consents, authorizations, elections and orders of
or filings or registrations with any governmental authority,
board, agency or commission having jurisdiction which would
constitute a condition precedent to, or the absence of which
would materially adversely affect, the performance by the
Authority of its obligations under the Authority Agreements
have been obtained and are in full force and effect.
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(xiii)Nothing has come to the attention of the City Attorneywhich
has led the City Attorneyto believe that the Official Statement
(excluding therefrom the financial and statistical data,
information regarding compliance with continuing disclosure
obligations of the City and its related entities, forecasts
included therein and information about The Depository Trust
Company, as to which no opinion need be expressed)
contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances
under which they were made, not misleading in any material
respect.
(8)A letter of Jones Hall, A Professional Law Corporation
(“Underwriter’s Counsel”), addressed to the Underwriter, in form
and substance acceptable to the Underwriter.
(9)An executed certificate of the Authority and the City, dated as of the
date of the Preliminary Official Statement, in the form attached as
Exhibit B.
(10)An executed closing certificate of the Authority, dated as of the
Closing, in the form attached as Exhibit C.
(11)An executed closing certificate of the City, dated as of the Closing,
in the form attached asExhibit D.
(12)The opinion of counsel of the Trusteeand the Escrow Agent, dated
as of the Closing, addressed to the Authority, the City and the
Underwriter to the effect that:
(i)The Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the
State, having full powers and authority and being qualified to
enter into, accept and administer the trust created under the
Indenture, the Assignment Agreement, the Continuing
Disclosure Agreementand the Escrow Agreementsand to
enter into the Indenture, the Assignment Agreement, the
Continuing Disclosure Agreement,and the Escrow
Agreements.
(ii)The Indenture, the Assignment Agreement, the Continuing
Disclosure Agreementand the Escrow Agreementshave been
duly authorized, executed and delivered by the Trustee, and,
assuming due authorization, execution and delivery by the
other parties thereto, the Indenture, the Assignment
Agreement, the Continuing Disclosure Agreementand the
Escrow Agreementsconstitute legal, valid and binding
agreementsof the Trustee enforceable in accordance with
their terms, subject to laws relating in bankruptcy, insolvency
or other laws affecting the enforcement of creditors’ rights
2016-04-05 Agenda Packet Page 313
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generally and the application of equitable principles if
equitable remedies are sought.
(13)A certificate of the Trusteeand the Escrow Agent, dated as of the
Closing, in the form attached as Exhibit E.
(14)A tax certificateduly signed on behalf of the Authorityand the Cityin
form and substance acceptable to Bond Counsel and the
Underwriter.
(15)Evidence of required filings with the California Debt and Investment
Advisory Commission.
(16)Evidence of one or more of the CLTA or ALTA title insurance
policies required under the Lease Agreement for the real property
described therein.
(17)A copy of the executed Blanket Issuer Letter of Representations by
and between the Authority and DTC relating to the book-entry
system.
(18)Evidence that the Bonds have received the rating set forth on the
cover of the Official Statement.
(19)Adefeasance opinion of Bond Counsel.
(20)A copy of the Continuing Disclosure Due Diligence Report.
(21)A certificate of Harrell & Company Advisors, LLC, the City’s financial
advisor, in the form and substance attached hereto as Exhibit F.
(23)Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Underwriter or Bond
Counsel may reasonably request to evidence compliance by the
Authority and the City with legal requirements, the truth and
accuracy, as of the date of the Closing, of the representations of the
Authority and the City herein contained and of the Official Statement
and the due performance or satisfaction by the Authority and the
City at or prior to such time of all agreements then to be performed
and all conditions then to be satisfied by the Authority and the City.
All of the opinions, letters, certificates, instruments and other documents
mentioned in this Purchase Contract willbe deemed to be in compliance with the
provisions of this Purchase Contract if, but only if, they are in form and substance
satisfactory to the Underwriter. If the Authority and the City are unable to satisfy the
conditions to the obligations of the Underwriter to purchase, to accept delivery of and to
pay for the Bonds contained in this Purchase Contract or if the obligations of the
Underwriter to purchase, to accept delivery of and to pay for the Bonds willbe
terminated for any reason permitted by this Purchase Contract, this Purchase Contract
willterminate and neither the Underwriter, the Authority nor the City willbe under further
obligations hereunder, except that the respective obligations of the Authority, the City
2016-04-05 Agenda Packet Page 314
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and the Underwriter set forth in Section11 of this Purchase Contract willcontinue in full
force and effect.
Section 9. Conditions to Authority’s and City’s Obligations. The
performance by the Authority and the City of their respective obligations under this
Purchase Contract are conditioned upon: (i) the performance by the Underwriter of its
obligations hereunder and (ii) receipt by the Authority and the City of opinions addressed
to the Authority and the City, and receipt by the Underwriter of opinions addressed to the
Underwriter, and the delivery of certificates being delivered on the date of the Closing by
persons and entities other than the Authority and the City.
Section 10. Termination Events. The Underwriter willhave the right to
terminate the Underwriter’s obligations under this Purchase Contract to purchase, to
accept delivery of and to pay for the Bonds by notifying the Authority and the City of its
election to do so if, after the execution hereof and prior to the Closing, any of the
following events occurs:
(1)the marketability of the Bonds or the market price thereof, in the
opinion of the Underwriter, has been materially and adversely
affected by any decision issued by a court of the United States
(including the United States Tax Court) or of the State of California,
by any ruling or regulation (final, temporary or proposed) issued by
or on behalf of the Department of the Treasury of the United States,
the Internal Revenue Service, or other governmental agency of the
United States, or any governmental agency of the State of
California,or by a tentative decision or announcement by any
member of the House Ways and Means Committee, the Senate
Finance Committee, or the Conference Committee with respect to
contemplated legislation or by legislation enacted by, pending in, or
favorably reported to either the House of Representatives or either
House of the Legislature of the State of California, or formally
proposed to the Congress of the United States by the President of
the United States or to the Legislature of the State of California by
the Governor of the State of California in an executive
communication, affecting the tax status of the Authority or the City,
its property or income, its bonds (including the Bonds) or the interest
thereon or any tax exemption granted or authorized by the Internal
Revenue Code of 1986, as amended;
(2)the United States becomes engaged in hostilities that result in a
declaration of war or a national emergency, or any other outbreak of
hostilities occurs, or a local, national or international calamity or
crisis occurs, financial or otherwise, the effect of such outbreak,
calamity or crisis being such as, in the reasonable opinion of the
Underwriter, would affect materially and adversely the ability of the
Underwriter to market the Bonds;
(3)there occurs a general suspension of trading on the New York Stock
Exchange or the declaration of a general banking moratorium by the
United States, New York State or California State authorities;
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(4)a stop order, ruling, regulation or official statement by, or on behalf
of, the Securities and Exchange Commission is issued or made to
the effect that the issuance, offering or sale of the Bonds is or would
be in violation of any provision of the Securities Act of 1933, as then
in effect, or of the Securities Exchange Act of 1934, as then in
effect, or of the Trust Indenture Act of 1939, as then in effect;
(5)legislation is enacted by the House of Representatives or the
Senate of the Congress of the United States of America, or a
decision by a court of the United States of America is rendered, or a
ruling or regulation by or on behalf of the Securities and Exchange
Commission or other governmental agency having jurisdiction of the
subject matter is made or proposed to the effect that the Bonds are
not exempt from registration, qualification or other similar
requirements of the Securities Act of 1933, as then in effect, or of
the Trust Indenture Act of 1939, as then in effect;
(6)inthe reasonable judgment of the Underwriter, the market price of
the Bonds, or the market price generally of obligations of the
general character of the Bonds, might be materially and adversely
affected because additional material restrictions not in forceas of
the date hereof is imposed upon trading in securities generally by
any governmental authority or by any national securities exchange;
(7)the Comptroller of the Currency, The New York Stock Exchange, or
other national securities exchange, or any governmental authority,
imposes, 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, or financial
responsibility requirements of the Underwriter;
(8)a general banking moratorium is established by federal, New York
or State authorities;
(9)any legislation, ordinance, rule or regulation is introduced in or be
enacted by any governmental body, department or agency in the
State or a decision of a court of competent jurisdiction within the
State is rendered, which, in the opinion of the Underwriter, after
consultation with the Authority and the City, materially adversely
affects the market price of the Bonds;
(10)any federal or California court, authority or regulatory body takes
action materially and adversely affecting the collection of Base
Rental Payments under the Indenture;
(11)any withdrawal,downgrading or placement on credit watch negative
of any underlying rating of any securities of the Authority or the City
by a national municipal bond rating agency that, in the opinion of the
Underwriter, adversely affects the market price of the Bonds; or
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(12)an event occurs which in the reasonable opinion of the Underwriter
makes untrue or misleading in any material respect any statement
or information contained in the Official Statement (other than any
information relating to the Underwriter).
Section 11. Payment of Expenses. (a) The Underwriter willbe under no
obligation to pay, and the City willpay the following expenses incident to the
performance of the Authority’s and the City’s obligations hereunder:
(i)the fees and disbursements of the City’s financial advisor(s) and of
Bond Counseland Disclosure Counsel;
(ii)the cost of printing and delivering the Bonds, the Preliminary Official
Statement and the Official Statement (and any amendment or
supplement prepared pursuant to Section 4 of this Purchase
Contract);
(iii)the fees and disbursements of accountants, advisers and of any
other experts or consultants retained by the Authority or the City;
and
(iv)any other expenses and costs of the Authority and the City incident
to the performance of their respective obligations in connection with
the authorization, issuance and sale of the Bonds, including
out-of-pocket expenses and regulatory expenses, and any other
expenses agreed to by the parties.
(b)The City and the Authoritywillbe under no obligation to pay, and the
Underwriter willpay, any fees of the California Debt and Investment Advisory
Commission, the cost of obtaining CUSIP numbers, the cost of preparation of any “blue
sky” or legal investment memoranda and this PurchaseContract; and all other expenses
incurred by the Underwriter in connection with its public offering and distribution of the
Bonds (except those specifically enumerated in paragraph (a) of this section), including
the fees and disbursements of Underwriter’s Counsel (if any) and any advertising
expenses.
Section 12. Notices. Any notice or other communication to be given to the
Authority or the City under this Purchase Contract may be given by delivering the same
in writing to the Authority and the City at the addresses set forth on the first page of this
Purchase Contract, 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 Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San
Francisco, California 94104 Attention: Sara Brown.
Section 13. Survival of Representations, Warranties, Agreements. All of the
Authority’s and the City’s representations, warranties and agreements contained in this
Purchase Contract willremain operative and in full force and effect regardless of: (a) any
investigations made by or on behalf of the Underwriter; or (b) delivery of and payment for
the Bonds pursuant to this Purchase Contract. The agreements contained in this
Section and in Section 11 willsurvive any termination of this Purchase Contract.
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Section 14. Benefit; No Assignment. This Purchase Contract is made solely
for the benefit of the Authority, the City and the Underwriter (including its successors and
assigns), and no other person willacquire or have any right hereunder or by virtue
hereof. The rights and obligations created by this Purchase Contract are not subject to
assignment by the Underwriter, the Authority or the City without the prior written consent
of the other parties hereto.
Section 15. Severability. In the event that any provision of this Purchase
Contract is held invalid or unenforceable by any court of competent jurisdiction, such
holding willnot invalidate or render unenforceable any other provision of this Purchase
Contract.
Section 16. Counterparts. This Purchase Contract may be executed in any
number of counterparts, all of which taken together willconstitute one agreement, and
any of the parties hereto may execute thePurchase Contract by signing any such
counterpart.
Section 17. Governing Law. This Purchase Contract willbe governed by the
laws of the State of California.
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Section 18. Effectiveness. This Purchase Contract willbecome effective upon
the execution of the acceptance hereof by an authorized officer of the Authority and the
City, and willbe valid and enforceable as of the time of such acceptance.
Very truly yours,
STIFEL, NICOLAUS & COMPANY,
INCORPORATED, as Underwriter
By:
Authorized Representative
Accepted:
CHULA VISTA MUNICIPALFINANCING
AUTHORITY
By:
Authorized Representative
Time of Execution: Pacific Time
CITY OF CHULA VISTA
By:
Authorized Representative
Time of Execution: Pacific Time
2016-04-05 Agenda Packet Page 319
A-1
EXHIBIT A
$[_______]
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
Lease Revenue Refunding Bonds, Series 2016
MATURITY SCHEDULE
Principal
Payment Date
(May 1)Principal Rate Yield Price
REDEMPTIONPROVISIONS
Optional Redemption. The Bonds maturingon or after May 1, 20__, aresubject
to optional redemption, in whole or in part, on any date on or after May 1, 20__, in
Authorized Denominations, fromany source of funds provided to the Trustee,including
prepaid Base Rental Payments paid pursuant to the Lease Agreement, at a Redemption
Price equal to the principal amount of the Bonds to be redeemed, plusaccruedinterest
thereon to the date of redemption, without premium.
Extraordinary Redemption from Insurance Proceeds. The Bonds are subject to
redemption, in whole or in part, on any date, in Authorized Denominations, from and to
the extent of any Net Insurance Proceeds received with respect to all or a portion of the
Leased Property, deposited by the Trustee in the Redemption Fund pursuant to the
Indenture, at a Redemption Price equal to the principal amount of the Bonds to be
redeemed, plus accrued interest thereon to the date of redemption, without premium.
Sinking Account Redemption.
The Bondsmaturing on May1, 20__, aresubject to mandatory sinking fund
redemption in part (by lot) on each May 1 on and after May 1, 20__, in integral multiples
of $5,000 at a Redemption Price of the principal amount thereof plus accrued interest to
the date fixed for redemption, without premium, as follows:
Sinking Fund
Redemption Date Principal Amount
(May1)To Be Redeemed
2016-04-05 Agenda Packet Page 320
B-1
EXHIBIT B
CHULA VISTA MUNICIPALFINANCING AUTHORITY
Lease Revenue Refunding Bonds, Series 2016
15c2-12 CERTIFICATE
The undersigned hereby certifies and represents that he or she is the duly
appointed and acting representative of the City of Chula Vista(the “City”) and the Chula
Vista MunicipalFinancing Authority(the “Authority”), and is duly authorized to execute
and deliver this Certificate and further hereby certifies and reconfirms on behalf of the
City and the Authority as follows:
(1)This Certificate is delivered in connection with the offering and sale of the
bonds captioned above (the “Bonds”) in order to enable the underwriter of the Bonds to
comply with Securities and Exchange Commission Rule 15c2-12 under the Securities
Exchange Act of 1934 (the “Rule”).
(2)In connection with the offering and sale of the Bonds, there has
been prepared a Preliminary Official Statement, setting forth information
concerning the Bonds, the Authority and the City (the “Preliminary Official
Statement”).
(3)As used herein, “Permitted Omissions” means the offering
price(s), interest rate(s), selling compensation, aggregate principal amount,
principal amount per maturity, delivery dates, ratings and other terms of the
Bonds depending on such matters, all with respect to the Bonds.
(4)The Preliminary Official Statement is, except for the Permitted
Omissions, deemed final within the meaning of Rule 15c2-12, and the
information therein is accurate and complete except for the Permitted Omissions.
Dated: ______, 2016.
CITY OF CHULA VISTA
By:_____________________________
Authorized Officer
CHULA VISTA MUNICIPALFINANCING
AUTHORITY
By:_____________________________
Authorized Officer
2016-04-05 Agenda Packet Page 321
C-1
EXHIBIT C
$[_______]
CHULA VISTA MUNICIPALFINANCING AUTHORITY
Lease RevenueRefundingBonds, Series 2016
CLOSING CERTIFICATE OF THE AUTHORITY
The undersigned hereby certifies and represents that he or she is the duly
appointed and acting representative of the Chula Vista MunicipalFinancing Authority
(the “Authority”), and is duly authorized to execute and deliver this Certificate and further
hereby certifies and reconfirms on behalf of the Authority as follows:
(a)The representations, warranties and covenants of the Authority contained in
the Bond Purchase Agreement dated [_____], 2016,among the Authority, the City of
Chula Vistaand Stifel, Nicolaus & Company, Incorporated, as underwriter(the
“Purchase Contract”), are true and correct and in all material respects on and as of the
date of the Closing with the same effect as if made on the date of the Closing.
(b)The Authority Resolution isin full force and effect at the date of the Closing
and has not been amended, modified or supplemented, except as agreed to by the
Authority and the Underwriter.
(c)The Authority has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied on or prior to the date of the Closing.
(d)Subsequent to the date of the Official Statement and on or prior to the date
of such certificate, there has been no material adverse change in the condition (financial
or otherwise) of the Authority, whether or not arising in the ordinary course of the
operations of the Authority, as described in the Official Statement.
(e)The Official Statement,under the heading “INTRODUCTION -The City and
the Authority,” does not contain any untrue or misleading statement of a material fact
and does not omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they are made, not misleading.
Capitalized terms used but not defined herein have the meanings given such
terms in the Bond Purchase Agreement.
Dated: May [__], 2016.
CHULA VISTA MUNICIPALFINANCING
AUTHORITY
By:_____________________________
Authorized Officer
2016-04-05 Agenda Packet Page 322
D-1
EXHIBIT D
$[_______]
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
Lease Revenue Refunding Bonds, Series 2016
CLOSING CERTIFICATE OF THE CITY
The undersigned hereby certifies and represents that he or she is the duly
appointed and acting representative of the City of Chula Vista(the “City”), and is duly
authorized to execute and deliver this Certificate and further hereby certifies and
reconfirms on behalf of the City as follows:
(a)The representations, warranties and covenants of the City contained in the
Bond Purchase Agreement dated [____], 2016, among the City, the Chula Vista
MunicipalFinancing Authorityand Stifel, Nicolaus & Company, Incorporated, as
underwriter(the “Purchase Contract”) are true and correct and in all material respects on
and as of the date of the Closing with the same effect as if made on the date of the
Closing.
(b)The City Resolution is in full force and effect at the date of the Closing and
has not been amended, modified or supplemented, except as agreed to by the City and
the Underwriter.
(c)The City has complied with all the agreements and satisfied all the
conditions on its part tobe performed or satisfied on or prior to the date of the Closing.
(d)Subsequent to the date of the Official Statement and on or prior to the date
of such certificate, there has been no material adverse change in the condition (financial
or otherwise) of the City, whether or not arising in the ordinary course of operations, as
described in the Official Statement.
(e)The Official Statement (other than any information it contains concerning
the Depository Trust Company and the book-entry system for the Bondsor provided by
the Underwriter) does not contain any untrue or misleading statement of a material fact
and does not omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they are made, not misleading.
Capitalized terms used but not defined herein have the meanings given in the
Purchase Contract.
Dated: May [__], 2016.
CITY OF CHULA VISTA
By:_____________________________
Authorized Officer
2016-04-05 Agenda Packet Page 323
E-1
EXHIBIT E
$[_______]
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
Lease Revenue Refunding Bonds, Series 2016
CLOSING CERTIFICATE OF THE TRUSTEE
The undersigned hereby certifies and represents that he or she is the duly
appointed and acting representative of U.S. Bank National Association(the “Trustee”),
and is duly authorized to execute and deliver this Certificate and further hereby certifies
and reconfirms on behalf of the Trustee as follows:
(a)The Trusteehas all necessary power to enter into the Indenture, dated as
of May 1, 2016(the “Indenture”), the Assignment Agreement, dated as of May 1, 2016
(the “Assignment Agreement”), the Continuing Disclosure Agreement, dated as ofMay
1, 2016(the “Continuing Disclosure Agreement”), and the Escrow Agreements, each
dated as of May 1, 2016(the “Escrow Agreements”); and
(b)The Indenture, the Assignment Agreement, the Continuing Disclosure
Agreementand the Escrow Agreementshavebeen duly authorized, executed and
delivered by the Trusteeand the Indenture, the Assignment Agreement, the Continuing
Disclosure Agreementand the Escrow Agreementsconstitute the legal, valid and
binding obligationsof the Trusteeenforceable in accordance with theirterms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors’ rights generally and by the application of equitable principles, if
equitable remedies are sought;
(c)No consent, approval, authorization or other action by any governmental or
regulatory authority having jurisdiction over the Trusteethat has not been obtained is or
will be required for the execution and delivery of the Trusteeor the performance by the
Trusteeof its duties and obligations under the Indenture, the Assignment Agreement,
the Continuing Disclosure Agreementand the Escrow Agreements;
(d)The execution and delivery by the Trusteeof the Indenture, the Assignment
Agreement, the Continuing Disclosure Agreementand the Escrow Agreementsand
compliance with the terms thereof 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 Trusteeis 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 Trusteeor any of its activities or properties
(except that no representation, warranty or agreement need be made by such counsel
with respect to any federal or State securities or blue sky laws or regulations); and
(e)There is no action, suit, proceeding or investigation, at law or in equity,
before or by any court or governmental agency, public board or body pending, or to the
best knowledge of the Trustee, threatened against the Trusteewhich in the reasonable
judgment of the Trusteewould affect the existence of the Trusteeor in any way
contesting or affecting the validity or enforceability of the Indenture, the Assignment
2016-04-05 Agenda Packet Page 324
E-2
Agreement, the Continuing Disclosure Agreementand the Escrow Agreementsor
contesting the powers of the Trusteeor its authority to enter into and perform its
obligationsthereunder.
Capitalized terms used but not defined hereinhave the meanings given such
terms in the Purchase Contract.
Dated: May [__], 2016.
U.S. BANK NATIONAL ASSOCIATION,
as trustee
By:_____________________________
Authorized Officer
2016-04-05 Agenda Packet Page 325
F-1
EXHIBIT F
$[_______]
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
Lease Revenue Refunding Bonds, Series 2016
CERTIFICATE OF FINANCIAL ADVISOR
The undersigned hereby states and certifies:
(i)that the undersigned is an authorized officer of Harrell & Company Advisors,
LLC(the “Financial Advisor”), which has acted as financial advisor to Chula Vista
MunicipalFinancing Authority(the “Authority”) in connection with the issuance of the
above-referenced bonds (the “Bonds”), and as such, is familiar with the facts herein
certified and is authorized and qualified to certify the same;
(ii)that the Financial Advisor has participated in the preparation of the
Preliminary Official Statement dated [_____], 2016and the final Official Statement dated
[____], 2016(the “Official Statement”) relating to the Bonds; and
(iii)that nothing has come to the attention of the Financial Advisor which would
lead it to believe that the Official Statement contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
Dated: [_____], 2016.
HARRELL & COMPANY ADVISORS, LLC,
as Financial Advisor
By:_____________________________
Authorized Officer
2016-04-05 Agenda Packet Page 326
PRELIMINARY OFFICIAL STATEMENT DRAFT DATED MARCH 21, 2016
NEW ISSUE RATING
BOOK-ENTRY S&P: “__”
(See “CONCLUDING INFORMATION - Rating on the Bonds” herein)
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel, subject,
however to certain qualifications described herein, under existing law, the interest on the Bonds is excludable from gross income of the
owners thereof for federal income tax purposes and such interest is not included as an item of tax preference in computing the alternative
minimum tax for individuals and corporations under the Internal Revenue Code of 1986, as amended, but is taken into account in
computing an adjustment used in determining the federal alternative minimum tax for certain corporations. In the further opinion of
Bond Counsel, such interest is exempt from California personal income taxes. See “TAX MATTERS” herein.
SAN DIEGO COUNTY STATE OF CALIFORNIA
$33,000,000*
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, SERIES 2016
Dated: Date of Delivery Due: As shown on the inside cover page
The cover page contains certain information for quick reference only. It is not a summary of the issue. Potential investors must
read the entire Official Statement to obtain information essential to the making of an informed investment decision. See “RISK
FACTORS” herein for a discussion of special risk factors that should be considered in evaluating the investment quality of the
Bonds.
The Chula Vista Municipal Financing Authority Lease Revenue Refunding Bonds, Series 2016 (the “Bonds”) are being issued to (i)
refinance existing leases and certain related outstanding bonds, and (ii) pay the costs incurred in connection with the issuance of the
Bonds. The Bonds are payable from the revenues pledged under the Indenture, as defined herein, consisting primarily of Base Rental
Payments (the “Base Rental Payments”) to be made by the City of Chula Vista (the “City”) to the Chula Vista Municipal Financing
Authority (the “Authority”) as rental for certain City-owned property (the “Leased Property”) pursuant to a Lease Agreement, as defined
herein, and from certain funds held under the Indenture and insurance or condemnation awards. The City is required under the Lease
Agreement to make Base Rental Payments in each fiscal year in consideration of the use and possession of the Leased Property from any
source of available funds in an amount sufficient to pay the annual principal and interest due with respect to the Bonds, subject to
abatement, as described herein. See “SOURCES OF PAYMENT FOR THE BONDS” and “RISK FACTORS” herein.
Interest on the Bonds is payable semiannually on November 1 and May 1 of each year, commencing November 1, 2016, until maturity
or earlier redemption. See “THE BONDS - General Provisions” and “THE BONDS - Redemption” herein.
THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM REVENUES AND OTHER FUNDS HELD
UNDER THE INDENTURE. THE BONDS ARE NOT A DEBT, OBLIGATION OR LIABILITY OF THE CITY, THE STATE OF CALIFORNIA OR
ANY OF ITS POLITICAL SUBDIVISIONS (OTHER THAN THE AUTHORITY), NOR DO THEY CONSTITUTE A PLEDGE OF THE FAITH AND
CREDIT OR THE TAXING POWER OF ANY OF THE FOREGOING (INCLUDING THE AUTHORITY AND THE CITY). THE AUTHORITY
DOES NOT HAVE ANY TAXING POWER. THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. THE CITY'S OBLIGATION TO MAKE BASE RENTAL
PAYMENTS IS AN OBLIGATION PAYABLE FROM THE CITY’S GENERAL FUND OR ANY OTHER SOURCE OF FUNDS LEGALLY
AVAILABLE TO THE CITY TO MAKE BASE RENTAL PAYMENTS. THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS
DOES NOT CONSTITUTE A DEBT OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR
RESTRICTION OR ANY OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION, OR FOR
WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION.
The Bonds are offered, when, as and if issued, subject to the approval as to their legality by Stradling Yocca Carlson & Rauth, a
Professional Corporation, Los Angeles, California, Bond Counsel. Certain legal matters will be passed on for the City and the Authority
by the City Attorney, and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure
Counsel and for the Underwriter by Jones Hall, A Professional Law Corporation, San Francisco, California. It is anticipated that the
Bonds, in book-entry form, will be available for delivery on or about May 17, 2016 through the facilities of The Depository Trust
Company (see “APPENDIX E - THE BOOK-ENTRY SYSTEM” herein).
The date of the Official Statement is ________, 2016.
__________________________
* Preliminary, subject to change. Th
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2016-04-05 Agenda Packet Page 327
$33,000,000*
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, SERIES 2016
MATURITY SCHEDULE
(Base CUSIP®† _______)
Maturity Principal Interest Reoffering Reoffering
Date Amount Rate Yield Price CUSIP®†
May 1, 2017
May 1, 2018
May 1, 2019
May 1, 2020
May 1, 2021
May 1, 2022
May 1, 2023
May 1, 2024
May 1, 2025
May 1, 2026
May 1, 2027
May 1, 2028
May 1, 2029
May 1, 2030
May 1, 2031
May 1, 2032
May 1, 2033
May 1, 2034
May 1, 2035
May 1, 2036
__________________________
* Preliminary, subject to change.
† Copyright 2016, American Bankers Association. CUSIP® is a registered trademark of the American Bankers
Association. CUSIP data herein is provided by CUSIP Global Services Bureau, operated by Standard & Poor’s.
This data is not intended to create a database and does not serve in any way as a substitute for CUSIP Global
Services. CUSIP numbers have been assigned by an independent company not affiliated with the City and are
included solely for the convenience of the holders of the Bonds. None of the Authority, the City, the Municipal
Advisor or the Underwriter takes any responsibility for the selection or uses of these CUSIP numbers, and no
representation is made as to their correctness on the Bonds or as included herein. The CUSIP number for a specific
maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions
including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market
portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain
maturities of the Bonds.
2016-04-05 Agenda Packet Page 328
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement. This Official Statement is submitted in connection with the offer and sale of the Bonds
referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official
Statement is not to be construed as a contract with the purchasers of the Bonds.
Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion
contained in this Official Statement are subject to change without notice. Neither the delivery of this Official
Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no
change in the affairs of the City or any other parties described in this Official Statement.
Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the City, any
press release and any oral statement made with the approval of an authorized officer of the City or any other entity
described or referenced herein, the words or phrases “will likely result,” “are expected to,” “will continue,” “is
anticipated,” “estimate,” “project,” “forecast,” “expect,” “intend” and similar expressions identify “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject
to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-
looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the
forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be
differences between forecasts and actual results, and those differences may be material.
Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the Authority or the City to
give any information or to make any representations in connection with the offer or sale of the Bonds other than those
contained herein and if given or made, such other information or representation must not be relied upon as having
been authorized by the Authority, the City, the Municipal Advisor or the Underwriter. This Official Statement does
not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person
in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.
Preparation of this Official Statement. The information contained in this Official Statement has been obtained from
sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness. The
information and expressions of opinions herein are subject to change without notice and neither the delivery of this
Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the City since the date hereof. This Official Statement is submitted in connection with
the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose,
unless authorized in writing by the City. All summaries of the Bonds, the Lease Agreement, the Indenture or other
documents, are made subject to the provisions of such documents and do not purport to be complete statements of any
or all of such provisions. Reference is hereby made to such documents on file with the City Clerk for further
information. See “INTRODUCTION - Summaries Not Definitive.”
The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has
reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors
under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does
not guarantee the accuracy or completeness of such information.
Bonds are Exempt from Securities Laws Registration. The issuance, sale and delivery of the Bonds has not been
registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in
reliance upon exemptions for the execution, sale and delivery of municipal securities provided under Section 3(a)(2)
of the Securities Act of 1933 and Section 3(a)(l2) of the Securities Exchange Act of 1934.
Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect transactions which
stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open
market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriter may offer and sell the
Bonds to certain dealers and others at prices lower than the public offering prices set forth on the inside cover page
hereof and said public offering prices may be changed from time to time by the Underwriter.
City Website. The City maintains a website. The information on such website is not part of this Official Statement
and is not intended to be relied on by investors with respect to the Bonds unless specifically set forth or incorporated
herein.
2016-04-05 Agenda Packet Page 329
CITY OF CHULA VISTA, CALIFORNIA
CITY COUNCIL/AUTHORITY BOARD MEMBERS
Mary Casillas Salas, Mayor
John McCann, Council Member
Patricia Aguilar, Council Member
Pamela Bensoussan, Council Member
Steve Miesen, Council Member
________________________________________
CITY STAFF
Gary Halbert, City Manager
Maria Kachadoorian, Deputy City Manager/Chief Financial Officer
Kelley Bacon, Deputy City Manager
David Bilby, Director of Finance/Treasurer
Mike Sylvia, Finance and Purchasing Manager
Glen R. Googins, City Attorney
Donna Norris, CMC, City Clerk
________________________________________
PROFESSIONAL SERVICES
Bond Counsel and Disclosure Counsel
Stradling Yocca Carlson & Rauth, a Professional Corporation
Newport Beach, California
Municipal Advisor
Harrell & Company Advisors, LLC
Orange, California
Trustee and Escrow Bank
U.S. Bank National Association
Los Angeles, California
Verification Agent
Grant Thornton LLP
Minneapolis, Minnesota
2016-04-05 Agenda Packet Page 330
TABLE OF CONTENTS
INTRODUCTION ...................................................... 1
The City and the Authority ........................................ 1
Purpose ...................................................................... 1
Security and Sources of Repayment .......................... 2
Limited Obligation ..................................................... 3
No Reserve Fund ....................................................... 3
Summaries Not Definitive ......................................... 3
THE FINANCING PLAN .......................................... 4
The Refunding Program............................................. 4
Verification ................................................................ 4
Estimated Sources and Uses of Funds ....................... 5
THE LEASED PROPERTY ...................................... 5
THE BONDS ............................................................... 6
General Provisions ..................................................... 6
Redemption ................................................................ 6
Scheduled Debt Service on the Bonds ....................... 9
SOURCES OF PAYMENT FOR THE BONDS ..... 10
General ..................................................................... 10
Base Rental Payments; Abatement .......................... 10
No Reserve Fund ..................................................... 11
Insurance Relating to the Property ........................... 11
Remedies on Default ................................................ 12
CITY OF CHULA VISTA ........................................ 13
General Information ................................................. 13
General Organization ............................................... 13
Governmental Services ............................................ 14
Community Facilities and Services ......................... 14
Transportation .......................................................... 15
Population ................................................................ 15
Per Capita Personal Income ..................................... 16
Employment ............................................................. 17
Industry .................................................................... 18
Largest Employers ................................................... 19
Commercial Activity ................................................ 19
Building Activity ..................................................... 21
FINANCIAL INFORMATION ............................... 22
Fiscal Policies .......................................................... 22
Budgetary Process and Administration .................... 24
Economic Conditions and Outlook .......................... 25
Revenues and Expenditures ..................................... 26
Ad Valorem Property Taxes ..................................... 29
Taxable Property and Assessed Valuation ................ 29
Redevelopment Agencies ......................................... 30
Largest Taxpayers .................................................... 31
State Legislative Shifts of Property Tax Allocation . 32
Local Taxes .............................................................. 32
Motor Vehicle License Fees ..................................... 34
Public Facilities Development Impact Fees ............. 34
Personnel .................................................................. 35
Employee Relations and Collective Bargaining ....... 36
Retirement Programs ............................................... 36
Defined Contribution Pension Plan .......................... 40
Other Post Employment Benefits ............................. 40
Risk Management .................................................... 43
City Investment Policy and Portfolio ....................... 44
Outstanding Indebtedness of the City ...................... 45
Direct and Overlapping Debt ................................... 46
Financial Statements ................................................ 47
RISK FACTORS ....................................................... 52
The Base Rental Payments ....................................... 52
Seismic Considerations ............................................ 53
State Budget ............................................................. 54
Limited Recourse on Default; No Acceleration ....... 55
Enforcement of Remedies ........................................ 55
Bankruptcy of the City ............................................. 56
Constitutional Limitation on Taxes and
Expenditures ......................................................... 56
Early Redemption Risk ............................................ 60
Loss of Tax Exemption ............................................ 61
IRS Audit of Tax-Exempt Bond Issues .................... 61
Secondary Market Risk ............................................ 61
TAX MATTERS ........................................................ 62
LEGAL MATTERS .................................................. 62
Enforceability of Remedies ...................................... 62
Approval of Legal Proceedings ................................ 62
Absence of Litigation ............................................... 62
CONCLUDING INFORMATION .......................... 63
Rating on the Bonds ................................................. 63
Underwriting ............................................................ 63
The Municipal Advisor ............................................ 63
Continuing Disclosure ............................................. 63
References ................................................................ 64
Execution ................................................................. 64
APPENDIX A - SUMMARY OF PRINCIPAL
LEGAL DOCUMENTS
APPENDIX B - CITY AUDITED FINANCIAL
STATEMENTS
APPENDIX C - FORM OF CONTINUING
DISCLOSURE CERTIFICATE
APPENDIX D - PROPOSED FORM OF BOND
COUNSEL OPINION
APPENDIX E - THE BOOK-ENTRY SYSTEM
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OFFICIAL STATEMENT
$33,000,000*
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, SERIES 2016
This Official Statement which includes the cover page, the inside cover page and appendices (the “Official
Statement”), is provided to furnish certain information concerning the sale of the Chula Vista Municipal
Financing Authority (the “Authority”) Lease Revenue Refunding Bonds, Series 2016 (the “Bonds”).
INTRODUCTION
The description and summaries of various documents hereinafter set forth do not purport to be
comprehensive or definitive, and reference is made to each document for the complete details of all terms
and conditions. All statements herein are qualified in their entirety by reference to each document. All
capitalized terms used in this Official Statement and not otherwise defined herein have the same meaning
as in the Indenture (defined below).
The City and the Authority
Chula Vista is located on San Diego Bay in Southern California, 8 miles south of the City of San Diego and
7 miles north of the Mexico border in an area generally known as “South Bay.” The City encompasses
approximately 50 square miles. Based on population, Chula Vista is the second largest city in San Diego
County (see “CITY OF CHULA VISTA” herein).
The Authority is a joint exercise of powers authority organized and existing under and by virtue of the Joint
Exercise of Powers Act, constituting Articles 1 through 4 (commencing with Section 6500) of Chapter 5,
Division 7, Title 1 of the Government Code of the State of California (the “Joint Powers Act”). The City
and the Housing Authority of the City of Chula Vista formed the Authority by the execution of a joint
exercise of powers agreement (“JPA Agreement”) on June 11, 2013.
Pursuant to the Joint Powers Act, the Authority is authorized to issue lease revenue bonds to provide funds
to acquire or construct and to refinance public capital improvements, such revenue bonds to be repaid from
the lease payments for such improvements, such as the Base Rental Payments described herein.
The Authority is governed by a five-member Board which consists of all members of the City Council. The
Mayor serves as the Chair of the Authority. The City Manager acts as the Executive Director.
Purpose
The Bonds are being issued to (1) refinance a portion of the existing Lease and to current refund all of the
City’s outstanding 2006 Certificates of Participation (Civic Center Project – Phase 2) (the “2006
Certificates”), (2) refinance an existing Lease and to advance refund the City’s outstanding 2010
Certificates of Participation (Capital Facilities Refunding Projects) (the “2010 Certificates”) and (3) pay
the costs of issuance of the Bonds. See “THE FINANCING PLAN” herein.
__________________________
* Preliminary, subject to change.
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Security and Sources of Repayment
The Bonds are secured under an Indenture, dated as of May 1, 2016, (the “Indenture”), by and between the
Authority and U.S. Bank National Association, Los Angeles, California, as trustee (the “Trustee”) (see
“APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS” herein).
The Bonds are payable from the revenues pledged under the Indenture. The revenues consist primarily of
Base Rental Payments (the “Base Rental Payments”) to be made by the City to the Authority as the rental
for certain city facilities (the “Leased Property”) and from certain funds held under the Indenture and
investment earnings thereon, and from net proceeds of insurance or condemnation awards (collectively with
the Base Rental Payments, the “Revenues”). See “THE LEASED PROPERTY” herein.
Pursuant to a Site Lease, dated as of May 1, 2016 (the “Site Lease”), by and between the Authority and the
City, the City has leased the Leased Property to the Authority. The Authority has subleased the Leased
Property back to the City under the Lease Agreement, dated as of May 1, 2016, by and between the City
and the Authority (the “Sublease”). The Base Rental Payments are to be made pursuant to the Lease
Agreement.
Under the Lease Agreement and, subject to abatement, the City is required to make the Base Rental
Payments from legally available funds in amounts calculated to be sufficient to pay principal of and interest
on the Bonds when due. The City has covenanted in the Lease Agreement to take such actions as may be
necessary to include all Base Rental Payments in its annual budgets and to make the necessary annual
appropriations for all such Base Rental Payments subject to complete or partial abatement of such Base
Rental Payments resulting from a taking of the Leased Property (either in whole or in part) under the powers
of eminent domain or resulting from damage or loss of all or any portion of the Leased Property. All of the
Authority’s right, title and interest in and to the Lease Agreement (apart from certain rights to receive
Additional Rental, as defined therein, to the extent payable to the Authority and to indemnification),
including the right to receive Base Rental Payments under the Lease Agreement, are assigned to the Trustee
under the Indenture and under the Assignment Agreement, dated May 1, 2016 (the “Assignment
Agreement”), for the benefit of Bondholders.
For a summary of the Indenture and the Lease Agreement, see “APPENDIX A - SUMMARY OF PRINCIPAL
LEGAL DOCUMENTS” herein. Certain capitalized terms used in this Official Statement and not otherwise
defined have the meanings given them in “APPENDIX A.”
In general, the City is required under the Lease Agreement to pay to the Authority specified amounts for
use and possession of the Leased Property which amounts are calculated to be sufficient in both time and
amount to pay, when due, the principal of and interest on the Bonds. The City is also required to pay any
taxes and assessments levied on the Leased Property and all costs of maintenance and repair of the Leased
Property. Except for the Authority’s right, title and interest in and to the Base Rental Payments and
otherwise to the Lease Agreement which have been assigned to the Trustee, no funds or properties of the
Authority or the City are pledged to or otherwise liable for the obligations of the Authority (see “RISK
FACTORS ” herein).
In the opinion of Bond Counsel, the Indenture, the Site Lease and the Lease Agreement have been duly
approved by the Authority and constitute the legal, valid and binding obligations of the Authority
enforceable against the Authority in accordance with their respective terms. In the further opinion of Bond
Counsel, the Lease Agreement has been duly approved by the City and constitutes a legal, valid and binding
obligation of the City enforceable against the City in accordance with its terms, however, the rights of the
owners of the Bonds and the enforceability of the Bonds, the Indenture and the Lease Agreement may be
subject to bankruptcy, insolvency, moratorium and other similar laws affecting creditors’ rights heretofore
or hereafter enacted and their enforcement may be subject to the exercise of judicial discretion in accordance
with general principles of equity and by the limitations on legal remedies against municipalities in the State
2016-04-05 Agenda Packet Page 333
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of California (see “RISK FACTORS - Limited Recourse on Default; No Acceleration” herein). The form of
Bond Counsel’s opinion is attached hereto as “APPENDIX D.”
Limited Obligation
THE OBLIGATION OF THE CITY TO PAY BASE RENTAL PAYMENTS DOES NOT CONSTITUTE AN
OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION
OR FOR WHICH THE CITY HAS PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF THE CITY
TO PAY BASE RENTAL PAYMENTS DOES NOT CONSTITUTE A DEBT OF THE STATE OF CALIFORNIA OR
OF ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR
STATUTORY DEBT LIMITATION OR RESTRICTION.
No Reserve Fund
The Authority will not fund a reserve fund for the Bonds.
Summaries Not Definitive
The summaries and references contained herein with respect to the Indenture, the Site Lease, the Lease
Agreement, the Assignment Agreement, the Bonds and other statutes or documents do not purport to be
comprehensive or definitive and are qualified by reference to each such document or statute, and references
to the Bonds are qualified in their entirety by reference to the form thereof included in the Indenture. Copies
of the documents described herein are available for inspection during the period of initial offering of the
Bonds at the offices of the Municipal Advisor. Copies of these documents may be obtained after delivery
of the Bonds at the trust office of the Trustee, U.S. Bank National Association, Los Angeles, California or
from the City Clerk, City of Chula Vista, 276 Fourth Avenue, Chula Vista, California 91910.
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THE FINANCING PLAN
The Refunding Program
On the Delivery Date, the Authority will irrevocably deposit a portion of the proceeds from the Bonds with
the Trustee as escrow bank (the “Escrow Bank”), pursuant to two separate Escrow Agreements, each dated
as of May 1, 2016 (each, an “Escrow Agreement”) by and between the City and the Escrow Bank. The
deposits will be in an amount sufficient to:
prepay the 2006 Certificates outstanding pursuant to an optional prepayment thereof on June 1,
2016 at a prepayment price equal to 100% of the principal amount thereof together with accrued
interest thereon to the date of prepayment,
pay interest and principal with respect to the 2010 Certificates through and including March 1,
2020, and
prepay the 2010 Certificates outstanding pursuant to an optional prepayment thereof on March 1,
2020 at a prepayment price equal to 100% of the principal amount thereof together with accrued
interest thereon to the date of prepayment.
Bond Counsel will deliver an opinion at closing to the effect that, assuming the sufficiency of the amounts
deposited under the Escrow Agreements, the 2006 Certificates and the 2010 Certificates will be discharged
and no longer be Outstanding under the trust agreement pursuant to which they were executed and delivered
and will not be secured by the Lease or the Lease Payments due thereunder Amounts on deposit with the
Escrow Bank are not available to pay debt service on the Bonds.
Verification
Grant Thornton LLP will verify from the information provided to them the mathematical accuracy as of the
date of the closing on the Bonds of (1) the computations contained in the provided schedules to determine
that the cash listed in the schedules prepared by the Municipal Advisor, to be held in escrow, will be
sufficient to pay the prepayment price with respect to all outstanding 2006 Certificates on July 1, 2016, (2)
the principal and interest requirements to and including March 1, 2020 and the prepayment price of the
2010 Certificates on March 1, 2020 and (3) the computation of yield on the Bonds contained in the provided
schedules used by Bond Counsel in its determination that the interest with respect to the Bonds is exempt
from federal taxation. Grant Thornton LLP will express no opinion on the assumptions provided to them,
nor as to the exemption from taxation of the interest with respect to the Bonds.
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Estimated Sources and Uses of Funds
The proceeds from the sale of the Bonds, together with other available funds, are anticipated to be applied
as follows:
Sources of Funds
Par Amount of Bonds
Net Original Issue Premium
Funds from 2006 Certificates Reserve Fund
Funds from 2010 Certificates Reserve Fund
Available Funds
Uses of Funds
Transfer to Escrow Bank
Underwriter’s Discount
Costs of Issuance Fund (1)
Total Uses
________________________________________
(1) Expenses include fees and expenses of Bond Counsel, Municipal Advisor, Disclosure Counsel and Trustee, rating
fees, costs of printing the Official Statement, and other costs of issuance of the Bonds.
THE LEASED PROPERTY
Description of the Leased Property
Pursuant to the terms of the Site Lease, the City leases the Site to the Authority. Pursuant to the terms of the
Lease Agreement, the Authority leases the Site back to the City. The Site consists of (1) approximately 25 acres
of improved land and the buildings thereon consisting of the City’s Corporation Yard and (2) the City’s Fire
Station No. 4, Fire Station No. 6 and Fire Station No. 8.
The City’s Corporation Yard is located at 1800 Maxwell Road in the City and is improved with buildings and
spaces essential to many City operations, such as a 55,745 square foot auto and truck garage, 42,210 square foot
administration building, 9,000 square foot receiving building, 6,500 square foot bus washing/fueling buildings
and 36,000 square feet of space in an enlarged shops building.
The facilities that comprise the Leased Property are insured for property damage in the amount of $__
million replacement value. The City estimates the value of the Site to be $___ million.
Pursuant to the Lease Agreement, the City and the Authority have agreed and determined that the Base Rental
Payments required to be made under the Lease Agreement represent fair rental value of the Leased Property.
The Leased Property consists of the facilities are insured for property damage in the amount of $26.5 million
replacement value. The facilities are also included in City properties currently insured for earthquake (see
“RISK FACTORS - Seismic Considerations”). The Leased Property is not located in a 100-year Flood Plain.
Substitution or Release of Property
Under the terms of the Lease Agreement, the City may substitute other property for the Leased Property, or
any portion thereof, and may release portions of the Leased Property provided that certain conditions set
forth in the Lease Agreement are met. See “APPENDIX A - SUMMARY OF PRINCIPAL LEGAL
DOCUMENTS - SUBLEASE - Substitution of Property” and “- Release of Property.”
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THE BONDS
General Provisions
Payment of the Bonds. Interest on the Bonds is payable at the rates per annum set forth on the inside front
cover page hereof, on November 1, 2016 and each May 1 and November 1 thereafter (each, an “Interest
Payment Date”) until maturity. The Bonds will be issued in the form of fully registered Bonds in the
principal amount of $5,000 each or any integral multiple thereof. Interest on the Bonds will be computed
on the basis of a year consisting of 360 days and twelve 30-day months. Principal on the Bonds is payable
on the dates and in the amounts set forth on the inside front cover page hereof.
Interest on the Bonds is payable from the Interest Payment Date next preceding the date of authentication
thereof unless (a) a Bond is authenticated on or before an Interest Payment Date and after the close of
business on the fifteenth day of the month preceding such Interest Payment Date (a “Record Date”), in
which event it will bear interest from such Interest Payment Date, (b) a Bond is authenticated on or before
the first Record Date, in which event interest thereon will be payable from the Closing Date, or (c) interest
on any Bond is in default as of the date of authentication thereof, in which event interest thereon will be
payable from the date to which interest has been paid in full. Interest is payable on each Interest Payment
Date to the persons in whose names the ownership of the Bonds is registered on the Registration Books at
the close of business on the immediately preceding Record Date, except as provided below. Interest on any
Bond which is not punctually paid or duly provided for on any Interest Payment Date is payable to the
person in whose name the ownership of such Bond is registered on the Registration Books at the close of
business on a special record date for the payment of such defaulted interest to be fixed by the Trustee, notice
of which is given to such Owner by first-class mail not less than 10 days prior to such special record date.
Book-Entry System. DTC will act as securities depository for the Bonds. The Bonds will be issued as
fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other
name as may be requested by an authorized representative of DTC. Interest on and principal of the Bonds
will be payable when due by wire of the Trustee to DTC which will in turn remit such interest and principal
to DTC Participants (as defined herein), which will in turn remit such interest and principal to Beneficial
Owners (as defined herein) of the Bonds (see “APPENDIX E - THE BOOK-ENTRY SYSTEM” herein). As
long as DTC is the registered owner of the Bonds and DTC’s book-entry method is used for the Bonds, the
Trustee will send any notices to Bond Owners only to DTC.
DTC may discontinue providing its services as securities depository with respect to the Bonds at any time
by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a
successor securities depository is not obtained, Bonds are required to be printed and delivered as described
in the Indenture.
Redemption
Optional Redemption. The Bonds maturing on or before May 1, 2026, are not subject to redemption prior
to their respective stated maturities. The Bonds maturing on or after May 1, 2027 shall be subject to
redemption prior to their respective maturity dates, as a whole or in part, from prepayments of Base Rental
made at the option of the City, on any date on or after May 1, 2026. The Bonds called for redemption
pursuant to this provision of the Indenture shall be redeemed at a redemption price equal to 100% of the
principal amount of Bonds called for redemption, plus accrued interest thereon to the date of redemption,
without premium.
Special Mandatory Redemption From Insurance or Condemnation Proceeds. The Bonds shall be
subject to redemption prior to their respective maturity dates, as a whole on any date, from amounts on
deposit in the Redemption Fund from Net Proceeds received by the City from insurance payments or
condemnation awards with respect to the Leased Property or any portion thereof under the circumstances
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and upon the conditions and terms prescribed in the Lease Agreement together with additional money, if
any, transferred by the City at its discretion for such purpose. Redemption pursuant to this provision of the
Indenture shall be made at a redemption price equal to the sum of the principal of the Bonds to be redeemed
plus accrued interest thereon to the date fixed for redemption, without premium.
“Net Proceeds” is defined in the Lease Agreement as any insurance or condemnation proceeds, paid with
respect to the portion of the Leased Property remaining after payment therefrom of all expenses in the
collection thereof. In accordance with the Lease Agreement, the City will cause the Net Proceeds of any
insurance payment (other than the Net Proceeds of rental interruption insurance) or any condemnation
award to be applied to the prompt repair, restoration, modification, improvement or replacement of the
damaged, destroyed or condemned portion of the Leased Property or cure the defect of title to the Leased
Property, and any balance of Net Proceeds remaining after such work or cure of title defect has been
completed shall be paid to the City. Notwithstanding the foregoing, if the proceeds of such insurance or
condemnation award (together with any other money that the City in its discretion has determined to use
for such purpose) are at least sufficient to redeem all of the then outstanding Bonds, then the City may elect
not to replace the destroyed, damaged or condemned portion of the Leased Property or cure the defect of
title to the Leased Property and thereupon shall cause said proceeds to be used for the prepayment of Base
Rental pursuant to the Lease Agreement; provided, that the City shall make a determination on whether to
prepay Base Rental within 45 days of the date on which the destruction of the Leased Property occurred,
the condemnation proceedings were completed or the leasehold interest in the Leased Property was
determined to be materially impaired, whichever is applicable, and in any event in sufficient time to provide
the Authority and the Trustee with at least 45 days’ prior written notice in the event the City determines to
prepay Base Rental Payments.
See “SOURCES OF PAYMENT FOR THE BONDS - Insurance Relating to the Property.” There can be no
assurance that such proceeds will be adequate to redeem all of the Bonds (see “RISK FACTORS - The Base
Rental Payments - Insurance” herein).
Notice of Redemption. The Trustee on behalf and at the expense of the Authority shall send by first class
mail, or if the Owner of such Bonds is a depository, by such method as acceptable to such depository, notice
of any redemption to the respective Owners of any Bonds designated for redemption at their respective
addresses appearing on the Registration Books, to the Securities Depositories and to one or more
Information Services by such manner of delivery as then acceptable to such entities, at least 30 but not more
than 60 days prior to the date fixed for redemption; provided, however, that neither failure to receive any
such notice so sent nor any defect therein shall affect the validity of the proceedings for the redemption of
such Bonds or the cessation of the accrual of interest thereon. Such notice shall state the date of the notice,
the redemption date, the redemption place and the redemption price and shall specify the Series designation,
the CUSIP numbers, the Bond numbers and the maturity or maturities (in the event of redemption of all of
the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that such
Bonds be then surrendered at the Trust Office of the Trustee for redemption at the redemption price, giving
notice also that further interest on such Bonds will not accrue from and after the redemption date.
So long as DTC is the registered Owner of the Bonds, all such notices will be provided to DTC as the
Owner, without respect to the beneficial ownership of the Bonds. See “APPENDIX E - THE BOOK-ENTRY
SYSTEM.”
Rescission of Notice. The Authority may rescind any optional redemption by written notice to the Trustee
on or prior to the date fixed for redemption. Any notice of redemption shall be cancelled and annulled if
for any reason funds will not be or are not available on the date fixed for redemption for the payment in full
of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default
under the Indenture. None of the Authority, the Trustee nor the City shall have any liability to the Owners
or any other party related to or arising from such rescission. The Trustee shall send notice of such rescission
in the same manner as that for an optional redemption of the Bonds.
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Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of
the principal of and interest on the Bonds so called for redemption shall have been duly provided, such
Bonds so called shall cease to be entitled to any benefit under the Indenture other than the right to receive
payment of the redemption price, and no interest shall accrue thereon from and after the redemption date.
Partial Redemption. In the event only a portion of any Bond is called for redemption, then upon surrender
of such Bond, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner
thereof, at the expense of the Authority, a new Bond or Bonds of the same Series and maturity date, of
authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond being
redeemed. A partial redemption shall be valid upon payment of the amount required to be paid to the Owner,
and the Authority and the Trustee shall be released and discharged from all liability to the extent of such
payment.
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Scheduled Debt Service on the Bonds
The following is a schedule of Base Rental Payments and therefore the total scheduled debt service on the
Bonds, assuming no optional or special mandatory redemption prior to maturity.
Semi-Annual
Period Ending Principal Interest Total Fiscal Year Total*
November 1, 2016
May 1, 2017
November 1, 2017
May 1, 2018
November 1, 2018
May 1, 2019
November 1, 2019
May 1, 2020
November 1, 2020
May 1, 2021
November 1, 2021
May 1, 2022
November 1, 2022
May 1, 2023
November 1, 2023
May 1, 2024
November 1, 2024
May 1, 2025
November 1, 2025
May 1, 2026
November 1, 2026
May 1, 2027
November 1, 2027
May 1, 2028
November 1, 2028
May 1, 2029
November 1, 2029
May 1, 2030
November 1, 2030
May 1, 2031
November 1, 2031
May 1, 2032
November 1, 2032
May 1, 2033
November 1, 2033
May 1, 2034
November 1, 2034
May 1, 2035
November 1, 2035
May 1, 2036
________________________________________
* Fiscal Years ending June 30.
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SOURCES OF PAYMENT FOR THE BONDS
General
The Bonds are payable from and secured by a pledge of Revenues and certain funds and accounts
established and held by the Trustee under the Indenture. Revenues, as defined in the Indenture, mean (a)
all Base Rental Payments payable by the City pursuant to the Lease Agreement (including prepayments);
(b) any proceeds of Bonds originally deposited with the Trustee and held by the Trustee in the Lease
Revenue Fund and the accounts thereof; (c) investment income with respect to any moneys held by the
Trustee in the Lease Revenue Fund and the accounts thereof (other than amounts payable to the United
States of America pursuant to the rebate requirements of the Indenture); and (d) any insurance proceeds or
condemnation awards received by or payable to the Trustee with respect to the Leased Properties, including
rental interruption insurance.
As security for the Bonds, the Authority will assign to the Trustee for the payment of the Bonds the
Authority’s rights, title and interest in the Lease Agreement (with certain exceptions), including the right to
receive Base Rental Payments to be made by the City under the Lease Agreement.
THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM AND SECURED
BY A PLEDGE OF REVENUES AND CERTAIN FUNDS AND ACCOUNTS HELD UNDER THE
INDENTURE. THE AUTHORITY HAS NO TAXING POWER.
Base Rental Payments; Abatement
The City is required to pay to the Authority specified amounts for use of the Leased Property, which are
equal to the principal of and interest due with respect to the Bonds. The Lease Agreement requires the City
to make Base Rental Payments to the Authority at least 5 Business Days preceding each Interest Payment
Date. Base Rental Payments to be paid by the City are assigned and are to be transmitted directly to the
Trustee. The Indenture provides that the Base Rental Payments will be deposited in Payment Fund
maintained by the Trustee under the Indenture and applied to pay the principal and interest on the Bonds.
The City has covenanted in the Lease Agreement to take such action as may be necessary to include all
Base Rental Payments in its annual budgets and to make annual appropriations for all such Base Rental
Payments. The Lease Agreement provides that the several actions required by such covenants are deemed
to be and shall be construed to be duties imposed by law and that it is the duty of each and every public
official of the City to take such action and do such things as are required by law in the performance of the
official duty of such official to enable the City to carry out and perform the covenants in the Lease
Agreement agreed to be carried out and performed by the City.
California law requires, and the Lease Agreement provides, that the Base Rental Payments may be abated
in whole or in part if portions of the Leased Property are destroyed, damaged or condemned. The obligation
of the City to pay Base Rental and Additional Rental shall be abated during any period in which, by reason
of any damage, destruction, condemnation or impairment of leasehold interest, there is substantial
interference with the use and occupancy of the Leased Property or any portion thereof by the City. Such
abatement shall be in an amount agreed upon by the City and the Authority such that the resulting Base
Rental in any year during which such interference continues does not exceed the fair rental value of the
portions of the Leased Property as to which such damage, destruction, taking or impairment do not
substantially interfere with the City’s use and right of possession. Such abatement shall continue for the
period commencing with the date of such interference and ending with the restoration of the relevant Leased
Property to tenantable condition. Upon the cessation of the occurrence of any abatement event during the
term of this Sublease, the City shall determine the then current fair rental value of the Leased Property. If
such fair rental value is greater than the fair rental value of the Leased Property determined as of the
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Commencement Date, the Base Rental shall be increased by the lesser of (i) such incremental value or (ii)
the amount needed to recoup all amounts abated during the remaining term of this Sublease.
Notwithstanding the foregoing, there shall be no abatement of Lease Payments under the Lease Agreement
by reason of damage, destruction, or unavailability of all or a portion of the Leased Property to the extent
that: (i) the fair rental value of the portions of the Leased Property not damaged, destroyed, incomplete or
otherwise unavailable for use and occupancy by the City, as determined by the City, is equal to or greater
than the unpaid principal component of the Base Rental Payments; or (ii) the proceeds of rental interruption
insurance and/or amounts on deposit in the Insurance and Condemnation Fund and/or Revenue Fund are
available to pay Base Rental Payments which would otherwise be abated, it being declared that such
proceeds and amounts constitute special funds for the payment of the Base Rental Payments.
During any period of abatement of Lease Payments, the Trustee shall pay principal and interest on the
Bonds allocable to such portions of the Leased Property from proceeds of insurance or condemnation award
(if any) on a pro-rata basis. The reduced Base Rental Payments may not be sufficient to pay principal and
interest on the Bonds in the amounts and at the rates set forth therein. The City’s reduced Base Rental
Payments will constitute the total Base Rental Payments. In the event and to the extent the Base Rental
Payments and other amounts available to the Trustee under the Indenture are subject to abatement, there
could be insufficient amounts to pay principal of and interest on the Bonds in full, and such insufficiency
would not constitute a default by the City under the Indenture, the Lease Agreement or otherwise.
If on May 1, 2036, the Indenture shall not be discharged by its terms, or if the Base Rental Payments shall
have been abated at any time and for any reason, then the term of the Lease Agreement shall be extended
until the Indenture shall be discharged by its terms, but no later than May 1, 2046.
THE OBLIGATION OF THE CITY TO PAY BASE RENTAL PAYMENTS DOES NOT CONSTITUTE AN
OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION
OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF
THE CITY TO PAY BASE RENTAL PAYMENTS DOES NOT CONSTITUTE A DEBT OF THE CITY, THE STATE
OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.
The City may enter into other obligations payable from its general fund without the consent of the Bond
Owners. To the extent the City issues such obligations, funds available to pay Base Rental Payments may
be reduced. See “RISK FACTORS - The Base Rental Payments - Base Rental Payments are Limited
Obligations of the City” herein.
No Reserve Fund
The Authority will not fund a reserve fund for the Bonds.
Insurance Relating to the Property
The Lease Agreement requires the City to maintain comprehensive general public liability and property
damage insurance and fire insurance with extended coverage on the Leased Property. The City is also
required to maintain rental interruption insurance covering loss of the use of any part of the Leased Property
in an amount equal to the Base Rental Payments due for a period of 24 months. The City is required to
maintain earthquake insurance only with respect to structures and only to the extent available at reasonable
cost from reputable insurers, therefore, although the City currently maintains earthquake insurance with
respect to the Leased Property, damage from earthquakes may not be covered in future years. The Lease
Agreement also requires the City to insure title to the Site Lease Property in an amount not less than the
initial principal amount of the Bonds.
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See “APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - SUBLEASE - Insurance” and “RISK
FACTORS - The Base Rental Payments - Insurance” herein.
In accordance with the Lease Agreement, the City will cause the Net Proceeds of any insurance payment
(other than the Net Proceeds of rental interruption insurance) or any condemnation award to be applied to
the prompt repair, restoration, modification, improvement or replacement of the damaged, destroyed or
condemned portion of the Leased Property or cure the defect of title to the Leased Property, and any balance
of Net Proceeds remaining after such work or cure of title defect has been completed shall be paid to the
City. Notwithstanding the foregoing, if the proceeds of such insurance or condemnation award (together
with any other money that the City in its discretion has determined to use for such purpose) are at least
sufficient to redeem all of the then outstanding Bonds, then the City may elect not to replace the destroyed,
damaged or condemned portion of the Leased Property or cure the defect of title to the Leased Property and
thereupon shall cause said proceeds to be used for the prepayment of Base Rental pursuant to the Lease
Agreement; provided, that the City shall make a determination on whether to prepay Base Rental within 45
days of the date on which the destruction of the Leased Property occurred, the condemnation proceedings
were completed or the leasehold interest in the Leased Property was determined to be materially impaired,
whichever is applicable, and in any event in sufficient time to provide the Authority and the Trustee with at
least 45 days’ prior written notice in the event the City determines to prepay Base Rental Payments.
If there are not sufficient insurance proceeds to complete repair of the Leased Property, the Lease
Payment schedule will be proportionally reduced in accordance with the Lease Agreement. Such
reduced Base Rental Payments may not be sufficient to pay principal and interest with respect to the
Bonds. Such reduction would not constitute a default under either the Indenture or the Lease
Agreement.
Remedies on Default
If the City defaults in performance of its obligations under the Lease Agreement, the Trustee, as assignee
of the Authority, may elect not to terminate the Lease Agreement and may re-enter and relet the Leased
Property and may enforce the Lease Agreement and hold the City liable for all Base Rental Payments on
an annual basis while re-entering and reletting the Leased Property. Such re-entry and reletting shall not
effect a surrender of the Lease Agreement. Alternatively, the Trustee may elect to terminate the Lease
Agreement and may re-enter and relet the Leased Property and seek to recover all costs, losses or damages
caused by the City’s default. See “APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -
SUBLEASE - Events of Default.”
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CITY OF CHULA VISTA
General Information
Chula Vista is located on San Diego Bay in Southern California, 8 miles south of the City of San Diego and
7 miles north of the Mexico border, in an area generally known as “South Bay.” Chula Vista’s city limits
cover approximately 50 square miles. Neighboring communities include the City of San Diego and
National City to the north and the City of Imperial Beach and the communities of San Ysidro and Otay
Mesa to the south. With a January 2015 estimated population of 257,989, Chula Vista is the second largest
city in the County.
The City maintains an internet website (www.chulavistaca.gov) for various purposes, however, none of the
information on that website is intended to assist investors in making any investment decision or to provide
any continuing information with respect to the Bonds or any other bonds or obligations of the City.
General Organization
Chula Vista was incorporated as a general law city on March 17, 1911, and operates under the
council/manager form of government. It became a charter city in 1949. The City is governed by a five-
member council consisting of four members and a Mayor, each elected at large for four-year alternating
terms. The City Attorney is also elected at large. Beginning in 2016, City Council members will be elected
by geographic districts. The positions of City Manager and City Clerk are filled by appointments of the
Council. In Fiscal Year 2014/15, the City had 961 authorized full-time staff positions including sworn
officers and fire personnel and has budgeted 966 positions in Fiscal Year 2015/16. Including part-time
personnel, the City employs approximately 1,150 staff.
The members of the City Council, the expiration dates of their terms and key administrative personnel are
set forth in the charts below.
CITY COUNCIL
City Council Member Term Expires
Mary Casillas Salas, Mayor December 2018
John McCann December 2018
Patricia Aguilar December 2018
Pamela Bensoussan December 2016
Steve Miesen December 2016
CITY STAFF
Gary Halbert, City Manager
Maria Kachadoorian, Deputy City Manager/Chief Financial Officer
Kelley Bacon, Deputy City Manager
David Bilby, Director of Finance/Treasurer
Mike Sylvia, Finance and Purchasing Manager
Glen R. Googins, City Attorney
Donna Norris, CMC, City Clerk
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Governmental Services
Public Safety and Welfare
For Fiscal Year 2015/16, the City of Chula Vista Police Department has authorized total positions of 323,
including sworn officers and non-sworn personnel providing patrol, traffic, animal control and
investigations. There are nine fire stations located in and operated by the City, staffed by 27 fire personnel.
Community Services
Services provided by the City include building permit and inspection, planning and zoning, landscape and
public infrastructure maintenance, street cleaning, traffic signal maintenance and municipal code
compliance.
Public Services
Water is supplied to Chula Vista by the Otay Water District and the Sweetwater Water District. Sewer
service is provided by the City. Electric power and natural gas are provided by San Diego Gas and Electric.
The Chula Vista Public Library is comprised of three individual libraries connected by a wide-area network.
The Library’s circulation was approximately 954,000 in Fiscal Year 2013/14. The Library delivers books
in English and Spanish, videos and CDs, and community programming to the City’s residents nearly every
day of the year. The Library contains an Office of Cultural Arts dedicated to advancing the arts and culture
in a manner designed to preserve the diverse cultures of the area.
Culture and Leisure
Chula Vista is the home to a variety of cultural and educational facilities such as the Chula Vista Heritage
Museum, Onstage Playhouse, and the San Diego Junior Theater.
The Chula Vista Recreation Department provides citizens with a variety of park and recreational services
on a year round basis. Facilities include nine community and recreation centers, including a youth
community center and a senior center. The City also has two community pools open year round, 43
community and neighborhood parks, and a Memorial Bowl with seating for 700 at which the City’s Summer
Concert Series is hosted. The City also has after-school recreation programs throughout the community.
Community Facilities and Services
Public educational instruction for kindergarten through high school is provided by the Chula Vista
Elementary School District and Sweetwater Union High School District. These districts administer 42
elementary schools, one junior high school, ten middle schools, 11 senior high schools, one continuation
high school, one alternative program school and one charter school. There are also four adult education
schools and numerous private schools. In addition to Southwestern College, a two year Community
College, there are seven universities or colleges within 30 minutes commuting distance from Chula Vista
in the San Diego metropolitan area.
There are two acute-care hospitals, two psychiatric hospitals and three convalescent hospitals in Chula
Vista.
Chula Vista is home to the 20,000 seat Sleep Train Amphitheatre, the Living Coast Discovery Center,
Aquatica SeaWorld Waterpark, four golf courses, numerous parks and open spaces, and a harbor which
includes two marinas, an RV park, and several restaurants.
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Chula Vista is the location of a United States Olympic Committee (“USOC”) Training Center. This is one
of three training centers in the nation and the only year-round training facility. The center is located on a
150-acre property adjacent to the Otay Lake reservoir. The City and USOC are exploring the City’s
takeover of responsibilities for operation of the facility, while remaining as much as possible an elite
Olympic training center with events and other activities that would be compatible uses.
Transportation
U.S. Highways 5 (along the coast) and 805 (inland) provide full freeway access from Chula Vista north to
San Diego and south to the Mexican border. Commuter rail service is provided by the San Diego Trolley,
a light rail system. Eleven bus routes serve Chula Vista.
The City established Chula Vista Express, a three-part commuting program to promote public
transportation, carpooling, vanpooling, biking and walking to work as alternatives to driving alone. It offers
free bus service from the eastern part of the City to downtown San Diego, and a free shuttle from the eastern
part of the City to the H Street Trolley Station to a cash incentive for riding or joining a vanpool or carpool.
Air cargo and passenger flight services are provided at San Diego’s Lindbergh International Airport, 12
miles west, which is served by all major airlines. Cargo shipping is available at the Unified Port of San
Diego, which serves as a transshipment facility for the region, which includes San Diego, Orange,
Riverside, San Bernardino and Imperial counties, plus northern Baja California, Arizona and points east.
Population
The following table provides a comparison of population growth for Chula Vista and San Diego County
between 2011 and 2015.
TABLE NO. 1
CHANGE IN POPULATION
CHULA VISTA AND SAN DIEGO COUNTY
2011 – 2015
CHULA VISTA SAN DIEGO COUNTY
January 1 Percentage Percentage
Year Population Change Population Change
2011 245,958 3,115,810
2012 248,044 0.8% 3,128,387 0.4%
2013 252,586 1.8% 3,164,818 1.2%
2014 255,580 1.2% 3,192,457 0.9%
2015 257,989 0.9% 3,227,496 1.1%
% Increase Between 2011 - 2015 4.9% 3.6%
__________________________________________
Source: State of California, Department of Finance, “E-4 Population Estimates for Cities, Counties, and the State,
2011-2015, with 2010 Census Benchmark” Sacramento, California, May 2015.
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Per Capita Personal Income
Per capita personal income information for Chula Vista, San Diego County, the State of California and the
United States is summarized in the following table.
TABLE NO. 2
PER CAPITA PERSONAL INCOME
CITY OF CHULA VISTA, SAN DIEGO COUNTY,
STATE OF CALIFORNIA AND UNITED STATES
2010 – 2014
Year Chula Vista San Diego County(1) State of California(1) United States(1)
2010 $41,840 $44,563 $42,282 $40,144
2011 43,000 47,095 44,749 42,332
2012 43,720 48,990 47,505 44,200
2013 43,240 49,907 48,434 44,765
2014 43,150 51,459 49,985 46,049
____________________________________
(1) For San Diego County, State of California and United States, per capita personal income was computed using
Census Bureau midyear population estimates. Estimates for 2010-2014 reflect county population estimates
available as of March 2015.
Note: All dollar estimates are in current dollars (not adjusted for inflation).
Last updated: November 19, 2015 - new estimates for 2014; revised estimates for 2010-2013.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, and City of Chula Vista Comprehensive
Annual Financial Report.
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Employment
As of December 2015 the civilian labor force for the City was approximately 119,800 of whom 112,600
were employed. The unadjusted unemployment rate as of December 2015 was 6.0% for the City as
compared to 4.7% for the County. Civilian labor force, employment and unemployment statistics for the
City, County, the State and the United States, for the years 2010 through 2014 are shown in the following
table:
TABLE NO. 3
CITY OF CHULA VISTA
CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT
ANNUAL AVERAGES
Year
Civilian
Labor Force
Employment
Unemployment
Unemployment
Rate
2010
City of Chula Vista 117,700 102,000 15,700 13.3%
San Diego County 1,516,000 1,353,100 162,900 10.7%
California 18,336,300 16,091,900 2,244,300 12.2%
United States 153,889,000 139,064,000 14,825,000 9.6%
2011
City of Chula Vista 118,300 103,200 15,100 12.8%
San Diego County 1,526,000 1,368,700 157,300 10.3%
California 18,419,500 16,260,100 2,159,400 11.7%
United States 153,617,000 139,869,000 13,747,000 8.9%
2012
City of Chula Vista 119,400 105,800 13,600 11.4%
San Diego County 1,544,600 1,403,600 141,000 9.1%
California 18,554,800 16,630,100 1,924,700 10.4%
United States 154,975,000 142,469,000 12,506,000 8.1%
2013
City of Chula Vista 119,100 107,500 11,600 9.7%
San Diego County 1,546,200 1,425,800 120,400 7.8%
California 18,671,600 17,002,900 1,668,700 8.9%
United States 155,389,000 143,929,000 11,460,000 7.4%
2014
City of Chula Vista 118,500 108,900 9,500 8.1%
San Diego County 1,544,600 1,445,400 99,200 6.4%
California 18,811,400 17,397,100 1,414,300 7.5%
United States 155,922,000 146,305,000 9,617,000 6.2%
____________________________________
Source: California State Employment Development Department and United States Bureau of Labor Statistics.
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Industry
The City is located in the San Diego-Carlsbad Metropolitan Statistical Area. Six major job categories
constitute 82.0% of the work force. They are professional and business services (17.1%), government
(16.9%), service producing (14.2%), educational and health services (14.1%), leisure and hospitality
(12.7%), and manufacturing (7.0%). The December 2015 unemployment rate in the San Diego-Carlsbad
MSA was 4.7%. The State of California December 2015 unemployment rate (unadjusted) was 5.8%.
TABLE NO. 4
SAN DIEGO-CARLSBAD METROPOLITAN STATISTICAL AREA
WAGE AND SALARY WORKERS BY INDUSTRY (1)
(in Thousands)
Industry 2011 2012 2013 2014 2015
Government 229.8 231.2 233.1 236.6 240.3
Other Services 47.4 48.9 49.9 54.1 51.6
Leisure and Hospitality 155.4 162.2 170.9 178.8 180.9
Educational and Health Services 165.5 177.6 184.0 191.1 201.3
Professional and Business Services 212.3 221.8 230.7 237.2 244.2
Financial Activities 68.8 71.7 71.1 70.6 73.6
Information 24.3 24.6 24.7 24.9 25.8
Transportation, Warehousing and Utilities 26.8 28.5 27.2 27.5 27.8
Service Producing
Retail Trade 143.3 147.4 152.4 152.4 156.3
Wholesale Trade 42.1 44.4 44.0 44.0 45.3
Manufacturing
Nondurable Goods 22.5 23.5 24.7 24.7 25.0
Durable Goods 71.4 72.2 71.7 72.7 74.2
Goods Producing
Construction 55.1 58.3 62.6 63.4 69.2
Mining and Logging 0.4 0.4 0.4 0.4 0.4
Total Nonfarm 1,265.1 1,312.7 1,347.4 1,378.4 1,415.9
Farm 8.8 8.7 8.9 9.6 9.4
Total (all industries) 1,273.9 1,321.4 1,356.3 1,388.0 1,425.3
____________________________________
(1) Annually, as of December.
Note: The unemployment rate is calculated using unrounded data. Data may not add due to rounding.
Source: State of California Employment Development Department, Labor Market Information Division, “Industry
Employment & Labor Force - by month, March 2014 Benchmark.”
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Largest Employers
The largest employers operating within the City and their respective number of employees as of June 30,
2015 are as follows:
TABLE NO. 5
CITY OF CHULA VISTA
LARGEST EMPLOYERS
Name of Company Number of Employees Product/Service
Sweetwater Union High School District 4,121 Education
Chula Vista Elementary School District 3,135 Education
Rohr Inc./Goodrich Aerospace 2,468 Aerospace Manufacturing
Southwestern Community College 1,918 Education
Sharp Chula Vista Medical Center 1,878 Hospital
Wal-Mart 1,239 General Merchandise
City of Chula Vista 1,178 Government
Scripps Mercy Hospital Chula Vista 1,058 Hospital
Costco 597 General Merchandise
24 Hour Fitness 559 Health Club
____________________________________
Source: City of Chula Vista Comprehensive Annual Financial Report.
Commercial Activity
The following table summarizes the volume of retail and food services sales and taxable transactions for
the City for 2009 through 2013 (the most recent year for which statistics are available for the full year).
The City’s sales tax receipts increased by approximately 6.2% between Fiscal Year 2012/13 and Fiscal Year
2014/15. See “FINANCIAL INFORMATION - Local Taxes.”
TABLE NO. 6
CITY OF CHULA VISTA
TOTAL TAXABLE TRANSACTIONS
(in $ Thousands)
2009 – 2013
Retail and Retail and Total Taxable
Food Services Food Services Transactions Issued Sales
Year ($000’s) % Change Permits ($000’s) % Change Permits
2009 $1,976,176 2,543 $2,199,592 4,005
2010 2,070,662 4.8% 2,649 2,303,400 4.7% 4,064
2011 2,184,654 5.5% 2,714 2,421,666 5.1% 4,095
2012 2,258,846 3.4% 2,778 2,501,497 3.3% 4,149
2013 2,333,365 3.3% 2,835 2,589,379 3.5% 4,182
____________________________________
Source: California State Board of Equalization, “Taxable Sales in California.”
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Taxable transactions by type of business for the City are summarized below for 2009 through 2013 (the
most recent year for which statistics are available for the full year).
TABLE NO. 7
CITY OF CHULA VISTA
TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
(in $ Thousands)
2009 – 2013
2009 2010 2011 2012 2013
Retail and Food Services
Clothing and Clothing
Accessories Stores $ 118,759 $ 134,611 $ 139,282 $ 147,168 $ 150,789
General Merchandise Stores 617,638 649,020 657,146 668,390 675,819
Food and Beverage Stores 117,144 117,923 124,929 131,846 139,157
Food Services and Drinking Places 280,806 287,698 297,506 317,320 338,183
Home Furnishings and
Appliance Stores 145,785 146,805 150,305 150,541 153,461
Building Materials and Garden
Equipment and Supplies 94,134 94,588 99,766 105,472 109,437
Motor Vehicle and Parts Dealers 188,516 185,847 209,121 230,345 246,160
Gasoline Stations 218,397 255,746 303,189 305,217 304,968
Other Retail Group 194,997 198,423 203,410 202,547 215,390
Total Retail and Food Services 1,976,176 2,070,661 2,184,654 2,258,846 2,333,365
All Other Outlets 223,416 232,738 237,013 242,651 256,014
Total All Outlets $2,199,592 $2,303,399 $2,421,667 $2,501,497 $2,589,379
____________________________________
Note: Detail may not compute to total due to rounding.
Source: State Board of Equalization, “Taxable Sales in California.”
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Building Activity
The following table summarizes building activity valuations for the City of Chula Vista for the Fiscal Years
2010/11 through 2014/15.
TABLE NO. 8
CITY OF CHULA VISTA
BUILDING ACTIVITY AND VALUATION
(in $ Thousands)
2010/11 – 2014/15
Residential Building Non-Residential Building
Permits Issued Permits Issued
Fiscal Year Units Valuation Buildings Valuation
2010/11 861 $144,615,239 23 $14,834,350
2011/12 479 120,416,023 12 4,281,013
2012/13 954 226,972,213 13 22,328,114
2013/14 571 116,869,207 26 53,222,385
2014/15 ___ ___________ __ __________
____________________________________
Source: City of Chula Vista.
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FINANCIAL INFORMATION
Fiscal Policies
The City Council has adopted several policies that form the overall framework within which the City’s
operating budget is formulated and serve as a basis for resource allocation decisions. These policies are
summarized below.
General
The City’s financial assets will be managed in a sound and prudent manner in order to ensure the
continued viability of the organization.
A comprehensive operating and capital budget for all City funds will be developed annually and
presented to the City Council for approval. The purpose of the annual budget will be to (1) identify
community needs for essential services, (2) identify the programs and specific activities required
to provide these essential services, (3) establish program policies and goals that define the nature
and level of program services required, (4) identify alternatives for improving the delivery of
program services, (5) identify the resources required to fund identified programs and activities, and
enable accomplishment of program objectives, and (6) set standards to facilitate the measurement
and evaluation of program performance.
The City’s annual operating budget will be balanced whereby planned expenditures do not exceed
anticipated revenues.
Recurring revenues will fund recurring expenditures. One-time revenues will be used for capital,
reserve augmentation, or other nonrecurring expenditures.
Accounting systems will be maintained in accordance with Generally Accepted Accounting
Principles.
Investment policy and practice will be in accordance with State statutes that emphasize safety and
liquidity over yield, including quarterly status reports to the City Council.
City operations will be managed and budgets prepared with the goal of maintaining an available
fund balance in the General Fund of no less than 15% of the General Fund operating budget.
General Fund fiscal status reports reflecting comparisons of actual and projected performance with
budget allocations for both revenue and expenditures will be presented to the City Council on a
quarterly basis.
Reserves
The City will target to maintain a minimum Operating Reserve equal to 15% of operating budget to address
extraordinary needs of an emergency nature, an Economic Contingency Reserve of 5% of operating budget
to mitigate service impacts during a significant downturn in the economy and a Catastrophic Event Reserve
of 3% of operating budget to fund unanticipated expenses related to a major natural disaster in the City.
The City’s Operating Reserve for the Fiscal Year ending June 30, 2015 is expected to be 10.5% and the
Economic Contingency Reserve is expected to be 2.6%. To date, the Catastrophic Event Reserve has not
been funded.
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Revenue
The City will endeavor to maintain a diversified and stable revenue base in order to minimize the
impact to programs from short-term economic fluctuations.
Revenue projections will be maintained for the current year and four future fiscal years, and
estimates will be based on a conservative, analytical, and objective process.
In order to maintain flexibility, except as required by law or funding source, the City will avoid
earmarking any restricted revenues for a specific purpose or program.
The City has established user fees to best ensure that those who use a proprietary service pay for
that service in proportion to the benefits received. With few exceptions, such as those services
provided for low-income residents, fees have been set to enable the City to recover the full cost of
providing those services.
User fees will be reviewed and updated on an ongoing basis to ensure that program costs continue
to be recovered and that the fees reflect changes in levels of service delivery.
The City will recover the cost of new facilities and infrastructure necessitated by new development
consistent with State law and the City’s Growth Management Program. Development Impact Fees
will be closely monitored and updated to ensure that they are maintained at a level adequate to
recover costs.
When considering new development alternatives, the City will attempt to determine the fiscal
impact of proposed projects, annexations, etc. and ensure that mechanisms are put in place to
provide funding for any projected negative impacts on City operations.
Expenditures
Budgetary control will be exercised at the Department/category level, meaning that each
department is authorized to spend up to the total amount appropriated for that department within
the expenditure categories of Personnel Costs, Supplies & Services, Other Charges, Utilities, and
Capital. Transfers of appropriations between expenditure categories of up to $15,000 may be
approved by the City Manager. Transfers of appropriations between expenditure categories in
excess of $15,000, or between departments require City Council approval.
Appropriations, other than for capital projects, remaining unspent at the end of any fiscal year will
be cancelled and returned to Available Fund Balance with the exception of any appropriations
encumbered as the result of a valid purchase order or as approved for a specific project or purpose
by the City Council or the City Manager. Appropriations for capital projects will necessarily be
carried over from year to year until the project is deemed to be complete.
The City will establish and maintain equipment replacement and facility maintenance funds as
deemed necessary to ensure that monies are set aside and available to fund ongoing replacement
needs.
The City will attempt to compensate non-safety employees at rates above the middle of the labor
market as measured by the median rate for similar jurisdictions.
Capital
Major capital projects will be included in a capital improvement program budget (the “CIP
Budget”) reflecting a five-year period. The CIP Budget will be updated annually and presented to
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City Council for approval. Resources will be formally appropriated (budgeted) for the various
projects on an annual basis in accordance with the five-year plan.
Capital Financing and Debt Management
The City will consider the use of debt financing only for one-time capital improvement projects
when the project’s useful life will exceed the term of the financing and when resources are identified
sufficient to fund the debt service requirements. The only exception to this limitation is the issuance
of short-term instruments such as tax and revenue anticipation notes, which will only be considered
in order to meet legitimate cash flow needs occurring within a fiscal year.
The City will attempt to limit the total amount of annual debt service payments guaranteed by the
General Fund to no more than 10% of estimated General Fund revenues.
The City will consider requests from developers for the use of debt financing secured by property
based assessments or special taxes in order to provide for necessary infrastructure for new
development only under strict guidelines adopted by the City Council, which may include
minimum value-to-lien ratios and maximum tax burdens.
The City will strive to minimize borrowing costs by seeking the highest credit rating possible,
procuring credit enhancement such as letters of credit or insurance, when cost effective, and
maintaining good communications with credit rating agencies regarding the City’s fiscal condition.
The City will diligently monitor its compliance with bond legal covenants, including adherence to
continuing disclosure requirements and federal arbitrage regulations.
In addition to externally financed debt, the City utilizes inter-fund loans whenever possible to
reduce borrowing costs or provide for shorter term loans. When interest is charged on internal
loans, it is done at the same rate the City earns from its pooled investments.
Planning Documents
In 2011, the City prepared a Five-Year Financial Outlook and embarked on a Fiscal Recovery and Progress
Plan. The City continues to update the five year outlook, with the most recent completed for the five year
period 2015-2019. The update for the five year period 2016-2020 is underway. The City also adopted a
Strategic Plan in 2012 and is developing a Long-Term Financial Plan. The overall goal of these planning
documents is to provide advance information on the City’s financial condition that can be used by decision
makers in developing budgets and prioritizing goals as well as responding timely to any projected budget
imbalances.
Budgetary Process and Administration
An annual budget is adopted by the City Council prior to the first day of the fiscal year. The budget process
includes submittal of each department’s budget request for the next fiscal year, a detailed review of each
department’s proposed budget by the City Manager, and a final City Manager recommended budget
transmitted to the City Council for its review before the required date of adoption. Once transmitted to the
City Council, the proposed budget is made available for public inspection. A public hearing is held to give
the public the opportunity to comment upon the proposed budget. Notice of such public hearing is published
in a newspaper of general circulation.
The adoption of the budget is accomplished by the approval of a Budget Resolution. The legal level of
budgetary control is at the department level. Any budget modification, which would result in an
appropriation increase, requires City Council approval. The City Manager and Finance Director are jointly
authorized to transfer appropriations up to $15,000 within a departmental budget. Any appropriation
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transfers between departments or greater than $15,000 require City Council approval.
All appropriations which are not obligated, encumbered or expended at the end of the fiscal year lapse and
become a part of the unreserved fund balance which may be appropriated for the next fiscal year.
An annual budget for the year ended June 30, 2016, was adopted and approved by the City Council for the
general, special revenue and debt service funds except for the Developer’s Deposit Special Revenue Fund,
which is used to account for various developer deposits for development projects and is used to fund staff
costs and other costs related to specific projects and the Public & Educational Government Fees Special
Revenue Fund, which is used to account for the 1% public, education and government access (PEG) costs.
These budgets are prepared on the modified accrual basis of accounting. The budgets of the capital projects
funds are primarily long-term budgets, which emphasize major programs and capital outlay plans extending
over a number of years.
Economic Conditions and Outlook
The City’s financial outlook is more stable than it has been in recent years. Positive revenue growth,
implementation of efficiency measures, the cooperation of City labor groups and strong City Council
leadership have help stabilize the City’s financial base. However, the City continues to seek new ways of
maximizing limited resources to deliver high-quality services to the community.
Sales Tax. Sales tax revenue is highly sensitive to economic conditions and reflects the factors that drive
taxable sales including the levels of unemployment, consumer confidence, per capita income and business
investment. Consumer spending decreased significantly nationwide due to the economic recession.
However recent trends show that sales tax revenues are beginning to increase due to improvement in local
economic indicators. The positive trend was expected to continue in Fiscal Year 2015/16 and was reflected
in the projections with an increase of 2.3%, or approximately $700,000 compared to 2014/15 estimates
when the budget was prepared, and 4.7% or $1.4 million more than the 2014/15 actual sales tax.
Property Tax. Property tax revenue fell throughout the economic recession, with Chula Vista being one
of the hardest hit areas in San Diego County. During the economic recession the City’s assessed valuation
dropped over 15% and until 2013/14 was still declining. Over the last two fiscal years the City’s assessed
value has increased, and this positive trend was anticipated to continue into Fiscal Year 2015/16 as reflected
in a budgeted property tax revenue increase of 3.3%, or approximately $1 million compared to 2014/15
estimates. A similar increase was budgeted for property taxes paid to the City in lieu of motor vehicle
license fees (See “Motor Vehicle License Fees” below). The actual assessed value for Fiscal Year 2015/16
reflected a net increase of approximately 4.8%.
Transient Occupancy Tax. The trend for City transient occupancy tax (“TOT”) revenues has been
improving since 2010 and actual TOT revenue has increased on a yearly basis since that time. Continuing
with this improving trend, Fiscal Year 2015/16 TOT revenues were budgeted to increase 3% over Fiscal
Year 2014/15 estimates. Actual TOT revenues for 2014/15 were $3.1 million, or $200,000 higher than the
2015/16 budgeted amounts.
Staffing Levels. As revenues have improved, the City has continued the trend of slowly recovering it’s
staffing levels previously reduced as a result of the great recession. Since Fiscal Year 2011/12 the City has
been able to achieve a modest 4.5% increase in staffing, managing to keep pace with the population 4%
increase over the same time period, resulting in no net increase in full time equivalent positions (“FTE”)
since 2011/12, when budget constraints necessitated the elimination of 331 FTE positions from the City’s
peak employment of 1,264 FTEs during Fiscal Year 2006/07.
Pension Costs. The increase in retirement cost driven by rising CalPERS rates is a significant budgetary
challenge facing the City. The payments made to the retirement system equals 15.3% of the City’s General
Fund in the Fiscal Year 2015/16 proposed budget. Over the last several years CalPERS has made a series
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of changes that have resulted in higher contribution rates. The impact of these cost increases have been
partially offset through negotiations with the City’s bargaining groups, and have resulted in the
implementation of pension reform. Under the negotiated pension reform, employees have agreed to pay
their share of pension costs, thereby reducing the impact of pension cost increases to the City’s budget.
Health Care Costs. Flex/health insurance represents an 8.5% of total Fiscal Year 2015/16 General Fund
expenditure budget and account for the healthcare costs for permanent employees. The annually increasing
flex/health insurance cost is also a challenge that the City will continue to address in future budgets. For
example medical premiums the City pays on behalf of Public Safety employees increased between 21%
and 34% since calendar year 2011.
Revenues and Expenditures
The City’s General Fund Budget includes programs which are provided on a largely city-wide basis. The
programs and services are financed primarily by the City’s share of property taxes, sales tax, revenues from
the State, and charges for services provided.
A comparison of the results for Fiscal Year 2013/14, the Fiscal Year 2014/15 budget and actual results for
Fiscal Year 2014/15 and the budget for Fiscal Year 2015/16 is 2.9 million, while expenditures were only
$300,000 higher than budgeted.
Revenues
The largest components of budgeted Fiscal Year 2015/16 General Fund revenues (including transfers) are
sales tax (22.8%), property tax (21.4%) and property tax in lieu of motor vehicle license fees (13.3%).
The revenues in Table No. 9 that follows are categorized as:
Property Taxes and Property Taxes In Lieu of Motor Vehicle License Fees (see “State Legislative
Shifts of Property Tax Allocation” below);
Sales Taxes, including the “triple flip” (see “State Legislative Shifts of Property Tax Allocation”
below);
Other Taxes, detailed in Table No. 14 “Tax Revenues by Source,” which include utility users tax,
transient occupancy tax, franchise fees, business licenses and other taxes such as documentary
transfer tax;
Licenses and Permits, which includes construction building permits and engineering permits;
Fines, Forfeitures and Penalties, which includes municipal and vehicle code violations;
Use of Money and Property, which includes rental income for various City facilities and investment
income;
Intergovernmental Revenue;
Charges for Services, comprised of charges such as plan checking, building inspection and other
municipal services, animal shelter contracts, services to the Port of San Diego, recreation program
fees and staff services reimbursement;
Other Revenue, which includes charges to other funds for overhead and administration, and
reimbursements for costs relating to staffing for open space and assessment district maintenance
and capital improvements, and
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Transfers In from the Gas Tax Fund, Traffic Safety Fund, Asset Seizure Fund, Proposition 42 Fund,
Sewer Service Fund and other funds to reimburse for qualifying expenditures or overhead.
Expenditures
The expenditures in Table No. 9 that follows are categorized by governmental function. Each function
generally includes salaries and benefits and materials and supplies.
Salaries and Benefits include direct personnel costs, benefits, health insurance costs and workers’
compensation and unemployment insurance costs. Materials and supplies include non-personnel operating
costs and contract professional services.
Operating Transfers Out are primarily transfers to the debt service funds for the General Fund share of
payments on outstanding debt not paid for using Public Facilities Development Impact Fees (see “Public
Facilities Development Impact Fees” below).
The City provides both police and fire services. These public safety expenditures represent approximately
53.2% of the total budgeted General Fund expenditures (including transfers) for Fiscal Year 2015/16.
As noted, Table No. 9 provides a comparison of results for Fiscal Year 2013/14, the Fiscal Year 2014/15
budget, the actual results for Fiscal Year 2014/15 and the budget for Fiscal Year 2015/16. Historical
financial information is shown in Table No. 25.
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TABLE NO. 9
CITY OF CHULA VISTA
GENERAL FUND REVENUES AND EXPENDITURES
2013/14 2014/15 2014/15 2015/16
Actual Budget Actual Budget
Revenues:
Property Tax $ 28,492,215 $ 28,032,214 $ 29,705,939 $ 29,896,924
Property Tax in Lieu of MVLF 16,773,957 17,450,125 17,779,353 18,597,204
Sales Tax 29,171,174 30,455,693 30,394,291 31,830,591
Other Taxes (1) 31,281,292 20,774,802 22,858,848 23,079,601
Licenses and Permits 1,315,445 1,309,447 1,281,656 1,309,447
Intergovernmental Revenue 2,477,214 3,440,490 1,933,114 2,789,541
Fines, Forfeitures and Penalties 1,009,736 1,110,800 1,638,251 1,133,800
Use of Money & Property 2,522,915 2,439,246 2,832,039 2,676,807
Charges for Services (2) 9,257,946 7,649,532 9,430,097 7,701,176
Other Revenue 1,381,502 868,212 3,538,553 940,970
Reimbursements from Other Funds 10,199,020 10,297,404 9,273,303 9,759,977
Transfers In (2) 9,571,300 10,708,779 9,994,525 9,988,321
Total Revenues 143,453,716 134,536,744 140,659,969 139,704,359
Expenditures:
General Government 18,316,773 18,124,817 20,841,178 19,433,341
Public Safety - Police 43,683,206 46,044,342 46,484,920 48,608,964
Public Safety - Fire 25,093,218 24,878,821 26,024,758 24,680,343
Public Works 27,092,607 27,939,619 27,822,644 29,404,880
Recreation and Library 6,925,073 7,476,017 7,273,387 7,982,168
Planning and Building 2,269,389 2,609,039 2,464,305 2,476,400
Capital Outlay 849,234 1,724,067 1,081,105 1,019,016
Transfers Out (1) 14,234,482 5,740,022 6,082,780 6,099,247
Total Expenditures 138,463,982 134,536,744 138,075,077 139,704,359
Net Change in Fund Balances 4,989,734 - 2,584,892 -
Beginning Unassigned Fund Balance 10,790,135 14,417,422 14,511,252 14,554,698
Change in Reserves (1,268,617) - (683,266) -
Ending Unassigned Fund Balance (3) $ 14,511,252 $ 14,417,422 $16,412,878 $ 14,554,698
____________________________________
(1) In Fiscal Year 2013/14, other taxes include recognition of $10.5 million in deferred utility users tax and transfers
out of $8,017,453 pursuant to a settlement agreement (see “Local Taxes” below).
(2) The City budgets charges for ambulance services in a separate fund and transfers in the revenues to the General
Fund. These revenues are shown as Charges for Services in the audited financial statements.
(3) Does not include Committed or Assigned Fund Balance. See “Financial Statements - GASB Statement No. 54”
herein.
Source: City of Chula Vista.
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Ad Valorem Property Taxes
Taxes are levied for each fiscal year on taxable real and personal property which is situated in the City as
of the preceding January 1. For assessment and collection purposes, property is classified either as
“secured” or “unsecured,” and is listed accordingly on separate parts of the assessment roll. The “secured
roll” is that part of the assessment roll containing State assessed property and real property having a tax
lien which is sufficient, in the opinion of the assessor, to secure payment of the taxes. Other property is
assessed on the “unsecured roll.”
Property taxes on the secured roll are due in two installments, on November 1 and February 1 of the fiscal
year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10%
penalty attaches to any delinquent payment. In addition, property on the secured roll with respect to which
taxes are delinquent is sold to the State on or about June 30 of the fiscal year. Such property may thereafter
be prepaid by payment of the delinquent taxes and the delinquency penalty, plus a prepayment penalty of
l½% per month to the time of prepayment. If taxes are unpaid for a period of five years or more, the
property is subject to sale by the County Tax Collector.
Property taxes on the unsecured roll become delinquent, if unpaid on August 31. A 10% penalty attaches
to delinquent taxes on property on the unsecured roll, and an additional penalty of l½% per month begins
to accrue on November 1 of the fiscal year. The County of San Diego has four ways of collecting delinquent
unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office
of the County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the
taxpayer; (3) filing a certificate of delinquency for record in the County Recorder’s Office, in order to obtain
a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or
possessory interests belonging or assessed to the assessee.
The Board of Supervisors of the County approved the implementation of the Alternative Method of
Distribution of Tax Levies and Collections and of Tax Sale Proceeds (known as the “Teeter Plan”), as
provided for in Section 4701 et seq. of the Revenue and Taxation Code of the State. Under the Teeter Plan,
the County apportions secured property taxes and assessments on an accrual basis when due (irrespective
of actual collections) to participating local political subdivisions for which the County acts as the levying
or collecting agency. The City does not participate in the Teeter Plan. As a result, the County apportions
to the City only the secured property taxes actually collected, including penalties and interest paid on
delinquent installments of property taxes.
Taxable Property and Assessed Valuation
Set forth in Table No. 10 are assessed valuations for secured and unsecured property within the City. Article
XIIIA of the California Constitution prescribes the method for determining the full cash value of real
property and the maximum ad valorem tax on real property. The full cash value, once established, is subject
to annual adjustment to reflect inflation at a rate not to exceed 2% or a reduction in the California Consumer
Price Index. There may also be declines in valuations if the California Consumer Price Index is negative.
Proposition 8 provides for the assessment of real property at the lesser of its originally determined (base
year) full cash value compounded annually by the inflation factor, or its full cash value as of the lien date,
taking into account reductions in value due to damage, destruction, obsolescence or other factors causing a
decline in market value. Reductions based on Proposition 8 do not establish new base year values, and the
property may be reassessed as of the following lien date up to the lower of the then-current fair market
value or the factored base year value. The City saw significant Proposition 8 reductions in property values
between 2008 and 2012, reducing assessed value by 19%. Assessed values increased by 2.2% in 2013
(Fiscal Year 2013/14), 7.9% in 2014 (Fiscal Year 2014/15) and 4.8% in 2015 (Fiscal Year 2015/16). See
“RISK FACTORS - Constitutional Limitation on Taxes and Expenditures - Article XIIIA” and “- Proposition
8 Adjustments” herein.
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TABLE NO. 10
CITY OF CHULA VISTA
GROSS ASSESSED VALUE OF ALL TAXABLE PROPERTY
Fiscal Year Secured Unsecured Total
2009/10 $21,556,536,548 $540,453,455 $22,096,990,003
2010/11 20,727,034,672 508,410,557 21,235,445,229
2011/12 20,622,452,438 531,510,997 21,153,963,435
2012/13 20,459,110,877 483,686,031 20,942,796,908
2013/14 21,179,757,717 466,551,192 21,646,268,909
2014/15 22,642,031,835 448,408,518 23,090,440,353
2015/16 23,761,465,611 454,158,733 24,215,624,344
____________________________________
Source: County of San Diego Auditor-Controller.
A five year history of property tax levies and collections for the City is set forth in Table No. 11.
TABLE NO. 11
CITY OF CHULA VISTA
PROPERTY TAX LEVIES AND COLLECTIONS
Current Percentage Collections in Total Percentage
Fiscal Total Tax Tax of Levy Subsequent Tax of
Year Levy (1) Collections Collected Years (2) Collections Levy
2010/11 25,325,126 24,773,002 97.82 134,325 24,907,328 98.35
2011/12 25,373,780 24,669,632 97.22 (35,474) 24,634,158 97.09
2012/13 25,352,454 24,982,072 98.54 117,973 25,100,045 99.00
2013/14 26,063,753 25,758,225 98.83 39,776 25,798,001 98.98
2014/15 27,726,666 27,398,740 98.82 36,404 27,435,143 98.95
____________________________________
(1) Levy amounts do not include supplemental taxes.
(2) Collection amounts represent delinquencies collected for all prior years during the current tax year. Total
delinquent collections are reduced by any refunds processed from prior year tax collections.
Source: City of Chula Vista.
Redevelopment Agencies
The California Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code of the State)
authorized the redevelopment agency of any city or county to receive an allocation of tax revenues resulting
from increases in assessed values of properties within designated redevelopment project areas (the
“incremental value”) occurring after the year the project area was formed. In effect, local taxing authorities,
such as the City, realized tax revenues only on the assessed value of such property at the time the
redevelopment project is created for the duration of such redevelopment project. There were two
redevelopment projects in the City. Table No. 12 sets forth total assessed valuations and redevelopment
agency incremental values.
The State Legislature approved a bill, AB X1 26, during the 2011/12 State budget process. AB X1 26
eliminated redevelopment agencies State-wide. The California Redevelopment Association and the League
of California Cities filed a petition with the California Supreme Court (the “Court”), requesting the Court
to review the constitutionality of AB X1 26. On December 29, 2011, the Court issued its opinion and upheld
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AB X1 26. As a result of the decision, all California redevelopment agencies, including the City’s
Redevelopment Agency, were dissolved as of February 1, 2012. Certain tax revenues allocable to the
former Redevelopment Agency will continue to be available to the City, as successor agency to the
Redevelopment Agency, to pay certain obligations, and some of those revenues may be redirected to other
taxing agencies, such as the County, school districts and the City. The City’s General Fund was impacted
by the implementation of AB X1 26 (and subsequent legislation AB 1484) and those impacts were
incorporated into the City’s budget beginning in 2012/13. See “RISK FACTORS - State Budget;
Redevelopment Agency Legislation.”
TABLE NO. 12
CITY OF CHULA VISTA
TOTAL AND NET PROPERTY TAX VALUATIONS
Total Redevelopment
Fiscal Assessed Agency Net Percent
Year Valuation Incremental Value Value Change
2009/10 $22,096,990,003 $(1,225,949,135) $20,871,040,868 (11.8)%
2010/11 21,235,445,229 (1,172,995,829) 20,062,449,400 (3.9)
2011/12 21,153,963,435 (1,212,102,912) 19,941,860,523 (0.6)
2012/13 20,942,796,908 (1,143,033,852) 19,799,763,056 (0.7)
2013/14 21,399,932,979 (1,255,372,303) 20,144,560,676 1.7
2014/15 23,090,440,553 (1,260,053,981) 21,830,386,572 8.3
____________________________________
Source: County of San Diego Auditor-Controller.
Largest Taxpayers
The largest property taxpayers as of June 30, 2015 are as shown in Table No. 13.
TABLE NO. 13
CITY OF CHULA VISTA
LARGEST PROPERTY TAXPAYERS
Assessed Percent
Taxpayer Valuation of Total
Rohr Inc. $ 225,819,454 0.98%
JPB Development 206,435,871 0.89%
Brisa Acquisitions LLC 117,000,000 0.51%
Regulo Place Apartments Invest 100,348,224 0.43%
Vista Pacific Villas LP 89,856,103 0.39%
Olympic Pointe West Communities 79,773,634 0.35%
Chula Vista Center LP 70,679,733 0.31%
EQR Teresina LP 68,091,753 0.29%
Camden USA Inc. 65,770,597 0.28%
ESSEL LP 51,803,100 0.22%
Total $1,075,578,469 4.66%
____________________________________
Source: City of Chula Vista.
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State Legislative Shifts of Property Tax Allocation
Since 1992/93, the State has required that local agencies including cities remit a portion of property taxes
received to augment school funding. These funds are deposited in each county’s Education Revenue
Augmentation Fund (“ERAF”). These property taxes (approximately 17.5%) are permanently excluded
from the City’s property tax revenues.
On July 24, 2009, the California legislature approved amendments to the 2009/10 Budget to close its
anticipated $26.3 billion budget shortfall. The approved amendments included borrowing from local
governments by withholding of the equivalent of 8% of Fiscal Year 2008/09 property related tax revenues
from cities’ and counties’ property tax collections under provisions of Proposition 1A (approved by the
voters in 2004), which the State was required to repay with interest within three years. The City participated
in the Proposition 1A securitization program undertaken by the California Statewide Community
Development Authority, whereby the City sold the $4,488,610 receivable that resulted from the State
borrowing of property tax revenues. The first (and to date, only) shift occurred in Fiscal Year 2009/10.
Fiscal Year 2012/13 was the first year that another shift was allowable, but the State has not implemented
another borrowing yet.
In addition, certain other provisions in the State budget have resulted in a realignment of property tax
revenues:
On March 2, 2004, voters approved a bond initiative formally known as the “California Economic Recovery
Act.” This act authorized the issuance of $15 billion in bonds to finance the Fiscal Year 2002/03 and Fiscal
Year 2003/04 State budget deficits, which would be payable from a fund to be established by the redirection
of tax revenues through the Triple Flip as described more fully below.
Under the “Triple Flip,” one-quarter of local governments’ 1% share of the sales tax imposed on taxable
transactions within their jurisdiction will be redirected to the State. In an effort to eliminate the adverse
impact of the sales tax revenue redirection on local government, the legislation provides for property taxes
in the ERAF to be redirected to local government. Because the ERAF moneys were previously earmarked
for schools, the legislation provides for schools to receive other state general fund revenues. The swap of
sales taxes for property taxes terminated once the deficit financing bonds were repaid in September 2015.
The City treated the Triple Flip property tax revenue as sales tax in its financial statements.
The City also received a portion of Department of Motor Vehicles license fees (“VLF”) collected statewide.
Several years ago, the State-wide VLF was reduced by approximately two-thirds. However, the State
continued to remit to cities and counties the same amount that those local agencies would have received if
the VLF had not been reduced, known as the “VLF backfill.” The State VLF backfill was phased out and
by 2011/12 all of the VLF is now received through an in lieu payment from State property tax revenues.
Local Taxes
In addition to ad valorem taxes on real property, the City receives the following non-real estate local taxes
(see “RISK FACTORS - Constitutional Limitation on Taxes and Expenditures - Proposition 62” and “-
Proposition 218” herein).
Sales and Use Taxes. Sales tax is collected and distributed by the State Board of Equalization. Each local
jurisdiction receives an amount equal to 1% of taxable sales within their jurisdiction. In addition, the City
receives a portion of a ½ cent sales tax increase approved by voters in 1993 pursuant to Proposition 172.
Sales tax generated by this increase is used to offset certain expenses for public safety.
Utility Users Tax. A utility users tax (“UUT”) is levied on gas and electric customers based on usage
(.01103 per therm for gas; .00300 per kilo watt for electricity) and telephone services based on gross
receipts. The UUT was first levied in 1970 and the last increase in tax rates was in 1979. A class action
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lawsuit was filed against the City contending that a tax on wireless phone use was not covered in the
implementing UUT ordinance. A preliminary settlement agreement was entered into in April 2013 for
rebates to affected wireless phone users who paid the UUT of their wireless phone bills from April 2010 to
April 2013. The court approved the final settlement on December 12, 2013.
At June 30, 2012, the City had recorded $7.3 million of disputed UUT as “deferred revenue” on its balance
sheet. As of June 30, 2013, the City recorded another $4.1 million as “deferred revenues,” moved
$8,000,000 of disputed UUT to a liability account in accordance with the settlement agreement, and
recorded $900,000 of prior deferred revenue to pay expenses of the UUT litigation, leaving $2.5 million in
UUT that had been collected in the “deferred revenue” account. Under the terms of the settlement, a portion
of the $8 million was applied to pay legal fees and expenses and a portion was paid to the claims
administrator for disbursement to the affected class of wireless phone users. Pursuant to the settlement
agreement, the balance of the funds were earmarked as separate from the General Fund and used for the
benefit of Chula Vista citizens to address communications, police services, fire services, libraries, parks and
recreation services. Pursuant to the settlement, starting March 1, 2014 the UUT rate on phone service was
reduced from 5% to 4.75%.
The City recognized a total $10.5 million of deferred UUT revenue in 2013/14, which is reflected in Table
No. 14.
There is no time limit established for the collection of the utility users tax or the transient occupancy tax.
There is also no expiration for the levy of sales tax pursuant to Proposition 172. See “RISK FACTORS - The
Base Rental Payments” and “Constitutional Limitation on Taxes and Expenditures - Proposition 218”
herein.
Franchise Fees. The City levies a franchise fee on its cable television, trash collection and utility
franchises. The City increased its franchise fees in 2014/15.
Business License Tax. The City levies a business license tax based on number of employees.
Transient Occupancy Tax. The City levies a 10% transient occupancy tax on hotel and motel bills.
Property Transfer Taxes. The City receives a documentary stamp tax which is assessed for recordation
of real property transfers.
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TABLE NO. 14
CITY OF CHULA VISTA
TAX REVENUES BY SOURCE
Budget
2012 2013 2014 2015 2016
Property Tax $24,518,260 $27,876,534 $ 28,492,215 $29,705,939 $ 29,896,924
Property Tax In Lieu of VLF (1) 16,288,377 16,253,826 16,773,957 17,779,353 18,597,204
Sales Tax 27,275,753 28,627,785 29,171,174 30,394,291 31,830,591
Franchise Fees 8,400,178 9,266,768 8,845,067 10,831,671 11,426,283
Utility Users Tax (2) 3,465,136 4,428,794 17,525,294 6,364,691 6,500,000
Transient Occupancy Tax 2,295,675 2,471,252 2,632,774 3,136,847 2,890,853
Business License Tax 1,169,307 1,260,622 1,328,554 1,407,145 1,429,643
Property Transfer Tax 779,981 1,125,252 949,603 1,118,494 832,822
Total $84,192,667 $91,310,833 $105,718,638 $100,738,431 $103,404,320
____________________________________
(1) See “Motor Vehicle License Fees” below. For comparison purposes, these amounts are included in “Taxes” for
all years.
(2) The City began recording a portion of the utility users’ tax as deferred revenue in Fiscal Year 2010/11. In 2012/13,
the City recognized $900,000 of deferred revenue to pay expenses related to the settlement described above. In
2013/14, the remaining $10.5 million of deferred revenue was recognized.
Source: City of Chula Vista.
Motor Vehicle License Fees
As described above, the City receives a portion of VLF collected state-wide. The total VLF budgeted for
Fiscal Year 2015/16 is $18.6 million, all of which is included in the City’s Fiscal Year 2015/16 budget as
intergovernmental revenues, but will be received through an in lieu payment from State property tax
revenues. Although the VLF is shown in Table No. 14 in all years as “Property Tax In Lieu of VLF” for
comparison purposes, the property tax portion of the VLF was phased in over several years, and in the
City’s financial statements (except for Fiscal Year 2011/12 and 2013/14), is shown in “Intergovernmental
Revenues.”
Public Facilities Development Impact Fees
The City assesses certain fees on new development. One such fee is the Public Facilities Development
Impact Fee, or “PFDIF.” These revenues are recorded in a Development Impact Fee Fund. See “APPENDIX
B - CITY AUDITED FINANCIAL STATEMENTS.” The City utilizes the PFDIF to offset the cost of
constructing or financing certain public facilities, such as the renovation of the Civic Center complex and
the Police Headquarters, including paying a portion of the lease payments related to the financing of these
improvements. See “Outstanding Indebtedness of the City” below.
The receipt of the PFDIF is dependent upon building activity in the City and such revenues were
significantly reduced during the recession years. Over the last eight years PFDIF revenues have ranged
from a high of $18 million in Fiscal Year 2005/06 to a low of $695,793 in Fiscal Year 2008/09. Such
amounts have not always been adequate in recent years to pay the proportionate share of lease payments as
expected and such amounts have instead been funded with the PFDIF fund balance or interfund loans made
to the PFDIF fund. The accumulated balance of PFDIF revenues at June 30, 2015 is approximately $8
million and the interfund loans due to other funds from the PFDIF was $10.7 million.
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Fiscal
Year
PFDIF
Revenues (1)
2006/07 $2,130,561
2007/08 2,861,465
2008/09 695,793
2009/10 1,610,071
2010/11 4,208,203
2011/12 3,122,330
2012/13 6,808,865
2013/14 4,554,723
2014/15 _________
2015/16 Budget 2,850,000
____________________________________
(1) Does not include investment income/market value decline in investment value or
reimbursements from other funds for prior expenditures.
Source: City of Chula Vista.
The City’s budget for Fiscal Year 2015/16 includes $2.85 million in PFDIF fee revenues as compared to a
total of approximately $5.8 million in the portion of lease payments on all City financings which could be
paid from such revenues (see “Outstanding Indebtedness of the City”). While the City has projected that
future development will stabilize and believes that annual PFDIF revenues, or accumulated PFDIF
revenues, will be available to pay a portion of the lease payments referenced above, there can be no
guarantee that building activity will occur as anticipated, and as a result, the City General Fund may be
required to pay a greater share of lease payments than currently anticipated by the City. However, to
mitigate future fluctuations in PFDIF revenues again impacting the General Fund, the City has reserved
$5.8 million (one year’s share of debt service on PFDIF – eligible projects) of the current $8.0 million fund
balance.
Personnel
Employee salaries and benefits account for over 80% of the City’s General Fund expenditures estimate for
Fiscal Year 2015/16. Table No. 15 sets forth historical employee information for the City as of June 30 in
each of the last five fiscal years and budgeted for 2015/16 based on authorized, budgeted full-time
equivalent positions.
TABLE NO. 15
CITY OF CHULA VISTA
CITY PERSONNEL
Fiscal Year
Number of Full Time
Permanent Employees
Employees Per
Thousand Population
2010/11 1,005 4.09
2011/12 923 3.72
2012/13 932 3.70
2013/14 950 3.70
2014/15 961 3.70
2015/16 966 3.70
____________________________________
Source: City of Chula Vista.
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Employee Relations and Collective Bargaining
City employees are represented by five labor unions and associations: the Chula Vista Employees’
Association (“CVEA”), the Chula Vista Police Officers’ Association (“POA”), the International Association
of Fire Fighters (“IAFF”), the Western Council of Engineers (“WCE”) and Mid Managers and Professional
Association (“MMPA”). CVEA is the largest association, representing approximately 45.5% of all City
employees. Currently 95% of all City employees are covered by negotiated agreements. Current negotiated
agreements of POA, IAFF, CVEA, WCE expire June 30, 2017. The current negotiated agreement with
MMPA expires June 30, 2018.
Retirement Programs
The City contributes to the California Public Employees Retirement System (“PERS”), an agent multiple-
employer public employee defined benefit pension plan. The City’s defined benefit pension plan provides
retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members
and beneficiaries. PERS acts as a common investment and administrative agent for participating public
entities within the State of California. Copies of PERS’ annual financial report may be obtained from its
executive office at 400 Q Street, Sacramento, California 95811.
California Public Employees’ Pension Reform Act of 2013. On September 12, 2012, the Governor
signed into law the California Public Employees’ Pension Reform Act of 2013 (the “Reform Act”), which
makes changes to both PERS and California State Teachers’ Retirement System (“CalSTRS”), most
substantially affecting new employees hired after January 1, 2013 (the “Implementation Date”). For non-
safety PERS participants hired after the Implementation Date, the Reform Act changes the normal
retirement age by increasing the eligibility for the 2% age factor from age 55 to 62 and increases the
eligibility requirement for the maximum age factor of 2.5% to age 67. Among the other changes to PERS
and CalSTRS, the Reform Act also: (i) requires all new participants enrolled in PERS and CalSTRS after
the Implementation Date to contribute at least 50% of the total annual normal cost of their pension benefit
each year as determined by an actuary, (ii) requires CalSTRS and PERS to determine the final compensation
amount for employees based upon the highest annual compensation earnable averaged over a consecutive
36-month period as the basis for calculating retirement benefits for new participants enrolled after the
Implementation Date, and (iii) caps “pensionable compensation” for new participants enrolled after the
Implementation Date at 100% of the federal Social Security contribution and benefit base for members
participating in Social Security or 120% for members not participating in social security, while excluding
previously allowed forms of compensation under the formula such as payments for unused vacation, annual
leave, personal leave, sick leave, or compensatory time off. Ultimately, the Reform Act is expected to
reduce the City’s long-term pension obligation as existing employees retire and new employees are hired
to replace them.
Funding Policy. The City has established two separately funded retirement plans, one for safety employees
(Safety Plan) and one for all other covered employees (Miscellaneous Plan). The City has implemented a
three-tiered structure and participants become members of a specific tier based on their date of membership
to PERS. Participants in the Miscellaneous Plan are required to contribute 8%, 7% and 6.75% of their
annual covered salary for tiers 1, 2 and 3, respectively. Participants in the Safety Plan contribute 9% of
their annual covered salary regardless of PERS membership date or tier. The City employees make the
required contributions.
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Under Governmental Accounting Standards Board (“GASB”) Statement No. 27, an employer reports an
annual pension cost (“APC”) equal to the annual required contribution (“ARC”) plus an adjustment for the
cumulative difference between the APC and the employer’s actual plan contributions for the year. The
cumulative difference is called the net pension obligation. The ARC for the period July 1, 2014 to June 30,
2015 was determined by an actuarial valuation of the plan as of June 30, 2013. The contribution rate
indicated for that period is 26.235% of payroll for the Miscellaneous Plan and 28.857% of payroll for the
Safety Plan. In order to calculate the dollar value of the ARC for inclusion in financial statements prepared
as of June 30, 2015, the contribution rate is multiplied by the payroll of covered employees that were paid
during the period from July 1, 2014 to June 30, 2015.
See below for a further discussion of GASB Statement No. 27 and the impact of GASB Statement No. 68
on pension reporting.
Contribution Rates. The contribution requirements of plan members and the City are established by
PERS. These rates are factored in to the City’s 2015/16 budget.
A history of the PERS annual portfolio rate of return is shown below. The PERS portfolio rate of return for
the most recent fiscal year ending June 30, 2015 was 2.4%. For the most recent calendar year 2014 for
which data is available, a rate of return of 6.5% was achieved. Future earnings performance and adjustments
of assumptions may increase or decrease future contribution rates for plan participants, including the City.
TABLE NO. 16
PERS HISTORICAL INVESTMENT RETURNS
Year Ending
June 30
Rate of
Return
2006 12.3%
2007 19.1
2008 (4.9)
2009 (23.4)
2010 11.6
2011 20.9
2012 1.0
2013 12.5
2014 18.4
2015 2.4
__________________________________________
Source: California Public Employees’ Retirement System.
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The City’s percentage of payroll for PERS payments for 2008/09 through 2015/16 and estimates for
2016/17 and for 2017/18 are shown in the table below. These rates do not include the employees’
contribution rates.
TABLE NO. 17
CITY OF CHULA VISTA
HISTORICAL AND PROJECTED PERS RATES
Fiscal Year Miscellaneous Safety
2008/09 18.317% 23.936%
2009/10 18.152% 23.228%
2010/11 19.599% 22.654%
2011/12 22.702% 26.134%
2012/13 23.668% 26.492%
2013/14 25.437% 27.316%
2014/15 26.235% 28.857%
2015/16 28.119% 30.431%
2016/17* __.____ __.____
2017/18* __.____ __.____
__________________________________________
* Projected by PERS at November 2015. Assumes a 7.5% rate of return.
Source: California Public Employees’ Retirement System.
Recent Changes in Actuarial Assumptions.
In March 2012, PERS voted to decrease the investment rate of return used in future actuarial valuations
from 7.75% to 7.5%. This change was implemented over a two-year period beginning with the 2013/14
rates.
In April 2013, PERS voted to raise employer rates roughly 50% over the next seven years, replacing current
actuarial methods. Over five years, the new method increases employer rates to the level needed to project
100% funding in 30 years.
Also in April 2013, PERS approved a recommendation to change the amortization and smoothing
policies. Prior to this change, PERS employed an amortization and smoothing policy, which spread
investment returns over a 15-year period while experience gains and losses were amortized over a rolling
30-year period. Effective with the June 30, 2013 valuations, PERS will no longer use an actuarial value of
assets and will employ an amortization and smoothing policy that will spread rate increases or decreases
over a five-year period, and will amortize all experience gains and losses over a fixed 30-year period.
The new amortization and smoothing policy was used for the first time in the June 30, 2013 actuarial
valuations. These valuations were performed in the fall of 2014 and affect employer contribution rates
beginning in Fiscal Year 2015/16.
In February 2014, PERS adopted new demographic assumptions regarding improved mortality
rates. According to PERS, this could result in rates as much as 2% to 5% higher. The impact would be
phased in and affects rates beginning in Fiscal Year 2016/17.
Although there is no assurance as to the actual level of PERS rates in future fiscal years, the City expects
PERS rates to stabilize within 5 years as the smoothing policy and other policy changes are fulling
recognized and there are less Tier 1 employees and more Tier 3 employees.
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Annual Pension Costs. A ten-year history of the City’s required annual pension cost and actual
contribution is shown in the table below. The required contribution was determined as part of annual
actuarial valuation using the entry age normal actuarial cost method. The current actuarial assumptions
include (a) 7.50% investment rate of return (net of administrative expenses), (b) projected salary increases
of 3.3% to 14.2%, and (c) 3.00% annual payroll growth. Both (a) and (b) included an inflation component
of 2.75% The actuarial value of PERS assets was determined using techniques that smooth the effects of
short-term volatility in the market value of investments. PERS unfunded actuarial accrued liabilities (or
surplus) is being amortized as a level percentage of projected payroll on a closed basis over 20 years.
TABLE NO. 18
CITY OF CHULA VISTA
TREND INFORMATION FOR EMPLOYER CONTRIBUTIONS
(ALL PLANS COMBINED)
(in $ Thousands)
Fiscal
Year
Annual
Pension Cost
Annual Required
Contribution
Percentage of
APC Contributed
Net Pension
Obligation
2005/06 $17,893,117 $17,893,117 100% -
2006/07 17,773,292 17,773,292 100% -
2007/08 19,084,940 19,084,940 100% -
2008/09 18,938,442 18,938,442 100% -
2009/10 17,865,618 17,865,618 100% -
2010/11 19,092,227 19,092,227 100% -
2011/12 23,996,289 23,996,289 100% -
2012/13 18,188,432 18,188,432 100% -
2013/14 16,215,564 16,215,564 100% -
2014/15 20,818,356 20,818,356 100% -
____________________________________
Source: California Public Employees’ Retirement System.
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Set forth below is a ten-year analysis of the market value of assets as a percentage of the actuarial accrual
liability and the unfunded actuarial accrued liability as a percentage of the annual covered payroll as of
June 30 of each year indicated for the City’s combined employee groups. The schedule presents multiyear
trend information about whether the market value of plan assets is increasing or decreasing over time
relative to the actuarial accrued liability for benefits. For the June 30, 2013 valuation date, PERS began
using market value as the actuarial value of plan assets.
TABLE NO. 19
CITY OF CHULA VISTA
HISTORICAL FUNDING PROGRESS (MARKET VALUE)
(ALL PLANS COMBINED)
(in $ Thousands)
Actuarial
Valuation
June 30 Date
Market
Valuation of
Assets
Entry Age
Actuarial
Accrued
Liability
Unfunded
Actuarial
Accrued
Liability
Funded
Ratio
Annual
Covered
Payroll
Unfunded
Liability as a
Percent of
Covered
Payroll
2005 359,233 428,428 69,195 83.8% 79,012 87.6%
2006 410,175 479,523 69,348 85.5% 88,655 78.2%
2007 498,631 521,653 23,022 95.6% 92,984 24.8%
2008 479,849 564,011 84,162 85.1% 83,391 100.9%
2009 362,945 617,013 254,068 58.8% 79,361 320.1%
2010 412,394 651,284 238,890 63.3% 77,797 307.1%
2011 499,961 701,421 201,460 71.3% 75,110 268.2%
2012 492,528 733,341 240,813 67.2% 74,422 323.6%
2013 551,851 776,710 224,859 71.0% 75,838 296.5%
2014
____________________________________
Source: California Public Employees’ Retirement System.
Defined Contribution Pension Plan
The City provides pension plan benefits for all of its part-time employees through a defined contribution
plan (Public Agency Retirement Plan). In a defined contribution plan, benefits depend solely on amounts
contributed to the plan plus investment earnings. The plan is administered by Public Agency Retirement
Services. All part-time employees are eligible to participate from the date of employment. Federal
legislation requires contributions of at least 7.5% to a retirement plan, and City Council resolved to match
the employees’ contributions of 3.75%. The City’s contributions for each employee (and interest earned by
the accounts) are fully vested immediately.
For the year ended June 30, 2015, the City’s total payroll and covered payroll for the Public Agency
Retirement Plan was $2,590,272. The City made employer contributions of $97,135 (3.75% of current
covered payroll), and employees contributed $97,135 (3.75% of current covered payroll).
Other Post Employment Benefits
Plan Description. The City provides a Retiree Healthcare Plan, a single employer defined benefit plan,
which allows retirees to purchase healthcare coverage under the City’s medical plan. Retirees pay 100%
of the premiums. Retirees not eligible for Medicare pay the same healthcare premiums as active employees,
even though retiree’s healthcare costs are greater than that of active employees. This results in an implied
subsidy of retiree’s healthcare costs by the City. In Fiscal Year 2011/12, the City entered into an agreement
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with various bargaining groups eliminating the subsidized retiree health care rates for employees hired
under the Second Tier PERS Retirement Plan. Employees hired under the Third Tier PERS Retirement
Plan are also not eligible for this benefit. The post employment benefit is a single-employer plan. The plan
has not been audited and therefore, there is no audited benefit plan report available.
Eligibility. Employees are eligible for retiree health benefits if they retire from the City on or after age 50
(unless disabled) and are eligible for PERS pension. The benefits are available only to employees who
retired from the City. The benefits terminate at age 65. Membership of the plan consisted of the following
at June 30, 2015:
Police Fire Miscellaneous Total
Eligible active employee 204 122 594 920
Enrolled eligible retirees 33 14 186 233
The information above does not reflect current retirees that are not yet enrolled in the healthcare plan but
are eligible to enroll in the plan at a later date.
Funding Policy. The City offers an implied subsidy benefit paid from the City’s General Fund. The City’s
contribution is based on pay-as-you-go. The retirees pay 100% of their individual premium except for the
retirees who retire under the incentive plan. The City is contributing $452 monthly in premium on behalf
of one employee who retired under the incentive plan in Fiscal Year 2012.
Annual OPEB Cost and Net OPEB Obligation. The City’s annual other post employment benefit
(“OPEB”) cost (expense) is calculated based on the ARC of the employer, an amount actuarially determined
in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that,
if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the
components of the City’s annual OPEB cost for Fiscal Years commencing 2010/11, the amount actually
contributed to the plan, and changes in the City’s net OPEB obligation for these benefits.
TABLE NO. 20
CITY OF CHULA VISTA
ANNUAL OPEB COST AND NET OPEB OBLIGATION
2010/11 2011/12 2012/13 2013/14 2014/15
Annual required contribution $1,470,000 $1,803,000 $1,974,000 $2,100,000 $1,920,000
Interest on net OPEB obligation 108,000 151,000 187,000 241,000 295,000
Adjustment to the annual required contribution - (285,000) (460,000) (607,000) (767,000)
Net OPEB cost 1,578,000 1,669,000 1,701,000 1,734,000 1,448,000
Contribution made (574,000) (537,000) (359,000) (392,000) (389,000)
Increase in net OPEB liability 1,004,000 1,132,000 1,342,000 1,342,000 1,059,000
Net OPEB liability, beginning of the year 2,549,000 3,553,000 4,685,000 6,027,000 7,369,000
Net OPEB liability, end of year $3,553,000 $4,685,000 $6,027,000 $7,369,000 $8,428,000
____________________________________
Source: City of Chula Vista Comprehensive Annual Financial Report.
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The City’s annual OPEB cost and the percentage of annual OPEB cost contributed to the plan for Fiscal
Years 2010/11 through 2014/15, and the net OPEB obligation as of June 30 of each Fiscal Year were as
follows:
TABLE NO. 21
CITY OF CHULA VISTA
OPEB COSTS AND NET OPEB OBLIGATION
Fiscal
Year
Annual
OPEB Cost
Percentage of
Annual OPEB Cost
Contributed
Net OPEB
Obligation
2010/11 $1,578,000 36% $3,553,000
2011/12 1,669,000 32 4,685,000
2012/13 1,701,000 21 6,027,000
2013/14 1,734,000 23 7,369,000
2014/15 1,448,000 27 8,428,000
____________________________________
Source: City of Chula Vista Comprehensive Annual Financial Report.
Funded Status and Funding Progress. Actuarial valuations of an ongoing plan involve estimates of the
value of reported amounts and assumptions about the probability of occurrence of events far into the future.
Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts
determined regarding the funded status of the plan and the annual required contributions of the employer
are subject to continual revision as actual results are compared with past expectations and new estimates
are made about the future. The schedule of funding progress presents information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities
for the benefits.
TABLE NO. 22
CITY OF CHULA VISTA
SCHEDULE OF FUNDING PROGRESS
Actuarial
Valuation
Date
June 30 (1)
Entry Age
Actuarial
Accrued
Liability
Actuarial
Value of
Assets
Unfunded
AAL
(UAAL)
Funded
Ratio
Covered
Payroll
UAAL as a
Percentage of
Covered
Payroll
2009 $11,885,000 $ - $11,885,000 0.0% $69,087,000 17.2%
2012 13,081,000 - 13,081,000 0.0 62,923,000 20.8
2014 12,877,000 - 12,877,000 0.0 58,224,000 22.1
____________________________________
Source: City of Chula Vista Comprehensive Annual Financial Report.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based
on the substantive plan (the plan as understood by the employer and the plan members) and include the
types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs
between employer and plan members to that point. The actuarial methods and assumptions used include
techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and
the actuarial assets, consistent with the long-term perspective of the calculations.
The actuarial cost method used for determining the benefit obligation is the Entry Age Normal Cost Method.
The current actuarial assumptions included a 4.0% discount rate, the inflation rate for HMO’s starts at 7.5%
(the increase in 2016 premiums over 2015) and grades down to 5.0% (2021 premiums over 2020) and
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remains at 5.0% into the future. This assumption means healthcare is assumed to increase, on the average,
6.75% a year for HMOs/PPOs Non-Medicare and 6.95% a year for HMOs/PPOs Medicare a year for the
next six years after 2014. The general inflation assumption rate is 3% and is assumed that healthcare will
level off at 1.5% over general inflation. The City’s unfunded actuarial accrued liability is being amortized
as a level percentage of projected payroll over a closed 30 years.
Risk Management
The City is self-insured for the first $500,000 per occurrence for its general liability losses including
personal injury, property damage, errors and omissions, automobile liability and employment practices
liability. For those losses between $500,000 and $2,000,000 per occurrence the City pools its liabilities
through its membership in the San Diego Pooled Insurance Program Authority (“SANDPIPA”). Insurance
for losses in excess of the $2,000,000 up to $45,000,000 is purchased on a group basis by the member cities.
SANDPIPA is a joint powers authority comprised of twelve San Diego County cities. The Board of
Directors consists of one staff representative (and an alternate) from each of the member cities as designated
by the city’s governing body. Each member city has equal representation on the Board of Directors. The
Board of Directors is liable for all actions of SANDPIPA.
The SANDPIPA Board of Directors establishes an Executive Committee that is responsible for the
administration and operation of the risk management programs of SANDPIPA, subject to the control of the
Board. The Executive Committee consists of the Board President, Vice-President, Treasurer and a member
at-large nominated by the Board President and approved by a vote of the Board. The Executive Committee
is responsible for the oversight of all SANDPIPA operations, including preparation and submittal of the
Pool’s annual budget to the Board for its review and approval.
Annual pool premiums and assessments are approved by the Board of Directors and are adjusted annually
based on the member city’s incurred losses; the member’s share of such losses and other expenses as a
proportion of all member’s losses; historical contributions to reserves (including reserves for IBNR losses);
the cost to purchase excess liability insurance and other coverage and a proportionate share of
administrative expenses.
The City is self-insured for the first $1,000,000 per occurrence for workers’ compensation liabilities. Excess
workers’ compensation coverage is obtained through participation in the CSAC Excess Insurance
Authority’s Excess Workers’ Compensation Program. As of June 30, 2014, there were 167 member entities
participating in the program that offers per occurrence coverage up to $5,000,000 through pooled resources
and from $5,000,000 to statutory limits via group purchased excess insurance policies.
Only the probable amounts of loss as estimated by the City’s Risk Manager and Attorney, including an
estimate of incurred-but-not reported losses, have been recorded as liabilities in the financial statements.
There were no reductions in insurance from the prior year and there were no insurance settlements that
exceeded coverage in each of the past three years.
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The aggregate change in the balance of claims payable as recorded in the Governmental Activities were as
follows:
Beginning of
Fiscal Year
Liability
Claims and
Changes in
Estimates
Claims
Payments
Balance at
Fiscal
Year End
2009/10 $17,869,949 $4,554,348 $(3,622,693) $18,801,604
2010/11 18,801,604 7,960,587 (4,330,098) 22,432,093
2011/12 22,432,093 3,372,465 (3,614,694) 22,189,864
2012/13 22,189,864 3,288,127 (4,456,532) 21,021,459
2013/14 21,021,459 5,186,700 (3,846,924) 22,361,235
____________________________________
Source: City of Chula Vista Comprehensive Annual Financial Report.
City Investment Policy and Portfolio
The City administers a pooled investment program, except for those funds which are managed separately
by trustees appointed under bond indentures. This program enables the City to combine available cash
from all funds and to invest cash that exceeds current needs. Under the City’s Investment Policy and in
accordance with the Government Code, the City may invest in the following types of investments subject
to certain limitations on maturity and amount:
Bankers’ Acceptances, Negotiable Certificates of Deposits, Commercial Paper, State and Local Agency
Bonds, U.S. Treasury Obligations, U.S. Agency Securities, Repurchase Agreements, Reverse-Purchase
Agreements, Medium-Term Corporate Notes, Time Certificates of Deposits, Money Market Funds, Local
Agency Investment Fund (LAIF) and the Investment Trust of California (CalTrust).
As of June 30, 2015, the book value (unaudited) of the Chief Financial Officer’s investment portfolio
(excluding funds held under bond indentures) was 189,867,654. The diversification of the Chief Financial
Officer’s investment portfolio assets as of such date is shown in the following table.
Type of Investment % of Combined Portfolio
Federal Securities 50.7%
Pooled Investments 40.1
Corporate Notes 7.9
Time Deposits 1.3
100.0%
The weighted average maturity of the investment portfolio was 916 days. The current yield of the
investment portfolio at June 30, 2015 (at cost) was 1.05%.
It has been the City’s general practice to purchase investments and hold them until their maturity. Given
this practice, the City does not expect its rate of return on the investment portfolio to be affected by
fluctuations in the market value of investments.
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Outstanding Indebtedness of the City
The City had the following outstanding indebtedness as of January 1, 2016, exclusive of obligations to be
paid from specifically pledged revenues, such as revenue bonds, tax allocation bonds and assessment
district or special tax bonds or Section 108 Loans. The City has never defaulted in the payment of any of
its obligations.
Original Amount Final
Category of Indebtedness Obligation Outstanding Maturity
(2) 2006 Certificates of Participation (Civic Center Phase 2) 20,325,000 9,275,000 2036
(3) 2010 Certificates of Participation (Capital Facilities Refunding) 29,355,000 27,285,000 2033
(4) 2014 Refunding Certificates of Participation (Police Facility Project)45,920,000 42,835,000 2032
(5) 2015 Refunding Certificates of Participation (Civic Center 34,330,000 34,330,000 2034
(5) Notes Payable 7,425,813 2026
(6) Capital Leases 2,498,987 2,226,728 2031
(7) Compensated Absences 6,625,460 N/A
__________________________
(1) In September 2004, the City delivered its 2004 Certificates of Participation to provide funding for
the first phase of the reconstruction, renovation, and equipping of the City’s Civic Center Complex
as well as approximately $9 million in infrastructure improvements throughout the City. The 2004
Certificates will be refunded with proceeds of the Certificates. The City expects that approximately
58.5% of the annual Lease Payments allocable to the refunding of the 2004 Certificates
($1,230,000) will be funded from the PFDIF, subject to the availability of funds and an additional
$595,000 will be funded from residential construction taxes.
(2) In March 2006, the City delivered its 2006 Certificates of Participation to provide funding for the
construction and equipping of certain improvements to the Civic Center Complex of the City of
Chula Vista and other existing City facilities. $7,135,000 of the 2006 Certificates maturing in years
2016-2026 were refunded with proceeds of the 2015 Certificates of Participation and the balance
will be refunded with proceeds of the Bonds. 77.8% of annual lease payments for the 2015
Certificates of Participation and the Bonds attributable to the 2006 Certificates of Participation
($______) will be funded from the PFDIF, subject to the availability of funds.
(3) To be refunded with proceeds of the Bonds. The City expects that approximately 71.5% of the
annual lease payments for the Bonds attributable to the 2010 Certificates of Participation ($______)
will be funded from the PFDIF, subject to the availability of funds.
(4) In March 2014, the City delivered the 2014 Certificates to provide funds to refinance its outstanding
2002 Certificates of Participation. The 2002 Certificates of Participation were delivered to provide
funds to construct the City’s Police Headquarters. The City expects that approximately 44.4%, of
the annual lease payments will be funded from the PFDIF ($________), subject to the availability
of funds.
(5) In August 2015, the City, the City delivered the 2015 Certificates to provide funds to refinance its
outstanding 2004 Certificates of Participation and a portion of the 2006 Certificates of Participation
as described in (2) above. The City expects that approximately 58.5% of the annual lease payments
for the Bonds attributable to the 2004 Certificates of Participation ($1,230,000) will be funded from
the PFDIF, subject to the availability of funds and an additional $595,000 will be funded from
residential construction taxes.
(5) (a) In September, 2007, the City Council authorized the City’s participation in the California
Energy Commission (CEC) and the SDG&E On-Bill Financing program. These loans would bridge
2016-04-05 Agenda Packet Page 376
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the financial gap between energy conservation project capital costs and the available rebates for
energy conservation equipment. As of June 30, 2015, the outstanding balance is $3,213,211. (b)
In December 2012, the City entered into a lease purchase agreement to purchase energy
conservation equipment relating to the Municipal Street Lighting Retrofit Project. As of June 30,
2015, the outstanding balance is $1,820,357. (c) In August 2013, the City entered into a lease
purchase agreement to purchase energy conservation equipment relating to the Municipal Solar
Project. As of June 30, 2015, the outstanding balance is $1,893,561. Annual payments for these
obligations total approximately $829,000.
(6) The City has capitalized a lease for energy efficiency equipment. The annual payments are
approximately $235,000. The City also entered into a capital lease for computer equipment. Annual
lease payments are $106,368.
(7) Represents that portion of compensated absences not expected to be paid during the current year.
Direct and Overlapping Debt
Set forth below is a direct and overlapping debt report (the “Debt Report”) prepared by California Municipal
Statistics, Inc. as of June 30, 2015. The Debt Report is included for general information purposes only.
The City has not reviewed the Debt Report for completeness or accuracy and makes no representations in
connection therewith. Any inquiries concerning the scope and methodology of procedures carried out to
compile the information presented should be directed to California Municipal Statistics, Inc.
The Debt Report generally includes long-term obligations sold in the public credit markets by public
agencies whose boundaries overlap the boundaries of the City in whole or in part. Such long-term
obligations are not payable from the City’s General Fund nor are they necessarily obligations secured by
property within the City. In many cases, long-term obligations issued by a public agency are payable only
from the general fund or other revenues of such public agency.
TABLE NO. 23
CITY OF CHULA VISTA
DIRECT AND OVERLAPPING DEBT
AS OF JUNE 30, 2015
2014/15 Assessed Valuation: $23,090,440,353
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable (1) Debt 6/30/15
Metropolitan Water District 0.995% $ 1,098,679
Otay Municipal Water District, I.D. No. 27 99.995 5,149,743
Southwestern Community College District 51.340 114,000,134
Sweetwater Union High School District 61.306 206,061,369
Chula Vista City School District 87.125 49,517,494
Chula Vista City School District Schools Facilities Improvement District No. 1 77.890 33,488,806
National School District 4.046 728,280
City of Chula Vista Community Facilities Districts 100. 177,025,000
Sweetwater Union High School District Community Facilities Districts 94.00 124,229,117
Chula Vista City School District Community Facilities Districts 99.718 3,819,199
City of Chula Vista 1915 Act Bonds 100. 15,896,000
California Statewide Communities Development Authority 1915 Act Bonds 100. 502,677
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 731,516,498
Continued on next page.
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Continued from previous page.
DIRECT AND OVERLAPPING GENERAL FUND DEBT: % Applicable Debt 6/30/15
San Diego County General Fund Obligations 5.510% $ 19,377,017
San Diego County Pension Obligation Bonds 5.510 37,612,096
San Diego County Superintendent of Schools Obligations 5.510 811,761
Southwestern Community College District Certificates of Participation 51.340 549,338
Sweetwater Union High School District General Fund Obligations 61.306 25,849,675
Chula Vista City School District Certificates of Participation 87.125 117,396,581
City of Chula Vista Certificates of Participation 100. 117,590,000 (2)
Otay Municipal Water District Certificates of Participation 64.660 29,223,087
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT $ 348,409,555
Less: Otay Municipal Water District Certificates of Participation 29,223,087
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT $ 319,186,468
OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 99.153-100. % $ 39,052,970
TOTAL DIRECT DEBT $ 117,590,000
TOTAL GROSS OVERLAPPING DEBT $1,001,389,023
NET OVERLAPPING TOTAL DEBT $ 972,165,936
GROSS COMBINED TOTAL DEBT $1,118,979,023 (3)
NET COMBINED TOTAL DEBT $1,089,755,936
(1) The percentage of the overlapping debt applicable to the City is estimated using taxable assessed property value. Applicable
percentages were estimated by determining the portion of the overlapping district’s assessed value that is within the boundaries
of the City divided by the district’s total taxable assessed value.
(2) Excludes refunding issues dated 7/15. Includes issues to be refunded.
(3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
Qualified Zone Academy Bonds are included based on principal due at maturity.
Ratios to 2014/15 Assessed Valuation:
Total Overlapping Tax and Assessment Debt ................................... 3.17%
Total Direct Debt ($121,650,000) ................................................... 0.51%
Gross Combined Total Debt ............................................................. 4.85%
Net Combined Total Debt ................................................................. 4.72%
Ratios to Redevelopment Successor Agency Incremental Valuation ($1,244,289,863):
Total Overlapping Tax Increment Debt ............................................ 3.14%
____________________________________
Source: California Municipal Statistics, Inc.
Financial Statements
The City’s accounting policies conform to generally accepted accounting principles and reporting standards
set forth by the State Controller. The audited financial statements also conform to the principles and
standards for public financial reporting established by the National Council of Government Accounting and
the Governmental Accounting Standards Board.
Basis of Accounting and Financial Statement Presentation. The government-wide financial statements
are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are levied. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues are considered to
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be available when they are collectible within the current period or soon enough thereafter to pay liabilities
of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures are recorded only when payment is due.
The City retained the firm of Lance, Soll & Lunghard, LLP, Certified Public Accountants, Brea, California,
to examine the general purpose financial statements of the City as of and for the year ended June 30, 2015.
The following tables summarize the audited Balance Sheet and Statement of Revenues, Expenditures and
Changes in Fund Balance of the City’s General Fund for the last five fiscal years.
See “APPENDIX B” hereto for the audited financial statements for the Fiscal Year ended June 30, 2015.
The City has not requested, and the auditor has not provided, any review or update of such statements in
connection with the inclusion in this Official Statement.
GASB Statement No. 54. The City was required to implement GASB Statement No. 54, Fund Balance
Reporting and Governmental Fund Type Definition, for the Fiscal Year ending June 30, 2011. GASB
Statement No. 54 establishes fund balance classifications that comprise a hierarchy based primarily on the
extent to which a government is bound to observe constraints imposed upon the use of the resources
reported in governmental funds.
The initial distinction that is made in reporting fund balance information is identifying amounts that are
considered nonspendable, such as fund balance associated with inventories. GASB Statement No. 54 also
provides for additional classification as “restricted,” “committed,” “assigned,” and “unassigned” based on
the relative strength of the constraints that control how specific amounts can be spent.
GASB Statement No. 68. On June 25, 2012, GASB approved two new standards (“Statements”) with
respect to pension accounting and financial reporting standards for state and local governments and pension
plans. The new Statements, No. 67 and No. 68, will replace GASB Statement No. 27 and most of
Statements No. 25 and No. 50. The changes will impact the accounting treatment of pension plans in which
state and local governments participate. Major changes include: 1) the inclusion of unfunded pension
liabilities on the government’s balance sheet (currently, such unfunded liabilities are typically included as
notes to the government’s financial statements); 2) more components of full pension costs will be shown as
expenses regardless of actual contribution levels; 3) lower actuarial discount rates will be required to be
used for underfunded plans in certain cases for purposes of the financial statements; 4) closed amortization
periods for unfunded liabilities will be required to be used for certain purposes of the financial statements;
and 5) the difference between expected and actual investment returns will be recognized over a closed five-
year smoothing period. In addition, according to GASB, Statement No. 68 means that, for pensions within
the scope of the Statement, a cost-sharing employer that does not have a special funding situation is required
to recognize a net pension liability, deferred outflows of resources, deferred inflows of resources related to
pensions and pension expense based on its proportionate share of the net pension liability for benefits
provided through the pension plan. Because the accounting standards do not require changes in funding
policies, the full extent of the effect of the new standards on the City is not known at this time. The reporting
requirements for pension plans took effect for the Fiscal Year beginning July 1, 2013 and the reporting
requirements for government employers, including the City, took effect for the Fiscal Year beginning July
1, 2014.
See Note 1 in the City’s audited financial statements attached in “APPENDIX B” for a discussion of
additional accounting changes.
Set forth in Table No. 24 below is the General Fund balance sheet for the last five fiscal years and Table
No. 25 below presents a five year history of General Fund revenues, expenditures and changes in fund
balances.
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TABLE NO. 24
CITY OF CHULA VISTA
GENERAL FUND
BALANCE SHEET
2011 2012 2013 2014 2015
Assets:
Pooled cash and investments $19,641,248 $17,403,991 $24,347,238 $20,276,201 $20,402,711
Receivables:
Accounts 790,544 2,397,608 1,673,960 792,147 2,066,125
Taxes 9,379,494 9,560,463 7,911,510 7,378,291 8,030,250
Accrued interest 21,885 26,988 25,816 27,374 -
Deferred loans 106,531 92,874 79,182 65,454 65,454
Allowance for uncollectible loans - - - - (65,454)
Other 123,705 34,641 - - -
Prepaid costs - - - - 32,906
Due from other funds 3,717,477 3,006,662 4,073,822 2,937,494 4,096,758
Due from other governments 672,822 505,049 188,542 844,196 275,123
Due from Successor Agency - 10,207,797 9,002,419 9,297,040 -
Due from agency fund - - 94,016 - -
Advances to other funds 14,150,004 1,581,814 1,621,446 1,661,076 1,496,657
Inventories and prepaid costs 72,852 49,595 104,344 61,805 -
Restricted Assets:
Cash and investments with fiscal agents - - - - 1,274,067
Due from Successor Agency of Chula Vista RDA - - - - 9,591,661
Total assets $48,676,562 $44,867,482 $44,122,295 $43,341,078 $47,266,258
Liabilities, Deferred Inflows of Resources,
and Fund Balances
Liabilities:
Accounts payable and accrued liabilities $ 5,964,280 $ 5,549,046 $ 6,154,223 $ 6,712,402 $ 1,744,436
Accrued liabilities - - - - 5,492,633
Retention payable 3,351 - 212,667 - -
Settlement payable - - 8,000,000 - -
Pass-through payable - - - - 8,229
Deferred revenue 6,968,532 11,279,378 6,786,230 - -
Total liabilities $12,936,163 $16,828,424 $21,153,120 $ 6,712,402 $ 7,245,298
Continued on next page.
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TABLE NO. 24
CITY OF CHULA VISTA
GENERAL FUND
BALANCE SHEET
Continued from previous page.
2011 2012 2013 2014 2015
DEFERRED INFLOWS OF RESOURCES:
Unavailable revenues $ - $ - $ - $ 3,669,767 $ 3,898,935
Total Deferred inflows of resources $ - $ - $ - $ 3,669,767 $ 3,898,935
Fund Balances (1):
Nonspendable:
Prepaid costs - - - 61,805 32,906
Notes and loans - - - 5,854,271 5,889,439
Advances to other funds - - - 1,508,736 1,496,657
Committed to:
Capital projects - - - 1,839,650 3,226,070
Economic contingency 3,600,000 3,600,000
San Diego Authority for Freeway Emergency - - - 695,951 695,951
Legal counsel - - - 80,000 80,000
Assigned to:
General government - - - 535,776 916,473
Public safety - - - 1,106,960 939,669
Parks and recreation - - - 152,853 116,375
Public works - - - 101,975 122,650
Library - - - 41 5,000
Public liability - - - - 2,587,957
Unassigned 14,511,252 16,412,878
Nonspendable (2) 11,258,150 8,799,026 7,481,079 - -
Restricted (2) 127,883 - 750,951 - -
Committed (2) 7,178,838 4,375,207 2,298,088 - -
Assigned (2) 5,298,536 2,895,545 6,648,922 - -
Unassigned (2) 11,876,992 11,969,280 10,790,135 - -
Total fund balances $35,740,399 $28,039,058 $27,969,175 $32,958,909 $36,122,025
Total liabilities, Deferred Inflows of
Resources, and Fund Balances $48,676,562 $44,867,482 $49,122,295 $43,341,078 $47,266,258
____________________________________
(1) See “GASB Statement No 54” above.
(2) Change in financial statement presentation to show individual components of the fund balance commitments and
designations.
Source: City of Chula Vista Comprehensive Annual Financial Reports.
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TABLE NO. 25
CITY OF CHULA VISTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
2011 2012 2013 2014 2015
REVENUES:
Taxes $ 69,441,761 $ 85,167,221 (2)$ 75,841,123 $105,718,638 $100,738,431
Intergovernmental (1) 18,748,469 2,029,529 19,542,065 2,477,213 1,933,114
Licenses and permits 2,777,946 1,222,769 1,395,519 1,315,445 1,281,656
Charges for services 9,721,746 7,794,981 8,357,509 9,257,946 9,430,097
Fines and forfeitures 1,708,846 1,355,769 1,002,946 1,009,736 1,638,251
Use of money and property 6,923,963 2,916,631 2,201,490 2,522,893 2,832,039
Miscellaneous 16,689,172 11,587,469 13,023,676 11,580,545 12,811,856
Total revenues $126,011,903 $112,074,369 $121,364,328 $133,882,416 $130,665,444
EXPENDITURES:
Current:
General government $ 28,568,063 $ 19,615,371 $ 22,742,279 $ 20,586,160 $ 23,305,483
Public safety 64,872,225 64,440,238 66,359,410 68,776,426 72,509,678
Public works 26,071,616 25,219,618 26,014,418 27,092,607 27,822,644
Parks and recreation 4,030,767 3,244,286 3,362,558 3,588,693 3,746,349
Library 3,870,646 3,435,325 3,182,483 3,336,380 3,527,038
Capital outlay 428,936 280,627 1,172,734 849,234 1,081,105
Total expenditures $127,842,253 $116,235,465 $122,833,882 $124,229,500 $131,992,297
REVENUES OVER (UNDER)
EXPENDITURES $ (1,830,350)$ (4,161,096)$ (1,469,554)$ 9,652,916 $ (1,326,853)
OTHER FINANCING SOURCES (USES):
Transfers in $ 11,304,257 $ 9,850,345 $ 9,661,447 $ 9,571,300 $ 9,994,525
Transfers out (6,915,308)(13,390,590)(2)(4,910,795)(14,234,482) (6,082,780)
Capital leases - - - - 578,224
Total other financing sources $ 4,388,949 $ (3,540,245)$ 4,750,652 $ (4,663,182) $ 4,489,969
NET CHANGE IN FUND BALANCES $ 2,558,599 $ (7,701,341)$ 3,281,098 $ 4,989,734 $ 3,163,116
FUND BALANCE
Beginning of year, as restated $ 33,181,800 $ 35,740,399 $ 24,688,077 $ 27,969,174 $ 32,958,909
End of year $ 35,740,399 $ 28,039,058 $ 27,969,175 $ 32,958,909 $ 36,122,025
____________________________________
(1) The City reflected the Motor Vehicle Fees and Property Taxes In-Lieu of Motor Vehicle Fees in
“Intergovernmental Revenues” in all years except Fiscal Year 2011/12 and 2013/14, when such revenue were
included in “Taxes.” See “Local Taxes” and “Motor Vehicle License Fees” above.
(2) Includes one-time recognition of $10.5 million in deferred UUT revenue. See “Local Taxes” above and
corresponding $8.0 million required transfer out of the General Fund.
Source: City of Chula Vista Comprehensive Annual Financial Reports.
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RISK FACTORS
The purchase of the Bonds involves investment risk. If a risk factor materializes to a sufficient degree, it
could delay or prevent payment of principal of and/or interest on the Bonds. Such risk factors include, but
are not limited to, the following matters and should be considered, along with other information in this
Official Statement, by potential investors.
The Base Rental Payments
Base Rental Payments are Limited Obligations of the City. The Base Rental Payments and other
payments due under the Lease Agreement (including a proportionate share of the costs of improvement,
repair and maintenance of the Leased Property and taxes, other governmental charges and assessments
levied against the Leased Property) are not secured by any pledge of taxes or other revenues of the City but
are payable from yearly appropriations of any funds lawfully available to the City. In the event the City’s
revenue sources are less than its total obligations, the City could choose to fund other services before paying
Base Rental Payments and other payments due under the Lease Agreement. The same result could occur
if, because of State Constitutional limits on expenditures, the City is not permitted to appropriate and spend
all of its available revenues (see “Constitutional Limitation on Taxes and Expenditures” below). To the
extent these types of events or other events adversely affecting the funds available to the City occur in any
year, the funds available to pay Base Rental Payments may be decreased.
The City has the capacity to enter into other obligations which may constitute additional charges against its
revenues. To the extent that additional obligations are incurred by the City, the funds available to the City
to pay Base Rental Payments may be decreased.
Abatement. Except to the extent that amounts are available (i) in the Lease Payment Fund under the
Indenture, (ii) from proceeds of rental interruption insurance, or (iii) as payments due from third parties due
to a delay in reconstructing the Leased Property, the amount of Base Rental Payments and Additional
Payments shall be abated during any period in which by reason of damage, destruction or taking by eminent
domain or condemnation of the Leased Property or defects in the title with respect to the Leased Property
there is substantial interference with the use and possession of all or a portion of the Leased Property by
the City. The amount of such abatement shall be such that the resulting Base Rental Payments, exclusive
of the amounts described above, do not exceed the fair rental value (as determined by the City) for the use
and possession of the portion of the Leased Property not damaged, destroyed, interfered with or taken. Such
abatement shall continue for the period commencing with such damage, destruction, interference or taking
and ending with the substantial completion of the replacement or work of repair or the removal of the title
defect causing such interference with use. The Lease Agreement shall continue in full force and effect
following an event of abatement and the City waives any right to terminate the Lease Agreement by virtue
of an abatement event.
In the event that such funds are insufficient to make all payments due on the Bonds during the period that
the Leased Property, or portion thereof, is being restored, then all or a portion of such payments may not be
made and no remedy is available to the Trustee or the Owners under the Lease Agreement or Indenture for
nonpayment under such circumstances. Failure to pay principal or interest with respect to the Bonds as a
result of abatement of the City’s obligation to make Base Rental Payments under the Lease Agreement is
not an event of default under the Indenture or the Lease Agreement. In the event that Base Rental Payments
are abated due to damage caused by earthquake or flood, such abatement may continue indefinitely - since
the Lease Agreement does not require earthquake or flood insurance unless the City determines that such
coverage is available from reputable insurers at commercially reasonable rates and although the City
currently maintains earthquake insurance with respect to the Leased Property, damage from earthquakes
may not be covered in future years - and the City cannot be compelled to repair or replace the damaged
Leased Property or to redeem the Bonds but has covenanted in the Lease Agreement to use its best efforts
to repair or replace the Leased Property from other lawfully available funds to the extent that the Net
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Proceeds are insufficient. See “APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -
SUBLEASE - Abatement of Base Rental Payments.”
Notwithstanding the provisions of the Lease Agreement and the Indenture specifying the extent of
abatement of Base Rental Payments and the application of other funds in the event of the City’s failure to
have use and occupancy of the Leased Property, such provisions may be superseded by operation of law,
and, in such event, the resulting Base Rental Payments of the City may not be sufficient to pay all of the
remaining principal and interest represented by the Bonds.
Insurance. The Lease Agreement obligates the City to obtain and keep in force various forms of insurance
to assure repair or replacement of the Leased Property in the event of damage or destruction to the Leased
Property and to maintain rental interruption insurance in an amount equal to maximum annual Base Rental
Payments in any two consecutive years (see “APPENDIX A - SUMMARY OF PRINCIPAL LEGAL
DOCUMENTS - SUBLEASE - Insurance” herein). The Lease Agreement does not require earthquake or flood
insurance unless the City determines that such coverage is available from reputable insurers at
commercially reasonable rates. See “Seismic Considerations” below. The City makes no representation as
to the ability of any insurer to fulfill its obligations under any insurance policy provided for in the Lease
Agreement. In addition, certain risks may not be covered by such property insurance (see “SOURCES OF
PAYMENT FOR THE BONDS - Insurance Relating to the Property” herein).
In the event the Leased Property is partially or completely damaged or destroyed due to any uninsured or
underinsured event, it is likely that Base Rental Payments will be partially or completely abated. If any
Leased Property so damaged or destroyed is not repaired or replaced within the period during which
amounts in the Reserve Fund and the proceeds of rental interruption insurance are available, any such
abatement could prevent the City from timely paying Base Rental Payments.
Discovery of a Hazardous Substance That Would Limit the Beneficial Use of the Leased Property. In
general, the owners and lessees of a parcel may be required by law to remedy conditions of the property
relating to releases or threatened releases of hazardous substances. The federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980 sometimes referred to as CERCLA or
the Superfund Act, is the most well-known and widely applicable of these laws but California laws with
regard to hazardous substances are also stringent and similar. Under many of these laws, the owner (or
lessee) is obligated to remedy a hazardous substance condition of property whether or not the owner (or
lessee) had any involvement in creating or handling the hazardous substance. The effect, therefore, should
the Leased Property be affected by a hazardous substance, might be to limit the beneficial use of the Leased
Property upon discovery and during remediation. The City is not aware of any such condition on the Leased
Property.
Seismic Considerations
According to the Public Safety Element of the City’s General Plan, the City is located in a seismically active
region and could be impacted by a major earthquake originating from the numerous faults in the
area. Traces of the potentially active La Nacion fault zone are known to cross the City in a generally north-
south direction within the central portion of the City. The nearest active faults are the Rose Canyon fault,
located approximately 14 miles northwest of the City, and the Coronado Bank fault, located approximately
30 miles from the City. Other active faults in the region are located more than 60 miles from the
City. Seismic hazards encompass potential surface rupture, ground shaking, liquefaction and landslides.
Strong vibrations due to earthquakes can cause liquefaction of certain soil types. Areas of Chula Vista in
close proximity to San Diego Bay and the Sweetwater and Otay River Valley have shallow groundwater
tables and poorly consolidated granular sediments potentially subject to seismically-induced
liquefaction. A portion of the City is also subject to landslides in the event of an earthquake. A major
earthquake could cause widespread destruction and significant loss of life in a populated area such as the
City.
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A major earthquake could cause widespread destruction and significant loss of life in a populated area such
as the City. If an earthquake were to substantially damage or destroy taxable property within the City, a
reduction in taxable values of property in the City and a reduction in revenues available to the General Fund
to make Base Rental Payments would be likely to occur. Seismic activity may also reduce or eliminate the
use and occupancy of the Leased Property by the City. There is no assurance that, in the event of a natural
disaster, sufficient City reserves or Federal Emergency Management Agency assistance would be available
for the repair or replacement of the Leased Property.
State Budget
The following information concerning the State’s budgets has been obtained from publicly available
information which the City, the Municipal Advisor and the Underwriter believe to be reliable; however,
neither the City, the Municipal Advisor nor the Underwriter guarantees the accuracy or completeness of
this information and has not independently verified such information. Furthermore, it should not be
inferred from the inclusion of this information in this Official Statement that the principal of or interest with
respect to the Bonds is payable by or the responsibility of the State of California.
State Budget. Information about the State budget is regularly available at various State-maintained
websites. Text of proposed and adopted budgets may be found at the website of the Department of Finance,
www.dof.ca.gov, under the heading “California Budget.” An impartial analysis of the budget is posted by
the Office of the Legislative Analyst at www.lao.ca.gov. In addition, various State of California official
statements, many of which contain a summary of the current and past State budgets and the impact of those
budgets on cities in the State, may be found at the website of the State Treasurer, www.treasurer.ca.gov. The
information referred to is prepared by the respective State agency maintaining each website and not by the
City, and the City can take no responsibility for the continued accuracy of these internet addresses or for
the accuracy, completeness or timeliness of information posted there, and such information is not
incorporated herein by these references.
According to the State Constitution, the Governor of the State (the “Governor”) is required to propose a
budget to the State Legislature (the “Legislature”) by no later than January 10 of each year, and a final
budget must be adopted by the vote of each house of the Legislature no later than June 15, although this
deadline has been routinely breached in the past. The State budget becomes law upon the signature of the
Governor, who may veto specific items of expenditure.
Prior to Fiscal Year 2010/11, the State budget had to be adopted by a two-thirds vote of each house of the
Legislature. However, in November 2010, the voters of the State passed Proposition 25, which reduced the
vote required to adopt a budget to a majority vote of each house and which provided that there would be no
appropriation from the current budget or future budget to pay any salary or reimbursement for travel or
living expenses for members of the Legislature for the period during which the budget was presented late
to the Governor.
Potential Impact of State of California Financial Condition on the City. For several fiscal years during
the recent recession, the State faced a structural deficit that resulted in substantial annual deficits and
reductions in expenditures. Although the State is projecting a budget surplus in the current fiscal year, the
State is still facing continuing financial challenges and unfunded long-term liabilities of more than $200
billion, which could result in future reductions or deferrals in amounts payable to the City. The State’s
financial condition and budget policies affect local public agencies throughout California. To the extent
that the State budget process results in reduced revenues to the City, the City will be required to make
adjustments to its budget. State budget policies can also impact conditions in the local economy and could
have an adverse effect on the local economy and the City’s major revenue sources.
No prediction can be made by the City as to whether the State will encounter budgetary problems in future
fiscal years, and if it were to do so, it is not clear what measures would be taken by the State to balance its
budget, as required by law. In addition, the City cannot predict the final outcome of future State budget
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negotiations, the impact that such budgets will have on City finances and operations or what actions will
be taken in the future by the State Legislature and the Governor to deal with changing State revenues and
expenditures. There can be no assurance that actions taken by the State to address its financial condition
will not materially adversely affect the financial condition of the City. Current and future State budgets
will be affected by national and State economic conditions and other factors over which the City has no
control.
Limited Recourse on Default; No Acceleration
If an event of default occurs and is continuing under the Lease Agreement, there is no remedy of
acceleration of any Base Rental Payments which have not come due and payable in accordance with the
Lease Agreement. The City will continue to be liable for Base Rental Payments as they become due and
payable in accordance with the Lease Agreement if the Trustee does not terminate the Lease Agreement,
and the Trustee would be required to seek a separate judgment each year for that year’s defaulted Base
Rental Payments. Any such suit for money damages would be subject to limitations on legal remedies
against cities in California, including a limitation on enforcement of judgments against funds or property
needed to serve the public welfare and interest. In addition, the enforcement of any remedies provided in
the Lease Agreement and the Indenture could prove both expensive and time-consuming.
The Lease Agreement permits the Trustee to take possession of and re-lease the Leased Property in the
event of a default by the City under the Lease Agreement. Even if the Trustee could readily re-lease the
Leased Property, the rents may not be sufficient to enable it to pay principal and interest on the Bonds in
full when due. Any such re-leasing of the Leased Property would be subject to existing encumbrances
thereon. See “THE LEASED PROPERTY” herein.
Enforcement of Remedies
The enforcement of any remedies provided in the Lease Agreement and the Indenture could prove both
expensive and time consuming. The rights and remedies provided in the Lease Agreement and the
Indenture may be limited by and are subject to the limitations on legal remedies against cities, including
State constitutional limits on expenditures, and limitations on the enforcement of judgments against funds
needed to serve the public welfare and interest; by federal bankruptcy laws, as now or hereafter enacted;
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the
enforcement of creditors’ rights generally, now or hereafter in effect (see “Bankruptcy of the City” below);
equity principles which may limit the specific enforcement under State law of certain remedies; the exercise
by the United States of America of the powers delegated to it by the Constitution; the reasonable and
necessary exercise, in certain exceptional situations, of the police powers inherent in the sovereignty of the
State and its governmental bodies in the interest of serving a significant and legitimate public purpose; and
the limitations on remedies against municipal entities in the State. Bankruptcy proceedings or the exercise
of powers by the federal or State government, if initiated, could subject the Owners of the Bonds to judicial
discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks
of delay, limitation or modification of their rights.
The legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel’s
legal opinion) will be qualified, as to the enforceability of the Bonds, the Indenture, the Site Lease, the
Lease Agreement, the Assignment Agreement and other related documents, by bankruptcy, insolvency,
reorganization, moratorium, arrangement, fraudulent conveyance and other laws relating to or affecting
creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in
appropriate cases, and to the limitation on legal remedies against charter cities and counties in the State. See
“Bankruptcy of the City” below.
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Bankruptcy of the City
The City is a unit of State government and therefore is not subject to the involuntary procedures of the
United States Bankruptcy Code (the “Bankruptcy Code”). However, pursuant to Chapter 9 of the
Bankruptcy Code, the City may seek voluntary protection from its creditors for purposes of adjusting its
debts. If the City were to become a debtor under the Bankruptcy Code, the City would be entitled to all of
the protective provisions of the Bankruptcy Code as applicable in a Chapter 9 proceeding. Among the
adverse effects of such a bankruptcy might be: (i) the application of the automatic stay provisions of the
Bankruptcy Code, which, until relief is granted, would prevent collection of payments from the City or the
commencement of any judicial or other action for the purpose of recovering or collecting a claim against
the City; (ii) the avoidance of preferential transfers occurring during the relevant period prior to the filing
of a bankruptcy petition; (iii) the existence of unsecured or court-approved secured debt which may have a
priority of payment superior to that of the Base Rental Payments under the Lease Agreement as they relate
to Revenues due to Owners of Bonds; and (iv) the possibility of the adoption of a plan for the adjustment
of the City’s debt (a “Plan”) without the consent of the Trustee or all of the Owners of Bonds, which Plan
may restructure, delay, compromise or reduce the amount of any claim of the Owners if the Bankruptcy
Court finds that the Plan is fair and equitable.
In addition, the City could either reject the Lease Agreement or assume the Lease Agreement despite any
provision of the Lease Agreement which makes the bankruptcy or insolvency of the City an event of default
thereunder. In the event the City rejects the Lease Agreement, the Trustee, on behalf of the Owners of the
Bonds, would have a pre-petition claim that may be limited under the Bankruptcy Code and treated in a
manner under a Plan over the objections of the Trustee or Owners of the Bonds. Moreover, such rejection
would terminate the Lease Agreement and the City’s obligations to make payments thereunder.
The Authority is a public agency and, like the City, is not subject to the involuntary procedures of the
Bankruptcy Code. The Authority may also seek voluntary protection under Chapter 9 of the Bankruptcy
Code. In the event the Authority were to become a debtor under the Bankruptcy Code, the Authority would
be entitled to all of the protective provisions of the Bankruptcy Code as applicable in a Chapter 9
proceeding. Such a bankruptcy could adversely affect the payments under the Indenture. Among the
adverse effects might be: (i) the application of the automatic stay provisions of the Bankruptcy Code, which,
until relief is granted, would prevent collection of payments from the Authority or the commencement of
any judicial or other action for the purpose of recovering or collecting a claim against the Authority; (ii) the
avoidance of preferential transfers occurring during the relevant period prior to the filing of a bankruptcy
petition; (iii) the existence of unsecured or court-approved secured debt which may have priority of payment
superior to that of the Owners of the Bonds; and (iv) the possibility of the adoption of a plan for the
adjustment of the Authority’s debt without the consent of the Trustee or all of the Owners of the Bonds,
which plan may restructure, delay, compromise or reduce the amount of any claim of the Owners if the
Bankruptcy Court finds that the Plan is fair and equitable. However, the bankruptcy of the Authority, and
not the City, should not affect the Trustee’s rights under the Lease Agreement. The Authority could still
challenge the assignment, and the Trustee and/or the Owners of the Bonds could be required to litigate these
issues to protect their interests.
Constitutional Limitation on Taxes and Expenditures
State Initiative Measures Generally. Under the California Constitution, the power of initiative is reserved
to the voters for the purpose of enacting statutes and constitutional amendments. Voters have exercised this
power through the adoption of Proposition 13 (“Article XIIIA”) and similar measures, such as Propositions
22 and 26 approved in the general election held on November 2, 2010.
Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies
such as the City. Subject to overriding federal constitutional principles, such collection may be materially
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and adversely affected by voter-approved initiatives, possibly to the extent of creating cash-flow problems
in the payment of outstanding obligations such as the Lease.
Article XIIIA. Article XIIIA of the California Constitution limits the taxing powers of California public
agencies. Article XIIIA provides that the maximum ad valorem tax on real property cannot exceed 1% of
the “full cash value” of the property, and effectively prohibits the levying of any other ad valorem property
tax except for taxes above that level required to pay debt service on voter-approved general obligation
bonds. “Full cash value” is defined as “the County assessor’s valuation of real property as shown on the
1975/76 tax bill under ‘full cash value’ or, thereafter, the appraised value of real property when purchased,
newly constructed, or a change in ownership has occurred after the 1975 assessment.” The “full cash value”
is subject to annual adjustment to reflect inflation at a rate not to exceed 2% or a reduction in the consumer
price index or comparable local data. Article XIIIA has subsequently been amended to permit reduction of
the “full cash value” base in the event of declining property values caused by substantial damage,
destruction or other factors, and to provide that there would be no increase in the “full cash value” base in
the event of reconstruction of property damaged or destroyed in a disaster and in other special
circumstances. There may also be declines in valuations if the California Consumer Price Index is negative.
The foregoing limitation does not apply to ad valorem taxes or special assessments to pay the interest and
prepayment charges on any indebtedness approved by the voters before July 1, 1978 or any bonded
indebtedness for the acquisition or improvement of real property approved by two-thirds of votes cast by
the voters voting on the proposition.
In the general election held November 4, 1986, voters of the State of California approved two measures,
Propositions 58 and 60, which further amend the terms “purchase” and “change of ownership,” for purposes
of determining full cash value of property under Article XIIIA, to not include the purchase or transfer of
(1) real property between spouses, and (2) the principal residence and the first $1,000,000 of other property
between parents and children. Proposition 60 amends Article XIIIA to permit the Legislature to allow
persons over age 55 who sell their residence and buy or build another of equal or lesser value within two
years in the same city, to transfer the old residence’s assessed value to the new residence. In the March 26,
1996 general election, voters approved Proposition 193, which extends the parents-children exception to
the reappraisal of assessed value. Proposition 193 amended Article XIIIA so that grandparents may transfer
to their grandchildren whose parents are deceased, their principal residences, and the first $1,000,000 of
other property without a reappraisal of assessed value.
Because the Revenue and Taxation Code does not distinguish between positive and negative changes in the
California Consumer Price Index used for purposes of the inflation factor, there was a decrease of 0.237%
in 2009/10 – applied to the 2010/11 tax roll – reflecting the actual change in the California Consumer Price
Index, as reported by the State Department of Finance. For each fiscal year since Article XIIIA has become
effective (the 1978/79 Fiscal Year), the annual increase for inflation has been at least 2% except in ten fiscal
years as shown below:
Tax Roll Percentage Tax Roll Percentage
1981/82 1.000% 2010/11 (0.237)%
1995/96 1.190% 2011/12 0.753%
1996/97 1.110% 2014/15 0.454%
1998/99 1.853% 2015/16 1.998%
2004/05 1.867% 2016/17 1.525%
Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real property
at the lesser of its originally determined (base year) full cash value compounded annually by the inflation
factor, or its full cash value as of the lien date, taking into account reductions in value due to damage,
destruction, obsolescence or other factors causing a decline in market value. Reductions based on
Proposition 8 do not establish new base year values, and the property may be reassessed as of the following
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lien date up to the lower of the then-current fair market value or the factored base year value. The State
Board of Equalization has approved this reassessment formula and such formula has been used by county
assessors statewide. The City experienced Proposition 8 reductions in property values between 2009 and
2013. See “FINANCIAL INFORMATION - Ad Valorem Property Taxes - Taxable Property and Assessed
Valuation” herein.
Article XIIIB. On November 6, 1979, California voters approved Proposition 4, or the Gann Initiative,
which added Article XIIIB to the California Constitution. Article XIIIB limits the annual appropriations of
the State and any city, county, city and county, school district, authority or other political subdivision of the
State. The “base year” for establishing such appropriations limit is the 1978/79 Fiscal Year, and the limit
is to be adjusted annually to reflect changes in population, consumer prices and certain increases in the cost
of services provided by public agencies.
Appropriations subject to Article XIIIB include generally the proceeds of taxes levied by or for the entity
and the proceeds of certain State subventions, refunds of taxes, benefit payments from retirement,
unemployment insurance and disability insurance funds. “Proceeds of taxes” include, but are not limited
to, all tax revenues, certain State subventions, and the proceeds to an entity of government, from (1)
regulatory licenses, user charges and user fees, to the extent that such charges and fees exceed the costs
reasonably borne in providing the regulation, product or service, and (2) the investment of tax
revenues. Article XIIIB includes a requirement that if an entity’s revenues in any year exceed the amounts
permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules within the
next two subsequent fiscal years.
In the June 1990 election, the voters approved Proposition 111 amending the method of calculation of State
and local appropriations limits. Proposition 111 made several changes to Article XIIIB. First, the term
“change in the cost of living” was redefined as the change in the California per capita personal income
(“CPCPI”) for the preceding year. Previously, the lower of the CPCPI or the United States Consumer Price
Index was used. Second, the appropriations limit for the fiscal year was recomputed by adjusting the
1986/87 limit by the CPCPI for the three subsequent years. Third and lastly, Proposition 111 excluded
appropriations for “qualified capital outlay for fiscal 1990/91 as defined by the legislature” from proceeds
of taxes.
Section 7910 of the Government Code requires the City to adopt a formal appropriations limit for each
fiscal year. The City’s appropriations limit for 2015/16 is $729,447,134. The City’s appropriations subject
to the limit for 2015/16 are $293,415,4059. Based on this, the appropriations limit is not expected to have
any impact on the ability of the City to continue to budget and appropriate the Base Rental Payments as
required by the Lease Agreement.
Proposition 62. Proposition 62 was a statutory initiative adopted in the November 1986 general
election. Proposition 62 added Sections 53720 to 53730, inclusive, to the California Government Code. It
confirmed the distinction between a general tax and special tax, established by the State Supreme Court in
1982 in City and County of San Francisco v. Farrell, by defining a general tax as one imposed for general
governmental purposes and a special tax as one imposed for specific purposes. Proposition 62 further
provided that no local government or district may impose (i) a general tax without prior approval of the
electorate by majority vote or (ii) a special tax without such prior approval by two-thirds vote. It further
provided that if any such tax is imposed without such prior written approval, the amount thereof must be
withheld from the levying entity’s allocation of annual property taxes for each year that the tax is
collected. By its terms, Proposition 62 applies only to general and special taxes imposed on or after August
1, 1985. Proposition 62 was generally upheld in Santa Clara County Local Transportation Authority v.
Guardino, a California Supreme Court decision filed September 28, 1995.
Proposition 218. On November 5, 1996, California voters approved Proposition 218 – Voter Approval for
Local Government Taxes – Limitation on Fees, Assessments, and Charges – Initiative Constitutional
Amendment. Proposition 218 added Articles XIIIC and XIIID to the California Constitution, imposing
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certain vote requirements and other limitations on the imposition of new or increased taxes, assessments
and property-related fees and charges. Proposition 218 states that all taxes imposed by local governments
shall be deemed to be either general taxes or special taxes. Special purpose districts, including school
districts, have no power to levy general taxes. No local government may impose, extend or increase any
general tax unless and until such tax is submitted to the electorate and approved by a majority vote. No
local government may impose, extend or increase any special tax unless and until such tax is submitted to
the electorate and approved by a two-thirds vote.
Proposition 218 also provides that no tax, assessment, fee or charge shall be assessed by any agency upon
any parcel of property or upon any person as an incident of property ownership except: (i) the ad valorem
property tax imposed pursuant to Article XIII and Article XIIIA of the California Constitution, (ii) any
special tax receiving a two-thirds vote pursuant to Section 4 of Article XIIIA the California Constitution,
and (iii) assessments, fees, and charges for property related services as provided in Article
XIIID. Proposition 218 added voter requirements for assessments and fees and charges imposed as an
incident of property ownership, other than fees and charges for sewer, water, and refuse collection
services. In addition, all assessments and fees and charges imposed as an incident of property ownership,
including sewer, water, and refuse collection services, are subjected to various additional procedures, such
as hearings and stricter and more individualized benefit requirements and findings. The effect of such
provisions will presumably be to increase the difficulty a local agency will have in imposing, increasing or
extending such assessments, fees and charges.
Proposition 218 also extended the initiative power to reducing or repealing any local taxes, assessments,
fees and charges. This extension of the initiative power is not limited to taxes imposed on or after
November 6, 1996, the effective date of Proposition 218, and could result in retroactive repeal or reduction
in any existing taxes, assessments, fees and charges, subject to overriding federal constitutional principles
relating to the impairment of contracts.
Proposition 218 provides that, effective July 1, 1997, fees that are charged “as an incident of property
ownership” may not “exceed the funds required to provide the property related services” and may only be
charged for services that are “immediately available to the owner of the property.”
The City levies a utility users tax (“UUT”) on gas and electric customers based on usage (.01103 per therm
for gas; .00300 per kilo watt for electricity) and telephone services based on gross receipts. The UUT was
first levied in 1970 and the last increase in tax rates was in 1979. A class action lawsuit was filed against
the City contending that a tax on wireless phone use was not covered in the implementing UUT
ordinance. A settlement agreement was entered into in December 2013 for rebates to affected wireless
phone users who paid the UUT of their wireless phone bills from April 2010 to April 2013. Under the terms
of the settlement, a portion of the previously collected UUT was paid to the claims administrator for
disbursement to the affected class of wireless phone users. In addition, pursuant to the settlement, starting
March 1, 2014 the UUT rate on phone service was reduced from 5% to 4.75%.
The City does not expect the application of Proposition 218 will have a material adverse impact on its
ability to pay Base Rental Payments.
Proposition 1A. Proposition 1A (“Proposition 1A”), proposed by the Legislature in connection with the
2004/05 Budget Act and approved by the voters in November 2004, restricts State authority to reduce major
local tax revenues such as the tax shifts permitted to take place in Fiscal Years 2004/05 and
2005/06. Proposition 1A provides that the State may not reduce any local sales tax rate, limit existing local
government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to
certain exceptions. Proposition 1A generally prohibits the State from shifting to schools or community
colleges any share of property tax revenues allocated to local governments for any fiscal year, as set forth
under the laws in effect as of November 3, 2004. Any change in the allocation of property tax revenues
among local governments within a county must be approved by two-thirds of both houses of the Legislature.
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Proposition 1A provides, however, that beginning in Fiscal Year 2008/09, the State may shift to schools and
community colleges up to 8% of local government property tax revenues, which amount must be repaid,
with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state
financial hardship, the shift is approved by two-thirds of both houses and certain other conditions are
met. Such a shift may not occur more than twice in any 10-year period. The State may also approve
voluntary exchanges of local sales tax and property tax revenues among local governments within a county.
For Fiscal Year 2009/10, 8% of the City’s property tax revenues (approximately $4.5 million) were diverted
to the State as a result of a Proposition 1A suspension.
Proposition 1A also provides that if the State reduces the vehicle license fee rate below 0.65% of vehicle
value, the State must provide local governments with equal replacement revenues. Further, Proposition 1A
requires the State to suspend State mandates affecting cities, counties and special districts, excepting
mandates relating to employee rights, schools or community colleges, in any year that the State does not
fully reimburse local governments for their costs to comply with such mandates.
Proposition 22. On November 2, 2010, voters in the State approved Proposition 22. Proposition 22,
known as the “Local Taxpayer, Public Safety, and Transportation Protection Act of 2010,” eliminates or
reduces the State’s authority to (i) temporarily shift property taxes from cities, counties and special districts
to schools, (ii) use vehicle license fee revenues to reimburse local governments for State-mandated costs
(the State will have to use other revenues to reimburse local governments), (iii) redirect property tax
increment from redevelopment agencies to any other local government, (iv) use State fuel tax revenues to
pay debt service on State transportation bonds, or (v) borrow or change the distribution of State fuel tax
revenues.
Proposition 26. On November 2, 2010, voters in the State also approved Proposition 26. Proposition 26
amends Article XIIIC of the State Constitution to expand the definition of “tax” to include “any levy, charge,
or exaction of any kind imposed by a local government” except the following: (1) a charge imposed for a
specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged,
and which does not exceed the reasonable costs to the local government of conferring the benefit or granting
the privilege; (2) a charge imposed for a specific government service or product provided directly to the
payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local
government of providing the service or product; (3) a charge imposed for the reasonable regulatory costs
to a local government for issuing licenses and permits, performing investigations, inspections, and audits,
enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (4) a
charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local
government property; (5) a fine, penalty, or other monetary charge imposed by the judicial branch of
government or a local government, as a result of a violation of law; (6) a charge imposed as a condition of
property development; and (7) assessments and property-related fees imposed in accordance with the
provisions of Article XIIID. Proposition 26 provides that the local government bears the burden of proving
by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no
more than necessary to cover the reasonable costs of the governmental activity, and that the manner in
which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on,
or benefits received from, the governmental activity. The City does not expect the provisions of
Proposition 26 to materially impede its ability to pay Base Rental Payments when due.
Future Initiatives. From time to time other initiative measures could be adopted, affecting the ability of
the City to increase revenues and appropriations.
Early Redemption Risk
Early payment of the Base Rental Payments and early redemption of the Bonds may occur in whole or in
part without premium, on any date if the Leased Property or a portion thereof is lost, destroyed or damaged
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beyond repair or taken by eminent domain and from the proceeds of title insurance (see “THE BONDS -
Redemption - Special Mandatory Redemption From Insurance or Condemnation Proceeds”).
Loss of Tax Exemption
As discussed under the caption “TAX MATTERS” herein, interest on the Bonds could become includable in
gross income for purposes of federal income taxation retroactive to the date the Bonds were executed and
delivered as a result of future acts or omissions of the Authority or the City in violation of its covenants
contained in the Indenture and the Lease Agreement. Should such an event of taxability occur, the Bonds
are not subject to special redemption or any increase in interest rate and will remain outstanding until
maturity.
In addition, Congress has considered in the past, is currently considering and may consider in the future,
legislative proposals, including some that carry retroactive effective dates, that, if enacted, would alter or
eliminate the exclusion from gross income for federal income tax purposes of interest on municipal bonds,
such as the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding
any pending or proposed federal tax legislation. Neither the Authority nor the City can provide assurance
that federal tax law will not change while the Bonds are outstanding or that any such changes will not
adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax
purposes. If the exclusion of the interest on the Bonds from gross income for federal income tax purposes
were amended or eliminated, it is likely that the market price for the Bonds would be adversely impacted.
IRS Audit of Tax-Exempt Bond Issues
The Internal Revenue Service has initiated an expanded program for the auditing of tax-exempt bond issues,
including both random and targeted audits. It is possible that the Bonds will be selected for audit by the
Internal Revenue Service. It is also possible that the market value of the Bonds might be affected as a result
of such an audit of the Bonds (or by an audit of similar bonds).
Secondary Market Risk
There can be no assurance that there will be a secondary market for purchase or sale of the Bonds, and from
time to time there may be no market for them, depending upon prevailing market conditions, the financial
condition or market position of firms who may make the secondary market and the financial condition of
the City.
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TAX MATTERS
(to be provided by Bond Counsel)
LEGAL MATTERS
Enforceability of Remedies
The remedies available to the Trustee and the Owners of the Bonds upon an event of default under the
Indenture, the Lease Agreement, the Site Lease, or any other document described herein are in many
respects dependent upon regulatory and judicial actions which are often subject to discretion and delay.
Under existing law and judicial decisions, the remedies provided for under such documents may not be
readily available or may be limited. In the case of any bankruptcy proceeding involving the City, the rights
of the Owners could be modified at the direction of the court. The various legal opinions to be delivered
concurrently with the delivery of the Bonds will be qualified to the extent that the enforceability of certain
legal rights related to the Indenture, the Lease Agreement, the Site Lease and other pertinent documents is
subject to limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the
rights of creditors generally and by equitable remedies and proceedings generally.
Approval of Legal Proceedings
Stradling Yocca Carlson & RauthStradling Yocca Carlson & Rauth, a Professional Corporation, Los
Angeles, California, as Bond Counsel, will render an opinion with respect to the validity and enforceability
of the Indenture and the Lease Agreement, and as to the validity of the Bonds. See “APPENDIX D” hereto
for the proposed form of Bond Counsel’s opinion.
The Authority and the City have no knowledge of any fact or other information which would indicate that
the Indenture, the Lease Agreement, the Site Lease or the Bonds are not so enforceable against the Authority
and the City, as applicable, except to the extent such enforcement is limited by principles of equity, by state
and federal laws relating to bankruptcy, reorganization, moratorium or creditors’ rights generally and by
limitations on legal remedies against municipalities in the State.
Certain legal matters will be passed on for the City and the Authority by Stradling Yocca Carlson & Rauth,
a Professional Corporation, Newport Beach, California, as Disclosure Counsel and by Glen R. Googins,
City Attorney. Certain legal matters will be passed on for the Underwriter by its Counsel, Jones Hall, A
Professional Law Corporation, San Francisco, California. Fees payable to Disclosure Counsel are
contingent upon the sale and delivery of the Bonds.
Absence of Litigation
The Authority and the City will each furnish a certificate dated as of the date of delivery of the Bonds that
there is not now known to be pending or threatened any litigation restraining or enjoining the execution or
delivery of the Indenture, the Lease Agreement or the sale or delivery of the Bonds or in any manner
questioning the proceedings and authority under which the Indenture, the Site Lease and the Lease
Agreement are to be executed or delivered or the Bonds are to be delivered or affecting the validity thereof.
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CONCLUDING INFORMATION
Rating on the Bonds
Standard & Poor’s has assigned their rating of “__” to the Bonds. Such rating reflects only the views of
the rating agency and any desired explanation of the significance of such rating should be obtained from
the rating agency. Generally, a rating agency bases its rating on the information and materials furnished to
it and on investigations, studies and assumptions of its own.
Except as otherwise required in the Continuing Disclosure Certificate, the City undertakes no responsibility
either to bring to the attention of the owners of any Bonds any downward revision or withdrawal of any
rating obtained or to oppose any such revision or withdrawal. There is no assurance such rating will
continue for any given period of time or that such rating will not be revised downward or withdrawn entirely
by the rating agency, if in the judgment of such rating agency, circumstances so warrant. Any such
downward revision or withdrawal of such rating may have an adverse effect on the market price of the
Bonds. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision or
withdrawal at any time.
Underwriting
The Bonds were sold to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), who is offering the
Bonds at the prices set forth on the inside cover page hereof. The initial offering prices may be changed
from time to time and concessions from the offering prices may be allowed to dealers, banks and others.
The Underwriter has purchased the Bonds at a price equal to $_______, which amount represents the
principal amount of the Bonds plus a net original issue premium of $_____, less an Underwriter’s discount
of $______. The Underwriter will pay certain of its expenses relating to the offering from the Underwriter’s
discount.
The Municipal Advisor
The material contained in this Official Statement was prepared by the Authority and the City with the
assistance of the Municipal Advisor who advised the Authority and the City as to the financial structure and
certain other financial matters relating to the Bonds. The information set forth herein received from sources
other than the City has been obtained by the Authority from sources which are believed to be reliable, but
such information is not guaranteed by Municipal Advisor as to accuracy or completeness, nor has it been
independently verified. Fees paid to the Municipal Advisor are contingent upon the sale and delivery of
the Bonds.
Continuing Disclosure
The City will covenant to provide certain annual financial information (the “Annual Reports”) and notices
of the occurrence of certain enumerated events in accordance with Rule 15c2-12 of the Securities Exchange
Act of 1934 as amended (the “Rule”) by not later than ______ in each year The specific nature of the
information to be contained in the Annual Report or the notices of listed events and certain other terms of
the continuing disclosure obligation are found in the form of the City’s Disclosure Certificate attached in
“APPENDIX C - FORM OF CONTINUING DISCLOSURE CERTIFICATE.”
The City and certain other entities related to the City, including the former redevelopment agency, various
community facilities districts and joint powers authorities (together, the “City Entities”), have entered into
previous undertakings pursuant to the Rule. Within the last five years, the City and certain of the City
Entities have failed to comply with their respective prior undertakings in the following respects: pursuant
to the undertakings for the City’s five series of Certificates of Participation (collectively, the “Certificates”)
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issued prior to 2011, the City’s audit for Fiscal Year 2009-10 was timely filed on EMMA (by February 1,
2011) and referenced in the annual reports as being filed, however, the audit was not linked by CUSIP
number to two series of Certificates until May 2011 and to the three other series of Certificates until
February 2014; (ii) pursuant to the undertakings for certain of the community facilities districts, such
community facilities districts were twelve days late in filing the City’s audited financial statements in 2013;
(iii) pursuant to the undertakings for three series of the former agency’s bonds, the former agency’s annual
reports due in February and March 2012 were not filed until July 2012 and financial statements due in
February and March 2011 were not filed until February 2014, although financial statements were timely
filed for all other years since 2011; (iv) notice of certain ratings changes resulting from changes in ratings
on municipal bond insurance companies were not promptly filed and one notice of an underlying rating
change was filed 37 days after the rating change occurred; and (v) in certain cases information was timely
filed on EMMA under the applicable base CUSIP number for the issuer but not linked to all of the individual
CUSIP numbers for a series of bonds.
The City has adopted policies and procedures regarding compliance with undertakings made by the City
and the City Entities pursuant to the Rule and has retained the services of outside consultants to assist in
the reporting process. The City’s Finance Department has assigned a specific person to coordinate with the
outside consultants and to monitor compliance.
References
Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated,
are intended as such and not as representations of fact. This Official Statement is not to be construed as a
contract or agreement between the Authority and the purchasers or Owners of any of the Bonds.
Execution
The execution of this Official Statement by the Treasurer of the Authority and the Deputy City
Manager/Chief Financial Officer has been duly authorized by the Authority and by the City, respectively.
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
By: ___________________________________
Treasurer
CITY OF CHULA VISTA
By: ___________________________________
Deputy City Manager/Chief Financial Officer
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A-1
APPENDIX A
SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
[to be provided by Bond Counsel]
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B-1
APPENDIX B
CITY AUDITED FINANCIAL STATEMENTS
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C-1
APPENDIX C
FORM OF CONTINUING DISCLOSURE CERTIFICATE
[to be provided by Disclosure Counsel]
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D-1
APPENDIX D
PROPOSED FORM OF BOND COUNSEL OPINION
[to be provided by Bond Counsel]
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E-1
APPENDIX E
THE BOOK-ENTRY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record
keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other
payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial
ownership interest in the Bonds and other related transactions by and between DTC, the DTC Participants
and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no
representations can be made concerning these matters and neither the DTC Participants nor the Beneficial
Owners should rely on the foregoing information with respect to such matters, but should instead confirm
the same with DTC or the DTC Participants, as the case may be.
Neither the issuer of the Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent
appointed with respect to the Bonds (the “Agent”) take any responsibility for the information contained in
this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to
the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b)
certificates representing ownership interest in or other confirmation or ownership interest in the Bonds, or
(c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the
Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants
will act in the manner described in this Appendix. The current “Rules” applicable to DTC are on file with
the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing
with DTC Participants are on file with DTC.
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository
for the Bonds (the “Securities”). The Securities will be issued as fully-registered securities registered in
the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of
the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If,
however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued
with respect to each $500 million of principal amount, and an additional certificate will be issued with
respect to any remaining principal amount of such issue.
2. DTC, the world’s largest securities depository, is a limited-purpose trust company
organized under the New York Banking Law, a “banking organization” within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the
New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of
Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5
million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market
instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC.
DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities
transactions in deposited securities, through electronic computerized book-entry transfers and pledges
between Direct Participants’ accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of
The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National
Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered
clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is
also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of
AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange
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Commission. More information about DTC can be found at www.dtcc.com. The information contained on
such Internet site is not incorporated herein by reference.
3. Purchases of Securities under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of
each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and
Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Securities, except in the event that use of the book-entry system for the Securities is
discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC
are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration
in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the
identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be
the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of
their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to
augment the transmission to them of notices of significant events with respect to the Securities, such as
redemptions, tenders, defaults, and proposed amendments to the Security documents. For example,
Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their
benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial
Owners may wish to provide their names and addresses to the registrar and request that copies of notices
be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue
are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures.
Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to
whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
8. Redemption proceeds and distributions on the Securities will be made to Cede & Co., or
such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to
credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from
Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in bearer form or registered in
“street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject
to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption
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proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested
by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such
payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as depository with respect to the Securities at
any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a
successor depository is not obtained, Security certificates are required to be printed and delivered.
10. Issuer may decide to discontinue use of the system of book-entry transfers through DTC
(or a successor securities depository). In that event, Security certificates will be printed and delivered to
DTC.
11. The information in this section concerning DTC and DTC’s book-entry system has been
obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy
thereof.
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CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement, dated as of May1, 2016(the “Disclosure
Agreement”) is executed and delivered by the City of Chula Vista (the “City”) and Willdan Financial
Services(the “Dissemination Agent”) in connection with the execution and delivery of
$___________ Chula VistaMunicipal Financing Authority2016Lease Revenue Refunding Bonds
(the “Bonds”). The Bondsare being executed pursuant to an Indenture, dated as of May1, 2016, as (
the “Indenture”), by and among the City, U.S.Bank National Association, as trustee (the “Trustee”)
and the Chula Vista Municipal Financing Authority (the “Authority”). The City covenants as
follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the City for the benefit of the Ownersand Beneficial Owners of the Bonds
and in order to assist the Participating Underwriter in complying with the Rule (defined below).
SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which
apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the City pursuant to, and as
described in, Sections 3 and 4 of this Disclosure Agreement.
“Beneficial Owner” shall mean any person which has the power, directly or indirectly, to
vote or consent with respect to, or to dispose of ownership of, any Bonds(including persons holding
Bondsthrough nominees, depositories or other intermediaries).
“Disclosure Representative” shall mean the City Manager, Deputy City Manager, Chief
Financial Officer, Director of Finance of the City or their designee, or such other officer or employee
as the City Manager shall designate in writing from time to time.
“Dissemination Agent” shall mean Willdan Financial Services, or any successor
dissemination agent designated in writing by the City Manager and which has filed with the City a
written acceptance of such designation.
“EMMA” shall mean the Electronic Municipal Market Access system of the MSRB.
“Listed Events” shall mean any of the events listed in Sections5(a)and 5(b)of this
Disclosure Agreement.
“MSRB” shall mean the Municipal Securities Rulemaking Board and any successor entity
designated under theRule as the repository for filings made pursuant to the Rule.
“Official Statement” shall mean the Official Statement relating to the Bonds, dated
_____________, 2016.
“Participating Underwriter” shall mean Stifel Nicolaus & Company, Incorporated.
“Repository” shall mean the MSRB or any other entity designated or authorized by the
Securities and Exchange Commission to receive reports pursuant to the Rule. Unless otherwise
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designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to
be made through the EMMA website of the MSRB, currently located at http://emma.msrb.org.
“Rule” shall mean Rule15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“State” shall mean the State of California.
SECTION 3. Provision of Annual Reports.
(a)The City shall, or, upon delivery of the Annual Report to the Dissemination Agent,
shall cause the Dissemination Agent to, not later than April1 ofeach year, commencing April1,
2017, provide to the Repository an Annual Report which is consistent with the requirements of
Section4 of this Disclosure Agreement. 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 Section4 of this Disclosure Agreement; provided that the audited financial statements of
the City may be submitted separately from the balance of the Annual Report and later than the date
required above for the filing of the Annual Report if they are 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 Section5(d). The City shall provide a written certification with each Annual Report furnished
to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report
required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such
certification of the City and shall have no duty or obligation to review such Annual Report.
(b)Not later than fifteen (15) days prior to the date for the filing of an Annual Report, the
City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by
fifteen (15) days prior to such date, the Dissemination Agent has not received a copy of the Annual
Report, the Dissemination Agent shall contact the City to inquire if the City is in compliance with
subsection (a).
(c)If the City is unable to provide to the Repository an Annual Report by the date
required in subsection(a), the Dissemination Agent shall send a notice to the Repository in the form
required by the Repository stating that the Annual Report has not been filedand, if provided by the
City, the date the City anticipates the filing to be made.
(d)The Dissemination Agent shall:
(i)determine each year prior to date for providing the Annual Report the
name and address of the Repository if other than the MSRB; and
(ii)file areport with the City certifying that the Annual Report has been
provided to the Repository pursuant to this Disclosure Agreement and stating the date it was
providedto the Repository.
SECTION 4. Content of Annual Reports. The City’sAnnual Report shallcontain or include
by reference the following:
(a)The City’s audited financial statements, prepared in accordance with generally
accepted auditing standards for municipalities in the State of California, for the prior fiscal year of
the City. If the City’s audited financial statements are not available by the time the Annual Report is
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required to be filed pursuant to Section3(a), the Annual Report shall contain unaudited financial
statements in a format similar to the financial statements contained in the final Official Statement,
and the audited financial statements shall be filed in the same manner as the Annual Report when
they become available.
(b)To the extent not contained in the audited financial statements filed pursuant to the
preceding subsection(a) by the date required by Section3 hereof, updates of [Tables10, 11, 14, 19,
20, 24 and 25]set forth in the Official Statement.
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 Repository or the Securities and Exchange Commission. If the
document included by reference is a final official statement, it must be available from the MSRB.
The City shall clearly identify each such other document so included by reference.
In the event that the Cityshall modify the basis upon which its financial statements are
prepared, the Dissemination Agentshall provide a notice of such modification to the Repository,
including the information set forth in Section 8(b) below.
SECTION 5. Reporting of Significant Events.
(a)Pursuant to the provisions of this Section5, the Cityshall give, or cause the
Dissemination Agent to give, notice to the Repository of the occurrence of any of the following
events with respect to the Bondsin a timely manner not more than ten (10) business days after the
occurrence of the event:
1.principal and interest payment delinquencies;
2.unscheduled draws ondebt service reserves reflecting financial difficulties;
3.unscheduled draws on credit enhancements reflecting financial difficulties;
4.substitution of credit or liquidity providers, or their failure to perform;
5.adverse tax opinions or the issuance by the Internal Revenue Service of
proposed or final determinations of taxability or of a Notice of Proposed Issue
(IRS Form 5701-TEB);
6.tender offers;
7.defeasances;
8.ratings changes; and
9.bankruptcy, insolvency, receivership or similar proceedings.
Note: for the purposes of the event identified in subparagraph(9), the event is
considered to occur when any of the following occur: the appointment of a receiver,
fiscal agent or similar officer for an obligated person in a proceeding under the U.S.
Bankruptcy Code or in any other proceeding under state or federal law in which a
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court or governmental authority has assumed jurisdiction over substantially all of the
assets or business of the obligated person, or if such jurisdiction has been assumed by
leaving the existing governmental body and officials or officers in possession but
subject to the supervision and orders of a court or governmental authority, or the
entry of an order confirming a plan of reorganization, arrangement or liquidation by a
court or governmental authority having supervision or jurisdiction over substantially
all of the assets or business of the obligated person.
(b)Pursuant to the provisions of this Section5, the Cityshall give, or cause to be given,
notice of the occurrence of anyof the following events with respect to the Bonds, if material, in a
timely manner not more than ten (10) Business Days after the occurrence of such event:
1.unless described in paragraph 5(a)(5) above, notices or determinations by the
Internal Revenue Service with respect to the tax status of the Bondsor other
material events affecting the tax status of the Bonds;
2.the consummation of a merger, consolidation or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the
obligated person, other than in the ordinary course of business, the entry into
a definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its
terms;
3.appointment of a successor or additional trustee or the change of the name of
a trustee;
4.nonpayment related defaults;
5.modifications to the rights of Owners of the Bonds;
6.notices of prepayment; and
7.release, substitution or sale of property securing repayment of the Bonds.
(c)Whenever the City obtains knowledge of the occurrence of a Listed Eventunder 5(b)
above, the City shall as soon as possible determine if such event would be material under applicable
federal securities laws.
(d)If a Listed Event under Section5(a) has occurred, or if the City determines that
knowledge of the occurrence of a Listed Event under 5(b) above would be material under applicable
federal securities laws, the City shall file a notice of such Listed Eventwith the Repository in a
timely manner not more than 10 business days after the event. Notwithstanding the foregoing, notice
of Listed Events described in subsections (a)(7) and (b)(6) need not be given under this subsection
any earlier than the notice (if any) of theunderlying event is given to Ownersof affected Bonds
pursuant to the Indenture.
(e)The Cityhereby agrees that the undertaking set forth in this Disclosure Agreement is
the responsibility of the Cityand that the Dissemination Agent shall not be responsible for
determining whether the City’s instructions to the Dissemination Agent under this Section 5 comply
with the requirements of the Rule.
2016-04-05 Agenda Packet Page 406
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SECTION 6. Termination of Reporting Obligation. The City’s obligations under this
Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full
of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall
give notice ofsuch termination in the same manner as for a Listed Event under Section5.
SECTION 7. Dissemination Agent. The City may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and
may discharge any such Dissemination Agent, with or without appointing a successor Dissemination
Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice
or report prepared by the City pursuant to this Disclosure Agreement. The Dissemination Agent may
resign by providing thirty days written notice to the City and the Trustee. The Dissemination Agent
shall not be responsible for the content of any report or notice prepared by the City and shall have no
duty to review any information provided to it by the City. The Dissemination Agent shall have no
duty to prepare any information report nor shall the Dissemination Agent be responsible for filing
any report not provided to it by the City in a timely manner and in a form suitable for filing.
SECTION 8. Amendment; Waiver.
(a)Notwithstanding any other provision of this Disclosure Agreement, the Citymay
amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived,
provided that the following conditions are satisfied:
(1)If the amendment or waiver related to the provisions of Sections 3(a), 4, or 5,
it may only be made in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature or status of an obligated person with
respect to the Bonds, or the type of business conducted;
(2)The undertaking hereunder, as amended or taking into account such waiver,
would, in the opinion of nationally recognized bondcounsel, have complied with the requirements of
the Rule at the time of the original execution and delivery of the Bonds, after taking into account any
amendments or interpretations of the Rule, as well as any change in circumstances; and
(3)The amendment or waiver either (i) is approved by the Owners of the Bonds
in the same manner as provided in the Indenture for amendments to the Indenture with the consent of
Owners, or (ii) does not, in the opinion of nationally recognized bondcounsel, materially impair the
interests of the Owners or Beneficial Owners of the Bonds.
(b)In the event of any amendment or waiver of a provision of this Disclosure
Agreement, the Cityshall describe such amendment in the next Annual Report, and shall include, as
applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the
type (or, in the case of a change of accounting principles, on the presentation) of financial
information or operating data being presented by the City. In addition,if the amendment is related to
the accounting principles to be followed in preparing financial statements, (i) notice of such change
shall be given in the same manner as for a Listed Event under Section 5(a), and (ii) the Annual
Report for the year in which the change is made should present a comparison (in narrative form and
also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the
new accounting principles and those prepared on the basis of the formeraccounting principles.
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SECTION 9. Format of Filings with Repository. Any report or filing with the Repository
pursuant to this Disclosure Agreement must be submitted in electronic format, accompanied by such
identifying information as is prescribed by the Repository.
SECTION 10. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the City from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event, in
addition to that which is required by this Disclosure Agreement. If the 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 Agreement, the City shall have no obligation hereunder to
update such information or include it in any future Annual Report or notice of occurrence of a Listed
Event.
SECTION 11. Default. In the event of a failure of the City to comply with any provision of
this Disclosure Agreement, any Owneror Beneficial Owner of the Bondsmay 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 Agreement. A default under
this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole
remedy under this Disclosure Agreement in the event of any failure of the City to comply with this
Disclosure Agreement shall be an action to compel performanceand the City shall have no monetary
liability to any person as a result of any failure to comply with the terms of this Disclosure
Agreement.
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
Agreement, and the City agrees, to the extent permitted by law, 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 attorney’s fees) of
defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s
negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the City
for its services provided hereunder in accordance with its schedule of fees as amended from time to
time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the
performance of its duties hereunder. In performing its duties hereunder, the Dissemination Agent
shall not be deemed to be acting in any fiduciary capacity for the City, the Certificate holders, or any
other party. The obligations of the City under this Section shall survive resignation or removal of the
Dissemination Agent and payment of the Bonds.
SECTION 13. Notices. Any notices or communications to or among any of the parties to
this Disclosure Agreement may be given as follows:
To the City:City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Attention: City Manager
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To the Dissemination Agent:Willdan Financial Services
27368 Via Industria, Suite 200
Temecula, CA92590
SECTION 14. Beneficiaries. This Disclosure Agreement solely to the benefit of the City,
the Dissemination Agent, the Participating Underwriter and Ownersand Beneficial Owners from
time to time of the Bonds, and shall create no rights in any other person or entity.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
2016-04-05 Agenda Packet Page 409
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SECTION 15. Signature. This Disclosure Agreement has been executed by the undersigned
on the date hereof, and such signaturebinds the City to the undertaking herein provided.
CITY OF CHULA VISTA
By:
Deputy City Manager/Chief Financial
Officer
WILLDAN FINANCIAL SERVICES, as
Dissemination Agent
By:
Authorized Officer
2016-04-05 Agenda Packet Page 410
RECORDING REQUESTED BY:
City of Chula Vista
AND WHEN RECORDED MAIL TO:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Robert J. Whalen
[Space above for Recorder’s use.]
TERMINATION AGREEMENT
by and among
CITY OF CHULA VISTA
and
CHULA VISTA PUBLICFINANCING AUTHORITY
and
U.S. BANK NATIONAL ASSOCIATION
as 2010Trustee
Dated as of May1, 2016
Relating to
$29,355,000
CITY OF CHULA VISTA
2010CERTIFICATES OF PARTICIPATION
(CAPITAL FACILITIES REFUNDING PROJECTS)
2016-04-05 Agenda Packet Page 411
TERMINATION AGREEMENT
This TERMINATION AGREEMENT is dated as of May1, 2016, and is by and among the
CITY OF CHULA VISTA, a municipal corporation and a charter city duly organized and existing
under the Constitution and laws of the State of California(the “City”), the CHULA VISTA PUBLIC
FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under
the laws of the State of California(the “Authority”), and U.S. BANK NATIONAL ASSOCIATION,
as trustee (the “2010Trustee”).
W I T N E S S E T H:
WHEREAS, the City and the Authority have heretofore entered into a Site Leasedated as of
February1, 2010and recorded in the Official Records of San DiegoCounty, California on February
24,2010as DocumentNo.2010-0091177(the “Site Lease”), pursuant to which the City agreed to
lease certain real property described including theimprovementsthereon to the Authority(the
“Leased Premises”); and
WHEREAS, the City and the Authority have heretofore entered into a Lease/Purchase
Agreementdated as of February1, 2010, and recorded in the Official Records of San Diego County,
California on February 24, 2010 as Document No. 2010-0091178 (the “Lease”), pursuant to which
the Authority agreed to lease the Leased Premises backto the City, and the City agreed to make
certain lease payments (the “Lease Payments”) to the Authority; and
WHEREAS, pursuant to an Assignment Agreement dated as of February1, 2010and
recorded in the Official Records of San DiegoCounty, Californiaon February 24, 2010 as Document
No. 2010-0091179(the “Assignment Agreement”), by and betweenthe Authority and the 2010
Trustee, the Authority assigned to the 2010Trustee, among other things, its rights to receive the
Lease Payments from the City under the Lease and the right to exercise such rights and remedies
conferred on the Authority underthe Lease to enforce payment of the Lease Payments; and
WHEREAS, by reason of the defeasancein full of the City of Chula Vista2010Certificates
of Participation (2010CommunityProjects), on ______, 2016(the “Prepayment Date”), the Site
Lease, the LeaseandtheAssignment Agreement have each terminated by their terms and all of the
Lease Payments have been deemed paid and fully discharged in accordance with theAssignment
Agreement; and
WHEREAS, the City, Authority and Trustee entered into that certain Trust Agreement dated
as of February1, 2010(the “Trust Agreement”), providing for the execution and deliveryof the 2010
Certificates.
WHEREAS, the City has notified the Trustee of its intention to exercise its option to pay all
maturing principal and interest on the 2010Certificates through and including _______, 2016, and to
prepayon the Prepayment Date, all principal components of the Lease Paymentsmaturing on or after
the Prepayment Date, and all accrued interest with respect theretoand has made provisions therefor,
pursuant to the terms of Section 14.01of the Trust Agreement and Section10.1of the Lease
Agreement.
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WHEREAS, the City hereby certifies that it has caused to be delivered: (i) the prepayment
price as described in Section 14.01of the Trust Agreement; and (ii) moneys sufficient to pay the
principal components of the Lease Payments maturing through and includingthe Prepayment Date
and accrued interest with respect thereto (collectively, the Prepayment”), to U.S. Bank National
Association, as escrow agent (the “Escrow Agent”), under that certain Escrow Agreement (2010
Certificates) dated as of May1, 2016, by and among the City, the Authority and the Escrow Agent,
in order to effect such Prepayment on the Prepayment Date.
WHEREAS, to facilitate the City’s exercise of the option to prepay the Lease Payments, the
City and the Authority now desire to terminate and discharge the Site Lease, the Lease Agreement
and the Assignment Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
1.Recordation. This Agreement shall not be recorded until the City has deposited the
Prepayment with the Escrow Agent.
2.Termination of Site Lease,Lease Agreement and Assignment Agreement. Effective
as of the recordation of this Agreement, the Authority,the City and the 2010Trustee hereby
acknowledge and agree that the Site Lease, the Lease Agreement and the Assignment Agreement are
terminated and discharged, and shall be of no further force or effect.
3.Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which, when taken together, shall constitute one
agreement. The signature and acknowledgment pages from each counterpart may be removed and
attached to a single document in order to create one original instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
2016-04-05 Agenda Packet Page 413
S-1
IN WITNESS WHEREOF, the parties hereto have executed and entered into the Termination
Agreement by their officers thereunto duly authorized as of the day and year first above written.
CITY OF CHULA VISTA
By:
David Bilby
Director of Finance
ATTEST:
Donna Norris
City Clerk
CHULA VISTA PUBLICFINANCING
AUTHORITY
By:
Gary Halbert
Executive Director
ATTEST:
Donna Norris
Secretary
[SIGNATURES CONTINUED ON NEXT PAGE.]
2016-04-05 Agenda Packet Page 414
S-2
[SIGNATURE PAGE CONTINUED.]
U.S. BANK NATIONAL ASSOCIATION
By:
____________
Authorized Officer
2016-04-05 Agenda Packet Page 415
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF SAN DIEGO )
On ___________________ before me, ____________________________________, Notary Public,
personally appeared _____________________________________________________, who proved
to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
2016-04-05 Agenda Packet Page 416
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the documentto which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF LOS ANGELES )
On ___________________ before me, ____________________________________, Notary Public,
personally appeared _____________________________________________________, who proved
to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executedthe same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
2016-04-05 Agenda Packet Page 417
A-1
EXHIBIT A
DESCRIPTION OF THE PROPERTY
THAT REAL PROPERTY IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL 1: (CORPORATION YARD APN'S: 644-230-11-00 THROUGH 644-230-19-00)
LOTS 11 THROUGH 19 INCLUSIVE IN CHULA VISTA TRACT NO. 81-6, OTAY VALLEY
INDUSTRIAL PARK, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 10974, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 21, 1984.
TOGETHER WITH THAT PORTION OF CHULA VISTA TRACT NO. 81-6, OTAY VALLEY
INDUSTRIAL PARK, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 10974, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 21, 1984, DESCRIBED AS
RESEARCH COURT AS VACATEDAND CLOSED TO PUBLIC USE BY RESOLUTION NO.
12630 WHICH RECORDED IN THE OFFICE OF THE COUNTY RECORDER ON
SEPTEMBER 12, 1986 AS INSTRUMENT NO. 86-402309 OF OFFICIAL RECORDS.
PARCEL 2: (FIRE STATION NO. 4 APN: 642-391-06-00)
LOT I OF CHULA VISTA TRACT NO. 88-1, RANCHO DEL REY PHASE 2, IN THE CITY OF
CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP THEREOF NO. 12341, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY, MARCH 28, 1989.
PARCEL 3: (FIRE STATION NO. 6 APN: 595-570-01-00)
LOT 1 OF CHULA VISTA TRACT NO. 92-02, SALT CREEK RANCH NEIGHBORHOOD 3A
SCHOOL PARK, AND FIRE STATION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 13440, FILED IN
THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JULY 19, 1997.
PARCEL 5: (FIRE STATION NO. 8 APN: 595-080-54-00)
LOT 'K' AND A PORTION OF LOT 'G' OF CHULA VISTA TRACT NO. 01-09, EASTLAKE III
WOODS, NEIGHBORHOOD WR-4 IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA ACCORDING TO THE MAP THEREOF NO. 14394 FILED
IN THE OFFICE OF THE COUNTY RECORDER MAY 16, 2002, DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID LOT 'K'; THENCE ALONG
THE SOUTHEASTERLY LINE OF SAID LOT "K" NORTH 53°45'38" EAST, 231.84 FEET;
THENCE NORTH 43°28'38" EAST, 14.69 FEET TO A POINT ON THE WESTERLY LINE OF
WOODS DRIVE AS SHOWN ON SAID MAP NO. 14394; THENCE ALONG SAID
WESTERLY LINE NORTH 12°24'11" EAST, 12.89 FEET TO THE BEGINNING OF A
2016-04-05 Agenda Packet Page 418
A-2
TANGENT 689.50 FOOT RADIUS CURVE, CONCAVE EASTERLY; THENCE NORTHERLY
ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 03°58'17", A
DISTANCE OF 47.79 FEET; THENCE NORTH 26°28'31" WEST, 26.45 FEET TO A POINT ON
THE SOUTHERLY LINE OF HAWTHORNE CREEK DRIVE AS SHOWN ON SAID MAP;
THENCE ALONG SAID SOUTHERLY LINE NORTH 69°52'42" WEST, 11.23 FEET TO THE
BEGINNING OF A TANGENT 830.00 FOOT RADIUS CURVE, CONCAVE NORTHERLY;
THENCE WESTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE
OF 09°55'21", A DISTANCE OF 143.74 FEET; THENCE LEAVING SAID SOUTHERLY LINE
OF HAWTHORNE CREEK DRIVE, SOUTH 27°08'59" WEST, 207.29 FEET; THENCE SOUTH
12°22'20" WEST, 100.42 FEET; THENCE SOUTH 77°37'40" EAST, 58.08 FEET TO THE POINT
OF BEGINNING.
PARCEL 6: (FIRE STATION NO. 8 APN: 595-080-47-00)
ALL THAT PORTION OF RANCHO JANAL, IN THE CITY OF CHULA VISTA, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF RECORDED
IN BOOK 1, PAGE 89 ET SEQ. OF PATENTS, LYING WITHIN SECTIONS 35 AND 36,
TOWNSHIP 17 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, DESCRIBED AS
FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 1 OF PARCEL MAP NO. 17874
FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY JULY 3, 1997, SAID
POINT BEING ON THE NORTHERLY LINE OF OTAY LAKES ROAD GRANTED TO THE
CITY OF CHULA VISTA PER DOCUMENT RECORDED NOVEMBER 28, 1990 AS
INSTRUMENT NO. 90-634654 OF OFFICIAL RECORDS; THENCE ALONG SAID
NORTHERLY LINE SOUTH 77°37'40" EAST (SOUTH 77°38'00" EAST PER SAID
INSTRUMENT NO. 90-634654) 238.48 FEET; THENCE LEAVING SAID NORTHERLY
LINE NORTH 53°45'38" EAST, 13.33 FEET TO THE TRUE POINT OF BEGINNING; THENCE
NORTH 53°45'38" EAST, 231.84 FEET; THENCE NORTH 43°28'38" EAST; 14.69 FEET TO A
POINT HEREINAFTER REFERRED TO AS POINT "A"; THENCE SOUTH 12°24'11" WEST,
166.03 FEET; THENCE SOUTH 57°23'16" WEST, 29.91 FEET; THENCE NORTH 76°49'57"
WEST, 12.16 FEET TO THE BEGINNING OF A TANGENT 5064.00 FOOT RADIUS
CURVE CONCAVE SOUTHERLY; THENCE WESTERLY ALONG THE ARC OF SAID
CURVE THROUGH A CENTRAL ANGLE OF 0°47'42" A DISTANCE OF 70.27 FEET;
THENCE NORTH 77°37'39" WEST, 57.20 FEET TO THE TRUE POINT OF BEGINNING.
THIS LEGAL IS MADE PURSUANT TO THAT CERTAIN CERTIFICATE OF COMPLIANCE
RECORDED MAY 30, 2006, AS INSTRUMENT NO. 2006-0380709 OF OFFICIAL RECORDS.
2016-04-05 Agenda Packet Page 419
RESOLUTION NO. ________
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
RESOLUTION OF THE CHULA VISTA MUNICIPAL FINANCING
AUTHORITY AUTHORIZING THE EXECUTION AND DELIVERY BY THE
AUTHORITY OF A SITE LEASE, LEASE AGREEMENT, INDENTURE,
ASSIGNMENT AGREEMENT AND BOND PURCHASE AGREEMENT IN
CONNECTION WITH THE ISSUANCE OF CHULA VISTA MUNICIPAL
FINANCING AUTHORITY 2016 LEASE REVENUE REFUNDING BONDS,
AUTHORIZING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT OF NOT TO EXCEED $40,000,000, AUTHORIZING THE
DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE
OFFERING AND SALE OF SUCH BONDS AND AUTHORIZING THE
EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND
RELATED ACTIONS
WHEREAS, the City of Chula Vista(the “City”) previously financed or refinanced a portion
of the costs of the acquisition, construction and installation of certain public capital improvements
(the “2006 Project”)within the City and described in the proceedings for the City of Chula Vista
2006Certificates of Participation (Civic Center Project –Phase 2) (the “2006 Certificates”) and
certain public capital improvements (the “2010 Project”) within the City and described in the
proceedings for theCity of Chula Vista 2010 Certificates of Participation (Capital Facilities
Refunding Projects) (the “2010 Certificates”);
WHEREAS, in 2015 the City refinanced a portion ofthe 2006Project originally financed
with the proceeds of the 2006Certificates;
WHEREAS,the Cityis a member of the Authority and the 2006Projectand the 2010 Project
arelocated within the boundaries of the City;
WHEREAS,the City haspreviously held a public hearing on the refinancing of the 2006
Projectand the 2010 Projectin all respects in accordance with Section 6586.5 of the Marks-Roos
Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government
Code (the “Act)and adopted its resolution approving the refinancing and making a finding of
significant public benefit in accordance with the Act;
WHEREAS, the Authority and the City have determined that it would be in the best interests
of the Authority, the City and residents of the City to authorize the preparation, sale and delivery of
the “Chula Vista Municipal Financing Authority2016Lease Revenue RefundingBonds” (the
“Bonds”) for the purpose of refinancing the 2006Certificatesand the 2010 Certificatesin order to
achieve debt service savings and reduce the total lease payments to be made by the City; and
WHEREAS, in order to facilitate the issuance of the Bonds, the City and the Authority desire
to enter into a Site Leasebetween the City and the Authority (the “Site Lease”) pursuant to which the
2016-04-05 Agenda Packet Page 420
City will lease certain real property described therein(the “Leased Assets”), subject to adjustment as
described in Section 2 below),to the Authority, and a Lease Agreement between the City and the
Authority (the “Lease Agreement”), pursuant to which the City will lease the Leased Assets back
from the Authority, and pay certain Base Rental Payments (as defined in the Lease Agreement),
which will bepledged to the owners of the Bonds by the Authority pursuant to an Indenture by and
among U.S. Bank National Association (the “Trustee”), the City and the Authority (the “Indenture”)
the formsof which havebeen presented to this Board of Directorsat the meeting at which this
Resolution is being adopted;
WHEREAS, the Authority and the Trustee desire to enter into an Assignment Agreement in
order to provide, among other things, that all rights to receive the Base Rental Paymentsunder the
Lease Agreementhave been assigned without recourse by the Authority to the Trustee;
WHEREAS, the Bonds will be issued pursuant to the Act;
WHEREAS, the City and the Authority desire to provide for the negotiated sale of the Bonds;
WHEREAS, the City and the Authority have engaged Stifel, Nicolaus & Company,
Incorporated to act as underwriter (the “Underwriter”) to purchase the Bonds from the Authority
pursuant to a BondPurchase Agreementby and among the City, the Authority and the Underwriter
(the “BondPurchase Agreement”);
WHEREAS, a form of the Preliminary Official Statementfor the Bonds(the “Preliminary
Official Statement”) has been prepared;
WHEREAS, the Board of Directors of the Authority (the “Board of Directors”) has been
presented with the form of each document referred to herein, and the Board of Directors has
examined and approved each document and desires to authorize and direct the execution of such
documents and the consummation of therefinancingof the 2006 Certificates and the 2010
Certificates; and
WHEREAS, all acts, conditions and things required by the laws of the State of California to
exist, to have happened and to have been performedprecedent to and in connection with the
consummation of such refinancing authorized hereby do exist, have happened and have been
performed in regular and due time, form and manner as required by law, and the Authority is now
duly authorized and empowered,pursuant to each and every requirement of law, to consummate such
refinancing for the purpose, in the manner and upon the terms herein provided;
NOW, THEREFORE, the Board of Directors of the Chula Vista Municipal Financing
Authority does hereby resolve asfollows:
SECTION 1.All of the recitals herein contained are true and correct and the Board of
Directors so finds. The Board of Directors has determined and hereby finds that the Authority’s
assistance in refinancing the 2006Projectand the 2010 Projectby the execution and delivery of the
Lease Agreement and related transactions will result in significant public benefits of the type
described in Section 6586 (a) through (d), inclusive, of the Act.
SECTION 2.The forms of the Lease Agreement and the Site Lease, on file with the
Secretary of the Authority, are hereby approved, and each of the Chairman, Vice Chairman,
2016-04-05 Agenda Packet Page 421
Executive Director, Chief Financial Officer and Secretary of the Authority, or the Chairman’s
designee, (the “Authorized Officers”) is authorized and directed to execute and deliver the Lease
Agreement and the Site Lease, respectively, in substantially said forms, with such changes, insertions
and omissions therein as the Authorized Officer executing the same may require or approve, such
approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that
the term of the Lease Agreement and the Site Lease shall terminate no later than May 1, 2036
(provided that such term may be extended as provided therein). The Leased Assets to be included in
the Lease Agreement and the Site Lease shall be designatedby theCity Manager or the Deputy City
Manager, or their designees, and may include all or a portion of the Leased Assets listed in the Lease
Agreement and the Site Lease on file with theSecretary of the Authority,or such additional real
property assets of the City as one of such officers determines is necessaryin order to satisfy any legal
requirements to enter into the Lease Agreement, based on the advice of bond counsel,or rating
agency requirements to rate the Bonds, with such designation to be conclusively evidenced by the
execution and delivery of the Site Lease and Lease Agreement by one or more of the Authorized
Officers.
SECTION 3.The form of Indenture, on file with the Secretary of the Authority, is hereby
approved, and the Authorized Officers are each hereby authorized and directed, for and in the name
and on behalf of the Authority, to execute and deliver the Indenture in substantially said form, with
such changes, insertions and omissions therein as the Authorized Officer executing the same may
require or approve, such approval to be conclusively evidenced by the execution and delivery
thereof; provided, however, that the aggregate amount of the Bonds shall not exceed $40,000,000,
the final maturity date of the Bonds shall be no later than May1, 2036,and provided,further, that
such changes, insertions and omissions shall be consistent with the terms of the Bonds established at
negotiated sale pursuant to the BondPurchase Agreement.
SECTION 4.The issuance of not to exceed $40,000,000aggregate principal amount of the
Bonds, in the principal amounts, bearing interest at the rates and maturing on the dates as specified in
the Indenture as finally executed, is hereby authorized and approved.
SECTION 5.The form of Assignment Agreement, on file with the Secretary of the
Authority, is hereby approved, and the Authorized Officers are each hereby authorized and directed,
for and in the name and on behalf of the Authority, to execute and deliver the Assignment Agreement
in substantially said form, with such changes, insertions and omissions therein as the Authorized
Officer executing the same may require or approve, such approval to be conclusively evidenced by
the execution and delivery thereof.
SECTION 6.The BondPurchase Agreement, on file with the Secretary of the Authority, is
hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the
name of the Authority to execute and deliver the BondPurchase Agreement in substantially said
form, with such changes, insertions and omissions as the Authorized Officer executing the same may
require or approve, such approval to be conclusively evidenced by the execution of the Bond
Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions
and omissions shall not result in an aggregate underwriter’s discount (not including any original issue
discount paid by the Underwriter) from the principal amount of the Bonds in excess of six-tenths of
one percent (0.6%) of the aggregate principal amount of the Bonds; and provided, further, that the
Bond Purchase Agreement shall be executed only if the net present value savings realized by the City
in terms of reduced lease payments, as confirmed by the City’s MunicipalAdvisor, is not less than
2016-04-05 Agenda Packet Page 422
five percent (5%) of the principal amount of the 2006Certificatesand the 2010 Certificatesdefeased
and prepaid.
SECTION 7.The form of Preliminary Official Statement, on file with the Secretary of the
Authority, with such changes, insertions and omissions therein as may be approved by an Authorized
Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the
offering and sale of the Bonds is hereby authorized and approved. The Authorized Officers are each
hereby authorized to certify on behalf of the Authority that the Preliminary Official Statement is
deemed final as of its date, within the meaning of Rule 15c2-12 promulgated under the Securities
Exchange Act of 1934 (except for the omission of certain final pricing, rating and related information
as permitted by such Rule).
The Authorized Officers are each hereby authorized and directed to furnish, or cause to be
furnished, to prospective bidders for the Bonds a reasonable number of copies of the Preliminary
Official Statement.
SECTION 8.The preparation and delivery of an Official Statement, and its use in
connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official
Statement shall be in substantially the form of the Preliminary Official Statement with such changes,
insertions and omissions as may be approved by an Authorized Officer, such approval to be
conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each
hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute the
final Official Statement and any amendment or supplement thereto for and in the name and on behalf
of the Authority.
SECTION 9.Selection of Professionals. Harrell & Company Advisors, LLC is hereby
designated as the Municipal Advisor to the City and the Authority for the Bonds and Stradling Yocca
Carlson & Rauth, a Professional Corporation is hereby designated as bond counsel and disclosure
counsel for the Bonds, and the Authorized Officers are each hereby authorized and directed, jointly
and severally, to execute any and all contracts for services and otherdocumentsnecessary to procure
the services of such firms for the execution and delivery of the Bonds.
SECTION 10.The officers and agents of the Authority are hereby authorized and directed,
jointly and severally, to do any and all things which they may deem necessary or advisable in order
to consummate the transactions herein authorized and otherwise to carry out, give effect to and
comply with the terms and intent of this Resolution. Specifically and without limiting the foregoing,
any Authorized Officer is authorized and directed to solicit and accept bids for bond insuranceand/or
reserve suretyfor the Bonds, provided such officer determines acceptance of the best bid will result
in further debt service savings, and appropriate changes to each of the documents referenced herein
to evidence such bond insurance and/or reserve surety and the terms thereof, are hereby authorized
and approved. All actions heretofore taken by the officers and agents of the Authority with respect to
the transactions set forth above are hereby approved, confirmed and ratified.
SECTION 11.This Resolution shall take effect from and after its date of adoption.
2016-04-05 Agenda Packet Page 423
Presented by Approved as to form by
David Bilby, MSBA, CPFO Glen R. Googins
Chief Financial Officer Authority General Counsel
2016-04-05 Agenda Packet Page 424
RESOLUTION NO. ________
CHULA VISTA PUBLIC FINANCING AUTHORITY
RESOLUTION OF THE CHULA VISTA PUBLIC FINANCING AUTHORITY
AUTHORIZING THE EXECUTION AND DELIVERY OF ESCROW
AGREEMENTS IN CONNECTION WITH THE ISSUANCE OF CHULA VISTA
MUNICIPAL FINANCING AUTHORITY 2016 LEASE REVENUE REFUNDING
BONDS AND AUTHORIZING THE EXECUTION OF NECESSARY
DOCUMENTS AND RELATED ACTIONS
WHEREAS, the Chula Vista Public Financing Authority (the “Authority”) is a joint exercise
of powers authority organized and existing underArticle 4 of Chapter 5 of Division 7 of Title 1 of
the Government Code of the State of California (the “JPA Act”) with the authority to assist in the
financing of the construction, reconstruction, modernization and equipping of certain capital
improvements on behalf of the City of Chula Vista (the “City”); and
WHEREAS, the Authority hasassisted the City in financing and refinancingthe construction,
reconstruction, modernization and equippingof various capital improvements of the Citythrough the
execution and delivery of the City of Chula Vista 2006 Certificates of Participation (Civic Center
Project—Phase II) (the “2006 Certificates”);
WHEREAS, in order to facilitate the execution and delivery of the 2006 Certificates, the City
has leased to the Authority the real property (the “2006 Site”) set forth in Exhibit A to that certain
Site Lease, dated as of September1, 2004, as amended, by and between the City and the Authority,
and the Authority has leased back the 2006 Site and the improvements located thereon, to the City
pursuantto that certain Lease/Purchase Agreement, dated as of September1, 2004, as amended (the
“2006 Lease”), both by and between the City and the Authority; and
WHEREAS, the Authority hasassisted the City in financingand refinancingthe construction,
reconstruction, modernization and equippingof variouscapital improvements of the Citythrough the
execution and delivery of the City of Chula Vista 2010Certificates of Participation (Capital Facilities
Refunding Project) (the“2010 Certificates” and together with the 2006 Certificates, the“Prior
Certificates”);
WHEREAS, in order to facilitate the execution and delivery of the 2010Certificates, the City
has leased to the Authority the real property (the “2010 Site”) set forth in Exhibit A to that certain
Site Lease, dated as of February1, 2010, by and between the City and the Authority, and the
Authority hasleased back the 2010 Site and the improvements located thereon,to the City pursuant
to that certain Lease/Purchase Agreement, dated as of February1, 2010 (the “2010 Lease”), both by
and between the City and the Authority; and
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2
WHEREAS, the Cityhas advised the Authority that itintendstorefund the Prior Certificates
with proceeds of the Chula VistaMunicipalFinancing Authority2016Lease Revenue Refunding
Bonds(the “Bonds”); and
WHEREAS, to accomplish the issuanceof the Bonds, it will be necessary to have the
Authority enter into an Escrow Agreement(the “2006 Escrow Agreement”)with the Cityand U.S.
Bank National Association, as escrow agent,and the Authority desires to approvethe 2006 Escrow
Agreement; and
WHEREAS, to accomplish the issuance of the Bonds, it will be necessary to have the
Authority enter into an Escrow Agreement (the “ 2010 Escrow Agreement”) with the City and U.S.
Bank National Association, as escrow agent, and a Termination Agreement (the “Termination
Agreement”) by and among the Authority, the City and U.S. Bank National Association, astrustee
and the Authority desires to approve the 2010 Escrow Agreement and the Termination Agreement;
and
NOW, THEREFORE, the Board of Directors of the Chula Vista Public Financing Authority
does hereby resolve as follows:
SECTION 1. Findings. The Board of Directorshereby specifically finds and declares that
eachof the statements, findings and determinations set forth in the recitals set forth above and in the
preambles of the documents approved herein are true and correct.
SECTION 2. 2015Certificate Documents. Theforms of the2006 Escrow Agreement, the
2010 Escrow Agreementand the Termination Agreement (collectively, the “Agreements”) presented
at this meeting are approved. Each of the Chairman, Vice Chairman, Executive Director, Chief
Financial Officerand Secretary of the Authority, or the Chairman’s designee, are authorized and
directed to execute and deliver the Agreements. The Agreements shall be executed in substantially
the forms hereby approved, with such additions thereto and changes therein as are recommended or
approved by counsel to the Authority and approved by the officer or officers of the Authority
executing the Agreements, such approval to be conclusively evidenced by the execution and delivery
thereof by one or more of the officers listed above.
SECTION 4. Other Actions. The Chairman, Vice Chairman, Executive Director, Chief
Financial Officer, Secretary and other officers of the Authority are authorized and directed, jointly
and severally, to do any and all things and to execute and deliver any and all documents which they
may deem necessary or advisable in order to consummate the defeasance and prepayment of the2006
Certificates and the2010 Certificates and the issuance of the Bondsand otherwise effectuate the
purposes of this Resolution,including, but not limited to,executing an amendment to the 2006 Lease,
and such actions previously taken by such officers are hereby ratified and confirmed.
SECTION 5. Effect. This Resolution shall take effect from and after its date of adoption.
2016-04-05 Agenda Packet Page 426
3
Presented by Approved as to form by
David Bilby, MSBA, CPFO Glen R. Googins
Chief Financial Officer Authority General Counsel
2016-04-05 Agenda Packet Page 427
INDENTURE
by and among
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
and
CITY OF CHULA VISTA
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
Dated as of May1, 2016
Relating to
$_____________
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
2016 LEASE REVENUE REFUNDING BONDS
2016-04-05 Agenda Packet Page 428
TABLE OF CONTENTS
Page
i
ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01Definitions.....................................................................................................................2
Section 1.02Equal Security.............................................................................................................13
ARTICLE II
THE BONDS
Section 2.01Authorization of Bonds...............................................................................................14
Section 2.02Terms of 2016Bonds..................................................................................................14
Section 2.03Form of 2016Bonds...................................................................................................15
Section 2.04Transfer and Exchange of Bonds................................................................................15
Section 2.05Registration Books......................................................................................................15
Section 2.06Execution of Bonds.....................................................................................................16
Section 2.07Authentication of Bonds.............................................................................................16
Section 2.08Temporary Bonds........................................................................................................16
Section 2.09Bonds Mutilated, Lost, Destroyed or Stolen...............................................................16
Section 2.10Book-Entry Bonds......................................................................................................17
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01Issuance of 2016Bonds..............................................................................................18
Section 3.02Application of Proceeds of the 2016Bonds................................................................18
Section 3.03Costs of Issuance Fund...............................................................................................19
Section 3.04Conditions for the Issuance of Additional Bonds.......................................................19
Section 3.05Procedure for the Issuance of Additional Bonds........................................................20
Section 3.06Additional Bonds........................................................................................................21
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01Redemption of 2016Bonds........................................................................................22
Section 4.02Notice of Redemption.................................................................................................22
Section 4.03Selection of Bonds for Redemption............................................................................23
Section 4.04Partial Redemption of Bonds......................................................................................23
Section 4.05Effect of Notice of Redemption..................................................................................23
2016-04-05 Agenda Packet Page 429
TABLE OF CONTENTS
(continued)
Page
ii
ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01Pledge; Special Obligations........................................................................................24
Section 5.02Flow of Funds.............................................................................................................24
Section 5.03Application of Net Insurance Proceeds.......................................................................25
Section 5.04Title Insurance............................................................................................................26
Section 5.05Reserve Fund..............................................................................................................26
Section 5.06Rebate Fund................................................................................................................29
Section 5.07Investment of Moneys.................................................................................................29
ARTICLE VI
COVENANTS
Section 6.01Compliance with Agreements.....................................................................................30
Section 6.02Compliance with Site Lease and Lease Agreement....................................................30
Section 6.03Observance of Laws and Regulations.........................................................................30
Section 6.04Other Liens..................................................................................................................31
Section 6.05Prosecution and Defense of Suits...............................................................................31
Section 6.06Accounting Records and Statements...........................................................................31
Section 6.07Recordation and Filing................................................................................................31
Section 6.08Tax Covenants............................................................................................................31
Section 6.09Continuing Disclosure................................................................................................32
Section 6.10Further Assurances......................................................................................................32
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01Action on Default........................................................................................................32
Section 7.02Other Remedies of the Trustee....................................................................................33
Section 7.03Non-Waiver.................................................................................................................33
Section 7.04Remedies Not Exclusive.............................................................................................33
Section 7.05No Liability by the Authority to the Owners..............................................................33
Section 7.06No Liability by the City to the Owners.......................................................................34
Section 7.07No Liability of the Trustee to the Owners..................................................................34
Section 7.08Application of Amounts After Default.......................................................................34
Section 7.09Trustee May Enforce Claims Without Possession of Bonds......................................34
Section 7.10Limitation on Suits......................................................................................................35
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ARTICLE VIII
THE TRUSTEE
Section 8.01Employment of the Trustee.........................................................................................35
Section 8.02Duties, Removal and Resignation of the Trustee........................................................35
Section 8.03Compensation of the Trustee......................................................................................36
Section 8.04Protection of the Trustee.............................................................................................37
ARTICLE IX
MODIFICATION OR AMENDMENTS
Section 9.01Modifications and Amendments Permitted.................................................................39
Section 9.02Effect of Supplemental Indenture...............................................................................40
Section 9.03Endorsement of Bonds; Preparation of New Bonds...................................................40
Section 9.04Amendment of Particular Bonds.................................................................................40
ARTICLE X
DEFEASANCE
Section 10.01Discharge of Indenture................................................................................................41
Section 10.02Bonds Deemed To Have Been Paid............................................................................41
Section 10.03Payment of Bonds After Discharge of Indenture........................................................42
ARTICLE XI
MISCELLANEOUS
Section 11.01Benefits of Indenture Limited to Parties.....................................................................42
Section 11.02Successor Deemed Included in all References to Predecessor...................................42
Section 11.03Execution of Documents by Owners..........................................................................42
Section 11.04Waiver of Personal Liability.......................................................................................43
Section 11.05Destruction of Bonds..................................................................................................43
Section 11.06Funds and Accounts....................................................................................................43
Section 11.07Article and Section Headings Gender and References...............................................43
Section 11.08Partial Invalidity..........................................................................................................43
Section 11.09Disqualified Bonds......................................................................................................44
Section 11.10Money Held for Particular Bonds...............................................................................44
Section 11.11Payment on Non-Business Days.................................................................................44
Section 11.12California Law............................................................................................................44
Section 11.13Notices........................................................................................................................44
Section 11.14Notice to Rating Agencies..........................................................................................45
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Section 11.15 Execution in Counterparts...........................................................................................45
Signatures...................................................................................................................................S-1
EXHIBITAFORM OF SERIES 2016Bond................................................................................A-1
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INDENTURE
THIS INDENTURE (this “Indenture”), executed and entered into as of May1, 2016, is by
and among the CHULA VISTA MUNICIPAL FINANCING AUTHORITY, a joint exercise of
powers authority duly organized and existing under the laws of the State of California(the
“Authority”), the CITY OF CHULA VISTA, a municipal corporation and a charter city duly
organized and existing under the Constitution and laws of the State of California(the “City”) and
U.S. Bank National Association, a national banking association duly organized and existing under
and by virtue of the laws of the United Statesof America, as Trustee (the “Trustee”);
WITNESSETH:
WHEREAS, the City and the Authority desireto prepay the City of Chula Vista2006
Certificates of Participation (Civic Center Project –Phase 2)(the “2006Certificates”)and the City of
Chula Vista 2010 Certificates of Participation (Capital Facilities Refunding Projects) (the “2010
Certificates”)and the City’s lease obligations in connection therewith, the proceeds of which were
used to finance and refinance the costs of the acquisition, construction and installation of certain
capital improvements constituting public capital improvements located within the City and more
fully described in the proceedings for the 2006Certificates(the “2006 Project”) and the proceedings
for the 2010 Certificates ( the “2010 Project”);
WHEREAS, in order to refinance the 2006 Projectand the 2010 Project, the Citywill lease
certain real property and the improvements located thereon (the “Leased Property”) to the Authority
pursuant to a Site Lease, dated as of the date hereof, and the City will sublease the Leased Property
back from the Authority pursuant to a Lease Agreement, dated as of the date hereof (the “Lease
Agreement”);
WHEREAS, the City and the Authority have determined that it would be in the best interests
of the City and the Authority to provide the funds necessary to refinance the 2006 Projectand the
2010 Projectthrough the issuance by the Authority of bonds payable from the base rental payments
(the “Base Rental Payments”) to be made by the City under the Lease Agreement;
WHEREAS, all rights to receive the Base Rental Payments have been assigned without
recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date
hereof;
WHEREAS, the Authority and the City desire to provide for the issuance by the Authority of
Chula Vista Municipal Financing Authority2016 Lease Revenue RefundingBonds
(the“2016Bonds”), in the aggregate principal amount of $____________, in order to refinance the
2006 Project and the 2010 Project;
WHEREAS, the 2016Bonds will be payable equally and ratably from the Base Rental
Payments;
WHEREAS, the Authority and the City desire to provide for the issuance of additional
bonds (the “Additional Bonds”) payable from the Base Rental Payments on a parity with the
2016Bonds (the 2016Bonds and any such Additional Bonds being collectively referred to as the
“Bonds”);
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WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish
and declare the terms and conditions upon which the Bonds are to be issued and secured and to
secure the payment of the principal thereof, premium,if any, and interest thereon, the Authority and
the City have authorized the execution and delivery of this Indenture; and
WHEREAS, the Authority and the City have determined that all acts and proceedings
required by law necessary to make the Bonds, when executed by the Authority, authenticated and
delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the
Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes
herein set forth in accordance with its terms, have been done and taken, and the execution and
delivery of the Indenture has been in all respects duly authorized;
NOW THEREFORE, in consideration of the premises and of the mutual agreements and
covenants contained herein and for other valuable consideration, the parties do hereby agree as
follows:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01Definitions. Unless the context otherwise requires, the terms defined in this
Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of the
Bonds and of any bond, opinion, requestor other document mentioned herein or therein have the
meanings defined herein, the following definitions to be equally applicable to both the singular and
plural forms of any of the terms defined herein. Capitalized terms not otherwise defined herein shall
have the meanings assigned to such terms in the Lease Agreement.
“Additional Bonds” means Bonds other than the 2016Bonds issued hereunder in accordance
with the provisions of Sections3.06 and 3.07 hereof.
“Act” means the Marks-Roos Local Bond Pooling Act of 1985, commencing with
Section 6584 of the California Government Code.
“Additional Rental Payments” means all amounts payable by the City as Additional Rental
Payments pursuant to Section3.02 of the Lease Agreement.
“Assignment Agreement” means the Assignment Agreement, dated as of the date hereof, by
and between the Authority and the Trustee.
“Authority” means the Chula Vista Municipal Financing Authority, a joint exercise of
powers authority organized under the laws of the Stateof California,its successors and assigns.
“Authorized Authority Representative” means the President, Vice President, Secretary,
Treasurer, Executive Director, Assistant Executive Director or Assistant Treasurer of the Authority,
or any other person authorized to act on behalf of the Authority under or with respect to this
Indenture.
“Authorized City Representative” means the City Manager and Director of Finance of the
City or any other person authorizedby the City Manager of the City to act on behalf of the City with
respect to the Lease or this Trust Agreement.
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“Authorized Denominations” means $5,000 or any integral multiple thereof.
“Base Rental Payment Fund” means the fund by that name established inaccordance with
Section 5.02 hereof.
“Base Rental Payments” means all amounts payable to the Authority by the City as Base
Rental Payments pursuant to Section 3.01 of the Lease Agreement.
“Beneficial Owner” means, whenever used with respect to a Book-Entry Bond, the person
whose name i s recorded as the beneficial owner of such Book-Entry Bond or a portion of such Book-
Entry Bond by a Participant on the records of such Participant or such person’s subrogee.
“Bonds” means the 2016Bonds and any Additional Bonds issued hereunder.
“Bond Year”means each twelve (12) month period extending from May2 in one calendar
year to May 1 of the succeeding calendar year, both dates inclusive; provided that the first Bond Year
with respect to the Bonds shall commence on the Closing Date and end on May1, 2016.
“Book-Entry Bonds” means the Bonds of a Series registered in the name of the nominee of
DTC, or any successor securities depository for such Series of Bonds, as the registered owner thereof
pursuant to the terms and provisions of Section2.10 hereof.
“Business Day” means a day which is not (a)a Saturday, Sunday or legal holiday, (b)a day
on which banking institutions in the State of California, or in any state in which the Office of the
Trustee is located, are required or authorized by law (including executive order) to close, or (c)a day
on which the New York Stock Exchange is closed.
“Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC
with respect to a Series of Book-Entry Bonds.
“City” means the City of Chula Vista, a municipal corporation and a charter city duly
organized and existing under the Constitution and laws of the State of California.
“Closing Date” means _________, 2016.
“Code” means the Internal Revenue Code of 1986, as amended.
“Continuing Disclosure Agreement” means the Continuing Disclosure Agreement, dated as
of the date hereof, executed by the Cityand Willdan Financial Services, as originally executed and as
it may from time to time be amended in accordance with theprovisions thereof.
“Costs of Issuance” means all the costs of issuing and delivering the Bonds, including, but
not limited to, all printing and document preparation expenses in connection with this Indenture, the
Lease Agreement, the Site Lease, the Assignment Agreement, the Bonds and any preliminary official
statement and final official statement pertaining to the Bonds, rating agency fees, CUSIP Service
Bureau charges, market study fees, legal fees and expenses of counsel with the issuance and delivery
of the Bonds, the initial fees and expenses of the Trustee and Escrow Agent and its counsel, the
initial fees and expenses of any bond insurer or reserve fund credit facility provider, and other fees
and expenses incurred in connection with the issuance and delivery of the Bonds, to the extent such
fees and expenses are approved by the City.
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“Costs of Issuance Fund” means the fund by that name established in accordance with
Section 3.04 hereof.
“Credit Facility”means a letter of credit, insurance policy, surety bond or other such
funding instrument, including the Reserve Policy,issued by an entity the long-term unsecured
obligations of which are rated “AA” or better by S&Pat the time of acquisitionand deposited with
the Trustee into the Reserve Fund for the 2016Bonds pursuant to Section 5.05 hereof.
“DTC” means The Depository Trust Company, a limited-purpose trust company organized
under the laws of the State of New York, and its successors as securities depository for any Series of
Book-Entry Bonds, including any such successor appointed pursuant to Section2.10 hereof.
“Escrow Agent” means U.S. Bank National Association, as escrow agent pursuant to the
2006 Escrow Agreement and the 2010 Escrow Agreement.
“Federal Securities” means (a)direct general obligations of the United States of America
(including obligations issued or held in book entry form on the books of the Department of the
Treasury of the United States of America), and (b)obligations of any agency, department or
instrumentality of the United States of America the timely payment of principal of and interest on
which are fully guaranteed by the United States of America.
“Site Lease” means the Site Lease, dated as of the date hereof, by and between the City and
the Authority, as originally executed and as it may from time to time be amended in accordance with
the provisions thereof and of the Lease Agreement.
“Indenture” means this Indenture, as originally executed and as it may be amended or
supplemented from time to time by any Supplemental Indenture.
“Information Services” means Municipal Securities Rulemaking Board through the
Electronic Municipal Marketplace Access (EMMA) website; and, in accordance with then current
guidelines of the Securities and Exchange Commission, such other services providing information
with respect to called certificates as the Authority may designate in a Written Certificate of the
Authority delivered to the Trustee.
“Interest Fund” means the fund by that name established in accordance with Section5.02
hereof.
“Interest Payment Date” means May 1 and November 1 of each year, commencing on
November 1, 2016.
“Lease Agreement” means the Lease Agreement, dated as of the date hereof, by and
between the City and the Authority, as originally executed and as it may be fromtime to time
amended in accordance with the provisions thereof.
“Moody’s” means Moody’s Investors Service, a corporation organized and existing under the
laws of the State of Delaware, its successors and assigns, except that if such corporation shall no
longer perform the function of a securities rating agency for any reason, the term “Moody’s” shall be
deemed to refer to any other nationally recognized securities rating agency selected by the Authority.
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“Office of the Trustee” means the principal corporate trust office of the Trustee in Los
Angeles, California, or such other office as may be specified to the Authority and the City by the
Trustee in writing, except that with respect to presentation of Bonds for payment or for registration of
transfer and exchange such term shall mean the office or the agency of the Trustee at which, at any
particular time, its corporate trust agency shall be conducted as specified to the Authority and the
City by the Trustee in writing.
“Opinion of Counsel” means a written opinion of counsel of recognized national standing in
the field of law relating to municipal bonds, appointed and paid by the Authority or the City and
which written opinion is satisfactory to the Trustee.
“Outstanding,” when used as of any particular timewith reference to Bonds, means (subject
to the provisions of Section11.09 hereof) all Bonds theretofore, or thereupon being, authenticated
and delivered by the Trustee under this Indenture except:
(a)Bonds theretofore canceled by the Trustee or surrendered to the Trustee for
cancellation;
(b)Bonds with respect to which all liability of the Authority shall have been
discharged in accordance with Section10.01 hereof; and
(c)Bonds for the transfer or exchange of or in lieu of or in substitution for which
other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture.
“Owner” means, with respect to a Bond, the Person in whose name such Bond is registered
on the Registration Books.
“Participant” means any entity which is recognized as a participant by DTC in the book-
entry system of maintaining records with respect to Book-Entry Bonds.
“Participating Underwriter” has the meaning ascribed thereto in the Continuing Disclosure
Agreement.
“Permitted Investments” means any of the following to the extent then permitted by the
general laws of the State of California (provided that the Trustee shall be entitled to rely upon any
investment directions from the City and Authority as conclusive certification to the Trustee that the
investments described therein are so authorized under the laws of the State of California):
(1)(a)Direct obligations (other than an obligation subject to—Variation in
principal repayment) of the United States of America (“United States Treasury Obligations”),
(b)obligations fully and unconditionally guaranteed as to timely payment of principal and interest by
the United States of America, (c)obligations fully and unconditionally guaranteed as to timely
payment of principal and interest by any agency or instrumentality of the United States of America
when such obligations are backed by the full faith and credit of the United States of America, or
(d)evidences of ownership of proportionate interests in future interest and principal payments on
obligations described above held by a bank or trust company as custodian, under which the owner of
the investment is the real party in interest and has the right to proceed directly and individually
against the obligor and the underlying government obligations are not available to any person
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claiming through the custodian or to whom the custodian may be obligated (collectively “United
States Obligations”). These include, but are not necessarily limited to:
-U.S. Treasury obligations
All direct or fully guaranteed obligations
-Farmers Home Administration
Certificates of beneficial ownership
-General Services Administration
Participation certificates
-U.S. Maritime Administration
Guaranteed Title XI financing
-Small Business Administration
Guaranteed participation certificates
Guaranteed pool certificates
-Government National Mortgage Association (GNMA)
GNMA-guaranteed mortgage-backed securities
GNMA-guaranteed participation certificates
-U.S. Department of Housing & Urban Development
Local authority bonds
-Washington Metropolitan Area Transit Authority
Guaranteed transit bonds
(2)Federal Housing Administration debentures.
(3)The listed obligations of government-sponsored agencies which are not
backed by the full faith and credit of the United States of America:
-Federal Home Loan Mortgage Corporation (FHLMC)
Participation certificates (excluded are stripped mortgage securities which
are purchased at prices exceeding their principal amounts)
Senior debt obligations
-Farm Credit Banks (formerly: Federal Land Banks, Federal intermediate
Credit Banks and Banks for Cooperatives)
Consolidated systemwide bonds and notes
-Federal Home Loan Banks (FHL Banks)
Consolidated debt obligations
-Federal National Mortgage Association (FNMA)
Senior debt obligations
Mortgage-backed securities (excluded are stripped mortgages securities
which are purchased at prices exceeding their principal amounts)
-Student Loan Marketing Association (SLMA)
Senior debt obligations (excluded are securities that do not have a fixed par
value and/or whose terms do not promise a fixed dollar amount at maturity
or call date)
-Financing Corporation (FICO)
Debt obligations
-Resolution Funding Corporation (REFCORP)
Debt obligations
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(4)Unsecured certificates of deposit, time deposits, and bankers’ acceptances
(having maturities of not more than 180 days) of any bank, including the Trustee and its affiliates, the
short-term obligations of which are rated “A-1+” or better by S&P and “P-1” or better by Moody’s.
(5)Deposits the aggregate amount of which are fully insured by the Federal
Deposit Insurance Corporation (FDIC), in banks, including the Trustee and its affiliates, which have
capital and surplus of at least $5 million.
(6)Commercial paper (having original maturities of not more than 270 days)
rated “A-1+” by S&P and “Prime-1” by Moody’s at the time of purchase.
(7)Money market funds rated “AAm” or “AAm-G” or better by S&P and “Aa2”
or better by Moody’s, including such funds for which the Trustee, its affiliates or subsidiaries provide
investment advisory or other management services or for which the Trustee or an affiliate of the
Trustee serves as investment administrator, shareholder servicing agent, and/or custodian or
subcustodian, notwithstanding that: (i) the Trustee or an affiliate of the Trustee receives fees from
funds for services rendered; (ii) the Trustee collects fees for services rendered pursuant to this
Indenture, which fees are separate from the fees received from such funds; and (iii) services
performed for such funds and pursuant to this Indenture may at times duplicate those provided to
such funds by the Trustee or an affiliate of the Trustee.
(8)Repurchase agreements:
(a)With any domestic bank the long term debt of which is rated “AA” or
better by S&P and “Aa” by Moody’s (so long as an opinion is rendered that the
repurchase agreement is a “repurchase agreement” as defined in the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) and that
such bank is subject to FIRREA), or any foreign bank rated at least“AA” by S&P
and “Aaa” by Moody’s or “AA” by S & P and at least “Aa2” by Moody’s; provided
the term of such repurchase agreement is for one year or less.
(b)With (i)any broker-dealer with “retail customers” which has, or the
parent company of which has, long-term debt rated at least “AA” by S&P and “Aa2”
by Moody’s, which broker-dealer falls under the jurisdiction of the Securities
Investors Protection Corp. (SIPC); provided that:
A.The market value of the collateral is maintained for United
States Treasury Obligations, at the levels shown below under “Collateral
Levels for United States Treasury Obligations”;
B.Failure to maintain the requisite collateral percentage will
require the City or the Trustee to liquidate the collateral;
C.The Trustee, the City or a third party acting solely as agent
therefor (the “Holder of the Collateral”) has possession of the collateral or the
collateral has been transferred to the Holder of the Collateral in accordance
with applicable state and federal laws (other than bymeans of entries on the
transferor’s books);
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D.The repurchase agreement states, and an opinion of counsel is
rendered to the effect, that the Trustee has a perfected first priority security
interest in the collateral, any substituted collateral and all proceeds thereof (in
the case of bearer securities, this means the Holder of the Collateral is in
possession);
E.The transferor represents that the collateral is free and clear of
any third-party liens or claims;
F.An opinion is rendered that the repurchase agreement is a
“repurchase agreement” as defined in the United States Bankruptcy Code;
G.There is or will be a written agreement governing every
repurchase transaction;
H.The City represents that it has no knowledge of any fraud
involved in the repurchase transaction; and
I.The City and the Trustee receive an opinion of counsel (which
opinion shall be addressed to the City and the Trustee) that such repurchase
agreement is legal, valid and binding and enforceable against the provider in
accordance with its terms.
(9)State Obligations
(a)Direct general obligations of any state of the United States or any
subdivision or agency thereof to which is pledged the full faith and credit of a state
the unsecured general obligation debt of which is rated “A2” by Moody’s and “A” by
S&P, or better, or any obligation fully and unconditionally guaranteed by any state,
subdivision or agency whose unsecured general obligation debt is so rated.
(b)Direct, general short-term obligations of any state agency or
subdivision described in (a) above and rated “A-1+” by S&P and “Prime-1” by
Moody’s.
(c)Special Revenue Bonds (as defined in the United States Bankruptcy
Code) of any state, state agency or subdivision described in (a) above and rated “AA”
or better by S&P and “Aa2” or better by Moody’s.
(10)Local Agency Investment Fund.
(11)Investment agreements with a domestic or foreign bank or corporation (other
than a life or property casualty insurance company) the long-term debt of which, or, in the case of a
guaranteed corporation the long-term debt of the guarantor, or in the case of a monoline financial
guaranty insurance company the claims paying ability of the guarantor, is rated at least “AA” by S&P
and “Aa2” by Moody’s; provided, that prior written notice of an investment in the investment
agreement is provided to S&P and, provided, further, by the terms of the investment agreement:
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(a)interest payments are to be made to the Trustee at times and in
amounts as necessary to pay debt service (or, if the investment agreement is for the
construction fund, construction draws) on the Bonds;
(b)the invested funds are available for withdrawal without penalty or
premium, at any time for purposes identified in this Indenture other than acquisition
of alternative investment property upon not more than seven days prior notice (which
notice may be amended or withdrawn at any time prior to the specified withdrawal
date); provided that the Indenture specifically requires the Trustee or the City to give
notice in accordance with the terms of the investment agreement so as to receive
funds thereunder with no penalty or premium paid;
(c)the investment agreement shall state that it is the unconditional and
general obligation of, and is not subordinated to any other obligation of, the provider
thereof;
(d)a guaranteed rate of interest is to be paid on invested funds and all
future deposits, if any, required to be made to restore the amount of such funds to the
level specified under the Indenture;
(e)the Trustee and the City receive the opinion of domestic counsel
(which opinion shall be addressed to the City) that such investment agreement is
legal, valid and binding and enforceable against the provider in accordance with its
terms and of foreign counsel (if applicable);
(f)the investment agreement shall provide that if during its term (A)the
provider’s or the guarantor’s rating by either Moody’s or S&P is withdrawn or
suspended or falls below “AA” or “Aa2”, respectively, or, with respect to a foreign
bank, below the ratings of such provider at the delivery date of the investment
agreement, the provider must, at the direction of the City or the Trustee (acting at the
direction of the City) within 10days of receipt of such direction, either
(1)collateralize the investment agreement by delivering or transferring in accordance
with applicable state and federal laws (other than by means of entries on the
provider’s books) to the Trustee, the City or a Holder of the Collateral, United States
Treasury Obligations which are free and clear of any third-party liens or claims at the
Collateral Levels set forth below; or (2)repay the principal of and accrued but unpaid
interest on the investment (the choice of (1)or (2) above shall be that of the City or
Trustee (acting at the direction of the City), as appropriate), and (B)the provider’s or
the guarantor’s rating by either Moody’s or S&P is withdrawn or suspended or falls
below “A” or “A2,” or, with respect to a foreign bank, below “AA” or “Aa2” by S&P
or Moody’s, as appropriate, the provider must, at the direction of the City or the
Trustee (acting at the direction of the City), within 10 days of receipt of such
direction, repay the principal of and accrued but unpaid interest on the investment, in
either case with no penalty or premium to the City or Trustee;
(g)the investment agreement shall state, and an opinion of counsel shall
be rendered to the effect, that the Trustee has a perfected first priority security interest
in the collateral, any substituted collateral and all proceeds thereof (in the case of
bearer securities, this means the Trustee is in possession); and
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(h)the investment agreement must provide that if during its term (A)the
provider shall default in its payment obligations, the provider’s obligation under the
investment agreement shall, at the direction of the City or the Trustee, be accelerated
and amounts invested and accrued but unpaid interest thereon shall be repaid to the
City or Trustee, as appropriate, and (B)the provider shall become insolvent, not pay
its debts as they become due, be declared or petition to be declared bankrupt, etc.
(“event of insolvency”), the provider’s obligations shall automatically be accelerated
and amounts invested and accrued but unpaid interest thereon shall be repaid to the
City or Trustee, as appropriate.
(12)Pre-refunded municipal obligations rated “AAA” by S&P and “Aaa” by
Moody’s meeting the following requirements:
(a)the municipal obligations are (i)not subject to redemption prior to
maturity or (ii)the trustee for the municipal obligations has been given irrevocable
instructions concerning their call and redemption and the issuer of the municipal
obligations has covenanted not to redeem such municipal obligations other than as set
forth in such instructions;
(b)the municipal obligations are secured by cash or United States
Treasury Obligations which may be applied only to payment of the principal of,
interest and premium on such municipal obligations;
(c)the principal of and interest on the United States Treasury Obligations
(plusany cash in the escrow) has been verified by the report of independent certified
public accountants to be sufficient to pay in full all principal of, interest, and
premium, if any, due and to become due on the municipal obligations
(“Verification”);
(d)the cash or United States Treasury Obligations serving as security for
the municipal obligations are held by an escrow agent or trustee in trust for owners of
the municipal obligations; and
(e)no substitution of a United States Treasury Obligation shall be
permitted except with another United States Treasury Obligation and upon delivery
of a new Verification; and
(f)the cash or the United States Treasury Obligations are not available to
satisfy any other claims, including those by or against the trustee orescrow agent.
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Collateral Levels For United States Treasury Obligations
Remaining Maturity
Frequency of
Valuation
1 year
or less
5 years
or less
10 years
or less
15 years
or less
30 years
or less
Daily 102 105 106 108 114
Weekly 103 111 112 114 120
Monthly 105 117 120 125 133
Quarterly 107 120 130 133 140
Further Requirements: (a)On each valuation date, the City, or the custodian who shall
confirm to the City and the Trustee, shall value the market value (exclusive of accrued interest) of the
collateral, which market value will be an amount equal to the requisite collateral percentage times the
principal amount of the investment (including unpaid accrued interest thereon) that is being secured,
(b)in the event the collateral level is below itscollateral percentage on a valuation date, such
percentage shall be restored within the following restoration periods: one Business Day for daily
valuations, two Business Days for weekly and monthly valuations, and one month for quarterly
valuations (theuse of different restoration periods affect the requisite collateral percentage), (c)the
City or the Trustee (acting at the direction of the City) shall terminate the repurchase agreement or
the investment agreement, as the case may be, upon a failure tomaintain the requisite collateral
percentage after the restoration period and, if not paid by the counterparty in federal funds against
transfer of the collateral, liquidate the collateral.
The Trustee shall have no responsibility to monitor the ratings of Permitted Investments after
the initial purchase of such Permitted Investments.
“Person” means an individual, corporation, firm, association, partnership, trust, or other legal
entity or group of entities, including a governmental entity or any agency orpolitical subdivision
thereof.
“Principal Fund” means the fund by that name established in accordance with Section5.02
hereof.
“Rebate Fund” means the fund by that name established in accordance with Section5.06
hereof.
“Rebate Requirement” has the meaning ascribed thereto in the Tax Certificate.
“Record Date” means the fifteenth day of the month next preceding an Interest Payment
Date, whether or not such day is a Business Day.
“Redemption Fund” means the fund by that name established in accordance with
Section 5.02 hereof.
“Redemption Price” means the aggregate amount of principal of and premium, if any, on the
Bonds upon the redemption thereof pursuant hereto.
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“Registration Books” means the records maintained by the Trustee for the registration of
ownership and registration of transfer of the Bonds pursuant to Section2.05 hereof.
“Rental Payments” means, collectively, the Base Rental Payments and the Additional
Rental Payments.
“Rental Period” means the period from the Closing Date through May 1, 2017and,
thereafter, the twelve-month period commencing on May 1 of each year during the term of the Lease
Agreement.
“Representation Letter” means the Letter of Representations from the Authority to DTC, or
any successor securities depository for any Series of Book-Entry Bonds, in which the Authority
makes certain representations with respect to issues of its securities for deposit by DTC or such
successor depository.
“Reserve Fund”means the fund by that name established in accordance with Section 5.05
hereof.
“Reserve Requirement”means, as of the date of calculation an amount equal to the least of
(a)10% of the “proceeds of the issue” of the 2016Bonds within the meaning of Section 148 of the
Code, (b) the maximum amount of debt service on the 2016Bondspayable in any one Bond Year,
and (c)125% of the average amount of debt service on the 2016Bonds payable in each Bond Year.
“S&P” means Standard and Poor’s Ratings Services, a Standard & Poor’s Financial Services
LLC business, its successors and assigns, except that if such entity shall no longer perform the
functions of a securities rating agency for any reason, the term “S&P” shall be deemed to refer to any
other nationally recognized securities rating agency selected by the Authority.
“Securities Depositories” means The Depository Trust Company; and, in accordance with
then current guidelines of the Securities and Exchange Commission, such other securities
depositories as the Authority may designate in a Written Certificate of the Authority delivered to the
Trustee.
“Security Documents” means any resolution, trust agreement, indenture, ordinance, loan
agreement, lease agreement, bond, note, certificate and/or any additional or supplemental document
executed in connection with the 2016Bonds.
“Series” means the 2016Bonds executed, authenticated and delivered on the Closing Date
and identified pursuant to this Indenture and any Additional Bonds issued pursuant to a Supplemental
Indenture and identified as a separate Series of Bonds.
“Supplemental Indenture” means any supplemental indenture amendatory of or
supplemental to this Indenture, but only if and to the extent that such Supplemental Indenture is
specifically authorized hereunder.
“Tax Certificate” means the Tax Certificate executed by the Authority and the City at the
time of issuance of the 2016Bonds relating to the requirements of Section148 of the Code, as
originally executed and as it may from time to time be amended in accordance with the provisions
thereof.
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“Trustee” means U.S. Bank National Association, a national banking association duly
organized and existing under and by virtue of the laws of the United Statesof America, or any
successor thereto as Trustee hereunder, appointed as provided herein.
“2006Certificates” has the meaning ascribed thereto in the recitals hereof.
“2006 Escrow Fund” means the fund established and held by the Escrow Agent pursuant to
the 2006 Escrow Agreement.
“2006Escrow Agreement” means the escrow agreement dated as of May 1, 2016 by and
between the Authority and the Escrow Agent relating to the defeasance of the 2006 Certificates.
“2010 Escrow Fund” means the fund established and held by the Escrow Agent pursuant to
the 2010 Escrow Agreement.
“2010 Escrow Agreement” means the escrow agreement dated as of May 1, 2016 by and
between the Authority and the Escrow Agent relating to the defeasance of the 2010Certificates.
“2016Bonds” means the Chula Vista Municipal Financing Authority2016 Lease Revenue
Refunding Bonds issued hereunder.
“Written Certificate of theAuthority” and “Written Request of the Authority” mean,
respectively, a written certificate or written request signed in the name of the Authority by an
Authorized Authority Representative. Any such certificate or request may, but need not, be
combined in a single instrument with any other instrument, opinion or representation, and the two or
more so combined shall be read and construed as a single instrument.
“Written Certificate of the City” and “Written Request of the City” mean, respectively, a
written certificate or written request signed in the name of the City by an Authorized City
Representative. Any such certificate or request may, but need, not, be combined in a single
instrument with any other instrument, opinion or representation, and the two or more so combined
shall be read and construed as a single instrument.
Section 1.02Equal Security. In consideration of the acceptance of the Bonds by the
Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the
Authority, the City, the Trustee and the Owners from time to time of all Bonds authorized, executed,
issued and delivered hereunder and then Outstanding to secure the full and final payment of the
principal of, premium, if any, and interest on all Bonds which may from timeto time be authorized,
executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and
provisions contained herein; and all agreements and covenants set forth herein to be performed by or
on behalf of the Authority or the City shall be for the equal and proportionate benefit, protection and
security of all Owners of the Bonds without distinction, preference or priority as to security or
otherwise of any Bonds over any other Bonds by reason of the number or date thereof or thetime of
authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as
expressly provided herein or therein.
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ARTICLE II
THE BONDS
Section 2.01Authorization of Bonds. The Authority hereby authorizes the issuance of
the Bonds under and subject to the terms of this Indenture and applicable laws of the State of
California for the purpose of refinancing the Project. The Bonds may consist of one or more Series
of Bonds of varying denominations, dates, maturities, interest rates and other provisions, subject to
the provisions and conditions contained herein.
Section 2.02Terms of 2016 Bonds.
(a)The 2016Bonds shall be designated the “Chula Vista Municipal Financing
Authority2016 Lease Revenue RefundingBonds.” Each Series of Additional Bonds shall bear such
additional designation as may be necessary or appropriate to distinguish such Series from every other
Series, of Bonds.
(b)The 2016Bonds shall be issued in fully registered form without coupons in
Authorized Denominations, so long as no 2016Bondshall have more than one maturity date. The
2016Bonds shall be dated as of the Closing Date, shall be issued in the aggregate principal amount
of $______________, shall mature on May 1 of each year and shallbear interest (calculated on the
basis of a 360-day year comprised of twelve 30-day months) at the rates per annum as follows:
Maturity Date
(May 1)
Principal
Amount
Interest
Rate
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2027
2028
2028
2029
2030
2030
2031
2032
2033
2034
2035
2036
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(c)Interest on the 2016Bonds shall be payable from the Interest Payment Date
next preceding the date of authentication thereof unless (i)a 2016Bondis authenticated on or before
an Interest Payment Date and after the close of business on the preceding Record Date, in which
event it shall bear interest from such Interest Payment Date, (ii)a 2016Bondis authenticated on or
before the first Record Date, in which event interest thereon shall be payable from the dated date
thereof, or (iii)interest on any 2016Bondis in default as of the date of authentication thereof, in
which event interest thereon shall be payable from the date to which interest has been paid in full,
payable on each Interest Payment Date. Interest shall be paid in lawful money of the United States
on each Interest Payment Date to the Persons in whose names the ownership of the 2016Bonds is
registered on the Registration Books at the close of business on the immediately preceding Record
Date, except as provided below. Interest shall be paid by check of the Trustee mailed by first class
mail, postage prepaid, on each Interest Payment Date to the 2016BondOwners at their respective
addresses shown on the Registration Books as of the close of business on the preceding Record Date.
(d)The principal and premium, if any, of the 2016Bonds shall be payable in
lawful money of the United States of America upon presentation and surrender thereof upon maturity
or earlier redemption at the Office of the Trustee.
(e)The 2016Bonds shall be subject to redemption as provided in ArticleIV.
Section 2.03Form of 2016Bonds. The 2016Bonds shall be in substantially the form set
forth in ExhibitA hereto, with appropriate or necessary insertions, omissions and variations as
permitted or required hereby.
Section 2.04Transfer and Exchange of Bonds. Any Bond may, in accordance with its
terms, be transferred upon the RegistrationBooks by the Person in whose name it is registered, in
person or by his duly authorized attorney, upon surrender of such Bond for cancellation,
accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to
the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall
execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series
in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the
Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid
with respect to such transfer.
The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal
amount ofBonds of the same Series of other authorized denominations. The Trustee shall require the
payment by the Bond Owner requesting such exchange of any tax or other governmental charge
required to be paid with respect to such exchange.
The Trustee shall not be obligated to make any transfer or exchange of Bonds of a Series
pursuant to this Section during the period established by the Trustee for the selection of Bonds of
such Series for redemption, or with respect to any Bonds of such Series selected for redemption.
Section 2.05Registration Books. The Trustee will keep or cause to be kept, at the Office
of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which
shall be open to inspection during regular business hours and upon reasonable notice by the City;
and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it
may prescribe, register or transfer or cause to be registered or transferred, on such records, the
ownership of the Bonds as hereinbefore provided.
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Section 2.06Execution of Bonds. The Bonds shall be executed in the name and on behalf
of the Authority with the facsimile signature of an Authorized Officer of the Authority attested by the
manual or facsimile signature of the Secretary of the Authority. The Bonds shall then be delivered to
the Trustee for authentication by it. In case any of such officers of the Authority who shall have
signed or attested any of the Bonds shall cease to be such officers of the Authority before the Bonds
so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the
Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such
authentication, delivery and issue, shall be as binding upon the Authority as though those who signed
and attested the same had continued to be such officers of the Authority, and also any Bonds may be
signed and attested on behalf of the Authority by such Persons as at the actual date of execution of
such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds
any such Person shall not have been such officer of the Authority.
Section 2.07Authentication of Bonds. Only such of the Bonds as shall bear thereon a
certificate of authentication substantially in the form as that set forth in ExhibitA hereto, manually
executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this
Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the
Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are
entitled to the benefits of this Indenture.
Section 2.08Temporary Bonds. The Bonds of a Series may be issued in temporary form
exchangeable for definitive Bonds of such Series when ready for delivery. Any temporary Bonds
may be printed, lithographed or typewritten, shall be of such authorized denominations as may be
determined by the Authority, shall be in fully registered form without coupons and may contain such
reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond
shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in
substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds of a
Series it will execute and deliver definitive Bonds of such Series as promptly thereafter as
practicable, and thereupon the temporary Bonds of such Series, may be surrendered, for cancellation,
at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such
temporary Bonds an equal aggregate principal amount of definitive Bonds of such Series in
Authorized Denominations. Until so exchanged, the temporary Bonds of such Series shall be entitled
to the same benefits under this Indenture as definitive Bonds of such Series authenticated and
delivered hereunder.
Section 2.09Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the Authority, at the expense of the Ownerof said Bond, shall execute, and the Trustee
shall thereupon authenticate and deliver, a new Bond of like tenor and Series in exchange and
substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so
mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered
to, or in accordance with the order of, the Authority. If any Bond shall be lost, destroyed or stolen,
evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and
indemnity satisfactory to the Trustee shall be given, the Authority, at the expense of the Owner, shall
execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and
Series in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond
shall have matured or shall have been selected for redemption, instead of issuing a replacement
Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment
by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued
under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any
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Bond of a Series issued under the provisions of this Section in lieu of any Bond of such Series
alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on
the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any
time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other
Bonds of such Series secured by this Indenture.
Section 2.10Book-Entry Bonds.
(a)Prior to the issuance of a Series of Bonds, the Authority may provide that
such Series of Bonds shall initially be issued as Book-Entry Bonds and, in such event, the Bonds of
such Series for each maturity shall be in the form of a separate single fully registered Bond (which
may be typewritten). The 2016Bonds shall initially be issued as Book-Entry Bonds.
Except as provided in subsection (c) of this Section, the registered Owner of all of the
Book-Entry Bonds shall be Cede & Co., as nominee of DTC. Notwithstanding anything to the
contrary contained in this Indenture, payment of interest with respect to any Book-Entry Bond
registered as of each Record Date in the name of Cede & Co. shall be made by wire transfer of same-
day funds to the account of Cede & Co. on the Interest Payment Date at the address indicated on the
Record Date for Cede & Co. inthe Registration Books or as otherwise provided in the
Representation Letter.
(b)The Trustee and the Authority may treat DTC (or its nominee) as the sole and
exclusive Owner of Book-Entry Bonds registered in its name for the purposes of payment of the
principal, premium, if any, or interest with respect to Book-Entry Bonds, selecting Book-Entry
Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to
Owners of Book-Entry Bonds under this Indenture, registering the transfer of Book-Entry Bonds,
obtaining any consent or other action to be taken by Owners of Book-Entry Bonds and for all other
purposes whatsoever, and neither the Trustee nor the Authority shall be affected by any notice to the
contrary. Neither the Trustee nor the Authority shall have any responsibility or obligation to any
Participant, any person claiming a beneficial ownership interest in Book-Entry Bonds under or
through DTC or any Participant, or any other person which is not shown on the Registration Books
as being an Owner, with respect to the accuracy of any records maintained by DTC or any
Participant, the payment by DTC or any Participant of any amount in respect of the principal,
premium, if any, or interest with respect to Book-Entry Bonds, any notice which is permitted or
required to be given to Owners of Book-Entry Bonds under this Indenture, the selection by DTC or
any Participant of any person to receive payment in the event of a partial redemption of Book-Entry
Bonds, or any consent given or other action taken by DTC as Owner of Book-Entry Bonds. The
Trustee shall pay all principal, premium, if any and interest with respect to Book-Entry Bonds, only
to DTC, and all such payments shall be valid and effective to fully satisfy and discharge the
Authority’s obligations with respect to the principal, premium, if any, and interest with respect to the
Book-Entry Bonds to the extent of the sum or sums so paid. Except under the conditions of
subsection (c) of this Section, no person other than DTC shallreceive an executed Book-Entry Bond
for each separate stated maturity. Upon delivery by DTC to the Trustee of written notice to the effect
that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the
provisions herein with respect to record dates, the term “Cede & Co.” in this Indenture shall refer to
such new nominee of DTC.
(c)In the event (i)DTC, including any successor as securities depository for a
Series of Bonds, determines not to continue to act as securities depository for such Series of Bonds,
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or (ii)the Authority determines that the incumbent securities depository shall no longer so act, and
delivers a written certificate to the Trustee to that effect, then the Authority will discontinue the
book-entry system with the incumbent securities depository for such Series of Bonds. If the
Authority determines to replace the incumbent securities depository for such Series of Bonds with
another qualified securities depository, the Authority shall prepare or direct the preparation of a new
single, separate fully registered Bond of such Series for the aggregate outstanding principal amount
of Bonds of such Series of each maturity, registered in the name of such successor or substitute
qualified securities depository, or its nominee, or make such other arrangement acceptable to the
Authority, the Trustee and the successor securities depository for the Bonds of such Series as are not
inconsistent with the terms of this Indenture. If the Authority fails to identify another qualified
successor securities depository for such Series of Bonds to replace the incumbent securities
depository, then the Bonds of such Series shall no longer be restricted to being registered in the
Registration Books in the name of the incumbent securitiesdepository or its nominee, but shall be
registered in whatever name or names the incumbent securities depository for such Series of Bonds,
or its nominee, shall designate. In such event the Authority shall execute, and deliver to the Trustee,
a sufficient quantity of Bonds of such Series to carry out the transfers and exchanges provided in
Sections2.04, 2.08 and 2.09 hereof. All such Bonds of such Series shall be in fully registered form
in Authorized Denominations.
(d)Notwithstanding any other provision of this Indenture to the contrary, so long
as any Book-Entry Bond is registered in the name of DTC, or its nominee, all payments with respect
to the principal, premium, if any, and interest with respect to such Book-Entry Bond and all notices
with respect to such Book-Entry Bond shall be made and given, respectively, as provided in the
Representation Letter.
(e)In connection with any notice or other communication to be provided to
Owners of Book-Entry Bonds pursuant to this Indenture by the Authority, the City or the Trustee
with respect to any consent or other action to be taken by Owners, the Authority, the City or the
Trustee, as the case may be, shall establish a record date for such consent or other action and give
DTC notice of such record date not less than 15 calendar days in advance of such record date to the
extent possible.
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01Issuance of 2016Bonds. The Authority may, at any time, execute the
2016 Bonds for issuance hereunder and deliver the same to the Trustee. The Trustee shall
authenticate the 2016Bonds and deliver the 2016Bonds to the original purchaser thereof upon
receipt of a Written Request of the Authority and upon receipt of the purchase price therefor.
Section 3.02Application of Proceeds of the 2016Bonds. On the Closing Date, the net
proceeds of the sale of the 2016Bonds received by the Trustee, $__________, shall be deposited by
the Trustee as follows:
(a)The Trustee shall deposit the amount of $________in the Costs of Issuance
Fund.
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(b)The Trustee shall transfer $__________to the Escrow Agent for deposit into
the 2006 Escrow Fundand $________ for deposit into the 2010 Escrow Fund.
(c)The Trustee shall transfer $__________ to the Reserve Fund.
The Trustee may establish a temporary fund or account in its records to facilitate and record
such deposits and transfer.
Section 3.03Costs of Issuance Fund. The Trustee shall establish and maintain a separate
fund designated the “Costs of Issuance Fund.” On the Closing Date, there shall be deposited in the
Costs of Issuance Fund theamount specified in Section3.02 hereof. There shall be additionally
deposited in the Cost of Issuance Fund the portion, if any, of the proceeds of the sale of any
Additional Bonds required to be deposited therein under the Supplemental Indenture pursuant to
which such Additional Bonds are issued.
The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from
time to time to pay the Costs of Issuance upon submission of a Written Request of the Authority
stating (a)the Person to whom payment is to be made, (b)the amount to be paid, (c)the purpose for
which the obligation was incurred, (d)that such payment is a proper charge against the Costs of
Issuance Fund, and (e)that such amounts have not been the subject of a prior disbursement from the
Costs of Issuance Fund, in each case together with a statement or invoice for each amount requested
thereunder. Each such Written Request of the Authority shall be sufficient evidence to the Trustee of the
facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On
December1, 2016, all amounts, if any, remaining in the Costs of Issuance Fund shall be withdrawn
therefrom by the Trustee and transferred to the Interest Fundand the Costs of Issuance Fund shall be
closed.
Section 3.04Conditions for the Issuance of Additional Bonds. The Authority may at
any time issue one or more Series of Additional Bonds (in addition to the 2016Bonds) payable from
Base Rental Payments as provided herein on a parity with all other Bonds theretofore issued
hereunder, but only subject to the following conditions, which are hereby made conditions precedent
to the issuance of such Additional Bonds:
(a)The issuance of such Additional Bonds shall have been authorized under and
pursuant hereto and shall have been provided for by a Supplemental Indenture which shall specify
the following:
(i)The application of the proceeds of the sale of such Additional Bonds;
(ii)The principal amount and designation of such Series of Additional
Bonds and the denomination or denominations of the Additional Bonds;
(iii)The date, the maturity date or dates, the interest payment dates and
the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional
Bonds; provided, however, that (i)the serial Bonds of such Series of Additional Bonds shall be
payable as to principal annually on May 1 of each year in which principal falls due, and the term
Bonds of such Series of Additional Bonds shall have annual mandatory sinking fund redemptions on
May 1, (ii)the Additional Bonds shall be payable as to interest semiannually on May 1 and
November 1 of each year, except that the first installment of interest may be payable on either May 1
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or November 1 and shall be for a period of not longer than twelve months and the interest shall be
payable thereafter semiannually on May 1 and November 1, (iii)all Additional Bonds of a Series of
like maturity shall be identical in all respects, except as to number or denomination, and (iv)serial
maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any
combination thereof, shall be established to provide for the redemption or payment of such
Additional Bonds on or before their respective maturity dates;
(iv)The redemption premiums and terms, if any, for such Additional
Bonds;
(v)The form of such Additional Bonds; and
(vi)If a separate reserve account is to be maintained for such Series of
Additional Bonds, the applicable reserve requirement and the amount, if any, to be deposited from
the proceeds of sale of such Additional Bonds in a separate account of the Reserve Fund to be held as
separate security for such Series of Additional Bonds;
(vii)Designate accounts in the Interest Fund, the Principal Fund, the
Redemption Fund, the Rebate Fund and the Reserve Fund (if any) to be applicable to such Additional
Bonds; and
(viii)Such other provisions that are appropriate or necessary and are not
inconsistent with the provisions hereof;
(b)The Authority shall be in compliance with all agreements, conditions,
covenants and terms contained herein, in the Lease Agreement and in the Site Leaserequired to be
observed or performed by it;
(c)The Authority shall be in compliance with all agreements, conditions,
covenants and terms contained herein, in the Lease Agreement and in the Site Leaserequired to be
observed or performed by it; and
(d)The Site Leaseshall have been amended, to the extent necessary, and the
Lease Agreement shall have been amended so as to increase the Base Rental Payments payable by
the City thereunder by an aggregate amount equal to the principal of and interest on such Additional
Bonds, payable at such times and in such manner as may be necessary to provide for the payment of
the principal of and interest on such Additional Bonds; provided, however, that no such amendment
shall be made such that the sum of Base Rental Payments, including any increase in the Base Rental
Payments as a result of such amendment, plus Additional Rental Payments, in any Rental Period
shall be in excess of the annual fair rental value of the Leased Propertyafter taking into account the
use of the proceeds of any Additional Bonds issued in connection therewith (evidence of the
satisfaction of such condition shall be made by a Written Certificate of the City).
Nothing contained herein shall limit the issuance of any bonds or other obligations payable
from Base Rental Payments if, after the issuance and delivery of such certificates or other
obligations, none of the Bondstheretofore issued hereunder will be Outstanding.
Section 3.05Procedure for the Issuance of Additional Bonds. At any time after the sale
of any Additional Bonds in accordance with the Act, such Additional Bonds shall be executed by the
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Authority for issuance hereunder and shall be delivered to the Trustee and thereupon shall be
authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following:
(a)Certified copies of the Supplemental Indenture authorizing the issuance of
such Additional Bonds, the amendment to the Lease Agreement required by Section3.06 hereof and
the amendment to the Site Lease, if any, required by Section3.06 hereof, together with satisfactory
evidence that such amendment to the Lease Agreement and such amendment to the Site Lease, if
any, have been duly recorded;
(b)A Written Request of the Authority as to the delivery of such Additional
Bonds;
(c)An opinion of Bond Counsel substantially to the effect that (i)the Indenture
(including all Supplemental Indentures), the Lease Agreement (including the amendment thereto
required by Section3.06 hereof) and the Site Lease(including any amendment thereto required by
Section3.06 hereof) have been duly authorized, executed and delivered by, and constitute the valid
and binding obligations of, the Authority and the City, enforceable in accordance with their terms
(except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting creditors’ rights and by the application of equitable principles and by the
exercise of judicial discretion in appropriate cases and subject to the limitations on legal remedies
against political subdivisions in the State of California), (ii)such Additional Bonds constitute valid
and binding special obligations of the Authority payable solely from Base Rental Payments as
provided herein and are enforceable in accordance with their terms (except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting
creditors’ rights and by the applicationof equitable principles and by the exercise of judicial
discretion in appropriate cases and subject to the limitations on legal remedies against political
subdivisions in the State of California), and (iii)the issuance of such Additional Bonds, in and of
itself, will not adversely affect the exclusion of interest on any tax-exempt Bonds Outstanding prior
to the issuance of such Additional Bonds from gross income for federal income tax purposes;
(d)a Written Certificate of the Authority that the requirements of Section3.06
hereof have been met;
(e)a Written Certificate of the City that the requirements of Section3.06 hereof
and Sections5.01 and 5.02 of the Lease Agreement have been met, and a Written Certificate of the
City as to the fair rental value of the Leased Property, after giving effect to the execution and
delivery of the Additional Bonds, and to the use of proceeds received therefrom; and
(f)Such further documents as are required by the provisions hereof or by the
provisions of the Supplemental Indentureauthorizing the issuance of such Additional Bonds.
Section 3.06Additional Bonds. So long as any of the Bonds remain Outstanding, the
Authority shall not issue any Additional Bonds or obligations payable from the Base Rental
Payments, except pursuant to Sections3.06and 3.07 hereof.
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ARTICLE IV
REDEMPTION OF BONDS
Section 4.01Redemption of 2016 Bonds.
(a)Extraordinary Redemption. The 2016Bonds shall be subject to redemption,
in whole or in part, on any date, in Authorized Denominations, from and to the extent of any Net
Insurance Proceeds received with respect to all or a portion of the Leased Property, deposited by the
Trustee in the Redemption Fund pursuant to Sections5.03 and 5.04 hereof, at a Redemption Price
equal to the principal amount of the 2016Bonds to be redeemed, plus accrued interest thereon to the
date of redemption, without premium.
(b)Optional Redemption. The 2016Bonds maturingon or after May 1, 20__,
shall be subject to optional redemption, in whole or in part, on any date on or after May 1, 20__, in
Authorized Denominations, from any source of funds provided to the Trustee, includingprepaid Base
Rental Payments paid pursuantto subsection (a) of Section7.02 of the Lease Agreement, at a
Redemption Price equal to the principal amount of the 2016Bonds to be redeemed, plus accrued
interest thereon to the date of redemption, without premium.
(c)Sinking Fund Redemption. The 2016Bondsmaturing on May 1, 2036are
subject to mandatory sinking fund redemption in part (by lot) on each November 1on and after
May1, 20__, in integral multiples of $5,000 at a Redemption Price of the principal amount thereof
plus accrued interest to the date fixed for redemption, without premium, in accordance with the
following schedule:
Sinking Fund Redemption Date
(May 1)
Principal Amount
To Be Redeemed
2036(maturity)
In the event of a redemption pursuant to Section 4.01(a) or (b), the City shall provide the
Trustee with a revised mandatory sinking fund schedule giving effect to the redemption so
completed.
Section 4.02Notice of Redemption. The Trustee on behalf and at the expense of the
Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any
Bonds designated for redemption at their respective addresses appearing on the Registration Books,
andto the Securities Depositories and to one or more Information Services, at least 30 but not more
than 60 days prior to the date fixed for redemption; provided, however, so long as all the Bonds of a
Series are Book-Entry Bonds, such notice shall be provided to DTC and its nominee in the manner
provided by DTC in its procedures. Such notice shall state the date of the notice, the redemption
date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, the
Bond numbers and the maturity or maturities (except in the event of redemption of all of the Bonds
of such maturity or maturities in whole) ofthe Bonds to be redeemed, and shall require that such
Bonds be then surrendered at the Office of the Trustee for redemption at the Redemption Price,
giving notice also that further interest on such Bonds will not accrue from and after the date fixed for
redemption. Such notice may state that such redemption is conditioned upon sufficient funds being
on deposit on the redemption date to redeem the Bonds so called for redemption. Such notice of
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redemption may also state that no representation is made as tothe accuracy or correctness of the
CUSIP numbers printed therein or on the Bonds. Neither the failure to receive any notice so mailed,
nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the
Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.
Section 4.03Selection of Bonds for Redemption. Whenever provision is made in this
Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be
redeemed from all Bonds not previously called for redemption (a)with respect to any optional
redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written
Request of the Authority and as to any term Bonds described in Section 4.02(c), with such
adjustments to mandatory sinking fund redemption described in such Written Request, (b)with
respect to any redemption pursuant to Section4.01(a) hereof and the corresponding provision of any
Supplemental Indenture pursuant to which Additional Bonds are issued, among maturities of all
Series of Bonds on a pro rata basis as nearly as practicable, and (c)with respect to any other
redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture
pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with
the same maturity in any manner which the Trustee in its sole discretion shall deem appropriate and
fair. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000
denominations and such separate denominations shall be treated as separate Bonds which may be
separately redeemed.
Section 4.04Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in
part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner
thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in authorized
denominations equal in aggregate principal amount representing the unredeemed portion of the
Bonds surrendered.
Section 4.05Effect of Notice of Redemption. Notice having been mailed as aforesaid,
and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption,
having been set aside in the Redemption Fund, the Bonds shall become due and payable on said date,
and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at
the Redemption Price thereof, together with interest accrued and unpaid to said date.
If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be
redeemed, together with interest to said date, shall be held by the Trustee so as to be available
therefor on such date, and, if notice of redemption thereof shall have been mailed as aforesaid and
not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and become
payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in
trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners
for interest thereon.
All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof
shall be canceled upon surrender thereof and destroyed.
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ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01Pledge; Special Obligations. Subject only to the provisions of this Indenture
permitting the application thereof for the purposes and on the terms and conditions set forth herein,
all of the Base Rental Payments and any other amounts (including proceeds of the sale of the Bonds)
held in the Base Rental Payment Fund, the Reserve Fund, the Interest Fund, the Principal Fund and
the Redemption Fund are hereby pledged to secure the payment of the principal of, premium, if any,
and interest on the Bonds in accordance with their terms, the provisions of this Indenture and the Act.
Said pledge shall constitute a first lien on such assets.
All obligations of the Authority under this Indenture shall be special obligations of the
Authority, payable solely from Rental Payments and the other assets pledged therefor hereunder;
provided, however, that all obligations of the Authority under the Bonds shall be special obligations
of the Authority, payable solely from Base Rental Payments and the other assets pledged therefor
hereunder. Neither the faith and credit nor the taxing power of the Authority, the City or the State of
California, or any political subdivision thereof, is pledged to the payment of the Bonds.
Section 5.02Flow of Funds.
(a)The Trustee shall establish and maintain separate funds designated the “Base
Rental Payment Fund,” the “Interest Fund,” the “Principal Fund” and the “Redemption Fund.” If
Additional Bonds are issued, the Trustee shall establish subaccounts within each fund for each Series
of Additional Bonds.
All Base Rental Payments shall be paid directly by the City to the Trustee, and if
received by the Authority at any time shall be transferred by the Authority with the Trustee within
one Business Day after the receipt thereof. All Base Rental Payments received by the Trustee shall
be deposited by the Trustee in the Base Rental Payment Fund.
(b)The Trustee shall transfer the amounts on deposit in the Base Rental Payment
Fund, at the times and in the manner hereinafter provided, to the following respective funds:
(1)Interest Fund. On the Business Day immediately preceding each
Interest Payment Date, the Trustee shall transfer from the Base Rental Fund to the Interest Fund the
amount, if any, necessary to cause the amount on deposit in the Interest Fund to be equal to the
interest due on the Bonds on such Interest Payment Date. Moneys in the Interest Fund shall be used
by the Trustee to pay interest due on the Bonds on each Interest Payment Date.
(2)Principal Fund. On the Business Day immediately preceding each
May 1, commencing May 1, 2017, the Trustee shall transfer from the Base Rental Fund to the
Principal Fund the amount, if any, necessary to cause the amount on deposit in the Principal Fund to
be equal to the principal amount of the Bonds due on such May1 either as a result of the maturity
thereof or mandatory sinking fund redemption payments required to be made with respect thereto.
Moneys in the Principal Fund shall be used by the Trustee for the purpose of paying the principal of
the Bonds when due and payable at their maturity dates or upon earlier mandatory sinking fund
redemption.
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(3)Redemption Fund. The Trustee, on the redemption date specified in
the Written Request of the City filed with the Trustee at the time that any prepaid Base Rental
Payment is paid to the Trustee pursuant to the Lease Agreement, shall deposit in the Redemption
Fund that amount of moneys representing the portion of the Base Rental Payments designated as
prepaid Base Rental Payments. Additionally, the Trustee shall deposit in the Redemption Fund any
amounts required to be deposited therein pursuant to Section5.03 or Section5.04 hereof. Moneys in
the Redemption Fund shall be used by the Trustee for the purpose of paying the principal of and
interest and premium, if any, on 2016Bonds redeemed pursuant to the provisions of subsections (a)
and (b) of Section4.01 hereof and Additional Bonds redeemed pursuant to the corresponding
provisions of the Supplemental Indenture pursuant to which such Additional Bonds are issued.
Section 5.03Application ofNet Insurance Proceeds. If the Leased Propertyor any
portion thereof shall be damaged or destroyed, subject to the further requirements of this Section, the
City shall, as expeditiously as possible, continuously and diligently prosecute or cause to be
prosecuted the repair or replacement thereof, unless the City elects not to repair or replace the Leased
Propertyor the affected portion thereof in accordance with the provisions hereof.
The Net Insurance Proceeds (other than Net Insurance Proceeds of rental interruption
insurance), including the proceeds of any self-insurance, received on account of any damage or
destruction of the Leased Propertyor a portion thereof shall as soon as possible be deposited with the
Trustee and be held by the Trustee in a special account and made available for and, to the extent
necessary, shall be applied to the cost of repair or replacement of the Leased Propertyor the affected
portion thereof upon receipt of a Written Request of the City, together with invoices therefor.
Pending such application, such proceeds may be invested by the Trustee as directed by the City in
Permitted Investments that mature not later than such times moneys are expected to be needed to pay
such costs of repair or replacement.
Notwithstanding theforegoing, the City shall, within 60 days of the occurrence of the event
of damage or destruction, notify the Trustee in writing as to whether the City intends to replace or
repair the Leased Propertyor the portions of the Leased Propertywhich were damaged or destroyed.
If the City does intend to replace or repair the Leased Propertyor portions thereof, the City shall
deposit with the Trustee the full amount of any insurance deductible to be credited to the special
account.
In the event of any damage to or destruction of the Leased Propertycaused by one of the
perils covered by the insurance required by Section 5.01(c) of the Lease Agreement which would
result in an abatement of rental payments or any portion thereof pursuant to Section 3.06 thereof,
then the City shall direct the Trustee in writing to apply the Net Insurance Proceeds (other than Net
Insurance Proceeds of rental interruption insurance), together with other legally available funds that
the City elects to contribute, to the repair, reconstruction or replacement of the damaged or destroyed
portions of the Leased Property; provided, however, that the City shall not be required to repair or
replace any portion of the Leased Propertypursuant to this Section 5.03 ifsuch Net Insurance
Proceeds, together with any other amounts held under this Indenture and any other legally available
funds made available by the City at its election, are sufficient to prepay (i) all of the Outstanding
Bonds, or (ii) a portion of the Outstanding Bonds such that the resulting Base Rental Payments under
Section 4.01(a) in any Rental Period following such partial prepayment are sufficient to pay in such
Rental Period the principal of and interest on all Bonds to remain Outstanding immediately after such
partial redemption. If the City is not required to replace or repair the Leased Property, or the affected
portion thereof, or to use such amounts to redeem Bonds, in each case as set forth in this Section
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5.03, then such proceeds (and rentalinterruption insurance proceeds not applied pursuant to the next
paragraph) shall, if there is first delivered to the Trustee a Written Certificate of the City to the effect
that the annual fair rental value of the Leased Propertyafter such damage or destruction, and after
any repairs or replacements made as a result of such damage or destruction, is at least equal to 100%
of the maximum amount of Base Rental Payments becoming due under the Lease Agreement in the
then current Rental Period or any subsequent Rental Period and the fair replacement value of the
Leased Propertyafter such damage or destruction is at least equal to the principal amount of the
Outstanding Bonds, be deposited upon written direction of the City to the Trustee into the Reserve
Fundto the extent that the amount therein is less than the Reserve Requirementand following such
deposit shall be paid to the City to be used for any lawful purpose.
Proceeds of rental interruption insurance shall be applied to the payment of Base Rental
Payments to the extent of any abatement thereof pursuant to the Lease Agreement, and otherwise as
directed in writing by the City.
The proceeds of any award in eminent domain received in respect to the Leased Property
shall be deposited by the Trustee in the Redemption Fund and applied to the redemption of Bonds
pursuant to subsection (a) of Section4.01 hereof and the corresponding provisions of any
Supplemental Indenture pursuant to which Additional Bonds are issued.
Section 5.04Title Insurance. Proceeds of any policy of title insurance received by the
Trustee in respect of the Leased Property shall be applied and disbursed by the Trustee as follows:
(a)if the City determines that the title defect giving rise to such proceeds has not
substantially interfered with its useand occupancy of the Leased Propertyand will not result in an
abatement of Rental Payments payable by the City under the Lease Agreement, upon written
direction of the City such proceeds shall be remitted to the City and used for any lawful purpose
thereof; or
(b)if the City determines that the title defect giving rise to such proceeds has
substantially interfered with its use and occupancy of the Leased Propertyand will result in an
abatement of Rental Payments payable by the City under the Lease Agreement, then upon written
direction of the City the Trustee shall deposit such proceeds in the Redemption Fund and such
proceeds shall be applied to the redemption of Bonds in the manner provided in subsection (a) of
Section4.01 hereof and the corresponding provisions of any Supplemental Indenture pursuant to
which Additional Bonds are issued.
Section 5.05Reserve Fund.
(a)The Trustee shall establish and maintain as security solely for the 2016Bonds
a separate fund designated the “Reserve Fund” and may establish separate accounts therein as
security for Additional Bonds pursuant to a Supplemental Indenture to the extent provided in Section
3.06 hereof. On the Closing Date there shall be deposited in the Reserve Fund the amount set forth
in Section 3.02 andshall draw upon the ReserveFundin accordance with this Section5.05. The
Authority may substitute aCredit Facility for all or part of the moneys on deposit in the Reserve
Fund by depositing such Credit Facility with the Trustee so long as, at the time of such substitution,
the amount on deposit in the Reserve Fund, together with the amount available under all Credit
Facilities, shall be at least equal to the Reserve Requirement. Moneys for which a Credit Facility has
been substituted as provided herein shall be transferred, at the election of the Authority, to the
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Redemption Fund or, upon receipt of an Opinion of Counsel that such transfer will not, in and of
itself, adversely affect the exclusion of interest on the Bonds from gross income for federal income
tax purposes, to a special account to be held by the Trustee and applied to the payment of capital
costs of the City.
(b)Amounts on deposit in the Reserve Fund which were not derived from
payments under aCredit Facility credited to the Reserve Fund to satisfy a portion of the Reserve
Requirement shall be used and withdrawn by the Trustee prior to using and withdrawing any
amounts derived from payments under anyCredit Facility. In order to accomplish such use and
withdrawal of such amounts not derived from payments under aCredit Facility, the Trustee shall, as
and to the extent necessary, liquidate any investments purchased with such amounts.
(c)At least five (5) Business Days immediately preceding any Interest Payment
Date, the Trustee shall ascertain the necessity for a claim under anyCredit Facility in accordance
with the terms of Section 5.05(a) hereof, and shall provide notice to the provider of any Credit
Facility at least five (5) Business Days prior to each date upon which interest or principal is due on
the 2016Bonds.
Whether or not Base Rental Payments are then in abatement, if five (5) Business
Days immediately preceding any Interest Payment Date, the moneys available in the Base Rental
Payment Fund do not equal the amount of the principal of and interest on the 2016Bonds then
coming due and payable, the Trustee first shall apply the moneys available in the Reserve Fund to
make delinquent or abated Base Rental Payments on behalf of the Authority by transferring the
amount necessary for such purpose to the Base Rental Payment Fund. All cash and investments in
the Reserve Fund shall be transferred to the Base Rental Payment Fund before any drawing shall be
made on the Credit Facility. The Trustee shall take whatever action is necessary to liquidate or draw
upon investments of funds held in the Reserve Fund or draw upon aCredit Facility to make such
funds available for application as provided hereunder on the Interest Payment Date.
Draws on all Credit Facilities on which there is available coverage shall be made on a
pro-rata basis (calculated by reference to the coveragethen available thereunder) after applying all
available cash and investments in the Reserve Fund. “Available coverage” means the coverage then
available for disbursement pursuant to the terms of theapplicable Credit Facilities without regard to
the legal or financial ability or willingness of the provider of such instrument to honor a claim or
draw thereon or the failure of such provide to honor any such claim or draw.
Repayment of draws under a Credit Facilityand payment of expenses and accrued
interest thereon as set forth therein(collectively, “Policy Costs”) shall shall be made on a pro-rata
basis prior to replenishment of any cash drawn from the Reserve Fund.
Amounts in respect of Policy Costs paid to the provider of a Credit Facilityshall be
credited first to interest due, then to the expenses due and then to principal due. As and to the extent
that payments are made to a Credit Provideron account of principal drawn on a Credit Facility, the
coverage under the Credit Facilitywill be increased by a like amount, subject to the terms of the
Credit Facility.
All cash and investments in the Reserve Fund established solely for the 2016Bonds
and all other available amounts in any funds available to pay debt service on the 2016Bonds shall be
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transferred to the Revenue Fund for payment of the debt service on the 2016Bonds before any
drawing may be made on any Credit Facility.
Payment of any Policy Cost shall be made prior to replenishment of any cash
amounts. Draws on all Credit Facilitieson which there is available coverage shall be made on a pro-
rata basis (calculated by reference to the coverage then available thereunder) after applying all
available cash and investments in the Reserve Fund. Payment of Policy Costs and reimbursement of
amounts with respect to other Credit Facilitiesshall be made on a pro-rata basis prior to
replenishment of any cash drawn from the Reserve Fund. For the avoidance of doubt, “available
coverage” means the coverage then available for disbursement pursuant to the terms of the applicable
Credit Facilityavailable for disbursement pursuant to the terms of the applicable Credit Facility
without regard to the legal or financial ability or willingness of the providerof such instrument to
honor a claim or draw thereon or the failure of such provider to honor any such claim or draw.
The Policy Limit shall automatically and irrevocably be reduced from time to time by
the amount of each reduction in the Reserve Requirement.
If the Authority shall fail to pay any Policy Costs in accordance with the
requirements hereof, the provider of a Credit Facilityshall be entitled to exercise any and all legal
and equitable remedies available to it, including those provided hereunder, other than remedies which
would adversely affect owners of the 2Bonds. This Indenture and the Lease Agreement shall not be
discharged or terminated prior to May 1, 2036(or such later date to which the Lease Term may be
extended by its terms ) until all Policy Costs owing the provider of each Credit Facilityshall have
been paid in full. The Authority’s obligation to pay such amounts shall expressly survive payment in
full of theBonds.
Moneys, if any, on deposit in the Reserve Fund (or the applicable account therein)
shall be withdrawn and applied by the Trustee for the final payment or payments of principal of and
interest on the2016 Bonds, or the applicable account thereinrelated to any Additional Bonds,
respectively.
(d)In the event of any transfer from the Reserve Fund or the making of any claim
under a Credit Facility, the Trustee shall, within five days thereafter, provide written notice to the
Authority and the City of the amount and the date of such transfer or claim.
(e)If the sum of the amount on deposit in the Reserve Fund, plus the amount
available under all available Credit Facilities, is less than the Reserve Requirement, the first of Base
Rental Payments thereafter received from the City under the Lease Agreement and not needed to pay
the principal, if any, of and interest on the Bonds scheduled to be paid on the following Interest
Payment Date shall be used to increase the amount on deposit in the Reserve Fund to an amount
which, when added to the amount available under all available Credit Facilities, shall equal the
Reserve Requirement.
(f)So long as no event of default hereunder shall have occurred and be
continuing, any amount in the Reserve Fund (or the applicable account therein)in excess of the
Reserve Requirement (or applicable reserve requirement) on April 15and October 15of each year
shall be withdrawn from the Reserve Fund (or the applicable account therein)by the Trustee and
such amount shall be deposited in the Base Rental Fund.
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(g)In no event shall amounts in the Reserve Fund (exclusive of accounts therein,
which shall be applied in accordance with the terms of the Supplemental Indenture providing for
Additional Bonds) be applied to payment of any Bonds other than 2016Bonds.
Section 5.06Rebate Fund.
(a)The Trustee shall establish and maintain a special fund designated the
“Rebate Fund.” There shall be deposited in the Rebate Fund such amounts as are required to be
deposited therein pursuant to the Tax Certificate, as specified in a Written Request of the Authority.
All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent
required to satisfy the Rebate Requirement, for payment to the United States of America.
Notwithstanding defeasance of the Bonds pursuant to ArticleX hereof or anything to the contrary
contained herein, all amounts required to be deposited into or on deposit in the Rebate Fund shall be
governed exclusively by this Section and by the Tax Certificate (which is incorporated herein by
reference). The Trustee shall be deemed conclusively to have complied with such provisions if it
follows the written directions of the Authority, and shall have no liability or responsibility to enforce
compliance by the Authority with the terms of the Tax Certificate. The Trustee may conclusively
rely uponthe Authority’s determinations, calculations and certifications required by the Tax
Certificate. The Trustee shall have no responsibility to independently make any calculation or
determination or to review the Authority’s calculations.
(b)Any funds remaining in the Rebate Fund after payment in full of all of the
Bonds and after payment of any amounts described in this Section, shall be withdrawn by the Trustee
and remitted to the Authority.
Section 5.07Investment of Moneys. Except as otherwise provided herein, all moneys in
any of the funds or accounts established pursuant to this Indenture and held by the Trustee shall be
invested by the Trustee solely in Permitted Investments, as directed in writing by the Authority.
Moneys in all funds and accounts held by the Trustee shall be invested in Permitted Investments
maturing not later than the date on which it is estimated that such moneys will be required for the
purposes specified in this Indenture; provided, however, that Permitted Investments in which moneys
in the Reserve Fund are so invested shall mature no later than the earlier of five years from the date
of investment or the final maturity date of the Bonds and, provided, further, that if such Permitted
Investments may be redeemed at par so as to be available on each Interest Payment Date, any amount
in the Reserve Fund may be invested in such redeemable Permitted Investments maturing on any date
on or prior to the final maturity date of the Bonds. Absent timely written direction from the
Authority, the Trustee shall hold any funds held by it in Permitted Investments of the type described
in paragraph (7) of such definition.
Subject to the provisions of Section5.07 hereof, all interest, profits and other income
received from the investment of moneys in any fund or account established pursuant to this Indenture
shall be retained in such fund or account.
Permitted Investments acquired as an investment of moneys in any fund established under
this Indenture shall be credited to such fund. For the purpose of determiningthe amount in any fund,
all Permitted Investments credited to such fund shall be valued by the Trustee at the fair market value
thereof, such valuation to be performed not less frequently than semiannually on or before each April
15 and October15. In determining fair market value, the Trustee may use and rely conclusively on
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any generally recognized securities pricing service available to it (including brokers and dealers in
securities).
The Trustee may act as principal or agent in the making or disposing of any investment.
Upon the Written Request of the Authority, the Trustee shall sell or present for redemption any
Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any
required payment, transfer, withdrawal or disbursement from the fund to which such Permitted
Investments is credited, and the Trustee shall not be liable or responsible for any loss resulting from
any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may
commingle moneys in any of the funds and accounts established hereunder.
The Trustee may make any investments hereunder through the bond or investment
department or trust investment department of the entity acting as Trustee hereunder, or those of such
entity’s parent or any affiliate, and such entity, or its parent or affiliate, as applicable, shall be entitled
to its normal, customary and reasonable compensation for such services.
The entity acting as Trustee hereunder, or any of its affiliates, may act as sponsor, advisor or
manager in connection with any investments made by the Trustee hereunder and such entity, or its
affiliate, as applicable, shall be entitled to its normal, customary and reasonable compensation for
such services.
The Authority and the City acknowledge that, to the extent regulations of the Comptroller of
the Currency or other applicable regulatory entity grant the Authority and the City the right to receive
brokerage confirmations of security transactions as they occur, at no additional cost, the Authority
and the City specifically waive receipt of such confirmations to the extent permitted by law.
ARTICLE VI
COVENANTS
Section 6.01Compliance with Agreements. The Trustee will not authenticate or deliver
any Bonds in any manner other than in accordance with the provisions hereof, and the Authority and
the City will not suffer or permit any default by them to occur hereunder, but will faithfully comply
with, keep, observe and perform all the agreements, conditions, covenants and terms hereof required
to be complied with, kept, observed and performed by them.
Section 6.02Compliance with Site Leaseand Lease Agreement. The Authority and the
City will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants
and terms contained in the Site Leaseand the Lease Agreement required to be complied with, kept,
observed and performed by them and, together with the Trustee, will enforce the Site Leaseand the
Lease Agreement against the other party thereto in accordance with their respective terms.
Section 6.03Observance of Laws and Regulations. The Authority, the City and the
Trustee will faithfully comply with, keep, observe and perform all valid and lawful obligations or
regulations now or hereafter imposed on them by contract, or prescribed by any law of the United
States of America or of the State of California, or by any officer, board or commission having
jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right
or privilege now owned or hereafter acquired by them, including their right to exist and carry on their
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respective businesses, to the end that such franchises, rights and privileges shall be maintained and
preserved and shall not become abandoned, forfeited or in any manner impaired.
Section 6.04Other Liens. The City will keep the Leased Propertyand all parts thereof
free from judgments and materialmen’s and mechanics’ liens and free from all claims, demands,
encumbrances and other liens of whatever nature or character, and free from any claim or liability
which materially impairs the City in conducting its business or utilizing the Leased Property, and the
Trustee at its option (after first giving the City ten days’ written notice to comply therewith and
failure of the City to so comply within such ten-day period) may, but is in no event obligated to,
defend against any and all actions or proceedings, or may pay or compromise any claim or demand
asserted in any such actions or proceedings; provided, however, that, in defending against any such
actions or proceedings or in paying or compromising any such claims or demands, the Trustee shall
not in any event be deemed to have waived or released the City from liability for or on account of
any of its agreements and covenants contained herein, or from its liability hereunder and to perform
such agreements and covenants.
So long as any Bonds are Outstanding, none of the Trustee, the Authority or the City shall
create or suffer to be created any pledge of or lien the amounts on deposit in any of the funds or
accounts createdhereunder, other than the pledge and lien hereof.
The Authority, the City and the Trustee shall not encumber the Leased Propertyother than in
accordance with the Site Lease, the Lease Agreement, the Indenture and the Assignment Agreement.
Section 6.05Prosecution andDefense of Suits. The City will promptly, upon request of
the T rustee (which request the Trustee is not required to make), take such action from time to time as
may be necessary or proper to remedy or cure any cloud upon or defect in the title to the Leased
Propertyor any part thereof, whether now existing or hereafter developing, will prosecute all actions,
suits or other proceedings as may be appropriate for such purpose and will indemnify and save the
Trustee harmless from all cost, damage, expense orloss, including attorneys’ fees and expenses,
which it or the Owners may incur by reason of any such cloud, defect, action, suit or other
proceeding.
Section 6.06Accounting Records and Statements. The Trustee will keep proper
accounting records in which complete andcorrect entries shall be made of all transactions made by
the Trustee relating to the receipt, deposit and disbursement of the Base Rental Payments, and such
accounting records shall be available for inspection by the Authority and the City at reasonable hours
and under reasonable conditionsupon reasonable prior notice.
Section 6.07Recordation and Filing. The City will record, or cause to be recorded, with
the San Diego County Recorder, the Lease Agreement, the Site Leaseand the Assignment
Agreement, or memoranda thereof.
Section 6.08Tax Covenants.
(a)Neither the Authority nor the City will take any action, or fail to take any
action, if such action or failure to take such action would adversely affect the exclusion from gross
income of interest on any tax-exempt Bonds under Section103 of the Code. Without limiting the
generality of the foregoing, the Authority and the City will comply with the requirements of the Tax
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Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive
payment in full or defeasance of the Bonds.
(b)In the event that at any time the Authority is of the opinion that for purposes
of this Section it is necessary or helpful to restrict or limit the yield on the investment of any moneys
held by the Trustee in any of the funds or accounts established hereunder, the Authority shall so
instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in
accordance with such instructions.
(c)Notwithstanding any provisions of this Section, if the Authority shall provide
to the Trustee an Opinion of Counsel to the effect that any specified action required under this
Section is no longer required or that some further or different action is required to maintain the
exclusion from federal income tax of interest on the Bonds, the Trustee may conclusively rely on
such opinion in complying with the requirements of this Section and of the Tax Certificate, and the
covenants hereunder shall be deemed to be modified to that extent.
Section 6.09Continuing Disclosure. The City will comply with and carry out all of the
provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this
Indenture, failure of the City to comply with the Continuing Disclosure Agreement shall not
constitute an event of default hereunder; provided, however, that the Trustee may (and, at the written
direction of any Participating Underwriter or the holders of at least 25% of the aggregate principal
amount of Outstanding Bonds, and upon being indemnified to its reasonable satisfaction therefor,
shall) or any holder or Beneficial Owner of the Bonds may take such actions as may be necessary
and appropriate to compel performance, including seeking mandate or specific performance by court
order.
Section 6.10Further Assurances. Whenever and so oftenas requested to do so by the
Trustee, the Authority and the City will promptly execute and deliver or cause to be executed and
delivered all such other and further assurances, documents or instruments and promptly do or cause
to be done all such other andfurther things as may be necessary or reasonably required in order to
further and more fully vest in the Trustee all advantages, benefits, interests, powers, privileges and
rights conferred or intended to be conferred upon it hereby or by the Assignment Agreement, the Site
Leaseor the Lease Agreement.
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01Action on Default. If an event of default (within the meaning of ArticleVI
of the Lease Agreement) shall happen, then such event of default shall constitute an event of default
hereunder. The Trustee shall give notice, as assignee of the Authority, of an event of default under
the Lease Agreement to the City. In each and every case during the continuance of an event of
default, the Trustee may, and upon being indemnified to its reasonable satisfaction therefor, shall,
upon notice in writing to the City and the Authority, exercise any of the remedies granted to the
Authority under the Lease Agreement and, in addition, take whatever action at law or in equity may
appearnecessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement
or to protect and enforce any of the rights vested in the Trustee or the Owners by this Indenture or by
the Bonds, either at law or in equity or in bankruptcy orotherwise, whether for the specific
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enforcement of any covenant or agreement or for the enforcement of any other legal or equitable
right, including any one or more of the remedies set forth in Section7.02 hereof.
Section 7.02Other Remedies of the Trustee. Subject to the provisions of Section7.01
hereof, the Trustee shall have the right:
(a)by mandamus or other action or proceeding or suit at law or in equity to
enforce its rights against the Authority or the City or any member, director, officer or employee
thereof, and to compel the Authority or the City or any such member, director, officer or employee to
perform or carry out its or his or her duties under law and the agreements and covenants required to
be performed by it or him or her contained herein;
(b)by suit in equity to enjoin any acts or things which are unlawful or violate the
rights of the Trustee; or
(c)by suit in equity upon the happening of any event of default hereunder to
require the Authority and the City to account as the trustee of an express trust.
Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment or composition
affecting the Bonds or the rights of any Owner thereof, or to authorize the Trustee to vote in respect
of the claim of any Owner in any such proceeding without the approval of the Owners so affected.
Section 7.03Non-Waiver. A waiver of any default or breach of duty or contract by the
Trustee shall not affect any subsequent default orbreach of duty or contract or impair any rights or
remedies on any such subsequent default or breach of duty or contract. No delay or omission by the
Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall
impair any such right or remedy or shall be construed to be a waiver of any such default or breach of
duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee by
law or by this Article may be enforced and exercised from time to time and as often the Trustee shall
deem expedient.
If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned
or determined adversely to the Trustee or any Owner, then subject to any adverse determination, the
Trustee, such Owner, the Authority and the City shall be restored to their former positions, rights and
remedies as if such action, proceeding or suit had not been brought or taken.
Section 7.04Remedies Not Exclusive. Subject to the provisions of Section7.01 hereof,
no remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other
remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be
exercised without exhausting and without regard to any other remedy conferred by any law. The
assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 7.05No Liability by the Authority to the Owners. Except as expressly provided
herein, the Authority shall not have any obligation or liability to the Owners with respect to the
payment when due of the Base Rental Payments by the City, or with respect to the performance by
the City of the other agreements and covenants required to be performed by it contained in the Lease
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Agreement or herein, or with respect to the performance by the Trustee of any right orobligation
required to be performed by it contained herein.
Section 7.06No Liability by the City to the Owners. Except for the payment when due
of the Base Rental Payments and the performance of the other agreements and covenants required to
be performed by it contained in the Lease Agreement, the Site Leaseor herein, the City shall not
have any obligation or liability to the Owners with respect to the Trust Indenture or the preparation,
execution, delivery or transfer of the Bonds or the disbursement of the Base Rental Payments by the
Trustee to the Owners, or with respect to the performance by the Trustee of any right or obligation
required to be performed by it contained herein.
Section 7.07No Liability of the Trustee to the Owners. Except as expressly provided
herein, the Trustee shall not have any obligation or liability to the Owners with respect to the
payment when due of the Base Rental Payments by the City, or with respect to the performance by
the Authority or the City of the other agreements and covenants required to be performed by them
contained in the Lease Agreement, the Site Leaseor herein.
Section 7.08Application of Amounts After Default. All payments received by the
Trustee with respect to the rental of the Leased Propertyafter a default by the City pursuant to
ArticleVI of the Lease Agreement (including, without limitation, any proceeds received in
connection with the sale, assignment or sublease of the Authority’s right, title and interest in the Site
Lease), and all damages or other payments received by the Trustee for the enforcement of any rights
and powers of the Trustee under ArticleVI of the Lease Agreement, shall be deposited into the Base
Rental Payment Fund and as soon as practicable thereafter applied, together with all other funds held
hereunder (except funds in the Rebate Fund):
(a)to the payment of all amounts due the Trustee under ArticleVIII hereof;
(b)to the payment of all amounts then due for interest on the Bonds, in respect of
which, or for the benefit of which, money has been collected (other than Bonds which have become
payable prior to such event of default and money for the payment of which is held by the Trustee),
ratably without preference or priority of any kind, according to the amounts of interest on such Bonds
due and payable; and
(c)to the payment of all amounts then due for principal of the Bonds, in respect
of which, or for the benefit of which, money has been collected (other than Bonds which have
become payable prior to such event of default and money for the payment of which is held by the
Trustee), ratably without preference or priority of any kind, according to the amounts of principal of
such Bonds due and payable.
Section 7.09Trustee May Enforce Claims Without Possession of Bonds. All rights of
action and claims under this Indenture or the Bonds may be prosecuted and enforced by the Trustee
without the possession of any of the Bonds or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefitof the Owners in respect of which such judgment has been
recovered.
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Section 7.10Limitation on Suits. No Owner of any Bond shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a
receiver orTrustee, or for any other remedy hereunder, unless (a)such Owner shall have previously
given written notice to the Trustee of a continuing event of default, (b)the Owners of not less than
25% of the aggregate principal amount of Bonds then Outstanding shall have made written request to
the Trustee to institute proceedings in respect of such event of default in its own name as Trustee
hereunder, (c)such Owner or Owners shall have afforded to the Trustee indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with
such request, (d)the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such proceedings, and (e)no directioninconsistent with
such written request shall have been given to the Trustee during such 60 day period by the Owners of
a majority of the aggregate principal amount of Bonds then Outstanding; it being understood and
intended that no one or more Owners shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other
Owner, or to obtain or seek to obtain priority or preference over any other Owner or to enforceany
right under this Indenture, except in the manner herein provided and for the equal and ratable benefit
of all the Owners
ARTICLE VIII
THE TRUSTEE
Section 8.01Employment of the Trustee. The Authority hereby appoints and employs
the Trustee to receive, deposit and disburse the Base Rental Payments, to authenticate, deliver and
transfer the Bonds and to perform the other functions contained herein, all in the manner provided
herein and subject to the conditions and terms hereof. By executing and delivering this Indenture,
theTrustee accepts the appointment and employment hereinabove referred to and accepts the rights
and obligations of the Trustee provided herein, subject to the conditions and terms hereof. Other
than when an event of default has occurred and is continuing, the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee. In case an event of default has
occurred andis continuing, the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs. The Trustee hereby
covenants and agrees that it will not encumber the Leased Property, other than Permitted
Encumbrances.
Section 8.02Duties, Removal and Resignation of the Trustee. The Authority may, by
an instrument in writing, remove the Trustee initiallya party hereto and any successor thereto unless
an event of default shall have occurred and then be continuing, and, shall remove the Trustee initially
a party hereto and any successor thereto if at any time (a)requested to do so by an instrument or
concurrent instruments in writing signed by the Owners of a majority of the aggregate principal
amount of Bonds at the time Outstanding (or their attorneys duly authorized in writing), or (b)the
Trustee shall cease to be eligible in accordance with the following sentence, and shall appoint a
successor Trustee. The Trustee and any successor Trustee shall be: (i) a national banking association
in good standing authorized to exercise trust powers or having the powers of a trust company and
duly authorized to exercise trust powers within the State having a combined capital and surplus of at
least $250,000,000, and subject to supervision or examination by federal or state authority, or (ii) a
state-chartered commercial bank that is a member of the Federal Reserve System having at least
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$1,000,000,000 of assets. If such entity 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 thecombined capital and surplus of such entity shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published.
The Trustee may at any time resign by giving written notice of such resignation to the
Authorityandthe City and by giving notice, by first class mail, postage prepaid, of such resignation
to the Owners at their addresses appearing on the Registration Books. Upon receiving such notice of
resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing;
provided, however, that in the event the Authority does not appoint a successor Trustee within
30days following receipt of such notice of resignation, the resigning Trustee may, at the expense of
the Authority, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any
resignation or removal of a Trustee and appointment of a successor Trustee shall become effective
only upon acceptance of appointment by the successor Trustee.
Any corporation, association or agency into which the Trustee may be converted or merged,
or with which it may be consolidated, or to which it may sell or transfer its corporate trust business
and assets as a whole or substantially as a whole, or any corporation or association resulting from any
such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such
entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and
become successor trustee under this Indenture and vested with all the trusts, powers, discretions,
immunities, privileges and all other matters as was its predecessor, without the execution or filing of
any instrument or any further act, deed or conveyance on the part of any ofthe parties hereto,
anything herein to the contrary notwithstanding.
Section 8.03Compensation of the Trustee. The City shall from time to time, subject to
any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for
all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and
expenditures (which shall not include “overhead expenses” except as such expenses are included as a
component of the Trustee’s stated annual fees) hereunder, including but not limited to advances to
and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other
experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys
retained by the Trustee, employed by it in the exercise and performance of its rights and obligations
hereunder. The Trustee may take whatever legal actions are lawfully available to it directly against
the Authority or the City.
The City shall, to the extent permitted by law, indemnify and save the Trustee harmless
against any liabilities, costs, claims or expenses, including those of its attorneys, which it may incur
in the exercise and performance of its powers and duties hereunder, under the Lease Agreement, or in
connection with any document or transaction contemplated hereunder or thereunder, including the
enforcement of any remedies and the defense of any suit, and which are not due to its negligence or
its misconduct. The duty of the City to indemnify the Trustee shall survive the termination and
discharge of this Indenture and the earlier removal or resignation of the Trustee.
No provision of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers hereunder.
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Upon an Event of Default, and only upon an Event of Default, the Trustee shall have a first
lien with right of payment prior to payment on account of principal of and premium, if any, and
interest on any Bond, upon the trust estate for the foregoing fees, charges and expenses incurred by
it. When the Trustee incurs expenses or renders services after the occurrence of an Event of Default,
such expenses and the compensation for such services are intended to constitute expenses of
administration under any federal or state bankruptcy, insolvency, arrangement, moratorium,
reorganization or other debtor relief law.
Section 8.04Protection of the Trustee. The Trustee shall be protected and shall incur no
liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice,
request, requisition, resolution, statement, telegram, voucher, waiver or other paper or document
which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by
the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to
make any investigation or inquiry as to any statements contained or matters referred toin any such
instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy
of such statements. The Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Owners of the Bonds pursuant to
this Indenture, unless such Owners shall have offered to the Trustee security or indemnity,
reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction. The Trustee may consult with
counsel, who may be counsel to the Authority or the City, with regard to legal questions, and the
opinion of such counsel shall be full and complete authorization and protection in respect to any
action taken or suffered by it hereunder in good faith in accordance therewith.
The Trustee shall not be responsible for the sufficiency of the Bonds or the Lease Agreement,
or of the assignment made to it by the Assignment Agreement, or for statements made in any
preliminary or final official statement relating to the Bonds, or of the title to the Leased Property.
Whenever in the administration of its rights and obligations hereunder the Trustee shall deem
it necessary or desirable that a matter be proved or established prior to taking or suffering any action
hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a Written Certificate of the City or a
Written Certificate of the Authority, and such certificate shall be full warrant to the Trustee for any
action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the
Trustee may,in lieu thereof, accept other evidence of such matter or may require such additional
evidence as it deems reasonable.
The Trustee may buy, sell, own, hold and deal in any of the Bonds and may join in any action
which any Owner may be entitled to take withlike effect as if the Trustee were not a party hereto.
The Trustee, either as principal or agent, may also engage in or be interested in any financial or other
transaction with the Authority or the City, and may act as agent, depository or trustee for any
committee or body of Owners or of owners of obligations of the Authority or the City as freely as if
it were not the Trustee hereunder.
The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers
hereof and perform any rightsand obligations required of it hereunder by or through agents,
attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its
rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or
misconduct of any such agent, attorney or receiver selected by it with reasonable care; provided,
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however, that in the event of any negligence or misconduct of any such attorney, agent or receiver,
the Trustee shall in a commercially reasonable manner pursue all remedies of the Trustee against
such agent, attorney or receiver. The Trustee shall not be liable for any error of judgment made by it
in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent
facts.
The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for
anything whatsoever in connection with the funds established hereunder, except only for its own
willful misconduct, negligence or breach of an obligation hereunder.
The Trustee shall not be deemed to have knowledge of an event of default unless it has actual
knowledge thereof.
The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which the
Authority or the City is a party and which, in the opinion of the Trustee and its counsel, affects the
Bonds or the security therefor, and shall do so if requested in writing by the Owners of at least 5% of
the aggregate principal amount of Bonds then Outstanding, provided the Trustee shall have no duty
to take such action unless it has been indemnified to its reasonable satisfaction against all risk or
liability arising from such action.
The Trustee’s rights to immunities and protection from liability hereunder and its rights to
payment of its fees and expenses shall survive its resignation or removal and final payment or
defeasance of the Bonds.
All indemnifications and releases from liability granted herein to the Trustee shall extend to
the directors, officers, employees and agents of the Trustee.
The permissive right of the Trustee to do things enumerated in this Indenture shall not be
construed as a duty, and the Trustee shall not be answerable for other than its negligence or willful
default. The Trustee shall have no responsibility or liability with respect to any information,
statements or recitals in any offering memorandum or other disclosure material prepared or
distributed with respect to the issuance of these Bonds. The Trustee shall not be accountable for the
use or application by theBorrower of any of the Bonds or the proceeds thereof or for the use or
application of any money paid over by the Trustee in accordance with the provisions of this
Indenture or for the use and application of money received by any paying agent.
The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture
sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods;
provided, however, that the Trustee shall have received an incumbency certificate listing persons
designated to give such instructions or directions and containing specimen signatures of such
designated persons, which such incumbency certificate shall be amended and replaced whenever a
person is to be added or deleted from the listing. If the Authority or the City elects to give the
Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the
Trustee in its discretion elects to act upon such instructions, the Trustee’s understandingof such
instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or
expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such
instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written
instruction. The Authority and the City agree to assume all risks arising out of the use of such
electronic methods to submit instructions and directions to the Trustee, including, without limitation,
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the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by
third parties.
In acting or omitting to act pursuant to the Lease Agreement or Site Lease, the Trustee shall
be entitled to all of the rights, immunitiesand indemnities accorded to it under this Indenture and the
Lease Agreement, including, but not limited to, this ArticleVIII.
ARTICLE IX
MODIFICATION OR AMENDMENTS
Section 9.01Modifications and Amendments Permitted.
(a)This Indenture and the rights and obligations of the Authority, the City, the
Owners of the Bonds and the Trustee may be modified or amended from time to time and at any time
by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into with the
written consent of the Owners of a majority in aggregate principal amount of all Bonds then
Outstanding, which shall have been filed with the Trustee. No such modification or amendment shall
(i)extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or the rate of
interest thereon, or extend the time of payment, without the consent of the Owner of each Bond so
affected, or (ii)reduce the aforesaid percentage of Bonds the consent of the Owners of which is
required to effect any such modification or amendment, or (iii)permit the creation of any lien on the
Base Rental Payments and other assets pledged under this Indenture prior to or on a parity with the
lien created by this Indenture or deprive the Owners of the Bonds of the lien created by this Indenture
on such Base Rental Payments and other assets (except as expressly provided in this Indenture),
without the consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary for
the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it
shall be sufficient if such consent shall approve the substance thereof.
(b)This Indenture and the rights and obligations of the Authority, the City, the
Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any
time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into
without the consent of any Bond Owners for any one or more of the following purposes:
(1)to add to the covenants and agreements of the Authority or the City in
this Indenture contained other covenants and agreements thereafter to be observed, to pledge or
assign additional security for the Bonds (or any portion thereof), or to surrender any right or power
herein reserved to or conferred upon the Authority or the City;
(2)to make such provisions for the purpose of curing any ambiguity,
inconsistency or omission, or of curing or correcting any defective provision contained in this
Indenture;
(3)to provide for the issuance of one or more Series of Additional Bonds,
and to provide the terms and conditions under which such Series of Additional Bonds may be issued,
subject to and in accordance with the provisions of ArticleIII hereof;
(4)to modify, amend or supplement this Indenture in such manner as to
permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar
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federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be
permitted by said act or similar federal statute;
(5)to modify, amend or supplement this Indenture in such manner as to
cause interest on the Bonds to be excludable from gross income for purposes of federal income
taxation by the United States of America; and
(6)in any other respect whatsoever as the Authority and the City may
deem necessary or desirable, provided that such modification or amendment does not materially
adversely affect the interests of the Bond Owners hereunder, in the opinion of Bond Counsel filed
with the Authority, the City and the Trustee.
(c)Promptly after the execution by the Authority, the City and the Trustee of any
Supplemental Indenture, the Trustee shall mail a notice (the form of which shall be furnished to the
Trustee by the Authority), by first class mail postage prepaid, setting forth in general terms the
substance of such Supplemental Indenture, to the Owners of the Bonds at the respective addresses
shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such Supplemental Indenture.
(d)No Supplemental Indenture shall modify any of the rights or obligations of
the Trustee without the Trustee’s prior written consent.
Section 9.02Effect of Supplemental Indenture. Upon the execution of any
Supplemental Indenture pursuant to this Article, this Indenture shall be deemed to be modified and
amended in accordance therewith, and the respective rights, duties and obligations under this
Indenture of the Authority, the City, the Trustee and all Owners of Bonds Outstanding shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such
modification and amendment, and all the terms and conditions of any such Supplemental Indenture
shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 9.03Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after
the execution of any Supplemental Indenture pursuant to this Article may, and if the Authority so
determines shall, bear a notation by endorsement or otherwise in form approved by the Authority and
the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and,
in that case, upon demand of the Owner of any Bonds Outstanding at the time of such execution and
presentation of his Bonds for the purpose at the Office of the Trustee a suitable notation shall be
made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to
conform, in the opinion of the Authority and the Trustee, to any modification or amendment
contained in such Supplemental Indenture, shall be prepared and executed by the Authority and
authenticated by the Trustee, and upon demand of the Owners of any Bonds then Outstanding shall
be exchanged at the Office of the Trustee, without cost to any Bond Owner, for Bonds then
Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amount of
the same interest rate and maturity.
Section 9.04Amendment of Particular Bonds. The provisions of this Article shall not
prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such
Owner.
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ARTICLE X
DEFEASANCE
Section 10.01 Discharge of Indenture. If the Authority shall pay or cause to be paid or
there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the
interest and premium, if any, thereon at the times and in the manner stipulated herein and therein,
then the Owners of such Bonds shall cease to be entitled to the pledge of the Base Rental and the
other assets as provided herein,and all agreements, covenants and other obligations of the Authority
and the City to the Owners of such Bonds hereunder shall thereupon cease, terminate and become
void and be discharged and satisfied. In such event, the Trustee shall execute and deliverto the
Authority andthe City all such instruments as may be necessary or desirable to evidence such
discharge and satisfaction, and the Trustee shall pay over or deliver to the City all money or
securities held by it pursuant hereto which are not required for the payment of the principal of and
interest and premium, if any, on such Bonds.
Subject to the provisions of the above paragraph, when any of the Bonds shall have been paid
and if, at the time of such payment, the Authority and the City shall have kept, performed and
observed all of the covenants and promises in such Bonds and in this Indenture required or
contemplated to be kept, performed and observed by them on or prior to that time, then this Indenture
shall be considered to have been discharged in respect of such Bonds and such Bonds shall cease to
be entitled to the lien of this Indenture and such lien and all covenants, agreements and other
obligations of the Authority and the City hereunder shall cease, terminate become void and be
completely discharged as to such Bonds.
Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this
Indenture in respect of any Bonds, those provisions of this Indenture relating to the maturity of the
Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of
mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-
presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall
remain in effect and shall be binding upon the Trustee and the Owners of the Bonds and the Trustee
shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for
the payment of the principal of and interest and premium, if any, on the Bonds, to pay to the Owners
of Bonds the funds so held by the Trustee as and when such payment becomes due. Notwithstanding
the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any
Bonds, those provisions of this Indenture relating to the compensation and indemnity of the Trustee
shall remain in effect and shall be binding upon the Trustee, the City and the Authority.
Section 10.02Bonds Deemed To Have Been Paid. If moneys shall have been set aside
and held by the Trustee for the payment or redemption of any Bonds and the interest thereon at the
maturity or redemption date thereof, such Bonds shall be deemed to have been paid within the
meaning and with the effect provided in Section10.01 hereof. Any Outstanding Bonds shall prior to
the maturity date or redemption date thereof be deemed to have been paid within the meaning of and
with the effect expressed in Section10.01 hereof if (a)in case any of such Bonds are to be redeemed
on any date prior to their maturity date, the Authority shall have given to the Trustee in form
satisfactory to it irrevocable instructions to mail, on a date in accordance with the provisions of
Section4.02 hereof, notice of redemption of such Bonds on said redemption date, said notice to be
given in accordance with Section4.02 hereof, (b)there shall have been deposited with the Trustee
either (i)money in an amount which shall be sufficient, or (ii)Federal Securities that are not subject
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to redemption other than at the option of the holder thereof, the interest on and principal of which
when paid will provide money which, together with the money, if any deposited with the Trustee at
the same time, shall, as verified by an independent certified public accountant, be sufficient to pay
whendue the interest to become due on such Bonds on and prior to the maturity date or redemption
date thereof, as the case may be, and the principal of and premium, if any, on such Bonds, and (c)in
the event such Bonds are not by their terms subject to redemption within the next succeeding
60days, the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions
to mail as soon as practicable, a notice to the owners of such Bonds that the deposit required by
clause(b) above has been made with the Trustee and that such Bonds, are deemed to have been paid
in accordance with this Section and stating the maturity date or redemption date upon which money
is to be available for the payment of the principal of and premium, if any, on such Bonds.
Section 10.03Payment of Bonds After Discharge of Indenture. Notwithstanding any
provisions of this Indenture, to the extent permitted by law, any moneys held by the Trustee in trust
for the payment of the principal of, or premium or interest on, any Bonds and remaining unclaimed
for two years after the date of deposit of such moneys, shall be repaid to the Authority (without
liability for interest) free from the trusts created by this Indenture, and all liability of the Trustee with
respect to such moneys shall thereupon cease; provided, however, that before the repayment of such
moneys to the Authority as aforesaid, the Trustee may (at the cost of the Authority) first mail, by first
class mail postage prepaid, to the Owners of Bonds which have not yet been paid, at the respective
addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by
the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions
relating to the repayment to the Authority of the moneys held for the payment thereof.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties. Nothing contained herein,
expressed or implied, is intended to give to any person other than the Authority, the City, the Trustee
and the Ownersany claim, remedy or right under or pursuant hereto, and any agreement, condition,
covenant or term required herein to be observed or performed by or on behalf of the Authority or the
City shall be for the sole and exclusive benefit of the Trustee and theOwners.
Section 11.02Successor Deemed Included in all References to Predecessor. Whenever
the Authority, the City or the Trustee, or any officer thereof, is named or referred to herein, such
reference shall be deemed to include the successor to the powers, duties andfunctions that are
presently vested in the Authority, the City or the Trustee, or such officer, and all agreements,
conditions, covenants and terms required hereby to be observed or performed by or on behalf of the
Authority, the City or the Trustee, or any officer thereof, shall bind and inure to the benefit of the
respective successors thereof whether so expressed or not.
Section 11.03Execution of Documents by Owners. Any declaration, request or other
instrument which is permitted or required herein to be executed by Owners may be in one or more
instruments of similar tenor and may be executed by Owners in person or by their attorneys
appointed in writing. The fact and date of the execution by any Owner or his attorney of any
declaration, request or other instrument or of any 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 or territory in which he purports to act that the person signing such
2016-04-05 Agenda Packet Page 474
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declaration, request 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,
or by such other proof as the Trustee may accept which it may deem sufficient.
The ownership of any Bonds and the amount, payment date, number and date of owning the
same may be proved by the Registration Books.
Any declaration, request or other instrument in writing of the Owner of any Bond shall bind
all future Owners of such Bond with respect to anything done or suffered to be done by the
Authority, the City or the Trustee in good faith and in accordance therewith.
Section 11.04Waiver of Personal Liability. Notwithstanding anything contained herein to
the contrary, no member, officer or employee of the Authority or the City shall be individually or
personally liable for the payment of any moneys, including without limitation, the principal of or
interest on the Bonds, but nothing contained herein shall relieve any member, officer or employee of
the City or the Authority from the performance of any official duty provided by any applicable
provisions of law, by the LeaseAgreement or hereby.
Section 11.05Destruction of Bonds. Whenever in this Indenture provision is made for the
cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee may, in lieu
of such cancellation and delivery, destroy such Bonds.
Section 11.06Funds and Accounts. Any fund or account required to be established and
maintained herein by the Trustee may be established and maintained in the accounting records of the
Trustee either as an account or a fund, and may, for the purposes of such accounting records, any
audits thereof and any reports or statements with respect thereto, be treated either as an account or a
fund, but all such records with respect to all such funds and accounts shall at an times be maintained
in accordance with sound accounting practice and with due regard for the protection of the security
of the Bonds and the rights of the Owners.
The Trustee may commingle any of the moneys held by it hereunder for investment purposes
only; provided, however, that the Trustee shall account separately for the moneys in each fund or
account established pursuant to this Indenture. The Trustee may establish such funds and accounts as
it deems necessary or appropriate to perform its obligations hereunder.
Section 11.07Article and Section Headings Gender and References. The singular form
of any word used herein, including the terms defined in Section1.01 hereof, shall include the plural,
and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender
shall include correlative words of the other genders. The headings or titles of the several Articles and
Sections hereof and the table of contents appended hereto shall be solely for convenience of
reference and shall not affect the meaning, construction or effect hereof. All references herein to
“Articles,” “Sections,” subsections or clauses are to the corresponding Articles, Sections, subsections
or clauses hereof, and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and
other words of similar import refer to this Indenture as a whole and not to any particular Article,
Section, subsection or clause thereof.
Section 11.08Partial Invalidity. If any one or more of the agreements, conditions,
covenants or terms required herein to be observed or performed by or on the part of the Authority,
the City or the Trustee shall be contrary to law, then such agreement or agreements, such condition or
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44
conditions, such covenant or covenants or such term or terms shall be null and void to the extent
contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants
and terms hereof and shall in no way affect the validity hereof or of the Bonds, and the Owners shall
retain all the benefit, protection and security afforded to them under any applicable provisions of law.
The Authority, the City and the Trustee hereby declare that they would have executed this Indenture,
and each and every Article, Section, paragraph, subsection, sentence, clause and phrase hereof and
would have authorized the execution and delivery of the Bonds pursuant hereto irrespective of the
fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases
hereof or the application thereof to any person or circumstance may be held to be unconstitutional,
unenforceable or invalid.
Section 11.09Disqualified Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or
waiver under this Indenture, Bonds which are actually known by the Trustee to be owned or held by
or for the account of the Authority or the City, or by any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the Authority or the City, shall be
disregarded anddeemed not to be Outstanding for the purpose of any such determination; except
that, in determining whether the Trustee shall be protected in relying upon any such demand, request,
direction, consent or waiver of an Owner, only Bonds which the Trustee actually knows to be owned
or held by or for the account of the Authority or the City, or by any Person directly or indirectly
controlling or controlled by, or under direct or indirect common control with, the Authority or the
City, shall be disregarded unless all Bonds are so owned or held, in which case such Bonds shall be
considered Outstanding for the purpose of such determination. Bonds so owned which have been
pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee
shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the
pledgee is not a Person directly or indirectly controlling or controlled by, or under direct or indirect
common control with, the Authority or theCity. In case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of
the Trustee, the Authority and the City shall specify in a Written Certificate of the Cityand Authority
those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such
Certificate.
Section 11.10Money Held for Particular Bonds. The money held by the Trustee for the
payment of the interest, principal or premium due on any date with respect to particular Bonds (or
portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and
pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds
entitled thereto, subject, however, to the provisions of Section10.03 hereof but without any liability
for interest thereon.
Section 11.11Payment on Non-Business Days. In the event any payment is required to be
made hereunder on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day with the same effect as if made on such non-Business Day.
Section 11.12California Law. This Indenture shall be construed and governed in
accordance with the laws of the State of California.
Section 11.13Notices. All written notices to be given hereunder shall be given by mail to
the party entitled thereto at its address set forth below, or at such other address as such party may
provide to the other parties in writing from time to time, namely:
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45
If to the City:City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Director of Finance
If to the Authority:Chula Vista Municipal Financing Authority
c/o City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Executive Director
If to the Trustee:U.S. Bank National Association
633 West Fifth St., 24th Floor
Los Angeles, California 90071
Attention: Global Corporate Trust Services
Ref: City of Chula Vista
Each such notice, statement, demand, consent, approval, authorization, offer, designation,
request or other communication hereunder shall be deemed delivered to the party to whom it is
addressed (a)if personally served or delivered, upon delivery, (b)if given by electronic
communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate
answer back or other written acknowledgment, (c)if given by registered or certified mail, return
receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is
deposited with the United States mail, (d)if given by overnight courier, with courier charges prepaid,
24 hours after delivery to said overnight courier, or (d)if given by any other means, upon delivery at
the address specified in this Section.
Section 11.14Notice to Rating Agencies. The Trustee shall provide S&P, if the Bonds are
then rated by S&P, and Moody’s, if the Bonds are then rated by Moody’s, with prompt notice of any
substitution or release of property pursuant to Section9.03 of the Lease Agreement.
Section 11.15Execution in Counterparts. This Indenture may be executed in several
counterparts, each of which shall be deemed an original, and all of which shall constitute but one and
the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
2016-04-05 Agenda Packet Page 477
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IN WITNESS WHEREOF, the Authority and the City have caused this Indenture to be
signed in their respective names by their representative thereunto duly authorized, and the Trustee, in
token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its
corporate name by its officer thereunto duly authorized, all as of the day and year first above written,
CHULA VISTA MUNICIPAL FINANCING
AUTHORITY
By:
Executive Director
ATTEST:
Secretary
CITY OF CHULA VISTA
By:
Director of Finance
ATTEST:
City Clerk
[SIGNATURES CONTINUED ON NEXT PAGE.]
2016-04-05 Agenda Packet Page 478
S-2
[SIGNATURE PAGE CONTINUED.]
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
Authorized Officer
2016-04-05 Agenda Packet Page 479
A-1
EXHIBITA
FORM OF SERIES 2016BOND
No. ____$___________
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE TRUSTEE 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.
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
2016 LEASE REVENUE REFUNDING BONDS
INTEREST RATEMATURITY DATEDATED DATE CUSIP
______%May 1, 20___________, 2016
REGISTERED OWNER:CEDE & CO.
PRINCIPAL AMOUNT:_________________________ THOUSAND DOLLARS
The Chula Vista Municipal Financing Authority(the “Authority”), for value received, hereby
promises to pay, solely from the Base Rental Payments (as hereinafter defined) or amounts in certain
funds and accounts held under the Indenture (as hereinafter defined), to the Registered Owner
identified above or registered assigns (the “Registered Owner”); on the Maturity Date identified
above or on any earlier redemption date, the Principal Amount identified above in lawful money of
the United States of America; and to pay interest thereon at the Rate of Interest identified above in
like lawful money from the date hereof payable semiannually on May 1 and November 1 in each
year, commencing November 1, 2016(the “Interest Payment Dates”), until payment of such
Principal Amount in full. This Bond shall bear interest from the Interest Payment Date next
preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an
Interest Payment Date and after the close of business on the fifteenth calendar day of the month next
preceding such Interest Payment Date, whether or not such day is a Business Day, in which event it
shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior
toOctober 15, 2016, in which event it shall bear interest from the Dated Date identified above;
provided, however, that if, at the time of authentication of this Bond, interest is in default on this
Bond, interest on this Bond shall be payable from the date to which interest hereon has been paid in
full, payable on each Interest Payment Date). The Principal Amount hereof is payable upon
surrender hereof upon maturityor earlier redemption at the Office of the Trustee (as hereinafter
defined). Interest hereon is payable by wire or check of U.S. Bank National Association, as Trustee
(the “Trustee”), mailed by first class mail, postage prepaid, on each Interest Payment Date to the
Registered Owner hereof at the address of the Registered Owner shown on the Registration Books at
2016-04-05 Agenda Packet Page 480
A-2
the close of business on the fifteenth calendar day of the month next preceding such Interest Payment
Date. “Office of the Trustee” means the principal corporate trust office of the Trustee in
LosAngeles, California, or such other office as may be specified to the Authority and the City of
Chula Vista(the “City”) by the Trustee in writing, except that with respect to presentation of Bonds
for payment or for registration of transfer and exchange such term shall mean the office or the agency
of the Trustee at which, at any particular time, its corporate trust agency shall be conducted as
specified to the Authority and the City by the Trustee in writing.
This Bond is one of a series of a duly authorized issue of bonds issued for the purpose of
refinancing the acquisition, construction and installation of certain public capital improvements
within the City and described in the proceedings for the issuance of the Bonds(the “Project”), and is
one of the series of bonds designated “Chula Vista Municipal Financing Authority2016 Lease
Revenue RefundingBonds” (the “2016Bonds”) in the aggregate principal amount of $20,325,000.
The 2016Bonds are issued pursuant to the Indenture, dated as of May1, 2016(the “Indenture”), by
and among the Authority, the City and the Trustee, and this reference incorporates the Indenture
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 Indenture, Additional Bonds (“Additional
Bonds”), may be issued by the Authority secured by a lien on a parity with the lien securing the
2016Bonds. The 2016Bonds and any Additional Bonds are collectively referred to as the “Bonds.”
The Indenture is entered into, and this Bond is issued under, the Marks-Roos Local Bond Pooling
Act of 1985 (the “Act”) and the laws of the State of California.
Pursuant to the Indenture, the principal of and interest on the Bonds are payable solely from
certain base rental payments (the “Base Rental Payments”) under and pursuant to that certain Lease
Agreement, dated as of May1, 2016(the “Lease Agreement”), by and between the City, as lessee,
and the Authority, as lessor, all of which rights to receive such Base Rental Payments have been
assigned without recourse by the Authority to the Trustee. Subject only to the provisions of the
Indenture permitting the application thereof for the purposes and on the terms and conditions set
forth therein, all of the Base Rental Payments and any other amounts (including proceeds of the sale
of the Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the
Redemption Fund established under the Indenture are pledged to secure the payment of the principal
of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of the
Indenture and the Act. Said pledge constitutes a first lien on such assets.
The 2016Bonds are authorized to be issued in the form of fully registered bonds without
coupons in denominations of $5,000 or any integral multiple thereof (“Authorized Denominations”).
The 2016Bonds shall be subject to redemption, in whole or in part, on any date, in
Authorized Denominations, from and to the extent of any net insurance proceeds received with
respect to all or a portion of the property leased under the Lease Agreement, remaining after payment
therefrom of all reasonable expenses incurred in the collection thereof, deposited by the Trustee in
the Redemption Fund established under the Indenture, at a Redemption Price equal to the principal
amount of the 2016Bonds to be redeemed, plus accrued interest thereon to the date of redemption,
without premium.
The 2016Bonds maturing on or after November 1, 20__, shall be subject to optional
redemption, in whole or in part, on any date on or after November 1, 20__, in Authorized
Denominations, from and to the extent of prepaid Base Rental Payments paid pursuant the Lease
2016-04-05 Agenda Packet Page 481
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Agreement, at a Redemption Price equal to the principal amount of the 2016Bonds to be redeemed,
plus accrued interest thereon to the date of redemption.
The 2016Bondsmaturing on November 1, 2036are subject to mandatory sinking fund
redemption in part (by lot) on each November 1on and after November 1, 2036, in integral multiples
of $5,000 at a Redemption Price of the principal amount thereof plus accrued interest to the date
fixed for redemption, without premium, in accordance with the following schedule:
Sinking Fund Redemption Date
(November 1)
Principal Amount
To Be Redeemed
2036(maturity)
The Trustee on behalf and at the expense of the Authority shall mail (by first class mail)
notice of any redemption to the respective owners of any 2016Bonds designated for redemption, at
their respective addresses appearing on the Registration Books, at least 20 but not more than 60 days
prior to the date fixed for redemption; provided, however, that neither failure to receive any such
notice so mailed, nor any defect therein, shall affect the validity of the proceedings for the
redemption of such 2016Bonds or the cessation of accrual of interest thereon from and after the date
fixed for redemption. The Redemption Price of the 2016Bonds to be redeemed shall be paid only
upon presentation and surrender thereof at the Office of the Trustee. From and after the date fixed
for redemption of any 2016Bonds, interest on such 2016Bonds will cease to accrue and become
payable.
Subject to the limitations and upon payment of the charges, if any, provided in the Indenture,
fully registered 2016Bonds may be exchanged at the Office of the Trustee for a like aggregate
principal amount and maturity of fully registered 2016Bonds of other authorized denominations.
This Bond is transferable by the Registered Owner hereof, in person or by his duly authorized
attorney, but only in the manner, subject to the limitations and upon payment of the charges provided
in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully
registered 2016Bondor 2016Bonds, in Authorized Denominations, for the same aggregate principal
amount will be issued to the transferee in exchange herefor. The Authority, the City and the Trustee
may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the
Authority, the City and the Trustee shall not be affected by any notice to the contrary.
The Indenture and the rights and obligations of the Authority, the City, the owners of the
Bonds and the Trustee may be modified or amended from time to time and at any time in the manner,
to the extent, and upon the terms provided in the Indenture; provided that no such modification or
amendment shall (a)extend the fixed maturity of any Bonds, or reduce the principal thereof or the
rate of interest thereon, or extend the time of payment, without the consent of the owner of each
Bond so affected, or, (b)reduce the percentage of Bonds the consent of the owners of which is
required to effect any such amendment or modification, or (c)permit the creation of any lien on the
Base Rental Payments and other assets pledged under the Indenture prior to or on a parity with the
lien created by the Indenture or deprive the owners of the Bonds of the liencreated by the Indenture
on such the Base Rental Payments and such other assets (except as expressly provided in the
Indenture), without the consent of the owners of all Bonds then outstanding.
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The Indenture contains provisions permitting the Authority tomake provision for the
payment of interest on, and the principal and premium, if any, of any of the Bond so that such Bonds
shall no longer be deemed to be outstanding under the terms of the Indenture.
All obligations of the Authority under the Indenture shall be special obligations of the
Authority, payable solely from Rental Payments and the other assets pledged therefor under the
Indenture; provided, however, that all obligations of the Authority under the Bonds shall be special
obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged
therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the
City or the State of California, or any political subdivision thereof, is pledged to the payment of the
Bonds.
IN WITNESS WHEREOF, the Authority has caused this Bond to be signed in its name and
on its behalf by the facsimile signatures of its Chairperson and Secretary, all as of the Dated Date
identified above.
CHULA VISTA MUNICIPAL FINANCING
AUTHORITY
By:
Executive Director
Attest:
Secretary
[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]
This is one of the 2016Bonds described in the within-mentioned Indenture and registered on
the Registration Books.
Date: _____________, 2016 U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
Authorized Signatory
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[FORM OF LEGAL OPINION]
The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth, a
Professional Corporation, in connection with theissuance of, and dated as of the date of the original
delivery of, the Bonds. A signed copy is on file in my office.
Secretary of the Board of the Chula Vista Municipal
Financing Authority
[FORM OF ASSIGNMENT]
For value, received the undersigned hereby sells, assigns and transfers unto
____________________________________________ whose address and social security or other tax
identifying number is ______________________, the within-mentioned Bond and hereby
irrevocably constitute(s) and appoint(s) ____________________________________ attorney, to
transfer the same on the registration books of the Trustee with full power of substitution in the
premises.
Dated: ____________________
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an eligible
guarantor.
Note: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of the
within pond in every particular without alteration or
enlargement or any change whatsoever.
2016-04-05 Agenda Packet Page 484
LEASE AGREEMENT
by and between
CITY OF CHULA VISTA
and
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
Dated as of May1, 2016
Relating to
$20,325,000
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
2016 LEASE REVENUE REFUNDING BONDS
2016-04-05 Agenda Packet Page 485
TABLE OF CONTENTS
Page
i
ARTICLE I
DEFINITIONS
Section 1.01Definitions ..............................................................................................................2
ARTICLE II
LEASE OF PROPERTY; TERM
Section 2.01Lease of Leased Property........................................................................................4
Section 2.02Term; Occupancy....................................................................................................4
ARTICLE III
RENTAL PAYMENTS
Section 3.01Base Rental Payments.............................................................................................4
Section 3.02Additional Rental Payments...................................................................................5
Section 3.03Fair Rental Value....................................................................................................5
Section 3.04Payment Provisions................................................................................................6
Section 3.05Appropriations Covenant........................................................................................6
Section 3.06Rental Abatement...................................................................................................6
ARTICLE IV
MAINTENANCE, ALTERATIONS AND ADDITIONS
Section 4.01Maintenance and Utilities.......................................................................................7
Section 4.02Additions to Leased Property.................................................................................7
Section 4.03Installation of City’s Equipment.............................................................................7
ARTICLE V
INSURANCE
Section 5.01Commercial General Liability and Leased Property Damage Insurance;
Workers’ Compensation Insurance.........................................................................8
Section 5.02Title Insurance........................................................................................................9
Section 5.03Additional Insurance Provision; Form of Policies..................................................9
Section 5.04Self-Insurance.........................................................................................................9
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01Defaults and Remedies.........................................................................................10
Section 6.02Waiver...................................................................................................................12
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TABLE OF CONTENTS
(continued)
Page
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ARTICLE VII
EMINENT DOMAIN; PREPAYMENT
Section 7.01Eminent Domain...................................................................................................13
Section 7.02Prepayment...........................................................................................................13
ARTICLE VIII
COVENANTS
Section 8.01Right of Entry.......................................................................................................14
Section 8.02Liens.....................................................................................................................14
Section 8.03Quiet Enjoyment...................................................................................................14
Section 8.04Authority Not Liable.............................................................................................14
Section 8.05Assignment and Subleasing..................................................................................15
Section 8.06Title to Leased Property........................................................................................16
Section 8.07Authority’s Purpose..............................................................................................16
Section 8.08Representations of the City...................................................................................16
Section 8.09Representation of the Authority............................................................................16
ARTICLE IX
NO CONSEQUENTIAL DAMAGES;
USE OF THE PROPERTY;SUBSTITUTION OR RELEASE
Section 9.01No Consequential Damages..................................................................................16
Section 9.02Use of the Leased Property...................................................................................16
Section 9.03Substitution or Release of the Leased Property....................................................16
ARTICLE X
MISCELLANEOUS
Section 10.01Law Governing.....................................................................................................17
Section 10.02Notices..................................................................................................................17
Section 10.03Validity and Severability......................................................................................18
Section 10.04Net-Net-Net Lease................................................................................................18
Section 10.05Taxes.....................................................................................................................18
Section 10.06Section Headings..................................................................................................19
Section 10.07Amendments.........................................................................................................19
Section 10.08Assignment...........................................................................................................20
Section 10.09Execution..............................................................................................................20
SIGNATURES...................................................................................................................................S-1
EXHIBITADESCRIPTION OF THE PROPERTY....................................................................A-1
EXHIBITBBASE RENTAL PAYMENT SCHEDULE.............................................................B-1
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LEASE AGREEMENT
THIS LEASE AGREEMENT (this “Lease Agreement”) executed and entered into as of
May 1, 2016, is by and between the CITY OF CHULA VISTA(the “City”), a municipal corporation
and a charter cityduly organized and existing under the Constitution and laws of the State of
California, as lessee, and the CHULA VISTA MUNICIPAL FINANCING AUTHORITY(the
“Authority”), a joint exercise of powers authority duly organized and existing under the laws of the
State of California, as lessor.
RECITALS
WHEREAS, the City and the Authority desire to refinance the City of Chula Vista2006
Certificates of Participation (Civic Center Project –Phase 2) (the “2006Certificates”)and the City of
Chula Vista 2010 Certificates of Participation (Capital Facilities Refunding Projects) (the “2010
Certificates”)and the City’s lease obligations in connection therewith, the proceeds of which were
used to finance and refinance a portion of the costs of the acquisition, construction and installation of
certain public capital improvements located within the City and described in the proceedings for the
2006Certificates(the “2006Project”)and the proceedings for the 2010 Certificates ( the “2010
Project”);
WHEREAS, in order to finance the refinance the 2006Projectand the 2010 Project, the City
will lease certain real property and the improvements located thereon (the “Leased Property”) to the
Authority pursuant to a Site Lease, dated as of the date hereofand recorded concurrently herewith,
and the City will sublease the Leased Propertyback from the Authority pursuant to this Lease
Agreement(the “Leased Property”);
WHEREAS, the City and the Authority have determined that it would be in the best interests
of the City and the Authority to provide the funds necessary to refinance the 2006Projectand the
2010 Projectthrough the issuance by the Authority of bonds payable from the base rental payments
(the “Base Rental Payments”) to be made by the City under this Lease Agreement;
WHEREAS, the City and the Authority have determined that it would be in the best interests
of the City and the Authority to provide for the issuance of such bonds payable from the Base Rental
Payments pursuant to an Indenture, dated as of thedate hereof, by and among the Authority, the City
and U.S. Bank National Association, as trustee (the “Trustee”);
WHEREAS, all rights to receive the Base Rental Payments have been assigned without
recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date
hereofand recorded concurrently herewith; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to
have been performed precedent to and in connection with the execution and entering into of this
Lease Agreement do exist, have happened and have been performed in regular and due time, form
and manner as required by law, and the parties hereto are now duly authorized to execute and enter
into this Lease Agreement;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the
parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01Definitions. Unless the context otherwise requires, the terms defined in this
Section shall, for all purposes of this Lease Agreement, have the meanings herein specified, which
meanings shall be equally applicable to both the singular and plural forms of any of the terms herein
defined. Capitalized terms not otherwise defined herein shall have the meanings assigned to such
terms in the Indenture.
“Additional Bonds” means bonds other than the 2016Bondsissued under the Indenture in
accordance with the provisions thereof
“Additional Rental Payments” means all amounts payable by the City as Additional Rental
Payments pursuant to Section 3.02 hereof.
“Authority” means the Chula Vista Municipal Financing Authority, a joint exercise of
powers authority organized and existing under the laws of the State of California.
“Base Rental Deposit Date” means the fifteenth daynext preceding each Interest Payment
Date.
“Base Rental Payments” means all amounts payable to the Authority from the City as Base
Rental Payments pursuant to Section 3.01 hereof.
“Base Rental Payment Schedule” means the schedule of Base Rental Payments payable to
the Authority from the City pursuant to Section3.01 hereof and attached hereto as ExhibitB.
“Bonds” means the Chula Vista Municipal Financing Authority2016 Lease Revenue
Refunding Bondsissued under the Indenture, and any Additional Bonds.
“City” means the City of Chula Vista, a municipal corporation and chartered city duly
organized and existing under and by virtue of the Constitution and laws of the State of California.
“Delivery Date” means _________, 2016.
“Site Lease” means the Site Lease, dated as of the date hereof, by and between the City and
the Authority, as originally executed and as it may from time to time be amended in accordance with
to the provisions thereof and hereof.
“Indenture” means the Indenture, dated as of the date hereof, by and among the Authority,
the City and the Trustee, as originally executed and as it may from time to time be amended or
supplemented in accordance with the provisions thereof.
“Joint Powers Agreement” means the Joint Exercise of Powers Agreement, dated as of June
11, 2013,by and between the City and the Housing Authorityof the City of Chula Vista, as
originally executed and as it may from time to time be amended in accordance with the provisions
thereof.
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“Lease Agreement” means this Lease Agreement, as originally executed and as it may from
time to time be amended in accordance with the provisions hereof.
“Net Insurance Proceeds” means any insurance proceeds or condemnation award in excess
of $50,000, paid with respect to any of the Leased Property, remaining after payment therefrom of all
reasonable expenses incurred in the collection thereof.
“Permitted Encumbrances” means, with respect to the Leased Property, as of any particular
time, (a)liens for general advalorem taxes and assessments, if any, not then delinquent, or which the
City may, pursuant to provisions of ArticleV hereof, permit to remain unpaid, (b)the Assignment
Agreement, (c)this Lease Agreement, (d)the Site Lease, (e)any right or claim of any mechanic,
laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law as
normally exist with respect to properties similar to the Leased Propertyfor the purposes for which it
was acquired or is held by the City, (f)easements, rights of way, mineral rights, drilling rights and
other rights, reservations, covenants, conditions or restrictionsor encumbranceswhich exist of record
as of the Delivery Date which the City certifies in writing will not affect the intended use of the
Leased Propertyor impair the security granted to the Trustee for the benefit of the Owners of the
Bonds by the Indenture and the Assignment Agreement and to which the Authority and the City
consent in writing, and (g)easements, rights of way, mineral rights, drilling rights and other rights,
reservations, covenants,conditions or restrictions established following the Delivery Date which the
City certifies in writing do not affect the intended use of the Leased Propertyor impair the security
granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture and the
Assignment Agreement and to which the Authority and the City consent in writing.
“Leased Property” means the real property described in Exhibit A hereto and the
improvements located thereon.
“Rental Payments” means, collectively, the Base Rental Payments and the Additional
Rental Payments.
“Rental Period” means the twelve-month period commencing on May 2of each year during
the term of the Lease Agreement.
“2016Bonds” means the Chula Vista Municipal Financing Authority2016 Lease Revenue
RefundingBondsissued under the Indenture.
“Termination Date” means May 1, 2036, unless extended or sooner terminated as provided
in Section 2.02 hereof.
“Trustee” means the trustee appointed under the Indenture and referred to therein as the
Trustee.
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ARTICLE II
LEASE OF PROPERTY; TERM
Section 2.01Lease of Leased Property.
(a)The Authority hereby leases to the City and the City hereby leases from the
Authority the Leased Property, on the terms and conditions hereinafter set forth, subject to all
Permitted Encumbrances.
(b)The leasing of the Leased Propertyby the City to the Authority pursuant to
the Site Leaseshall not effect or result in a merger of the City’s leasehold estate pursuant to this
Lease Agreement and its fee estate as lessor under the Site Lease, and the Authority shall continue to
have a leasehold estate in the Leased Propertypursuant to the Site Leasethroughout the term thereof
and hereof. The leasehold interest granted by the City to the Authority pursuant to the Site Leaseis
and shall be independent of this Lease Agreement; this Lease Agreement shall not be an assignment
or surrender of the leasehold interest granted to the Authority under the Site Lease.
Section 2.02Term; Occupancy. The term of this Lease Agreement shall commence on
the Delivery Date and shall end on the Termination Date, unless such term is extended or sooner
terminated as hereinafter provided. If on the Termination Date the Bonds shall not be fully paid, or
provision therefor made in accordance with ArticleX of the Indenture, or the Indentureshall not be
discharged by its terms, or if the Rental Payments shall remain due and payable or shall have been
abated at any time and for any reason, then the term of this Lease Agreement shall be extended until
the date upon which (i)all Bonds shall befully paid, or provision therefor made in accordance with
ArticleX of the Indenture, or (ii)the Indenture shall be discharged by its terms and all Rental
Payments shall have been paid in full. Notwithstanding the foregoing, the term of this Lease
Agreement shall in no event be extended beyond March 1, 2046, such extended date being the
“Maximum Lease Term.” If prior to the Termination Date, all Bonds shall be fully paid, or provision
therefor made in accordance with ArticleX of the Indenture, the Indenture shall be discharged by its
terms and all Rental Payments shall have been paid in full, and the term of this Lease Agreement
shall end simultaneously therewith.
ARTICLE III
RENTAL PAYMENTS
Section 3.01Base Rental Payments.
(a)Subject to the provisions hereof relating to a revision of the Base Rental
Payment Schedule pursuant to subsection(b) of this Section, the City shall pay to the Authority, as
Base Rental Payments (subject to the provisions of Section3.06 and ArticleVII hereof) the amount
at the times specified in the Base Rental Payment Schedule, a portion of which Base Rental
Payments shall constitute principal, and a portion of which shall constitute interest. Rental
Payments, including Base Rental Payments, shall be paid by the City to the Authority for and in
consideration of the right to use and occupy the Leased Propertyand in consideration of the
continued right to the quiet use and enjoyment thereof during each Rental Period for which such
Rental Payments are to be paid.
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The obligation of the City to make the Base Rental Payments does not constitute a
debt of the City or of the State of California, or of any political subdivision thereof, within the
meaning of any constitutional or statutory debt limit or restriction, and does not constitute an
obligation for which the City or the State of California is obligated to levy or pledge any form of
taxation or for which the City or the State of California has levied or pledged any form of taxation.
(b)If the term of this Lease Agreement shall have been extended pursuant to
Section2.02 hereof, the obligation of the City to pay Rental Payments shall continue toand including
the Base Rental Deposit Date preceding the date of termination of this Lease Agreement (as so
extended pursuant to Section2.02 hereof). Upon such extension, the Base Rental Payments shall be
established so that they will be sufficient to pay all extended and unpaid Base Rental Payments;
provided, however, that the Rental Payments payable in any Rental Period shall not exceed the
annual fair rental value of the Leased Property.
Section 3.02Additional Rental Payments. The City shall also pay, as Additional Rental
Payments, such amounts as shall be required for the payment of the following:
(a)all taxes and assessments of any type or nature charged to the Authority or the
City or affecting the Leased Propertyor the respective interests or estates of the Authority or the City
therein;
(b)all reasonable administrative costs of the Authority relating to the Leased
Propertyincluding, but without limiting the generality of the foregoing, salaries, wages, fees and
expenses, compensation and indemnification of the Trustee payable by the Authority under the
Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and
reasonable administrative costs of the Authority or charges required to be paid by it in order to
maintain its existence or to comply with the terms of the Indenture or the Lease Agreement or to
defend the Authority and its members, officers, agents and employees;
(c)insurance premiums for all insurance required pursuant to ArticleV hereof;
(d)any amounts with respect to the Lease Agreement or the Bonds required to be
rebated to the federal government in accordance with Section148(f) of the Code;and
(e)all other payments, other than Base Rental Payments,required to be paid by
the City under the provisions of this Lease Agreement or the Indenture.
Amounts constituting Additional Rental Payments payable hereunder shall be paid by the
City directly to the person or persons to whom such amounts shall be payable. The City shall pay all
such amounts when due or at such later time as such amounts may be paid without penalty or, in any
other case, within 60 days after notice in writing from the Trustee to the City stating the amount of
Additional Rental Payments then due and payable and the purpose thereof.
Section 3.03Fair Rental Value. The parties hereto have agreed and determined that the
annual fair rental value of the Leased Propertyis not less than the maximum annual Rental Payments
due in any year. In making such determination of fair rental value, consideration has been given to
the uses andpurposes that may be served by the Leased Propertyand the benefits therefrom which
will accrue to the City and the general public. Payments of the Rental Payments for the Leased
Propertyduring each Rental Period shall constitute the total rental for said Rental Period.
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Section 3.04Payment Provisions. Each installment of Base Rental Payments payable
hereunder shall be paid in lawful money of the United States of America to or upon the order of the
Authority at the principal office of the Trustee in Los Angeles, California, or such other place or
entity as the Authority or Trustee shall designate. Each Base Rental Payment shall be deposited with
the Trustee no later than the Base Rental Deposit Date preceding the Interest Payment Date on which
such Base Rental Payment is due. Any Base Rental Payment which shall not be paid by the City
when due and payable under the terms of this Lease Agreement shall bear interest from the date
when the same is due hereunder until the same shall be paid at the rate equal to the highest rate of
interest on any of the Outstanding Bonds. Notwithstanding any dispute between the Authority and
the City, the City shall make all Rental Payments when due without deduction or offset of any kind
and shall not withhold any Rental Payments pending the final resolution of such dispute. In the event
of a determination that the City was not liable for said Rental Payments or any portion thereof, said
payments or excess of payments, as the case may be, shall be credited against subsequent Rental
Payments due hereunder or refunded at the time of such determination. Amounts required to be
deposited by the City with the Trustee pursuant to this Section on any date shall be reduced to the
extent of available amounts on deposit in the Base Rental PaymentFund, the Interest Fund or the
Principal Fund.
Section 3.05Appropriations Covenant. The City covenants to take such action as may
be necessary to include all Rental Payments due hereunder in its annual budgets and to make
necessary annual appropriations for all suchRental Payments. The City will deliver to the Authority
and the Trustee a Certificate of the City stating that its final annual budget includes all Base Rental
Payments due in such fiscal year within ten days after the filing or adoption thereof. The covenants
on the part of the City herein contained shall be deemed to be and shall be construed to be duties
imposed by law and it shall be the duty of each and every public official of the City to take such
action and do such things as are required by law in the performance of the official duty of such
officials to enable the City to carry out and perform the covenants and agreements in this Lease
Agreement agreed to be carried out and performed by the City.
Section 3.06Rental Abatement. Except as otherwise specifically provided in this
Section, during any period in which, by reason of material damage to, or destruction or
condemnation of, the Leased Property, or any defect in title to the Leased Property, there is
substantial interference with the City’s right to use and occupy any portion of the Leased Property,
Rental Payments shall be abated proportionately, and the City waives the benefits of Civil Code
Sections1932(1), 1932(2) and 1933(4) and any and all other rights to terminate the Lease Agreement
by virtue of any such interference, and the Lease Agreement shall continue in full force and effect.
The amount of such abatement shall be agreed upon by the City and the Authority; provided,
however, that the Rental Payments due for any Rental Period shall not exceed the annual fair rental
value of that portion of the Leased Propertyavailable for use and occupancy by the City during such
Rental Period. The City and the Authority shall calculate such abatement and shall provide the
Trustee with a certificate setting forth such calculation and the basis therefor. Such abatement shall
continue for the period commencing with the date of interference resulting from such damage,
destruction, condemnation or title defect and, with respect to damage to or destruction of the Leased
Property, ending with the substantial completion of the work of repair or replacement of the Leased
Property, or the portion thereof so damaged or destroyedand with the removal of any title defect
causing an interference with use; and the term of this Lease Agreement shall be extended as provided
in Section2.02 hereof, except that the term shall in no event be extended beyond the Maximum
Lease Termdescribed in said Section.
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Notwithstanding the foregoing, to the extent that moneys are available forto be credited
towards the payment of Rental Payments in any of the funds and accounts established under the
Indenture, Rental Payments shall not be abated as provided above but, rather, shall be payable by the
City as a special obligation payable solely from said funds and accounts.
ARTICLE IV
MAINTENANCE, ALTERATIONS AND ADDITIONS
Section 4.01Maintenance and Utilities. Throughout the term of this Lease Agreement,
as part of the consideration for rental of the Leased Property, all improvement, repair and
maintenance of the Leased Propertyshall be the responsibility of the City, and the City shall pay for
or otherwise arrange for the payment of all utility services supplied to the Leased Property, which
may include, without limitation, janitor service, security, power gas, telephone, light, heating,
ventilation, air conditioning, water and all other utility services, and shall pay for or otherwise
arrange for payment of the cost of the repair and replacement of the Leased Propertyresulting from
ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In
exchange for the Rental Payments, the Authority agrees to provide only the Leased Property.
Section 4.02Additions to Leased Property. Subject to Section 8.02 hereof, the City and
any sublessee shall, at its own expense, have the right to make additions, modifications and
improvements to the Leased Propertyso long as such additions, modifications and improvements
will not result in an abatement of Rental Payments. To the extent that the removal of such additions,
modifications or improvements would not cause material damage to the Leased Property, such
additions, modifications and improvements shall remain the sole property of the City or such
sublessee, and neither the Authority nor the Trustee shall have any interest therein. Such additions,
modifications and improvements shall not in any way damage the Leased Propertyor cause it to be
used for purposes other than those authorized under the provisions of state and federal law; and the
Leased Property, upon completion of any additions, modifications and improvements made pursuant
to this Section, shall be of a value which is at least equal to the value of the Leased Property
immediately prior to the making of such additions, modifications and improvements.
Section 4.03Installation of City’s Equipment. The City and any sublessee may at any
time and from time to time, in its sole discretion and at its own expense, install or permit to be
installed items of equipment or other personal property in or upon the Leased Property. All such
items shall remain the sole property of the City or such sublessee, and neither the Authority nor the
Trustee shall have any interest therein. The City or such sublessee may remove or modify such
equipment or other personal property at any time, provided that such party shall repair and restore
any and all damage to the Leased Propertyresulting from the installation, modification or removal of
any such items. Nothing in this Lease Agreement shall prevent the City or any sublessee from
purchasing items to be installed pursuant to this Section under a conditional sale or lease purchase
contract, or subject to a vendor’s lien or security agreement as security for the unpaid portion of the
purchase price thereof, provided that no such lien or security interest shall attach to any part of the
Leased Property.
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ARTICLE V
INSURANCE
Section 5.01Commercial General Liability and Leased PropertyDamage Insurance;
Workers’ Compensation Insurance.
(a)The City shall maintain or cause to be maintained, throughout the term of this
Lease Agreement, a standard commercial general liability insurance policy or policies in protection
of the City, the Authority and their respective members, officers, agents andemployees. Said policy
or policies shall provide for indemnification of said parties against direct or contingent loss or
liability for damages for bodily and personal injury, death or property damage occasioned by reason
of the use or ownership of the Leased Property. Said policy or policies shall provide coverage in the
minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000
for personal injury or deaths of two or more persons in a single accident or event, andin a minimum
amount of $500,000 for damage to property (subject to a deductible clause of not to exceed
$100,000) resulting from a single accident or event. Such commercial general liability and property
damage insurance may, however, be in the form of asingle limit policy in the amount of $3,000,000
covering all such risks. Such liability insurance may be maintained as part of or in conjunction with
any other liability insurance coverage carried or required to be carried by the City, and may be
maintained in whole or in part in the form of self-insurance by the City provided such self-insurance
complies with the provisions of Section5.04 hereof. The Net Insurance Proceeds of such liability
insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which
the Net Insurance Proceeds of such insurance shall have been paid.
(b)The City shall maintain or cause to be maintained, throughout the term of this
Lease Agreement, workers’ compensation insurance issued by a responsible carrier authorized under
the laws of the State of California to insure employers against liability for compensation under the
California Labor Code, or any act enacted as an amendment or supplement thereto or in lieu thereof,
such workers’ compensation insurance to cover all persons employed by the City in connection with
the Leased Propertyand to cover full liability for compensation under any such act; provided,
however, that the City’s obligations under this subsection may be satisfied by self-insurance,
provided such self-insurance complies with the provisions of Section5.04 hereof.
(c)The City shall maintain or cause to be maintained, fire, lightning and special
extended coverage insurance (which shall include coverage for vandalism and malicious mischief,
but need not include coverage for earthquake damage) on all improvements constituting any part of
the Leased Propertyin an amount equal to the greater of 100% of the replacement cost of such
improvements or 100% of the outstanding principal amountof the Bonds. All insurance required to
be maintained pursuant to this subsection may be subject to a deductible in an amount not to exceed
$500,000. The City’s obligations under this subsection may be satisfied by self-insurance, provided
such self-insurance complies with the provisions of Section5.04 hereof.
(d)The City shall maintain rental interruption insurance to cover the Authority’s
loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of
any part of the Leased Propertyas a result of any of the hazards required to be coveredby the
insurance requiredpursuant to subsection(c) of this Section in an amount not less than the maximum
remaining scheduled Base Rental Payments in any future 24-month period. The City shall not be
permitted to self-insure its obligation under this subsection.
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(e)The insurance required by this Section shall be provided by reputable
insurance companies with claims paying abilities determined, in the reasonable opinion of a
professionally certified risk manager or an independent insurance consultant, to be adequate for the
purposes hereof.
Section 5.02Title Insurance. The City shall provide, at its own expense, one or more
CLTA or ALTA title insurance policies for the Leased Propertyin the aggregate amount of not less
than the initial aggregate principal amount of the 2016Bonds. Such policy or policies shall insure
(a)the fee interest of the City in the Leased Property, (b)the Authority’s leaseholdestate in the
Leased Propertyunder the Site Lease, and (c)the City’s leasehold estate in the Leased Property
hereunder, subject only to Permitted Encumbrances. All Net Insurance Proceeds received under said
policy or policies shall be deposited with the Trustee and applied as provided in Section5.03of the
Indenture. So long as any of the Bonds remain Outstanding, each policy of title insurance obtained
pursuant to the Indenture or this Lease Agreement or required thereby or hereby shall provide that all
proceeds thereunder shall be payable to the Trustee for the benefit of the Bond Owners.
Section 5.03Additional Insurance Provision; Form of Policies. The City shall pay or
cause to be paid when due the premiums for all insurance policies required by Section5.01 hereof,
and shall promptly furnish orcause to be furnished evidence of such payments to the Trustee. All
such policies shall provide that the Trustee shall be given 30 days’ notice of the expiration thereof or
any intended cancellation thereof. The Trustee shall be fully protected in accepting payment on
account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the
Trustee.
The City shall cause to be delivered to the Trustee on or before August 15 each year,
commencing August 15, 2016, a Certificate of the City stating that such policies are in full force and
effect and that the City is in full compliance with the requirements of this Article. The Trustee shall
be entitled to rely upon said Certificate of the City as to the City’s compliance with this Article. The
Trustee shall not be responsible for the sufficiency of coverage or amounts of such policies.
Section 5.04Self-Insurance. Insuranceprovided through a California joint powers
authority of which the City is a member or with which the City contracts for insurance shallnotbe
deemed to be self-insurance for purposes hereof. Any self-insurance maintained by the City pursuant
to this Article shall comply with the following terms:
(a)the self-insurance program shall be approved in writing by a professionally
certified risk manager or by an independent insurance consultant;
(b)the self-insurance program shall include an actuarially sound claims reserve
fund out of which each self-insured claim shall be paid, the adequacy of each such fund shall be
evaluated on an annual basis by a professionally certified risk manager or by an independent
insurance consultant and any deficiencies in any self-insured claims reserve fund shall be remedied
in accordance with the recommendation of a professionally certified risk manager orsuch
independent insurance consultant, as applicable; and
(c)in the event the self-insurance program shall be discontinued, the actuarial
soundness of its claims reserve fund, as determined by a professionally certified risk manager or by
an independent insurance consultant, shall be maintained.
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ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01Defaults and Remedies.
(a)(i)If the City shall fail (A)to pay any Rental Payment payable hereunder
when the same becomes due and payable, time being expressly declared to be of the essence in this
Lease Agreement, or (B)to keep, observe or perform any other term, covenant or condition
contained herein or in the Indenture to be kept or performed by the City, or (ii)upon the happening
of any of the events specified in this subsection or in subsection(b) of this Section, the City shall be
deemed to be in default hereunder and it shall be lawful for the Authority, to exercise any and all
remedies available pursuant to law or granted pursuant to this Lease Agreement. The City shall in no
event be in default in the observance or performance of any covenant, condition or agreement in this
Lease Agreement on its part to be observed or performed, other than as referred to in clause (i)(A) or
(ii) of the preceding sentence, unless the City shall have failed, for a period of 30 days or such
additional time as is reasonably required to correct any such default after notice by the Authority to
the City properly specifying wherein the City has failed to perform any such covenant, condition or
agreement. Uponany such default, the Authority, in addition to all other rights and remedies it may
have at law, shall have the option to do any of the following:
(1)To terminate this Lease Agreement in the manner hereinafter
provided on account of default by the City, notwithstanding any re-entry or re-letting of the Leased
Propertyas hereinafter provided for in subparagraph (2) hereof, and to re-enter the Leased Property
and remove all persons in possession thereof and all personal property whatsoever situated upon the
Leased Propertyand place such personal property in storage in any warehouse or other suitable
place, for the account of and at the expense of the City. In the event of such termination, the City
agrees to surrender immediately possession of the Leased Property, without let or hindrance, and to
pay the Authority all damages recoverable at law that the Authority may incur by reason of default
by the City, including, without limitation, any costs, loss or damage whatsoever arising out of, in
connection with, or incident to any such re-entry upon the Leased Propertyand removal and storage
of such property by the Authority or its duly authorized agents in accordance with the provisions
herein contained. Neither notice to pay Rental Payments or to deliver up possession of the Leased
Propertygiven pursuant to law nor any entry or re-entry by the Authority nor any proceeding in
unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry
or obtaining possession of the Leased Propertynor the appointment of a receiver upon initiative of
the Authority to protect the Authority’s interest under this Lease Agreement shall of itself operate to
terminate this Lease Agreement, and no termination of this Lease Agreement on account ofdefault
by the City shall be or become effective by operation of law or acts of the parties hereto, or
otherwise, unless and until the Authority shall have given written notice to the City of the election on
the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no
surrender of the Leased Propertyor of the remainder of the term hereof or any termination of this
Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated by the
Authority by such written notice.
(2)Without terminating this Lease Agreement, (x)to collect each
installment of Rental Payments as the same become due and enforce any other terms or provisions
hereof to be kept or performed by the City, regardless of whether or notthe City has abandoned the
Leased Property, or (y)to exercise any and all rights of entry and re-entry upon the Leased Property.
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In the event the Authority, does not elect to terminate this Lease Agreement in the manner provided
for in subparagraph (1) hereof, the City shall remain liable and agrees to keep or perform all
covenants and conditions herein contained to be kept or performed by the City and, if the Leased
Propertyis not re-let, to pay the full amount of the Rental Payments to the end of the term of this
Lease Agreement or, in the event that the Leased Propertyis re-let, to pay any deficiency in Rental
Payments that results therefrom; and further agrees to pay said Rental Payments and/or Rental
Payment deficiency punctually at the same time and in the same manner as hereinabove provided for
the payment of Rental Payments hereunder, notwithstanding the fact that the Authority may have
received in previous years or may receive thereafter in subsequent years Rental Payments in excess
of the Rental Payments herein specified, and notwithstanding any entry or re-entry by the Authority
or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such
re-entry or obtaining possession of the Leased Property. Should the Authority elect to re-enter as
herein provided, the City hereby irrevocably appoints the Authority as the agent and attorney-in-fact
of the City to re-let the Leased Property, or any part thereof, from time to time, either in the
Authority’s name or otherwise, upon such terms and conditions and for such use and period as the
Authority may deem advisable and to remove all persons in possession thereof and all personal
property whatsoever situated upon the Leased Propertyand to place such personal property in storage
in any warehouse or other suitable place, for the account of and at the expense of the City, and the
City hereby indemnifies and agrees to save harmless the Authority from any costs, loss or damage
whatsoever arising out of, in connection with, or incident to any such re-entry upon and re-letting of
the Leased Propertyand removal and storage of such property by the Authority or its duly authorized
agents in accordance with the provisions herein contained. The City agrees that the terms of this
Lease Agreement constitute full and sufficient notice of the right of the Authority to re-let the Leased
Propertyin the event of such re-entry without effecting a surrender of this Lease Agreement, and
further agrees that no acts of the Authority in effecting such re-letting shall constitute a surrender or
termination of this Lease Agreement irrespective of the use or the term for which such re-letting is
made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the
event of such default by the City the right to terminate this Lease Agreement shall vest in the
Authority to be effected in the sole and exclusive manner provided for in subparagraph(1) hereof.
The City further agrees to pay the Authority the cost of any alterations or additions to the Leased
Propertynecessary to place the Leased Propertyin condition for re-letting immediately upon notice
to the City of the completion and installation of such additions or alterations.
The City hereby waives any and all claims for damages caused or which may be
caused by the Authority in re-entering and taking possession of the Leased Propertyas herein
provided and all claims for damages that may result from the destruction of or injury to the Leased
Propertyand all claims for damages to or loss of any property belonging to the City, or any other
person, that may be in or upon the Leased Property.
(b)If (i)the City’s interest in this Lease Agreement or any part thereof is
assigned or transferred, either voluntarily or by operation of law or otherwise, without the written
consent of the Authority and, as hereinafter provided for, or (ii)the City or any assignee shall file any
petition or institute any 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
the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of
the City’s debts or obligations, or offers to the City’s creditors to elect a composition or extension of
time to pay the City’s debts or asks, seeks or prays for reorganization or to effect a plan of
reorganization, or for a readjustment of the City’s debts, or for any other similar relief, or if any such
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petition or any such proceedings of the same or similar kind or character be filed or be instituted or
taken against the City, or if a receiver of the business or of the property or assets of the City shall be
appointed by any court, except a receiver appointed at the instance or request of the Authority, or if
the City shall make a general assignment for the benefit of the City’s creditors, or (iii)the City shall
abandon or vacate the Leased Property, then the City shall be deemed to be in default hereunder.
(c)In addition to the other remedies set forth in this Section, upon the occurrence
of an event of default, the Authority and its assignee shall be entitled to proceed to protect and
enforce the rights vested in the Authority and its assignee by the Lease Agreement or by law. The
provisions of the Lease Agreement and the duties of the City and of its city council, officers or
employees shall be enforceable by the Authority or its assignee by mandamus or other appropriate
suit, action or proceeding in any court of competent jurisdiction. Without limiting the generality of
the foregoing, the Authority and its assignee shall have the right to bring the following actions:
(i)Accounting. By action or suit in equity to require the City and its city
council, officers and employees and its assigns to account as the trustee of an express trust.
(ii)Injunction. By action or suit in equity to enjoin any acts or things
which may be unlawful or in violation of the rights of the Authority or its assignee.
(iii)Mandamus. By mandamus or other suit, action or proceeding at law
or in equity to enforce the Authority’s or its assignee’s rights against the City (and its city council,
officers and employees) and to compel the City to perform and carry out its duties and obligations
under the law and its covenants and agreements with the City as provided herein.
Each and all of the remedies given to the Authority hereunder or by any law now or
hereafter enacted are cumulative and the single or partial exercise of any right, power or privilege
hereunder shall not impair the right of the Authority to the further exercise thereof or the exercise of
any or all other rights, powers or privileges. The term “re-let” or “re-letting” as used in this Section
shall include, but not be limited to, re-letting by means of the operation by the Authority of the
Leased Property. If any statute or rule of law validly shall limit the remedies given to the Authority
hereunder, the Authority nevertheless shall be entitled to whatever remedies are allowable under any
statute or rule of law.
In the event the Authority shall prevail in any action brought to enforce any of the
terms and provisionsof this Lease Agreement, the City agrees to pay a reasonable amount as and for
attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the
Authority hereunder.
Notwithstanding anything to the contrary contained in this Lease Agreement, the
Authority shall have no right upon a default hereunder by the City to accelerate Rental Payments.
(d)Notwithstanding anything to the contrary contained in this Lease Agreement,
the termination of this Lease Agreement by the Authority and its assignees on account of a default by
the City under this Section shall not effect or result in a termination of the Site Lease.
Section 6.02Waiver. Failure of the Authority to take advantage of any default on the part
of the City shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which
may grow up between the parties in the course of administering this instrument be construed to waive
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or to lessen the right of the Authority to insist upon performance by the City of any term, covenant or
condition hereof, or to exercise any rights given the Authority on account of such default. A waiver
of a particular default shallnot be deemed to be a waiver of any other default or of the same default
subsequently occurring. The acceptance of Rental Payments hereunder shall not be, or be construed
to be, a waiver of any term, covenant or condition of this Lease Agreement.
ARTICLE VII
EMINENT DOMAIN; PREPAYMENT
Section 7.01Eminent Domain. If all of the Leased Property(or portions thereof such that
the remainder is not usable for public purposes by the City) shall be taken under the power of
eminent domain, the term hereof shall cease as of the day that possession shall be so taken. If less
than all of the Leased Propertyshall be taken under the power of eminent domain and the remainder
is usable for public purposes by the City at the time of such taking, then the Lease Agreement shall
continue in full force and effect as to such remainder, and the parties waive the benefits of any law to
the contrary, and in such event there shall be a partial abatement of the Rental Payments in
accordance with the provisions of Section3.06 hereof. So long as any Bonds shall be Outstanding,
any award made in eminent domain proceedings for the taking of the Leased Property, or any portion
thereof, shall be paid to the Trustee and applied to the redemption of Bonds as provided in
subsection(a) of Section4.01 of the Indenture, in the corresponding provisions of any Supplemental
Indenture pursuant to which Additional Bonds are issued and in Section5.03 of the Indenture. Any
such award made after all of the Bonds, and all other amounts due under the Indenture and
hereunder, have been fully paid, shall be paid to the Authority and to the City as their respective
interests may appear.
Section 7.02Prepayment.
(a)The City may prepay all or a portion of the Base Rental Payments attributable
to the 2016Bondswhich are payable after May1, 20__from any source of available funds, on any
date on or after May 1, 20__, by paying (i)all or a portion, as selected by the City, of the principal
components of such Base Rental Payments, and (ii)the accrued but unpaid interest component of
such BaseRental Payments to be prepaid to the date of such prepayment.
(b)The City may prepay, from any source of available funds, all or any portion
of the Base Rental Payments attributable to the 2016Bondsby depositing with the Trustee moneys
or securities as provided, and subject to the terms and conditions set forth, in ArticleX of the
Indenture sufficient to make such Base Rental Payments when due or to make such Base Rental
Payments through a specified date on which the City has a right to prepay such Base Rental
Payments pursuant to subsection(a) of this Section, and to prepay such Base Rental Payments on
such prepayment date, at a prepayment price determined in accordance with subsection(a) of this
Section.
(c)If less than all of the Base Rental Payments attributable to the 2016Bondsare
prepaid pursuant to this Section then, as of the date of such prepayment pursuant to subsection(a) of
this Section, or the date of a deposit pursuant to subsection(b) of this Section, the principal and
interest components of such Base Rental Payments shall be recalculated by the City and transmitted
to the Trusteein order to take such prepayment into account. The City agrees that if, following a
partial prepayment of such Base Rental Payments, the Leased Propertyis damaged or destroyed or
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taken by eminent domain, or a defect in title to the Leased Propertyis discovered, the City shall not
be entitled to, and by such prepayment waives the right of, abatement of such prepaid Base Rental
Payments and the City shall not be entitled to any reimbursement of such Base Rental Payments.
(d)If all of the Base Rental Payments are prepaid in accordance with the
provisions of this Lease Agreement then, as of the date of such prepayment pursuant to subsection(a)
of this Section and, if applicable, the corresponding provisions hereof relating to the prepayment of
Base Rental Payments attributable to Additional Bonds, or deposit pursuant to subsection(b) of this
Section and, if applicable, such corresponding provisions, and payment of allother amounts owed
under this Lease Agreement, the term of this Lease Agreement shall be terminated.
(e)Prepayments of Base Rental Payments attributable to the 2016Bondsmade
pursuant to this Section shall be applied to the redemption of the 2016Bondsas directed by the City
and as provided in Section4.01 of the Indenture.
(f)Before making any prepayment pursuant to this Article, the City shall give
written notice to the Authority and the Trustee specifying the date on which the prepayment will be
made (conditionally or otherwise), which date shall be not less than 30 nor more than 60 days from
the date such notice is given to the Authority.
ARTICLE VIII
COVENANTS
Section 8.01Right of Entry. The Authority and its assignees shall have the right to enter
upon and to examine and inspect the Leased Propertyduring reasonable business hours (and in
emergencies at all times) for any purpose connected with the Authority’s rights or obligations under
this Lease Agreement, and for all other lawful purposes.
Section 8.02Liens. In the event the City shall at any time during the term of this Lease
Agreement cause any changes, alterations, additions, improvements, or other work to be done or
performed or materials to be supplied, in or upon the Leased Property, the City shall pay, when due,
all sums of money that may become due for, or purporting to be for, any labor, services, materials,
supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about
the Leased Propertyand which may be secured by a mechanics’, materialmen’s or other lien against
the Leased Propertyor the Authority’s interest therein, and will cause each such lien to be fully
discharged and released at the time the performance of any obligation secured by any such lien
matures or becomes due, except that, if the City desires to contest any such lien, it may do so as long
as such contestment is in good faith. If any such lien shall be reduced to final judgment and such
judgment or such process as may be issued for the enforcement thereof is not promptlystayed, or if
so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment.
Section 8.03Quiet Enjoyment. The parties hereto mutually covenant that the City, by
keeping and performing the covenants and agreements herein contained, shall at all times during the
term of this Lease Agreement peaceably and quietly have, hold and enjoy the Leased Property
without suit, trouble or hindrance from the Authority.
Section 8.04Authority Not Liable. The Authority and its directors, officers, agents and
employees, shall not be liable to the City or to any other party whomsoever for any death, injury or
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damage that may result to any person or property by or from any cause whatsoever in, on or about
the Leased Property. To the extent permitted by law, the City shall, at its expense, indemnify and
hold the Authority and the Trustee and all directors, members, officers and employees thereof
harmless against and from any and all claims by or on behalf of any person, firm, corporation or
governmental authority arising from the acquisition, construction, occupation, use, operation,
maintenance, possession, conduct or management of or from any work done in or about the Leased
Propertyor from the subletting of any part thereof, including any liability for violation of conditions,
agreements, restrictions, laws, ordinances, or regulations affecting the Leased Propertyor the
occupancy or use thereof, but excepting the negligence or willful misconduct of the persons or entity
seeking indemnity. The City also covenants and agrees, at its expense, to pay and indemnify and
save the Authority and the Trustee and all directors, officers and employees thereof harmless against
and from any and all claims arising from (a)any condition of the Leased Propertyand the adjoining
sidewalks and passageways, (b)any breach or default on the part of the City in the performance of
any covenant or agreement to be performed by the City pursuant to this Lease Agreement, (c)any act
or negligence of licensees in connection with their use, occupancy or operation of the Leased
Property, or (d)any accident, injury or damage whatsoever caused to any person, firm or corporation
in or about the Leased Propertyor upon or under the sidewalks and from and against all costs,
reasonable counsel fees, expenses and liabilities incurred in any action or proceeding brought by
reason of any claim referred to in this Section, but excepting the negligence or willful misconduct of
the person or entity seeking indemnity. In the event that any action or proceeding is brought against
the Authority or the Trustee or any director, member, officer or employee thereof, by reason of any
such claim, the City, upon notice from the Authority or the Trustee or such director, member, officer
employee thereof, covenants to resist or defend such action or proceeding by counsel reasonably
satisfactory to the Authority or the Trustee or such director, member, officer or employee thereof.
Section 8.05Assignment and Subleasing. Neither this Lease Agreement nor any interest
of the Cityhereunder shall be sold, mortgaged, pledged, assigned, or transferred by the City by
voluntary act or by operation by law or otherwise. The Leased Propertymay not be subleased in
whole or in part by the City without the prior written consent of the Authority. Any such sublease
shall be subject to all of the following conditions:
(a)this Lease Agreement and the obligation of the City to make all Rental
Payments hereunder shall remain the primary obligation of the City;
(b)the City shall, within 30 days after the delivery thereof, furnish or cause to be
furnished to the Authority and the Trustee a true and complete copy of such sublease;
(c)no such sublease by the City shall cause the Leased Propertyto be used for a
purpose other than a governmental or proprietaryfunction authorized under the provisions of the
Constitution and laws of the State of California;
(d)any sublease of the Leased Propertyby the City shall explicitly provide that
such sublease is subject to all rights of the Authority under the Lease Agreement, including, the right
to re-enter and re-let the Leased Propertyor terminate the Lease Agreement upon a default by the
City; and
(e)the City shall furnish the Authority and the Trustee with an Opinion of
Counsel to the effect that such sublease will not, in and of itself, cause the interest on the Bonds to be
included in gross income for federal income tax purposes.
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Section 8.06Title to Leased Property. Upon the termination or expiration of this Lease
Agreement (other than as provided in Section6.01 and Section7.01hereof), and the first date upon
which the Bonds are no longer Outstanding, all right, title and interest in and to the Leased Property
shall vest in the City. Upon any such termination or expiration, the Authority shall execute such
conveyances, deeds and other documents as may be necessary to effect such vesting of record.
Section 8.07Authority’s Purpose. The Authority covenants that, prior to the discharge of
this Lease Agreement and the Bonds, it will not engage in any activities inconsistent with the
purposes for which the Authority is organized, as set forth in the Joint Powers Agreement.
Section 8.08Representations of the City. The City represents and warrants to the
Authority that (a)the City has the full power and authority to enter into, to execute and to deliver this
Lease Agreement and the Indenture, and to perform all of its duties and obligations hereunder and
thereunder, and has duly authorized the execution and delivery of this Lease Agreement and the
Indenture, and (b)the Leased Propertywill be used in the performance of essential governmental
functions.
Section 8.09Representation of theAuthority. The Authority represents and warrants to
the City that the Authority has the full power and authority to enter into, to execute and to deliver this
Lease Agreement, the Assignment Agreement and the Indenture, and to perform all of its duties and
obligations hereunder and thereunder, and has duly authorized the execution and delivery of this
Lease Agreement, the Assignment Agreement and the Indenture.
ARTICLE IX
NO CONSEQUENTIAL DAMAGES;
USE OF THE PROPERTY;SUBSTITUTION OR RELEASE
Section 9.01No Consequential Damages. In no event shall the Authority or the Trustee
be liable for any incidental, indirect, special or consequential damage in connection with or arising
out of this Lease Agreement or the City’s use of the Leased Property.
Section 9.02Use of the Leased Property. The City will not use, operate or maintain the
Leased Propertyimproperly, carelessly, in violation of any applicable law or in a manner contrary to
that contemplated by this Lease Agreement. In addition, the City agrees to comply in all respects
(including, without limitation, with respect to the use, maintenance and operation of the Leased
Property) with all laws of the jurisdictions in which its operations may extend and any legislative,
executive, administrative or judicial body exercising any power or jurisdiction over the Leased
Property; provided, however, that the City may contest in good faith the validity or application of any
such law or rule in any reasonable manner which does not, in the opinion of the Authority, adversely
affect the estate of the Authority in and to any of the Leased Propertyor its interest or rights under
this Lease Agreement.
Section 9.03Substitution or Release of the Leased Property. The City shall have the
right to substitute alternate real property for any portion of the Leased Property or to release a portion
of the Leased Propertyfrom this Lease Agreement. All costs and expenses incurred in connection
with such substitution orrelease shall be borne by the City. Notwithstanding any substitution or
release of Leased Propertypursuant to this subsection, there shall be no reduction in or abatement of
the Base Rental Payments due from the City hereunder as a result of such substitution or release.
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Any such substitution or release of any portion of the Leased Propertyshall be subject to the
following specific conditions, which are hereby made conditions precedent to such substitution or
release:
(a)an independent certified real estate appraiser selected by the City shall have
found (and shall have delivered a certificate to the City and the Trustee setting forth its findings) that
the Leased Property, as constituted after such substitution or release, (i)has an annual fair rental
value at least equal to the maximum Base Rental Payments payable by the City in any Rental Period,
and (ii)has a useful life in excess of the final maturity of any Outstanding Bonds;
(b)the City shall have obtained or caused to be obtained a CLTA or ALTA title
insurance policy or policies with respect to any substituted property in the amount at least equal to
the aggregate principal amount of any Outstanding Bonds of the type and with the endorsements
described in Section5.02 hereof;
(c)the City shall have provided the Trustee with an Opinion of Counsel to the
effect that such substitution or release will not, in and of itself, cause the interest on the Bonds to be
included in gross income for federal income tax purposes;
(d)the City, the Authority and the Trustee shall have executed, and the City shall
have caused to be recorded with the San Diego County Recorder, any document necessary to
reconvey to the City the portion of the Leased Propertybeing released and to include any substituted
real property in the description of the Leased Propertycontained herein and in the Site Lease;
(e)the City shall have provided notice of such substitution to each rating agency
then rating the Bondsin accordance with Section 11.14 of the Indenture;
(f)no Event of Default (within the meaning of ArticleVI hereof) has occurred
and is continuing;
(g)the City will give, or cause to be given, any notice of the occurrence of such
substitution required to be given pursuant to the Continuing Disclosure Agreement;
(h)the City will certify to the Trustee that the City has a current need for the
substituted real property; and
(i)the City shall certify to the Trustee that any substitution shall not cause the
City to violate any of its covenants, representations and warranties made in the Lease Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.01 Law Governing. THIS LEASE AGREEMENT SHALL BE GOVERNED
EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE STATE OF
CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.
Section 10.02Notices. All written notices, statements, demands, consents, approvals,
authorizations, offers, designations, requests or other communications hereunder shall be given to the
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party entitled thereto at its address set forth below, or at such other address as such party may provide
to the other parties in writing from time to time, namely:
If to the City:City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Director of Finance
If to the Authority:Chula Vista Municipal Financing Authority
276 Fourth Avenue
Chula Vista, California 91910
Attention: Executive Director
Each such notice, statement, demand, consent, approval, authorization, offer, designation,
request or other communication hereunder shall be deemed delivered to the party to whom it is
addressed (a)if personally served or delivered, upon delivery, (b)if given by electronic
communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate
answerback or other written acknowledgment, (c)if given by registered or certified mail, return
receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is
deposited with the United States mail, (d)if given by overnight courier, with courier charges prepaid,
24 hours after delivery to said overnight courier, or (e)if given by any other means, upon delivery at
the address specified in this Section.
Section 10.03Validity and Severability. If for any reason this Lease Agreement shall be
held by a court of competent jurisdiction to be void, voidable or unenforceable by the Authority or by
the City, or if for any reason it is held by such a court that any of the covenants and conditions of the
City hereunder, including the covenant to pay Rental Payments, is unenforceable for the full term
hereof; then and in such event this Lease Agreement is and shall be deemed to be a Lease Agreement
under which the Rental Payments are to be paid by the City annually in consideration of the right of
the City to possess, occupy and use the Leased Property, and all of the terms, provisions and
conditions of this Lease Agreement, except to the extent that such terms, provisions and conditions
are contrary to or inconsistent with such holding, shall remain in full force and effect.
Section 10.04Net-Net-Net Lease. This Lease Agreement shall be deemed and construed to
be a “net-net-net lease” and the City hereby agrees that the Rental Payments shall be an absolute net
return to the Authority, free and clear of any expenses, charges or set-offs whatsoever and
notwithstanding any dispute between the City and the Authority.
Section 10.05Taxes. The City shall pay or cause to be paid all taxes and assessments of
any type or nature charged to the Authority or affecting the Leased Propertyor the respective
interests or estates therein; provided, however, that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period of years, the City shall
be obligated to pay only such installments as are required to be paid during the term of this Lease
Agreement as and when the same become due.
The City or any sublessee may, at the City’s or such sublessee’s expense and in its name, in
good faith contest any such taxes, assessments, utility and other charges and, in the event of any such
contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the
period of such contest and any appeal therefrom unless the Authority or the Trustee shall notify the
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City or such sublessee that, in the opinion of independent counsel, by nonpayment of any such items,
the interest of the Authority in the Leased Propertywill be materially endangered or the Leased
Property, or any part thereof, will be subject to loss or forfeiture, in which event the City or such
sublessee shall promptly pay such taxes, assessments or charges or provide the Authority with full
security against any loss which may result from nonpayment, in form satisfactory to the Authority
and the Trustee.
Section 10.06Section Headings. All section headings contained herein are for convenience
of reference only and are not intended to define or limit the scope of any provision of this Lease
Agreement.
Section 10.07Amendments.
(a)This Lease Agreement and the Site Leasemay be amended and the rights and
obligations of the Authority and the City hereunder and thereunder may be amended at any time by
an amendment hereto or thereto which shall become binding upon execution and delivery by the
Authority and the City, but only with the prior written consent of the Owners of a majority of the
principal amount of the Bonds then Outstanding pursuant to the Indenture, provided that no such
amendment shall (i)extend the payment date of any Base Rental Payments, reduce the interest
component or principal component of any Base Rental Payments or change the prepayment terms
and provisions, without the prior written consent of the Owner of each Bond so affected, or
(ii)reduce the percentage of the principal amount of the Bonds the consent of the Owners of which is
required for the execution of any amendment of this Lease Agreement or the Site Lease.
(b)This Lease Agreement and the Site Leaseand the rights and obligations of the
Authority and the City hereunder and thereunder may also be amended at any time by an amendment
hereto or thereto which shall become binding upon execution by the Authority and the City, without
the written consents of any Ownersbutonly to the extent permitted by law and only for any one or
more of the following purposes:
(i)to add to the agreements, conditions, covenants and terms required by
the Authority or the City to be observed or performed herein or therein other agreements, conditions,
covenants and terms thereafter to be observed or performed by the Authority or the City, or to
surrender any right or power reserved herein or therein to or conferred herein or therein on the
Authority or the City, and which in either case shall not materially adversely affect the interests of
the Owners, as evidenced by an Opinion of Bond Counsel;
(ii)to make such provisions for the purpose of curing any ambiguity or of
correcting, curing or supplementing any defective provision contained herein or therein or in regard
to questions arising hereunder or thereunder which the Authority or the City may deem desirable or
necessary and not inconsistent herewith or therewith, and which shall not materially adversely affect
the interests of the Owners, as evidenced by an Opinion of Bond Counsel;
(iii)to make such additions, deletions or modifications as may be
necessary or appropriate to assure the exclusion from gross income for federal income tax purposes
of the interest on the Bonds;
(iv)to provide for the substitution or release of a portion of the Leased
Propertyin accordance with the provisions of Section9.03 hereof;
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(v)to provide for the issuance of Additional Bonds in accordance with
ArticleIII of the Indenture; or
(vi)to make such other changes herein or therein or modifications hereto
or thereto as the Authority or the City may deem desirable or necessary, and which shall not
materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel.
Section 10.08Assignment. The City and the Authority hereby acknowledge the assignment
of this Lease Agreement (except for the Authority’s obligations and its rights to give consents or
approvals hereunder), and the Base Rental Payments payable hereunder,to the Trustee pursuant to
the Assignment Agreement. To the extent that this Lease Agreement confers upon or gives or grants
the Trustee any right, remedy or claim under or by reason of this Lease Agreement, the Trustee is
hereby explicitly recognized asbeing a third-party beneficiary hereunder and may enforce any such
right, remedy or claim conferred, given or granted hereunder.
Section 10.09Execution. This Lease Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all together shall constitute but one
and the same Lease Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Authority and the City have caused this Lease Agreement to
be executed by their respective officers thereunto duly authorized, all as of the day and year first
above written.
CITY OF CHULA VISTA
By:
Director of Finance
ATTEST:
City Clerk
CHULA VISTA MUNICIPAL FINANCING
AUTHORITY
By:
Executive Director
ATTEST:
Secretary
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CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in the Leased Premises conveyed under the foregoing to the
City of Chula Vista, amunicipal corporation and a charter city duly organized and existing under the
Constitution and laws of the State of California, is hereby accepted by the undersigned officer or
agent on behalf of the City Council of the City of Chula Vista, pursuant to authority conferred by
resolution of the said City Council adopted on ________, 2016and the grantee consents to
recordation thereof by itsduly authorized officer.
Dated: __________, 2016 CITY OF CHULA VISTA
By:
City Manager
2016-04-05 Agenda Packet Page 509
A-1
EXHIBITA
LEGAL DESCRIPTION OF THE PROPERTY
THAT REAL PROPERTY IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL 1: (CORPORATION YARD APN'S: 644-230-11-00 THROUGH 644-230-19-00)
LOTS 11 THROUGH 19 INCLUSIVE IN CHULA VISTA TRACT NO. 81-6, OTAY VALLEY
INDUSTRIAL PARK, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAPTHEREOF NO. 10974, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 21, 1984.
TOGETHER WITH THAT PORTION OF CHULA VISTA TRACT NO. 81-6, OTAY VALLEY
INDUSTRIAL PARK, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 10974, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 21, 1984, DESCRIBED AS
RESEARCH COURT AS VACATED AND CLOSED TO PUBLIC USE BY RESOLUTION NO.
12630 WHICH RECORDED IN THE OFFICE OF THE COUNTY RECORDERON
SEPTEMBER 12, 1986 AS INSTRUMENT NO. 86-402309 OF OFFICIAL RECORDS.
PARCEL 2: (FIRE STATION NO. 4 APN: 642-391-06-00)
LOT I OF CHULA VISTA TRACT NO. 88-1, RANCHO DEL REY PHASE 2, IN THE CITY OF
CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP THEREOF NO. 12341, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY, MARCH 28, 1989.
PARCEL 3: (FIRE STATION NO. 6 APN: 595-570-01-00)
LOT 1 OF CHULA VISTA TRACT NO. 92-02, SALT CREEK RANCH NEIGHBORHOOD 3A
SCHOOL PARK, AND FIRESTATION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 13440, FILED IN
THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JULY 19, 1997.
PARCEL 5: (FIRE STATION NO. 8 APN: 595-080-54-00)
LOT 'K' ANDA PORTION OF LOT 'G' OF CHULA VISTA TRACT NO. 01-09, EASTLAKE III
WOODS, NEIGHBORHOOD WR-4 IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA ACCORDING TO THE MAP THEREOF NO. 14394 FILED
IN THE OFFICE OF THE COUNTY RECORDER MAY 16, 2002,DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID LOT 'K'; THENCE ALONG
THE SOUTHEASTERLY LINE OF SAID LOT "K" NORTH 53°45'38" EAST, 231.84 FEET;
THENCE NORTH 43°28'38" EAST, 14.69 FEET TO A POINT ON THE WESTERLY LINE OF
WOODS DRIVE AS SHOWN ON SAID MAP NO. 14394; THENCE ALONG SAID
WESTERLY LINE NORTH 12°24'11" EAST, 12.89 FEET TO THE BEGINNING OF A
2016-04-05 Agenda Packet Page 510
A-2
TANGENT 689.50 FOOT RADIUS CURVE, CONCAVE EASTERLY; THENCE NORTHERLY
ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 03°58'17", A
DISTANCE OF 47.79 FEET; THENCE NORTH 26°28'31" WEST, 26.45 FEET TO A POINT ON
THE SOUTHERLY LINE OF HAWTHORNE CREEK DRIVE AS SHOWN ON SAID MAP;
THENCE ALONG SAID SOUTHERLY LINE NORTH 69°52'42" WEST, 11.23 FEET TO THE
BEGINNING OF A TANGENT 830.00 FOOT RADIUS CURVE, CONCAVE NORTHERLY;
THENCE WESTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE
OF 09°55'21", A DISTANCE OF 143.74 FEET; THENCE LEAVING SAID SOUTHERLY LINE
OF HAWTHORNE CREEK DRIVE, SOUTH 27°08'59" WEST, 207.29 FEET; THENCE SOUTH
12°22'20" WEST, 100.42 FEET; THENCE SOUTH 77°37'40" EAST, 58.08 FEET TO THE POINT
OF BEGINNING.
PARCEL 6: (FIRE STATION NO. 8 APN: 595-080-47-00)
ALL THAT PORTION OF RANCHO JANAL, IN THE CITY OF CHULA VISTA, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF RECORDED
IN BOOK 1, PAGE 89 ET SEQ. OF PATENTS, LYING WITHIN SECTIONS 35 AND 36,
TOWNSHIP 17 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, DESCRIBED AS
FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 1 OF PARCEL MAP NO. 17874
FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY JULY 3, 1997, SAID
POINT BEING ON THE NORTHERLY LINE OF OTAY LAKES ROAD GRANTED TO THE
CITY OF CHULA VISTA PER DOCUMENT RECORDED NOVEMBER 28, 1990 AS
INSTRUMENT NO. 90-634654 OF OFFICIAL RECORDS; THENCEALONG SAID
NORTHERLY LINE SOUTH 77°37'40" EAST (SOUTH 77°38'00" EAST PER SAID
INSTRUMENT NO. 90-634654) 238.48 FEET; THENCE LEAVING SAID NORTHERLY
LINE NORTH 53°45'38" EAST, 13.33 FEET TO THE TRUE POINT OF BEGINNING; THENCE
NORTH 53°45'38" EAST, 231.84 FEET; THENCE NORTH 43°28'38" EAST; 14.69 FEET TO A
POINT HEREINAFTER REFERRED TO AS POINT "A"; THENCE SOUTH 12°24'11" WEST,
166.03 FEET; THENCE SOUTH 57°23'16" WEST, 29.91 FEET; THENCE NORTH 76°49'57"
WEST, 12.16 FEET TO THE BEGINNING OF A TANGENT 5064.00 FOOT RADIUS
CURVE CONCAVE SOUTHERLY; THENCE WESTERLY ALONG THE ARC OF SAID
CURVE THROUGH A CENTRAL ANGLE OF 0°47'42" A DISTANCE OF 70.27 FEET;
THENCE NORTH 77°37'39" WEST, 57.20 FEET TO THE TRUE POINT OF BEGINNING.
THIS LEGAL IS MADE PURSUANT TO THAT CERTAINCERTIFICATE OF COMPLIANCE
RECORDED MAY 30, 2006, AS INSTRUMENT NO. 2006-0380709 OF OFFICIAL RECORDS.
2016-04-05 Agenda Packet Page 511
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EXHIBITB
BASE RENTAL PAYMENT SCHEDULE
Date
(Fifteen Days
Prior to)Principal ComponentInterest ComponentTotal Base Rental
11/1/2016
5/1/2017
11/1/2017
5/1/2018
11/1/2018
5/1/2019
11/1/2019
5/1/2020
11/1/2020
5/1/2021
11/1/2021
5/1/2022
11/1/2022
5/1/2023
11/1/2023
5/1/2024
11/1/2024
5/1/2025
11/1/2025
5/1/2026
11/1/2026
5/1/2027
11/1/2027
5/1/2028
11/1/2028
5/1/2029
11/1/2029
5/1/2030
11/1/2030
5/1/2031
11/1/2031
5/1/2032
11/1/2032
5/1/2033
11/1/2033
5/1/2034
11/1/2034
5/1/2035
11/1/2035
5/1/2036
2016-04-05 Agenda Packet Page 512
RECORDING REQUESTED BY:
Chula Vista Municipal Financing Authority
AND WHEN RECORDED RETURN TO:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Robert J. Whalen, Esq.
[Space above for Recorder’s use.]
THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT
TO SECTION11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS
EXEMPT FROM RECORDING FEES PURSUANT TO SECTION27383 OF THE CALIFORNIA
GOVERNMENT CODE.
THE GRANTOR AND THE GRANTEE ARE GOVERNMENTAL AGENCIES. THE LEASE TERM IS LESS
THAN 35 YEARS.
SITE LEASE
by and between
CITY OF CHULA VISTA
and
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
Dated as of May1, 2016
Relating to
$20,325,000
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
2016LEASE REVENUE REFUNDINGBONDS
2016-04-05 Agenda Packet Page 513
SITE LEASE
THIS SITE LEASE (this “Site Lease”), executed and entered into as of May1, 2016, is by
and between the CITY OF CHULA VISTA(the “City”), a municipal corporation and a charter city
duly organized and existing under the Constitution and laws of the State of California, as lessor, and
the CHULA VISTA MUNICIPAL FINANCING AUTHORITY, a joint exercise of powers authority
duly organized and existing under the laws of the State of California(the “Authority”), as lessee.
WITNESSETH:
WHEREAS, the City and the Authority desire to refinance the City of Chula Vista2006
Certificates of Participation (2006 Civic Center Project –Phase2) (the “2006Certificates”)and the
City of Chula Vista 2010 Certificates of Participation (Capital Facilities Refunding Projects) (the
“2010 Certificates”)and the City’s lease obligationsin connection therewith, the proceeds of which
were used to finance and refinance a portion of the costs of the acquisition, construction and
installation of certain public capital improvements located within the City and described in the
proceedings for the 2006Certificates(the “2006Project”)and the proceedings for the 2010
Certificates ( the “2010 Project”);
WHEREAS, in order to refinance the 2006Projectand the 2010 Project, the City will lease
certain real property and the improvements located thereon (the “Leased Property”) to the Authority
pursuant to thisSite Lease, and the City will sublease the Leased Propertyback from the Authority
pursuant to aLease Agreement, dated the date hereof;
WHEREAS, the Leased Propertyis more particularly described in ExhibitA hereto;
WHEREAS, the City and the Authorityhave determined that it would be in the best interests
of the City and the Authorityto provide the funds necessary to refinance the 2006Projectand the
2010 Projectthrough the issuance by the Authority of bonds payable from the base rental payments
(the “Base Rental Payments”) to be made by the City under theLease Agreement;
WHEREAS, the City and the Authorityhave determined that it would be in the best interests
of the City and the Authorityto provide for the issuance of such bonds payable from the Base Rental
Payments pursuant to an Indenture, dated as of the date hereof, by and among the Authority, the City
and U.S. Bank National Association, as trustee (the “Trustee”);
WHEREAS, all rightsto receive the Base Rental Payments have been assigned without
recourse by the Authorityto the Trustee pursuant to an Assignment Agreement, dated as of the date
hereof (the “Assignment Agreement”)and recorded concurrently herewith;
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to
have been performed precedent to and in connection with the execution and entering into of this Site
Leasedo exist, have happened and have been performed in regular and due time, form and manner as
required by law, and the parties hereto are now duly authorized to execute and enter into this Site
Lease;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the
parties hereto agree as follows:
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2
ARTICLE I
DEFINITIONS
Except as otherwise defined herein, or unless the context clearly otherwise requires, words
and phrases defined in ArticleI of the Lease Agreement shall have the same meaning in this Site
Lease.
ARTICLE II
LEASE OF THE LEASED PROPERTY; RENTAL
Section 2.01Lease of Leased Property. The City hereby leases to the Authority, and the
Authority hereby leases from the City, for the benefit of the Owners of the Bonds, the Leased
Property, subject only to Permitted Encumbrances, to have and to hold for the term of this Site Lease.
Section 2.02Rental. The Authorityshall pay to the City as and for rental of the Leased
Property hereunder, the sum of $1.00, the receipt of which is hereby acknowledged.
ARTICLE III
QUIET ENJOYMENT
The parties intend that the Leased Propertywill be leased back to the City pursuant to the
Lease Agreement for the term thereof. It is further intended that, to the extent provided herein and in
the Lease Agreement, if an event of default occurs under the Lease Agreement, theAuthority, or its
assignee, will have the right, for the then remaining term of this Site Leaseto (a)take possession of
the Leased Property, (b)if it deems it appropriate, cause an appraisal of the Leased Propertyand a
study of the then reasonable use thereof to be undertaken, and (c)relet the Leased Property. Subject
to any rights the City may have under the Lease Agreement (in the absence of an event of default) to
possession and enjoyment of the Leased Property, the City hereby covenants and agrees that it will
not take any action to prevent the Authorityfrom having quiet and peaceable possession and
enjoyment of the Leased Propertyduring the term hereof and will, at the request of the Authorityand
at the City’s cost, to the extent that it may lawfully do so, join in any legal action in which the
Authorityasserts its right to such possession and enjoyment.
ARTICLE IV
SPECIAL COVENANTS AND PROVISIONS
Section 4.01Waste. The Authorityagrees that at all times that it is in possession of the
Leased Property, it will not commit, suffer or permit any waste on the Leased Property,and that it
will not willfully or knowingly use or permit the use of the Leased Propertyfor any illegal purpose or
act.
Section 4.02Further Assurances and Corrective Instruments. The City and the
Authority agree that they will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements hereto and such further instruments as may
2016-04-05 Agenda Packet Page 515
3
reasonably be required for correcting any inadequate or incorrect description of the Leased Property
hereby leased or intended so to be or for carrying out the expressed intention of this Site Lease, the
Indenture and the Lease Agreement.
Section 4.03Waiver of Personal Liability. All liabilities under this Site Leaseon the part
of the Authority shall be solely liabilities of the Authority as a joint exercise of powers entity, and the
City hereby releases each and every director, officer and employee of the Authorityof and from any
personal or individual liability under this Site Lease. No director, officer or employee of the
Authorityshall at any time or under any circumstances be individually or personally liable under this
Site Leaseto the City or to any other party whomsoever for anything done or omitted to be done by
the Authorityhereunder.
All liabilities under this Site Leaseon the part of the City shall be solely liabilities of the City
as a public corporation, and the Authorityhereby releases each and every member, officer and
employee of the City of and from any personal or individual liability under this Site Lease. No
member, officer or employee of the City shall at any time or under any circumstances be individually
or personally liable under this Site Leaseto the Authorityor to any other party whomsoever for
anything done or omitted to be done by the City hereunder.
Section 4.04Taxes. The City covenants and agrees to pay any and all assessments of any
kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the
Leased Property.
Section 4.05Right of Entry. The City reserves the right for any of its duly authorized
representatives to enter upon the Leased Propertyat any reasonable time to inspect the same.
Section 4.06Representations of the City. The City represents and warrants to the
Authority and the Trustee as follows:
(a)the City has the full power and authority to enter into, to execute and to
deliver this Site Lease, and to perform all of its duties and obligations hereunder, and has duly
authorized the execution of this Site Lease;
(b)except for Permitted Encumbrances, the Leased Propertyis not subject to any
dedication, easement, right of way, reservation in patent, covenant, condition, restriction, lien or
encumbrance which would prohibit or materially interfere with the use of the Leased Propertyfor
governmental purposes as contemplated by the City;
(c)all taxes, assessments or impositions of any kind with respect to the Leased
Property, except current taxes, have been paid in full; and
(d)the Leased Propertyis necessary to the City in order for the City to perform
its governmental functions.
Section 4.07Representations of the Authority. The Authorityrepresents and warrants to
the City and the Trustee that the Authorityhas the full power and authority to enter into, to execute
and to deliver this Site Lease, and to perform all of its duties and obligations hereunder, and has duly
authorized the execution and delivery of this Site Lease.
2016-04-05 Agenda Packet Page 516
4
ARTICLE V
ASSIGNMENT, SUBLEASING, MORTGAGING ANDSELLING
Section 5.01Assignment and Subleasing. This Site Leasemay be sold or assigned and
the Leased Propertysubleased, as a whole or in part, by the Authoritywithout the necessity of
obtaining the consent of the City, if an event of default occurs under the Lease Agreement. The
Authorityshall, within 30 days after such an assignment, sale or sublease, furnish or cause to be
furnished to the City a true and correct copy of such assignment, sale or sublease, as the case may be.
Section 5.02Restrictions on City. The City agrees that, except with respect to Permitted
Encumbrances, it will not mortgage, sell, encumber, assign, transfer or convey the Leased Property
or any portion thereof during the term of this Site Lease.
ARTICLE VI
TERM; TERMINATION
Section 6.01Term. The term of this Site Leaseshall commence as of the date of
commencement of the term of the Lease Agreement and shall remain in full force and effect from
such date to and including May 1, 2036 unless such term is extended or sooner terminated as
hereinafter provided.
Section 6.02Extension; Early Termination. If, on May1, 2036,the Bonds shall not be
fully paid, or provision therefor made in accordance with ArticleX of the Indenture, or theIndenture
shall not be discharged by its terms, or if the Rental Payments payable under the Lease Agreement
shall have been abated at any time, then the term of this Site Leaseshall be automatically extended
until the date upon which all Bonds shall be fully paid, or provision therefor made in accordance with
ArticleX of the Indenture, and the Indenture shall be discharged by its terms, except that the term of
this Site Leaseshall in no event be extended beyond March 1, 2036. If, prior to March 1, 2036all
Bonds shall be fully paid, or provisions therefor made in accordance with ArticleX of the Indenture,
and the Indenture shall be discharged by its terms, the term of this Site Leaseshall end
simultaneously therewith.
ARTICLE VII
MISCELLANEOUS
Section 7.01Binding Effect. This Site Leaseshall inure to the benefit of and shall be
binding upon the City, the Authorityand their respective successors and assigns.
Section 7.02Severability. In the event any provision of this Site Leaseshall be held
invalid or unenforceable by any court ofcompetent jurisdiction, such holding shall not invalidate or
render unenforceable any other provision hereof.
Section 7.03Amendments, Changes and Modifications. This Site Leasemay be
amended, changed, modified, altered or terminated only in accordance with the provisions of the
Lease Agreement.
2016-04-05 Agenda Packet Page 517
5
Section 7.04Assignment to Trustee. The Authorityand City acknowledge that the
Authority has assigned its right, title and interest in and to this Site Lease(but none of its obligations
and none of its rights to provide consents or approvals hereunder) to the Trustee pursuant to certain
provisions of the Assignment Agreement. The City consents to such assignment.
Section 7.05Execution In Counterparts. This Site Leasemay be simultaneously
executed in several counterparts, each of which shall be an original and all of which shall constitute
but one and the same instrument.
Section 7.06Applicable Law. This Site Leaseshall be governed by and construed in
accordance with the laws of the State of California.
Section 7.07Captions. The captions or headings in this Site Leaseare for convenience
only and in no way define, limit or describe the scope or intent of any provisions or sections of this
Site Lease.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
2016-04-05 Agenda Packet Page 518
S-1
DOCSOC/1702875/200168-0002
IN WITNESS WHEREOF, the Authorityand the City have caused this Site Leaseto be
executed by their respective officers hereunto duly authorized, all as of the day and year first above
written.
CITY OF CHULA VISTA
By:
David Bilby
Director of Finance
ATTEST:
Donna Norris
City Clerk
CHULA VISTA MUNICIPAL FINANCING
AUTHORITY
By:
Gary Halbert
Executive Director
ATTEST:
Donna Norris
Secretary
2016-04-05 Agenda Packet Page 519
DOCSOC/1702875/200168-0002
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed under the foregoing to the Chula
Vista Municipal Financing Authority (the “Authority”), a body corporate and politic, is hereby
accepted by the undersigned officer or agent on behalf of the Board of the Authority (the “Board”),
pursuant to authority conferred by resolution of said Board adopted on April 5, 2016, and the grantee
consents torecordation thereof by its duly authorized officer.
Dated: ______________, 2016 CHULA VISTA MUNICIPAL FINANCING
AUTHORITY
By:
Gary Halbert
Executive Director
2016-04-05 Agenda Packet Page 520
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF SAN DIEGO )
On ___________________ before me, ____________________________________, Notary Public,
personally appeared _____________________________________________________, who proved
to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
2016-04-05 Agenda Packet Page 521
A notary public or other officer completing this certificate verifiesonly the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF SAN DIEGO )
On ___________________ before me, ____________________________________, Notary Public,
personally appeared _____________________________________________________, who proved
to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
2016-04-05 Agenda Packet Page 522
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EXHIBIT A
LEGAL DESCRIPTION OF THE LEASED PROPERTY
THAT REAL PROPERTY IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL 1: (CORPORATION YARD APN'S: 644-230-11-00 THROUGH 644-230-19-00)
LOTS 11 THROUGH 19 INCLUSIVE IN CHULA VISTA TRACT NO. 81-6, OTAY VALLEY
INDUSTRIAL PARK, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 10974, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 21, 1984.
TOGETHER WITH THAT PORTION OF CHULA VISTA TRACT NO. 81-6, OTAY VALLEY
INDUSTRIAL PARK, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 10974, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 21, 1984, DESCRIBED AS
RESEARCH COURT AS VACATED AND CLOSED TO PUBLIC USE BY RESOLUTION NO.
12630 WHICH RECORDED IN THE OFFICE OF THE COUNTY RECORDER ON
SEPTEMBER 12, 1986 AS INSTRUMENT NO. 86-402309 OF OFFICIAL RECORDS.
PARCEL 2: (FIRE STATION NO. 4 APN: 642-391-06-00)
LOT I OF CHULA VISTA TRACT NO. 88-1, RANCHO DEL REY PHASE 2, IN THE CITY OF
CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP THEREOF NO. 12341, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY, MARCH 28, 1989.
PARCEL 3: (FIRE STATION NO. 6 APN: 595-570-01-00)
LOT 1 OF CHULA VISTA TRACT NO. 92-02, SALT CREEK RANCH NEIGHBORHOOD 3A
SCHOOL PARK, AND FIRE STATION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 13440, FILED IN
THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JULY 19, 1997.
PARCEL 5: (FIRE STATION NO. 8 APN: 595-080-54-00)
LOT 'K' AND A PORTION OF LOT 'G' OF CHULA VISTA TRACT NO. 01-09, EASTLAKE III
WOODS, NEIGHBORHOOD WR-4 IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA ACCORDING TO THE MAP THEREOF NO. 14394 FILED
IN THE OFFICE OF THE COUNTY RECORDER MAY 16, 2002, DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID LOT 'K'; THENCE ALONG
THE SOUTHEASTERLY LINE OF SAID LOT "K" NORTH 53°45'38" EAST, 231.84 FEET;
THENCE NORTH 43°28'38" EAST, 14.69 FEET TO A POINT ON THE WESTERLY LINE OF
WOODS DRIVE AS SHOWN ON SAID MAP NO. 14394; THENCE ALONG SAID
WESTERLY LINE NORTH 12°24'11" EAST, 12.89 FEET TO THE BEGINNING OF A
2016-04-05 Agenda Packet Page 523
A-2
TANGENT 689.50 FOOT RADIUS CURVE, CONCAVE EASTERLY; THENCE NORTHERLY
ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 03°58'17", A
DISTANCE OF 47.79 FEET; THENCE NORTH 26°28'31" WEST, 26.45 FEET TO A POINT ON
THE SOUTHERLY LINE OF HAWTHORNE CREEK DRIVE AS SHOWN ON SAID MAP;
THENCE ALONG SAID SOUTHERLY LINE NORTH 69°52'42" WEST, 11.23 FEET TO THE
BEGINNING OF A TANGENT 830.00 FOOT RADIUS CURVE, CONCAVE NORTHERLY;
THENCE WESTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE
OF 09°55'21", A DISTANCE OF 143.74 FEET; THENCE LEAVING SAID SOUTHERLY LINE
OF HAWTHORNE CREEK DRIVE, SOUTH 27°08'59" WEST, 207.29 FEET; THENCE SOUTH
12°22'20" WEST, 100.42 FEET; THENCE SOUTH 77°37'40" EAST, 58.08 FEET TO THE POINT
OF BEGINNING.
PARCEL 6: (FIRE STATION NO. 8 APN: 595-080-47-00)
ALL THAT PORTION OF RANCHO JANAL, IN THE CITY OF CHULA VISTA, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF RECORDED
IN BOOK 1, PAGE 89 ET SEQ. OF PATENTS, LYING WITHIN SECTIONS 35 AND 36,
TOWNSHIP 17 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, DESCRIBED AS
FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 1 OF PARCEL MAP NO. 17874
FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY JULY 3, 1997, SAID
POINT BEING ON THE NORTHERLY LINE OF OTAY LAKES ROAD GRANTED TO THE
CITY OF CHULA VISTA PER DOCUMENT RECORDED NOVEMBER 28, 1990 AS
INSTRUMENT NO. 90-634654 OF OFFICIAL RECORDS; THENCE ALONG SAID
NORTHERLY LINE SOUTH 77°37'40" EAST (SOUTH 77°38'00" EAST PER SAID
INSTRUMENT NO. 90-634654) 238.48 FEET; THENCE LEAVING SAID NORTHERLY
LINE NORTH 53°45'38" EAST, 13.33 FEET TO THE TRUE POINT OF BEGINNING; THENCE
NORTH 53°45'38" EAST, 231.84 FEET; THENCE NORTH 43°28'38" EAST; 14.69 FEETTO A
POINT HEREINAFTER REFERRED TO AS POINT "A"; THENCE SOUTH 12°24'11" WEST,
166.03 FEET; THENCE SOUTH 57°23'16" WEST, 29.91 FEET; THENCE NORTH 76°49'57"
WEST, 12.16 FEET TO THE BEGINNING OF A TANGENT 5064.00 FOOT RADIUS
CURVE CONCAVE SOUTHERLY; THENCE WESTERLY ALONG THE ARC OF SAID
CURVE THROUGH A CENTRAL ANGLE OF 0°47'42" A DISTANCE OF 70.27 FEET;
THENCE NORTH 77°37'39" WEST, 57.20 FEET TO THE TRUE POINT OF BEGINNING.
THIS LEGAL IS MADE PURSUANT TO THAT CERTAIN CERTIFICATE OF COMPLIANCE
RECORDED MAY 30,2006, AS INSTRUMENT NO. 2006-0380709 OF OFFICIAL RECORDS.
2016-04-05 Agenda Packet Page 524
ESCROW AGREEMENT (2006CERTIFICATES)
THISESCROW AGREEMENT, dated as of May1, 2016, by and amongthe City of Chula
Vista (the “City”), the Chula Vista PublicFinancing Authority(the “Authority”) and U.S. Bank
National Association, acting in its capacity as escrow bank (the “Escrow Bank”) pursuant to this
Escrow Agreement (2006Certificates) (the “Agreement”) and as 2006Trustee (as defined below);
WITNESSETH:
WHEREAS, the Authorityhas previously caused to be executed and delivered those certain
2006 Certificates of Participation (Civic Center Project –Phase2) (the “2006Certificates”), in the
original aggregate principal amount of $20,325,000, pursuant to anAmended and Restated Trust
Agreement,dated as of March1, 2006(the “2006Trust Agreement”), by and between the Authority
and U.S. Bank National Association, successor to The Bank of New York Trust Company, N.A., as
trustee (the “2006Trustee”), of which $__________aggregate principal amount iscurrently
outstanding; and
WHEREAS, the City hasdetermined that it is in its best interests and desirable that the 2006
Certificatesbe prepaidand defeased; and
WHEREAS, in order to accomplish such prepaymentit is necessary and desirable for the
City to prepayits remainingLeasePaymentobligationsunder that certainLease/Purchase Agreement
between the City, as lessee, and the Authority, as lessor, dated as of September1, 2004 as amended
by the First Amendmentto Lease/PurchaseAgreement,dated as of March1, 2006(the “Lease
Agreement”),and to thereby defease the 2006Certificatesin accordance with the terms of
Section14.01of the 2006Trust Agreementand Section10.3of the LeaseAgreement; and
WHEREAS, the City and the Chula Vista Municipal Financing Authority(the “Financing
Authority”) have agreed to provide funds necessary to effect theprepaymentand defeasance of the
2006Certificatesthrough the issuance by the Financing Authorityof its $__________aggregate
principal amount Chula Vista Municipal Financing Authority2016Lease Revenue Refunding Bonds
(the “2016Bonds”), secured in part by leasepayments to be made by the City to the Financing
Authoritypursuant to the LeaseAgreement, dated as of May1, 2016, by and between the City and
the Financing Authority; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the City, the Authorityandthe Escrow Bank agree as follows:
SECTION 1.Deposit ofMoneys.
(a)The City has causedto be depositedwith the Escrow Bank$__________
from the net proceeds of the 2016Bondsand$_________from certain funds and accounts held
under the 2006 Indenture. Such moneys shallbe held in irrevocable escrow by the Escrow Bank
separate and apart from other funds of the City, the Authority,the Financing Authority,the Escrow
Bank and the 2006Trusteein a fund hereby created and established and to be known as the “Escrow
Fund,” and shallbe applied solely as provided in this Agreement.
(b)The Escrow Bank hereby acknowledges receipt of the opinion of Stradling
Yocca Carlson & Rauth, dated _________, 2016, and relating to this Agreement with respect to the
2016-04-05 Agenda Packet Page 525
2
fact that the City’s and the Authority’s obligations under the 2006Trust Agreementwith respect to
the 2006Certificatesare defeased in the manner and to the extent provided in Section14.01of the
2006Trust Agreement.
SECTION 2.Investment of Moneys. The Escrow Bank acknowledges receipt of the
moneys described in Section 1 and agrees immediately to invest such moneys in the Governmental
Obligationslisted on Schedule A hereto, to deposit such Governmental Obligationsin the Escrow
Fundand to hold $_______ uninvested in cash.
The Escrow Bank shall be entitledto rely upon the conclusion of ______________________
(the “Verification Agent”), that the Government Obligations in the Escrow Fund mature and bear
interest payable in such amounts and at such times as, together with cash on deposit in the Escrow
Fund, will be sufficient to pay the prepayment price of the2006Certificates maturing on and after
March 1, 2017 on ___________, 2016.
SECTION 3.Investment of Any Remaining Moneys. At the written direction ofthe City,
the Escrow Bank shall reinvest any other amount of principal and interest, or any portion thereof,
received from the Governmental Obligationsprior to the date on which such payment is required for
the purposes set forth herein, in noncallable Governmental Obligationsmaturing not later than the
date on which such payment or portion thereof is required for the purposes set forth in Section 5, at
the written direction of the City, as verified in a report prepared by an independent certified public
accountant or firm of certified public accountants of favorable national reputation experienced in the
refunding of obligations of political subdivisions to the effect that the reinvestment described in said
report will not adversely affect the sufficiency of the amounts of securities, investments and money
in the Escrow Fund to pay the prepayment price of the 2006Certificates maturing on and after March
1, 2017 on ___________, 2016; provided that the Cityhas obtained and delivered to the Escrow
Bank an opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation,or other nationally
recognized bond counsel firmthat such reinvestment will not adversely affect the exclusion from
gross income for federal income tax purposes of the interest portion of the 2006Certificates or
interest on the Bonds. Any interest income resulting from investment or reinvestment of moneys
pursuant to this Section 3 which are not required for the purposes set forth in Section 5, as verified in
the letter of the Verification Agent originally obtained by the Bank with respect to the refunding of
the 2006Certificates or in any other report prepared by an independent certified public accountant or
firm of certified public accountants of favorable national reputation experienced in the refunding of
tax exempt obligations of political subdivisions, shall be paid to the City promptly upon the receipt of
such interest income by the Escrow Bank. The determination of the City as to whether an accountant
qualifies under this Escrow Agreement shall be conclusive.
SECTION 4.Substitution of Securities. Upon the written request of the City, and subject
to the conditions and limitations herein set forth and applicable governmental rules and regulations,
the Escrow Bank shall sell, prepayor otherwise dispose of the Governmental Obligations, provided
that there are substituted therefor from the proceeds of the Governmental Obligationsother
Governmental Obligations, but only after the City has obtained and delivered to the Escrow Bank:
(i)an ofStradling Yocca Carlson & Rauth, a Professional Corporation,or other nationally
recognized bond counsel firmto the effect that the substitution of securities is permitted hereunder
and that such reinvestment will not adversely affect the exclusion from gross income for federal
income tax purposes of the interest portion of the 2006Certificates or interest with respect to the
2016Bonds; and (ii) a report by a firm of independent certified public accountants to the effect that
the reinvestment described in said report will not adversely affect the sufficiency of the amounts of
2016-04-05 Agenda Packet Page 526
3
securities, investments and money in the Escrow Fund to pay the prepayment price of the 2006
Certificates maturing on and after March 1, 2017 on ___________, 2016. The Escrow Bank shall not
be liable or responsible for any loss resulting from any reinvestment made pursuant to this
Agreement and in full compliance with the provisions hereof.
SECTION 5.Payment of 2006Certificates.
(a)Payment. The Escrow Bank shall transfer from the Escrow Fund to the 2006
Trusteeamounts sufficient to pay the prepayment price of the 2006Certificates maturing on and after
March 1, 2017 on ___________, 2016 (the “Prepayment Date”) the prepayment price (the
“Prepayment Price”) of the 2006Certificatesmaturing after the Prepayment Date. The 2006Trustee
is hereby directed to apply such moneys to prepaythe 2006Certificateson the PrepaymentDate.
(b)Irrevocable Instructions to Provide Notice. The forms of the notice required
to be mailed pursuant to Sections 4.05and 14.01 of the 2006Trust Agreement are substantially in the
forms attached hereto as Exhibit C. The Cityhereby irrevocably instructs the Escrow Bankto mail a
notice of prepayment and a notice of defeasance of the 2006Certificates in accordance with Sections
4.05and 14.01, respectively, of the 2006Trust Agreement, as required to provide for the prepayment
of the 2006Certificates in accordance withthis Section 5.
(c)Unclaimed Moneys. Any moneys which remain unclaimed for one(1) year
after the Prepayment Date, shall, at the written request of the City, be repaid by the Escrow Bank to
the City;provided, however, that the Escrow Bank shall first mail a notice as more fully described in
the 2006Trust Agreementthat said moneys remain unclaimed.
(d)Priority of Payments. The holders of the 2006Certificatesshall have a first
lien on the moneys in the Escrow Fund which are allowable and sufficient to pay the 2006
Certificatesuntil such moneys are used and applied as provided in this Agreement. Any cash held in
the Escrow Fund isirrevocably pledged only to the 2006Certificate holders.
(e)Termination of Obligation. As provided in the 2006Trust Agreement, upon
deposit of moneys with the Escrow Bankin the Escrow Fund as set forth in Section 1 hereof and the
purchase of the various Governmental Obligationsas provided in Section 2 hereof, all obligations of
the City under the 2006Trust Agreement with respectto the 2006Certificates shall cease, terminate
and become void except as set forth in the 2006Trust Agreement. As provided in Section 10.3of the
LeaseAgreement the obligations of the City under the LeaseAgreement with respect to the portion
of the Lease Payments relating to the 2006Certificates shall cease, terminate, become void and be
completely discharged and satisfied (except for the rights of the 2006Trustee and the obligation of
the City to have the Governmental Obligationsand moneys on deposit in the Escrow Fund applied to
Lease Payments).
SECTION 6.Application of Certain Terms of the 2006Trust Agreement. All of the terms
of the 2006Trust Agreement relating to the making of payments of principal and interest with
respect to the 2006Certificates and relating to the exchange or transfer of the 2006Certificates are
incorporated in this Agreement as if set forth in full herein.
SECTION 7.Performance of Duties. The Escrow Bank agrees to perform only the duties
set forth herein and shall have no responsibility to take any action or omit to take any action not set
forth herein.
2016-04-05 Agenda Packet Page 527
4
SECTION 8.Escrow Bank’s Authority to Make Investments. Except as provided in
Sections 2, 3 and 4 hereof, the Escrow Bank shall have no power or duty to invest any funds held
under this Agreement or to sell, transfer or otherwise dispose of the moneys or Governmental
Obligationsheld hereunder.
SECTION 9.Indemnity. The City and the Authority hereby assume liability for, and
hereby agree (whether or not any of the transactions contemplated hereby are consummated) to
indemnify, protect, save and keep harmless the Escrow Bank and its respective successors, assigns,
agents, employees and servants, from and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees
and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or
asserted against, the Escrow Bank at any time (whether or not also indemnified against the same by
the Cityor the Authorityor any other person under any other agreement or instrument, but without
double indemnity) in any way relating to or arising out of the execution, delivery and performance of
thisAgreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds and
securities deposited therein and any payment, transfer or other application of moneys or securities by
the Escrow Bank in accordance with the provisions of this Agreement; provided, however, that the
City and the Authority shall not be required to indemnify the Escrow Bank against the Escrow
Bank’s own negligence or willful misconduct or the negligent or willful misconduct of the Escrow
Bank’s respective successors, assigns, agents and employees or the breach by the Escrow Bank of the
terms of this Agreement. In no event shall the City, the Authorityor the Escrow Bank be liable to
any person by reason of the transactions contemplated hereby other than to each other as set forth in
this section. The indemnities contained in this section shall survive the termination of this
Agreement and the resignation or removal of the Escrow Bank.
SECTION 10.Responsibilities of the Escrow Bank. The Escrow Bank and its respective
successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort,
contract or otherwise, in connection with the execution and delivery of this Agreement, the
establishment of the Escrow Fund, the acceptance of the moneys deposited therein, the sufficiency of
such moneysto accomplish the defeasance of the 2006Certificatesor any payment, transfer or other
application of moneys or obligations by the Escrow Bank in accordance with the provisions of this
Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error of
the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the
“Whereas” clauses herein shall be taken as the statements of the City and the Authority and the
Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no
representation as to the sufficiency of the moneys deposited in the Escrow Fundto accomplish the
defeasance of the 2006Certificatesor to the validity of this Agreement as to the City and, except as
otherwise provided herein, the Escrow Bank shall incur no liability with respect thereto. The Escrow
Bank shall not be liable in connection with the performance of its duties under this Agreement except
for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow
Bank shall be determined by the express provisions of this Agreement. In no event shall the Escrow
Bank be liable for any special indirect or consequential damages. The Escrow Bank may consult
with counsel, who may or may not be counsel to the City, and in reliance upon the written opinion of
such counsel shall have full and complete authorization and protection with respect to any action
taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank
shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering,
or omitting any action under this Agreement, such matter may be deemed to be conclusively
established by a certificate signed by an authorized officer of the City or the Authority. The Escrow
Bank shall incur no liability for losses arising from any investment made pursuant to this Agreement.
2016-04-05 Agenda Packet Page 528
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No provision of this Agreement shall requirethe Escrow Bank to expend or risk its own funds or
otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or
in the exercise of its rights or powers, 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. Any
company into which the Escrow Bank may be merged or converted or with which it may be
consolidated, or any company resulting from any merger, conversion or consolidation to which it
shall be a party or any company to which the Escrow Bank may sell or transfer all or substantially all
of its corporate trust business shall be the successor to the Escrow Bank without the execution or
filing of any paper or further act, anything herein to the contrary notwithstanding.
SECTION 11.Amendments. This Agreement is made for the benefit of the City, the
Authorityand the holders from time to time of the 2006Certificatesand it shall not be repealed,
revoked, altered or amended without the written consent of all such holders, the Escrow Bank and the
City; provided, however, but only after the receipt by the Escrow Bank of an opinion of nationally
recognized bond counsel that the exclusion from gross income of interest with respect to the
2016Bondsand the 2006Certificateswill not be adversely affected for federal income tax purposes,
that the City, the Authorityand the Escrow Bank may, without the consent of, or notice to, such
holders, amend this Agreement or enter into such agreements supplemental to this Agreement as
shall not adversely affect the rights of such holders and as shall not be inconsistent with the terms
and provisions of this Agreement for any one or more of the following purposes: (i)to cure any
ambiguity or formal defect or omission in this Agreement; (ii)to grant to, or confer upon, the Escrow
Bank for the benefit of the holders of the 2006Certificatesany additional rights, remedies, powers or
authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Bank; and
(iii)to include under this Agreement additional funds, securities or properties. The Escrow Bank
shall be entitled to rely conclusively upon an unqualified opinion of nationally recognized municipal
bond attorneys with respect to compliance with this section, including the extent, if any, to which any
change, modification, addition or elimination affects the rights of the holders of the 2006Certificates
or that any instrument executed hereunder complies with the conditions and provisions of this
section.
SECTION 12.Term. This Agreement shall commence upon its execution and delivery and
shall terminate on the later to occur of either:(i) the date upon which the 2006Certificateshave been
paid in accordance with this Agreement;or (ii) the date upon which no unclaimed moneys remain on
deposit with the Escrow Bank pursuant to Section 3(b) of this Agreement.
SECTION 13.Compensation. The Escrow Bank shall receive its reasonable fees and
expenses as previously agreed to; provided, however, that under no circumstances shall the Escrow
Bank be entitled to any lien nor will it assert a lien whatsoever on any moneys in the Escrow Fund
for the payment of fees and expenses for services rendered by the Escrow Bank under this
Agreement.
SECTION 14.Resignation or Removal of Trustee as Escrow Bank.
(a)The Escrow Bank may resign by giving notice in writing to the City and the
Authority. The EscrowBank may be removed: (1) by: (i) filing with the City and the Authority an
instrument or instruments executed by the holders of at least 51% in aggregate principal amount of
the 2006Certificatesthen remaining unpaid; and (ii) the delivery of a copy of the instruments filed
with the City and the Authority to the Escrow Bank; or (2) by a court of competent jurisdiction for
failure to act in accordance with the provisions of this Agreement upon application by the City or the
2016-04-05 Agenda Packet Page 529
6
Authority or the holders of 5% in aggregate principal amount of the 2006Certificatesthen remaining
unpaid.
(b)If the position of Escrow Bank becomes vacant due to resignation or removal
of the Escrow Bank or any other reason, a successor Escrow Bank may be appointed by the City and
the Authority. Within one year after a vacancy, the holders of a majority in principal amount of the
2006Certificatesthen remaining unpaid may, by an instrument or instruments filed with the City and
the Authority, appoint a successor Escrow Bank who shall supersede any Escrow Bank theretofore
appointed by the City and the Authority. If no successor Escrow Bank is appointed by the City and
the Authority or the holders of such 2006Certificatesthen remaining unpaid, within 45 days after
any such resignation or removal, the holder of any such 2006Certificatesor any retiring Escrow
Bank may apply to a court of competent jurisdiction for the appointment of a successor Escrow
Bank. The responsibilities of the Escrow Bank under this Escrow Agreement will not be discharged
until a new Escrow Bank is appointed and until the cash held under this Escrow Agreement is
transferred to the new Escrow Bank.
SECTION 15.Severability. If any one or more of the covenants or agreements provided in
this Agreement on the part of the City, the Authorityor the Escrow Bank to be performed should be
determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements
shall be null and void and shall be deemed separate from the remaining covenants and agreements
herein contained and shall in no way affect the validity of the remaining provisions of this
Agreement.
SECTION 16.Counterparts. This Agreement may be executed in several counterparts, all or
any of which shall be regarded for all purposes as one original and shall constitute and be but one and
the same instrument.
SECTION 17.Governing Law. This Agreement shall be construed under the laws of the
State of California.
SECTION 18.Holidays. If the date for making any payment or the last date for performance
of any act or the exercising of any right, as provided in this Agreement, shall be a legal holiday or a
day on which banking institutions in the city in which is located the principal office of the Escrow
Bank are authorized by law to remain closed, such payment may be made or act performed orright
exercised on the next succeeding day not a legal holiday or a day on which such banking institutions
are authorized by law to remain closed, with the same force and effect as if done on the nominal date
provided in this Agreement, and no interest shall accrue for the period from and after such nominal
date.
SECTION 19.Assignment. This Agreement shall not be assigned by the Escrow Bank or
any successor thereto without the prior written consent of the City.
SECTION 20.Insufficient Funds. If at any time the Escrow Bankhas actual knowledge that
the moneys and investments in the Escrow Fund, including the anticipated proceeds of and earnings
thereon, will not be sufficient to make all payments required by this Agreement, the Escrow Bank
shall notify the Cityin writing, of the amount thereof and the reason therefor to the extent known to
it. The Escrow Bankshall have no responsibility regarding any such deficiency.
2016-04-05 Agenda Packet Page 530
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SECTION 21.Standard and Poor’s. The City agrees to provide to each rating agency rating
the 2016 Bonds and the 2006 Certificatesprior notice of each amendment entered into pursuant to
Section 11hereof and a copy of such proposed amendment, and to forward a copy (as soon as
possible) of: (i)each amendment hereto entered into pursuant to Section 11hereof; and (ii)any
action relating to severability or contemplated by Section 15hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
2016-04-05 Agenda Packet Page 531
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers.
CITY OF CHULA VISTA
By:
City Manager
ATTEST:
By:
City Clerk
CHULA VISTA MUNICIPAL FINANCING
AUTHORITY
By:
Treasurer
ATTEST:
By:
Secretary
[SIGNATURES CONTINUED ON NEXT PAGE.]
2016-04-05 Agenda Packet Page 532
S-2
[SIGNATURE PAGE CONTINUED.]
U.S. BANK NATIONAL ASSOCIATION, as Escrow
Bank and 2006Trustee
By:
Authorized Officer
2016-04-05 Agenda Packet Page 533
A-1
EXHIBIT A
GOVERNMENT OBLIGATIONS
2016-04-05 Agenda Packet Page 534
B-1
EXHIBIT B
ESCROW SUFFICIENCY
2016-04-05 Agenda Packet Page 535
C-1
EXHIBIT C
FORM OF IRREVOCABLE INSTRUCTIONS AND REQUEST TO
2006TRUSTEEAND ESCROW BANK
_________, 2016
U.S. Bank National Association.
Los Angeles, California
$20,325,000
CITY OF CHULA VISTA
2006CERTIFICATES OF PARTICIPATION
(CIVIC CENTER PROJECT–PHASE2)
Ladies and Gentlemen:
As Trustee under that certain Amended and Restated Trust Agreement,dated as of March1,
2006(the “2006Trust Agreement”),by and between the Chula Vista PublicFinancingAuthority(the
“Authority”)and U.S. Bank National Association, successor to The Bank of New York Trust
Company, N.A.as trustee (“U.S. Bank”),and as Escrow Bank under that certain Escrow Agreement,
dated as of May 1, 2016(the “Escrow Agreement”), by and among the City of Chula Vista(the
“City”), the Authority and U.S. Bank, you are hereby notified of the irrevocable election of the City
to cause to be paid on _________, 2016(the “PrepaymentDate”), the prepaymentprice of the
above-captioned certificates (the “2006Certificates”) maturing on and after March 1, 2017.
You are hereby furtherirrevocably instructed to mailupon receipt of moneys adequate to pay
the prepaymentprice of and the interest on the 2006Certificates, (i) a notice to the registered owners
of such 2006Certificates(in the form attached hereto as Exhibit Y) that the deposit of moneys has
been made with you as such Escrow Bank and that the projected withdrawals from such escrow have
been calculated to be adequate to pay the prepaymentprice of and the interest onthe 2006
Certificateson the PrepaymentDate. You are further irrevocably instructed to mailon or before
_________, 2016a notice of prepaymentof such 2006Certificatesin the form attached hereto as
Exhibit Zpursuant to instructions of the City.
CITY OF CHULA VISTA
By:
City Manager
2016-04-05 Agenda Packet Page 536
C-2
RECEIPT ACKNOWLEDGED AND CONSENTED TO:
U.S. BANK NATIONAL ASSOCIATION.,
as Escrow Bank
By:_________________________________
Authorized Officer
2016-04-05 Agenda Packet Page 537
Y-1
EXHIBIT Y
NOTICE OF DEFEASANCE OF
CITY OF CHULA VISTA
2006CERTIFICATES OF PARTICIPATION
Notice is hereby given to the owners of the outstanding bonds (the “2006Certificates”)
captioned above: (i) that there has been deposited with U.S. Bank National Association, as Escrow
Bank, moneys as permitted by the Amended and Restated Trust Agreement, dated as of March1,
2006(the “2006Trust Agreement”), by and between the Chula Vista PublicFinancing Authority(the
“Authority”) and U.S. Bank National Association, successor to The Bankof New York Trust
Company, N.A., as 2006Trustee, which, together with such other moneys deposited with the Escrow
Bank, shall be sufficient and available to pay on ________________, 2016the prepaymentprice
equal to 100% aggregate principal amount of the 2006Certificatesmaturing on and after March 1,
2017; and (ii)that the 2006Certificatesare deemed to be paid and that the 2006Trust Agreement
and the pledge of Lease Payments (as such term is defined in the 2006Trust Agreement) and other
assets made under the 2006Trust Agreementand all covenants, agreements and other obligations of
the Authority under the 2006Trust Agreementwith respect to the 2006 Certificateshave ceased,
terminated, become void and been completely discharged and satisfied in accordance with Section
14.01 of the 2006Trust Agreement.
All 2006Certificatesshall be surrendered at the following address for replacement
certificates to be issued in exchange as described above:
If by Mail:If by Hand or Overnight Mail:
No representation is made as to the correctness of the CUSIP number either as printed on any
of the 2006Certificatesor as contained herein and any error in the CUSIP number shall not affect the
validity of the proceedings for prepaymentof the 2006Certificates.
Dated this ____day of ________, 20__.
CHULA VISTA PUBLICFINANCING
AUTHORITY
U.S BANK NATIONAL ASSOCIATION,as 2006
Trustee
2016-04-05 Agenda Packet Page 538
Z-1
EXHIBIT Z
NOTICE OF FULL PREPAYMENT
[REPLACE WITH ACTUAL FORM USED BY TRUSTEE]
2016-04-05 Agenda Packet Page 539
ESCROW AGREEMENT (2010CERTIFICATES)
THISESCROW AGREEMENT, dated as of May1, 2016, by and amongthe City of Chula
Vista (the “City”), the Chula Vista PublicFinancing Authority(the “Authority”) and U.S. Bank
National Association, acting in its capacity as escrow bank (the “Escrow Bank”) pursuant to this
Escrow Agreement (2010Certificates) (the “Agreement”) and as 2010Trustee (as defined below);
WITNESSETH:
WHEREAS, the Authorityhas previously caused to be executed and delivered those certain
2010 Certificates of Participation (Capital Facilities Refunding Projects) (the “2010Certificates”), in
the original aggregate principal amount of $29,355,000, pursuant to anTrustAgreement,dated as of
February1, 2010(the “2010Trust Agreement”), by and between the Authority and U.S.Bank
National Association, as trustee (the “2010Trustee”), of which $__________aggregate principal
amount iscurrently outstanding; and
WHEREAS, the City hasdetermined that it is in its best interests and desirable that the 2010
Certificatesbe prepaidand defeased; and
WHEREAS, in order to accomplish such prepaymentit is necessary and desirable for the
City to prepayits remainingLeasePaymentobligationsunder that certainLease/Purchase Agreement
between the City, as lessee, and the Authority, as lessor, dated as of February1, 2010(the “Lease
Agreement”),and to thereby defease the 2010Certificatesin accordance with the terms of
Section14.01of the 2010Trust Agreementand Section10.3of the LeaseAgreement; and
WHEREAS, the City and the Chula Vista Municipal Financing Authority(the “Financing
Authority”) have agreed to provide funds necessary to effect theprepaymentand defeasance ofthe
2010Certificatesthrough the issuance by the Financing Authorityof its $__________aggregate
principal amount Chula Vista Municipal Financing Authority2016Lease Revenue Refunding Bonds
(the “2016Bonds”), secured in part by leasepayments to be made by the City to the Financing
Authoritypursuant to the LeaseAgreement, dated as of May1, 2016, by and between the City and
the Financing Authority; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the City, the Authorityandthe Escrow Bank agree as follows:
SECTION 1.Deposit of Moneys.
(a)The City has causedto be depositedwith the Escrow Bank$__________
from the net proceeds of the 2016Bondsand$_________from certain funds and accounts held
under the 2010Indenture. Such moneys shallbe held in irrevocable escrow by the Escrow Bank
separate and apart from other funds of the City, the Authority,the Financing Authority,the Escrow
Bank and the 2010Trusteein a fund hereby created and established and to be known as the “Escrow
Fund,” and shallbe applied solely as provided in this Agreement.
(b)The Escrow Bank hereby acknowledges receipt of the opinion of Stradling
Yocca Carlson & Rauth, dated _________, 2016, and relating to this Agreement with respect to the
fact that the City’s and the Authority’s obligations under the 2010Trust Agreementwith respect to
2016-04-05 Agenda Packet Page 540
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the 2010Certificatesare defeased in the manner and to the extent provided in Section14.01of the
2010Trust Agreement.
SECTION 2.Investment of Moneys. The Escrow Bank acknowledges receipt of the
moneys described in Section 1 and agrees immediately to invest such moneys in the Governmental
Obligationslisted on Schedule A hereto, to deposit such Governmental Obligationsin the Escrow
Fundand to hold $_______ uninvested in cash.
The Escrow Bank shall be entitledto rely upon the conclusion of ______________________
(the “Verification Agent”), that the Government Obligations in the Escrow Fund mature and bear
interest payable in such amounts and at such times as, together with cash on deposit in the Escrow
Fund, will be sufficient to pay the prepayment price of the2010Certificates maturing on and after
March 1, 2017 on ___________, 2016.
SECTION 3.Investment of Any Remaining Moneys. At the written direction of the City,
the Escrow Bank shall reinvest any other amount of principal and interest, or any portion thereof,
received from the Governmental Obligationsprior to the date on which such payment is required for
the purposes set forth herein, innoncallable Governmental Obligationsmaturing not later than the
date on which such payment or portion thereof is required for the purposes set forth in Section 5, at
the written direction of the City, as verified in a report prepared by an independent certified public
accountant or firm of certified public accountants of favorable national reputation experienced in the
refunding of obligations of political subdivisions to the effect that the reinvestment described in said
report will not adversely affect the sufficiency of the amounts of securities, investments and money
in the Escrow Fund to pay the prepayment price of the 2010Certificates maturing on and after March
1, 2017 on ___________, 2016; provided that the Cityhas obtained and delivered to the Escrow
Bank an opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation,or other nationally
recognized bond counsel firmthat such reinvestment will not adversely affect the exclusion from
gross income for federal income tax purposes of the interest portion of the 2010Certificates or
interest on the Bonds. Any interest income resulting from investment or reinvestment of moneys
pursuant to this Section 3 which are not required for the purposes set forth in Section 5, as verified in
the letterof the Verification Agent originally obtained by the Bank with respect to the refunding of
the 2010Certificates or in any other report prepared by an independent certified public accountant or
firm of certified public accountants of favorable national reputation experienced in the refunding of
tax exempt obligations of political subdivisions, shall be paid to the City promptly upon the receipt of
such interest income by the Escrow Bank. The determination of the City as to whether an accountant
qualifies under this Escrow Agreement shall be conclusive.
SECTION 4.Substitution of Securities. Upon the written request of the City, and subject
to the conditions and limitations herein set forth and applicable governmental rules and regulations,
the Escrow Bank shall sell, prepayor otherwise dispose of the Governmental Obligations, provided
that there are substituted therefor from the proceeds of the Governmental Obligationsother
Governmental Obligations, but only after the City has obtained and delivered to the Escrow Bank:
(i)an of Stradling Yocca Carlson & Rauth, a Professional Corporation,or other nationally
recognized bond counsel firmto the effect that the substitution of securities is permitted hereunder
and that such reinvestment will not adversely affect the exclusion from gross income for federal
income tax purposes of the interest portion of the 2010Certificates or interest with respect to the
2016Bonds; and (ii) a report by a firm of independent certified public accountants to the effect that
the reinvestment described in said report will not adversely affect the sufficiency of the amounts of
securities, investments and money in the Escrow Fund to pay the prepayment price of the 2010
2016-04-05 Agenda Packet Page 541
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Certificates maturing on and after March 1, 2017 on ___________, 2016. The Escrow Bank shall not
be liable or responsible for any loss resulting from any reinvestment made pursuant to this
Agreement and in full compliance with the provisions hereof.
SECTION 5.Payment of 2010Certificates.
(a)Payment. The Escrow Bank shall transfer from the Escrow Fund to the 2010
Trusteeamounts sufficient to pay the prepayment price of the 2010Certificates maturing on and after
March 1, 2017 on ___________, 2016 (the “Prepayment Date”) the prepayment price (the
“Prepayment Price”) of the 2010Certificatesmaturing after the Prepayment Date. The 2010Trustee
is hereby directed to apply such moneys to prepaythe 2010Certificateson the PrepaymentDate.
(b)Irrevocable Instructions to Provide Notice. The forms of the notice required
to be mailed pursuant to Sections 4.05and 14.01 of the 2010Trust Agreement are substantially in the
forms attached hereto as Exhibit C. The Cityhereby irrevocably instructs the Escrow Bankto mail a
notice of prepayment and a notice of defeasance of the 2010Certificates in accordance with Sections
4.05and 14.01, respectively, of the 2010Trust Agreement, as required to provide for the prepayment
of the 2010Certificates in accordance withthis Section 5.
(c)Unclaimed Moneys. Any moneys which remain unclaimed for one(1) year
after the Prepayment Date, shall, at the written request of the City, be repaid by the Escrow Bank to
the City;provided, however, that the Escrow Bank shall first mail a notice as more fully described in
the 2010Trust Agreementthat said moneys remain unclaimed.
(d)Priority of Payments. The holders of the 2010Certificatesshall have a first
lien on the moneys in the Escrow Fund which are allowable and sufficient to pay the 2010
Certificatesuntil such moneys are used and applied as provided in this Agreement. Any cash held in
the Escrow Fund isirrevocably pledged only to the 2010Certificate holders.
(e)Termination of Obligation. As provided in the 2010Trust Agreement, upon
deposit of moneys with the Escrow Bankin the Escrow Fund as set forth in Section 1 hereof and the
purchase of the various Governmental Obligationsas provided in Section 2 hereof, all obligations of
the City under the 2010Trust Agreement with respectto the 2010Certificates shall cease, terminate
and become void except as set forth in the 2010Trust Agreement. As provided in Section 10.3of the
LeaseAgreement the obligations of the City under the LeaseAgreement with respect to the portion
of the Lease Payments relating to the 2010Certificates shall cease, terminate, become void and be
completely discharged and satisfied (except for the rights of the 2010Trustee and the obligation of
the City to have the Governmental Obligationsand moneys on deposit in the Escrow Fund applied to
Lease Payments).
SECTION 6.Application of Certain Terms of the 2010Trust Agreement. All of the terms
of the 2010Trust Agreement relating to the making of payments of principal and interest with
respect to the 2010Certificates and relating to the exchange or transfer of the 2010Certificates are
incorporated in this Agreement as if set forth in full herein.
SECTION 7.Performance of Duties. The Escrow Bank agrees to perform only the duties
set forth herein and shall have no responsibility to take any action or omit to take any action not set
forth herein.
2016-04-05 Agenda Packet Page 542
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SECTION 8.Escrow Bank’s Authority to Make Investments. Except as provided in
Sections 2, 3 and 4 hereof, the Escrow Bank shall have no power or duty to invest any funds held
under this Agreement or to sell, transfer or otherwise dispose of the moneys or Governmental
Obligationsheld hereunder.
SECTION 9.Indemnity. The City and the Authority hereby assume liability for, and
hereby agree (whether or not any of the transactions contemplated hereby are consummated) to
indemnify, protect, save and keep harmless the Escrow Bank and its respective successors, assigns,
agents, employees and servants, from and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees
and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or
asserted against, the Escrow Bank at any time (whether or not also indemnified against the same by
the Cityor the Authorityor any other person under any other agreement or instrument, but without
double indemnity) in any way relating to or arising out of the execution, delivery and performance of
thisAgreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds and
securities deposited therein and any payment, transfer or other application of moneys or securities by
the Escrow Bank in accordance with the provisions of this Agreement; provided, however, that the
City and the Authority shall not be required to indemnify the Escrow Bank against the Escrow
Bank’s own negligence or willful misconduct or the negligent or willful misconduct of the Escrow
Bank’s respective successors, assigns, agents and employees or the breach by the Escrow Bank of the
terms of this Agreement. In no event shall the City, the Authorityor the Escrow Bank be liable to
any person by reason of the transactions contemplated hereby other than to each other as set forth in
this section. The indemnities contained in this section shall survive the termination of this
Agreement and the resignation or removal of the Escrow Bank.
SECTION 10.Responsibilities of the Escrow Bank. The Escrow Bank and its respective
successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort,
contract or otherwise, in connection with the execution and delivery of this Agreement, the
establishment of the Escrow Fund, the acceptance of the moneys deposited therein, the sufficiency of
such moneysto accomplish the defeasance of the 2010Certificatesor any payment, transfer or other
application of moneys or obligations by the Escrow Bank in accordance with the provisions of this
Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error of
the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the
“Whereas” clauses herein shall be taken as the statements of the City and the Authority and the
Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no
representation as to the sufficiency of the moneys deposited in the Escrow Fundto accomplish the
defeasance of the 2010Certificatesor to the validity of this Agreement as to the City and, except as
otherwise provided herein, the Escrow Bank shall incur no liability with respect thereto. The Escrow
Bank shall not be liable in connection with the performance of its duties under this Agreement except
for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow
Bank shall be determined by the express provisions of this Agreement. In no event shall the Escrow
Bank be liable for any special indirect or consequential damages. The Escrow Bank may consult
with counsel, who may or may not be counsel to the City, and in reliance upon the written opinion of
such counsel shall have full and complete authorization and protection with respect to any action
taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank
shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering,
or omitting any action under this Agreement, such matter may be deemed to be conclusively
established by a certificate signed by an authorized officer of the City or the Authority. The Escrow
Bank shall incur no liability for losses arising from any investment made pursuant to this Agreement.
2016-04-05 Agenda Packet Page 543
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No provision of this Agreement shall requirethe Escrow Bank to expend or risk its own funds or
otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or
in the exercise of its rights or powers, 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. Any
company into which the Escrow Bank may be merged or converted or with which it may be
consolidated, or any company resulting from any merger, conversion or consolidation to which it
shall be a party or any company to which the Escrow Bank may sell or transfer all or substantially all
of its corporate trust business shall be the successor to the Escrow Bank without the execution or
filing of any paper or further act, anything herein to the contrary notwithstanding.
SECTION 11.Amendments. This Agreement is made for the benefit of the City, the
Authorityand the holders from time to time of the 2010Certificatesand it shall not be repealed,
revoked, altered or amended without the written consent of all such holders, the Escrow Bank and the
City; provided, however, but only after the receipt by the Escrow Bank of an opinion of nationally
recognized bond counsel that the exclusion from gross income of interest with respect to the
2016Bondsand the 2010Certificateswill not be adversely affected for federal income tax purposes,
that the City, the Authorityand the Escrow Bank may, without the consent of, or notice to, such
holders, amend this Agreement or enter into such agreements supplemental to this Agreement as
shall not adversely affect the rights of such holders and as shall not be inconsistent with the terms
and provisions of this Agreement for any one or more of the following purposes: (i)to cure any
ambiguity or formal defect or omission in this Agreement; (ii)to grant to, or confer upon, the Escrow
Bank for the benefit of the holders of the 2010Certificatesany additional rights, remedies, powers or
authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Bank; and
(iii)to include under this Agreement additional funds, securities or properties. The Escrow Bank
shall be entitled to rely conclusively upon an unqualified opinion of nationally recognized municipal
bond attorneys with respect to compliance with this section, including the extent, if any, to which any
change, modification, addition or elimination affects the rights of the holders of the 2010Certificates
or that any instrument executed hereunder complies with the conditions and provisions of this
section.
SECTION 12.Term. This Agreement shall commence upon its execution and delivery and
shall terminate on the later to occur of either:(i) the date upon which the 2010Certificateshave been
paid in accordance with this Agreement;or (ii) the date upon which no unclaimed moneys remain on
deposit with the Escrow Bank pursuant to Section 3(b) of this Agreement.
SECTION 13.Compensation. The Escrow Bank shall receive its reasonablefees and
expenses as previously agreed to; provided, however, that under no circumstances shall the Escrow
Bank be entitled to any lien nor will it assert a lien whatsoever on any moneys in the Escrow Fund
for the payment of fees and expenses for servicesrendered by the Escrow Bank under this
Agreement.
SECTION 14.Resignation or Removal of Trustee as Escrow Bank.
(a)The Escrow Bank may resign by giving notice in writing to the City and the
Authority. The EscrowBank may be removed: (1) by: (i) filing with the City andthe Authority an
instrument or instruments executed by the holders of at least 51% in aggregate principal amount of
the 2010Certificatesthen remaining unpaid; and (ii) the delivery of a copy of the instruments filed
with the City and the Authority to the Escrow Bank; or (2) by a court of competent jurisdiction for
failure to act in accordance with the provisions of this Agreement upon application by the City or the
2016-04-05 Agenda Packet Page 544
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Authority or the holders of 5% in aggregate principal amount of the 2010Certificatesthenremaining
unpaid.
(b)If the position of Escrow Bank becomes vacant due to resignation or removal
of the Escrow Bank or any other reason, a successor Escrow Bank may be appointed by the City and
the Authority. Within one year after a vacancy, the holders of a majority in principal amount of the
2010Certificatesthen remaining unpaid may, by an instrument or instruments filed with the City and
the Authority, appoint a successor Escrow Bank who shall supersede any Escrow Bank theretofore
appointed by the City and the Authority. If no successor Escrow Bank is appointed by the City and
the Authority or the holders of such 2010Certificatesthen remaining unpaid, within 45 days after
any such resignation or removal, the holder of any such 2010Certificatesor anyretiring Escrow
Bank may apply to a court of competent jurisdiction for the appointment of a successor Escrow
Bank. The responsibilities of the Escrow Bank under this Escrow Agreement will not be discharged
until a new Escrow Bank is appointed and until the cash held under this Escrow Agreement is
transferred to the new Escrow Bank.
SECTION 15.Severability. If any one or more of the covenants or agreements provided in
this Agreement on the part of the City, the Authorityor the Escrow Bank to be performed should be
determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements
shall be null and void and shall be deemed separate from the remaining covenants and agreements
herein contained and shall in no way affect the validity ofthe remaining provisions of this
Agreement.
SECTION 16.Counterparts. This Agreement may be executed in several counterparts, all or
any of which shall be regarded for all purposes as one original and shall constitute and be but one and
the same instrument.
SECTION 17.Governing Law. This Agreement shall be construed under the laws of the
State of California.
SECTION 18.Holidays. If the date for making any payment or the last date for performance
of any act or the exercising of any right, as provided in this Agreement, shall be a legalholiday or a
day on which banking institutions in the city in which is located the principal office of the Escrow
Bank are authorized by law to remain closed, such payment may be made or act performed or right
exercised on the next succeeding day not a legal holiday or a day on which such banking institutions
are authorized by law to remain closed, with the same force and effect as if done on the nominal date
provided in this Agreement, and no interest shall accrue for the period from and after such nominal
date.
SECTION 19.Assignment. This Agreement shall not be assigned by the Escrow Bank or
any successor thereto without the prior written consent of the City.
SECTION 20.Insufficient Funds. If at any time the Escrow Bankhas actual knowledge that
the moneys and investments in the Escrow Fund, including the anticipated proceeds of and earnings
thereon, will not be sufficient to make all payments required by this Agreement, the Escrow Bank
shall notify the Cityin writing, of the amount thereof and the reason therefor to the extent known to
it. The Escrow Bankshall have no responsibility regarding any such deficiency.
2016-04-05 Agenda Packet Page 545
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SECTION 21.Standard and Poor’s. The City agrees to provide to each rating agency rating
the 2016 Bonds and the 2010Certificatesprior notice of each amendment entered into pursuant to
Section 11hereof and a copy of such proposed amendment, and to forward a copy (as soon as
possible) of: (i)each amendment hereto entered into pursuant to Section 11hereof; and (ii)any
action relating to severability or contemplated by Section 15hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
2016-04-05 Agenda Packet Page 546
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers.
CITY OF CHULA VISTA
By:
City Manager
ATTEST:
By:
City Clerk
CHULA VISTA MUNICIPAL FINANCING
AUTHORITY
By:
Treasurer
ATTEST:
By:
Secretary
[SIGNATURES CONTINUED ON NEXT PAGE.]
2016-04-05 Agenda Packet Page 547
S-2
[SIGNATURE PAGE CONTINUED.]
U.S. BANK NATIONAL ASSOCIATION, as Escrow
Bank and 2010Trustee
By:
Authorized Officer
2016-04-05 Agenda Packet Page 548
A-1
EXHIBIT A
GOVERNMENT OBLIGATIONS
2016-04-05 Agenda Packet Page 549
B-1
EXHIBIT B
ESCROW SUFFICIENCY
2016-04-05 Agenda Packet Page 550
C-1
EXHIBIT C
FORM OF IRREVOCABLE INSTRUCTIONS AND REQUEST TO
2010TRUSTEEAND ESCROW BANK
_________, 2016
U.S.Bank National Association
Los Angeles, California
$29,355,000
CITY OF CHULA VISTA
2010CERTIFICATES OF PARTICIPATION
(CAPITAL FACILITIES REFUNDING PROJECTS)
Ladies and Gentlemen:
As Trustee under that certain Amended and Restated Trust Agreement,dated as of
February1, 2010(the “2010Trust Agreement”),by and between the Chula Vista PublicFinancing
Authority(the “Authority”)and U.S.Bank National Associationas trustee (“BNY”),and as Escrow
Bank under that certain Escrow Agreement,dated as of May 1, 2016(the “Escrow Agreement”), by
and among the City of Chula Vista(the “City”), the Authority and BNY, you are hereby notified of
the irrevocable election of the City to cause to be paid on _________, 2016(the “PrepaymentDate”),
the prepaymentprice of the above-captioned certificates (the “2010Certificates”) maturing on and
after March1, 2017.
You are hereby furtherirrevocably instructed to mailupon receipt of moneys adequate to pay
the prepaymentprice of and the interest on the 2010Certificates, (i) a notice to the registered owners
of such 2010Certificates(in the form attached hereto as Exhibit Y) that the deposit of moneys has
been made with you as such Escrow Bank and that the projected withdrawals from such escrow have
been calculated to be adequate to pay the prepaymentprice of and the interest onthe 2010
Certificateson the PrepaymentDate. You are further irrevocably instructed to mailon or before
_________, 2016a notice of prepaymentof such 2010Certificatesin the form attached hereto as
Exhibit Zpursuant to instructions of the City.
CITY OF CHULA VISTA
By:
City Manager
2016-04-05 Agenda Packet Page 551
C-2
RECEIPT ACKNOWLEDGED AND CONSENTED TO:
U.S.BANK NATIONAL ASSOCIATION,
as Escrow Bank
By:_________________________________
Authorized Officer
2016-04-05 Agenda Packet Page 552
Y-1
EXHIBIT Y
NOTICE OF DEFEASANCE OF
CITY OF CHULA VISTA
2010CERTIFICATES OF PARTICIPATION
Notice is hereby given to the owners of the outstanding bonds (the “2010Certificates”)
captioned above: (i) that there has been deposited with U.S. Bank National Association, as Escrow
Bank, moneys as permitted by the Amended and Restated Trust Agreement, dated as of February1,
2010(the “2010Trust Agreement”), by and between the Chula Vista PublicFinancing Authority(the
“Authority”) and U.S.Bank National Association, as 2010Trustee, which, together with such other
moneys deposited with the Escrow Bank, shall be sufficient and available to pay on
________________, 2016the prepaymentprice equal to 100% aggregate principal amount of the
2010Certificatesmaturing on and after March 1, 2017; and (ii)that the 2010Certificatesare deemed
to be paid and that the 2010Trust Agreementand the pledge of Lease Payments (as such term is
defined in the 2010Trust Agreement) and other assets made under the 2010Trust Agreementand all
covenants, agreements and other obligations of the Authority under the 2010Trust Agreementwith
respect to the 2010Certificateshave ceased, terminated, become void and been completely
discharged and satisfied in accordance with Section 14.01 of the 2010Trust Agreement.
All 2010Certificatesshall be surrendered at the following address for replacement
certificates to be issued in exchange as described above:
If by Mail:If by Hand or Overnight Mail:
No representation is made as to the correctness of the CUSIP number either as printed on any
of the 2010Certificatesor as contained herein and any error in the CUSIP number shall not affect the
validity of the proceedings for prepaymentof the 2010Certificates.
Dated this ____day of ________, 20__.
CHULA VISTA PUBLICFINANCING
AUTHORITY
U.S.BANK NATIONAL ASSOCIATION, as 2010
Trustee
2016-04-05 Agenda Packet Page 553
Z-1
EXHIBIT Z
NOTICE OF FULL PREPAYMENT
[REPLACE WITH ACTUAL FORM USED BY TRUSTEE]
2016-04-05 Agenda Packet Page 554
RECORDING REQUESTED BY:
Chula Vista Municipal Financing Authority
AND WHEN RECORDED RETURN TO:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Robert J. Whalen, Esq.
[Space above for Recorder’s use.]
THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT
TO SECTION11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS
EXEMPT FROM RECORDING FEES PURSUANT TO SECTION27383 OF THE CALIFORNIA
GOVERNMENT CODE. THE ASSIGNOR IS A GOVERNMENTAL AGENCY.
ASSIGNMENT AGREEMENT
by and between
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
Dated as of May1, 2016
Relating to
$__________
CHULA VISTA MUNICIPAL FINANCING AUTHORITY
2016LEASE REVENUE REFUNDINGBONDS
2016-04-05 Agenda Packet Page 555
2
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”), executed and
entered into as of May1, 2016, is by and between the CHULA VISTA MUNICIPAL FINANCING
AUTHORITY, a joint exercise of powers entity organized and existing under and by virtue of the
laws of the State of California(the “Authority”), and U.S. BANK NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws of the United States, as Trustee
(the “Trustee”).
WITNESSETH:
WHEREAS, the City of Chula Vista(the “City”) and the Authority desire to refinance the
City of Chula Vista2006Certificates of Participation (Civic Center Project –Phase2) (the “2006
Certificates”)and the City of Chula Vista 2010 Certificates of Participation (Capital Facilities
Refunding Projects) (the “2010 Certificates”)and the City’s lease obligations in connection
therewith, the proceeds of which were used to finance and refinance a portion of the costs of the
acquisition, construction and installation of certain public capital improvements located within the
City and described in the proceedings for the 2006Certificates(the “2006Project”)and the
proceedings for the 2010 Certificates ( the “2010 Project”);
WHEREAS, in order to refinance the 2006Projectand the 2010 Project, the City will lease
certain real property and the improvements located thereon (the “Leased Property”) to the Authority
pursuant to a Site Lease, dated as of the date hereof, and the City will sublease the Leased Property
back from the Authoritypursuant to aLease Agreement;
WHEREAS, the Leased Propertyis more particularly described in ExhibitA hereto;
WHEREAS, under the Lease Agreement, the City is obligated to make Base Rental
Payments (as defined in the Lease Agreement) to the Authority;
WHEREAS, the Authoritydesires to assign without recourse certain ofits rights in the Site
Lease and the Lease Agreement, including its right to receive the Base Rental Payments, to the
Trustee for the benefit of the owners of bonds (the “Bonds”) to be issued pursuant to the Indenture,
dated as of the date hereof (the “Indenture”), by and among the Authority, the City and the Trustee;
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to
have been performed precedent to and in connection with the execution and entering into of this
Assignment Agreement do exist, have happened and have been performed in regular and due time,
form and manner as required by law, and the parties hereto are now duly authorized to execute and
enter into this Assignment Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements and
covenants contained herein and for other valuable consideration, the parties hereto do hereby agree as
follows:
Assignment. The Authority, for good and valuable consideration, the receipt of which is hereby
acknowledged, does hereby sell, assign and transfer to the Trustee, irrevocably and absolutely,
without recourse, for the benefit of the owners of the Bonds, all of its right, title and interest in and to
the Site Leaseand the Lease Agreement including, without limitation, its right to receive the Base
2016-04-05 Agenda Packet Page 556
3
Rental Payments to be paid by the City under and pursuant to the LeaseAgreement; provided,
however, that the Authorityshall retain its obligations under the Lease Agreement and Site Leaseand
its rights to indemnification andto give approvals and consents under the Lease Agreement and the
Site Leaseand to payment or reimbursement of its reasonable costs and expenses under the Lease
Agreement.
Section 1. Acceptance. The Trustee hereby accepts the foregoing assignment, subject to the
terms and provisions of the Indenture, and all such Base Rental Payments shall be applied and the
rights so assigned shall be exercised by the Trustee as provided in the Lease Agreement and the
Indenture.
Section 2. Conditions. This Assignment Agreement shall impose no obligations upon the
Trustee beyond those expressly provided in the Indenture.
Section 3. Further Assurances. The Authorityshall make, execute and deliver any and all
such further resolutions, instruments and assurances as may be reasonably necessary or proper to
carryout the intention or to facilitate the performance of this Assignment Agreement, and for the
better assuring and confirming to the Trustee, for the benefit of the owners of the Bonds, the rights
intended to be conveyed pursuant hereto.
Section 4. Governing Law. THIS ASSIGNMENT AGREEMENT SHALL BE
GOVERNED EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE
STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.
Section 5. Execution. This Assignment Agreement may be executedin any number of
counterparts, each of which shall be deemed to be an original, but all together shall constitute but one
and the same Assignment Agreement.
[REMAINDER OF PAGE INTENTIONALLYLEFT BLANK.]
2016-04-05 Agenda Packet Page 557
S-1
IN WITNESS WHEREOF, the Authorityand the Trustee have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and
year first above-written.
CHULA VISTA MUNICIPAL FINANCING
AUTHORITY
By:
Gary Halbert
Executive Director
ATTEST:
Donna Norris
Secretary
[SIGNATURES CONTINUED ON NEXT PAGE.]
2016-04-05 Agenda Packet Page 558
S-2
[SIGNATURE PAGE CONTINUED.]
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
_______________
Authorized Officer
2016-04-05 Agenda Packet Page 559
CONSENT
The City of Chula Vistahereby consents to the foregoing.
CITY OF CHULA VISTA, as Lessee
By:
David Bilby
Director of Finance
ATTEST:
Donna Norris
City Clerk
2016-04-05 Agenda Packet Page 560
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF SAN DIEGO )
On ___________________ before me, ____________________________________, Notary Public,
personally appeared _____________________________________________________, who proved
to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
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A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA )
)ss.
COUNTY OF LOS ANGELES )
On ___________________ before me, ____________________________________, Notary Public,
personally appeared _____________________________________________________, who proved
to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
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A-1
EXHIBIT A
LEGAL DESCRIPTION OF THE LEASED PROPERTY
THAT REAL PROPERTY IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL 1: (CORPORATION YARD APN'S: 644-230-11-00 THROUGH 644-230-19-00)
LOTS 11 THROUGH 19 INCLUSIVE IN CHULA VISTA TRACT NO. 81-6, OTAY VALLEY
INDUSTRIAL PARK, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 10974, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 21, 1984.
TOGETHER WITH THAT PORTION OF CHULA VISTA TRACT NO. 81-6, OTAY VALLEY
INDUSTRIAL PARK, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 10974, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 21, 1984, DESCRIBED AS
RESEARCH COURT AS VACATED AND CLOSED TO PUBLIC USE BY RESOLUTION NO.
12630 WHICH RECORDED IN THE OFFICE OF THE COUNTY RECORDER ON
SEPTEMBER 12, 1986 AS INSTRUMENT NO. 86-402309 OF OFFICIAL RECORDS.
PARCEL 2: (FIRE STATION NO. 4 APN: 642-391-06-00)
LOT I OF CHULAVISTA TRACT NO. 88-1, RANCHO DEL REY PHASE 2, IN THE CITY OF
CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP THEREOF NO. 12341, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY, MARCH 28, 1989.
PARCEL 3: (FIRE STATIONNO. 6 APN: 595-570-01-00)
LOT 1 OF CHULA VISTA TRACT NO. 92-02, SALT CREEK RANCH NEIGHBORHOOD 3A
SCHOOL PARK, AND FIRE STATION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 13440, FILED IN
THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JULY 19, 1997.
PARCEL 5: (FIRE STATION NO. 8 APN: 595-080-54-00)
LOT 'K' AND A PORTION OF LOT 'G' OF CHULA VISTA TRACT NO. 01-09, EASTLAKE III
WOODS, NEIGHBORHOOD WR-4 IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA ACCORDING TO THE MAP THEREOF NO. 14394 FILED
IN THE OFFICE OF THE COUNTY RECORDER MAY 16, 2002, DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID LOT 'K'; THENCE ALONG
THE SOUTHEASTERLY LINE OF SAID LOT "K" NORTH 53°45'38" EAST, 231.84 FEET;
THENCE NORTH 43°28'38" EAST, 14.69 FEET TO A POINT ON THE WESTERLY LINE OF
WOODS DRIVE AS SHOWN ON SAID MAP NO. 14394; THENCE ALONG SAID
WESTERLY LINE NORTH 12°24'11" EAST, 12.89 FEET TO THE BEGINNING OF A
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A-2
TANGENT 689.50 FOOT RADIUS CURVE, CONCAVE EASTERLY; THENCE NORTHERLY
ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 03°58'17", A
DISTANCE OF 47.79 FEET; THENCE NORTH 26°28'31" WEST, 26.45 FEET TO A POINT ON
THE SOUTHERLY LINE OF HAWTHORNE CREEK DRIVE AS SHOWN ON SAID MAP;
THENCE ALONG SAID SOUTHERLY LINE NORTH 69°52'42" WEST, 11.23 FEET TO THE
BEGINNING OF A TANGENT 830.00 FOOT RADIUS CURVE, CONCAVE NORTHERLY;
THENCE WESTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE
OF 09°55'21", A DISTANCE OF 143.74 FEET; THENCE LEAVING SAID SOUTHERLY LINE
OF HAWTHORNE CREEK DRIVE, SOUTH 27°08'59" WEST, 207.29 FEET; THENCE SOUTH
12°22'20" WEST, 100.42 FEET; THENCE SOUTH 77°37'40" EAST, 58.08 FEET TO THE POINT
OF BEGINNING.
PARCEL 6: (FIRE STATION NO. 8 APN: 595-080-47-00)
ALL THAT PORTION OF RANCHO JANAL, IN THE CITY OF CHULA VISTA, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF RECORDED
IN BOOK 1, PAGE 89 ET SEQ. OF PATENTS, LYING WITHIN SECTIONS 35 AND 36,
TOWNSHIP 17 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, DESCRIBED AS
FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 1 OF PARCEL MAP NO. 17874
FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY JULY 3, 1997, SAID
POINT BEING ON THE NORTHERLY LINE OFOTAY LAKES ROAD GRANTED TO THE
CITY OF CHULA VISTA PER DOCUMENT RECORDED NOVEMBER 28, 1990 AS
INSTRUMENT NO. 90-634654 OF OFFICIAL RECORDS; THENCE ALONG SAID
NORTHERLY LINE SOUTH 77°37'40" EAST (SOUTH 77°38'00" EAST PER SAID
INSTRUMENT NO. 90-634654) 238.48 FEET; THENCE LEAVING SAID NORTHERLY
LINE NORTH 53°45'38" EAST, 13.33 FEET TO THE TRUE POINT OF BEGINNING; THENCE
NORTH 53°45'38" EAST, 231.84 FEET; THENCE NORTH 43°28'38" EAST; 14.69 FEET TO A
POINT HEREINAFTER REFERRED TO AS POINT "A"; THENCE SOUTH 12°24'11" WEST,
166.03 FEET; THENCE SOUTH 57°23'16" WEST, 29.91 FEET; THENCE NORTH 76°49'57"
WEST, 12.16 FEET TO THE BEGINNING OF A TANGENT 5064.00 FOOT RADIUS
CURVE CONCAVE SOUTHERLY; THENCE WESTERLY ALONG THE ARC OF SAID
CURVE THROUGH A CENTRAL ANGLE OF 0°47'42" A DISTANCE OF 70.27 FEET;
THENCE NORTH 77°37'39" WEST, 57.20 FEET TO THE TRUE POINT OF BEGINNING.
THIS LEGAL IS MADE PURSUANT TO THAT CERTAIN CERTIFICATE OF COMPLIANCE
RECORDED MAY 30, 2006, AS INSTRUMENT NO. 2006-0380709 OF OFFICIAL RECORDS.
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City of Chula Vista
Staff Report
File#:16-0107, Item#: 8.
DISCUSSIONANDPOSSIBLEACTIONREGARDINGTHEREAPPOINTMENTPROCESSFOR
MEMBERSOFCHULAVISTACOMMISSIONSWHOAREINTERVIEWEDANDAPPOINTEDBY
THE COUNCIL
RECOMMENDED ACTION
Council discuss the reappointment process and provide direction to staff.
SUMMARY
TheCouncilmadeareferraltostafftoprovideinformationandpossiblealternativeprocessesforthe
reappointmentofmemberstocommissionswhoareinterviewedandappointedbytheCouncil.This
item presents some suggestions for processes for Council’s consideration.
ENVIRONMENTAL REVIEW
Environmental Notice
Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality
ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental
review is required.
Environmental Determination
TheDirectorofDevelopmentServiceshasreviewedtheproposedactivityforcompliancewiththe
CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthattheactivityisnota“Project”as
definedunderSection15378oftheStateCEQAGuidelinesbecauseitwillnotresultinaphysical
changeintheenvironment;therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelines,
the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not applicable
DISCUSSION
Background
TheCouncilmadeareferraltostafftoprovideinformationandpossiblealternativeprocessesforthe
reappointment of members to commissions who are interviewed and appointed by the Council.
Thereare19activeboardsandcommissionintheCity.ThefullCouncilinterviewsandappoints
memberstofourofthem.Thecommissionswhosemembersareinterviewedandappointedbythe
full Council are:
-Growth Management Oversight Commission
-Parks & Recreation Commission
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-Planning Commission
-Two seats on the Civil Service Commission
Thestandardtermforthesecommissionsisfouryears,beginningJuly1andendingJune30four
years later. Members are limited to serving a maximum of two consecutive terms.
Current Reappointment Process and Timeline
Timeframe Activity
Throughout the year Commission secretaries are responsible for providing the
Councilmembers with copies of minutes within 10 days of
approval (CVMC 2.25.230)
By December 31 A list of commission members whose terms expire the following
calendar year is posted at City Hall, the Civic Center Library, and
online, in compliance with the Maddy Act.
June The City Clerk’s office contacts eligible Commissioners to
determine their interest in being considered for reappointment.
July 1 Councilmembers are provided an informational memorandum
with the attendance records and activities for the previous fiscal
year. (CVMC 2.25.120, 2.25.280)
Early- to Mid-July An item is placed on the Council agenda for the Council to
consider whether or not to reappoint those members who are
eligible and interested.
Reappointment Process Options
1.Continuethecurrentprocess.Considerreappointmentsbasedonthemember’sattendance,
andthecommission’sactivityreport,andminutes.Areportindicatingthemember’s
compliancewithrequiredtrainingcanalsobeprovided.AmajorityoftheCouncilvotesto
eitherapproveordisapprovethereappointment.Ifthereappointmentisnotapproved,theseat
would then be filled using the established appointment process.
2.Addaninterviewcomponenttotheexistingprocess.TheCouncilcouldinterviewincumbents
aspartofthereappointmentprocess.Inasurveyofothercities(seetablesbelowand
Attachment2),interviewprocessesrangedfromaskingincumbentstomakeabriefstatement
regardingtheirinterestandqualificationsataregularCouncilmeeting,toschedulingaspecial
meeting at which the Council asked a series of questions.
3.AppointasubcommitteeoftheCounciltomakereappointmentrecommendations.TheCouncil
couldappointasubcommitteeoftwomemberswhocouldmakerecommendationsfor
reappointments to the full Council for consideration.
4.Requireincumbentstoreapply.Usetheexistingappointmentprocess(seeAttachment1)to
considertheincumbentaswellasanyqualifiedmembersofthepublicwhowishtobe
considered to fill the seat.
IftheCouncilchoosesaprocessthatinvolvesinterviewingincumbents,theinterviewprocesscould
bewaivedforthosememberswhohaveservedlessthantwoyears.Whenamemberisappointedto
fillamid-termvacancy,heorsheservesfortheremainingunexpiredterm.Iftheunexpiredtermhas
lessthantwoyearsremaining,itisnotconsideredatermforpurposesofthetwo-consecutive-term
limit.Therefore,anindividualappointedtofillanunexpiredtermoflessthantwoyearsmay
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limit.Therefore,anindividualappointedtofillanunexpiredtermoflessthantwoyearsmay
subsequentlybeappointedtotwofullterms.Forexample,oneofthetermsexpiringinJune2016is
foramemberoftheParksandRecreationCommissionwhowasjustinterviewedbythefullCouncil
andappointedinNovember2015.Thememberfilledavacancythathadonlysevenmonths
remainingintheunexpiredterm.TheCouncilmaydecidenottore-interviewincumbentsinsimilar
situations.
Survey Results of Other Cities’ Reappointment Processes
Forty-fiveCaliforniacitiesrespondedtoasurveyregardingtheirreappointmentprocesses.Resultsof
the survey have been attached (Attachment 2). Highlights of the survey are presented below:
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File#:16-0107, Item#: 8.
DECISION-MAKER CONFLICT
Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsite-
specificandconsequently,the500-footrulefoundinCaliforniaCodeofRegulationsTitle2,section
18702.2(a)(11),isnotapplicabletothisdecisionforpurposesofdeterminingadisqualifyingreal
property-relatedfinancialconflictofinterestunderthePoliticalReformAct(Cal.Gov'tCode§87100,
et seq.).
Staffisnotindependentlyaware,andhasnotbeeninformedbyanyCityCouncilmember,ofany
other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy
Community,StrongandSecureNeighborhoodsandaConnectedCommunity.Supportforboards
andcommissions,includingexecutingreappointmentprocesses,isdirectlyrelatedtotheConnected
Communitygoal.MembersoftheCity’sboardsandcommissionsplayavitalrolebyparticipatingin
the City’s processes and helping influence public policy with their diverse viewpoints.
CURRENT YEAR FISCAL IMPACT
Thecurrentfiscalyearimpactisanticipatedtoconsistofstafftimetocoordinatereappointments
using the Council’s desired processes. Staff does not anticipate that additional funds will be required.
ONGOING FISCAL IMPACT
Theongoingfiscalyearimpactisanticipatedtoconsistofstafftimetoprocessreappointmentsusing
the Council’s desired processes. Staff does not anticipate that additional funds will be required.
ATTACHMENTS
1.InterimAppointmentProcessforMembersoftheGrowthManagementOversight,Parksand
Recreation, Planning, and Civil Service Commissions
2.Survey results
Staff Contact: Kerry Bigelow
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INTERIM APPOINTMENT PROCESS FOR
MEMBERS OF THE GROWTH MANAGEMENT OVERSIGHT, PARKS
& RECREATION, PLANNING, AND CIVIL SERVICE1 COMMISSIONS
The below process is intended to clarify and further describe the details of the interview and
appointment processes as stated in CVMC §§ 2.25.050 (E) and 2.43.050, and City Charter
Section 609. Effective June 16, 2015, the following process will be used to appoint members to
the Growth Management Oversight, Parks & Recreation, Planning, and Civil Service1
Commissions (the “Commissions”):
An individual desiring to serve on one of the Commissions shall complete an application,
pursuant to CVMC section 2.25.050A. The application form shall be available through
the City Clerk’s office and will specify the required components for an application to be
deemed complete.
Within ten business days of a Commission seat becoming vacant, the City Clerk will
provide the Mayor and each Councilmember with all complete applications received for
that Commission during the previous two years.
The Mayor and each Councilmember shall independently review forwarded applications
for the vacant position.
Should four or fewer applications be received for a vacant seat, the City Council will
interview all applicants using the following process:
1. At an open meeting of the City Council, the Mayor and Council shall collectively set a
date and time to hold an open meeting of the City Council for the purpose of interviewing
each applicant.
2. At the meeting set for interviews, any member of the public shall be afforded the
opportunity to speak to the item prior to the interviews.
3. The Mayor and Council will then conduct the interviews.
4. Public comment will be heard after the interviews.
5. Following the interviews and public comment, the Mayor and City Council shall publicly
deliberate and select one individual for the available position. 2 The affirmative votes of
at least three Council members are required for appointment.
1 The interim appointment process for the Civil Service Commission only applies to the seats of the two members
appointed by the City Council directly
2 If multiple vacancies occur on a Commission simultaneously, the City shall conduct interviews pursuant to this
Interim Appointment Process, and select from that process as many appointees as are necessary to fill the vacancies.
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Interim Appointment Process for Members of the Growth Management Oversight, Parks & Recreation,
Planning, and Civil Service1 Commissions
Page 2
Should five or more applications be received for a vacant seat, the City Council will
interview certain applicants using the following process:
1. An item will be placed on the agenda of an open City Council meeting indicating that
nominations for interview will take place. The vacancy and the applicants’ names will be
listed.
2. At the meeting, any member of the public shall be afforded the opportunity to speak to
the nomination item.
3. Following the public comment period, each Councilmember will complete a form
indicating one or more applicants each wishes to nominate for an interview and provide it
to the City Clerk. The forms submitted to the Clerk shall be public record and retained on
file in the Office of the City Clerk.
4. The City Clerk shall then publicly announce each applicant receiving two or more
nominations and indicate that each Councilmember’s nomination form is available for
public review.
5. The Mayor and Council shall then collectively set a time to hold an open meeting of the
City Council for the purposes of interviewing each applicant that received two or more
nominations.
6. At the meeting, prior to interviews taking place, any member of the public shall be
afforded the opportunity to speak to the item.
7. The Mayor and Council will then conduct the interviews.
8. Public comment will be heard again after the interviews.
9. Following interviews and public comment, the Mayor and City Council shall deliberate
and select one individual for the available position. 3
3 If multiple vacancies occur on a Commission simultaneously, the City shall conduct interviews pursuant to this
Interim Appointment Process, and select from that process as many appointees as are necessary to fill the vacancies.
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Survey Results - Reappointment Processes - 2/2016
#
Appointment
Recommended
By:
Incumbents
Interviewed for Re-
appointment?
Interviews
Conducted at
Council Meeting?
Respondents' Notes
1Council Yes Yes
Councilmembers interview all applicants, including
incumbents, unless no one else applied for a
position other than an incumbent.
2Mayor Yes No Interviews are conducted by the Mayor and a staff
member for the Board or Commission.
3Council Yes Yes
Council conducts interviews at a special meeting. If
an incumbent is the only applicant, the council may
elect not to re-interview.
4Council Yes Yes
The interviews are done panel style. There is no
requirement that an applicant or incumbent be
interviewed in order to be appointed or
reappointed.
5Council Yes Yes
6 Specific Council
Seat No N/A
When a commission or board consists of 5
members, each council member appoints one
member.
7Mayor No N/A
8 Specific Council
Seat Yes Yes
Biennial recruitments are conducted in even-
numbered years, with individual appointment
recommendation made by the newly elected
Councilmembers who have corresponding terms of
office; appointment is ratified by the full Council.
9Council No N/A
10Mayor Yes Yes
The Mayor makes appointments annually with
consensus of the Council. All applicants are
interviewed in open session.
11Council No N/A
12Council Yes Yes
Each councilmember may nominate one or more
persons to be members of a commission, with the
appointments/reappointments by majority vote of
the council. Reappointments are subject to the
same process as initial appointments.
13Council Yes Yes
The applicants make a 2-minute opening statement
prior to questions from Council. Those seeking
reappointment complete an application and are
interviewed.
14Council No N/A
15Council No N/A
16Council Yes Yes
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Survey Results - Reappointment Processes - 2/2016
#
Appointment
Recommended
By:
Incumbents
Interviewed for Re-
appointment?
Interviews
Conducted at
Council Meeting?
Respondents' Notes
17Council Yes Yes
The Council interviews all applicants, including
incumbents. Each Councilmember is given a paper
ballot and votes after the interviews. The top
applicants are recommended for approval and the
Council votes on the appointments.
18Council No N/A
19Subcommittee Yes No
The Mayor and Vice Mayor contact each
incumbent, talk about their term and time on the
board or commission and ask the incumbent if they
wish to be reappointed. The Council then votes to
reappoint those who are interested.
20Mayor If requested N/A
All applicants and incumbents are invited to the
council meeting at which appointments are
expected to be made so that they can introduce
themselves and provide background information.
21Staff Yes Yes The Council liaisons (primary /secondary) do the
interviews and make recommendation to Council.
22Mayor Yes No
23Council Yes Yes
24Mayor Yes No
When there is a large number of applicants the
Council as a whole will conduct the interviews. If an
incumbent is the only applicant, they are
reappointed.
25Mayor No N/A
26Subcommittee Yes No
A Committee presides over the selection process,
which is done in private. The council adopts a
resolution of procedures governing the selection
process of the committee. The Mayor makes the
final appointments.
27Council Yes Yes
28Council Yes Yes
29Council Yes Yes
If there are no new applicants for a given seat and
the incumbent wishes to be reappointed they do
not have to interview.
30Mayor No N/A For Planning Commission, formal interviews by the
full Council are conducted at a special meeting.
31Council Yes Yes
32Mayor No N/A For Planning commission, formal interviews by the
mayor and two councilmembers are conducted.
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Survey Results - Reappointment Processes - 2/2016
#
Appointment
Recommended
By:
Incumbents
Interviewed for Re-
appointment?
Interviews
Conducted at
Council Meeting?
Respondents' Notes
33Council Yes Yes
34Mayor Yes No Incumbents must reapply to be considered for
another term.
35Subcommittee No N/A
36Council No N/A
37Subcommittee Yes YesIncumbents re-apply and interview
38Council Yes Yes
39Council No N/A
40Mayor No N/A
41Council Yes Yes
42Subcommittee No N/A
43Council If requested N/A
It is up to each applicant to make an appointment
to interview with the Mayor and Council.
Incumbents may be interviewed if they request it.
44Subcommittee Yes No
45Council No N/A
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City of Chula Vista
Staff Report
File#:16-0155, Item#: 9.
CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING LITIGATION PURSUANT TO
GOVERNMENT CODE SECTION 54956.9 (d)(1)
Name of case:Yvette Roullier v. City of Chula Vista, Worker’s Compensation Appeals Board,
Case No. ADJ10018442
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City of Chula Vista
Staff Report
File#:16-0170, Item#: 10.
CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION
54957.6
Agency designated representatives: Courtney Chase, David Bilby, Simon Silva, Harry Muns, Gary
Halbert, Glen Googins and Kelley Bacon
Employee organization:International Association of Fire Fighters (IAFF), Local 2180
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