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2016-05-24 Agenda Packet
t dalare under penalry of perjury thu i em employed by[he Ciry of Chula Visu in the offia of the Ciry Clerk aod tha f ported the documant rxordin�m Brown Act requ'uements. Deted: (q 1(o Si�adr .� `�� �, � CHULA V ISTA � ������i� � Mary Casillas Salas, Mayor Patricia Aguilar, Councilmember Gary Halbert, City Manager Pamela Bensoussan, Councilmember Glen R. Googins, City Attomey John McCann, Councilmember ponna R. Norcis, City Clerk Steve Miesen. Councilmember Tuesday, May 24, 2016 5:00 PM Council Chambers 276 4th Avenue, Building A Chula VisU, CA 91910 SPECIAL MEETINGS OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY AND THE HOUSING AUTHORITY MEETING JOINTLY WITH THE MUNICIPAL FINANCING AUTHORITY, PUBLIC FINANCING AUTHORITY AND CITY COUNCIL OF THE CITY OF CHULA VISTA Notice is hereby given Mat Me Mayw of Me City o/ Chula Vista has called and will convene Specia! Meetings of the Successor Agency to the Redevelopment Agency and the Housing Authonty on Tuesday, May 24, 2016, at 5:00 pm. in the Council Chambers, located at 276 Fourth Avenue, Chula Vista, Calilomia ro consider Me ifems on fhis agenda. CALL TO ORDER ROLL CALL: Councilmembers Aguilar. 8ensoussan. McCann. Miesen and Mayor Casillas Salas PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE SPECIAL ORDERS OF THE DAY A. 1C�0221 EMPLOYEE SERVICE RECOGNITION HONORING STAFF WITH MILESTONE SERVICE ANNIVERSARIES B. 16-0226 SPECIAL RECOGNITION HONORING NEW UNITED STATES ARMY RECRUITS FROM CHULA VISTA Ciry o7CI,uY V/sd Pap�1 Pnntetl on YIY1016 City Council Agenda May 24, 20�6 C. 16-0270 PRESENTATION OF A PROCLAMATION TO CHULA VISTA POLICE CAPTAIN VERN SALLEE PROCLAIMING THURSDAY, JUNE 2, 2016 AS NATIONAL GUN VIOLENCE AWARENESS DAY IN THE CITY OF CHULA VISTA D. 16-0265 PRESENTATION OF A PROCLAMATION TO SVPR COMMUNICATIONS PRESIDENT SUSANA VILLEGAS ON BEHALF OF CHILDREN'S TUMOR ASSOCIATION PROCLAIMING MAY 2016 AS NEUROFIBROMATOSIS AWARENESS MONTH IN THE CITY OF CHULA VISTA CONSENT CALENDAR (Items 1 - 12) The Council will enact the Consent Calendar staff recommendations by one motion, without discussion, unless a Councilmember, a membe� 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 pnor to the meeting. Items pulled from the Consent Calenda� will be discussed immediately following the Consent Calendar. 1. 16-0271 ORDINANCE OF THE CITY OF CHULA VISTA AMENDING SECTION 15.04.018 OF THE CHULA VISTA MUNICIPAL CODE RELATING TO "ADDITIONAL PLANNING, DESIGN, CONSTRUCTION, AND POST CONSTRUCTION REQUIREMENTS FOR ALL LAND DEVELOPMENT AND REDEVELOPMENT PROJECTS" (SECOND READING AND ADOPTION) oePa.u�e�e Public Works Department en��ro�menn�NOUCe: The activity is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidetines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. smeRecomme�aaao�: Council adopt the ordinance. Ciry o/Chula YsG Page 2 Pnntetl on S2Q2070 !" #&.0 '+,-./(@(!"47 "4<;6 4Q GHIJGaa9>&@?LDC@<!@E!D8>!"CDA!"@L<"C?!@E!D8>!"CDA!@E! GHIJGaa "8L?,!BC&D,!,LD8@9C`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`C<7!> >97><"A!&)><;C<7! C<!,""@9;,<">!FCD8! L<C"C),?!"@;>!&>"DC@<! 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EMPLOYEESERVICERECOGNITIONHONORINGSTAFFWITHMILESTONESERVICE ANNIVERSARIES City of Chula VistaPage 1 of 1Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 11 City of Chula Vista Staff Report File#:16-0226, Item#: B. SPECIALRECOGNITIONHONORINGNEWUNITEDSTATESARMYRECRUITSFROMCHULA VISTA City of Chula VistaPage 1 of 1Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 12 City of Chula Vista Staff Report File#:16-0270, Item#: C. PRESENTATIONOFAPROCLAMATIONTOCHULAVISTAPOLICECAPTAINVERNSALLEE PROCLAIMINGTHURSDAY,JUNE2,2016ASNATIONALGUNVIOLENCEDAYINTHECITYOF CHULA VISTA City of Chula VistaPage 1 of 1Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 13 City of Chula Vista Staff Report File#:16-0265, Item#: D. PRESENTATIONOFAPROCLAMATIONTOSVPRCOMMUNICATIONSPRESIDENTSUSANA VILLEGASONBEHALFOFCHILDREN’STUMORASSOCIATIONPROCLAIMINGMAY2016AS NEUROFIBROMATOSIS AWARENESS MONTH IN THE CITY OF CHULA VISTA City of Chula VistaPage 1 of 1Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 14 City of Chula Vista Staff Report File#:16-0271, Item#: 1. ORDINANCEOFTHECITYOFCHULAVISTAAMENDINGSECTION15.04.018OFTHECHULA VISTAMUNICIPALCODERELATINGTO“ADDITIONALPLANNING,DESIGN,CONSTRUCTION, ANDPOSTCONSTRUCTIONREQUIREMENTSFORALLLANDDEVELOPMENTAND REDEVELOPMENT PROJECTS”(SECOND READING AND ADOPTION) RECOMMENDED ACTION Council adopt the ordinance. SUMMARY TheproposedamendmenttoMunicipalCode(CVMC)Section15.04.018relatingto“Additional planning,design,constructionandpostconstructionrequirementsforalllanddevelopmentand redevelopmentprojects”willprovideconsistencywithpreviouslyamendedCVMCChapter14.20and willincorporate,byreference;theCityofChulaVistaBestManagementPracticeDesignManual “BMPDesignManualDecember2015”approvedbyCouncilonJanuary12,2016,ResolutionNo. 2016-003. ENVIRONMENTAL REVIEW Environmental Notice Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental reviewisrequired.Notwithstandingtheforegoing,theactivityqualifiesforanExemptionpursuantto Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Environmental Determination TheproposedactivityhasbeenreviewedforcompliancewiththeCaliforniaEnvironmentalQuality Act(CEQA)andithasbeendeterminedthattheactivityisnota“Project”asdefinedunderSection 15378ofthestateCEQAGuidelinesbecauseitwillnotresultinaphysicalchangeinthe environment;therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelines,theactivityis notsubjecttotheCEQA.Notwithstandingtheforegoingithasalsobeendeterminedthatthereisno possibilitythattheactivitymayhaveasignificanteffectontheenvironment;therefore,pursuantto Section15061(b)(3)oftheStateCEQAGuidelines,theactivityisnotsubjecttotheCEQA.Thus,no environmental review is required. BOARD/COMMISSION RECOMMENDATION Not Applicable DISCUSSION OnMay08,2013,theSanDiegoRegionalWaterQualityControlBoard(RegionalBoard)adopted City of Chula VistaPage 1 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 15 File#:16-0271, Item#: 1. OrderNo.R9-2013-0001(MunicipalPermit).TheMunicipalPermitregulatesdischargestostorm drainsystemswithin18municipalitiesinSanDiegoCounty,theCountyofSanDiego,theSanDiego CountyRegionalAirportAuthority,andtheSanDiegoUnifiedPortDistrict,aswellas13 CopermitteesinOrangeCountyand5CopermitteesinRiversideCounty(collectivelyreferredtoas “Copermittees”). OnJune16,2015,CityCouncilapprovedanamendmenttotheChulaVistaMunicipalCode(CVMC) Chapter14.20tobringtheCodeintocompliancewiththeMunicipalPermit.Theproposed amendmenttoCVMCSection15.04.018relatingto“Additionalplanning,design,constructionand postconstructionrequirementsforalllanddevelopmentandredevelopmentprojects”willprovide consistency with the previous Chapter 14.20 Ordinance amendment. Furthermore,theproposedamendmenttoCVMCSection15.04.018wouldincorporatebyreference theCityofChulaVistaBestManagementPracticeDesignManual“BMPDesignManualDecember 2015”approvedbyCouncilonJanuary12,2016.TheManualestablishesnewrequirementsand guidelinesfordevelopmentandredevelopmentprojectsintheCityofChulaVistatocomplywiththe City’sstormwaterandnon-stormwaterrequirementsonnewdevelopmentandredevelopment projects, during both the construction and post-construction phases of projects. The proposed actions would place the CVMC Section 15.04.018 amendment on first reading. 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.AmendingCVMC Section15.04.018supportsOperationalExcellenceasitallowstheCitytoimprovethewaterquality throughreducingandprohibitingstormwaterandnon-stormdischargesofpollutantstoitsmunicipal separatestormsewersystem(MS4)receivingwaterswithintheSanDiegoBayWatershed Management Area CURRENT YEAR FISCAL IMPACT UpdatingtheCityofChulaVistaBMPDesignManualisaMS4Permitrequirement,whichinitselfwill nothavefiscalimpactsontheCity.TheCity’scostsforcompliancewiththeMS4PermitinFiscal Year2015-2016havebeenincludedinthePublicWorksbudgetforFiscalYear2015-2016. Therefore, no appropriation is required. ONGOING FISCAL IMPACT City of Chula VistaPage 2 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 16 File#:16-0271, Item#: 1. TherequestedactionbyitselfwillnotresultinanyongoingfiscalimpacttotheCity.However, compliancewiththeMunicipalPermitdemandsongoingprogramexpenditures.Basedon experience,witheachre-issuanceoftheMunicipalPermit,morestringentandcostlyrequirements can be expected. Projectsubmittalreviewsandinspectionservicesrelatingtodevelopmentprojectsarechargeableto projectdeveloperdepositaccounts.FundsrequiredtocoverBMPDesignManualupdatescostsfor eachadditionalyearwillbeprogrammedaspartoftheCity’sPublicWorksbudgetforthatFiscal Year as part of the normal budget process. ATTACHMENTS (1)Proposed amendments to CVMC Section 15.04.018 StaffContact:BoushraSalemP.E.,SeniorCivilEngineer(DepartmentofPublicWorksEngineering- Stormwater Management Section) City of Chula VistaPage 3 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 17 ATTACHMENT 1 15.04.018Additional planning, design, construction, and post- construction requirements for all land development and redevelopment projects. The City of Chula Vista Development Storm Water Manual is a part of this chapter and is incorporated by reference as though set forth in full in this chapter. No land owner or development project proponent in the City of Chula Vista shall receive any City permit or approval for land development activity or significant redevelopment activity unless the project meets or will meet the requirements of this chapter, Chapter 14.20and the Development Storm Water City of Chula Vista BMP Design Manual December 2015. A.The Development Storm Water Manual includes, among other requirements, the following requirements: 1.Phased grading during construction (limitation of grading to a maximum disturbed area before either temporary or permanent erosion controls are implemented); 2.Compliance with low impact development (LID) principles; 3.Compliance with interim hydromodification criteria and hydrograph modification management plan (HMP) requirements; 4.Compliance with post-construction best management practices self- inspections, maintenance, record keeping, and maintenance certification. B.The City of Chula Vista generally accepts standards established in the most up- to-date editions of the following documents for best management practices; however, the City Engineer will make the final determination to approve or disapprove any proposed BMPs: 1.Stormwater Best Management Practices Handbooks developed by the California Stormwater Quality Association; 2.CALTRANS Treatment BMP Technology Report; 3.County of San Diego Low Impact Development Handbook. Long-term maintenance obligations of all proposed best management practices must be approved in an agreement that runs with the land in perpetuity prior to the issuance of a grading or other construction permit. (Ord. 3104 §1, 2008). tğŭĻ Њ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 18 SECOND READING AND ADOPTION ORDINANCENO. ORDINANCEOFTHECITYOFCHULAVISTAAMENDING SECTION15.04.018OFTHECHULAVISTAMUNICIPAL CODERELATINGTO“ADDITIONALPLANNING,DESIGN, CONSTRUCTION,ANDPOSTCONSTRUCTION REQUIREMENTSFORALLLANDDEVELOPMENTAND REDEVELOPMENT PROJECTS”(FIRSTREADING) WHEREAS,onMay08,2013,theSanDiegoRegionalWaterQualityControlBoard (RegionalBoard)adoptedOrderNo.R9-2013-0001 (MunicipalPermit);and WHEREAS,theMunicipalPermitregulatesdischargestostormdrainsystemswithin18 municipalitiesinSanDiegoCounty,theCountyofSanDiego,theSanDiegoCountyRegional AirportAuthority,andtheSanDiegoUnifiedPortDistrict,aswellas13CopermitteesinOrange Countyand5 Copermitteesin RiversideCounty(collectivelyreferredtoas“Copermittees”);and WHEREAS,onJune16,2015,CityCouncilapprovedanamendmenttotheChulaVista MunicipalCode(CVMC)Chapter14.20tobringtheCodeintocompliancewiththeMunicipal Permit;and WHEREAS,theproposedamendmenttoCVMCSection15.04.018relating to “Additionalplanning,design,constructionandpostconstructionrequirementsforallland developmentandredevelopmentprojects”willprovideconsistencywiththepreviousChapter 14.20 Ordinance amendment; and WHEREAS,furthermore,theproposedamendmenttoCVMCSection15.04.018would incorporatebyreferencetheCityofChulaVistaBestManagementPracticeDesignManual “BMPDesignManual December 2015” approvedbyCouncilon January12, 2016, and WHEREAS,theBMPDesignManualDecember2015establishesnewrequirementsand guidelinesfordevelopmentandredevelopmentprojectsintheCityofChulaVistatocomply withtheCity’sstormwaterandnon-stormwaterrequirementsonnewdevelopmentand redevelopmentprojects,duringboth theconstruction and post-constructionphasesof projects. NOWTHEREFOREtheCityCouncilof theCityofChula Vista doesordain asfollows: SectionI.ThatSection15.04.018oftheChulaVistaMunicipalCodeisamendedas follows: 15.04.018Additionalplanning,design, construction,andpost-construction requirementsforall land developmentand redevelopmentprojects. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 19 SECOND READING AND ADOPTION Ordinance Page 2 NolandownerordevelopmentprojectproponentintheCityofChulaVistashallreceive anyCitypermitorapprovalforlanddevelopmentactivityorsignificantredevelopmentactivity unlesstheprojectmeetsorwillmeettherequirementsofthischapter,Chapter14.20andtheCity ofChula Vista BMPDesignManual December2015. SectionII.Severability IfanyportionofthisOrdinance,oritsapplicationtoanypersonorcircumstance,isfor anyreasonheldtobeinvalid,unenforceableorunconstitutional,byacourtofcompetent jurisdiction,thatportionshallbedeemedseverable,andsuchinvalidity,unenforceabilityor unconstitutionalityshallnotaffectthevalidityorenforceabilityoftheremainingportionsofthe Ordinance,or its application to anyother personor circumstance.The CityCouncilof theCityof ChulaVistaherebydeclaresthatitwouldhaveadoptedeachsection,sentence,clauseorphrase ofthisOrdinance,irrespectiveofthefactthatanyoneormoreothersections,sentences,clauses orphrasesoftheOrdinance bedeclaredinvalid, unenforceableor unconstitutional. SectionIII. Construction TheCityCounciloftheCityofChulaVistaintendsthisOrdinancetosupplement,notto teorcontradict,applicablestateandfederallawandthisOrdinanceshallbeconstruedin duplica lightof that intent. SectionIV. EffectiveDate This Ordinance shall takeeffectand bein forceonthe thirtiethdayafterits finalpassage. SectionV. Publication TheCityClerkshallcertifyto thepassageandadoption ofthis Ordinance and shallcause the sameto bepublishedorpostedaccordingto law. Presented byApprovedasto form by RichardA.HopkinsGlenR. Googins DirectorofPublicWorksCityAttorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 20 City of Chula Vista Staff Report File#:16-0199, Item#: 2. RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAAUTHORIZINGTHECITY MANAGERTOENTERINTOAMEMORANDUMOFUNDERSTANDINGWITHTHECENTERFOR EMPLOYMENT OPPORTUNITIES RECOMMENDED ACTION Council adopt the resolution. SUMMARY In2012,theCityenteredintoaMemorandumofUnderstanding(MOU)withtheCenterfor EmploymentOpportunitiestosupportPublicWorksmaintenancecrewswithCEOcrewsof individualsparoledfromourlocalprisonsystemthatarestrivingtore-entertheworkforce.TheMOU initiallyexpiredNovember2013andwasextendedtoJune2016.StaffrecommendsCouncilapproval toenterintoanewone-yearagreementwithCEO,withthreeone-yearoptionsbymutualagreement of CEO and City if work performance is satisfactory. ENVIRONMENTAL REVIEW Environmental Notice Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental review is required. Environmental Determination The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. BOARD/COMMISSION RECOMMENDATION Not Applicable DISCUSSION In2012,theCityenteredinatwo-yearMemorandumofUnderstanding(MOU)withtheCenterfor EmploymentOpportunities(CEO)tosupportPublicWorksmaintenancecrewswithCEOcrewsof individualsparoledfromourlocalprisonsystemthatarestrivingtore-entertheworkforce.Thisnon- profitorganization,CEO,providesasupervisedfulltimeeight-personworkcrew.Theprogram providesvaluabletransitionalworkexperiencefortheparticipantsandstudieshavedemonstrated that individuals with a criminal history who gain employment are less likely to re-offend. City of Chula VistaPage 1 of 2Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 21 File#:16-0199, Item#: 2. Fora$75,000annualcompensationbytheCity,CEOworkcrewswillprovideservicestotheParks Sectionsforvariousmaintenanceprojectsincludinglandscapemaintenance,graffitiremoval,and painting.Furthermore,CEOwillprovidebrushclearance,trailmaintenance,revegetation,andweed abatementservicessupporttovariousOpenSpaceDistricts,forwhichthecostswillbereimbursed fromthoseDistricts.CEOwillalsoprovidelandscapemaintenanceandotherservicesasneededto the Otay Valley Regional Park (OVRP). Additionally,theCityhasagreedtomakeaone-time$10,000paymenttoCEO,duringtheperiod July1,2016toJune30,2017,tosupportthepurchaseoftoolsandequipmentforuseintheCityby CEOworkcrews,withthefollowingprovisions:(a)TheCityshallnotaccedetoanyfutureCEO requeststopurchase,repair,orreplaceworktoolsandequipment;(b)CEOshallberesponsiblefor trainingitsworkcrewsinthesafeuse,maintenance,andstorageofthetoolsandequipment;and(c) TheCityshallnotbeliableforanybodilyinjury,personalinjury,orpropertydamagearisingfromthe handling and use of the tools and equipment. DECISION-MAKER CONFLICT Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsite- specificandconsequently,the500-footrulefoundinCaliforniaCodeofRegulationssection18704.2 (a)(1),isnotapplicabletothisdecision.Staffisnotindependentlyaware,andhasnotbeeninformed byanyCouncilmember,ofanyotherfactthatmayconstituteabasisforadecisionmakerconflictof interest in this matter. LINK TO STRATEGIC GOALS TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy Community,StrongandSecureNeighborhoodsandaConnectedCommunity.TheThirdAmendment totheCEOMOUsupportsthefollowingStrategicGoals:OperationalExcellence-CEOworkcrews providesupportforvariousmaintenanceprojectssuchasoutdoormaintenance,cleaning, beautification,andgroundskeeping.HealthyCommunity-maintainingcommunityopenspacefor public enjoyment CURRENT YEAR FISCAL IMPACT No additional appropriations are being requested for Fiscal Year 2015-16. ONGOING FISCAL IMPACT TheFiscalYear2016-17budgetincludesanappropriationof$25,000fromtheOpenSpaceDistricts and$50,000fromthePublicWorksOperationsbudgetforCEO-providedmaintenanceservices.An additional$10,000one-timepaymenttoCEO,duringFiscalYear2016/2017,forthepurchaseof toolsandequipmentwillbeappropriatedfromOpenSpaceDistricts($5,000)andPublicWorks Operationsbudget($5,000)respectively.FuturemaintenanceservicesfromCEOaresubjecttothe annual budget process. ATTACHMENT 1.CEO-signed Memorandum of Understanding. Staff Contact: Sam Oludunfe, Open Space Manager City of Chula VistaPage 2 of 2Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 22 RESOLUTION NO. 2016- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE CITY MANAGER TO ENTER INTO A MEMORANDUM OF UNDERSTANDING WITH THE CENTER FOR EMPLOYMENT OPPORTUNITIES WHEREAS,pursuant to a Memorandum of Understanding between the City of Chula Vista and the Center for Employment Opportunities (“CEO”) entered into in January 2012 (the “MOU”), CEO has supported Public Works maintenance crews with a work crew of individuals paroled from our local prison system whoare striving to re-enter the workforce; and WHEREAS,the program provides valuable transitional work experience for the participants,and studies have demonstrated that individuals with criminal history who gain employment are less likely to re-offend; and WHEREAS,the MOU expireson June 30, 2016,and both the City of Chula Vista and CEO have expressed interest in entering into a newMOUwith effect from July 1, 2016; and WHEREAS,Staff recommends Council approval to enter into a new one-year Memorandum of Understandingwith CEO; and WHEREAS, the MOU containsthree one-year options to extend. The options may be exercised by mutual written agreement of CEO and City, provided that City determines that CEO’s work performance has beensatisfactory;and WHEREAS,theFiscal Year 2016-17 includes an appropriation of $25,000 from the Open Space Districts and $50,000 from thePublic Works Operationsbudget for CEO-provided maintenance services; and WHEREAS,the City has agreed to make a one-time $10,000 payment to CEO to support the purchase of tools and equipment for use in the City by CEO work crewsduring the period July 1, 2016 to June 30, 2017 with the following provisions: (a) The City shall not accede to any future CEO requests to purchase, repair, or replace work tools and equipment; (b) CEO shall be responsible for training its work crews in the safe use, maintenance, and storage of the tools and equipment; (c) The City shall not be liable for any bodily injury, personal injury, or property damage arising from the handling and use of the tools and equipment. NOW, THEREFORE, BE IT RESOLVED thatthe City Council of the City of Chula Vista does hereby authorize the City Manager to enter into a newone-year Memorandum of Understanding with CEO, with three one-year options to extendby mutual agreement of CEO and City. Presented byApproved as to form by Richard A. HopkinsGlen R. Googins ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 23 Director of Public WorksCity Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 24 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 25 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 26 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 27 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 28 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 29 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 30 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 31 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 32 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 33 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 34 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 35 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 36 City of Chula Vista Staff Report File#:16-0233, Item#: 3. RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAAUTHORIZING EMERGENCYSPENDINGINACCORDANCEWITHMUNICIPALCODESECTION2.56.100(A) WITHDOWNSTREAMSERVICESINC.,ARRIETACONSTRUCTIONINC.,NU-LINE TECHNOLOGIESLLC,TCCONSTRUCTIONCOMPANYINC.,SANCONENGINEERINGINC.AND SOUTHWESTPIPELINEANDTRENCHLESSCORP.FORCIPDR204,“STORMDRAINREPAIRS AT VARIOUS LOCATIONS” PROJECT IN A CUMULATIVE AMOUNT NOT-TO-EXCEED $3,000,000 RECOMMENDED ACTION Council adopt the resolution. SUMMARY PursuanttoChulaVistaMunicipalCode2.56.100(A),staffisrequestingauthorizationforemergency spendingwithDownstreamServicesInc.,ArrietaConstructionInc.,Nu-LineTechnologiesLLC,TC ConstructionCompanyInc.,SanConEngineeringInc.andSouthwestPipelineandTrenchlessCorp. forCIPDR204,“StormDrainRepairsatVariousLocations”Projectinatotalnot-to-exceedamountof $3,000,000 (cumulatively). CIP DR204 is funded with TransNet and Gas Tax funds. ENVIRONMENTAL REVIEW Environmental Notice TheProjectqualifiesforaClass1CategoricalExemptionpursuanttoSection15301(Existing Facilities) of the California Environmental Quality Act State Guidelines. Environmental Determination TheDirectorofDevelopmentServiceshasreviewedtheproposedprojectforcompliancewiththe CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthattheproject,whichconsistsof removingdebrisandblockages,spotrepairs,andliningofexistingCMPstormdrainpipesatvarious locations,qualifiesforaClass1CategoricalExemptionpursuanttoSection15301(Existing Facilities)oftheStateCEQAGuidelinesbecausetheproposalinvolvesnegligibleornoexpansionof anexistinguse,andallworkwillbedonewithinexistingCityofChulaVistaright-of-way.Thus,no further environmental review is required. BOARD/COMMISSION RECOMMENDATION Not Applicable DISCUSSION DuetothestrongElNinoeventthatwasexpectedforthispastwinterfailuresintheCorrugated MetalPipe(CMP)wereanticipatedtooccur.Suchfailurescouldhaveresultedindamagetopublic andprivatepropertyandjeopardizedthehealth,safetyandthegeneralwelfareofthecommunity. Becauseoftheimminentnatureofthethreatsinvolved,onNovember6,2015,theDirectorofPublic City of Chula VistaPage 1 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 37 File#:16-0233, Item#: 3. WorksissuedaninformationalmemonotifyingtheMayorandCityCouncilthatstaffwaspreparing constructioncontractstoaddressthepotentialCMPfailuresandthattheworkwouldbeprocuredin accordance with the emergency provisions contained in Section 1009 of the City Charter. Staffobtainedbidsfromqualifiedlocalcontractorsandproceededwithemergencyrepairstothe failingCMPstormdrainpipes.Theworkconsistedofremovingdebriswithinpipes,performingspot repairswithconcreteandliningtheexistingCMPwithPVCrigidpipelinersorfiberglasscured-in- placepipeliner.Insomecases,thedeterioratedCMPpipewasinsuchbadconditionthatitcould notbelined:InsteaditwascompletelyremovedandreplacedwithReinforcedConcretePipe.Post- constructionvideowastakeninsidethelinedand/ornewpipetoshowthattheworkwasperformed satisfactorily. The contractors being used for the work include: Downstream Services Inc. Arrieta Construction Inc. Nu-Line Technologies LLC TC Construction Company Inc. SanCon Engineering Inc. Southwest Pipeline and Trenchless Corp. AllcontractorsmettheCity’sLiabilityInsurancerequirementsandallworkwasperformedat Prevailing Wage Rates. AllconstructionunderthisprojectoccurredwithinCityright-of-way,understreetsandsidewalk.No work was proposed in open channels, sensitive habitat, or wetland areas. Duetothenatureofdrainagerepairwork,actualcostscanvarywidely.Whenalljobshavebeen completedsatisfactorily,staffwillreturnwithaCouncilAgendaitemtoreportfinalemergencyrepair costs and to ratify the actions taken under the stated provision of the City Charter. 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.TheEmergency StormDrainRepairsatvariouslocations(CIP#DR204)projectsupportstheStrongandSecure City of Chula VistaPage 2 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 38 File#:16-0233, Item#: 3. NeighborhoodsStrategicGoalasitmaintainspublicinfrastructurevitaltothequalityoflifefor residents. CURRENT YEAR FISCAL IMPACT Approvaloftheproposedresolutionwillallowstafftoutilizeinitsentiretytheavailable$3,000,000in TransNet and Gas Tax funds within CIP DR204 to the six mentioned contractors. ONGOING FISCAL IMPACT Upon completion of the repairs, the storm drain pipes will only require routine maintenance. ATTACHMENTS None Staff Contact: Silvester Evetovich, Principal Civil Engineer City of Chula VistaPage 3 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 39 RESOLUTION NO. 2016-_____ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING EMERGENCY SPENDING IN ACCORDANCE WITH MUNICIPAL CODE SECTION 2.56.100 (A)WITH DOWNSTREAM SERVICESINC., ARRIETA CONSTRUCTIONINC., NU-LINE TECHNOLOGIES LLC,TC CONSTRUCTIONCOMPANY INC.,SANCON ENGINEERING INC. AND SOUTHWEST PIPELINE AND TRENCHLESS CORP.FOR CIP DR204, “STORM DRAIN REPAIRS AT VARIOUS LOCATIONS” PROJECT IN A CUMULATIVEAMOUNT NOT-TO-EXCEED $3,000,000 WHEREAS, Pursuant to Chula Vista Municipal Code 2.56.100(A), staff is requesting authorization for emergency spending withDownstream ServicesInc., Arrieta ConstructionInc., Nu-Line Technologies LLC, TC ConstructionCompany Inc., SanConEngineering Inc. and Southwest Pipeline and Trenchless Corp.for CIP DR204, “Storm Drain Repairs at Various Locations” Projectin a total not-to-exceed amount of $3,000,000 (cumulatively); 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, which consists of removing debris and blockages, spot repairs, and lining of existing CMP storm drain pipes at various locations, qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the State CEQA Guidelines because the proposal involves negligible or no expansion of an existing use, and all work will be done within existing City of Chula Vista right-of-way. Thus, no further environmental review is required; and WHEREAS, the proposed resolution will allow staff to utilize in its entirety the available $3,000,000 in TransNet and Gas Tax funds within CIP DR204 tothe six mentioned contractors; and NOW, THEREFORE, BE IT RESOLVEDbythe City Council of the City of Chula Vista,that it does hereby authorize emergency spending in accordance with Municipal Code Section 2.56.100 (A)with Downstream Services Inc., Arrieta Construction Inc., Nu-Line Technologies LLC, TC Construction Company Inc., SanCon Engineering Inc. and Southwest Pipeline and Trenchless Corp. for CIP DR204, “STORM DRAIN REPAIRS AT VARIOUS LOCATIONS” project in a cumulativeamount not-to-exceed $3,000,000. Presented byApproved as to form by ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 40 Resolution No. 2016-_____ Page 2 ______________________________________________________ Richard A. HopkinsGlen R. Googins Director of Public Works City Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 41 City of Chula Vista Staff Report File#:15-0643, Item#: 4. RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAACCEPTINGMULTIPLE DONATIONS,SPONSORSHIPSANDGRANTFUNDSINTHEAMOUNTOF$12,184FORCOSTS ASSOCIATEDWITHRECREATIONFACILITIESANDPROGRAMSANDAMENDINGTHE FY2015/2016RECREATIONDEPARTMENTBUDGETTOREFLECTTHEAPPROPRIATIONOF THESE FUNDS (4/5 VOTE REQUIRED) RECOMMENDED ACTION Council adopt the resolution. SUMMARY Multipledonors,sponsorsandgrantorshavemadedonationstotheRecreationDepartmenttofund costsassociatedwiththerecreationfacilitiesandprograms.Today’sactionaskstheCityCouncilto appropriate these funds. ENVIRONMENTAL REVIEW Environmental Notice Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental review is required. Environmental Determination TheproposedactivityhasbeenreviewedforcompliancewiththeCaliforniaEnvironmentalQuality Act(CEQA)andithasbeendeterminedthattheactivityisnota“Project”asdefinedunderSection 15378oftheStateCEQAGuidelinesbecauseitwillnotresultinaphysicalchangeinthe environment;therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelines,theactivityis not subject to CEQA. Thus, no environmental review is required. BOARD/COMMISSION RECOMMENDATION Not Applicable. DISCUSSION TheRecreationDepartmentwasawardedaPerformingandVisualArtsGrantfromtheChulaVista Libraryintheamountof$2,100.Thisawardallowedforacontractedartisttopaintarecreation themed mural at the Parkway Community Center. TheFriendsofChulaVistaParksandRecreationdonatedgrantfundsof$6,876.37receivedthrough theSanDiegoFoundation’sHealthandHumanServices.TheRecreationDepartmentoffered numerousclasses,activities,andeventsinSpanish,Korean,andEnglishtoover150seniors.The classesandactivitiesfocusedonthethreemainkeystodiseaseprevention:dietandnutrition, City of Chula VistaPage 1 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 42 File#:15-0643, Item#: 4. physicalactivity,andmentalhealth.Classesincludedcookingdemonstrations,laughteryoga,cardio danceparties,andholidayfitnessfrenzy.Throughthisholisticapproach,seniorsweregiventhe completesetoftoolstheyneedtopreventdiseases,liveahealthierlifestyle,andincreasetheir quality of life. TheRecreationDepartmenthaspartneredwiththeUCSDFamilyMedicine&PublicHealth DepartmenttoconductthePeerEmpowerment4PhysicalActivityresearchstudy.NormanPark SeniorCenterandtheLomaVerdeRecreationCenterwererecentlyselectedasthefirsttwositesin SanDiegoCountytohostthestudy.Theprogramcreatedapeerleadwalkingprograminaneffortto improvethehealthandqualityoflifeofolderadults,ages50+atNormanParkSeniorCenter.They willalsoprovide4communityhealthfairsatLomaVerdeRecreationCenter.Thistwoyearprogram focusesonincreasingtheamountofwalkingandoverallactivitylevelsofolderadultsattendinglocal seniororcommunitycenters.Todate,wehavereceived$850;$600ofthefundshasbeenallocated to part-time staff wages to implement the program. SanDiegoGas&Electrichasdonated$150tosupporttheNormanParkSeniorCenterasa designatedCoolZone.Inaddition,thecenterconductsdailyRUOKcallstoanumberofhomebound seniorstoensuretheirwellbeingandtoseeiftheyareneedofanyassistance.Thesecallsare fundedbythedonationsfromChulaVistaGardenClubintheamountof$50.00andAT&Tinthe amount of $742.79. TherapeuticsRecreationhasreceiveddonationstotaling$400tousetowardstheirprogram operations.These(4)$100donationswereprovidedbylocalresidentsDr.CarlosSaucedo,Ronald Lopez, Mabelle Glithero and Rogelio Gonzalez. TheRecreationDepartmentprovidesMoviesintheParkthroughoutthecommunityduringthe summermonths.Thedonationshelppayforthemovielicensesaswellas,Funflicks,thecompany thatprovidesthebigscreen,projectorandaudiosystem.TheFriendsoftheChulaVistaParksand recreationdonated$514.00tosupporttheMoviesintheParkseries.GraceRenewalChurchhas donated $500.00 to sponsor a Movie in the Park at Heritage Park. DECISION-MAKER CONFLICT Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsite specificandconsequently,the500-footrulefoundinCaliforniaCodeofRegulationssection18704.2 (a)(1),isnotapplicabletothisdecision.Staffisnotindependentlyaware,andhasnotbeeninformed byanyCityCouncilmember,ofanyotherfactthatmayconstituteabasisforadecisionmaker conflict of interest in this matter. LINK TO STRATEGIC GOALS TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy Community,StrongandSecureNeighborhoodsandaConnectedCommunity.Partnership opportunitiesarevitaltotheRecreationDepartmenttoexpandspecialevents,programsand servicessuchastheMoviesinthePark,NormanParkSeniorCenterWalkingClubandTherapeutics programming,increasingeconomicvitalityandcommunityengagementaswellasproviding diversified activities for youth through seniors that promote a healthy lifestyle and community. ThesepartnershipsalsoenhancetheRecreationDepartment’sstatureandroleasthe“Heartofthe City of Chula VistaPage 2 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 43 File#:15-0643, Item#: 4. Community”andservetoencourageanddevelopstrongandsecureneighborhoodsandaconnected communitybyprovidingdiverserecreationalopportunitiesthatbringfamiliestogetherandfostercivic pride. CURRENT YEAR FISCAL IMPACT Approvalofthisresolutionwillresultinanappropriationof$12,184frommultipledonors,sponsors andgrantorstotheRecreationDepartment’sbudget.ThereisnonetfiscalimpacttotheGeneral Fund. ONGOING FISCAL IMPACT ThegrantfundsdonatedbytheFriendsofChulaVistaParksandRecreationthroughtheSanDiego Foundation’sHealthandHumanServicesenhancedtheNormanParkSeniorCenterHealthand Wellness programs. TheNormanParkSeniorCenterWalkingProgramiscompletelysupportedbythefundsdonatedby UCSD Family Medicine & Public Health Department and will continue through 2017. TheMoviesintheParkseriesisanannualbudgetedevent.Donatedfundsandsponsorshipsare used to offset event costs. There is no on-going impact to the budget. TheTherapeuticsRecreationprogrammingisabudgetedprogramintheRecreationDepartment, andthedonatedfundsfromindividualswillbeusedforadditionalcostsfortheprogramthatarenot already covered by the Community Development Block Grant. ATTACHMENTS Resolution Budget Detail Form with Expenditures and Revenues Staff Contact: Gil Contreras, Principal Recreation Manager City of Chula VistaPage 3 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 44 COUNCIL RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING MULTIPLEDONATIONS, SPONSORSHIPS AND GRANT FUNDS IN THE AMOUNT OF $12,184FOR COSTS ASSOCIATED WITH RECREATION FACILITIES AND PROGRAMS AND AMENDING THE FY2015/2016 RECREATION DEPARTMENT BUDGET TO REFLECT THE APPROPRIATION OF THESE FUNDS WHEREAS, the City of Chula VistaRecreation Departmentwas awarded a Performing and Visual Arts Grant from the Chula Vista Library in the amount of $2,100; and WHEREAS, this award allowed for a contracted artist to paint a recreation themed mural at the Parkway Community Center; and WHEREAS, the City of Chula VistaRecreation Departmentreceived a donationfrom the Friends of Chula Vista Parks and Recreation in the amountof$6,876.37 through the San Diego Foundation’s Health and Human Services; and WHEREAS, the City of Chula Vista Recreation Department usedthese donated funds to support operations at Norman Park Senior Center, senior health and nutrition programs; and WHEREAS, the City of Chula VistaRecreation Departmenthas receiveda donation from theUniversity of California San Diego Family Medicine & Public Health Department in the amount of $850; and WHEREAS, the City of Chula Vista Recreation Department will use these donated funds to support the Peer Empowerment Program for Physical Activity (PEP4PA)at Norman Park Senior Centerand Loma Verde Recreation Center; and WHEREAS, the City of Chula Vista Recreation Department has receivedadonation from SDG&Ein the amount of $150;and WHEREAS, the City of Chula Vista Recreation Department will use these donated funds to support operations at Norman Park Senior Centeras a designated cool zone; and WHEREAS, the City of Chula Vista Recreation Department has receivedadonation fromthe Chula Vista Garden Club in the amount of $50and a donation from AT&Tin the amount of $742.79; and WHEREAS, the City of Chula Vista Recreation Department will usethese donated funds to supportRUOK callsat Norman Park SeniorCenter; and ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 45 Resolution No. _________ Page 2 WHEREAS, the City of Chula VistaRecreation Departmenthas received (4) $100 donationsfrom local residents Dr. Carlos Saucedo, Ronald Lopez, Mabelle Glithero,Rogelio Gonzalez;and WHEREAS, the City of Chula Vista Recreation Department will use these donated funds to supportprogram operations inTherapeutics Recreation; and WHEREAS, the City of Chula VistaRecreation Departmenthas receiveda donation from the Friends of Chula Vista Parks & Recreation in the amount of $514and a donation from Grace Renewal Church in the amount of $500; and WHEREAS, the City of Chula Vista Recreation Department will use these donated funds to support the Movies in the Park; and WHEREAS, accordingly, all donated, sponsorship and grant funds will be appropriated to the Recreation Department’s FY2015-2016budget. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it hereby accepts$12,184in donations from multiple donors and grantors, as presented,and appropriates said funds to the Recreation Department’s budget. Presented byApproved as to form by Kristi McClureHuckabyGlen R. Googins Director of RecreationCity Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 46 Staff Report File#:, Item#: 5. RECOMMENDED ACTION SUMMARY ENVIRONMENTAL REVIEW Environmental Notice Environmental Determination BOARD/COMMISSION RECOMMENDATION DISCUSSION ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 47 File#:, Item#: 5. DECISION-MAKER CONFLICT LINK TO STRATEGIC GOALS CURRENT YEAR FISCAL IMPACT ONGOING FISCAL IMPACT ATTACHMENTS Staff Contact: Lynn France, Environmental Services Manager ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 48 RESOLUTION NO. ______________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING SUBMITTAL OF APPLICATIONS FOR CALRECYCLE’S BEVERAGE CONTAINER RECYCLING PAYMENT PROGRAM AND RELATED AUTHORIZATIONS, FOR UP TO FIVE YEARS WHEREAS, pursuant to Public Resources Code section 48000 et seq. the Departmentof Resources Recycling and Recovery (CalRecycle) is authorized to administer various payment programs in furtherance of California’s efforts to reduce, recycle and reuse solid waste generated in the state thereby preserving landfill capacity and protecting public health and safety and the environment; and WHEREAS, in furtherance of this authority CalRecycle is required to establish procedures governing the administration, application, awarding, and management of the of the payment programs; and WHEREAS, CalRecycle’s procedures for administering payment programs require, among other things, an applicant’s governing body to declare by resolution certain authorizations related tothe administration of the payment program. NOW, THEREFORE, BE IT RESOLVED that the City of Chula Vista,is authorized to submit an application to CalRecycle for the CalRecycle Beverage Container Recycling Payment Program; and BE IT FURTHER RESOLVED thattheCity Manageror designee, is designated as the “Signature Authority” on behalf of the City and is hereby authorizedand directedto execute all documents, including but not limited to, applications, agreements, amendments and requests for payment,necessary to implement the Beverage Container Recycling Payment Program in the City, and secure paymentfor such program; and BE IT FURTHER RESOLVED that this authorization is effective for five years from the date this resolution is adopted, unless earlierrescinded by the City Council. Presented by Approved as to form by _____________________________________________ Eric CrockettGlen Googins Director of Economic DevelopmentCity Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 49 March 2016 Department of Resources Recycling and Recovery Beverage Container Recycling City/County Payment Program Program Guidelines Fiscal Year 201516 Table of Contents Overview and Statutory Authority ........................................................................................................ 2 Timeline and Cycle Activity ................................................................................................................. 2 Eligibility .............................................................................................................................................. 2 Regional Application Requirements .................................................................................................... 2 Funding ............................................................................................................................................... 3 Term ................................................................................................................................................... 3 Application Process ............................................................................................................................ 3 Webpass.............................................................................................................................................3 Funding Request Information .............................................................................................................. 3 Funding Request Tab ......................................................................................................................... 4 Authorizing Documents ....................................................................................................................... 4 Resolution ....................................................................................................................................... 4 Letter of Authorization Or Regional Participant Resolution ............................................................. 5 Letter of Designation ....................................................................................................................... 5 Contacts .............................................................................................................................................. 5 Addresses ........................................................................................................................................... 5 Activities .............................................................................................................................................. 6 Expenditure Information ...................................................................................................................... 6 Payments............................................................................................................................................ 7 Expenditure Changes ......................................................................................................................... 8 Reporting ............................................................................................................................................ 8 Semi-Annual Reporting For AB 506 .................................................................................................... 8 Unspent Funds .................................................................................................................................... 8 Records Retention And Audit Considerations ..................................................................................... 8 Termination For Cause ....................................................................................................................... 9 Indemnity ............................................................................................................................................ 9 Compliance ......................................................................................................................................... 9 How To Reach Us ............................................................................................................................... 9 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 50 Submittal of a Beverage Container Recycling City/County Payment Program (Program) Application constitutes acceptance of these Guidelines as the controlling requirements for receiving, spending, and accounting for funds and for annual reporting. The on-line funding request application and these Guidelines shall constitute the Agreement. OVERVIEW AND STATUTORY AUTHORITY Pursuant to Public Resources Code (PRC) section 14581(a)(3)(A) of the California Beverage Container Recycling and Litter Reduction Act, the Department of Resources Recycling and Recovery (CalRecycle) is distributing $10,500,000 in fiscal year (FY) 201516 to eligible cities and counties specifically for beverage container recycling and litter cleanup activities. The goal of beverage container recycling program is to reach and maintain an 80 percent recycling rate for all California Refund Value beverage containers - aluminum, glass, plastic and bi-metal. Projects implemented by cities and counties will assist in reaching and maintaining this goal. These Guidelines describe the application and administrative processes to implement the Program. Recipients are responsible and accountable for ensuring that expenditures are appropriate and that proper internal supporting documentation is maintained. To ensure full compliance with the processes and requirements, recipients must adhere to these Guidelines and the provisions set out in PRC 14581 et al. TIMELINE AND CYCLE ACTIVITY DateActivity March 1, 2016Funding Request Open Date June 1, 2016Funding Request Due Date July 2016Payment Awards and Beginning of Term July -November2016Payments Distributed June 29, 2018Term End Date September 4, 2018Reporting DueDate ELIGIBILITY Eligible applicants include cities, counties, or cities and counties in California, as identified by the California Department of Finance, unless otherwise determined by CalRecycle. California Labor Code section 1782 prohibits a charter city from receiving state funding or financial assistance for construction projects if that charter city does not comply with Labor Code sections 1770-1782. If it is determined after award that a participating jurisdiction is a charter city prohibited from receiving state funds for their project, the award will be terminated and any disbursed funds shall be returned to CalRecycle. REGIONAL APPLICATION REQUIREMENTS Local governments may join together in a regional application in which two or more eligible jurisdictions join together for the purpose of project implementation. A Regional Lead Participant (Lead) must be designated to act on behalf of all participating jurisdictions.The Lead is the applicant/recipientwho will be responsible for the performance of the Programand all required documentation. CalRecycle will direct all official correspondence and payments to the Lead. If a jurisdiction is a participant in a regional application, it may not apply individually. Beverage Container Recycling City/County Payment Program 2 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 51 FUNDING $10,500,000 is available for fiscal year 201516, subject to funding availability. Each city is eligible to receive $5,000 or an amount calculated by CalRecycle, on a per capita basis, whichever is greater. Each county is eligible to receive $10,000 or an amount calculated by CalRecycle, on a per capita basis, whichever is greater. The calculation, is based upon the population as of January 1, 2015, in the incorporated areas of a city, or a city and county, or the unincorporated area of a county, as stated in the annual E1 Cities, Counties and the State Population Estimates with Annual Percentage Change January 1, 2014 and 2015 report submitted to the governor by the California Department of Finance. TERM The term begins from the date of award and ends on June 29, 2018. Program expenditures may start no earlier than the date of award. Eligible costs must be incurred no later than June 29, 2018. Recipients will benotified by email once the awards are approved and will be provided the listing of the awarded amounts. APPLICATION PROCESS Cities and counties may apply for Program funds by completing a Funding Request in the web- based City/County Annual Payment and Reporting System (CAPRS). Access to CAPRS is secure; therefore the applicant must have a CalRecycle WebPass in order to log in. The application process requires that applicants must: 1. Submit a completed Funding Requestin CAPRSby the Funding Request due date and upload an electronic (scanned) version of the signed Funding RequestCertification document. 2. Submit the authorizing documents by the Funding Request due date (see the Timeline and Cycle Activity table for due date). WEBPASS Those who have previously obtained a WebPass for this program or another CalRecycle system (i.e., GMS, LoGIC, etc.) do not need to obtain a new WebPass. New users must contact your CalRecycle Regional Representative and request access to CAPRS.After the request is received and approved,a WebPass invitation will be sent and an e-mail grantingaccess to the secure CAPRS website. WebPass accounts are created for individuals, not organizations, and are tied to the specific email address. If the email address changes or becomes inactive, a new WebPass account is needed to access CAPRS. All individuals must create their own password. Passwords should not be shared within the organization. Access cannot be granted to the on-line application unless the applicant is designated as a contact in CAPRS. FUNDING REQUEST INFORMATION The components of the Funding Request are divided into tabs. To fill out a Funding Request, click on each tab and complete the sections in each tab as required. General instructions are on the top of each page. Beverage Container Recycling City/County Payment Program 3 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 52 June 1, 2016 Funding Requests must be submitted no later than 11:59 p.m. on .The system will not allow any Funding Requests to be submitted after the deadline (PRC section 14581(a)(3)(E)). Customer service will be available until 4:00 p.m. on the application due date either by emailing grantassistance@calrecycle.ca.gov or calling Ms. Donnell Duclo at (916) 341-6658. FUNDING REQUEST TAB This tab provides a summary of the funding status, eligible Program funds, due date, program requirements, checklist, contacts, addresses, documents, region information, and a link to this document, the Beverage Container Recycling City/County Payment Program Guidelines. It is the all required documents, based on the individual or regional application, are submitted by the due date. EditFunding Request Type To begin, click the button. Start with the and use the drop down to IndividualRegional select either or . NoteRegional : if you selected as the Funding Request Type, a new tab titled Participating Jurisdictions will be added to the row of tabs. This is where the participating jurisdictions are selected and their authorizing documents are uploaded. AUTHORIZING DOCUMENTS Payment program-specific examples can be found on our Resolution and Letter Examples webpage. Review your options carefully. Resolution Any applicant that is subject to a governing body must upload a Resolution that authorizes specific payment program-related matters. A copy of the authorizing Resolution is a required document that must be uploaded no later than the due date or the application will be deemed incomplete and will be disqualified. Resolution requirements vary for individual and regional Resolution and Letter Examples applications. See the link for more information. Resolution for individual applicants: Individual Resolution Use the Payment Programtemplate. It must authorize submittal of the payment program application. It must identify the job title or his/her designee authorized as Signature Authority to execute all documents necessary to implement and secure payment. The Resolution can be effective until rescinded or specify an end date. Resolution for regional applicants: Regional Lead Resolution Use the Payment Programtemplate. The Regional Lead Participant (Lead) must submit an approved Resolution that authorizes it to act as a lead for a regional program. It must attach a separate list of designated participating jurisdictions and authorize the Signature Authority to revise the list as necessary. It must identify the job title or his/her designee authorized as Signature Authority to execute all documents necessary to implement and secure payment. The Resolution can be effective until rescinded or specify an end date. Note : The choice of the Signature Authority is important because the individual who holds the designated job title is responsible for signing all documents as long as the resolution is valid. Beverage Container Recycling City/County Payment Program 4 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 53 Letter of Authorization or Regional Participant Resolution For regional applications, the Lead must ask each of its participating jurisdictions to prepare either a Letter of Authorization or a Regional Participant Resolution. The Lead is responsible for uploading the documentation to their application by the due date. Letter of Authorization Regional Participant Resolution Use the template or the template. Letters of Authorization and Resolutions may be valid until rescinded or a specific time period. Letter of Designation When authorized by Resolution, the Signature Authority may designate another person the authority to sign and submit required documents, such as Funding Requests and Expenditure Reports. The Letter of Designation must be uploaded to CAPRS and accepted by CalRecycle prior staff Letter of Designation template and include the information below. It must contain a specific end date or state that it is valid until rescinded by the identified Signature Authority. It must be signed by the Signature Authority. CONTACTS A contact may be the city or county recycling coordinator, lead agency or Joint Powers Authority. One staff person may serve as more than one contact.If the city or county would like to assign a person not currently identifiedas a contact, click on Jurisdictionson the left navigation menu in CAPRS, select the Jurisdiction Name,and follow the instructions to set-up a new user. The new user will also need a WebPass. Contacts may be updated before a Funding Request is submitted or during the application process by updating the Contacts tab in the Funding Request. Contact Types are as follows. Signature Authority . The person(s) authorized to sign CalRecycle documents, such as Funding Request Certification and Expenditure Reporting Certification, etc., as authorized by a board/council-adopted Resolution or Letter of Designation. Primary Contact .One person who has been authorized by the Signature Authority/Designee to manage and oversee the Program. This person will be the first contact with whom the CalRecycle Regional Representative will communicate. Secondary Contact .The person(s) authorized (by the Primary Contact or Signature Authority/Designee) as the alternate person with whom the CalRecycle Regional Representative will communicate. (Not required) ADDRESSES A payment and a physical address are required. Payments will be mailed to the payment address. To comply with the requirements of Chapter 8400 of the State Administrative Manual address for counties. If one address is used for more than one payment type, only enter the address once, and check the appropriate address types. Beverage Container Recycling City/County Payment Program 5 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 54 ACTIVITIES shall not be used for activities unrelated Pursuant to PRC section 14581(a)(3)(C), these funds to beverage container recycling or litter reduction. Approved activities are listed in the Other Activities tab, by category, in the Funding Request.The field is provided to allow additional activities to be listed. These are subject to approval by CalRecycle. Eligible activities include, but are not necessarily limited to: New or existing curbside recycling programs. Neighborhood drop-off recycling programs. Public education promoting beverage container recycling. Litter reduction and cleanup where the waste stream includes beverage containers that will be recycled. Cooperative regional efforts among two or more cities and counties. Other beverage container recycling programs. Supporting AB 341 Mandatory Commercial Recycling (MCR) requirements. (For additional information on MCR a- as they relate to this regulation, see Mandatory Commercial Recycling). Infrastructure for businesses to recycle beverage containers. o Support for new or existing beverage container recycling programs for multi-family o residential dwellings. Public education and outreach (must include a beverage container recycling o component). EXPENDITURE INFORMATION Beginning FY 201516, all eligible expenditures are subject to proportionate cost/rate to beverage container recycling activities (i.e., a flyer containing equal parts E-Waste, Oil, Household Hazardous Waste, and Beverage Container Recycling would be funded at a 25 percent proportionate rate.)The funding level for beverage container portions for activities will be approved on a case-by-case basis by aCalRecycle Regional Representative. Bins/Litter Reduction. Please distinguish between litter reduction projects and waste management projects. Trash only receptacles are not considered litter reduction. Therefore, the receptacles are an ineligible expenditure. The purchase of multi-material recycling bins (to include beverage container recycling), permanently attached together, is an eligible expense and may be funded. Litter reduction activities must include beverage containers as part of the waste stream, and must be recycled. Advertising/Promotion. If you plan to spend Program funds on advertising/promotion, submit the artwork, brochure, radio script, flyer, or poster to the assigned CalRecycle Regional Representative for your jurisdiction for approval prior to going to print/production. CalRecycle Regional Representatives are listed on the Funding Request page in CAPRS. Education/Outreach. Education and outreach activities and materials are subject to proportionate cost/rate.Recipients must provide supporting documentation to the CalRecycle Regional Representative for approval. For example, arecycling guide costs $5,000. The guide includes material topics such as oil, electronic waste, sharps, organics, cardboard, and beverage container recycling. The beverage container recycling portion is 1 of 4 pages of the entire guide. Therefore, staff would approve 25 percent (or $1,250) in this case as an eligible expenditure. Beverage Container Recycling City/County Payment Program 6 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 55 Acknowledgement. activities or projects funded, in whole or in part, by this Agreement are publicized in any news media, brochures, articles, seminars or other type of promotional material. California Recycling Recovery Association Conference. If you anticipate attending the California Recycling Recovery Association annual conference, or other conference related to beverage container recycling, please limit the expenditures to registration and travel for no more than two (2) staff. Please contact your CalRecycle Regional Representative before making travel plans in order to ensure that the trip is eligible for reimbursement. Travel expenses must follow the criteria for state travel expenses. The most current information related to travel expenses reimbursable by the state can be found at the California Department of Human Resources webpage. Personnel Hours. If you are charging personnel hours, ensure they are auditable by hours. Program funding will only pay for direct time toward increasing beverage container recycling. Litter Clean-Up Event . If you are sponsoring a litter cleanup event, in which beverage containers are part of the waste stream and are being recycled, Program funds may be used to pay for charges related to the cleanup. This may include supplies (i.e., bags, liners, grabbers, and gloves), personnel, and safety items (i.e., water, vests, and goggles). However, giveaways, incentives, food and/or promotional T-shirts are ineligible expenditures. Promotional Items/Stuff WeAllGet. directive, promotional items are ineligible expenses under CalRecycle grant/direct payment programs. More information can be found at Promotional Items/SWAG (Stuff We All Get). Ineligible Activities/Items. Any activity/items unrelated to beverage container recycling or litter reduction to include, but are not limited to: Recycled Content Products. Pet/BioBag Waste Bags. Monetary/Gift Card Rewards for Recycling Activities/Challenges. Memberships to Associations. Out of State Conferences. Trash Containers Only. Activities solely related to use oil, E-waste, household hazardous waste, organics, cardboard recycling, andwaste. PAYMENTS payments to each city and county. The warrant will arrive without a cover letter to the city or to the county treasurer. Payments must be placed into an interest bearing account. Tracking and reporting of interest earned (if any) on the payment is not required. All interest accrued and received from the Program shall be used only for eligible expenses related to the performance of this Agreement. Pursuant to PRC section 14581(a)(3)(F), CalRecycle may withhold payment to any city, county, or a city and county that has prohibited the siting of a certified recycling center at a supermarket site, caused a certified recycling center at a supermarket site to close its business, or adopted a land use policy that restricts or prohibits the siting of a certified recycling center at a supermarket site within its jurisdiction since January 1, 2000. Beverage Container Recycling City/County Payment Program 7 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 56 EXPENDITURE CHANGES To request changes to Program expenditures/activities once a Funding Request has been submitted, contact your CalRecycle Regional Representative for prior approval. Your Funding Request activities should match your Expenditure Report. REPORTING Expenditure reporting is now a requirement for ongoing eligibility for the Program.Recipients September 4, 2018 must spend the Program funds by the reporting due date of .Recipients must Recipients may submit an Expenditure Report once all Program funds have been spent but no later than the reporting due date.Failure to meet this reporting due date may result in the denial of future Program funding and/or collection of unspent/unreported Program funds. Supporting documentation for all All expenditures will be reported through CAPRS. expenditures will be required .Failure to account for funds and/or ineligible expenditures may result in requiring reimbursement from and/or forfeiture of Program funds. In addition, recipients may be denied future Program funding. SEMI-ANNUAL REPORTING FOR AB 506 If your jurisdiction indicated that it was participating in mediation mandated by AB 506, filed for bankruptcy or declared fiscal emergency, CalRecycle will request you submit a Semi-Annual Report. This report will track your progress as you expend your Program funds. You will be required to submit an Expenditure Report. UNSPENT FUNDS Unspent Program funds at the end of the term must be reimbursed by check to CalRecycle within 45 days of that date. Notify your CalRecycle Regional Representative if you will be sending in a check. The check will need to be labeled as City County Payment Program Unspent Funds for FY (insert applicable fiscal year) andmailed to: CalRecycle, Accounting P.O. Box 4025 Sacramento, CA 95812-4025 If there are questions or other issues related to expenditures, work with your CalRecycle Regional Representative to resolve these issues. Program funds due to CalRecycle but left unpaid may result in a recipient not being eligible for future funding. RECORDS RETENTION AND AUDIT CONSIDERATIONS Recipients are responsible and accountable for all Program funds; therefore, it is essential that adequate supporting documentation and a clear paper/audit trail are maintained. The accounting of Program funds must be maintained in a manner that provides clear and separate tracking of funds and related transactions for fiscal program management and audit purposes. CalRecycle, the Department of Finance, the California State Auditor, or their designated representative(s) shall have the right to review and to copy any records and supporting documentation pertaining to the use of Program funds; and shall have the right to interview staff relevant to the audit. Examples of supporting documentation subject to audit include: Expenditure ledgers. Paid warrants. Travel logs. Beverage Container Recycling City/County Payment Program 8 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 57 Payroll register entries. Time sheets. Contracts and change orders. Samples/pictures of items and materials developed with Program funds. Invoices, receipts, cancelled checks. Supporting documentation must clearly identify all eligible expenditures related to beverage container recycling and litter cleanup activities. All such records shall be maintained for possible audit for a minimum of three (3) years after the Program term end date, or until completion of any action and resolution of all issues, which may arise as a result of any litigation, dispute, or audit, whichever is later. TERMINATION FOR CAUSE In the event the recipient fails to comply with the requirements of these Guidelines at the time and in the manner herein provided, CalRecycle may terminate the Agreement. Recipients are encouraged to discuss any problems they may have in complying with these Guidelines with their CalRecycle Regional Representative to determine if CalRecycle can be of assistance. INDEMNITY Recipient agrees to indemnify, defend and save harmless the state,CalRecycle, its officers, agents, and employees from any and all claims and/or losses accruing or resulting from the performance of the Program. COMPLIANCE Recipient shall comply fully with all applicable federal, state, and local laws, ordinances, regulations, and permits. HOW TO REACH US Your CalRecycle page. This is the best contact for any questions about the Program. Department of Resources Recycling and Recovery Grants and Payment Unit 5 1001 I Street, MS 13A Sacramento, CA 95814 Telephone: (916) 322-0613 Email:citycounty@calrecycle.ca.gov Beverage Container Recycling City/County Payment Program 9 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 58 City of Chula Vista Staff Report File#:16-0227, Item#: 6. RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAGRANTINGNEW EASEMENTSANDAMENDINGTHECONFIGURATIONOFANEXISTINGEASEMENTOVER CITY OWNED LAND TO SAN DIEGO GAS & ELECTRIC COMPANY RECOMMENDED ACTION Council adopt the resolution. SUMMARY SDG&EiscurrentlypreparingtobeginconstructionoftheSaltCreekSubstationlocatedsouthof HunteParkwayandeastExplorationFallsDrive.InordertocompletethisprojectSDG&Eneedsto acquiresomeadditionaleasementsfromtheCityandmodifytheexistingeasements.Theadditional easementsarerequiredbasedontheproject’sfinaldesignandwereanticipatedbytheCityatthe time the location for the substation was identified. ENVIRONMENTAL REVIEW Environmental Notice TheProjectwasadequatelycoveredinpreviouslyadoptedSaltCreekSubstationProject Environmental Impact Report (SCH 2014081032) Environmental Determination TheDevelopmentServicesDirectorhasreviewedtheproposedprojectforcompliancewiththe CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthattheproposedprojectwas adequatelycoveredinthepreviouslyadoptedSaltCreekSubstationProjectEnvironmentalImpact Report (SCH 2014081032). Thus, no further environmental review or documentation is necessary. BOARD/COMMISSION RECOMMENDATION Not Applicable DISCUSSION InJune2011,SDG&Eacquired11.64AcresfromJJJ&KInvestmentsTwo(JJJ&K)asthesitefor theirfutureSaltCreekSubstation.ThissitewaschosenafternegotiationsbetweenSDG&E,JJJ&K andtheCity.TheCitygrantedaneasementtoSDG&Etoaccessthesiteandenteredintoan agreementtojointlyutilizeaCityownedpublicsewerandaccesseasement.Atthetime,SDG&E hadnotdesignedthesubstation.Thepartiesacknowledgedthat,basedonthefinaldesignofthe substation,additionaleasementsmightbenecessaryandtheexistingeasementsmayneedtobe modifiedand/orrelocated.ThedesignisnowcompleteandSDG&Eispreparedtobegin construction.Asanticipated,someadditionaleasementrightsareneededfromtheCityandothers need to be modified slightly. City of Chula VistaPage 1 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 59 File#:16-0227, Item#: 6. SDG&Eisrequestinganewtransmissioneasementtobringpowerintothenewsubstationaswellas anewdistributioneasementtotakepowerouttotheundergroundsysteminHunteParkway. Additionally,inordertoaccommodateconstructionandfuturemaintenanceneedstheyarealso requestingthattheirexistingeasementforaccessoffofHunteParkwaybemodifiedtoamore functionalconfiguration.Finally,asaresultofthesubstationconstruction,aportionoftheCity’s existingslopeeasementalongHuntParkwaywillnolongerbenecessary,andSDG&Edesiresto maintaintheremainderoftheslope,attheircost,inordertoprotecttheirfacility.Toaccomplishthis, theyhaveaskedthattheCityvacatetheunnecessaryportionoftheslopeandassignSDG&E responsibilitytomaintaintheremainingslopeeasement.Copiesofdeedsforbothneweasements andtheagreementamendingtheexistingroadeasementareattachedtothisreportforreference. Thevacationofaportionoftheslopeeasementandtheassignmentoftheremainingslope maintenance will be done at a later date by separate action. Staffconcursthattheseactionsarereasonablefortheconstructionofthissubstationandarewithin thescopeofwhatwasoriginallyanticipatedandagreedtoatthetimethelandwasconveyedtoboth the City and SDG&E. DECISION-MAKER CONFLICT StaffhasreviewedthepropertyholdingsofCityCouncilmembersandhasfoundnoproperty 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.Thisproject,when completedwillensureadequateelectricsupplyforthefuturedevelopmentofeasternChulaVista thus contributing to the Citys Economic Vitality. CURRENT YEAR FISCAL IMPACT No fiscal impact in the current fiscal year. ONGOING FISCAL IMPACT No ongoing fiscal impact from this action. ATTACHMENTS 1.Easement Deeds R/W 363304 and R/W 363305 2.Road Easement First Amendment Staff Contact:Rick Ryals, Real Property Manager City of Chula VistaPage 2 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 60 File#:16-0227, Item#: 6. City of Chula VistaPage 3 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 61 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULAVISTA GRANTING NEW EASEMENTS AND AMENDING THE CONFIGURATION OF AN EXISTING EASEMENT OVER CITY OWNED LAND TO SAN DIEGO GAS & ELECTRIC COMPANY WHEREAS, San Diego Gas &Electric (SDG & E) is currently preparing to begin constructionof the Salt Creek Substation located south of Hunte Parkway and east Exploration Falls Drive; and WHEREAS, in order to complete this project, SDG & E needs to acquire some additional easement rights from the City and modify the orientation of another; and WHEREAS the need for additional easements was determined by the projects final design; and WHEREAS, these actions are reasonable for purposes of the construction of this substation and are within the scope of what was originally anticipated and covenanted to at the time the land was conveyed to both the City and SDG & E. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it does hereby approve the grant of the two necessary easements and the amendment of the existing easement for the construction of the Salt Creek Substation by SDG & E and authorize the execution of the required documents, copies of which are attached hereto and by reference made a part hereof. . Presented byApproved as to form by Eric CrockettGlen R. Googins Director of Economic DevelopmentCity Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 62 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 63 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 64 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 65 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 66 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 67 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 68 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 69 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 70 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 71 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 72 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 73 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 74 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 75 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 76 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 77 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 78 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 79 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 80 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 81 City of Chula Vista Staff Report File#:16-0229, Item#: 7. RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAGRANTINGAN EASEMENTFORELECTRICALANDCOMMUNICATIONSFACILITIESTOSANDIEGOGASAND ELECTRICNECESSARYFORTHEOPERATIONOFASWEETWATERAUTHORITYWELLAT EUCALYPTUS PARK RECOMMENDED ACTION Council adopt the resolution. SUMMARY InApril,2015,CouncilsoldeasementstoSweetwaterAuthorityfortwowellsiteslocatedonCity propertythatareapartofexpansionoftheRichardA.ReynoldsDesalinationFacility.Atthesame timeCouncilgrantedaneasementtoSanDiegoGas&Electrictoservethewelllocatedat FriendshipPark.Subsequently,Sweetwaterdeterminedthatasimilareasementwouldberequired for the Eucalyptus Park site. ENVIRONMENTAL REVIEW Environmental Notice TheProjectwasadequatelycoveredinpreviouslyadoptedRichardReynoldsBrackishGroundwater DesalinationFacility-PhaseIIExpansionFinalEnvironmentalImpactReport(FEIR)(SCHNo. 2007101055). Environmental Determination TheDevelopmentServicesDirectorhasreviewedtheproposedprojectforcompliancewiththe CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthattheproposedprojectwas adequatelycoveredinthepreviouslyadoptedRichardReynoldsBrackishGroundwaterDesalination Facility-PhaseIIExpansionFinalEnvironmentalImpactReport(FEIR)(SCHNo.2007101055). Thus, no further environmental review or documentation is necessary BOARD/COMMISSION RECOMMENDATION Not applicable DISCUSSION TheSweetwaterAuthority(Authority)iscurrentlyexpandingtheRichardA.ReynoldsDesalination Facility(Facility).Whencomplete,thisproposedexpansionwilladdfivemilliongallonsperdayof productioncapacitytotheexistingfacility.Inordertocompletethisexpansion,theAuthorityis drillingfivenewwellsandconstructingnewpipelinestotransportthebrackishwellwatertothe Facility.InApril,2015Councilauthorizedthesaleoftwoeasementstoforwellsiteslocatedat FriendshipParkandEucalyptusPark.Atthesametime,CouncilgrantedaneasementtoSanDiego City of Chula VistaPage 1 of 2Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 82 File#:16-0229, Item#: 7. Gas&ElectrictoprovideelectricalservicetothewelllocatedatFriendshipPark.Subsequently,the AuthorityhasdeterminedthatasimilareasementwillberequiredfortheEucalyptusParksite.This action will authorize the grant of that easement. DECISION-MAKER CONFLICT StaffhasreviewedthepropertyholdingsoftheCityCouncilandhasfoundaproperty-relatedconflict ofinterestexists,inthatCouncilMemberMcCannhasrealpropertyholdingswithin500feetofthe boundariesofthepropertywhichisthesubjectofthisaction.Staffisnotindependentlyaware,and hasnotbeeninformedbyanyCityCouncilmember,ofanyotherfactthatmayconstituteabasisfor a decision maker conflict of interest in this matter. LINK TO STRATEGIC GOALS TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy Community,StrongandSecureNeighborhoodsandaConnectedCommunityThegrantofthis easementhelpsensuretheavailabilityofwaterinthefuturefromasourcethatislocallycontrolled which supports strong and secure neighborhoods CURRENT YEAR FISCAL IMPACT There is no current fiscal impact as a result of this action ONGOING FISCAL IMPACT There is no ongoing fiscal impact as a result of this action ATTACHMENTS 1.Easement Deed Staff Contact:Rick Ryals, Real Property Manager City of Chula VistaPage 2 of 2Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 83 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA GRANTING AN EASEMENT FOR ELECTRICALAND COMMUNICATIONS FACILITIES TO SAN DIEGO GAS AND ELECTRIC NECESSARY FOR THE OPERATION OF A SWEETWATER AUTHORITY WELL AT EUCALYPTUSPARK WHEREAS, the Sweetwater Authority (Authority) is currently expandingits Richard A. Reynolds Desalination Facility to add five million gallons of water a day to the local supply; and WHEREAS, in order to accomplish this expansion,the Authority isconstructingfive new wells, two of which are located in City Parks; and WHEREAS, the Authority’s proposed project contributes to the regions current and future water needs; and WHEREAS, the well to be constructed at EucalyptusPark will require that an Easement be granted to San Diego Gas and Electric (SDG& E) to provide electrical and communications services; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it does hereby approve the Grant of the above-described easement on the terms presentedand authorize the City Manager or his designee(s) to execute all necessary documents, in forms approved by the City Attorney, and to take all necessary and appropriate actions to complete the sale consistent with suchterms. . Presented byApproved as to form by Eric CrockettGlen R. Googins Director of Economic DevelopmentCity Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 84 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 85 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 86 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 87 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 88 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 89 City of Chula Vista Staff Report File#:16-0153, Item#: 8. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE PERFORMING AND VISUAL ARTS GRANT TASK FORCE’S SELECTION OF THE FISCAL YEAR 2016 PERFORMING AND VISUAL ARTS GRANTS RECIPIENTS AND MONETARY GRANT AWARDS TOTALING $75,300 RECOMMENDED ACTION Council adopt the resolution. SUMMARY In 1997 the City Council approved a Sublease with Live Nation, Inc. (formerly Universal Concerts) that established a process whereby ticket sales proceeds at the Sleep Train (formerly Coors/Cricket) amphitheater would be paid to the City and utilized for a Performing and Visual Arts Fund. This fund is to be used for arts grants to the Chula Vista community for the purpose of promoting and stimulating the growth of performing and visual arts within the City of Chula Vista. This year, the Chula Vista Library, who manages the grant process, received $76,352 from Live Nation for their 2015 Concert Series. As called for in the sublease, a Performing and Visual Arts Task Force was established to make recommendations to the City Council regarding the grant awards. The task force is assisted by the Library Department, which formally conducts the grant application process. The Task Force has reviewed the Fiscal Year 2016-2017 applications and makes the following recommendations to the City Council. 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 The Performing and Visual Arts Grant Task Force recommends that the City Council award arts City of Chula VistaPage 1 of 7Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 90 File#:16-0153, Item#: 8. funds to groups as outlined in this report. The Cultural Arts Commission endorsed the Task Force th recommendations at their meeting on May 16, 2016. DISCUSSION Since the program’s inception the Library Department has administered the Performing and Visual Arts Fund grant application process. The Performing and Visual Arts Grant Application was announced through a press release, advertised on the City of Chula Vista and Library webpages, and applications were made available online or by email communication. The period for submittal ran th from late December to late February, with an application deadline of 5 pm on February 29. Fifty-two applications totaling $188,667 in grant requests were received by the application due date. This was an increase from the previous year when thirty-three applications requested $146,350 in grant awards. The amount available from Live Nation was down slightly from 2015 and totaled $76,352. A copy of each application was made available to members of the Task Force assembled specifically for the purpose of determining the successful applications. The Task Force members invited to participate in the process this year were: Adrianna Hernandez, City Council Administrative Division Darbi Peters, Guest Services Manager, Live Nation Virginia Sywyj, Cultural Arts Commission Karen Daniels, Cultural Arts Commission Silvia Lugo, Southwestern College Stephanie Loney, Chula Vista Library (non-voting) Yeelin Cheung, Chula Vista Library (non-voting) All fifty-two applications were distributed two weeks before the panel met to the panelists for their th, review. The Task Force met on April 82016, reviewed all the applications and made the following recommendations for grant awards to forty-six of them. All but four of the successful applications had award amounts reduced. This was due to the high number of requests received this year. Six requests were unsuccessful. The awards recommended total $75,300 and are as follows - List of Grant Recommendations: Community Events Chula Vista Rotary Foundation$2,000 To fund a community event in Chula Vista entitled OctoberFiesta!, showcasing Mariachi and Folklorico performers, vendors, and a silent auction. A blend of Mariachi tradition and German October festival. City of Chula Vista Harborfest$5,000 To fund a Community Zone in which local artists, performers, schools, and groups can showcase th their artistic talents. To take place on Saturday August 20 at the Marina Bayfront in Chula Vista. City of Chula Vista Independence Day Fireworks$2,500 City of Chula VistaPage 2 of 7Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 91 File#:16-0153, Item#: 8. To fund the promotion of the Independence Day Fireworks Festival using various methods including fliers, posters, banners. City of Chula Vista Recreation Department$5,000 To fund a summer concert in the park series, to be held in the Memorial Bowl from July 2016 through September 2016. The concerts will also include activities for the audience. City of Chula Vista Starlight Parade$5,000 To promote the annual Starlight Parade with fliers, posters, banners and an online media campaign. Parade Band Foundation$3,800 To fund the main stage at the annual Chula Vista Bayfront Band Review and Festival: Salute to Veterans, showcasing cultural music and dance, in partnership with Chula Vista and Sweetwater School districts. Third Avenue Village Association$2,000 rd To fund the annual Holiday in the Village celebration on December 3, 2016. To include live holiday entertainment, activities, and photo opportunities. Third Avenue Village Association$2,500 To provide musical entertainment and seasonal activities at the Third Avenue Village Certified Farmers Market on Thursday evenings throughout the year. Individual Applicants Ania Acuna Avilez$1,000 To fund costumes for traditional choreographies for ballet classes and performances conducted in Chula Vista Recreation Centers. Charles Berigan$750 To support a series of evenings devoted to the work of local writers in Chula Vista, read by the authors themselves, in conjunction with music. In addition, the creation of books consisting of the work presented at each event. Jeanne Becijos$1,500 To fund performances of the play “Heartquakes” at a Chula Vista venue. Written by local playwright, Jeanne Becijos, the work was original performed as part of the San Diego International Fringe Festival. Yolanda Chacon Beniquez$1,000 To support a performance of Ballet Folklorico at a Chula Vista venue, featuring dances of the Sinaloa and Jalisco regions. Candice Silva Cortez$2,000 To support the production of CD’s/DVD’s of the film “It’s About Alex” and its screening, promotion, and/or entry into film festivals. The film is shot entirely in Chula Vista. City of Chula VistaPage 3 of 7Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 92 File#:16-0153, Item#: 8. Dr. Rachel N Hastings$2,000 To support an interactive, multimedia-driven performance art exhibit examining the socio-political state of black men in America. The three part exhibit originating at Southwestern College will function as a backdrop to Dr. Hasting’s one-person performance, as well as convert into a traveling exhibit for a wider audience. James B. Farrell$250 To support the study of iconography and the completion of an iconic representation of Our Lady of Guadalupe. Mr. Farrell lectures at Mater Dei and Corpus Christi parishes and will display this work at these events. Omar Quintero$1,000 To illustrate a series of regalia plates of Native American tribal dancers, with descriptions of dance styles and their origins. To culminate with the production of an artistic book on the same subject. Melissa Yumi Richards & Adrian Arancibia$1,000 To help support a poetry reading in an unconventional venue as a pop-up performance/visual art show at a location in Chula Vista. John Stencil$500 To support the purchase of Elixar acoustic guitar strings as an upgrade to a set of 31 Baby Taylor th Guitars used by 6 graders at Clear View Elementary School. Dance California Ballet Association$1,000 To support on-site performances/lessons at Eastlake and Bonita Vista High Schools Chula Vista Ballet$2,000 To support the production of a Season Finale gala of Snow White at a Chula Vista location, restaged by Taeko Nishino. Also, a presentation of Act II of Swan Lake, staged by guest choreographer Shannon Parsley of the Boston Ballet. Friends of the Chula Vista Library$300 To support a celebration of diversity within the community by hosting a performance of traditional dances of the Pacific island region at the Chula Vista Library. Theater Arc of San Diego$1,000 To support in part, a theater production at The Arc’s Gerber Family Center in Chula Vista that features the Arc’s clients, who are people with a range of disabilities. Bonitafest Melodrama$1,000 To support a community musical-melodrama based on local history, to run in conjunction with the Bonitafest in September. City of Chula VistaPage 4 of 7Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 93 File#:16-0153, Item#: 8. CYT San Diego$1,000 To support advertising, costumes and sound equipment of theater performancesin Chula Vista libraries and at the Day of the Child event (April 2017) Heritage Elementary School Performing Arts Troupe$1,500 To support a whole-school production of the Wizard of Oz at Heritage Elementary La Jolla Playhouse$2,000 To fund POP tours in Chula Vista Elementary Schools OnStage Productions$1,000 To support theater marketing efforts of OnStage Productions OnStage Productions$1,000 To underwrite theater tickets for charter school and Sweetwater Union High School District students in grades 8-12 to expose them to the live theater experience Visual Art Chula Vista Art Guild$2,000 To fund three art exhibits at different locations within Chula Vista to encourage community participation and closer community connections Museum of Contemporary Art$2,000 To support the Extended School Partnership program at Chula Vista High School, including museum visits, educator’s professional development, in class activities built on exhibition themes, and a student showcase of work. Music San Diego Youth Symphony$3,000 To help fund afterschool music instruction for students in the Chula Vista Elementary School District Bonita Vista High School Club Blue$500 To partially support upgrades to live sound equipment Bonita Vista High School Music Machine$500 To support Music Machine performances in Chula Vista Bonita Vista High School Sound Unlimited$500 To support Sound Unlimited performances in Chula Vista Bonita Vista High School Lady Tones$500 To support Lady Tones performances in Chula Vista Eastlake High School Band Boosters$1,000 City of Chula VistaPage 5 of 7Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 94 File#:16-0153, Item#: 8. To support the teaching and performance of music by various ELHS bands Friends of the Chula Vista Library$1,000 To support a series of weekly classes in the Chula Vista library to teach the 8 string musical instrument Jarana to members of the community Friends of the Chula Vista Library$1,500 To support a program that teaches an appreciation of music while also demonstrating the science behind musical sound. Interdisciplinary Arts for Learning San Diego$1,000 To help support a series of arts/musical experiences for all ages at the Chula Vista Library. The performances will include sing-alongs, drum circles, mask making, story-telling, and body percussion. Friends of the Chula Vista Library$2,500 To provide six weeks of artistic and performance arts programing to local youth at each of the Chula Vista library branches during the summer. High Tech High Chula Vista$2,500 To fund a collaborative project between High Tech High Chula Vista, the Museum of Contemporary Art, and the Museum of Photographic Art. HTHCV will work with both museums to curate several museum exhibits throughout the year in Chula Vista. San Diego Entertainment and Arts Guild$1,500 To fund performances at the annual Steve Kowit Poetry Prize and awards ceremony. To be held in April 2017 at Southwestern College. Mexicayotl Indio Cultural Center$1,000 To partially fund the creation of a video exploring how participation in a traditional art community impacts performers view of the arts and journey to artistic discovery. Mater Dei Catholic High School$1,500 To partially support a collaboration between Mater Dei Catholic High School and the San Diego Junior Youth Theatre to produce a spring 2017 musical performance Media Arts Friends of the Chula Vista Library$1,000 To partially support a series of classes teaching film creation (storyboarding, filming and editing). Film creators will have six months to create a short film and completed films will be submitted for review, culminating in a library film festival in March 2017. Friends of the Chula Vista Library$1,200 To support Film Forum programming at the Chula Vista Library. Programs will include screening of different movie genres and accompanying director talks. City of Chula VistaPage 6 of 7Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 95 File#:16-0153, Item#: 8. The above grant award recommendations were made by the Task Force with full consideration given th to previous recommendations made at City Council on April 9, 2009 that applications should be submitted on the correct application form, that criteria on how points are awarded are considered, and that itemized budgets and final reports are a requirement. The previous guidelines were th approved by City Council on December 14, 1999 and entitled “Criteria for the Allocation of the Performing Arts Fund. DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site- specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section 18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter. LINK TO STRATEGIC GOALS The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. Awarding the Performing and Visual Arts Grants to the organizations and individuals listed above supports the Connected Community goal as many of the projects are free and open to the general public. In addition, the Economic Vitality goal is supported as community events bring investment into the area where they are situated, and lastly, the Healthy Community goal is supported as dance and musical opportunities support physical and mental well-being. CURRENT YEAR FISCAL IMPACT There is no current fiscal impact associated with these grants. The recommended fiscal year 2016- 2017 grant awards total $75,300 and the amount received from Live Nation totaled $76,352. A remaining amount of $1,052 will carry over to the following fiscal year. ONGOING FISCAL IMPACT None ATTACHMENTS 1.Criteria for the Allocation of the Performing Arts Fund as approved by City Council on th , 1999. December 14 Staff Contact: Stephanie Loney, Principal Librarian, Library City of Chula VistaPage 7 of 7Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 96 th May 24, 2016, Item_____ ATTACHMENT A Criteria for the Allocation of the Performing Arts Fund as approved by City Council on th December 14, 1999. The Performing and Visual Arts Fund, established by the sublease between the City Council and Live Nation shall be annually re-granted through a formal application process. The following groups and individuals shall be eligible to apply for funds: Chula Vista based tax-exempt, non-profit organizations Chula Vista based educational organizations Chula Vista based religious organizations Performance groups associated with Chula Vista based educational institutions (i.e., the Music Machine The City of Chula Vista and its various departments and Boards and Commissions Individuals who reside in Chula Vista For profit organizations, institutions and businesses shall not be eligible for funds unless they partner with Chula Vista based organizations. Individual Chula Vista residents (especially students) shall be eligible to apply, in an effort to develop local talent. Per the agreement, applicants may only apply for funds to underwrite the cost of presentations. Funds shall not be awarded to establish an endowment or trust fund, for administrative costs, for capital projects, for rent of performance or office space, and/or for general operating expenses. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 97 RESOLUTION NO. 2016-______ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF APPROVING THE PERFORMING AND CHULA VISTA VISUALARTS GRANT TASK FORCE’S SELECTION OF THE FISCAL YEAR 2016PERFORMING AND VISUAL ARTS GRANTS RECIPIENTS AND MONETARY GRANT AWARDS TOTALING $75,300 in1997, the City Council approved a Sublease with Live Nation, Inc. WHEREAS, (formerlyUniversal Concerts) that established a process whereby ticket sales proceeds at the Sleep Train (Formerly Coors/Cricket) Amphitheater would be paid to the City and utilized for a Performing and Visual Arts Fund; and this fund is to be used for arts grants to the Chula Vista community WHEREAS, forthe purpose of promoting and stimulating the growth of performing and visual arts within the City of Chula Vista; and this year, the Chula Vista Public Library received $76,352from Live WHEREAS, Nation for their 2015Concert Series; and since the program’s inception, the Library Department has WHEREAS, administered the Performing and Visual Arts Fund grant application process; and aPerforming and Visual ArtsGrantTask Force was assembled WHEREAS, specifically for the purpose of determining the successful applications; and the Performing and Visual Arts Grant Task Force reviewed the 2016- WHEREAS, 2017applications and made its recommendations to award Performing and Visual Arts Grants to forty-six(46) recipients. by the City Council of the City of Chula NOW, THEREFORE, BE IT RESOLVED Vista,that it approves the Performing and Visual Arts Grant Task Force’s selection of the Fiscal Year 2016-2017Performing and Visual Arts Grant recipients and monetary grant awards totaling $75,300, in the form presented. Presented byApproved as to form by Betty WaznisGlen R. Googins Library DirectorCity Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 98 City of Chula Vista Staff Report File#:16-0245, Item#: 9. A.RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAAMENDINGTHE COMPENSATIONSCHEDULEANDCLASSIFICATIONPLANTOREFLECTCHANGESIN THECOMPENSATIONFORTHECBAGEXECUTIVEDIRECTOR,CBAGDEPUTY EXECUTIVE DIRECTOR AND FA DIRECTOR OF SD LECC EFFECTIVE JANUARY 1, 2016 B.RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAAPPROVINGTHE REVISEDFISCALYEAR2015-2016COMPENSATIONSCHEDULEEFFECTIVEMAY27, 2016, AS REQUIRED BY CALIFORNIA CODE OF REGULATIONS, TITLE 2, SECTION 570.5 . RECOMMENDED ACTION Council adopt the resolutions. SUMMARY PerHIDTA(HighIntensityDrugTraffickingArea)policy,thecompensationfortheCBAGExecutive Director,CBAGDeputyExecutiveDirectorandFA(FiscalAgent)DirectorofSDLECC(SanDiego LawEnforcementCoordinationCenter)positionsaretiedtotheFederalGeneralSchedule(GS) SalaryTable,withthemostrecentchangeseffectiveJanuary1,2016.TheChulaVista CompensationplanneedstobeupdatedtoreflecteligiblestepincreasesbasedupontheFederal GeneralSchedulesalaryguidelinesforthesethreepositionseffectiveasofJanuary1,2016.A correspondingactionisrequiredtoupdatetheCompensationSchedulepursuanttotheCalifornia Code of Regulations, Title 2, Section 570.5. 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. City of Chula VistaPage 1 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 99 File#:16-0245, Item#: 9. DISCUSSION ThePoliceDepartmententeredintoanagreementwiththeOfficeofNationalDrugControlPolicyin 1996tobethefiscalagentfortheCaliforniaBorderAllianceGroup(CBAG),whichisnowreferredas theSanDiego/ImperialHighIntensityDrugTraffickingArea(HIDTA).Inessence,theCityreceives fullfunding,plusa4%administrativefee,tohireandadministersalaryandbenefitsforHIDTA positions.Todate,therearecurrently17HIDTApositionswiththeCityofChulaVistathatarefully funded from the Office of National Drug Control Policy (ONDCP). PerHIDTApolicy,thecompensationfortheCBAGExecutiveDirector,CBAGDeputyExecutive DirectorandFADirectorofSDLECCpositionsaretiedtotheFederalGeneralScheduleSalary Table. The below table went into effect as of January 1, 2016: TitleUnclassifiedBargainingCurrent EProposed E GroupStep SalaryStep Salary (biweekly)(biweekly) CBAG Executive DirectorYesEXEC$5,501.14$5,580.88 CBAG Deputy ExecutiveYesSM$4,676.66$4,744.50 Director FA Director of SD LECCYesSM$5,501.13$5,580.88 OnApril5,2016,theCityCouncilamended(viaResolutionNo.2016-056)theCity’sCompensation Plantoreflecttheaboveeligiblestepincreases.TheeffectivedateofthechangewasApril15,2016. However,thecurrentrequestmakesthecompensationforthethreepositionseffectiveretroactiveto January 1, 2016 in-line with the Federal GS Salary Table effective date. CaliforniaCodeofRegulations,Title2,Section570.5requiresthat,forpurposesofdetermininga retiringemployee'spensionallowance,thepayratebelimitedtotheamountlistedonapayschedule thatmeetscertainrequirementsandbeapprovedbythegoverningbodyinaccordancewiththe requirementsoftheapplicablepublicmeetinglaws.TheFiscalYear2015-2016Compensation Schedule("CompensationSchedule")waslastamendedbyCityCouncilonApril5,2016,Resolution No.2016-055.ApprovalofResolutionBwillapprovetherevisedCompensationScheduletoreflect thesalaryadjustmentforCBAGExecutiveDirector,CBAGDeputyExecutiveDirectorandFA Director of SD LECC. DECISION-MAKER CONFLICT Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsite specificandconsequentlythe500-footrulefoundinCaliforniaCodeofRegulationssection18704.2 (a)(1)isnotapplicabletothisdecision.Staffisnotindependentlyaware,norhasstaffbeeninformed byanyCityCouncilmember,ofanyotherfactthatmayconstituteabasisforadecisionmakerconflict of interest in this matter. LINK TO STRATEGIC GOALS TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy City of Chula VistaPage 2 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 100 File#:16-0245, Item#: 9. Community,StrongandSecureNeighborhoodsandaConnectedCommunity.AmendingtheCity’s compensationschedulesupportsthegoalofOperationalExcellencebycomplyingwithHIDTA policies of these grant-funded positions. CURRENT YEAR FISCAL IMPACT TheCityisfullyreimbursedforHIDTApositionsandreceivesa4%administrativefeetoactasa fiscalagent.ThecostsofthecompensationadjustmentsfortheCBAGExecutiveDirector,CBAG DeputyExecutiveDirectorandFADirectorofSDLECCpositionswillbecompletelyoffsetby personnelsavingsofcurrentHIDTAvacantpositions,resultinginnonetfiscalimpactinthecurrent fiscalyear.ThecompensationadjustmentwasapprovedbyCityCouncilonApril5,2016via ResolutionNo.2016-056andwaseffectiveApril15,2016.Thecurrentrequestmakesthechange retroactive to January 1, 2016. ONGOING FISCAL IMPACT Thereisnoongoingfiscalimpactapprovingthecompensationofthesethreegrant-fundedpositions. TheproposedFY2017budgetwillincorporateanticipatedsalaryadjustmentsforHIDTApositions, and the funding from ONDCP will fully offset these costs. ATTACHMENTS 1.Compensation Schedule Staff Contact: Joseph Walker City of Chula VistaPage 3 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 101 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 LECCEFFECTIVE JANUARY 1, 2016 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 positionsto be effective January 1, 2016; 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 CBAG Executive Director at $5,580.88, CBAG Deputy Executive Director at $4,744.50 and FA Director of SD LECC at $5,580.88to be effective retroactively to January 1, 2016. Presented by:Approved as to form by: ____________________________________________ David BejaranoGlen R. Googins Police ChiefCity Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 102 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE REVISED FISCAL YEAR 2015-2016 COMPENSATION SCHEDULEEFFECTIVE MAY 27, 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 ofApril 5, 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, originally approved on April 5, 2016, tobe effective retroactively to January 1, 2016. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula 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 byApproved as to form by David BejaranoGlen R. Googins Chief of PoliceCity Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 103 FiscalYear20152016CompensationSchedule EffectiveJune26,2015 HourlyRateBiWeeklyRate POSITIONTITLEPCNBARGStepAStepBStepCStepDStepEStepAStepBStepCStepDStepE ACCOUNTANT3633CONF$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 ACCOUNTINGASSISTANT3641CVEA$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 ACCOUNTINGASSISTANT(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 ACCOUNTINGTECH(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 ACCOUNTINGTECHNICIAN3643CONF$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 ACCOUNTINGTECHNICIAN3675CVEA$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 ACCOUNTSPAYABLESUPERVISOR3645CVEA$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 ADMINSECRETARY(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 ADMINSERVICESMANAGER0215SM$43.72$53.14$3,497.53$4,251.27 ADMINISTRATIVESECRETARY0149CONF$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 ADMINISTRATIVESECRETARY0179CVEA$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 ADMINISTRATIVETECH(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 ADMINISTRATIVETECHNICIAN0147CONF$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 ADMINISTRATIVETECHNICIAN0181CVEA$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 ANIMALADOPTIONCOUNSELOR5310CVEA$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 ANIMALCAREAIDE(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 ANIMALCAREFACADMINISTRATOR5327SM$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 ANIMALCARESPECIALIST5343CVEA$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 ANIMALCARESPECIALIST(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 ANIMALCARESUPERVISOR5319CVEA$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 ANIMALCONTROLOFFICER5303CVEA$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 ANIMALCONTROLOFFICER(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 ANIMALCTRLOFFCRSUPERVISOR5304CVEA$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 ANIMALSERVICESSPECIALIST5309CVEA$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 APPLICATIONSSUPPSPECHRLY3078UCHR$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 APPLICATIONSSUPPORTMANAGER3083MM$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 APPLICATIONSSUPPORTSPECIALIST3088PROF$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 AQUARIST7741CVEA$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 AQUATICSUPERVISORI7579CVEA$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 AQUATICSUPERVISORII7577CVEA$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 AQUATICSUPERVISORIII7575CVEA$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 ASSISTANTCITYCLERK2210SM$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 ASSISTANTDIROFDEVSERVICES4040SM$64.42$78.30$5,153.44$6,264.04 ASSOCACCOUNTANT3635CONF$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 ASSOCENGINEER6017WCE$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 ASSOCLANDSURVEYOR6287WCE$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 ASSOCPLANCHECKENGINEER4747WCE$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 ASSOCPLANNER4437CVEA$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 ASSOCPLANNER(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 ASSTCHIEFOFPOLICE5011SM$63.19$76.81$5,055.32$6,144.76 ASSTCITYATTORNEY2405SM$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 ASSTCITYMANAGER/ADMIN2707EXEC$87.29$105.45$6,983.54$8,435.75 ASSTDIRHUMANRESOURCES3304SM$58.77$70.53$4,701.74$5,642.09 ASSTDIROFDEVSVCS(INTERIM)4044SM$64.42$70.89$78.30$5,153.44$5,671.54$6,264.04 ASSTDIROFFINANCE3604SM$58.42$70.53$4,673.34$5,642.09 ASSTDIROFPUBLICWORKS6322SM$58.42$68.96$70.53$4,673.34$5,517.17$5,642.09 ASSTDIROFRECREATION7401SM$48.26$58.66$3,860.47$4,692.42 ASSTDIRECTOROFENGINEERING6008SM$58.42$70.53$4,673.34$5,642.09 ASSTENGINEER6015WCE$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 ASSTLANDSURVEYOR6289WCE$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 ASSTPLANCHECKENGINEER4749WCE$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 ASSTPLANNER4439CVEA$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 AUTOMATEDFINGERPRINTTECH5123CVEA$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 BENEFITSMANAGER3404MMCF$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 BLDGPROJECTMANAGER6412PROF$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&ANALYSISMANAGER2222SM$54.69$66.00$4,375.46$5,280.01 BUILDINGINSPECTIONMGR4769MM$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 BUILDINGINSPECTORI4771CVEA$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 BUILDINGINSPECTORII4773CVEA$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 BUILDINGINSPECTORIIHRLY4774UCHR$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 BUILDINGINSPECTORIII4775CVEA$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 BUILDINGOFFICIAL/CODEENFMGR4780SM$61.35$74.57$4,908.03$5,965.75 BUILDINGPROJECTCOORDINATOR6407CVEA$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 BUSINESSLICENSEREP4505CVEA$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 CARPENTER6444CVEA$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 CBAGDEPUTYDIRECTORSDLECC5269SM$45.09$52.19$54.80$3,606.94$4,175.48$4,384.26 AllpositiontitlesdesignatedasExecutiveΛͻ99/ͼΜorSeniorManagementΛͻ{aͼΜhavesalarybandswithaminimumΛͻ{ƷĻƦ!ͼΜandmaximumΛͻ{ƷĻƦ9ͼΜsalary;salaryappointmentsandsubsequent adjustmentswithintheapprovedsalaryrangemaybemadebythepƚƭźƷźƚƓƭappointingauthority. CBAGDEPUTYEXECUTIVEDIRECTOR5273SM$48.79$59.31$3,903.31$4,744.50 ApprovedandAdopted: Page1 ResolutionNo.: ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 104 FiscalYear20152016CompensationSchedule EffectiveJune26,2015 HourlyRateBiWeeklyRate POSITIONTITLEPCNBARGStepAStepBStepCStepDStepEStepAStepBStepCStepDStepE CBAGEXECUTIVEDIRECTOR5272EXEC$57.39$63.28$69.76$4,591.40$5,062.02$5,580.88 CBAGPROGRAMMANAGER5285MM$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 CHIEFOFPOLICE5001EXEC$81.77$97.32$99.39$6,541.23$7,785.95$7,950.91 CHIEFOFSTAFF2011MMUC$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 CHIEFSUSTAINABILITYOFFICER2729SM$58.42$68.96$70.53$4,673.34$5,517.17$5,642.09 CITYATTORNEY(ELECTED)2400CATY$90.89$7,270.81 CITYCLERK2201CCLK$70.06$5,604.53 CITYENGINEER6010SM$58.83$71.51$4,706.70$5,721.02 CITYMANAGER2710CMGR$116.37$9,309.26 CIVILBCKGRNDINVEST(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 CIVILIANBACKGROUNDINVEST5429CVEA$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 CIVILIANPOLICEINVESTIGATOR5431UCHR$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 CLERICALAIDE0241UCHR$10.55$11.07$11.63$12.21$12.82$843.66$885.84$930.14$976.64$1,025.47 CODEENFOFFICERI4777CVEA$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 CODEENFOFFICERI(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 CODEENFOFFICERII4779CVEA$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 CODEENFOFFICERII(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 CODEENFORCEMENTTECHNICIAN4789CVEA$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 COLLECTIONSSUPERVISOR3683MM$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 COMMUNITYSERVOFFICER5141CVEA$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 CONSERVATIONSPECIALISTI6200CVEA$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 CONSERVATIONSPECIALISTII6202CVEA$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 CONSTITUENTSERVICESMANAGER2038PRUC$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&REPAIRSUPVSR6427CVEA$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 COUNCILASSISTANT2023UCHR$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 COUNCILPERSON2003CL$23.99$1,919.49 CRIMELABORATORYMANAGER5101MM$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 CULTURALARTSPROGRAMMGR4435PROF$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 CUSTODIALSUPERVISOR6667CVEA$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 CUSTODIAN6661CVEA$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 DELIVERYDRIVER7191CVEA$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 DEPCITYMANAGER2705EXEC$90.29$99.55$7,223.45$7,963.85 DEPUTYCITYATTORNEYI2410PRUC$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 DEPUTYCITYATTORNEYII2408PRUC$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 DEPUTYCITYATTYIII2411SM$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 DEPUTYCITYCLERKI2245PRUC$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 DEPUTYCITYCLERKII2243PRUC$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 DEPUTYFIRECHIEF5505SM$60.72$73.81$4,857.83$5,904.72 DETENTIONFACILITYMANAGER5130MM$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 DEVELOPMENTSERVICESTECHI4542CVEA$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 DEVELOPMENTSVCSDEPTDIR4039EXEC$75.39$90.19$91.64$6,030.87$7,214.88$7,331.54 DEVELOPMENTSVCSTECHII4541CVEA$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 DEVELOPMENTSVCSTECHIII4543CVEA$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 DEVLPMENTSVCSTECHII(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 DEVLPMTSVCSCOUNTERMGR4547MM$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 DIROFECONDEVELOPMENT2734EXEC$70.53$85.07$5,642.50$6,805.71 DIROFENG/CITYENGINEER6006EXEC$66.80$81.20$5,344.15$6,495.84 DIROFFINANCE3601EXEC$75.93$85.07$91.63$6,074.29$6,805.73$7,330.56 DIROFHUMANRESOURCES3303EXEC$65.89$80.09$5,271.23$6,407.22 DIROFINFOTECHSVCS3001EXEC$65.89$72.64$80.09$5,271.24$5,811.54$6,407.21 DIROFLIBRARY7002EXEC$70.53$85.07$5,642.50$6,805.71 DIROFPUBLICWORKS6320EXEC$74.72$88.09$91.63$5,977.82$7,047.51$7,330.56 DIROFRECREATION7405EXEC$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 ELECTRICIAN6438CVEA$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/EQUIPINSTALLER6492CVEA$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 ELECTRONICSTECHSUPERVISOR6472CVEA$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 ELECTRONICSTECHNICIAN6475CVEA$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 EMERGENCYSVCSCOORDINATOR5564PROF$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 EMSNURSECOORDINATOR5567PROF$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 ENGINEERINGTECHI6081CVEA$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 ENGINEERINGTECHII6071CVEA$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 ENVIRONSUSTAINABILITYMGR6207MM$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 ENVIRONMENTALHLTHSPECIALIST6129CVEA$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 ENVIRONMENTALSERVICESMGR6205MM$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 EQUIPMENTMAINTENANCEMANAGER6505MM$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 EQUIPMENTMECHANIC6542CVEA$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 EQUIPMENTOPERATOR6361CVEA$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 EXECUTIVESECRETARY0187CONF$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 ApprovedandAdopted: Page2 ResolutionNo.: ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 105 FiscalYear20152016CompensationSchedule EffectiveJune26,2015 HourlyRateBiWeeklyRate POSITIONTITLEPCNBARGStepAStepBStepCStepDStepEStepAStepBStepCStepDStepE FAACCOUNTINGTECHNICIAN5270CONF$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 FAADMINANALYSTI5297CONF$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 FAADMINANALYSTII5296CONF$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 FAANALYST5277CONF$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 FADIRECTOROFSDLECC5274SM$57.39$69.76$4,591.40$5,580.88 FAEXECUTIVEASSISTANT5286CONF$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 FAFINANCIALMANAGER5493MMUC$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 FAGEOSPATIALINTELANALYST5439PRUC$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 FAGRAPHICDESIGNER/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 FAINFOSECURITYPROGRAMMGR5453MMUC$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 FAINTELLIGENCEANALYST5485CONF$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 FAIVDCLECCEXECDIRECTOR5491SM$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 FALECCITMANAGER5440MMUC$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 FAMANAGEMENTASSISTANT5278CONF$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 FAMICROCOMPUTERSPECIALIST5443PRUC$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 FANTWRKADMINISTRATORI5292PRUC$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 FANTWRKADMINISTRATORII5294PRUC$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 FAPROGRAMANALYST5444PRUC$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 FAPROGRAMASSISTANT5451CONF$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 FAPROGRAMMANAGER5445SM$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 FARCFLNETWRKENGINEER5284CONF$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 FASRFINANCIALANALYST5495PRUC$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 FASRINTELLIGENCEANALYST5483PRUC$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 FASRSECRETARY5477CONF$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 FASUPVINTELLIGENCEANALYST5481PRUC$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 FACILITIESMANAGER6425MM$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&SUPPLYSPECIALIST5648CVEA$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&YOUTHLITERACYCOORD7035CVEA$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 FIELDMAINTENANCESPECIALIST7471CVEA$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&PURCHASINGMGR3625SM$54.30$66.00$4,343.88$5,280.02 FIREAPPARATUSMECH6521CVEA$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 FIREBATTALIONCHIEF(112HR)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 FIREBATTALIONCHIEF(80HR)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 FIREBATTALIONCHIEF(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 FIRECAPTAIN(112HR)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 FIRECAPTAIN(80HR)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 FIRECAPTAIN(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 FIRECHIEF5501EXEC$72.87$86.37$88.57$5,829.39$6,909.80$7,085.66 FIREDIVISIONCHIEF5507MMUC$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 FIREENG(112HR)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 FIREENG(80HR)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 FIREENGINEER(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 FIREINSP/INVESTI5530IAFF$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 FIREINSP/INVESTI(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 FIREINSP/INVESTII5531IAFF$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 FIREINSP/INVESTIIHRLY5532UCHR$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 FIREPREVENG/INVEST5528IAFF$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 FIREPREVENTIONAIDE5535CVEA$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 FIREPREVENTIONAIDE(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(112HR)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(80HR)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(112HR)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(80HR)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&MANAGEMENTANALYST0216PRCF$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 FISCALOFFICESPEC(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 FISCALOFFICESPECIALIST0169CVEA$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 FLEETINVENTORYCONTROLSPEC6513CVEA$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 FLEETMANAGER6501MM$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 FORENSICSSPECIALIST5114CVEA$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 GARDENERI6627CVEA$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 GARDENERII6623CVEA$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 GISMANAGER3079MM$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 GISSPECIALIST3081CVEA$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 GISSPECIALIST(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 GRAFFITIABATEMENTCOORDINATOR6339CVEA$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 GRAPHICDESIGNER2775CVEA$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 GYMNASTICSPECIALIST7543UCHR$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 HOUSINGMANAGER4093SM$50.43$60.81$4,034.01$4,864.98 ApprovedandAdopted: Page3 ResolutionNo.: ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 106 FiscalYear20152016CompensationSchedule EffectiveJune26,2015 HourlyRateBiWeeklyRate POSITIONTITLEPCNBARGStepAStepBStepCStepDStepEStepAStepBStepCStepDStepE HRANALYST3310PRCF$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 HROPERATIONSMANAGER3317SM$46.39$56.38$3,711.02$4,510.76 HRTECHNICIAN3315CONF$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 HVACTECHNICIAN6430CVEA$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 INFOTECHMANAGER5104SM$49.84$59.80$3,986.86$4,784.24 INFOTECHSUPPORTSPECIALIST3014PROF$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,GRADUATE0269UCHR$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,UNDERGRADUATE0267UCHR$12.12$12.72$13.36$14.03$14.73$969.47$1,017.95$1,068.84$1,122.29$1,178.40 ITSUPPORTSPECIALIST(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 LANDSCAPEARCHITECT4480PROF$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 LANDSCAPEINSPECTOR6291CVEA$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 LANDSCAPEPLANNERI4482CVEA$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 LANDSCAPEPLANNERII4483CVEA$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 LATENTPRINTEXAMINER5111CVEA$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 LATENTPRINTEXAMINERHRLY5112UCHR$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 LAWOFFICEMANAGER2465MMUC$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 LEADCUSTODIAN6663CVEA$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 LEGALASSISTANT0183CONF$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 LIBRARIANI7075CVEA$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 LIBRARIANI(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 LIBRARIANII7073CVEA$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 LIBRARIANII(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 LIBRARIANIII7071CVEA$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 LIBRARYAIDE7181UCHR$10.55$11.07$11.63$12.21$12.82$843.66$885.84$930.14$976.64$1,025.47 LIBRARYASSISTANT7157CVEA$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 LIBRARYASSOCIATE7091CVEA$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 LIBRARYASSOCIATE(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 LIBRARYDIGITALSERVICESMGR7025MM$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 LIBRARYOPERATIONSMANAGER7029MM$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 LIBRARYTECHNICIAN7121CVEA$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 LIBRARYTECHNICIAN(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 LIBRARYVISITORASSISTANT7185UCHR$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 LIFEGUARDI7587UCHR$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 LIFEGUARDII7585UCHR$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 LOCKSMITH6443CVEA$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 MAINTENANCEWORKERI6377CVEA$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 MAINTENANCEWORKERI(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 MAINTENANCEWORKERII6373CVEA$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 MAINTENANCEWORKERIIHRLY6381UCHR$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 MANAGEMENTANALYST0225CVEA$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&COMMUNICATIONSMGR2781SM$53.12$54.62$64.57$4,249.69$4,369.56$5,165.53 MAYOR2001MY$59.98$4,798.73 MECHANICASSISTANT6550CVEA$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 MUSEUMATTENDANT7215UCHR$10.94$11.49$12.06$12.67$13.30$875.38$919.15$965.11$1,013.36$1,064.02 OFFICESPECIALIST0161CVEA$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 OFFICESPECIALIST(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 OFFICESPECIALIST(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 OFFICESPECIALIST(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 OPENSPACEINSPECTOR6311CVEA$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 OPENSPACEMANAGER6302MM$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&TELECOMMGR3025MM$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 PAINTER6434CVEA$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 PARKRANGER7434UCHR$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 PARKRANGERSUPERVISOR7441CVEA$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 PARKINGENFORCEMENTOFFICER5154CVEA$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 PARKINGMETERTECH(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 PARKINGMETERTECHNICIAN3693CVEA$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 PARKSMANAGER6604MM$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 PARKSOPERATIONSMANAGER6610MM$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 PARKSSUPERVISOR6605CVEA$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 PEACEOFFICER5061POA$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&ORGDEVMGR2758SM$50.68$60.81$4,054.18$4,864.98 PLANCHECKSUPERVISOR4731MM$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 PLANCHECKTECHNICIAN4753CVEA$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 PLANNINGMANAGER4727SM$52.35$63.15$4,187.70$5,051.79 PLANNINGTECHNICIAN4527CVEA$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 PLUMBER6432CVEA$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 POLICEADMINSVCSADMINISTRATOR5025SM$51.25$62.30$4,100.08$4,983.67 POLICEAGENT5051POA$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 ApprovedandAdopted: Page4 ResolutionNo.: ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 107 FiscalYear20152016CompensationSchedule EffectiveJune26,2015 HourlyRateBiWeeklyRate POSITIONTITLEPCNBARGStepAStepBStepCStepDStepEStepAStepBStepCStepDStepE POLICECADET5427UCHR$11.22$11.78$12.37$12.98$13.63$897.24$942.10$989.20$1,038.66$1,090.60 POLICECAPTAIN5022SM$63.80$77.54$5,103.71$6,203.59 POLICECOMMRELSPECIALIST5258CVEA$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 POLICECOMMSYSTEMSMANAGER5185MM$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 POLICEDATASPECIALIST0163CVEA$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 POLICEDISPATCHER5181CVEA$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 POLICEDISPATCHER(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 POLICEDISPATCHERSUPERVISOR5183CVEA$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 POLICEDISPATCHERTRAINEE5179CVEA$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 POLICELIEUTENANT5031POA$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 POLICEREC&SUPPORTSUPV5203CVEA$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 POLICERECTRANSCRIPT(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 POLICERECORDSSPEC(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 POLICERECORDSSPECIALIST0165CVEA$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 POLICERECRUIT5071CVEA$25.29$26.55$0.00$0.00$0.00$2,023.01$2,124.16$0.00$0.00$0.00 POLICESERGEANT5041POA$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 POLICESERVICESOFF(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 POLICESERVICESOFFICER5131CVEA$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 POLICESERVICESTECHNICIAN5415CVEA$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 POLICESUPPORTSERVICESMGR5205MM$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 POLICESVCSOFFICERSUPERVISOR5132CVEA$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 POLICESVCSTECH(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 POLICETECHSPECIALIST(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 POLICETECHNOLOGYSPECIALIST5107CVEA$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 POLICYAIDE2013PRUC$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 PRINCIPALCIVILENGINEER6021MM$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 PRINCIPALECONOMICDEVSPEC2724PROF$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 PRINCIPALHRANALYST3305MMCF$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 PRINCIPALLANDSCAPEARCHITECT4486MM$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 PRINCIPALLIBRARIAN7051MM$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 PRINCIPALMANAGEMENTANALYST0208PROF$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 PRINCIPALMGMTANALYST(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 PRINCIPALPLANNER4431MM$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 PRINCIPALPROJECTCOORDINATOR4212PROF$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 PRINCIPALRECREATIONMANAGER7410MM$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 PROCUREMENTSPECIALIST3721CVEA$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 PROGRAMMERANALYST3090PROF$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 PROJECTCOORDINATORI4217CVEA$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 PROJECTCOORDINATORI(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 PROJECTCOORDINATORII4215CVEA$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 PROJECTCOORDINATORII(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&EVIDENCESPECIALIST5127CVEA$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 PUBWORKSSPECIALIST6712CVEA$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 PUBLICINFORMATIONSPECIALIST2782CONF$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 PUBLICSAFETYANALYST5254CVEA$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 PUBLICSAFETYANALYST(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 PUBLICWORKSINSPI6123CVEA$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 PUBLICWORKSINSPII6121CVEA$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 PUBLICWORKSMANAGER6336MM$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 PUBLICWORKSSUPERVISOR6337CVEA$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 PUMPMAINTTECHNICIAN6396CVEA$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 PUMPMAINTENANCESUPERVISOR6392CVEA$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 PURCHASINGAGENT3711SM$46.39$56.38$3,711.02$4,510.76 RANGEMASTER5417CVEA$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 RANGEMASTER(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 RCFLNETWORKENGINEER5450UCHR$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 REALPROPERTYMANAGER6037MMUC$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 RECAIDE7605UCHR$10.00$10.50$11.03$11.58$12.16$800.32$840.34$882.36$926.48$972.80 RECSPECIALIST7601UCHR$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 RECSUPERVISORI(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 RECORDSMANAGER2211MM$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 RECORDSSPECIALIST2217CVEA$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 RECREATIONLEADERI7609UCHR$11.45$12.02$12.63$13.26$13.92$916.16$961.97$1,010.07$1,060.57$1,113.60 RECREATIONLEADERII7607UCHR$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 RECREATIONSUPERVISORI7425CVEA$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 RECREATIONSUPERVISORII7423CVEA$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 RECREATIONSUPERVISORIII7422CVEA$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 RECYCLINGSPECIALISTI2742CVEA$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 RECYCLINGSPECIALISTII2744CVEA$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 ApprovedandAdopted: Page5 ResolutionNo.: ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 108 FiscalYear20152016CompensationSchedule EffectiveJune26,2015 HourlyRateBiWeeklyRate POSITIONTITLEPCNBARGStepAStepBStepCStepDStepEStepAStepBStepCStepDStepE REGISTEREDVETTECH(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 REGISTEREDVETERINARYTECH5307CVEA$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 RESERVEOFFICER5081UCHR$14.24$14.95$15.69$1,139.42$1,195.85$1,255.53 RISKMANAGEMENTSPECIALIST3367PRCF$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 RISKMANAGER3361SM$46.85$56.95$3,748.13$4,555.86 SCHOOLCROSSINGGUARD5143UCHR$10.05$10.55$11.08$11.64$12.22$804.19$844.39$886.62$930.94$977.49 SEASONALASSISTANT0231UCHR$9.55$10.03$10.53$11.06$11.61$764.21$802.42$842.54$884.67$928.90 SECRETARY0171CVEA$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 SIGNALSYSTEMSENGINEERI6169CVEA$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 SIGNALSYSTEMSENGINEERII6170CVEA$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&STRIPINGSUPERVISOR6355CVEA$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 SPECIALEVENTSCOORDINATOR2799PRUC$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 SPECIALPLANNINGPROJMGR4101SM$43.75$53.17$3,499.74$4,253.96 SRACCOUNTANT3630MMCF$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 SRACCOUNTINGASST3651CVEA$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 SRADMINISTRATIVESECRETARY0145CONF$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 SRADMINISTRATIVESECRETARY0185CVEA$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 SRANIMALCARESPECIALIST5345CVEA$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 SRAPPLSUPPORTSPEC(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 SRAPPLICATIONSSUPPORTSPEC3089PROF$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 SRASSTCITYATTORNEY2403EXEC$72.87$88.57$5,829.39$7,085.66 SRBUILDINGINSPECTOR4781CVEA$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 SRBUSINESSLICENSEREP4507CVEA$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 SRCIVILENGINEER6019WCE$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 SRCODEENFOFF(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 SRCODEENFORCEMENTOFF4763CVEA$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 SRCONSERVATIONSPECIALIST6204CVEA$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 SRCOUNCILASST2027CONF$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 SRCOUNCILASST2025UCHR$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 SRDEPUTYCITYCLERK2208PRUC$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 SRELECTRICIAN6442CVEA$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 SRELECTRONICSTECHNICIAN6471CVEA$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 SRENGINEERINGTECHNICIAN6059CVEA$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 SREQUIPMENTMECHANIC6512CVEA$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 SRFIREINSP/INVEST5529IAFF$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 SRFISCALOFFSPEC(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 SRFISCALOFFICESPECIALIST0141CONF$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 SRFISCALOFFICESPECIALIST0175CVEA$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 SRGARDENER6621CVEA$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 SRGISSPECIALIST3080CVEA$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 SRGRAPHICDESIGNER2764PROF$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 SRHRANALYST3308PRCF$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 SRHUMANRESOURCESTECHNICIAN3316CONF$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 SRHVACTECHNICIAN6441CVEA$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 SRINFOTECHSUPPORTSPEC3012PROF$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 SRLANDSURVEYOR6285WCE$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 SRLANDSCAPEINSPECTOR6295CVEA$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 SRLEGALASSISTANT2463CONF$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 SRLIBRARIAN7053MM$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 SRLIFEGUARD7589UCHR$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 SRMAINTENANCEWORKER6371CVEA$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 SRMANAGEMENTANALYST0206PROF$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 SROFFICESPECIALIST0173CVEA$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 SROFFICESPECIALIST(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 SROPENSPACEINSPECTOR6309CVEA$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 SRPARKRANGER7439CVEA$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 SRPLANCHECKENGINEER4746WCE$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 SRPLANCHECKTECHNICIAN4751CVEA$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 SRPLANNER4432PROF$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 SRPLANNINGTECHNICIAN4529CVEA$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 SRPOLICEDATASPECIALIST0164CVEA$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 SRPOLICETECHNOLOGYSPEC5109PROF$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 SRPROCUREMENTSPECIALIST3728PROF$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 SRPROGRAMMERANALYST3091PROF$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 SRPROJECTCOORDINATOR4214PROF$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 SRPROP&EVIDENCESPECIALIST5125CVEA$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 SRPUBLICSAFETYANALYST5260PROF$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 SRPUBLICWORKSINSP6101CVEA$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 ApprovedandAdopted: Page6 ResolutionNo.: ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 109 FiscalYear20152016CompensationSchedule EffectiveJune26,2015 HourlyRateBiWeeklyRate POSITIONTITLEPCNBARGStepAStepBStepCStepDStepEStepAStepBStepCStepDStepE SRPUBLICWORKSSPECIALIST6702CVEA$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 SRRECORDSSPECIALIST2215CVEA$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 SRRECREATIONMGR7421MM$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 SRRECYCLINGSPECIALIST2746CVEA$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 SRRISKMANAGEMENTSPECIALIST3365PRCF$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 SRSECRETARY0139CONF$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 SRSECRETARY0177CVEA$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 SRSECRETARY(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 SRTREETRIMMER6573CVEA$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 SRWEBMASTER2779PROF$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 STOREKEEPER3734CVEA$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 STOREKEEPERSUPERVISOR3732CVEA$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 STORMWTRCOMPLNCEINSPI6127CVEA$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 STORMWTRCOMPLNCEINSPII6125CVEA$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 SURVEYTECHNICIANI6151CVEA$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 SURVEYTECHNICIANII6141CVEA$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/DATABASEADMINISTRATR3015PROF$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 TELECOMMUNICATIONSSPECIALIST3027CVEA$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 TINYTOTAIDE7503UCHR$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 TINYTOTSPECIALIST7505UCHR$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 TRAFFICCONTROLASSISTANT5155UCHR$15.69$1,255.20 TRAFFICDEVICESTECH6177CVEA$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 TRAFFICDEVICESTECHSUPV6175CVEA$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 TRAFFICENGINEER6024PROF$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 TRAFFICOFFICER(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 TRAININGPROGRAMSPEC(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 TRAININGPROGRAMSSPECIALIST5262CVEA$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 TRANSENGINEERW/CERT6031WCE$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 TRANSENGINEERW/OCERT6033WCE$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 TRANSITMANAGER6218MMUC$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 TREASURYANDBUSINESSMANAGER3611SM$54.30$66.00$4,343.88$5,280.02 TREETRIMMER6575CVEA$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 TREETRIMMERSUPERVISOR6572CVEA$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 VETERINARIAN5321PROF$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 VETERINARIANPERMITTED5322UCHR$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 VETERINARYASSISTANT5325CVEA$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 VETERINARYASSISTANT(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 VOLUNTEERCOORD(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 VOLUNTEERCOORD(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 WASTEWATERCOLLECTIONSMGR6334MM$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 WEBMASTER2777CVEA$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 ThefollowingsalariesareeffectiveJanuary1,2016 HourlyRateBiWeeklyRate POSITIONTITLEPCNBARGStepAStepBStepCStepDStepEStepAStepBStepCStepDStepE CBAGDEPUTYEXECUTIVEDIRECTOR5273SM$48.79$59.31$3,903.31$4,744.50 CBAGEXECUTIVEDIRECTOR5272EXEC$57.39$63.28$69.76$4,591.40$5,062.02$5,580.88 FADIRECTOROFSDLECC5274SM$57.39$69.76$4,591.40$5,580.88 Revised: July21,2015 September15,2015 October6,2015 Λ9ŅŅĻĭƷźǝĻhĭƷƚĬĻƩЋͲЋЉЊЎΜ November3,2015 Λ9ŅŅĻĭƷźǝĻhĭƷƚĬĻƩЌЉͲЋЉЊЎΜ November10,2015 December15,2015 Λ9ŅŅĻĭƷźǝĻ5ĻĭĻƒĬĻƩЋЎͲЋЉЊЎΜ December15,2015 Λ9ŅŅĻĭƷźǝĻWğƓǒğƩǤБͲЋЉЊЏΜ February23,2016 April5,2016 May24,2016 ApprovedandAdopted: Page7 ResolutionNo.: ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 110 City of Chula Vista Staff Report File#:16-0217, Item#: 10. A.RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAADOPTINGAN ANNEXATIONMAPSHOWINGTERRITORYPROPOSEDTOBEANNEXEDTO IMPROVEMENTAREA“C”OFCOMMUNITYFACILITIESDISTRICTNO.97-2(PRESERVE MAINTENANCE DISTRICT) B.RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTADECLARINGITS INTENTIONTOAUTHORIZETHEANNEXATIONOFTERRITORYTOCOMMUNITY FACILITIESDISTRICTNO.97-2(PRESERVEMAINTENANCEDISTRICT)AND IMPROVEMENT AREA “C” THERETO RECOMMENDED ACTION Council adopt the resolutions. SUMMARY TheOtayRanchGeneralDevelopmentPlan,originallyapprovedin1993,isbasedonclustered developmentsothatlargeareasoftheOtayRanchcanbepreservedinaccordancewiththeOtay RanchResourceManagementPlan.Everyacreofdevelopmentisrequiredtodedicate1.188acres ofpreservelandasaconditionofdevelopment.Further,thedevelopedareaisrequiredtofundthe monitoringandmaintenanceofthepreservedlandinperpetuity.ACommunityFacilitiesDistrict (“CFD”)wasformedin1998tofundthesemonitoringandmaintenancecostsoftheOtayRanch Preserve(CFD97-2).AstheOtayRanchbuildsout,newvillagesareannexedintothePreserve MaintenanceDistrict(CFD97-2).ThenextVillageoftheOtayRanchtobedevelopedisVillage3, northeastoftheintersectionofHeritageRoadandMainStreet.Theowner,HomefedVillageIII, LLC,hasrequestedtheCityconductproceedingstoconsidertheannexationofVillage3intothe PreserveMaintenanceDistrict.Tonight’sactionwillinitiatetheformalproceedingstoconsiderthe annexation of Otay Ranch Village 3 to CFD No. 97-2, Improvement Area C. ENVIRONMENTAL REVIEW Environmental Notice Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental review is required. Environmental Determination TheDirectorofDevelopmentServiceshasreviewedtheproposedactivityforcompliancewiththe CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthattheactivityisnota“Project”as definedunderSection15378oftheStateCEQAGuidelinesbecausetheproposedactivityconsistsof thecreationofagovernmentalfiscal/fundingmechanismwhichdoesnotinvolveanycommitmentto anyspecificprojectwhichmayresultinapotentiallysignificantphysicalimpactontheenvironment. Therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelines,theactivityisnotsubject City of Chula VistaPage 1 of 5Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 111 File#:16-0217, Item#: 10. to CEQA. Thus, no environmental review is required. BOARD/COMMISSION RECOMMENDATION Not Applicable DISCUSSION InJuly1998,CouncilformedCFDNo.97-2(PreserveMaintenanceDistrict).CFD97-2wasoriginally dividedintotwoImprovementAreas:AandB.ImprovementAreaAwasintendedtofundthecostsof theResourceMonitoringProgramaswellasthePreserveOperationsandMaintenancewithinthe boundariesoftheOtayRanchPreserve.ImprovementAreaBwasintendedtofundonlythe ResourceMonitoringProgramwithinthatsamearea.Boththeseimprovementareaswere establishedpriortothecreationofMultipleSpeciesConservationProgram(“MSCP”)which developedbetterbudgetsformonitoringandmaintenanceofpreserveareas.ImprovementAreaC wasthereforeformedin2003,inconjunctionwiththeannexationofBrookfieldSheaOtayVillage ElevenintoCFD97-2,andfundsboththeResourceMonitoringProgramandPreserveOperations andMaintenanceconsistentwiththerequirementsoftheOtayRanchResourceManagementPlan PhasesI&IIandtheMSCP.AllannexationsintoCFD97-2since2003areintoImprovementArea C. Territory Proposed to be Annexed TheboundariesoftheterritoryproposedtobeannexedtoImprovementAreaCofCFDNo.97-2 encompasstheparcelslocatedwithintheOtayRanchknownasVillage3.OtayRanchVillage3is approximatelyfourhundredandtwenty-three(423)acreslocatedjustsouthandeastoftheOtay LandfillandVillageTwo,westoftheexistinglightindustrialusesintheCityofChulaVistaandnorth oftheOtayRiverValley.HomefedVillageIII,LLCownsthepropertywithintheproposedannexation areaandtheprojectisproposedforapproximately813single-familyunitsand457multi-familyunits, 7.4acresofmixedusecommercial,7.9acresofofficespace,29.3acresofindustrialuses,parks, CommunityPurposeFacilityland,andanelementaryschoolsite.Staffhasreviewedtheproposed annexationboundarymap,identifiedasAnnexationMapNo.10toCFD97-2,andhasfounditready and acceptable for approval by Council. A reduced copy of the map is presented in Attachment 1. Proposed Special Tax Therateandmethodofapportionmentofthespecialtaxesauthorizedtobeleviedwithintheexisting boundaries of CFD 97-2 has four categories of taxation, as follows: ·DevelopedParcels(Single-FamilyandMulti-FamilyResidences)aretaxedbasedonthesquare footage of the structure. Industrial and Commercial Parcels are taxed on the acreage of the parcel. ·TheFinalMappedproperties,whichincludeallsinglefamilyandmulti-residentialparcelsandall industrialandcommercialparcels,forwhichabuildingpermithasnotbeenissued,aretaxedon acreage of the parcel. · Property not categorized as Developed or Final Mapped Property is taxed on acreage of the parcel. · The Exempt Category includes all publicly owned parcels and Homeowner’s Association parcels. DevelopedParcelsarethoseparcelsforwhichabuildingpermithasbeenissued.Theproposed City of Chula VistaPage 2 of 5Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 112 File#:16-0217, Item#: 10. maximumspecialtaxrateintherateandmethodofapportionmentwasdeterminedatthetimeof formation of CFD 97-2 in 1998. Collection of Taxes AtthebeginningofeachfiscalyeartheCityshalldeterminetheamountoftheSpecialTaxLiability (budgetplusreserve)ofeachImprovementArea.Then,thespecialtaxeswillfirstbeleviedwithin eachoftheImprovementAreasontheDevelopedParcelsthereintofundtheSpecialTaxLiabilityfor suchImprovementArea.IfthispooloffundsisinsufficienttofundtheSpecialTaxLiabilityforsuch ImprovementArea,asmaybethecaseintheearlyyearsofdevelopment,thedistrictwilllevythe specialtaxonthevacantlandwithinsuchImprovementAreastartingwithFinalMappedProperty. ThebufferofhavingthevacantlandcoveringanyportionoftheSpecialTaxLiabilitynotfundedfrom specialtaxesleviedonDevelopedParcelswithinanImprovementAreawilldisappearoncethe ImprovementAreahasbeenfullydeveloped.IftheSpecialTaxLiabilityforanyfiscalyearforan ImprovementAreaislessthanthemaximumspecialtaxauthorizedtobeleviedontheDeveloped ParcelswithinsuchImprovementArea,theactualrateofthespecialtaxestobeleviedonsuch Developed Property in that specific year will be reduced accordingly. Followingisabriefdiscussionofsomekeyissuesregardingthe“RateandMethodofApportionment (RMA)ofSpecialTaxes”proposedtobeestablishedforterritoryproposedtobeannexedto Improvement Area C of CFD 97-2 (See Attachment 2 for full description of RMA): ·TheMaximumSpecialTaxRatesincreaseeachyearbyafactorequaltotheannualpercentage change in the San Diego Metropolitan All Urban Consumer Price Index. ·TheRMAprovidesthattheannualbudgetforanyyearmayincludeanamountdeemednecessary to maintain an adequate level of the operating reserve fund. ·ThemaximumspecialtaxratesarebasedontheoriginalRateandMethodofApportionmentof specialtaxesestablishedforCFD97-2whenthedistrictwasformed.Iftheactualsquarefootageof residentialdevelopmentand/ortheacreageofnon-residential(industrialandcommercial) developmentwithinImprovementAreaCmeetsorexceedstheprojectionsonwhichthespecialtax rateswerebased,theactualspecialtaxratenecessarytobeleviedannuallywithinImprovement AreaCtofundtheSpecialTaxLiabilityforImprovementAreaCmaybelessthantheauthorized maximum special tax. Approved Maximum Special Taxes TheapprovedmaximumspecialtaxratesforFiscalYear2016/2017forImprovementAreaCofCFD 97-2 are as follows: Table 1 - Maximum Special Tax for Monitoring Special Tax CategoryMaximum Special Tax (Monitoring) Category I - Residential (per square foot)$ 0.0076 Category I - Non-Residential (per acre)$123.0613 Category II - Final Map Property (per acre)$123.0613 City of Chula VistaPage 3 of 5Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 113 File#:16-0217, Item#: 10. Category III - Undeveloped Property (per acre)$79.4238 Table 2 - Maximum Special Tax for Operations & Maintenance Special Tax CategoryMaximum Special Tax (Operations & Maintenance) Category I - Residential (per square foot)$0.0119 Category I - Non-Residential (per acre)$195.3689 Category II - Final Map Property (per acre)$195.3689 Category III - Undeveloped Property (per acre)$126.0917 Resolutions There are two resolutions on tonight’s agenda, which, if adopted, will accomplish the following: TheRESOLUTIONADOPTINGTHEANNEXATIONMAPistheformalactionadoptingAnnexation MapNo.10,settingforththeboundariesoftheterritoryproposedtobeannexedtoImprovement Area C of Community Facilities District No. 97-2 (Preserve Maintenance District). TheRESOLUTIONOFINTENTIONisthejurisdictionalresolutiondeclaringtheintentionoftheCity CounciltoauthorizetheannexationoftheterritorywithinAnnexationMapNo.10toImprovement AreaCofCommunityFacilitiesDistrictNo.97-2(PreserveMaintenanceDistrict),toauthorizethe levyofaSpecialTax,andtosetthetimeandplaceforthepublichearingontheproposed annexation and Special Tax authorization. Future Actions Thepublichearingandconsiderationoftheadoptionofaresolutionsubmittingtheauthorizationfor thelevyofspecialtaxestothequalifiedelectorsarescheduledfortheCityCouncilmeetingofJuly 12, 2016, at 5:00 P.M. DECISION-MAKER CONFLICT 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.Thisactionsupports thegoalofEconomicVitality,whichincludespromotingandsupportingthedevelopmentofbalanced communities, by providing a funding source for the maintenance of preserve open space. City of Chula VistaPage 4 of 5Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 114 File#:16-0217, Item#: 10. CURRENT YEAR FISCAL IMPACT DeveloperisresponsibleforallcostsassociatedwiththeAnnexationNo.10toCFD97-2.TheCity willrecoverthefullcostofstafftimeexpendedindistrictannexation,thustherewillbenofiscal impact. ONGOING FISCAL IMPACT Theon-goingadministrationwillbefundedentirelybythedistrict;therefore,thereisnonetfiscal impact. ATTACHMENTS Attachment 1. Annexation Map Attachment 2. Rate and Method of Apportionment Staff Contact: \[Dave Kaplan 691-5025\] City of Chula VistaPage 5 of 5Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 115 25 1 y Shw - I 5 - Rate and Method of Apportionment of Special Tax City of Chula Vista Community Facilities District No. 97-2 (PRESERVE MAINTENANCE DISTRICT) Improvement Area C Annexation No. 10 A Special Tax of Community Facilities District No. 97-2 (Preserve Maintenance District) of the City of Chula Vista ("CFD") shall be levied on all Assessor's Parcels in Annexation No. 10of Improvement Area Cof the CFD and collected each Fiscal Year commencing with Fiscal Year 2017-2018in an amount determined through the application of the rate and method of apportionment of the Special Tax set forth below. All of the real property within Annexation No. 10 of Improvement Area C ofthe CFD, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A.DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage"means the land area of an Assessor’s Parcel as shown on an Assessor's Parcel Map,or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Subdivision Map, other final map, other parcel map, other condominium plan, or functionally equivalent map or instrument recorded in the Office of the County Recorder. The square footageof an Assessor's Parcel is equal to the Acreage multiplied by 43,560. "Act"means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses"means the actual or estimated costs incurred by the City, acting for andon behalf of the CFD as the administrator thereof, to determine, levy and collect the Special Taxes, including salaries of City employees and a proportionate amount of the City’s general administrative overhead related thereto, and the fees of consultants and legal counsel providing services related to the administration of the CFD; the costs of collecting installments ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 117 of the Special Taxes; and any other costs required toadminister Area C of the CFD as determined by the City. Assessor's Parcel"or“Parcel”means a lot or parcel shown in an Assessor's Parcel Map with " an assigned assessor's parcel number. "Assessor's Parcel Map"means an official map of the Assessor of theCounty designating parcels by assessor's parcel number. "Building Square Foot or Square Footage"means the square footage as shown on an building permit of Residential Property excluding garages or other structures Assessor’s Parcel’s not used as living space. "CFD Administrator"means an official of the City, or designee thereof, responsible for determiningthe Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD"means Community Facilities District No. 97-2 (Preserve Maintenance District) of the City of Chula Vista. "City"means the City of Chula Vista. "City Clerk"means the City Clerk for the City of Chula Vista or his or her designee. "City Manager"means the City Manager for the City of Chula Vista or his or herdesignee. "Community Purpose Facility Property"or"CPF Property" means all Assessor’s Parcels which areclassified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2883. "Council"means the City Council of the City of Chula Vista, acting as the legislative body of the CFD. "County"means the County of San Diego, California. "Developed Property"means all Taxable Property for which a building permit was issued prior which the Special Tax is being levied. to the March 1st preceding the Fiscal Year in "Final Map Property" means any residential lot or non-residential lot created by a Final Subdivision Map, but which is not classified as Developed Property. "Final Subdivision Map"means a subdivision of property creating residential or non-residential buildablelots by recordation of a final subdivision map or parcel map pursuant to the Subdivision Map Act (California Government Code Section66410 et seq.), or recordation of a condominium plan pursuant to California Civil Code 1352, that creates individual lots for which ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 118 building permits may be issued without further subdivision and is recorded prior to March 1 preceding the Fiscal Year in which the Special Tax is being levied. "Fiscal Year"means the period starting July 1 and ending on the following June 30. "Improvement Area C"or"Area C" means Improvement Area C of the CFD, as identified on the boundary map for the CFD as amended from time to time. "Land Use Class"means any of the classes listed in Table 1, Table 2, or Table 3. "Maximum Special Tax"means the maximum Special Tax, determined in accordance with C below that may be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Section Property. "Non-Residential Property"means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued for a structure or structures for non-residential use. "Operating Fund"means a fund that shall be maintained within the CFD for each Fiscal Year to payfor Resource Monitoring and/or Preserve Operations and Maintenance activities and Administrative Expenses. "Operating Fund Balance"means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Operating Fund Requirement"means for any Fiscal Year an amount equal to the Resource MonitoringFund Requirement and the Preserve Operations and Maintenance Fund Requirement for the current Fiscal Year in which Special Taxes are levied. "Preserve Operations and Maintenance"means those activities described in Attachment A hereto which is incorporated herein by this reference. "Preserve Operations and Maintenance Fund Requirement"means for any Fiscal Year an equal to the budgeted costs for Preserve Operations and Maintenance plus a pro-rata amount share of the budgetedAdministrative Expenses of the District for the current Fiscal Year in which Special Taxes are levied. "Property Owner Association Property"means any property within the boundaries of Area C of theCFD that is owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder to, a property owner association, including any master or sub-association. "Public Property"means any property within the boundaries of Area C of the CFD that is, at the of the CFD formation, expected to be used for any public purpose and is owned by or time dedicated to the federal government, the State, the County, the City or any other public agency. "Reserve Fund"means a fund that shall be maintained for the CFD each Fiscal Year to provide necessarycash flow for the first six months of each Fiscal Year, working capital to cover monitoring, maintenance and repair cost overruns and delinquencies in the payment of Special Taxes and a reasonable buffer to prevent large variations in annual Special Tax levies. "Reserve Fund Balance"means the amount of funds in the Reserve Fund at the end of the preceding Fiscal Year. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 119 "Reserve Fund Requirement"means an amount equal to up to 100% of the Operating Fund Requirement for any Fiscal Year. "Residential Property"means all Assessor’s Parcels of Developed Property for which a building g one or more residential dwelling unit. permit(s) has been issued for purposes of constructin "Resource Management Plan"means the Otay Ranch Phase 1 Resource Management Plan also referredto as “The Otay Ranch Resource Management Plan” dated October 28, 1993, and the Otay Ranch Phase 2, Resource Management Plan dated June 4, 1996, as both such plans may be amended from time to time. "Resource Monitoring Program"means those described in Attachment B hereto which is incorporated herein by this reference. "Resource Monitoring Fund Requirement"means for any Fiscal Year an amount for each ImprovementArea equal to the Improvement Area’s fair share of the budgeted costs of the ResourceMonitoring Program plus a pro rata share of the budgeted Administrative Expenses of the CFD for the current Fiscal Year in which Special Taxes are levied. Improvement Area C’s “fair share” shall be based on Improvement Area C’s percentage of the total acreage within the Otay Ranch General Development Plan Planning Area for which a Resource Monitoring Program funding mechanism has been established. "Special Tax"means the Special Tax levied pursuant to the provisions of sections C and D below ineach Fiscal Year on each Assessor's Parcel of Developed Property and Undeveloped Property in Area C to fund the Special Tax Requirement. "Special Tax Requirement"means that amount required in any Fiscal Year for Area C to: (i) pay theResource Monitoring Fund Requirement, and Preserve Operations and Maintenance Fund Requirement, less the Operating Fund Balance, and (ii) pay any amounts required to establish or replenish the Reserve Fund to the Reserve Fund Requirement; (iii) pay for reasonably anticipated delinquentSpecial Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year. "State"means the State of California. "Taxable Property"means all of the Assessor's Parcels within the boundaries of Area C of the from the Special Tax pursuant to law or as defined below. CFD that are not exempt "Undeveloped Property"means, for each Fiscal Year, all Taxable Property not classified as Developed Property. B. ASSIGNMENT TO CATEGORIES OF SPECIAL TAX Each Fiscal Year using the definitions above, all Taxable Property withinAnnexation No. 10 of Improvement Area Cof the CFD shall be classified as Category I, Category II, Category III or Exemptas defined in Section C. The Taxable Property shall further be classified as Developed Property, FinalMap Property or Undeveloped Propertyand shall be subject to Special Taxes pursuant to SectionsC and D below.Developed Property shall be further assigned to a Land Use Class as specified in Table 1. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 120 C. MAXIMUM SPECIAL TAX RATE CI ATEGORY Category I includes Developed Property within the District (“Category I”). The Maximum Special Tax for the Resource MonitoringProgram, and Preserve Operations and Maintenance for Fiscal Year 2016-2017on Developed Property are the rates set forth in Table 1 below. For Residential Property, the Special Tax shall be levied based upon Building Square Footage and for Non-Residential Property shall be levied based on Acreage. TABLE 1 Maximum Special Tax for Category I Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2016-2017) DescriptionResource Operation &Total MonitoringMaintenance Residential$0.0076/sq ft$0.0119/sq ft$0.0195/sq ft Non-Residential$123.0613/acre$195.3689/acre$318.4302/acre C II ATEGORY Category II includes each Assessor’s Parcel of Taxable Property within the District for which a Final Map has been recorded, but which is not classified as a Developed Parcel (“Category II”). TheMaximum Special Tax for the Resource MonitoringProgram, and Preserve Operations and Maintenance approved for Fiscal Year 2016-2017on each Assessor’s Parcel in Category II is the rate set forth in Table 2 below (said amount to be levied pro rata for any portion of an Acre). TABLE 2 Maximum Special Tax for Category II Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2016-2017) ResourceOperation &Total MonitoringMaintenance $123.0613/acre$195.3689/acre$318.4302/acre C III ATEGORY Category III includes each Assessor’s Parcel of Taxable Property within the District not subject to Special Tax under any other category (“Category III”). ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 121 The Maximum Special Tax approved for Fiscal Year 2016-2017on Taxable Property within Category III is the rate set forth in Table 3 below (said amount to be levied pro rata for any portionof an Acre). TABLE 3 Maximum Special Tax for Category III Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2016-2017) ResourceOperation &Total MonitoringMaintenance $79.4238/acre$126.0917/acre$205.5155/acre EC XEMPTATEGORY The Exempt Category includes each property owned, conveyed or irrevocably offered for dedication to a public agency, or land which is in the public right-of-way, unmanned utility easements which make utilization for other than the purpose set forth in the easement impractical, common areas, private streets and parks, and open space lots (“Exempt Category”). SC PECIALASES In some instances,an Assessor’s Parcel of Developed Property may contain more than one Land Use Class and be considered “Special Case”.The Maximum Special Tax that may be levied on an Assessor’s Parcel identified as Special Case shall be the sum of the Maximum Special Tax levies that may be levied on all Land Use Classes located on that Assessor’s Parcel. The CFD Administrator shall determine the allocation to each Land Use Class. AEMST NNUALSCALATION OF AXIMUMPECIALAX The Maximum Special Tax as shown in the tables above that may be levied on each Assessor’s Parcel in Improvement Area C, Annexation No. 10, shall be increased each FiscalYear beginning in Fiscal Year 2016-2017and thereafter by a factor equal to the annual percentage change in the San Diego Metropolitan Area Consumer Price Index for All Urban Consumers(CPI-U, All Items) or zero percent (0%),whichever is greater. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2017-2018, and for each following Fiscal Year, the Council shall levy the Improvement Area C, Annexation No. 10, Special Tax at the rates established pursuant to steps 1 through 4 below sothat the amount of the Special Tax levied equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: Step 1:Determine the revenue which could be generated by Parcels assigned to Category I by multiplyingthe BuildingSquare Footage for Parcels classified as Residential Parcels by the Maximum Special Tax per Building Square Foot for the Resource MonitoringProgram, and ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 122 Preserve Operations and Maintenance for Parcels and adding to that the maximum revenue which could begenerated by multiplying the total acres for Parcels classified as Non-Residential Parcels by the Maximum Special Tax per Acre for the Resource MonitoringProgram,and Preserve Operations and Maintenance. Step 2:If the total revenue as calculated in Step1 is greater than the estimated Special Tax Liabilityfor Improvement Area C, reduce the Special Tax for each Parcel proportionately so that the Special Tax levy for the Fiscal Year is equal to the Special Tax Liability for the Fiscal Year. Step 3:If thetotal revenue as calculated in Step 1 is less than the Special Tax Liability for Improvement Area C, a Special Tax shall be levied upon each Parcel within Improvement Area C, classified as Category II. The Special Tax for Parcels assigned to Category II shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category II, OR The Maximum Special Tax rate for Parcels assigned to Category II. Step 4:If the total revenue as calculated in Step 1 and 3 is less than the Special Tax Liability, for ImprovementArea C, a Special Tax shall be levied upon each Parcel within Improvement Area C classified as Category III. The Special Tax for Parcels assigned the Category III shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 and 3 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category III, OR The Maximum Special Tax rate for Parcels assigned to Category III and within Improvement Area C. However, in the event it is determined that the Special Tax Liability for Improvement Area C includes delinquent Special Taxes from Parcel in Category III from the prior Fiscal Year, the City shall determine the amount of delinquent taxes that arose from such Parcels and identify the owner(s). The amount of delinquent Special Taxes, if any, that arose from the applicable owner(s) shall first be divided by the total Category III Acres owned by such owner(s) and collected from the applicable owner(s) with the remaining portion of the Special Tax Liability not related to delinquent Special Taxes to be collected from all Parcels in Category III according to the procedure set forth in the preceding paragraph. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor’s Parcel of Residential Property or Multi-Family Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent(10%) ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 123 annually up to the Maximum Special Tax as a consequence of delinquency or default by the owner of any other Assessor's Parcel within Area C of the CFD. E. APPEALS Any landowner or resident who pays the Special Tax and believes that the amount of the Special Tax levied on their Assessor’s Parcel is in errorshall first consult with the CFD Administrator regarding such error. If following such consultation, the CFD Administrator determines that an error has occurred;the CFD Administrator may amend the amount of the Special Tax levied on such Assessor’s Parcel. If following such consultation and action, if any, by the CFD Administrator, the landowner or resident believes such error still exists;such person may file a written notice with the City Clerk of the City appealing the amount of the Special Tax leviedon such Assessor’s Parcel. Upon the receipt of any such notice, the City Clerk shall forward a copy of such notice to the City Manager who shall establish as part of the proceedings and administration of the CFD, a special three-member Review/Appeal Committee. The Review/Appeal Committee may establish such procedures, as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. F. MANNER OF COLLECTION Special Taxes levied pursuant to Section Dabove shall be collected in the same manner and at the same time as ordinary ad valoremproperty taxes; provided, however, that the CFD at a different time or in Administrator may directly bill the Special Tax, may collect Special Taxes a different mannerif necessary to meet the financial obligations of Area C of the CFD or as otherwise determined appropriate by the CFD Administrator. G. TERM OF SPECIAL TAX Taxable Property in Improvement Area C of the CFD shall remain subject to the Special Tax in perpetuity. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 124 Attachment A Description of Preserve Operations and Maintenance Preserve Operations and Maintenance includes the maintenance, operation and management ofthe public or private property within boundaries of the Otay Ranch Preserve, as such boundaries may be modified from time to time, required by the Resource Management Plan to be maintained as open space or habitat preservation land or both. Such maintenance, operations and management shall include, but not be limited to, the following: (i)Preserve Maintenance. Development, implementation and ongoing provision of programs to maintain, operate and manage preserve habitat values through: cultivation, irrigation, trimming, spraying, fertilizing, and/or treatment of disease or injury; removal of trimmings, rubbish, debris and other solid waste; maintenance of trails; removal and control of exotic plant species (weeds); and control of cowbirds through trapping. (ii)Security. Development, implementation and ongoing provision of security programs to: enforce "no trespassing" rules; curtail activities that degrade resources, such as grazing, shooting, and illegal dumping; remove trash, litter, and other debris; control access; prohibit off-road traffic; and maintain fences and trails. (iii)Preserve improvements: Acquire equipment and/or install improvements necessary to maintain, operate and manage the open space and habitat preservation land described above. The above description of the Preserve Operations and Maintenance is general in nature. The actual maintenance, operations and management of the open space and habitat preservation land within the Otay Ranch Preserve may be modified from time to time as necessary in order to effectively provide such services in compliance with the requirements of the Resource Management Plan. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 125 Attachment B Description of Resource Monitoring Implement the annual biota monitoring and reporting program consistent with the Resource ManagementPlan to identify changes in the quality and quantity of preserve resources including wildlife species, sensitive plants and sensitive habitat types. The above description of the Resource Monitoring is general in nature. The actual monitoring and reporting program may be modified from time to time as necessary in order to effectively provide such services consistent with the requirements of the Resource Management Plan. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 126 RESOLUTION NO. _________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULAVISTAADOPTING AN ANNEXATION MAP SHOWING TERRITORY PROPOSED TO BE ANNEXED TO IMPROVEMENT AREA “C”OF COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) (ANNEXATION NO. 10) WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA, (“City Council”), formed a Community Facilities District and certain improvement areas therein pursuant to the terms and provisions of the “Mello-Roos Community FacilitiesAct of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Act”), and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the “Ordinance”) (the Act and the Ordinance may be referred to collectively as the “Community Facilities District Law”). The Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) (the “District”) and the Improvement Areas were designated as IMPROVEMENT AREA “A,” IMPROVEMENT AREA “B” and IMPROVEMENT AREA “C” of such District ; and, WHEREAS, the CityCouncil desires to initiate proceedings to annex certain property to Improvement Area “C”thereof; and WHEREAS, there has been submitted a map entitled “Annexation Map No. 10 Community Facilities District No. 97-2 (Preserve Maintenance District), Improvement Area “C”, City Of Chula Vista, County Of San Diego, State Of California” (the “Annexation Map”), showing the territory proposed to be annexed to the District and Improvement Area “C”thereof (the “Territory”). NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: SECTION 1. The above recitals are all true and correct. SECTION 2. The Annexation Map showing the Territory proposed to be annexedto the District and Improvement Area “C”thereof and to be subject to the levy of a special tax is hereby approved and adopted. SECTION 3. A certificate shall be endorsed on the original and on at least one (1)copy of Annexation Map, evidencing the date and adoption of this Resolution and,within fifteen (15) days after the adoption of the Resolution,fixing the time and place of the hearing on the intention to annex or extent of the annexation to the District and Improvement Area “C” thereof, a copy of such map shall be filed with the correct and proper endorsements thereon with ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 127 Resolution No. 2016-___ Page No. 2 the County Recorder, all in the manner and form provided for in Section 3111 of the Streets and Highways Code of the State of California. PREPARED BY:APPROVED AS TO FORM BY: ____________________________________________________________ Kelly G. BroughtonFASLAGlen R. Googins Director of Development Services City Attorney 09960.00000\\24869181.1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 128 Rate and Method of Apportionment of Special Tax City of Chula Vista Community Facilities District No. 97-2 (PRESERVE MAINTENANCE DISTRICT) Improvement Area C Annexation No. 10 A Special Tax of Community Facilities District No. 97-2 (Preserve Maintenance District) of the City of Chula Vista ("CFD") shall be levied on all Assessor's Parcels in Annexation No. 10of Improvement Area Cof the CFD and collected each Fiscal Year commencing with Fiscal Year 2017-2018in an amount determined through the application of the rate and method of apportionment of the Special Tax set forth below. All of the real property within Annexation No. 10 of Improvement Area C ofthe CFD, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A.DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage"means the land area of an Assessor’s Parcel as shown on an Assessor's Parcel Map,or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Subdivision Map, other final map, other parcel map, other condominium plan, or functionally equivalent map or instrument recorded in the Office of the County Recorder. The square footageof an Assessor's Parcel is equal to the Acreage multiplied by 43,560. "Act"means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses"means the actual or estimated costs incurred by the City, acting for andon behalf of the CFD as the administrator thereof, to determine, levy and collect the Special Taxes, including salaries of City employees and a proportionate amount of the City’s general administrative overhead related thereto, and the fees of consultants and legal counsel providing services related to the administration of the CFD; the costs of collecting installments ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 129 of the Special Taxes; and any other costs required toadminister Area C of the CFD as determined by the City. Assessor's Parcel"or“Parcel”means a lot or parcel shown in an Assessor's Parcel Map with " an assigned assessor's parcel number. "Assessor's Parcel Map"means an official map of the Assessor of theCounty designating parcels by assessor's parcel number. "Building Square Foot or Square Footage"means the square footage as shown on an building permit of Residential Property excluding garages or other structures Assessor’s Parcel’s not used as living space. "CFD Administrator"means an official of the City, or designee thereof, responsible for determiningthe Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD"means Community Facilities District No. 97-2 (Preserve Maintenance District) of the City of Chula Vista. "City"means the City of Chula Vista. "City Clerk"means the City Clerk for the City of Chula Vista or his or her designee. "City Manager"means the City Manager for the City of Chula Vista or his or herdesignee. "Community Purpose Facility Property"or"CPF Property" means all Assessor’s Parcels which areclassified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2883. "Council"means the City Council of the City of Chula Vista, acting as the legislative body of the CFD. "County"means the County of San Diego, California. "Developed Property"means all Taxable Property for which a building permit was issued prior which the Special Tax is being levied. to the March 1st preceding the Fiscal Year in "Final Map Property" means any residential lot or non-residential lot created by a Final Subdivision Map, but which is not classified as Developed Property. "Final Subdivision Map"means a subdivision of property creating residential or non-residential buildablelots by recordation of a final subdivision map or parcel map pursuant to the Subdivision Map Act (California Government Code Section66410 et seq.), or recordation of a condominium plan pursuant to California Civil Code 1352, that creates individual lots for which ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 130 building permits may be issued without further subdivision and is recorded prior to March 1 preceding the Fiscal Year in which the Special Tax is being levied. "Fiscal Year"means the period starting July 1 and ending on the following June 30. "Improvement Area C"or"Area C" means Improvement Area C of the CFD, as identified on the boundary map for the CFD as amended from time to time. "Land Use Class"means any of the classes listed in Table 1, Table 2, or Table 3. "Maximum Special Tax"means the maximum Special Tax, determined in accordance with C below that may be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Section Property. "Non-Residential Property"means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued for a structure or structures for non-residential use. "Operating Fund"means a fund that shall be maintained within the CFD for each Fiscal Year to payfor Resource Monitoring and/or Preserve Operations and Maintenance activities and Administrative Expenses. "Operating Fund Balance"means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Operating Fund Requirement"means for any Fiscal Year an amount equal to the Resource MonitoringFund Requirement and the Preserve Operations and Maintenance Fund Requirement for the current Fiscal Year in which Special Taxes are levied. "Preserve Operations and Maintenance"means those activities described in Attachment A hereto which is incorporated herein by this reference. "Preserve Operations and Maintenance Fund Requirement"means for any Fiscal Year an equal to the budgeted costs for Preserve Operations and Maintenance plus a pro-rata amount share of the budgetedAdministrative Expenses of the District for the current Fiscal Year in which Special Taxes are levied. "Property Owner Association Property"means any property within the boundaries of Area C of theCFD that is owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder to, a property owner association, including any master or sub-association. "Public Property"means any property within the boundaries of Area C of the CFD that is, at the of the CFD formation, expected to be used for any public purpose and is owned by or time dedicated to the federal government, the State, the County, the City or any other public agency. "Reserve Fund"means a fund that shall be maintained for the CFD each Fiscal Year to provide necessarycash flow for the first six months of each Fiscal Year, working capital to cover monitoring, maintenance and repair cost overruns and delinquencies in the payment of Special Taxes and a reasonable buffer to prevent large variations in annual Special Tax levies. "Reserve Fund Balance"means the amount of funds in the Reserve Fund at the end of the preceding Fiscal Year. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 131 "Reserve Fund Requirement"means an amount equal to up to 100% of the Operating Fund Requirement for any Fiscal Year. "Residential Property"means all Assessor’s Parcels of Developed Property for which a building g one or more residential dwelling unit. permit(s) has been issued for purposes of constructin "Resource Management Plan"means the Otay Ranch Phase 1 Resource Management Plan also referredto as “The Otay Ranch Resource Management Plan” dated October 28, 1993, and the Otay Ranch Phase 2, Resource Management Plan dated June 4, 1996, as both such plans may be amended from time to time. "Resource Monitoring Program"means those described in Attachment B hereto which is incorporated herein by this reference. "Resource Monitoring Fund Requirement"means for any Fiscal Year an amount for each ImprovementArea equal to the Improvement Area’s fair share of the budgeted costs of the ResourceMonitoring Program plus a pro rata share of the budgeted Administrative Expenses of the CFD for the current Fiscal Year in which Special Taxes are levied. Improvement Area C’s “fair share” shall be based on Improvement Area C’s percentage of the total acreage within the Otay Ranch General Development Plan Planning Area for which a Resource Monitoring Program funding mechanism has been established. "Special Tax"means the Special Tax levied pursuant to the provisions of sections C and D below ineach Fiscal Year on each Assessor's Parcel of Developed Property and Undeveloped Property in Area C to fund the Special Tax Requirement. "Special Tax Requirement"means that amount required in any Fiscal Year for Area C to: (i) pay theResource Monitoring Fund Requirement, and Preserve Operations and Maintenance Fund Requirement, less the Operating Fund Balance, and (ii) pay any amounts required to establish or replenish the Reserve Fund to the Reserve Fund Requirement; (iii) pay for reasonably anticipated delinquentSpecial Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year. "State"means the State of California. "Taxable Property"means all of the Assessor's Parcels within the boundaries of Area C of the from the Special Tax pursuant to law or as defined below. CFD that are not exempt "Undeveloped Property"means, for each Fiscal Year, all Taxable Property not classified as Developed Property. B. ASSIGNMENT TO CATEGORIES OF SPECIAL TAX Each Fiscal Year using the definitions above, all Taxable Property withinAnnexation No. 10 of Improvement Area Cof the CFD shall be classified as Category I, Category II, Category III or Exemptas defined in Section C. The Taxable Property shall further be classified as Developed Property, FinalMap Property or Undeveloped Propertyand shall be subject to Special Taxes pursuant to SectionsC and D below.Developed Property shall be further assigned to a Land Use Class as specified in Table 1. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 132 C. MAXIMUM SPECIAL TAX RATE CI ATEGORY Category I includes Developed Property within the District (“Category I”). The Maximum Special Tax for the Resource MonitoringProgram, and Preserve Operations and Maintenance for Fiscal Year 2016-2017on Developed Property are the rates set forth in Table 1 below. For Residential Property, the Special Tax shall be levied based upon Building Square Footage and for Non-Residential Property shall be levied based on Acreage. TABLE 1 Maximum Special Tax for Category I Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2016-2017) DescriptionResource Operation &Total MonitoringMaintenance Residential$0.0076/sq ft$0.0119/sq ft$0.0195/sq ft Non-Residential$123.0613/acre$195.3689/acre$318.4302/acre C II ATEGORY Category II includes each Assessor’s Parcel of Taxable Property within the District for which a Final Map has been recorded, but which is not classified as a Developed Parcel (“Category II”). TheMaximum Special Tax for the Resource MonitoringProgram, and Preserve Operations and Maintenance approved for Fiscal Year 2016-2017on each Assessor’s Parcel in Category II is the rate set forth in Table 2 below (said amount to be levied pro rata for any portion of an Acre). TABLE 2 Maximum Special Tax for Category II Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2016-2017) ResourceOperation &Total MonitoringMaintenance $123.0613/acre$195.3689/acre$318.4302/acre C III ATEGORY Category III includes each Assessor’s Parcel of Taxable Property within the District not subject to Special Tax under any other category (“Category III”). ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 133 The Maximum Special Tax approved for Fiscal Year 2016-2017on Taxable Property within Category III is the rate set forth in Table 3 below (said amount to be levied pro rata for any portionof an Acre). TABLE 3 Maximum Special Tax for Category III Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2016-2017) ResourceOperation &Total MonitoringMaintenance $79.4238/acre$126.0917/acre$205.5155/acre EC XEMPTATEGORY The Exempt Category includes each property owned, conveyed or irrevocably offered for dedication to a public agency, or land which is in the public right-of-way, unmanned utility easements which make utilization for other than the purpose set forth in the easement impractical, common areas, private streets and parks, and open space lots (“Exempt Category”). SC PECIALASES In some instances,an Assessor’s Parcel of Developed Property may contain more than one Land Use Class and be considered “Special Case”.The Maximum Special Tax that may be levied on an Assessor’s Parcel identified as Special Case shall be the sum of the Maximum Special Tax levies that may be levied on all Land Use Classes located on that Assessor’s Parcel. The CFD Administrator shall determine the allocation to each Land Use Class. AEMST NNUALSCALATION OF AXIMUMPECIALAX The Maximum Special Tax as shown in the tables above that may be levied on each Assessor’s Parcel in Improvement Area C, Annexation No. 10, shall be increased each FiscalYear beginning in Fiscal Year 2016-2017and thereafter by a factor equal to the annual percentage change in the San Diego Metropolitan Area Consumer Price Index for All Urban Consumers(CPI-U, All Items) or zero percent (0%),whichever is greater. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2017-2018, and for each following Fiscal Year, the Council shall levy the Improvement Area C, Annexation No. 10, Special Tax at the rates established pursuant to steps 1 through 4 below sothat the amount of the Special Tax levied equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: Step 1:Determine the revenue which could be generated by Parcels assigned to Category I by multiplyingthe BuildingSquare Footage for Parcels classified as Residential Parcels by the Maximum Special Tax per Building Square Foot for the Resource MonitoringProgram, and ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 134 Preserve Operations and Maintenance for Parcels and adding to that the maximum revenue which could begenerated by multiplying the total acres for Parcels classified as Non-Residential Parcels by the Maximum Special Tax per Acre for the Resource MonitoringProgram,and Preserve Operations and Maintenance. Step 2:If the total revenue as calculated in Step1 is greater than the estimated Special Tax Liabilityfor Improvement Area C, reduce the Special Tax for each Parcel proportionately so that the Special Tax levy for the Fiscal Year is equal to the Special Tax Liability for the Fiscal Year. Step 3:If thetotal revenue as calculated in Step 1 is less than the Special Tax Liability for Improvement Area C, a Special Tax shall be levied upon each Parcel within Improvement Area C, classified as Category II. The Special Tax for Parcels assigned to Category II shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category II, OR The Maximum Special Tax rate for Parcels assigned to Category II. Step 4:If the total revenue as calculated in Step 1 and 3 is less than the Special Tax Liability, for ImprovementArea C, a Special Tax shall be levied upon each Parcel within Improvement Area C classified as Category III. The Special Tax for Parcels assigned the Category III shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 and 3 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category III, OR The Maximum Special Tax rate for Parcels assigned to Category III and within Improvement Area C. However, in the event it is determined that the Special Tax Liability for Improvement Area C includes delinquent Special Taxes from Parcel in Category III from the prior Fiscal Year, the City shall determine the amount of delinquent taxes that arose from such Parcels and identify the owner(s). The amount of delinquent Special Taxes, if any, that arose from the applicable owner(s) shall first be divided by the total Category III Acres owned by such owner(s) and collected from the applicable owner(s) with the remaining portion of the Special Tax Liability not related to delinquent Special Taxes to be collected from all Parcels in Category III according to the procedure set forth in the preceding paragraph. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor’s Parcel of Residential Property or Multi-Family Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent(10%) ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 135 annually up to the Maximum Special Tax as a consequence of delinquency or default by the owner of any other Assessor's Parcel within Area C of the CFD. E. APPEALS Any landowner or resident who pays the Special Tax and believes that the amount of the Special Tax levied on their Assessor’s Parcel is in errorshall first consult with the CFD Administrator regarding such error. If following such consultation, the CFD Administrator determines that an error has occurred;the CFD Administrator may amend the amount of the Special Tax levied on such Assessor’s Parcel. If following such consultation and action, if any, by the CFD Administrator, the landowner or resident believes such error still exists;such person may file a written notice with the City Clerk of the City appealing the amount of the Special Tax leviedon such Assessor’s Parcel. Upon the receipt of any such notice, the City Clerk shall forward a copy of such notice to the City Manager who shall establish as part of the proceedings and administration of the CFD, a special three-member Review/Appeal Committee. The Review/Appeal Committee may establish such procedures, as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. F. MANNER OF COLLECTION Special Taxes levied pursuant to Section Dabove shall be collected in the same manner and at the same time as ordinary ad valoremproperty taxes; provided, however, that the CFD at a different time or in Administrator may directly bill the Special Tax, may collect Special Taxes a different mannerif necessary to meet the financial obligations of Area C of the CFD or as otherwise determined appropriate by the CFD Administrator. G. TERM OF SPECIAL TAX Taxable Property in Improvement Area C of the CFD shall remain subject to the Special Tax in perpetuity. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 136 Attachment A Description of Preserve Operations and Maintenance Preserve Operations and Maintenance includes the maintenance, operation and management ofthe public or private property within boundaries of the Otay Ranch Preserve, as such boundaries may be modified from time to time, required by the Resource Management Plan to be maintained as open space or habitat preservation land or both. Such maintenance, operations and management shall include, but not be limited to, the following: (i)Preserve Maintenance. Development, implementation and ongoing provision of programs to maintain, operate and manage preserve habitat values through: cultivation, irrigation, trimming, spraying, fertilizing, and/or treatment of disease or injury; removal of trimmings, rubbish, debris and other solid waste; maintenance of trails; removal and control of exotic plant species (weeds); and control of cowbirds through trapping. (ii)Security. Development, implementation and ongoing provision of security programs to: enforce "no trespassing" rules; curtail activities that degrade resources, such as grazing, shooting, and illegal dumping; remove trash, litter, and other debris; control access; prohibit off-road traffic; and maintain fences and trails. (iii)Preserve improvements: Acquire equipment and/or install improvements necessary to maintain, operate and manage the open space and habitat preservation land described above. The above description of the Preserve Operations and Maintenance is general in nature. The actual maintenance, operations and management of the open space and habitat preservation land within the Otay Ranch Preserve may be modified from time to time as necessary in order to effectively provide such services in compliance with the requirements of the Resource Management Plan. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 137 Attachment B Description of Resource Monitoring Implement the annual biota monitoring and reporting program consistent with the Resource ManagementPlan to identify changes in the quality and quantity of preserve resources including wildlife species, sensitive plants and sensitive habitat types. The above description of the Resource Monitoring is general in nature. The actual monitoring and reporting program may be modified from time to time as necessary in order to effectively provide such services consistent with the requirements of the Resource Management Plan. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 138 RESOLUTION NO. _________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DECLARING ITS INTENTION TO AUTHORIZETHE ANNEXATION OF TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT)AND IMPROVEMENT AREA “C”THERETO (ANNEXATION NO. 10) WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA, (“City Council”), formed a Community Facilities District and designated certain improvement areas therein pursuant to the terms and provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Act”), and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the Cityof Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the “Ordinance”) (the Act and the Ordinance may be referred to collectively as the “Community Facilities District Law”). The Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) (the “District”) and the Improvement Areas were designated as IMPROVEMENT AREA “A,”IMPROVEMENT AREA “B” and IMPROVEMENT AREA “C” of such District; and, WHEREAS, the District was formed for the purpose of financing the monitoring, maintenance, operation and management of public property required to be maintained as open space or habitat preservation or both; and WHEREAS, Improvement Area “C”was established to finance Preserve Operations and Maintenance plus a pro-rata share of Administrative Expenses of the District as such terms are defined in the rate and method of apportionment of special taxes (the “Improvement Area “C” Rate and Method”) attached as Exhibit A hereto and incorporated herein by this reference; and WHEREAS, certain territory known as Village 3 located withinthe Otay Ranch is proposed to be annexed to the District and Improvement Area “C”thereto and such territory shall be known and designated as COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT), IMPROVEMENT AREA “C,” ANNEXATION NO. 10 (the “Territory”). WHEREAS, this legislative body now desires to proceed to adopt its Resolution of Intention to annex the Territory to Improvement Area “C,”to describe the territory included within Improvement Area “C”and the Territory proposed to be annexed thereto, to specify the services to be financed from the proceeds of the levy of special taxes within the Territory, to set and specifythe special taxes that would be levied within the Territory to finance such services, and to set a time and place for a public hearing relating to the annexation of the Territory to the Improvement Area “C,”and, 1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 139 WHEREAS, a map showing the Territory proposed to be annexed has been submitted, which map has been previously approved and a copy of the map shall be kept on file with the transcript of these proceedings. NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: SECTION 1. Recitals. The above recitals are all true and correct. SECTION 2. Legal Authority. These proceedings for annexation are initiated by this City Council pursuant to the authorization of the Community Facilities District Law. SECTION 3. Intent to Annex; Description of Territory. This legislative body hereby determines that the public convenience and necessity requires that the Territory be added to the District and Improvement Area “C”thereto and this City Council declares its intention to annex the Territory to the District and Improvement Area “C”thereto. A description of the boundaries and Territory proposed to be annexed is as follows: All that Territory proposed to be annexed to the District and Improvement Area “C”thereto, as such property is shown on a map as previously approved by this legislative body, such map entitled “Annexation Map No. 10 City of Chula Vista Community Facilities District No. 97-2 (Preserve Maintenance District), Improvement Area “C”, City Of Chula Vista, County Of San Diego, State Of California” (the “Annexation Map”), a copy of which is on file in the Office of the City Clerk and shall remain open for public inspection. A general description of the territory included in the District is hereinafter described as follows: All that property and territory as originally included within and previously annexed to the Districtand Improvement Area “C” thereto, as such property is shown on maps of the original District and territory previously annexed as approved by this City Council and designated by the name of the original District and Annexation Nos. 1through 10. A copy of such maps are on file in the Office of the City Clerk and have also been filed in the Office of the County Recorder. SECTION 4. Name. The proposed annexation shall be known and designated as COMMUNITY FACILITIES DISTRICT NO.97-2 (PRESERVE MAINTENANCE DISTRICT), IMPROVEMENT AREA “C,” ANNEXATION NO. 10. SECTION 5. Services Authorized to be Financed by the District. The services that are authorized to be financed by the District from the proceeds of special taxes levied within Improvement Area “C”are certain services which are in addition to those provided in or required for the territory within Improvement Area “C”and will not be replacing services already available. A general description of such services to be financed by the District is as follows: 2 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 140 The monitoring, maintenance, operation and management of public property in which the City has a property interest and which conforms to the requirements of the Ordinance or private property within the Otay Ranch Preserve which is required by the Preserve Owner/Manager to be maintained as open space or for habitat maintenance or both. Such property may be located outside the boundaries of the District and outside the jurisdictional boundaries of the City of Chula Vista. Such services shall not include the maintenance, operation and/or management of any property owned, maintained, operated and/or managed by the federal and/or state government as open space, habitat maintenance and/or for any other purpose. A more complete description of such services may be found in Attachments A and B to the Improvement Area “C” Rate and Method (defined in Section 6 below). The District shall finance all direct, administrative and incidental annual costs and expenses necessary to provide such monitoring, maintenance, operation and management of such public property. The same types of services which are authorized to be financed by the District from the proceeds of special taxes levied within Improvement Area “C”are the types of services to be provided in the Territory. If and to the extent possible such services shall be provided in common within the District and the Territory. SECTION 6. Special Taxes. It is the further intention of this City Councilthat, except where funds are otherwise available, a special tax sufficient to pay for such services and related incidental expenses authorized by the Community Facilities District Law, secured by recordation of a continuing lien against all non-exempt real property in the Territory, will be levied annually within the boundaries of such Territory.For further particulars as to the rate and method of apportionment of the proposed special tax, reference is made to the attached and incorporated Exhibit “A”(the “Improvement Area ‘C’ Rate and Method”), which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within the proposed Territory to clearly estimate the maximum amount that such person will have to pay. The special tax proposed to be levied within the Territory shall be equal to the special tax levied to pay for the same services in Improvement Area “C,” except that a higher or lower special tax may be levied within the Territory to the extent that the actual cost of providing the services in the Territory is higher or lower than the cost of providing those services in Improvement Area “C.” Notwithstanding the foregoing, the special tax may not be levied at a rate which is higher thanthe maximum special tax authorized to be levied pursuant to the Improvement Area “C” Rateand Method. The special taxes herein authorized, to the extent possible, shall be collected in the same manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the Treasurer. 3 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 141 The maximum special tax rate in Improvement Area “C”shall not be increased as a result ofthe annexation of the Territory to Improvement Area “C.” SECTION 7. Public Hearing. NOTICE IS GIVEN THAT ON May 24, 2016, AT THE HOUR OF 5:00 PM CLOCK P.M., IN THE REGULAR MEETING PLACE OF THE LEGISLATIVE BODY, BEING THE COUNCIL CHAMBERS, 276 FOURTH AVENUE, CHULAVISTA, CALIFORNIA, A PUBLIC HEARING WILL BE HELD WHERE THIS LEGISLATIVE BODY WILL CONSIDER THE AUTHORIZATION FOR THE ANNEXATION OF THE TERRITORY TO THE DISTRICT AND IMPROVEMENT AREA “C”THERETO, THE PROPOSED RATE AND METHOD OF APPORTIONMENT OF THE SPECIALTAX TO BE LEVIED WITHIN THE TERRITORY AND ALL OTHER MATTERS AS SET FORTH IN THIS RESOLUTION OF INTENTION. AT SUCH PUBLIC HEARING, THE TESTIMONY OF ALL INTERESTED PERSONS FOR OR AGAINST THE ANNEXATION OF THE TERRITORY OR THE LEVYING OF SPECIAL TAXES WITHINTHE TERRITORY WILL BE HEARD. AT SUCH PUBLIC HEARING, PROTESTS AGAINST THE PROPOSED ANNEXATION OF THE TERRITORY, THE LEVY OF SPECIAL TAXES WITHIN THE TERRITORY OR ANY OTHER PROPOSALS CONTAINED IN THIS RESOLUTION MAY BE MADE ORALLY BY ANY INTERESTED PERSON.ANY PROTESTS PERTAINING TO THE REGULARITY OR SUFFICIENCY OF THE PROCEEDINGS SHALL BE IN WRITING AND SHALL CLEARLY SET FORTH THE IRREGULARITIES OR DEFECTS TO WHICH OBJECTION IS MADE. ALL WRITTEN PROTESTS SHALL BE FILED WITH THE CITY CLERK PRIOR TO THE TIMEFIXED FOR THE PUBLIC HEARING. WRITTEN PROTESTS MAY BE WITHDRAWN AT ANY TIME BEFORE THE CONCLUSION OF THE PUBLIC HEARING. SECTION 8. Majority Protest. If (a) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within Improvement Area “C” of the District, (b) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within the Territory, (c) owners of one-half or more of the area of land in the territory included in Improvement Area “C” of the District, or (d) owners of one-halfor more of the area of land included in the Territory, file written protests against the proposed annexation of the Territory to the District in the future and such protests are not withdrawn so as to reduce theprotests to less than a majority, no further proceedings shall be undertaken for a period of one year from the date of the decision by the City Council on the issuediscussed at the public hearing. SECTION 9. Election. Upon the conclusion of the public hearing, ifthe legislative body determines to proceed with the annexationof the Territory, a proposition shall be submitted to the qualified electors of the Territory. The vote shall be by registered voters within the Territory; provided, however, if there are less than 12 registered voters, the vote shall be by landowners, with each landowner having one vote per acre or portion thereof within the Territory. 4 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 142 SECTION 10. Notice. Notice of the time and place of the public hearing shall be given by the City Clerk by publication in the legally designated newspaper of general circulation, said publication pursuant to Section 6061 of the Government Code, with said publication to be completed at least seven (7) days prior to the date set for the public hearing. PREPARED BY:APPROVED AS TO FORM BY: _____________________________________________________ Kelly G. Broughton FASLAGlen R. Googins Director of Development Services City Attorney 5 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 143 EXHIBIT A CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) IMPROVEMENT AREA C SEE NEXT PAGE 1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 144 City of Chula Vista Staff Report File#:16-0198, Item#: 11. A.QUARTERLY FINANCIAL REPORT FOR THE QUARTER ENDING MARCH 31, 2016 B.RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAMAKINGVARIOUS AMENDMENTSTOTHEFISCALYEAR2015/16BUDGETTOADJUSTFORVARIANCES AND APPROPRIATING FUNDS THEREFOR (4/5 VOTE REQUIRED) RECOMMENDED ACTION Council accept the report and adopt the resolution. SUMMARY TheFinanceDepartmentpreparesquarterlyfinancialreportsfortheGeneralFundthatreflectbudget toactualcomparisons,projectedrevenuesandexpenditures,andhighlightmajorvariancesthatmay requireadditionalactionorchanges.ThequarterlyfinancialreportsareincompliancewithSection 504(f)oftheCityCharter,whichrequiresthatquarterlyfinancialreportsbefiledbytheDirectorof Finance through the City Manager. Inpreparingthequarterlyfinancialprojections,staffhasidentifiedvariousbudgetchangesthatare neededtobetterreflectactualrevenuesandexpendituresoraddresschangesinbudgetaryneeds. Forgovernmententities,abudgetcreatesalegalframeworkforspendingduringthefiscalyear. Afterthebudgetisapprovedtherearecircumstances,whicharisethatcouldrequireadjustmentsto theapprovedbudget.CouncilPolicy220-02“FinancialReportingandTransferAuthority”was establishedinJanuaryof1996andallowsforbudgettransferstobecompleted.Thisreport discussesbudgetadjustmentsthatstaffrecommendsintheGeneralFundaswellasvariousother funds. ENVIRONMENTAL REVIEW TheDevelopmentServicesDirectorhasreviewedtheproposedactivityforcompliancewiththe CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthatfilingofthequarterlyfinancial statusreportisnota“Project”asdefinedunderSection15378oftheStateCEQAGuidelines becauseitwillnotresultinaphysicalchangetotheenvironment;therefore,pursuanttoSection 15060(c)(3) of the State CEQA Guidelines the actions proposed are not subject to CEQA. Environmental Notice Theactivityisnota“Project”asdefinedunderSection15378ofCaliforniaEnvironmentalQualityAct StateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental review is required. BOARD/COMMISSION RECOMMENDATION Not applicable City of Chula VistaPage 1 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 145 File#:16-0198, Item#: 11. DISCUSSION TheFinanceDepartmentpreparesquarterlyfinancialreportsfortheGeneralFundthatreflectbudget toactualcomparisons,projectedrevenuesandexpenditures,andhighlightmajorvariancesthatmay requireadditionalactionorchanges.ThequarterlyfinancialreportsareincompliancewithSection 504(f)oftheCityCharter,whichrequiresthatquarterlyfinancialreportsbefiledbytheDirectorof Finance through the City Manager. General Fund Overview AttachmentA-QuarterlyFinancialReportprovidesthefinancialoutlookfortheGeneralFundforthe current fiscal year and includes summary information for revenues and expenditures. ThefollowingchartsummarizestheprojectionsforJune30,2016basedontherevenueand expendituretrendsthroughthethirdquarteroffiscalyear2015/16fortheCity’sGeneralFund.The amendedbudgetcolumnincludesallCouncilapprovedchangestothefiscalyear2015/16adopted budgetthathavetakenplacethroughtheendofthethirdquarterendingMarch31,2015.The projectedcolumnliststhefiscalyear2015/16projectionsforrevenuesandexpendituresasofJune 30,2016.ThefollowingtablereflectstheauditedGeneralFundreservesasofJuly1,2015 (beginningfundbalance)aswellastheprojectedGeneralFundreservesforJune30,2016 (projected ending fund balance). Notes: 1.TheCityCouncilAdoptedbudgetwasbalancedanddidnotprojectanincreaseinfund balancefortheGeneralFund.ThebudgetedsurplusreflectedintheAmendedBudgetcolumnis aresultofmid-yearCouncilapprovedbudgetamendmentsthathaveresultedinaminorsurplus of revenues over expenditures. 2.TheAmendedBudgetandprojectionsreflectedinthistabledonotincludeprioryear appropriationsforcapitalimprovementprojectsandotherencumbrancestotaling$5.3millionthat werecarriedforwardintothefiscalyear2015/16budget.Theseexpenditureimpactsarealready reflectedintheestimatedfundbalanceasofJuly1,2015andarethereforenotincludedinthe City of Chula VistaPage 2 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 146 File#:16-0198, Item#: 11. above table. 3.PendingnetappropriationsreflectsavingsthatwillberealizedbytheGeneralFundasaresult of the successful refinancing of various Certificates of Participation (COPS) General Fund Summary TheCity’sfinancialoutlookappearsstablethroughtheendofthethirdquarter.Revenuesare projectedtoincreasemodestlyfromtheamendedbudgetlevelbasedonupdatedassumptionsfor fiscalyear2016actualsandtrendsinthethirdquarter.Majorfactorsaffectingexpendituresinclude: anFLSAovertimeretropayment;andseveralexpenditureswithrevenueoffsetsTheGeneralFundis projected to end the fiscal year at approximately the same fund balance as last year at $16.3 million. TheCity’sdiscretionaryrevenuesareinlargepartprojectedtoexceedtheirbudgetedlevels. Departmentalprogramrevenues,however,areanticipatedtofallshortoftheirtargets.Particularly Policejailreimbursementsandgrantrevenue,aswellasFirepermitandreimbursementrevenueare notprojectedtomeetthebudgetedlevel.Overall,GeneralFundrevenuesareprojectedat$0.7 millionabovethecurrentamendedbudget.Whilethereareprojectedshortfallsinthefollowing revenuecategories:ChargesforServices($0.9million),RevenuefromOtherAgencies($0.2million), LicensesandPermits($0.05million),andFines,Forfeitures,andPenalties($0.05million);these shortfallswerefullyoffsetwithimprovementsintheOtherLocalTaxescategoryof$0.9million,and PropertyTaxesof$0.2million.Theprojectedfluctuationsfortheserevenuesarebasedonareview ofpreviousfiscalyearactuals,ananalysisofactualsthroughMarch31,2016,andrevised assumptions since the second quarter projections. Departmentalexpendituresaretrackingwithinbudgetedlevelsasthemajorityofthedepartmentsare projectedtorealizesavingsasoftheendofthefiscalyear.PersonnelServicesarecurrently projectedtoendthefiscalyearatasavingsof$0.7millionbelowtheamendedbudget. Departmentalexpendituresforsuppliesandservicesareprojectedtoincreaseby$0.4millionover theamendedbudget.Utilityexpendituresareprojectedtoendtheyearatasavingsof$0.3million belowtheamendedbudget.Asstatedinthefirstquarterreport,salarysavingslevelsarenot projectedtobeachievedbasedonthecurrenttrend.Thisisprimarilyduelowerthananticipated employeeattritionrates.Salarysavingsarecurrentlybudgetedat$1.6millionintheGeneralFund reflectingstaff’sfirstquarterrecommendationtorecognizethesavingsinthevoluntaryworkfurlough programandhealthinsurancesavingscostsandapplythesesavingstoreducethebudgetedsalary savingsintheNon-Departmentalbudget.Staffwillcontinuetomonitorsalarysavingslevelsandlook for other potential cost saving measures in order to remain within budget. nd Asmentionedinthe2quarterreporttheCitywillreceiveadditionalsalestaxrevenueasaresultof theendingoftheTripleFlipallocation.Theserevenueswillhelpaddressexpendituresformajor projectsthatwerenotincludedinthefiscalyear2015-16adoptedbudget,butwilllikelyrequire fundinginthecurrentfiscalyear.Themajorityofthetripleflipallocationhasbeenappropriatedfor various projects detailed in this report. Development Services Fund Overview TheDevelopmentServicesDepartmentEnterprisefundconsistsofLandDevelopment,Development City of Chula VistaPage 3 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 147 File#:16-0198, Item#: 11. Planning,theDSFFrontCounterandtheBuildingDivision.AsofJuly1,2015TheDevelopment ServicesFundhadaccumulatedadeficitof$16.5million.Thisisincontrasttowhatwaspreviously reportedinthefiscalyear2015thirdquarterreport,whichprojectedthefundatadeficitof$0.2 million.ThevarianceisduetotheimplementationofGovernmentalAccountingStandardsBoard (GASB)StatementNos.68and71requiringtheaccrualofnetpensionliabilitiesandtheinclusionof compensatedabsences,whichwereformerlyreporteddifferently.Iftheseareexcludedfromthe calculation,asdetailedinthetablebelow,theprojectedreservesoftheDevelopmentServicesFund was $52,074, as of July 1, 2015. Comparingthebudgetedrevenueandexpenditurestotheprojectedrevenuesandexpendituresfor June30,2016,expendituresarecurrentlyontrendtoexceedrevenues.Althoughexpendituresare projectedtobeunderthecurrentamendedbudgetedlevel,revenuesaretrackingatamuchlower ratethananticipated.Basedontrendsthroughthethirdquarter,staffisconservativelyprojectingto endthecurrentfiscalyearwithaprojecteddeficitof$0.5million,whichwouldputtheDevelopment ServicesFundinanoveralldeficit(excludingthedeficitcausedbyGASB68and71and compensatedabsences).Projectionsforthefiscalyear2015-16secondquarterestimatedadeficitof $0.7million.Theimprovementsincethesecondquarterisduetoabetteroutlookonrevenuesbased on current year trends. Althoughtherehavebeenimprovementsinthecurrentyear,thefundisstillprojectedtoendtheyear inadeficit.Staffhasbeenworkingonproposalstoeliminatethedeficitandmitigateanyfuture impacts to the Development Services Fund. Development Services Fund Summary Itisimportanttonotethatthenatureoftheworkintheenterprisefundisbeginningtochangefrom oneofprocessingplanningdocuments(depositaccountbased)tooneofprocessingbuildingand improvementplans(flatfeebased).Thischangeinactivitymayrequiremodificationtotheexisting City of Chula VistaPage 4 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 148 File#:16-0198, Item#: 11. compositionofstaffinDevelopmentServicesFundinordertoremainresponsivetothetypeand quantityofworkbeingprocessed.Thischangeinworkloadwillrequirestaffingandresource realignment,whichhavebeentakenintoconsiderationduringthedevelopmentofthefiscalyear 2016-17 proposed budget. General Fund - Budget Amendments StaffisrecommendingbudgetamendmentsintheCityCouncil,Non-Departmental,PublicWorksand Library departments. These changes result in no net fiscal impact to the General Fund. Administration-Staffisrequestingatransferof$30,000fromthePersonnelServicescategorytothe SuppliesandServicescategoryoftheAdministrationDepartment.Thistransferisneededto addresshigherthananticipatedtravelandconferenceexpendituresrelatedtotheSmartCities initiative,theOlympicTrainingCentertransferandtheBayfrontprojectthathaveresultedinSupplies andServicestobeexceeded.ThistransferwillbefundedfromPersonnelServicessavingsresulting in no net fiscal impact. Non-Departmental-ThefollowingbudgetamendmentsarerecommendedfortheNon-Departmental budget: TheNon-DepartmentalbudgetisprojectedtogooverbudgetwithintheSuppliesandServices categorybyapproximately$85,000,largelyduetounanticipatedattorneyservicesfortheBayfront project.Staffisrequestinganappropriationof$85,000totheSuppliesandServicescategoryofNon -Departmentalbudget.Theappropriationwillbeoffsetby$55,000savingswithintheUtilities categoryand$30,000inone-timesalestaxrevenuesresultingfromtheendofthetripleflip.Thereis no net fiscal impact to the General Fund as a result of this action. Anappropriationof$334,579isalsorequestedtotheSuppliesandServicescategoryoftheNon- Departmentalbudget.Thisrequestisforthefinancingofacapitalleasefortheacquisitionofone(1) HMEAhrens-FOX34DTypeIIIBrushEngine.Thisappropriationwillbeoffsetbyrevenuesofan equal amount derived from the secured lease financing of the Brush Engine. StaffisalsorecommendingtheclosureoftheBayfrontFireStationNonCIPProject.Thisprojectwas establishedseveralyearsagotoconductafeasibilitystudyontheuseof610BayBoulevardasa potentialsiteoftheBayfrontfirestation.Thestudywasconductedandtheremainingprojectfunds of$8,100arenolongerneededforthisproject.Staffrecommendsclosingthisprojectand transferringthesefundstotheSuppliesandServicesexpensecategoryoftheNonDepartmental budgettoaddressaprojectedbudgetoverageduetounanticipatedcosts.Thistransferresultsina no net fiscal impact to the General Fund. TheCityhassuccessfullyrefinancedvariousCertificatesofParticipation(COPS)andstaffis recommendinganetreductionof$57,842inTransfersOutto2004CertificatesofParticipation-Civic CenterPhaseIandtheWesternChulaVistaInfrastructure(Fund472)and2006Certificatesof Participation-CivicCenterPhaseIIandNatureCenter(Fund473)inordertoreflecttherefinance savingsintheNon-DepartmentalBudget.Anappropriationof$573inrevenueassociatedwiththe COP refinancing is also requested. PublicWorks-ThefollowingbudgetamendmentsarerecommendedforthePublicWorks Department: City of Chula VistaPage 5 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 149 File#:16-0198, Item#: 11. Anappropriationof$216,366totheSuppliesandServicesCategoryoftheParkMaintenance Budgetandanadditionalappropriationof$17,125toCapitalCategoryoftheOpenSpace AdministrationBudgetforirrigationcontrollersandconversionsrelatedtodroughtturf conversions.TheseappropriationswillbeoffsetfromrebaterevenuereceivedfromSoCal Water Smart for the drought turf conversions. Anappropriationof$22,000totheSuppliesandServicesCategoryoftheConstruction& RepairBudgetforaninsurancedeductiblefortherestorationofFireStation3andforthe replacementofthecoilunitsfortheHVACsystematCivicCenterBuildingA.This appropriation will be offset by a transfer from projected savings in the Utilities budget. Anappropriationof$100,000totheSuppliesandServicesCategoryoftheConstruction& RepairBudgetforconsultingservicesinregardtoconstructiondefectsattheJohnLippitt PublicWorksCenterandconstructionsdefectsofasegmentalretainingwallatVeteran’s Park.Thisappropriationwillbefullyoffsetbyinone-timesalestaxrevenuesresultingfromthe end of the triple flip. InformationTechnologyServices-TheInformationTechnologyServicesDepartmentisrequesting thetransferof$60,000theCapitalexpensecategorytoSuppliesandServicesforthepaymentofthe DellComputerLease.Thistransferisnecessarybecauseithasbeendeterminedthatthesefunds aremoreappropriatelycategorizedundertheSuppliesandServicescategoryascomputersarenot classified as capital items due to the useful life limitations. AnimalCareFacility-Staffisrequestinganappropriationof$20,000totheAnimalCareFacility Department’sUtilitiescategory.Thisisduetoanincreaseingasandelectricchargesthatisresulting intheAnimalCareFacilityexceedingtheirbudgetwithintheirUtilitiescategory.Thisappropriation will be offset by unanticipated revenues and therefore have no impact to the General Fund. Police-ThePoliceDepartmentisrequestingatransferof$141,280fromthePersonnelServices expensecategorytoSuppliesandServices.Thistransferisrequiredtoaddressaprojecteddeficitin theSuppliesandServicesexpensecategoryattributedtohigherthanexpectedcostsforcontracted services,wirelessanddataaccess,uniforms,supplies,training,otheragencypermitsandfeesand otherongoingcosts.Thistransferwillbefundedfromsalarysavingscostsgeneratedbyvacant positions. Fire - The following budget amendments are recommended for the Fire Department: TheFireDepartmenthasreceived$158,249fromtheCityofSanDiegoandStateofCalifornia OfficeofEmergencyServices(CalOES)formutualaid,training,TaskForce8(TF-8) members’deploymentsandstatewidestriketeamdeployments.TheFireDepartmentis requestingtoappropriate$129,171toPersonnelServicestooffsetovertimecostsand $29,268 to the Supplies and Services Category to offset travel and related supply costs. TheFireDepartmentisrequestingtoappropriate$30,000ofunanticipatedFireConstruction FeerevenuetotheSupplies&ServicesCategory.Thisfundingwillbeusedtocover City of Chula VistaPage 6 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 150 File#:16-0198, Item#: 11. unanticipatedexpensesforuniformandpersonalprotectiveequipmentgear,equipmentrepair and maintenance, other supplies associated with fire station operations. TheFireDepartmentisalsorequestingthetransferof$200,000fromtheNon-CIPProject ExpenditureCategorytotheCapitalExpenditurecategory.Thesefundswereapprovedto purchaseequipmenttooutfittwo(2)newfireenginesandone(1)brushrigpurchasedduring thefiscalyear.Thetransferwillensurethattheseexpendituresarecapitalizedandare correctly reflected in the City’s Financial Reporting systems. Anappropriationintheamountof$436,000tothePersonnelServicescategoryoftheFire DepartmentbudgetisrequestedinordertocompensateInternationalAssociationof Firefighter(IAFF)membersforinaccuraciesinthecalculationofFairLaborStandardsAct (FLSA)“regularrateofpay”andintheamountofFLSA“overtimepremium”paidtoIAFFfor theFLSAOvertimepayoutamount.Theseinaccuracieswererevealedthroughthecourseof anauditofCitypayrollkeepingprocessesconductedbytheCity.Thisappropriationwillbe offset by one-time sales tax revenues resulting from the end of the triple flip. Library-TheLibraryhasreceivedseveraldonationstotaling$3,313.Thesourcesthesedonations include:theRotaryClub($685),CatherineDanklefsandRuthHart(inmemoryofSuzanneJung) ($550)andtheExecutiveBoardoftheFriendsoftheChulaVistaLibraryintheamountof$2,078. StaffisrequestingthatthesedonationsbeappropriatedtotheSuppliesandServicesbudgetofthe Library Department for book purchases. Other Funds EastlakeMaintenanceDistrictZone-Anappropriationof$20,544totheSuppliesandServices CategoryofEastlakeMaintenanceDistrictZoneAbudgetisrequestedforreimbursementofdrought turfconversionexpenditures.Theappropriationwillbeoffsetwithrebaterevenuereceivedfrom SoCal Water Smart for the drought turf conversions. FederalGrantsFund-TheCityhasreceivedapprovalfromtheCountyofSanDiegototransfer $25,800ofFY2015EmergencyManagementPerformanceGrant(EMPG)fundingfromthe PersonnelServicescategorytoSuppliesandServices.ThisamountisavailablefromPersonnel ServicessavingsresultingfromthevacancyoftheFull-TimeEmergencyServicesCoordinator positionthatisfundedthroughtheEMPG.Approvalofthistransferwillallowforthepurchaseof firefighting personal protective equipment. Staff is requesting approval of this transfer. StatesGrantsFund-TheLibraryhasreceivedthesecondinstallmentoftheCaliforniaLibrary LiteracyServices(CLLS)grantintheamountof$10,859.Thisfundingwillhelpoffsetstaffingcosts fortheLibrary’sliteracyprograms.StaffisrequestingtheCLLSgrant($10,859)beappropriatedto the Personnel Services expenditure category of the States Grant Fund. TUTCommonFund-Staffrecommendsthat$355,262betransferredfromtheSuppliesand ServicescategorytotheCapitalcategory,inordertopurchase12patrolvehiclesfromtheTUT CommonFund.ThesefundsbecameavailableinthecurrentfiscalyearSuppliesandServices budgetwhenthepreviouslyscheduledexpenditureofthesefundswasre-scheduledforfiscalyear City of Chula VistaPage 7 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 151 File#:16-0198, Item#: 11. 2016-17. Approval of this transfer results in no net fiscal impact to the TUT Common Fund. WorkersCompensationFund-Staffisrequestinganappropriationof$400,000totheOther ExpensescategoryoftheWorkersCompensationFund.Thesefundsareneededduetoa settlementthatwasnotincludedinthefiscalyear2015-16budgetandhigherthananticipatedclaim expenses.TheappropriationwillbemadefromtheavailablebalanceoftheWorkersCompensation Fund.Thefiscalimpactofthisappropriationwillbedeterminedbytheactualexpendituresinthis fund at year end. BicycleFacilitiesFund-TheCityhasreceived$100,000ingrantfundingfromtheSanDiego AssociationofGovernmentsSANDAGfortheWalk+BikeChulaVistaEducation,Encouragement andAwarenessCampaign.ProgrampartnersaretheRecreationDepartment,CirculateSanDiego, andtheSanDiegoCountyBicycleCoalitionTheWalk+BikeChulaVistaEducationEncouragement AwarenessCampaigncreatesauniquepartnershipbetweentheCityofChulaVista,CirculateSan Diego,andtheSanDiegoCountyBicycleCoalition(SDCBC)tohelpbuildapositivemultimedia campaign,coordinateandpromotenewwalkingandbikinginfrastructureprojectstoincrease awarenessonbicycleandpedestrianaccess,educatebusinessesandresidents,andpromote alternativetransportationchoicesandimprovedsafetyinChulaVista.Theone-yearcampaignwill includetwomessagetracks:onemessagetargetingtheThirdAvenueVillagetoencouragemore walkandbiketripstotheVillageamongChulaVistaresidentsandresidentsfromnearby neighborhoods,andasecondbroadermessagetobuildawarenessandencouragewalkingand bikingtripswithingreaterChulaVista.Staffisrecommendingthat$35,000ofthegrantamountbe appropriatedtotheSuppliesandServicesexpenditurecategoryoftheBicycleFacilitiesFund.The remaining balance of the will be included in the fiscal year 2016-17 budget. GeneralFund(Fund100)/2004CertificatesofParticipation-CivicCenterPhaseIandWestern ChulaVistaInfrastructure(Fund472)/2006CertificatesofParticipation-CivicCenterPhaseIIand NatureCenter(Fund473)/2015RefundingCertificatesofParticipation-CivicCenterProject(Fund 476)/PFDIF-CivicCenterExpansion(Fund572)/ResidentialConstruction&Conversion(Fund 717)-TheCityrefinancedthe2004andaportionofthe2006COPsinSeptember2015replacing bothwiththe2015COPs.MultipleappropriationsarerequestedtofacilitatetheclosureofFund472 andapartialwinddownofFund473,whichaccountedforactivityrelatedtothe2004andthe2006 COPs,respectively.Thenew2015COPswillbeaccountedforinFund476.Thetransfersout relatedtothedebtserviceinFunds100,572,and717,willbereducedasresultoftherefunding savings.Inaddition,thetransfersoutbudgetsinthesefundswillberedirectedtoFund476from Funds472and473.Perthetablebelow,Staffisrequestingthefollowingappropriationsandbudget amendments to various funds, which reflects the impact by fund, net of intra-category changes: City of Chula VistaPage 8 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 152 File#:16-0198, Item#: 11. RDASuccessorAgency(Fund318)/2006ATABs(Fund663)/2008TABs(Fund665)-An appropriationof$15,458isrequestedtotheTransfersOutcategoryoftheRDASuccessorAgency Fund.Thisappropriationwillbemadefromtheavailablefundbalance.Thisrequestisforcuringtwo DebtServiceReserveFund(DSRF)deficitsthatwerediscoveredbyStaff,asaresultofthe RDA/SuccessorAgencyTrustee’sbonddocumentinterpretationandcalculationerrors.Thespecific DSRFdeficitsare:a)2006ATaxAllocationBonds:$8,671;andb)2008TaxAllocationBonds: $6,787.Withtheseadditionalappropriations,thereservefundsforbothbondissueswillbefully funded.Thisresultsinapositivefundbalanceimpactforthe2006ATaxAllocationBondsFund ($8,671) and the 2008 Tax Allocation Bond Fund ($6,787). RDASuccessorAgency(Fund318)/Long-TermAdvancesDSF-RDASA(Fund692)-TheLong- TermAdvancesDSF-RDASAFundaccountsforSuccessorAgencyinterfundloans.Theproposed budgetchangeallowsforbettertrackingandconsistencywithintheTransfersin&Transfersout budgetcategories.Theproposedchangeswouldonlyshiftexistingappropriationsfromonelineitem toanotherinthesamecategoryinbothfunds.Thisshiftwillprovidebudgetarycongruenceand results in no net fiscal impact on either fund. OtayRanchVillage1,2,5,&6PedestrianBridgeDevelopmentImpactFee(DIF)-Staffis recommendingtheappropriationof$6,000totheOtherExpensescategoryoftheOtayRanchVillage 1,2,5,&6PedestrianBridgeDevelopmentDIFFund.Thisappropriationisneededinorderto reimburseforstafftimeexpendedinthecurrentfiscalyearupdatingthisDIFprogram.The appropriation will be made from the available balance of this fund. TrunkSewerCapitalReserve(Fund413)/SewerFacilityReplacement(Fund428)/Long-term AdvancesDSF-City(Fund451)/TransportationDIF(Fund591)/ParkLandAcquisitionand DevelopmentFund(Fund715)-TheCityestablishedtheLong-termAdvancesDSF-City(Fund451) inordertoaccountforCityinter-fundloanrepayments.TheFinanceDepartmentstaffhasreviewed existinginter-fundloanrepaymentsandisupdatingthebudgettomoreclearlyaccountforinter-fund loan repayments. Staff is requesting the following appropriations to various funds: City of Chula VistaPage 9 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 153 File#:16-0198, Item#: 11. DECISION-MAKER CONFLICT Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsite specificandconsequently,the500-footrulefoundinCaliforniaCodeofRegulationsTitle2,section 18702.2(a)(11),isnotapplicabletothisdecisionforpurposesofdeterminingadisqualifyingreal property-relatedfinancialconflictofinterestunderthePoliticalReformAct(Cal.Gov'tCode§87100, etseq.).Staffisnotindependentlyaware,andhasnotbeeninformedbyanyCityofChulaVistaCity Councilmember,ofanyotherfactthatmayconstituteabasisforadecisionmakerconflictofinterest in this matter. LINK TO STRATEGIC GOALS TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy Community,StrongandSecureNeighborhoodsandaConnectedCommunity.Thisactionsupports theOperationalExcellencegoalbycommunicatingtheCity’sprojectedfinancialpositionforthe currentfiscalyearinanopenandtransparentmanner.ThistransparencysupportsCityInitiative 1.3.1. - “Foster public trust through an open and ethical government.” CURRENT YEAR FISCAL IMPACT There is no fiscal impact resulting from accepting the Quarterly Financial Report. GeneralFund-Approvaloftheresolutionamendingthefiscalyear2015/16budgetwillresultinthe following appropriations to the General Fund. City of Chula VistaPage 10 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 154 File#:16-0198, Item#: 11. NetImpact-TherecommendedchangesintheGeneralFundwillresultinapositiveimpactof $58,415duetotheCOPrefinancingsavingsintheNon-DepartmentalBudget.Alloftheother requestedchangesareneutralastheyareeitherrevenueoffsetorreflectoffsettingtransfers between expenditure categories resulting in no net fiscal impact. City of Chula VistaPage 11 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 155 File#:16-0198, Item#: 11. NetImpact-TherecommendedchangesintheOtherFundsresultinatotalof$80.3millionin appropriationstothesefundsthatareoffsetby$79.9millioninrevenues.Thenetimpactofthese changes is $0.4 million that will be absorbed by the available fund balances of these funds. ONGOING FISCAL IMPACT Staff will continue to monitor and analyze revenue and expenditure trends and incorporate changes as necessary into future financial reports and/or budgets. ATTACHMENTS 1. Third Quarter Financial Report Staff Contact: David Bilby, Finance Department City of Chula VistaPage 12 of 12Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 156 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA MAKING VARIOUS AMENDMENTS TO THE FISCAL YEAR 2015/16BUDGET TO ADJUST FOR VARIANCES AND APPROPRIATING FUNDS THEREFOR WHEREAS,the City Charterstates that at any meeting after the adoption of the budget, the City Council may amend or supplement the budget by motion adopted by the affirmative votes of at least four members; and WHEREAS, staff has completed the budget review for the quarter ending March31, 2016and is recommending a number of budget amendments; and WHEREAS, staff is recommending approximately $1.28million in new appropriations to various departments in the General Fund that will be offset by $1.34million in new revenues resulting in apositive impactof $0.06 million; and WHEREAS, the recommended appropriations in the General Fund include $0.3million for a capital lease to acquire a new brush rig for the Fire Department, $0.4 million for a one-time payout for an FLSA premiumovertime payment agreement reached with the International Firefighters Association (IAFF) member,and $0.2 million in reimbursements for a drought turf conversion project; and WHEREAS,the appropriations to the State Grants Fund, Eastlake Maintenance District 1 and the Bicycle Facilities Fund are revenue offset resulting in no net fiscal impact to these funds; and WHEREAS,the budget adjustments to the Telecommunications UsersTax(TUT) Common Fund, Long-Term Advances Debt Service RDA Successor Agency Fund, Low and Moderate Income Housing Successor Agency Fund,consist of offsetting transfers between expenditure categories within these funds for the purpose of achieving budget congruence resulting in no net fiscal impact to these funds; and WHEREAS,the appropriationof $2.9 million in the Long-Term Advances Debt Service Fund-City Transfers-Out expenditure category is required to more clearly account for inter-fund loan repaymentsbased on the most recent review by the Finance Department;and WHEREAS,the appropriation of $2.9 million in the Long-Term Advances Debt Service Fund-City Transfers-Out expenditure category will result in Transfer-In revenue to the following funds: Trunk Sewer Capital Reserve Fund ($1.2) million, Sewer Facility Replacement Fund ($0.2) million, Transportation Development Impact Fee Fund ($1.0) million,and Parkland Acquisition Fund $(0.5) million;and ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 157 WHEREAS,staff is requesting the appropriation of $78.6 million across various funds in order to accurately reflect and administer the refinancing of the City’s 2004 and 2006 Certificates of Participation that took place in September 2015 resulting in a net savings to the City; and WHEREAS,the requestedappropriation of $15,458 to the Transfers-Out expenditure category of theRedevelopment Obligation Retirement will be made from the available balance of this fund and is needed in order to address deficits in two other debt service reserve funds;and WHEREAS,the requested appropriation of $15,458 to the Transfers-Out expenditure category of the Redevelopment Obligation Retirement will be reflected as Transfers-In revenue to the 06 Tax Allocation Bond Series A –SA Fund and the 08 Tax Allocation Bond –SA Fund in the amountsof $8,671 and $6,787,respectively;and WHEREAS,the requested appropriation of $6,000 to the Other Expenses category of the Otay RanchVillage 1,5&6 will be made to the available balance of this fund and is necessary to offset staff time reimbursements. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that it amends the fiscal year 2015/16 budget and approves the followingappropriations/ transfers: ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 158 Resolution No. Page 3 PERSONNELSUPPLIES &OTHERNON-CIPTRANSFERSTOTALTOTAL DEPARTMENT/FUNDSERVICESSERVICESEXPENSESCAPTIALCAPITALOUTUTILITIESEXPENSEREVENUENET COST Administration$ (30,000)$ 30,000 $ -$ -$ -$ -$ -$ -$ -$ - Information Technology Srvcs$ $ $ -60,000$ -(60,000)$ -$ -$ -$ -$ -$ - Non-Departmental$ $ $ (8,100)$ (57,842)$ 306,737$ 901,152$ (594,415) $ -93,100$ -334,579$ (55,000) Animal Care Facility$ 20,000$ 20,000 $ -$ -$ -$ -$ -$ 20,000$ - Police$ (141,280)$ 141,280 $ -$ -$ -$ -$ -$ -$ -$ - Fire$ 59,268$ $ (200,000)$ $ 188,429$ 436,000 $ 565,161$ -200,000$ -$ -624,429 Public Works$ $ $ 333,491$ 233,491$ 100,000 $ -338,366$ -17,125$ -$ -$ (22,000) Library$ 3,313$ 3,313$ 3,313 $ -$ -$ -$ -$ -$ - TOTAL GENERAL FUND$ 725,327$ $ (208,100)$ (57,842)$ 1,287,970$ 1,346,385$ (58,415) $ 393,881$ -491,704$ (57,000) OTHER FUNDS TUT Common Fund$ $ $ -(355,262)$ -355,262$ -$ -$ -$ -$ -$ - Federal Grants Fund$ (25,800)$ 25,800 $ -$ -$ -$ -$ -$ -$ -$ - State Grants Fund$ 10,859$ 10,859 $ 10,859$ -$ -$ -$ -$ -$ -$ - $ 15,458$ 15,458$ Redv Obligation Retirement Fnd$ -$ -$ -$ -$ -$ -$ -15,458 Low & Mod Income Housing - SA$ -$ -$ -$ -$ -$ -$ -$ -$ -$ - Eastlake Maintenance Dist 1$ $ 20,544$ 20,544 $ -20,544$ -$ -$ -$ -$ -$ - Trunk Sewer Capital Reserve$ $(1,120,000) $ -$ -$ -$ -$ -$ -$ -$ -1,120,000 Sewer Facility Replacement$ $ (210,000) $ -$ -$ -$ -$ -$ -$ -$ -210,000 Long-term Advances DSF-City$ $ $ $ -$ -$ -$ -$ -2,890,000$ -2,890,000$ -2,890,000 2004 COP Civ Ctr Proj Phase I$$ $ $28,437,406$ 2,458,443 $ -$ -28,011,843$ -$ -2,884,006$ -30,895,849 2006 COP Civ Ctr Proj Phase 2$ $ $ $ 7,128,556$ 143,895 $ -$ -7,107,692$ -$ -164,759$ -7,272,451 2015 Refunding COP$ 2,091,2464,040$ $ $ $41,321,452$(2,223,414) $ -$ -$ -37,002,752$ -39,098,038 PFDIF - Civic Center Expansion$ $ $ 2,552$ (228,004) $ -$ -$ -$ -$ -(225,452)$ -(225,452) Otay Ra Vlg 1,5&6 Ped Brid DIF$ 6,000$ 6,000$ 6,000 $ -$ -$ -$ -$ -$ -$ - Transportation DIF$ $(1,045,000) $ -$ -$ -$ -$ -$ -$ -$ -1,045,000 06 TABs Series A - SA$ 8,671$ (8,671) $ -$ -$ -$ -$ -$ -$ -$ - 08 TABs - SA$ 6,787$ (6,787) $ -$ -$ -$ -$ -$ -$ -$ - Long-term Advances DSF-RDA SA$ -$ -$ -$ -$ -$ -$ -$ -$ -$ - Park Land Acquisition Fund$ $ (515,000) $ -$ -$ -$ -$ -$ -$ -$ -515,000 Resident. Construct/Conver Fnd$ $ $ 1,235$ (153,221) $ -$ -$ -$ -$ -(151,986)$ -(151,986) Bicycle Facilities Fund35,000 $ $ 35,000 $ -35,000$ -$ -$ -$ -$ -$ - TOTAL OTHER FUNS$ (14,941)$ (269,878)$37,216,781$ 355,262$ $ $79,863,062$ 3,699 $ -42,579,537$ -79,866,761 $ 455,449$37,216,781$ 846,966$ (208,100)$ 42,521,695$ 81,154,731$81,209,447$ (54,716) TOTAL BUDGET AMENDMENTS$ 378,940$ (57,000) Presented byApproved as to form by David BilbyGlen R. Googins Director of Finance/TreasurerCity Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 159 Quarterly Financial Report ThirdQuarter Ending March 31, 2016 Prepared –April2016 OVERVIEW 3 The San Diego Forecast-The USD Burnham-Moores This financial report summarizes the City’s General Center for Real Estate’s Index of Leading Economic Fund financial position for fiscal year 2016through Indicators for San Diego County rose 0.1 percent in March 31, 2016and projecting out to June 30, 2016. February. The advance was led by a sharp increase in The purpose of this report is to provide the City online help wanted advertising along with a moderate Council, Management and the citizens of Chula Vista gain in initial claims for unemployment insurance. There an update on the City’s fiscal status based on the most were smaller gains in building permits and the outlook recent financial information. for the national economy. On the downside was another big loss for local stocks and a small decline in consumer ECONOMIC UPDATE confidence. The National Forecast 1-In the March 2016report, With February’s gain, the USD Index has now been Senior Economist David Shulman points out that the positive four of the last five months. As a result, the economy has for the most part weathered the outlook for the local economy remains positive for the disturbances caused by the fall in oil and stock prices rest of 2016. The index was boosted by employment as well as the predicted economic slowdown in China gainsas the two employment components of the index and stagnation in Europe. Shulman indicates that the posted gains signaling a strong trend for overall growth. markets have calmed down and wiped out much of Overall,nearly 40,000 wage and salary jobs were added their earlier losses as strong data from the consumer in San Diego County last year. sideof the economy indicated that retail sales were solid andemployment growth remained robust. As The index was also strengthened by performance in the such,asidefrom modest declines in the industrial construction sector as more than 600 residential sector, there was norecession in the data. construction permits were approved in Februaryand a gain in the national economy as growthin the fourth 2-In the California forecast, The California Forecast quarter of 2015 was better than initially reported. The Senior Economist Jerry Nickelsburgrevisits the gains in the index were offset decreases in consumer bifurcated recovery undergone by the State as coastal confidence, which fell for the fourth straight month and regions have gained traction while the inlandregions local stock prices that have yet to recover the losses stagnated, or in some cases contracted.Nickelsburg experienced at the beginning of the year. The decrease differentiates that the economy inthe eastern part the in consumer confidence is of concern as consumer State was predominately driven by construction, activity is typically more than two-thirds of all economic traditionalmanufacturing, government and agriculture. activity in an economy. While in the westernpart, the economy was predominately one based on services,particularly San Diego Index of Leading Economic Indicators technology-laden services.Nickelsburg further states San Diego County, 2010 –2016 that economic growth is currently being more influenced by the presence of a vibrant tech oriented Index sector(s) or by thepresence of extractive energy to “business friendly” resourcesas opposed 145 governmental policies. 140 135 Based on a higher than forecasted employment growth 130 rate of 3.1% for 2015the forecast has been revised 125 downward.Theestimate for total employment growth 120 in 2016 is 1.9%and for 2017 and 2018 the forecast is 115 for 1.6%and 1.0%. Payrolls will grow more at about 110 the same rateover the forecast horizon. Real personal 105 income growth isestimated to be 3.6% in 2016 and 100 forecast to be 3.2% and3.0% in 2017 and 2018, respectively. 3 Source: University of San Diego School of Business 1 Source: UCLA Anderson Forecast,March2016 Administration, USD Index of Leading Economic 2 Source: UCLA Anderson Forecast, March2016 Indicators, September 2015; retrievedfrom URL: http://home.sandiego.edu/~agin/usdlei/index.html ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 160 QUARTERLY FINANCIAL REPORT FISCAL YEAR 2016: FIRSTQUARTER Page 2of 7 The City’s discretionary revenues are in large part General Fund Reserves -The General Fund Reserve projected to exceed their budgeted levels. Departmental policy was established to ensure that the City’s program revenues however are anticipated to fall short finances are managed in a manner which will: of their targets. Particularly Police jail reimbursements 1.Continue to provide for the delivery of quality and grant revenue, as well as Fire permit and servicesreimbursement revenue are not projected to meetthe 2.Maintain and enhance service delivery as the budgeted level. Overall, General Fund revenues are community grows in accordance with the General projected at $0.7 million above the current amended Planbudget.Revenue shortfalls are projected to be fully 3.Minimize or eliminate the need to raise taxes and offset with improvements in the Other Local Taxes fees because of temporary revenue shortfalls category of $0.9 million, and Property Taxesof $0.2 4.Establish the reserves necessary to meet known million. and unknown future obligations and ability to respond to unexpected opportunities. Departmental expenditures are tracking within budgeted levels as the majority of the departments are projected to The following table reflectsthe audited General Fund realize savings as of the end of the fiscal year. reserves as of June 30, 2015as well as the projectedPersonnel Services are currently projected to end the General Fund reserves for June 30, 2016.fiscal year at a savings of $0.7 million below the amended budget. Departmental expenditures for supplies and services are projected to increase by $0.4 million over the amended budget. Utility expenditures are projected to end the year at a savings of $0.3 million below the amended budget. As stated in the first quarter report, salary savings levels are not projected to be achieved based on the current trend. This is primarily due lower than anticipated employee attrition rates. Salary savings are currently budgeted at $1.6 million in the General Fund reflecting staff’s first quarter recommendation to recognize the savings in the voluntary work furlough program and health insurance savings costs and apply these savings to reduce the budgeted salary savings in the Non-Departmental Notes: budget. Staff will continue to monitor salary savings 1.The City Council Adopted budget was balanced and did not levels and look for other potential cost saving measures project an increase in fund balance for the General Fund. in order to remain within budget. 2.The Amended Budget and projections reflected in this table do As previously discussed in the 2nd quarter report,the not include prior year appropriations forcapital improvement projects and other encumbrances totaling $5.3 million that were City will receive additional sales tax revenue as a result carried forward into the fiscal year 2015/16 budget. These of the ending of the Triple Flip allocation. These expenditure impacts are already reflected in the estimated fund revenues will help address expenditures for major balance as of July 1, 2015 and are therefore not included in the projects that were not included in the fiscal year 2015-16 above table. adopted budget, but will likely require funding in the 3.Pending net appropriations reflect savings that will be realized current fiscal year. The majority of the triple flip by the General Fund as a result of the successful refinancing of allocation has been appropriated for various projects various Certificates of Participation (COPS) detailed in the Council staff report that accompanies this The City’s financial outlook appears stable through the report. end of the third quarter. Revenues are projected to increase modestly from the amended budget level based on updated assumptions for fiscal year 2016 actuals and trends in the third quarter. Major factors affecting expenditures include: an FLSAovertime retro payment; and several expenditures with revenue offsets.The General Fund is projected to end the fiscal year at approximately the same fund balance as last year at $16.3 million. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 161 QUARTERLY FINANCIAL REPORT FISCAL YEAR 2016: FIRSTQUARTER Page 3of 7 Revenues Sales Tax (Sales Tax and Sales Tax in lieu) - Sales The following table compares the projected revenues taxis projected to be the City’s largest revenue source, included in the adopted budget and the updated representing 22.2% of General Fund revenues in the revenue projections for discretionary and departmental fiscal year 2015/16amended budget. HdL Companies, program revenues.Overall, General Fund revenues the City’s Sales Tax consultant, has provided data for are projected at $0.65 million abovethe current the thirdfourthof calendar year 2015. They report that amended budget.The major variances are as follows: the change in sales tax receipts between thirdquarter Aprojected $1.0 million decrease in Charges for calendar year 2014and thirdquarter calendar year 2015 Servicesrevenues due to lower Police jail increased by 2.6% in Chula Vista.General Consumer reimbursements. Goods represents the largest major industry group for Sales Tax generation.In this category,the change in A$0.5million decrease in projected Utility User Sales Tax increased1.4% in Chula Vista when Taxbased on the currentfiscal yeartrend and compared to the same quarter for 2014.Other sectors reflecting previous fiscal year actual revenues. that also increased included:Building and Construction A $0.3million projected decrease in Revenue from 28.4%, Restaurants and Hotels 6.9% and Autos and Other Agencies due to lower grant revenues. Transportation 11.6%. A $0.7million projected decrease in Other Theprojection for Sales Tax revenues has been Revenuesfrom prior year revenues that are no increased to reflect improvedeconomic activity. longer anticipated to be received. The following chart represents actual sales tax A projected $1.0 million increase in Transient collections since fiscal year 2011/12and the projection Occupancy Taxes based on an improved growth for fiscal year 2015/16. trend and previous fiscal year collections. A $0.7 million increase in other revenues due to Sales Taxand Sales Tax in Lieu projected higher reimbursement revenue. A $0.4 million increase in Sales Tax revenue. $35.0 $32.0 $30.3 $29.2 $28.6 $27.3 $30.0 General Fund Revenues $25.0 Amended Millions Budget as of Q3 Projected $20.0 3/31/16 6/30/16 Variance Category $15.0 Property Taxes$ 30,052,206$ 30,267,152 $ 214,946 $10.0 Sales Tax$ 25,720,448$ 26,073,710 $ 353,262 Sales Tax In Lieu$ 5,981,593$ 5,981,593$5.0 $ - Motor Vehicle License$ 18,887,001$ 18,934,512 $0.0 $ 47,511 Other Revenue$ 12,195,378$ 12,882,703 FY12FY13FY14FY15FY16 $ 687,325 ActualActualActualActualProjected Transfers In$ 10,022,271$ 9,993,254 $ (29,017) Franchise$ 11,426,283$ 11,525,886 $ 99,603 Charges for Services$ 7,748,531$ 6,804,427 $(944,104) Property Taxes- The City of Chula Vista receives Revenue from Other Agencies2,730,917$ $ 2,526,127 $(204,790) property tax revenue based upon a 1.0% levy on the Utility Users Tax$ 6,500,000$ 5,959,903 $(540,097) assessed value of all real property. Property tax is the Transient Occupancy Taxes2,890,853$ $ 3,826,580 City’s second largest revenue source, representing $ 935,727 Use of Money & Property$ 2,733,590$ 2,613,650 21.1%of General Fund revenues in the fiscal year $(119,940) 2015/16 budget. Other Local Taxes$ 2,245,437$ 2,223,353 $ (22,084) Licenses and Permits$ 1,309,447$ 1,263,747 $ (45,700)The Property tax revenue projectionhas beenincreased Fines, Forfeitures, Penalties1,133,800$ $ 1,287,672 by $0.2 million over the secondquarter to reflect the $ 153,872 Real Property Transfer Tax$ 962,865$ 1,023,661 receipt of Redevelopment Agency and residual pass $ 60,796 through payments. Overall the initial assumption for Total General Fund $142,540,620$143,187,930 $ 647,310 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 162 QUARTERLY FINANCIAL REPORT FISCAL YEAR 2016: FIRSTQUARTER Page 4of 7 property tax revenue growth of 5.6% remains unchanged from the second quarter projection. Property Tax Motor Vehicle License Fee $18.9 $35.0 $20.0 $17.9 $30.3 $16.8 $28.6 $18.0 $16.3$16.3 $27.9 $27.5 $30.0 $16.0 $24.5 $25.0 $14.0 Millions Millions $12.0 $20.0 $10.0 $15.0 $8.0 $6.0 $10.0 $4.0 $5.0 $2.0 $0.0 $0.0 FY12FY13FY14FY15FY16 FY12*FY13FY14FY15FY16 ActualActualActualActualProjected ActualActualActualActualProjected Franchise Fees- Franchise fee revenues are generated Motor Vehicle License Fee (VLF)– Since the State from public utility sources such as San Diego Gas & BudgetAct of 2004, the allocation of VLF revenues to Electric (2% on gas and 1.25% on electricity), trash cities and counties was substantially changed. collection franchises (20% fee), and cable franchises Beginning in 2005/06,the majority of VLF revenues for (5% fee) conducting business within City limits. SDG&E each city grew essentially in proportion to the growth in collects the franchise fee from Chula Vista customers the change in gross assessed valuation. Due to this and remits these revenues to the City. Trash franchise change in the formula by the State, the majority of the fees and cable fees are based on fixed rates. City’s VLF revenues fluctuate with changes in assessed values in the City. Franchise Fee revenues have been revised in the third quarter and are projected to exceed the second quarter VLF revenue projectionswere revised to in the first projection by $0.1 million. This increase is attributed to a quarter to reflect the changein the city-wide assessed higher than anticipated monthly average collection of valuationprojection growth rate of 5.6% for fiscal year Franchise Fee revenues from the City’s franchise 2015-16versus the 4% projected growth rate assumed operators. in the adopted budget.The projection for VLF revenues remained unchanged for the second quarter. The third The following chart represents actual franchise fee quarter projection indicates that VLF revenues will revenues since fiscal year 2011/12and the projectionfor increase by $46,000 over the second quarter projection fiscal year 2015/16. Fiscal year actual 2012-13 revenues based on the current trend, reflect previously accrued Franchise Fee revenues that were realized by the City. The following chart represents actual VLF revenues since fiscal year 2011/12and the projection for fiscal Franchise Fees year 2015/16. $14.0 $11.5 $12.0 $10.8 $9.6 $10.0 $8.8 $8.4 Millions $8.0 $6.0 $4.0 $2.0 $0.0 FY12FY13FY14FY15FY16 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 163 ActualActualActualActualProjected QUARTERLY FINANCIAL REPORT FISCAL YEAR 2016: FIRSTQUARTER Page 5of 7 Transient Occupancy Tax (TOT)- The City receives The following chart reflects actual UUT revenue since 10%of hotel and motel room rates for stays less than fiscal year 2011/12. Fiscal year 2015/16is projected 30 days. Projections for TOT revenues have been and does not reflect actual collections. updated to reflect the positive trend that began in fiscal year 2012and has subsequently continued. The Utility Users Tax (UUT) projection for fiscal year 2015/16wasbeen increased by $0.9million when compared to the adopted budget $15.1 $16.0 in the second quarter based onthe previous fiscal $14.0 year’s growth trend, and $0.3 million due to previous $12.0 fiscal year collectionsthat werereceived the current fiscal year. The third quarter projection for TOT $10.0 Millions revenues remains unchanged. $8.0 $6.4 $6.1 $6.0 $4.4 The following chart represents actual TOT revenues $3.5 $4.0 since fiscal year 2011/12and the projection for fiscal year 2015/16. $2.0 $0.0 Transient Occupancy Tax (TOT) FY12FY13FY14FY15FY16 ActualActualActual*ActualProjected $4.5 $3.8 $4.0 $3.1 $3.5*Increased fiscal year 2013/14 Utility User’s tax revenue reflect a mid- yearappropriation(Council resolution 2013-092)of previously $2.6 $3.0 $2.5 collected wireless telecommunication related tax revenue that was $2.3 Millions utilized to fund attorney and City administrative costs pertaining toa $2.5 Cityclass-action lawsuit. $2.0 $1.5 $1.0 $0.5 $0.0 FY12FY13FY14FY15FY16 ActualActualActualActualProjected Utility Users Tax (UUT) -The City adopted its Utility UsersTax (UUT) in 1970. The City of Chula Vista imposes a UUT on the use of telecom at the rate of 4.75% of gross receipts. The UUT on natural gas services is $0.00919 per therm and $0.00250 per kilowatt on electricity services, which equates to approximately a 1% tax. The projection for UUT revenues was reduced by $0.37million from the adopted budgetin the second quarter.This downward trend has continued through the third quarter as the projection for UUT revenues has been decreased by an additional $0.17 million. Overall,UUT revenues are estimated to be under budget by $0.6 million. This decrease is partially offset by $0.2 million fromrealized prepaid wireless UUT revenuesthat became effective on January 1, 2016. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 164 QUARTERLY FINANCIAL REPORT FISCAL YEAR 2016: FIRSTQUARTER Page 6of 7 Expenditures supplies and services costs due to a Fire Academy that is scheduled to take place in the current fiscal year. The The General Fund’s amended budget reflects the deficit will be largely mitigated through the appropriation Council adopted budget of $139.8 million,Council of strike team and other reimbursement revenues that approved mid-year appropriations of $3.3million, and have been received by the Fire Department. $5.3 million of prior year encumbrances that were carried over into the current fiscal year. As of the end Overall, General Fund expenditures are projected to be of the First Quarter, the amended budget totals $148.4 over budget by $0.1million in the current fiscal yearas a million. result of encumbrance savings targets assigned to departments.This deficit however, should be corrected The following table reflects the General Fund amended with the budget amendments in the following paragraph. budget and actual expenditures by department as of March 31, 2016. In total, Departments have expended Forthe third quarter, the major staff recommended 69% of the General Fund budget after 75% of the fiscal budget adjustments include funding of$0.4million for year has elapsed. the agreement reached between the City and the membership of the International Association of General Fund Expenditures as of 3/31/2016 Firefighters (IAFF) regarding a discrepancy in the FLSA Amended Budget Expended as % premium overtime payoutto IAFF membersthat will Department as of3/31/16 of 3/31/16 Expended occur in the current fiscal year. In addition, an City Council 1,499,840$ $ 989,62166% appropriation of $0.3 for the capital asset lease financing to acquire a fire brush rig is also included as well as a Boards & Commissions $ 77,520$ 48,31162% $0.2 appropriation to the Public Works Department for City Clerk $ 942,667$ 575,19861% reimbursement revenue received as part of a city-wide City Attorney 3,038,310$ $ 1,926,86463% drought turf conversion project. Thenet fiscal impact to Administration 3,375,975$ $ 2,264,26667% the General Fund of these and the other staff $ 3,604,224$ 2,395,76366% Information Tech Srvcs recommended adjustments is $(0.06)million.These recommendations will be included in the Council staff $ 2,600,103$ 1,759,48568% Human Resources report that accompanies this report. Finance $ 3,720,758$ 2,481,58367% $ 12,149,286$ 9,149,17175% Non-Departmental Staff will continue to work to address these issues and Animal Care Facility$ 2,988,449$ 2,032,29068% mitigate potential impacts to the General Fund. Dev Services (GF)$ 2,482,554$ 1,682,26368% General Fund Projections by Department Police $ 49,528,234$ 35,032,38271% forJune 30, 2016 Fire $ 26,838,645$ 19,060,93571% Amended Public Works $ 27,359,798$ 17,929,56366% Budget as of Q3 Projected Recreation 4,332,469$ $ 2,768,72264% Department 3/31/16 6/30/16 Variance Library $ 3,875,332$ 2,640,62068% City Council 1,499,840$ $ 1,435,735$ 64,105 Total Expenditures148,414,164$ $ 102,737,03769% Boards & Commissions $ 77,520$ 77,520 $ - City Clerk 942,667$ $ 907,421$ 35,246 The following table reflects the projected expenditures City Attorney $ 3,038,310$ 3,000,306$ 38,004 for June 30, 2016. As noted on the table,all of the operating departments with the exception of the Fire Administration $ 3,375,975$ 3,302,212$ 73,763 Department are projecting to be within budget or Information Tech Srvcs $ 3,604,224$ 3,483,914$ 120,310 realize savings in the current fiscal year. A $1.4million Human Resources $ 2,600,103$ 2,433,485$ 166,618 deficit is projected for the Non-Departmental budget Finance 3,720,758$ $ 3,491,642$ 229,116 due tobudgeted salary savings levels that are not Non-Departmental $ 12,149,286$ 13,550,371$(1,401,085) projected to be achieved based on the trendidentified Animal Care Facility2,988,449$ $ 2,936,802$ 51,647 in the first quarter.In an effort to mitigate this short-fall, Council implemented staff’s recommendation to Dev Services (GF)$ 2,482,554$ 2,446,964$ 35,590 decrease the salary savings level and offset it with Police 49,528,234$ $ 49,044,793$ 483,441 savings from the voluntary work furlough program and Fire 26,838,645$ $ 27,143,010$ (304,365) health insurancesavings costs as part of the budget Public Works $ 27,359,798$ 27,194,366$ 165,432 adjustments approved in the first quarter. The Recreation 4,332,469$ $ 4,283,820$ 48,649 projected deficit in the Fire Department is due to higher Library 3,875,332$ $ 3,804,676$ 70,656 personnel costs due to overtime and projected higher Total Expenditures148,414,164$$148,537,037$ (122,873) ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 165 QUARTERLY FINANCIAL REPORT FISCAL YEAR 2016: FIRSTQUARTER Page 7of 7 Budget Transfers Third QuarterBudget Amendments The following table reflects the administrative budget Third Quarterexpenditure appropriations approved transfers that have been approved through thethird through March31, 2016totaled $3,331,493. The City quarter. These changes result in no net fiscal impact Council approved changes to budgeted revenues of to the General Fund budget and are within the Council $2,734,451. Combined, these changes resultin a policyallowing for transfers up to $15,000. positive net impact of $597,042. Summary of General Fund Budget Transfers The City Council approved the following budget amendments during throughthe firstquarter: DateDescriptionAmountFrom/To Development Servces GF Summary of General Fund Budget Amendments Transfer for copier Supplies & Services Jul-15$500 leaseto Capital Description/Dept DateRevenueExpenditureNet Impact Human Resources Supplies & Services Transfer to Other Jul-15$56 DHS Contraband Kit Expenses (Refund)to Other Expenses Purchase (Police) 7/14/2015$ 21,599$ 21,599 Boards and Commissions $ - Transfer for Supplies & Services HIDTA Position Sep-15$100 Personnel Services to Personnel Reclassification (Police) 7/21/2015$ 1,479$ -$ (1,479) Public Works Transfer for Turf Utilities to FA Supervising Intel Analyst Nov-15$15,000 ReplacementSupplies & Services Admin Fee Revenue (Police) 7/28/2014$ 4,825$ -$ (4,825) Transfer for Vehicle Capital to Supplies San Ysidro Health Clinic Nov-15$11,245 Outfitting& Services Amended Lease (Non- Transfer for Departmental) Personnel to 9/15/2015$ 40,000$ 40,000 Nov-15Emergency Facility $15,000 $ - Supplies & Services 610 Bay Bl Property Repairs Improvements for AIM Lease Transfer forPark Utilities to Nov-15$15,000 (Non-Departmental) 8/5/2014$ 10,000$ 10,000 Sports Field LightingSupplies & Services $ - Unrepresented , Conf./Non Administration Conf. MOU Salary Transfer for Personnel to Adjustments (Various) 10/6/2014$244,511$ 244,511 Jan-16$15,000 Consulting ServicesSupplies & Services $ - Animal Care Facility Roof Fire Repair ( Animal Care Supplies & Services Cell Phone Stipend Facility) 11/3/2015$ 33,736$ 33,736 Jan-16$1,530 Adjustmentto Personnel $ - Western Council of Animal Care Facility EngineersMOU Salary Transfer for Animal Personnel to Adjustments (Various) 11/3/2015$ 29,590$ 29,590 Mar-16Clinic's Doctors $15,000 $ - Supplies & Services Payments 1st Quarter Budget Human Resources Adjusmtents (Various) 11/3/2015$916,295$ 916,295 Transfer for copier Supplies & Services $352 Mar-16 $ - leaseto Personnel Chula Vista Employees Assoc. MOU Salary Adjustments (Various) 11/3/2015$301,020$ 301,020 $ - Attorney Services for Case at Bay and E. (Non- Departmental) 12/15/2015$460,000$ 460,000 $ - 2nd Qtr. Budget Adjustments (Various) 2/23/2016$441,396$ 1,044,742$ 603,346 California Public Library Broadband Proj. Grant (Library) 2/23/2016$ 30,000$ 30,000 $ - Application for U3 Advisors Inc. (Non-Departmental) 3/8/2016$200,000$ 200,000 $ - Total Appropriations to date: $ 3,331,493$ 597,042 $2,734,451 1.The above table does not reflect a -$49,518accounting adjustmentto the Non-Departmental budget that was made as a result of the close-out of a capital improvement project (CIP). ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 166 City of Chula Vista Staff Report File#:16-0238, Item#: 12. INVESTMENT REPORT FOR THE QUARTER ENDED MARCH 31, 2016 RECOMMENDED ACTION Council accept the report. SUMMARY TransmittedherewithistheCity’sinvestmentreportforthequarterendedMarch31,2016.Tomeet thereportingrequirementssetforthintheCaliforniaGovernmentCodeSections53600etseq.and theCityofChulaVistaInvestmentPolicyandGuidelines,aseparatereportwasdistributedtothe City Council in April. ENVIRONMENTAL REVIEW TheDevelopmentServicesDirectorhasreviewedtheproposedactivityforcompliancewiththe CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthattheactivityisnota“Project”in accordancewithSection15378(b)(5)oftheStateCEQAGuidelinesbecauseitinvolvesonly acceptanceoftheQuarterlyInvestmentReport;thereforeitisanorganizationaloradministrative activityofgovernmentthatwillnotresultinadirectorindirectphysicalchangeintheenvironmental; therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelinestheactivityisnotsubjectto CEQA. Thus, no environmental review is necessary. Environmental Notice Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental review is required. BOARD/COMMISSION RECOMMENDATION Not Applicable DISCUSSION ThetotalcashandinvestmentportfolioheldbytheCityasofMarch31,2016was$226,259,336and total cash and investments held by the trustees was $39,246,991. ThecashandinvestmentsheldbytheCityarecomposedofthefollowingcomponents:Cash/Time Deposits($34,853,534),ManagedInvestmentPortfolio($154,821,225),StateofCALocalAgency InvestmentFund($1,640,296),andCountyofSanDiegoPooledInvestmentFund($34,652,788). CashandinvestmentsheldbytheCityandthetrusteescontinuetobeinvestedinaccordancewith theGovernmentCodeandtheCouncilInvestmentPolicyasadoptedbyResolution2016-046on March 15, 2016. Duringthequarter,oneinvestmenttotaling$1,500,000wassoldpriortoitsmaturitydate.Two City of Chula VistaPage 1 of 2Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 167 File#:16-0238, Item#: 12. purchasesweremadetoreplacethatinvestmentandinvestidlecash.Purchasedinvestments includetwocorporatenotesissuedbyToyota($1,530,000)andHonda($750,000).PublicFinancial Management(PFM),theCity'sinvestmentadvisor,continuestomonitortheportfolioandwillmake recommendationsasfinancialandeconomicconditionswarrant.Thereisnofurtheractivitytoreport on other than routine investments by the City's fiscal agents. TheFederalOpenMarketCommittee(FOMC)maintainedtheFedFundstargetrateatarangeof 0.25%to0.50%throughMarch.Two-yearTreasuriesyielding1.05%atthebeginningofthequarter ended lower at the end of the quarter at 0.72%. AsofMarch31,2016,theYieldtoMaturityatCostontheManagedInvestmentPortfoliowas1.23%, which is identical to the previous quarter. Attheendofthisquarter,theweightedaveragematurityoftheManagedInvestmentPortfoliowas 2.39 years which is a decrease from 2.61 the previous quarter and is within the Council Policy. DECISION-MAKER CONFLICT Staffhasdeterminedthattheactioncontemplatedbythisitemisministerialinnatureanddoesnot requiretheCityCouncilmemberstomakeorparticipateinmakingagovernmentaldecision, pursuanttoCaliforniaCodeofRegulationssection18702.4(a).Consequently,thisitemdoesnot presentaconflictunderthePoliticalReformAct(Cal.Gov'tCode§87100,etseq.).Staffisnot independentlyaware,norhasstaffbeeninformedbyanyCityCouncilmember,ofanyotherfactthat 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.Theinvestment portfoliosupportstheOperationalExcellencegoalasitseekstomaintainthesafetyandliquidityof the City’s cash while contributing investment earnings to the bottom line. CURRENT YEAR FISCAL IMPACT ConsideringtheprojectedtimingofcashreceiptsanddisbursementsandthestructureofthePooled InvestmentPortfolio,theCityshouldbeabletocomfortablymeetoverallcashflowneedsoverthe next six months. There is no direct fiscal impact by this action. ONGOING FISCAL IMPACT There is no ongoing fiscal impact by this action. ATTACHMENTS 1.Summary of Cash and Investments as of March 31, 2016 2.PFM Investment Report for the Quarter Ended March 31, 2016 Staff Contact: David Bilby, Director of Finance/Treasurer, Finance Department City of Chula VistaPage 2 of 2Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 168 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 169 City of Chula VistaQuarter Ended March 31, 2016 Summary of Portfolio Characteristics and Key Statistics SecurityMarket Sector % ofPolicy 12 Distribution PortfolioLimits TypeValue Money San Diego U.S. Treasuries$64,524,38834%100% Asset- Market County Backed Federal Agencies$47,997,62625%100% FundPool Securities <1%18% 1% Federal Agency CMOs$1,384,2591%100% LAIF 1% Municipal Obligations$00%100% Corporate Notes Commercial Paper$00%25% 17% Negotiable CDs$5,381,2653%30% Negotiable Corporate Notes$33,486,96617%30% CDs 3% Asset-Backed Securities$2,615,1381%20% U.S. Federal Money Market Fund$216,225<1%20% Treasuries Agency 34% CMOs San Diego County Pool$34,652,78818%100% 1% LAIF$1,640,2961%$50 Million Federal Agencies Totals$191,898,951100% 25% Credit Quality (S&P Ratings)Maturity Distribution Not Rated AAA 50% (LAIF) Percentage of Total Portfolio 3 Not Rated 1% 1% <1% 40% AAAf/S1 (San Diego County) 30% 25% 24% 18% 23% 21% Money 20% Market AA Fund 66% <1% 10% 4% 3% A-1+/A-1 (Short- 0% term) Under 66 - 121 - 22 - 33 - 44 - 5 3% A 3 BBB MonthsMonthsYearsYearsYearsYears 10% 1% 5 4 Key Statistics Total Return Par ValueUnannualized $190,785,310 Amortized CostChula Vista Past Quarter $190,960,4751.33% Weighted Average Maturity (years) 2.39BAML 1-5 Yr TSY Index1.57% Effective Duration (years)Annualized 2.20 Yield to Maturity at CostChula Vista Past Quarter 1.23%5.46% Yield to Maturity at Market 1.03%BAML 1-5 Yr TSY Index6.44% Notes: 1. End of quarter trade-date market values of portfolio holdings. Percentages may not add to 100% due to rounding. 2. Balances held in LAIF and the San Diego County Investment Pool are not managed by PFM Asset Management LLC. 3. Nissan ABS is not rated by S&P, but is rated Aaa by Moody's. Goldman Sachs and Citigroup are rated BBB+ by S&P, but Goldman Sachs is rated A3 by Moody's and Citigroup is rated A by Fitch. 4. Yields, weighted average maturity, and effective duration exclude balances not managed by PFM Asset Management LLC. 5. Performance is measured on a total return basis, which takes into account interest income, realized gains and losses, and unrealized gains and losses due to changes in market value. Returns excludes balances not managed by PFM Asset Management LLC. Returns for periods less than 1 year are unannualized. Returns on trade date basis, gross (i.e., before fees), in accordance with the CFA Institute’s Global Investment Performance Standards (GIPS). Bank of America Merrill Lynch (BAML) Indices provided by Bloomberg Financial Markets. Annualized return for quarter assumes the portfolio generates the same unannualized return for four quarters. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 170 171 0 ¦¤ $30 a barrel in February, before staging a comeback and rebounding above about the global economy and then later in the quarter after the Fed signaled Mortgage-backed securities were the worst-performing sector in the quarter, but especially emerging market countries — those dependent on commodity The Chinese economy continued to slow, stoking concern that weakness in the world’s second-largest economy may negatively impact global growth, outperformance for the sector to surpass comparable-maturity Treasuries a slower pace of rate increases. The two-year Treasury yield fell 33 basis declines boosted market values. Longer maturity issues performed best. points (0.33%) during the quarter, while the 10-year Treasury yield fell 50of February, spreads tightened dramatically in March, generating enough corporates suffered sharp underperformance through January and much underperforming Treasuries. They were hurt as declining interest rates Non-callable federal agency securities performed generally in line with of deposit (CDs) offered unusually wide yield spreads. Petroleum Exporting Countries (OPEC). increased anticipated pre-payments. comparable-maturity Treasuries. over the entire quarter. basis points (0.50%). Sector Performance Interest Rates exports. ••• consumption expenditure (PCE) price index, the Fed’s most favored metric of U.S. gross domestic product (GDP) grew at a 1.4% rate in the fourth quarter home prices rose, and wages showed modest improvements. The personal rose off their February lows before giving back gains after the Federal Opengrowth, while business investment and net exports were a drag. Preliminary Global commodity price declines deepened early in the year, as the supply- Volatility ushered in the New Year, as slowing global growth drove investorscommodity prices plunged. As a result, U.S. Treasury yields retraced nearly haven securities such as U.S. government debt. Stocks posted one of their still easing monetary policy. The European Central Bank expanded its bond While the Fed embarks on a tightening path, other global central banks are purchase program to 80 billion euros per month, including the purchase of out of riskier assets, such as equities and high-yield bonds, and into safe- The Federal Reserve (Fed) left policy rates unchanged in the 1st quarter. demand imbalance remained in focus. Domestic crude oil fell to less than worst-ever starts to a year, with the S&P 500 falling more than 10% while Fear began to abate in February, spurring a rebound in stocks and corporate bonds, while the Bank of Japan cut rates to -0.10%. while the labor participation rate rose four months in a row. ee’s (FOMC’s) “dovish” March statement. First Quarter 2016 all of their fourth-quarter increases. © 2016 PFM Asset Management LLC Economic Snapshot Packet risk to its outlook. arket Commit !¦¤£ Summary ΑΏΐΕȃΏΔȃΑΓ M •••••• 172 0 ¦¤ Economic Snapshot Source: Bloomberg © 2016 PFM Asset Management LLC Packet !¦¤£ ΑΏΐΕȃΏΔȃΑΓ 173 Industrial Corporates, A Rated 0 ¦¤ March 31, 2015 30-yr 30-yr 25-yr Yield Curves as of 3/31/2016 U.S. Treasury Yield Curve December 31, 2015 Maturity Maturity Federal Agency 10-yr 10-yr 7-yr March 31, 2016 7-yr U.S. Treasury 5-yr 5-yr 3-yr 3-yr 2-yr 2-yr 1-yr 1-yr 3-mo Interest Rate Overview 5%4%3%2%1%0% 4%3%2%1%0% Yield Yield 3/31/16 10-Year 2/29/16 U.S. Treasury Note Yields U.S. Treasury Yields 5-Year 1/31/16 2-Year © 2016 PFM Asset Management LLC Packet Source: Bloomberg !¦¤£ 12/31/15 ΑΏΐΕȃΏΔȃΑΓ 3.0%2.5%2.0%1.5%1.0%0.5%0.0% Yield 174 0 ¦¤ BofA Merrill Lynch Index Returns Source: BofA Merrill Lynch Indices © 2016 PFM Asset Management LLC Packet !¦¤£ ΑΏΐΕȃΏΔȃΑΓ change. Information is obtained from sources generally believed to be reliable and available to the public; however, PFMAM cannot guarantee its accuracy, completeness, The views expressed within this material constitute the perspective and judgment of PFM Asset Management LLC (PFMAM) at the time of distribution and are subject to Advisers Act of 1940. 175 0 ¦¤ report is not an offer to purchase or sell any securities. PFMAM is registered with the Securities and Exchange Commission under the Investment © 2016 PFM Asset Management LLC. Further distribution is not permitted without prior written consent. © 2016 PFM Asset Management LLC Packet !¦¤£ Disclosures ΑΏΐΕȃΏΔȃΑΓ !"#$%"&'$( F+0 MOR8ROTS8LN8 TORRMOMRMLNT TORR6O8RML88 NOP6MOSS6LS8 MORNNOSPRLSR NOSR7OPM8LS8 6O866O6MML88 NOPSTO8QMLS8 TO8PPOPRMLM8 MO8STOS86L88 6OSTSON78LS8 NOP7PO7TRLS8 TORRNOQ68L88 6OT8QONTQLP8 G 5/+ 176 0 ¦¤ !"# $ %!" &%'(%) H 9*9) 5V4 - /+,-2. 09W+, MOR8NOP7MLPS TORR8ORTRLRQ TORNQO6QRLNP NOSP7OM77LNM MORP8OP6TLT6 NOS6POT8NL7N RRSOPPNLNQ NOSMSOQ7TLTS TO877OP6SL77 MO866OSQ7LP7 6O7R7OP8NL6T NOS88OSRRL7T TORS6OMTRLMS 6O6RPOPNQL67 6.70 6.70 0"6.70P)0+ +70 TTORMPL7N N6LSP QONN6L6N 6ROSNPLT8 TNOPS8LQT MSOQ8PLRQ TO8R7LQN 7TON7NLMP SPL7T NMLMM RO7SQL7T SMOSRTL8M 68O8N6LRQ 6OM87LMS 8L788LP88LNM6L8S6L8R6L6N6L766LMP6LTR6LMQ6LP86LS86L7P6LMT MORRMOSMRL8P MO88RONMPL6M TORN7OSM6LTS NOSN7OMMSLR7 MORQQO88NL86 NOST8OSNSLR7 RR7O8TML77 NOS7MONTNL6M TO8MROM7NLNM MO886ONPQL6R 6O7RMO7RPL8R NOS88OPP7L8P TOR78O7PNLQS 6O6RPOTRPLNN ) *+,"- ./)0"L+0 95".K"1+ / 909+7"S+5, 4 ,+1+005+8NBT8B678NBTQB6768BTPB6S8QB8PB6S8NB8SB6S8QB8PB6S8TBTMB6S8QB8PB6S87BTQB6S8SB87B6S8PBTRB6S8QB8PB6S8SBTNB6S68B6MB6S ; 09)*; 09)*L 0+L 0+ 8NB6RB678NBTPB6768BTMB6S8QB8TB6S8NB87B6S8QB8TB6S8TB6RB6S8QB8TB6S87BTMB6S8SB86B6S8PBTPB6S8QB8TB6S8SBTPB6S68B8NB6S 1RJ ..,3U7 2??2??2??2??2??2??2??2??2??2??2??2??2??2?? 22\\22\\22\\22\\22\\22\\22\\22\\22\\22\\22\\22\\22\\22\\ MOR88O888L88 TORNSO888L88 MO888O888L88 NOS88O888L88 MONRSO888L88 NOS88O888L88 6O888O888L88 NOS88O888L88 TO8PSO888L88 MO8S8O888L88 6OS88O888L88 NOS88O888L88 MO888O888L88 6OT88O888L88 J R6TNTN\[18 R6TNTN0b6 R6TNTN3b8 R6TNTNb9N R6TNTN4EMR6TNTN0G7 R6TNTN0a6R6TNTN,>6R6TNTN,>6 R6TNTN>9Q R6TNTN2M7 R6TNTN PTR6TNTN PT R6TNTN>_6 L 0+,"L 0+T6./I.)T 0/ 9036O1PJ E,E 8SBM6BT866 6LQS8Z 8SBM6BT86PE,E 8RBM8BT866 6L888Z 8RBM8BT86PE,E 87BM8BT86M 8LPTSZ 87BM8BT86NE,E 8QBM6BT86M 6LMQSZ 8QBM6BT86NE,E 68BM6BT866 6LQS8Z 68BM6BT86NE,E 6TB8TBT86M 6LTS8Z 66BM8BT86NE,E 86BM6BT86T 6LTS8Z 86BM6BT86RE,E 8PB8TBT867 6LS88Z 8SBM6BT86RE,E 68B86BT86T 6L888Z 8RBM8BT86RE,E 68B86BT86T 6L888Z 8RBM8BT86RE,E 68BM6BT867 6LS88Z 68BM6BT86RE,E 68BM6BT867 6LS88Z 68BM6BT86RE,E 66BM8BT86T 6L888Z 66BM8BT86RE,E 8TBTNBT86M 6LTS8Z 8TBTRBT8T8 OC1C"4 + 7/ 3"8.),"T"X.0+ *+,- . */012 3+4,2 1+ / 903"43I+TL+7 9I09.) 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M6MP2bEb8 R6TNTN0b6R6TNTN0b6M6MM&*b,7 M6MM&E&G7 M6MM&2-TN M6MM&*21N M6MMN6*QN M6MM&2M_S L 0+,"L 0+T6./I.)T 0/ 9036O1PJ &E&>21 2>$ *>&E+, G2=^4U*2112G1&V &E&>21 2>$ *>&E+, G2=^4U*2112G1&V &E&>21 2>$ *>&E+, G2=^4U*2112G1&V &E&>21 /.$& 1.2= G2=^4 U*2112G1&V E,E 8TBTNBT86M 6LTS8Z 8TBTRBT8T8E,E 8TBTNBT86M 6LTS8Z 8TBTRBT8T8 2==+& $2& 4&>+&4 T86S5$6M 24bTE,E 68B86BT86S 6LP7PZ 8RB86BT86RE,E 66BTNBT86T 8LSR8Z 66BTNBT86PE,E 8SBM8BT86M 8LQS8Z 8SBM8BT86QE,E 6TB6RBT86T 8LQM8Z 8PB6RBT86QE,E 86BTNBT867 6L688Z 8PBTNBT86QE,E 8RBT6BT86T 8LNM8Z 8RBT6BT86QE,E 68B68BT86T 8LR88Z 68B68BT86Q Y+,+ 5"-*+) 3"8.),"T"X.0+ OC1C"4 + 7/ 3"8.),"T"X.0+ *+,- . */012 3+4,2 1+ / 903"43I+TL+7 9I09.) &E&>21 2>$ *>&E+, G2=^4 Packet 1+ / 903"43I+"1/M>4.0 51+ / 903"43I+"1/M>4.0 5 !¦¤£ 04 ,>&240>- =.,&404 ,>&240>- =.,&4 ΑΏΐΕȃΏΔȃΑΓ *G =.,&4 G.=E4 G.=EG.=EG.=E !"#$%"&'$( "DE%BBE%(&(C''" F+0 TORRRORR7L88 MO888O86NL88 MO888O677L88 TORRSOM6QL88 TORNRO78QL88 MO888OTSTL88 MO886O6R6L88 MO887OQRQL88 TORNROMN8L88 TO888OPR8L88 6OS8POR7RLS8 G 5/+ 178 0 ¦¤ !"# $ %!" &%'(%) "DA%'''%'''C''" H 9*9) 5V4 - /+,-2. 09W+, MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 TO886OMP7LTP 6OS88OPRTLTQ 6.70 "$&D%E'#CE(" 6.70 0"6.70P)0+ +70 66ON6QLS8 66ONS8L88 POQTRL6Q QO8S8L88 PO76PLPQ SOTMSLNM MO6PTLS8 68O6PPLPQ 68OQN6LTS MON88L88 QO8NMLMM "'CB$" 8LNQ8LR88LNS8LR88LNN6L8M6L6S6L886L6M8LN66LT6 "DA%'''%'''C''" MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 TO88TOPT8L88 6OS86OPN8L88 ) *+,"- ./)0"L+0 95".K"1+ / 909+7"S+5, 4 ,+1+005+68B6NB6T68BTMB6T6TBTPB6T6TBTQB6T86B8MB6M86BM8B6M8TBTNB6M8SBTRB6M8PB8PB6M8QB8NB6S8RBTPB67 ; 09)*; 09)*L 0+L 0+ 68B6PB6T68BTMB6T6TBTPB6T6TBTQB6T86B8MB6M86BM8B6M8TBTNB6M8SBTRB6M8PB8PB6M8QB8TB6S8RBTSB67 1RJ ..,3U7 2??2??2??2??2??2??2??2??2?? 2626 22\\22\\22\\22\\22\\22\\22\\22\\22\\22\\ 22 "DA%'''%'''C''" MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 MO888O888L88 TO888O888L88 6OS88O888L88 J M6M7A7S\[7 M6MSA80=6 Q6Q8N6EET M6MSA8,3S M6M7AMT36M6MSA8\]4Q M6MPA67\]7 M6MM&2S2T M6M7AMT1M M6MMN8a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PRESENTATION OF THE CITY MANAGER’S PROPOSED BUDGET FOR FISCAL YEAR 2016-17 RESOLUTIONOFTHECITYCOUNCIL/SUCCESSORAGENCYTOTHEREDEVELOPMENT AGENCY/HOUSINGAUTHORITYOFTHECITYOFCHULAVISTAACCEPTINGTHECITY MANAGER’SPROPOSEDOPERATINGANDCAPITALIMPROVEMENTBUDGETSFORFISCAL YEAR2016-17ASTHEIRPROPOSEDBUDGETS,RESPECTIVELY,ANDSETTINGTHETIME AND PLACE FOR A PUBLIC HEARING FOR FINAL CONSIDERATION AND ADOPTION OF SAME RECOMMENDED ACTION ThattheCouncil/SuccessorAgency/HousingAuthorityhearthepresentation,providecomments,and proposedchanges.IfCouncilispreparedtoapprovethebudget,withorwithoutmodifications,asthe CityCouncilProposedBudget,theCityCouncil/SuccessorAgency/HousingAuthoritymayadoptthe resolutionandsetthetimeandplaceforapublichearingforfinalconsiderationandadoptionofthe budget. SUMMARY InaccordancewiththeCityCharter,theCityManagerhassubmittedtheproposedbudgetforthe upcomingfiscalyeartotheCityCouncilatleast35dayspriortothebeginningoffiscalyear2016-17. StaffrecommendsthattheCouncil/SuccessorAgency/HousingAuthorityhearthepresentation, providecomments,andproposedchanges(ifany).IfCouncilispreparedtoapprovethebudget,with orwithoutmodifications,astheCityCouncilProposedBudget,theCityCouncil/Successor Agency/HousingAuthoritymayadopttheresolutionandsetthetimeandplaceforapublichearing for final consideration and adoption of the budget. ENVIRONMENTAL REVIEW ENVIRONMENTAL REVIEW TheDevelopmentServicesDirectorhasreviewedtheproposedactivityforcompliancewiththe CaliforniaEnvironmentalQualityAct(CEQA)andhasdeterminedthatapprovalofthefiscalyear 2016-17CityManagerproposedbudgetastheCityCouncilproposedbudgetisnota“Project”as definedunderSection15378oftheStateCEQAGuidelinesbecauseitwillnotresultinaphysical changetotheenvironment;therefore,pursuanttoSection15060(c)(3)oftheStateCEQAGuidelines the actions proposed are not subject to CEQA. Environmental Notice Theactivityisnota“Project”asdefinedunderSection15378oftheCaliforniaEnvironmentalQuality ActStateGuidelines;therefore,pursuanttoStateGuidelinesSection15060(c)(3)noenvironmental review is required. City of Chula VistaPage 1 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 187 File#:16-0237, Item#: 13. BOARD/COMMISSION RECOMMENDATION Not applicable. DISCUSSION InaccordancewiththeCityCharter,theCityManagerhassubmittedtheproposedbudgetforthe upcomingfiscalyeartotheCityCouncilatleast35dayspriortothebeginningoffiscalyear2016-17. TheCityManagerhaspreparedandprovidedtheproposedoperatingandcapitalimprovement budgetstotheCityCouncil,andhasalsopreparedtheproposedbudgetsfortheSuccessorAgency totheRedevelopmentAgencyandtheHousingAuthority,andpresentedthemtotheirrespective governingbodies,forfiscalyear2016-2017.TheCityManager’sProposedBudgetforFiscalYear 2016-17hasbeenmadeavailableontheCity’swebsiteandahardcopyofthedocumentisavailable for public review at the City Clerk’s Office. StaffisnowseekingCityCouncilinputontheCityManager’sProposedBudgetforfiscalyear2016- 17.OnceCouncilhasapprovedtheCityManager’sProposedBudgetforfiscalyear2016-17astheir own,withorwithoutchanges,staffwillmaketheCityCouncil’sProposedBudgetforfiscalyear2016- 17availableforpublicreviewbypublishingthebudgetontheCity’swebsiteandmakingacopy available at the City Clerk’s Office at least ten days prior to the public hearing. IfCouncilchoosestoadopttheresolution,thepublichearingforthefinalconsiderationandadoption of the budget will be held on June 7, 2016. DECISION-MAKER CONFLICT Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsite- specificandconsequently,the500-footrulefoundinCaliforniaCodeofRegulationsTitle2,section 18702.2(a)(11),isnotapplicabletothisdecisionforpurposesofdeterminingadisqualifyingreal property-relatedfinancialconflictofinterestunderthePoliticalReformAct(Cal.Gov'tCode§87100, et seq.). Staffisnotindependentlyaware,andhasnotbeeninformedbyanyCityCouncil/Successor Agency/HousingAuthoritymember,ofanyotherfactthatmayconstituteabasisforadecisionmaker conflict of interest in this matter. LINK TO STRATEGIC GOALS TheCity’sStrategicPlanhasfivemajorgoals:OperationalExcellence,EconomicVitality,Healthy Community,StrongandSecureNeighborhoodsandaConnectedCommunity.Thisactionsupports theOperationalExcellencegoalbycommunicatingtheCityManager’sproposedbudgetforfiscal year2016-17inanopenandtransparentmanner.ThistransparencysupportsCityInitiative1.3.1.- “Foster public trust through an open and ethical government.” CURRENT YEAR FISCAL IMPACT There is no fiscal impact as a result of this action in the current fiscal year. ONGOING FISCAL IMPACT ThereisnofiscalimpactasaresultoftheCityCouncilacceptingtheCityManager’sProposedFiscal Year2016-17budgetastheirown.Withapprovaloftheresolution,Councilwillsetthetimeanddate for the final consideration and adoption of the fiscal year 2016-17 budget. City of Chula VistaPage 2 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 188 File#:16-0237, Item#: 13. Council changes to the proposed budget may result in a fiscal impact. ATTACHMENTS None Staff Contact: David Bilby, Finance Director City of Chula VistaPage 3 of 3Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 189 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL/SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY/ HOUSING AUTHORITYOF THE CITY OF CHULA VISTA ACCEPTING THE CITY MANAGER’S PROPOSED OPERATING AND CAPITAL IMPROVEMENT BUDGETS FOR FISCAL YEAR 2016-17AS THEIR PROPOSED BUDGETS, RESPECTIVELY, AND SETTING THE TIME AND PLACE FOR A PUBLIC HEARING FORFINAL CONSIDERATION AND ADOPTION OF SAME WHEREAS, the City Charter requires that the City Manager submit the proposed budget for the upcoming fiscal year tothe City Council at least 35 days prior to the beginning of such fiscal year; and WHEREAS, the City Manager has prepared and provided the proposed operating and capital improvement budgets to the City Council, and has also prepared the proposed budgets for the Successor Agency to the Redevelopment Agency and the Housing Authority, and presented them to their respective governing bodies, for fiscal year 2016-2017; and WHEREAS, the City Council, Successor Agency to the Redevelopment Agency and Housing Authority have received the City Manager’s budget report and the respective proposed budgets and have approved the budgets as their proposed budgets; and WHEREAS, a public hearing shall be held prior to adoption of the proposed budgets and the proposed budgets, and notice of the proposed hearing, shall be published at least ten days prior to the public hearing. NOW, THEREFORE, BE IT RESOLVED by the City Council/Successor Agency to the Redevelopment Agency/Housing Authority of the City of Chula Vista that the City Manager’s budget report for fiscal year 2016-17 is approved, and the City Manager’s proposed operating and capital improvement budgets for fiscal year 2016-17 are approved as their respective proposed budgets. BE IT FURTHER RESOLVED that a public hearing shall be held on the proposed budgets on June 7, 2016, and that the City Clerk is directed to publish the proposed budgets, in the form presented, for public inspection, and provide notice of the public hearing, at least ten days prior to the hearing date. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 190 Presented byApproved as to form by David BilbyGlen R. Googins Director of Finance/TreasurerCity Attorney ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 191 City of Chula Vista Staff Report File#:16-0236, Item#: 14. CONSIDERATION OF APPROVAL TO REFINANCE 2006 AND 2010 CERTIFICATES OF PARTICIPATION A.RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAMODIFYING,IN PART,RESOLUTIONNO.2016-058ANDAUTHORIZINGTHEDISTRIBUTIONOFAN OFFICIALSTATEMENTINCONNECTIONWITHTHEOFFERINGANDSALEOFTHE CHULAVISTAMUNICIPALFINANCINGAUTHORITY2016LEASEREVENUEREFUNDING BONDS B.RESOLUTIONOFTHECITYCOUNCILOFTHECITYOFCHULAVISTAMAKING REQUIREDFINDINGS,AUTHORIZINGTHEEXECUTIONANDDELIVERYOF DOCUMENTSRELATINGTOTHESALEANDDELIVERYOFNOTTOEXCEED $10,000,0002016REFUNDINGCERTIFICATESOFPARTICIPATION,(CIVICCENTER PROJECT),ANDAUTHORIZINGANDDIRECTINGCERTAINACTIONSINCONNECTION THEREWITH C.RESOLUTIONOFTHEBOARDOFDIRECTORSOFTHECHULAVISTAMUNICIPAL FINANCINGAUTHORITYMODIFYING,INPART,RESOLUTIONNO.2016-002AND AUTHORIZINGTHEDISTRIBUTIONOFANOFFICIALSTATEMENTINCONNECTION WITHTHEOFFERINGANDSALEOFTHECHULAVISTAMUNICIPALFINANCING AUTHORITY 2016 LEASE REVENUE REFUNDING BONDS D.RESOLUTIONOFTHECHULAVISTAPUBLICFINANCINGAUTHORITYAPPROVINGTHE EXECUTIONANDDELIVERYOFDOCUMENTSINCONNECTIONWITHTHESALEAND DELIVERYOFTHECITYOFCHULAVISTA2016REFUNDINGCERTIFICATESOF PARTICIPATION,(CIVICCENTERPROJECT)INAPRINCIPALAMOUNTNOTTOEXCEED $10,000,000ANDAUTHORIZINGANDDIRECTINGCERTAINACTIONSINCONNECTION THEREWITH. RECOMMENDED ACTION CounciladoptResolutionsAandB,MunicipalFinancingAuthorityadoptResolutionCand Public Financing Authority adopt Resolution D. SUMMARY City of Chula VistaPage 1 of 6Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 192 File#:16-0236, Item#: 14. InApril2016,theCityapprovedarefinancingofitsoutstandingCityofChulaVista2006 CertificatesofParticipationandCityofChulaVista2010CertificatesofParticipationtoreduce annualdebtservicepayments.Therefinancingwasexpectedtobeaccomplishedbythe issuanceofoneseriesofLeaseRevenueRefundingBondsissuedbytheChulaVista MunicipalFinancingAuthority(MFA).Subsequently,itwasdeterminedthattherefinancingof theCityofChulaVista2006CertificatesofParticipationshouldbecompletedbyissuing CertificatesofParticipation.Thechangeinthefinancingstructurerequiresapprovalof changes to the resolutions adopted in April as well as approval of additional resolutions. 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)to nd financethecostofthe2phaseoftheCivicCenterconstructionandtheNatureCenter.The GeneralFund’sshareoftheannualdebtserviceonthe2006COPsisapproximately22%,with thebalancepaidfromthePublicFacilitiesDevelopmentImpactFee(PFDIF)Fund.Market conditionsinsummer2015allowedtheCitytorefinanceaportionofthe2006COPsand realizeadebtservicesavingsinyears2016-2026.Thecurrentbalanceoutstandingis $8,755,000. In2010,theCitydelivered$29,355,0002010CertificatesofParticipation(2010COPs)to rd reimbursetheGeneralFundandPFDIFFundfortheconstructioncostofthe3phaseofthe CivicCenterconstruction,andtorefinancetheoriginalconstructionoftheCorporationYard improvements.TheGeneralFund’sshareoftheannualdebtserviceonthe2010COPsis approximately28%,withthebalancepaidfromPFDIF.Thecurrentbalanceoutstandingis $26.2 million. AspresentedinApril2016,theCityhastheopportunitytorefinanceeachseriesofCOPsat today’sfavorableinterestrates,andreducetheannualpaymentspayablefromtheGeneral FundandthePFDIFfund.Currently,staffexpectsthattheremaining2006COPsmaturing City of Chula VistaPage 2 of 6Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 193 File#:16-0236, Item#: 14. between2027and2036canberefinancedtoproduceatotalnetsavingsofapproximately $790,000,ora6.2%reductionintotalpaymentsoverthoseyears.Thepresentvalueofthe savingsfromrefinancingis5.9%,whichishigherthantheCity’sdebtpolicy5%savings minimum requirement. This estimate is lower than the April 2016 estimate (which was 7.5%). Staffexpectsthat2010COPscanberefinancedtosave$250,000annuallyfor15years, reducingnetdebtservicepaymentsby9.5%inthoseyears.Someofthesesavingsresultfrom beingabletoeliminateareservefundforthebondsbecauseoftheCity’sAA-creditrating. Thereservefundthatcurrentlyexistswouldhaveoffsetthefinalpaymentonthe2010COPs, butnowthesavingsthatwouldhavebeenrealizedonlyinthefinalyearwillberealizedover timethroughlowerannualdebtserviceinsteadofatfinalmaturity.Basedontoday’sratesthe presentvalueofthesavingsfromthisrefinancingis7%,higherthantheApril2016estimate (which was 5.6%). ThesavingsfromtherefinancingwillbesharedbetweentheGeneralFundandthePFDIF Fundinthesameratioasthecurrentfunding.ThetotalGeneralFundshareoftheannual savingsisestimatedat$70,000for15years,withanadditional$20,000ofsavingseachyear between2027and2036,foratotal$1.25millionover20years.Thebalanceofthesavingswill accrue to the PFDIF Fund. No extension of existing maturity of either series of COPs is contemplated. Financing Structure The2006COPsarecurrentlysecuredbyleasepaymentspayabletotheChulaVistaPublic FinancingAuthority(PFA)withrespecttoaleaseoftheCivicCenterProperty,FireStationNo. 7andMontevallePark.The2010COPsarecurrentlysecuredbyleasepaymentspayableto thePFAwithrespecttoaleaseoftheCorporationYardandFireStations4,6and8.TheApril approvalscontemplatedthattherefinancingofthe2006COPswouldbecombinedwiththe refinancingofthe2010COPsandsecuredbyaleaseofthepropertiescurrentlysecuringthe 2010Certificates.Afterfurtheranalysis,combiningthe2006COPsandthe2010COPswould require the City to encumber additional city facilities to do a single refinancing. Staffhasconcludedthatthefinancialbenefitsofcombiningthe2006COPsrefinancingwiththe 2010COPsrefinancing(areductioninthecostsofissuance)donotoutweighthedisadvantage ofencumberingadditionalcityfacilities.The2006COPscanberefinancedonastand-alone basisthroughtheissuanceofRefundingCertificatesofParticipation(2016COPs)securedby thesamepropertycurrentlysecuringthe2006COPs.TheCouncil,theMFABoardandthe PFA Board are required to adopt resolutions to provide for this revised financing structure. Separatingtherefinancingsintotwotransactionsdoesincreasetheexpectedcostsofissuance somewhat;however,theincreasedcostswillnothaveamaterialimpactonthedebtservice savingsestimates.Basedonabondsizeof$36,000,000torefinanceboththe2006COPsand the2010COPs,costsofissuancewereestimatedatapproximately$400,000.Withtwo separateseriesofapproximately$28millionand$8million,costsofissuancewillincreaseby approximately$45,000.Thelargestcomponentofthisrelatestotheseparateratingfeesthat willbechargedbyMoody’sandS&P(increaseof$17,000),sincethereisaminimumfeeeach issue.TheFinancialAdvisorfeeincreasesby$7,500forpreparationofasecondofficial statement,thetrusteefeeincreasesby$4,200fortheadministrationofaseparateseriesof 2016COPsandthebondanddisclosurecounselfeeincreasesby$7,000fortheseparate documentationrequiredforthesecondseriesof2016COPs.Thereareotherminorcost City of Chula VistaPage 3 of 6Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 194 File#:16-0236, Item#: 14. increases.ThecostsofissuancearecontingentandpaidonlyfromproceedsoftheMFABonds and the 2016 COPs. ModificationtoAprilApprovalsforMFABonds.InApril,afterconductingapublichearing,the CouncilandtheMFABoardadoptedresolutionsapprovingtherefinancingofboththe2006 COPsandthe2010COPsthroughtheissuanceofLeaseRevenueRefundingBonds(MFA Bonds),afterconductingapublichearing.ChangestotheresolutionsadoptedbytheCouncil andtheMFAarenecessarytoreflectthatonlythe2010COPswillberefinancedbytheMFA Bonds.Thesechangesreducethemaximumbondamount,whichislowerduetotheexclusion ofthe2006COPs,andapproveanewdraftpreliminaryofficialstatement.TheMFABondswill besecuredbyaleasewhichincludesonlytheCorporateYardandthethreefirestations included in the current lease securing the 2010 COPs. Approvalsfor2016COPs.Staffisrecommendingthatthe2006COPsberefinancedonparity withtheoutstanding2015CertificatesofParticipationthatwereissuedlastyeartorefunda portionofthe2006COPs.Thiswillbeaccomplishedthroughresolutionstobeadoptedbythe CouncilandthePFABoardauthorizingcertainamendmentstotheexistingdocumentsforthe 2006COPsandthe2015COPs,thesaleofthe2016COPsinanamountnot-to-exceed $10,000,000andapprovingtheformofthepreliminaryofficialstatement.The2016COPswill besecuredbyaleaseofthesameCityassetscurrentlysecuringthe2006COPsandthe2015 COPs. Authorization and Sale InordertoamendtheauthorizationfortheissuanceoftheMFABondsandtoauthorizethe 2016COPs,theCouncil,theMFABoardandthePFABoardhavebeenpresentedwith resolutions for their consideration. MFALeaseRevenueBonds.WithrespecttotheMFABonds,theCityandMFAresolutions modifytheAprilresolutions,inpart,tolimittheMFABondstotherefinancingofthe2010COPs andreducethenot-to-exceedparamountthatcanbeissuedto$30,000,000(fromthe previouslyapproved$40,000,000)andapprovetheformofthePreliminaryOfficialStatement for the MFA Bonds. 2016RefundingCertificatesofParticipation.TheCityandPFAresolutionsforthe2016COPs approve the form of the following documents to be used in connection with the refinancing: SecondSupplementtoAmendedandRestatedTrustAgreementbetweentheCity,the PFA and the Trustee; Third Amendment to Lease/Purchase Agreement between the City and the PFA; Third Amendment to Assignment Agreement between the PFA and the Trustee; PurchaseContractbetweentheCity,thePFAandStifelNicolaus&Company, Incorporated 2006EscrowAgreementbetweentheCity,thePFAandtheU.S.Bank(asEscrow Bank); Preliminary Official Statement; and Continuing Disclosure Agreement City of Chula VistaPage 4 of 6Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 195 File#:16-0236, Item#: 14. Theresolutionsforthe2016COPsalsoapprovethedistributionofthepreliminaryofficial statementrelatingtothe2016COPsandauthorizetheexecutionofthePurchaseContractby theCityManager,DeputyCityManagerorDirectorofFinanceandthePFAExecutiveDirector orChiefFinancialOfficer,aswellasprovidecertainsaleparameters.Theseparametersare: (1)theparamountofthe2016COPscannotexceed$10,000,000,(2)thepresentvalue savingsforthe2016COPsmustbeatleast5%oftheprincipalamountofthe2006COPs beingrefunded,and(3)theunderwriter’sdiscountcannotexceed0.6%oftheparamountofthe 2016 COPs. PreliminaryOfficialStatements.Thepreliminaryofficialstatementswerepreparedbystaffand thefinancialadvisor,withinputfromtheCity’sbondanddisclosurecounsel.TheCouncil’s reviewofthedescriptionoftheCityandtheCity’sFinancialInformationcontainedinthe preliminaryofficialstatementsisrequestedtobemadeinaccordancewiththeCity’sDisclosure Policiesandanyrequestedchangeswillbeincorporatedpriortopostingthepreliminaryofficial statementsinadvanceofthesaleoftheMFABondsandthe2016COPsonoraboutJune7, 2016.Thepreliminaryofficialstatementswillcontinuetobeupdateduntilthen,includingfor theFiscalYear2016/17budgetinformationpresentedtotheCityCouncil,priortousein marketing the MFA Bonds and the 2016 COPs to investors. Financing Team TheCityconsultedwiththefollowingconsultantstofacilitatethisproposedrefunding:Financial Advisor-SuzanneHarrellofHarrell&Associates;BondCounsel-RobertJ.Whalenof StradlingYoccaCarlson&Rauth,P.C.;andUnderwriter-SaraOberliesBrownandHollyVocal of Stifel. DECISION-MAKER CONFLICT Staffhasreviewedthedecisioncontemplatedbythisactionandhasdeterminedthatitisnotsite- specificandconsequently,the500-footrulefoundinCaliforniaCodeofRegulationsTitle2,section 18702.2(a)(11),isnotapplicabletothisdecisionforpurposesofdeterminingadisqualifyingreal property-relatedfinancialconflictofinterestunderthePoliticalReformAct(Cal.Gov'tCode§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.Refundingthese CertificatesofParticipationpromotesOperationalExcellence,EconomicVitalitybyreducingdebt service payments in future years. CURRENT YEAR FISCAL IMPACT There is no fiscal impact in the current Fiscal Year 2015/16. ONGOING FISCAL IMPACT City of Chula VistaPage 5 of 6Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 196 File#:16-0236, Item#: 14. Theon-goingfiscalimpacttotheGeneralFundandthePFDIFFundwillbetoreduceannual leasepaymentsbyapproximately$250,000for15yearsandanother$90,000fora9year periodbeginningin2027.Basedonthepaymentratios,theGeneralFundsavingsisestimated at$70,000annuallyfor15yearstogetherwith$20,000annuallyfor9yearsbeginningin2027. ThePFDIFFundsavingsisestimatedat$180,000annuallyfor15yearstogetherwith$70,000 annually for 9 years beginning in 2027. ATTACHMENTS 1.Preliminary Official Statement ( MFA Bonds) 2.Second Supplement to Amended and Restated Trust Agreement (2016 COPs) 3.Third Amendment to Lease/Purchase Agreement (2016 COPs) 4.2006 Escrow Agreement (2016 COPs) 5.Third Amendment to Assignment Agreement (2016 COPs) 6.Purchase Contract (2016 COPs) 7.Continuing Disclosure Agreement (2016 COPs) 8.Preliminary Official Statement (2016 COPs) Staff Contact: Mike Sylvia, MBA CPFO, Finance & Purchasing Manager City of Chula VistaPage 6 of 6Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 197 PRELIMINARY OFFICIAL STATEMENT DRAFT DATED MAY 16, 2016 umstances shall e of these securities in any NEW ISSUERATING BOOK-ENTRY S&P: “__” Moody’s: “__” (See “ - Ratings on the Bonds” herein) CONCLUDING INFORMATION This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circ 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 te an offer to sell or a solicitation of an offer to buy nor shall there be any sal 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 “” herein. TAX MATTERS urisdiction. SAN DIEGO COUNTY STATE OF CALIFORNIA $28,000,000* CHULA VISTA MUNICIPAL FINANCING AUTHORITY j would be unlawful under the securities laws of such LEASE REVENUE REFUNDING BONDS, SERIES 2016 Dated: Date of DeliveryDue: 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 ” herein for a discussion of special risk factors that should be considered in evaluating the investment quality of the FACTORS Bonds. The Chula Vista Municipal Financing Authority Lease Revenue Refunding Bonds, Series 2016 (the “Bonds”) are being issued to (i) refinance a lease and certain related outstanding certificates of participation, 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 “” and “” herein. SOURCES OF PAYMENT FOR THE BONDSRISK FACTORS 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 “ - General Provisions” and “ - Redemption” herein. THE BONDSTHE BONDS 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 urisdiction in which such offer, solicitation or sale 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 this Preliminary Official Statement constitu 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 June 21, 2016 through the facilities of The Depository Trust Company (see “ - ” herein). APPENDIX ETHE BOOK-ENTRY SYSTEM The date of the Official Statement is ________, 2016. j __________________________ * Preliminary, subject to change. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 198 $28,000,000* CHULA VISTA MUNICIPAL FINANCING AUTHORITY LEASE REVENUE REFUNDING BONDS, SERIES 2016 MATURITY SCHEDULE ® (Base CUSIP† _______) Maturity Date Principal Interest Reoffering Reoffering ® May 1 Amount Rate Yield PriceCUSIP† 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 __________________________ * Preliminary, subject to change. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the Authority, the City, the Municipal Advisor or the Underwriter and are included solely for the convenience of the holders of the Certificates. None of the Authority, the City, the Municipal Advisor or the Underwriter is responsible for the selection or use of these CUSIP numbers, and no representation is made as to their correctness on the Certificates or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the execution and delivery of the Certificates as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity 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 Certificates. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 199 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 - Summaries Not Definitive.” information. See “ INTRODUCTION 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. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 200 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 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 201 TABLE OF CONTENTS INTRODUCTION ...................................................... 1 Motor Vehicle License Fees ..................................... 33 The City and the Authority ........................................ 1Public Facilities Development Impact Fees ............. 33 Purpose ...................................................................... 1Personnel .................................................................. 35 Security and Sources of Repayment .......................... 2Employee Relations and Collective Bargaining ....... 35 Limited Obligation ..................................................... 3Retirement Programs ............................................... 35 No Reserve Fund ....................................................... 3Defined Contribution Pension Plan .......................... 41 Legal Matters ............................................................. 3Other Post Employment Benefits ............................. 42 Professional Services ................................................. 3Risk Management .................................................... 44 Offering of the Bonds ................................................ 3City Investment Policy and Portfolio ....................... 45 Summaries Not Definitive ......................................... 3Outstanding Indebtedness of the City ...................... 46 Direct and Overlapping Debt ................................... 47 THE FINANCING PLAN .......................................... 4 Financial Statements ................................................ 48 The Refunding Program............................................. 4 RISK FACTORS ....................................................... 53 Verification ................................................................ 4 Estimated Sources and Uses of Funds ....................... 5The Base Rental Payments ....................................... 53 Seismic Considerations ............................................ 54 THE LEASED PROPERTY ...................................... 5 State Budget ............................................................. 55 THE BONDS ............................................................... 6 Limited Recourse on Default; No Acceleration ....... 56 General Provisions ..................................................... 6Enforcement of Remedies ........................................ 56 Redemption ................................................................ 6Bankruptcy ............................................................... 57 Scheduled Debt Service on the Bonds ....................... 9Constitutional Limitation on Taxes and Expenditures ......................................................... 57 SOURCES OF PAYMENT FOR THE BONDS ..... 10 Early Redemption Risk ............................................ 61 General ..................................................................... 10 Loss of Tax Exemption ............................................ 62 Base Rental Payments; Abatement .......................... 10 IRS Audit of Tax-Exempt Bond Issues .................... 62 No Reserve Fund ..................................................... 11 Secondary Market Risk ............................................ 62 Insurance Relating to the Property ........................... 11 TAX MATTERS ........................................................ 62 Remedies on Default ................................................ 12 CITY OF CHULA VISTA ........................................ 13LEGAL MATTERS .................................................. 62 General Information ................................................. 13Enforceability of Remedies ...................................... 62 General Organization ............................................... 13Approval of Legal Proceedings ................................ 63 Governmental Services ............................................ 14Absence of Litigation ............................................... 63 Community Facilities and Services ......................... 14 CONCLUDING INFORMATION .......................... 63 Transportation .......................................................... 15 Ratings on the Bonds ............................................... 63 Population ................................................................ 16 Underwriting ............................................................ 64 Per Capita Personal Income ..................................... 16 The Municipal Advisor ............................................ 64 Employment ............................................................. 17 Continuing Disclosure ............................................. 64 Industry .................................................................... 18 References ................................................................ 65 Largest Employers ................................................... 19 Execution ................................................................. 65 Commercial Activity ................................................ 19 APPENDIX A - SUMMARY OF PRINCIPAL Building Activity ..................................................... 21 LEGAL DOCUMENTS FINANCIAL INFORMATION ............................... 21 APPENDIX B - CITY AUDITED FINANCIAL Fiscal Policies .......................................................... 21 STATEMENTS Budgetary Process and Administration .................... 24 Economic Conditions and Outlook .......................... 24 APPENDIX C - FORM OF CONTINUING Revenues and Expenditures ..................................... 25 DISCLOSURE AGREEMENT Ad Valorem Property Taxes ..................................... 28 APPENDIX D - PROPOSED FORM OF BOND Taxable Property and Assessed Valuation ................ 28 COUNSEL OPINION Redevelopment Agencies ......................................... 29 Largest Taxpayers .................................................... 30 APPENDIX E - THE BOOK-ENTRY SYSTEM State Legislative Shifts of Property Tax Allocation . 31 Local Taxes .............................................................. 31 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 202 OFFICIAL STATEMENT $28,000,000* 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 “” herein). CITY OF CHULA VISTA 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 refinance an existing Lease and to advance refund the City’s outstanding 2010 Certificates of Participation (Capital Facilities Refunding Projects) (the “2010 Certificates”) and pay ” herein. the costs of issuance of the Bonds. See “ THE FINANCING PLAN __________________________ * Preliminary, subject to change. 1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 203 Security and Sources of Repayment The Bonds are secured under an Indenture, dated as of June 1, 2016, (the “Indenture”), by and between the Authority and U.S. Bank National Association, Los Angeles, California, as trustee (the “Trustee”) (see “”herein). APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS 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 ” herein. the Base Rental Payments, the “Revenues”). See “ THE LEASED PROPERTY Pursuant to a Site Lease, dated as of June 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 June 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 June 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 ” herein. Certain capitalized terms used in this Official Statement and not otherwise LEGAL DOCUMENTS 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 ” herein). FACTORS 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 2 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 204 of California (see “ - Limited Recourse on Default; No Acceleration” herein). The form of RISK FACTORS 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. Legal Matters Certain legal matters relating to the issuance of the Bonds are subject to the approving opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel. Certain legal matters will be passed on for the City and the Authority by Glen R. Googins, as City Attorney and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel, and for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, San Francisco, California. Professional Services U.S. Bank National Association, Los Angeles, California, serves as Trustee under the Indenture. Harrell & Company Advisors, LLC (the “Municipal Advisor”) has advised the City as to the financial structure and certain other financial matters relating to the Bonds. Fees payable to Bond Counsel, Disclosure Counsel and the Municipal Advisor are contingent upon the sale and delivery of the Bonds. Offering of the Bonds Authority for Issuance and Delivery. The Bonds are to be issued pursuant to Section 53570 et seq. of the California Government Code, the Indenture and by Resolution No. ___ of the Authority adopted on May 24, 2016. Offering and Delivery of theBonds. The Bonds are offered, when, as and if issued, subject to the approval as to their legality by Bond Counsel. It is anticipated that the Bonds, in book-entry form, will be available for delivery on or about June 21, 2016 through the facilities of The Depository Trust Company. 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 3 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 205 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. 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 an Escrow Agreement, dated as of June 1, 2016 (each, an “Escrow Agreement”) by and between the City and the Escrow Bank. The deposits will be in an amount sufficient, together with earnings thereon, to pay interest and principal with respect to the 2010 Certificates through and including March 1, 2020, and to 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 Agreement, 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 and investments listed in the schedules prepared by the Municipal Advisor, to be held in escrow, will be sufficient together with earnings thereon to pay the principal and interest requirements to and including March 1, 2020 and the prepayment price of the 2010 Certificates on March 1, 2020 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. 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. 4 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 206 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 2010 Certificates Reserve Fund Available Funds Uses of Funds Transfer to Escrow Bank Underwriter’s Discount (1) Costs of Issuance Fund 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 55, 745 square foot auto and truck garage, 42,210 square foot spaces essential to many City operations, such as a 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 “ Seismic Considerations”). The Leased Property is not located in a 100-year Flood Plain. RISK FACTORS - 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 Substitution of Property” and “- Release of Property.” DOCUMENTS - SUBLEASE - 5 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 207 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 “” herein). As APPENDIX E - THE BOOK-ENTRY SYSTEM 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 6 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 208 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. - Insurance Relating to the Property.” There can be no See “ SOURCES OF PAYMENT FOR THE BONDS - The Base assurance that such proceeds will be adequate to redeem all of the Bonds (see “ RISK FACTORS 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. 7 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 209 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. 8 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 210 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 PrincipalInterestTotal 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. 9 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 211 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 10 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 212 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 “ - The Base Rental Payments - Base Rental Payments are Limited RISK FACTORS 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. 11 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 213 See “ - Insurance” and “ APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - SUBLEASERISK - The Base Rental Payments - Insurance” herein. FACTORS 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 - Events of Default.” SUBLEASE 12 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 214 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 2015-16, the City had 966 authorized full-time staff positions including sworn officers and fire personnel and has budgeted 984.25 positions in Fiscal Year 2016-17. Including part-time personnel, the City employs approximately ____ 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, MayorDecember 2018 John McCannDecember 2018 Patricia Aguilar December 2018 Pamela Bensoussan December 2016 Steve MiesenDecember 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 13 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 215 Governmental Services Public Safety and Welfare For Fiscal Year 2016-17, the City of Chula Vista Police Department has authorized total positions of ___, 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 __ 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. 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 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. 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 14 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 216 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. 15 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 217 Population The following table provides a comparison of population growth for Chula Vista and San Diego County between 2012 and 2016. TABLE NO. 1 CHANGE IN POPULATION CHULA VISTA AND SAN DIEGO COUNTY 2012 – 2016 CHULA VISTA SAN DIEGO COUNTY January 1 Percentage Percentage Year Population Change Population Change 2012 250,864 3,153,951 2013 256,741 2.3% 3,194,778 1.3% 2014 260,765 1.6% 3,230,278 1.1% 2015 263,347 1.0% 3,263,848 1.0% 2016 265,070 0.7% 3,288,612 0.8% % Increase Between 2012 - 2016 5.7% 4.3% __________________________________________ Source: State of California, Department of Finance, “E-4 Population Estimates for Cities, Counties, and the State, 2011-2016, with 2010 Census Benchmark” Sacramento, California, May 2016. 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. 16 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 218 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 Civilian Unemployment Year Labor Force EmploymentUnemployment 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. 17 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 219 Industry The City is located in the San Diego-CarlsbadMetropolitan 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 (1) WAGE AND SALARY WORKERS BY INDUSTRY (in Thousands) Industry 2011 2012 2013 2014 2015 Government 229.8231.2 233.1 236.6 240.3 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 ServiceProducing 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.” 18 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 220 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 3,135Education Rohr Inc./Goodrich Aerospace 2,468 Aerospace Manufacturing Southwestern Community College 1,918 Education Sharp Chula Vista Medical Center 1,878Hospital 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 “ - Local Taxes.” FINANCIAL INFORMATION 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.” 19 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 221 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 Services1,976,176 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.” 20 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 222 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 YearUnitsValuationBuildingsValuation 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. 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 willbe managed ina sound and prudent manner in order toensurethe continuedviability 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 recurringexpenditures.One-time revenues willbe used forcapital, reserveaugmentation,orother nonrecurring expenditures. Accounting systems will be maintained in accordance with Generally Accepted Accounting Principles. 21 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 223 Investment policy and practice willbein accordancewith State statutes thatemphasize safety and liquidity over yield, including quarterly status reportstotheCity Council. City operations will be managed and budgets preparedwith the goal of maintaining an available fundbalance in the GeneralFundofno less than 15% of the General Fund operating budget. General Fund fiscal status reportsreflecting comparisons of actual and projected performance with budgetallocations forboth revenueandexpenditures will bepresented 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, 2016 is expected to be ___% and the Economic Contingency Reserve is expected to be ___%. To date, the Catastrophic Event Reserve has not been funded. Revenue The City will endeavor to maintain a diversified and stable revenue base inorder to minimize the impact to programs from short-term economic fluctuations. Revenueprojectionswill be maintained for the current year andfour future fiscal years,and estimates will be basedonaconservative, analytical, andobjective process. In order tomaintain flexibility, except as required by law or funding source, the City will avoid earmarking any restricted revenues for a specific purpose or program. TheCity has established user fees to best ensurethat those whousea proprietary servicepayfor thatservicein proportion to the benefits received. With few exceptions, such as thoseservices 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 toensure that program costs continue tobe recovered and that the feesreflect changesinlevels of service delivery. TheCity willrecover the cost of newfacilities and infrastructure necessitated bynewdevelopment consistentwithStatelawandtheCity’s GrowthManagement Program. DevelopmentImpact Fees willbecloselymonitored and updated to ensure that they are maintained at a leveladequate to recovercosts. When considering newdevelopment alternatives, theCity will attempt todetermine thefiscal impact of proposed projects,annexations,etc.and ensure that mechanisms areputinplaceto providefunding for any projected negativeimpacts on City operations. Expenditures Budgetarycontrolwillbeexercised at theDepartment/category level,meaning that each department is authorizedto spend up to the total amount appropriated for that department within theexpenditure categories of Personnel Costs, Supplies &Services, Other Charges, Utilities,and Capital.Transfers ofappropriationsbetween expenditure categories of up to $15,000 may be 22 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 224 approved by the City Manager. Transfers of appropriations between expenditure categories in excess of $15,000, orbetween departments requireCity Council approval. Appropriations, other than for capital projects, remaining unspent at the end of any fiscal year will becancelled and returned to Available FundBalancewiththe exception of any appropriations encumbered astheresultof a validpurchase order or as approved for a specific project orpurpose by the CityCouncilor theCity Manager. Appropriations for capital projects willnecessarilybe carried over from yeartoyear until the project is deemed to be complete. TheCity will establish and maintain equipment replacement and facility maintenance funds as deemed necessary to ensure that monies are setaside andavailable tofund ongoing replacement needs. TheCity will attempt to compensate non-safety employees at rates above the middleofthelabor marketas measured by the median rate for similar jurisdictions. Capital Major capital projects willbeincluded in a capital improvement program budget (the “CIP Budget”) reflecting a five-year period. The CIP Budgetwillbe updated annually and presented to City Council for approval. Resources willbe formally appropriated (budgeted)for the various projects on anannual basis in accordance with the five-year plan. Capital Financing andDebtManagement TheCity willconsidertheuse of debt financing onlyforone-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 withbond legal covenants,including adherence to continuing disclosure requirements and federal arbitrage regulations. Inaddition to externally financeddebt, the City utilizes inter-fund loans wheneverpossible to reduce borrowing costsor provide for shorter term loans. When interest is charged oninternal loans,it is done at the same rate the City earns from itspooled 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 2016-2020. The City also adopted a Strategic Plan in 2012. The recently developed Long-Term 23 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 225 Financial Plan is anticipated to be adopted with the 2016-17 Budget. 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 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, 2017, 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 showed that sales tax revenues was increasing 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 2015-16 budget was prepared, and 4.7% or $1.4 million more than the 2014-15 actual sales tax. Current year 2015-16 trends show sales tax revenues improving, and continuing with this trend, sales taxes are estimated to grow 3% from the current projections (excluding one-time Triple Flip projected revenues described under “State Legislative Shifts of Property Tax Allocation” below). 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 three fiscal years the City’s assessed 24 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 226 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%. The trend is anticipated to continue and a 4% increase in assessed valuation is projected in fiscal year 2016-17. 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. Taking the trend into account, TOT is anticipated to be $3.7 million in 2016- 17. Staffing Levels. As revenues have improved, the City has continued the trend of slowly recovering it’s as a result of staffing levels previously reduced from 1,264 to 933 full time equivalent positions (“FTE”) the great recession. Since Fiscal Year 2011-12 the City has been able to achieve a modest increase in staffing, managing to keep pace with the population increase over the same time period, resulting in no net increase in FTE positions since 2011-12 of 3.7 FTE positions per 1,000 residents. 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 equaled 15.3% of the City’s General Fund in the Fiscal Year 2015-16 budget and are estimated at $23.7 million in 2016-17, or 16.2% of the Fiscal Year 2016-17 proposed budget. Over the last several years CalPERS has made a series 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. Revenues The largest components of budgeted Fiscal Year 2016-17 General Fund revenues (including transfers) are sales tax (22.1%), property tax (21.3%) and property tax in lieu of motor vehicle license fees (13.4%). 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); 25 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 227 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 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 52.8% 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 Years 2013-14 and 2014-15 the budget for Fiscal Year 2015-16 and the proposed budget for Fiscal Year 2016-17. Historical financial information is shown in Table No. 24. 26 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 228 TABLE NO. 9 CITY OF CHULA VISTA GENERAL FUND REVENUES AND EXPENDITURES 2013-14 2014-15 2015-16 2016-17 Actual Budget Actual Budget Revenues: Property Tax $ 28,492,215 $ 29,705,939 $ 29,896,924 Property Tax in Lieu of MVLF 16,773,957 17,779,353 18,597,204 Sales Tax 29,171,174 30,394,291 31,830,591 (1) Other Taxes 31,281,292 22,858,848 23,079,601 Licenses and Permits 1,315,445 1,281,656 1,309,447 Intergovernmental Revenue 2,477,214 1,933,114 2,789,541 Fines, Forfeitures and Penalties 1,009,736 1,638,251 1,133,800 Use of Money & Property 2,522,915 2,832,039 2,676,807 (2) Charges for Services 9,257,946 9,430,097 7,701,176 Other Revenue 1,381,502 3,538,553 940,970 Reimbursements from Other Funds 10,199,020 9,273,303 9,759,977 (2) Transfers In 9,571,300 9,994,525 9,988,321 Total Revenues 143,453,716 140,659,969 139,704,359 Expenditures: General Government 18,316,773 20,841,178 19,433,341 Public Safety - Police 43,683,206 46,484,920 48,608,964 Public Safety - Fire 25,093,218 26,024,758 24,680,343 Public Works 27,092,607 27,822,644 29,404,880 Recreation and Library 6,925,073 7,273,387 7,982,168 Planning and Building 2,269,389 2,464,305 2,476,400 Capital Outlay 849,234 1,081,105 1,019,016 (1) Transfers Out 14,234,482 6,082,780 6,099,247 Total Expenditures 138,463,982 138,075,077 139,704,359 Net Change in Fund Balances 4,989,734 2,584,892 - Beginning Unassigned Fund Balance 10,790,135 14,511,252 14,554,698 Change in Reserves (1,268,617) (683,266) - (3) Ending Unassigned Fund Balance $ 14,511,252 $ 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. 27 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 229 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 “ - Constitutional Limitation on Taxes and Expenditures - Article XIIIA” and “- Proposition RISK FACTORS 8 Adjustments” herein. 28 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 230 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)CollectionsLevy 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 29 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 231 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 “ - State Budget; RISK FACTORS Redevelopment Agency Legislation.” TABLE NO. 12 CITY OF CHULA VISTA TOTAL AND NET PROPERTY TAX VALUATIONS Total Redevelopment FiscalAssessed 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 2015-16 24,215,624,344 (1,344,869,101) 22,870,755,243 4.8 ____________________________________ 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 Valuation of Total Taxpayer 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. 30 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 232 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 - Constitutional Limitation on Taxes and Expenditures - Proposition 62” and “- (see “ RISK FACTORS 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 31 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 233 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 “ - The RISK FACTORS 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. 32 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 234 TABLE NO. 14 CITY OF CHULA VISTA TAX REVENUES BY SOURCE Budget Budget 2013 2014 2015 2016 2017 Property Tax $27,876,534 $ 28,492,215$ 29,705,939 $ 29,896,924 $ 31,175,000 Property Tax In Lieu of VLF (1) 16,253,826 16,773,957 17,779,353 18,597,204 19,692,000 Sales Tax 28,627,785 29,171,174 30,394,291 31,830,591 32,350,000 Franchise Fees 9,266,768 8,845,067 10,831,671 11,426,283 11,796,000 (2) Utility Users Tax 4,428,794 17,525,294 6,364,691 6,500,000 6,380,000 Transient Occupancy Tax 2,471,252 2,632,774 3,136,847 2,890,853 3,655,000 Business License Tax 1,260,622 1,328,554 1,407,145 1,429,643 1,430,000 Property Transfer Tax 1,125,252 949,603 1,118,494 832,822 1,018,000 Total $91,310,833 $105,718,638 $100,738,431 $103,404,320 $107,496,000 ____________________________________ (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 $19.7 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, the City reflected the VLF in “Intergovernmental Revenues” in Fiscal Year 2010-11 and 2012-13 and in all other years in “Taxes.” 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 .” The City utilizes the PFDIF to offset the cost of B - CITY AUDITED FINANCIAL STATEMENTS 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, 2016 is expected to be approximately $__ million and the interfund loans due to other funds from the PFDIF is expected to be $___ million. 33 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 235 FiscalPFDIF Year 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 Estimate _________ 2016-17 Budget _________ ____________________________________ (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 $___ 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 $___ million fund balance. 34 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 236 Personnel Employee salaries and benefits account for over 80% of the City’s General Fund expenditures estimate for Fiscal Year 2016-17. 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 2016-17 based on authorized, budgeted full-time equivalent positions. TABLE NO. 15 CITY OF CHULA VISTA CITY PERSONNEL Number of Full TimeEmploees Per y Fiscal Year Permanent Employees 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 3.60 2016-17 984 3.70 ____________________________________ Source: City of Chula Vista. 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 This caption contains certain information relating to the California Public Employees Retirement System (“CalPERS”). The information is primarily derived from information produced by CalPERS, its independent accountants and its actuaries. The City has not independently verified the information provided by CalPERS and makes no representations nor expresses any opinion as to the accuracy of the information provided by CalPERS. The comprehensive annual financial reports of CalPERS are available on its Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information concerning benefits and other matters. The textual reference to such Internet website is provided for convenience only. None of the information on such Internet website is incorporated by reference herein. The City cannot guarantee the accuracy of such information. Actuarial assessments are “forward-looking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or be changed in the future. Plan Description. The City provides retirement benefits, disability benefits, periodic cost-of-living adjustments, and death benefits to plan members and beneficiaries (the “Plans”). The Plans are part of CalPERS, an agent multiple-employer plan administered by CalPERS, which acts as a common investment 35 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 237 and administrative agent for participating public employers within the State. Benefit provisions are established by State statute and by City contracts with employee bargaining groups. The Plans as described herein covers three separate employee groups – Miscellaneous, Safety Fire and Safety Police. 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” or “PEPRA”), which made changes to CalPERS Plans, most substantially affecting new employees hired after January 1, 2013 (the “Implementation Date”). For non-safety CalPERS participants hired after the Implementation Date, the Reform Act changed the normal retirement age by increasing the eligibility for the 2% age factor from age 55 to 62 and increased the eligibility requirement for the maximum age factor of 2.5% to age 67. The Reform Act also: (i) requires all new participants enrolled in CalPERS 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 to a maximum of 8% of salary, (ii) requires CalPERS 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. Benefit Tiers. In 2011 the City established two tiers of benefits for employees in each of the employee plans (Miscellaneous, Safety Fire and Safety Police), based on date of hire (“Tier 1” and “Tier 2”). Benefits were reduced for Tier 2 employees hired on or after April 22, 2011. Due to PEPRA, the City added a benefit tier in each employee group for employees subject to PEPRA (“PEPRA Tier”). 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. The Plans’ provisions and benefits in effect at June 30, 2015, are summarized as follows: Miscellaneous Plan Tier 1Tier 2PEPRA Tier Benefit Formula3% at 60 2% at 60 2% at 62 Benefit Vesting Schedule 5 years 5 years 5 years Earliest Retirement Age 505052 Maximum Benefit Factor 2.0% to 3.0% 1.092% to 2.418% 1.0% to 2.5% Final Compensation 12 months 36 months 36 months Required Employee Contribution Rates 8.0% 7.0% 6.25% Required Employer Contribution Rates 26.235% 26.235% 26.235% 36 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 238 Safety Fire Plan Tier 1Tier 2PEPRA Tier Benefit Formula3% at 503% at 552.7% at 57 Benefit Vesting Schedule 5 Years5 Years5 Years Earliest Retirement Age 505050 Maximum Benefit Factor 3.0%2.4% to 3.0%2.0% to 2.7% Final Compensation 12 Months36 Months36 Months Required Employee Contribution Rates 9.0%9.0%12.25% Required Employer Contribution Rates 28.857%28.857%28.857% Safety Police Plan Tier 1Tier 2PEPRA Tier Benefit Formula3% at 503% at 552.7% at 57 Benefit Vesting Schedule 5 Years5 Years5 Years Earliest Retirement Age 505050 Maximum Benefit Factor 3.0%2.4% to 3.0%2.0% to 2.7% Final Compensation 12 Months36 Months36 Months Required Employee Contribution Rates 9.0%9.0%12.25% Required Employer Contribution Rates 28.857%28.857%28.857% Funding Policy. Active members in the Plans are required to contribute a percent of their annual covered salary as shown in the charts above. All employees pay their own employee contributions towards retirement. Actuarial Methods and Assumptions Used to Determine Total Pension Liability. The total pension liabilities in the June 30, 2013 actuarial valuations, rolled forward to June 30, 2014, using standard update procedures, were determined using the following actuarial assumptions: Valuation Date June 30, 2013 Measurement Date June 30, 2014 Actuarial Cost Method Entry-Age Normal Cost Method Actuarial Assumptions: Discount Rate 7.5% Inflation 2.75% (1) Projected Salary Increase Varies (2) Investment Rate of Return 7.5% (3) Mortality Post Retirement Benefit Increase Contract cost of living adjustment up to 2.75% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.75% thereafter ____________________________________ (1) Varies by entry age and service. (2) Net of pension plan investment and administrative expenses, including inflation. (3) The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the CalPERS 2014 Experience Study. 37 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 239 All other actuarial assumptions used in the June 30, 2013 valuation were based on the results of a January 2014 actuarial experience study (“Experience Study”) for the period 1997 to 2011. Further details of the Experience Study can be found on the CalPERS website under Forms and Publications. Recent Changes in Actuarial Assumptions. In March 2012, CalPERS 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, CalPERS 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, CalPERS 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, CalPERS 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, CalPERS adopted new demographic assumptions regarding improved mortality rates. According to CalPERS, this could result in rates as much as 2% to 5% higher. The impact is phased in and affects rates beginning in Fiscal Year 2016-17. 38 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 240 Contribution Rates. The contribution requirements of Plan members and the City are established by CalPERS. The City’s percentage of payroll for CalPERS payments for Fiscal Years 2008-09 through 2016-17 and estimates for Fiscal Years 2017-18 through 2021-22 are shown in the table below. These rates do not include the employees’ contribution rates. TABLE NO. 16 EMPLOYER RETIREMENT CONTRIBUTION RATES Fiscal Year Miscellaneous Safety Fire Safety Police 2008-09 18.317% 23.936% 25.642% 2009-10 18.152% 23.228% 25.823 2010-11 19.599% 22.654% 25.145 2011-12 22.702% 26.134% 28.749 2012-13 23.668% 26.492% 29.153 2013-14 25.437% 27.316% 30.534 2014-15 26.235% 28.857% 34.020 2015-16 28.119% 30.431% 35.587 2016-17 2017-18* 2018-19* 2019-20* 2020-21* 2021-22* ____________________________________ * Projected by PERS based on various assumptions as of November 2015, including an investment return of 7.5%. Source: California Public Employees’ Retirement System. Annual Pension Costs. A five-year history of the City’s required annual pension costs is shown in the table below. The required contribution was determined as part of an annual actuarial valuation. The most recent actuarial assumptions are described under the caption “Actuarial Methods and Assumptions Used to Determine Total Pension Liability.” TABLE NO. 17 FIVE-YEAR TREND INFORMATION FOR ANNUAL PENSION COSTS ALL TIERS COMBINED Annual Pension Fiscal Year Cost (APC) 2010-11 $19,092,227 2011-12 23,996,289 2012-13 18,188,432 2013-14 16,215,564 2014-15 20,818,356 39 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 241 For Fiscal Years 2015-16 and 2016-17, the employer and employees’ share of CalPERS costs are shown below. BudgetEstimated Budget 2015-16 2015-16 2016-17 Employer Share Employees’ Share Total Annual Pension Cost Pension Liabilities. The City’s net pension liability for the Plans is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plans is measured as of June 30, 2014, using the annual actuarial valuation as of June 30, 2013 rolled forward to June 30, 2014 using standard update procedures. The City’s changes in net pension liability for the Plans between June 30, 2013 and 2014 was as follows: TABLE NO. 18 NET PENSION LIABILITY BY PLAN Miscellaneous Plan Increase (Decrease) TotalPlanNet Pension Fiduciary Pension Liability Net Position Liability/(Asset) (1) Balance at: 6/30/2013 (Valuation Date) $436,436,153 $279,540,671 $156,895,482 Changes Recognized for the Measurement Period: Service Cost 8,696,183 - 8,696,183 32,359,841 Interest on the Total Pension Liability 32,359,841 - Contribution from the Employer - 9,134,182 (9,134,182) Contributions from Employees - 4,555,300 (4,555,300) Net Investment Income (2)-48,303,496 (48,303,496) Benefit Payments including Refunds of Employee Contributions (18,639,387) (18,639,387) - Net Changes During 2013-14 22,416,637 43,353,591 (20,936,954) Balance at: 6/30/2014 (Measurement Date) (1) $458,852,790 $322,894,262 $135,958,528 _______________________________________ (1) The fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary self-insurance and OPEB expense. This may differ from the plan assets reported in the funding actuarial valuation report. (2) Net of administrative expenses. (Continued on following page) 40 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 242 Safety Plan (combined Fire and Police) Increase (Decrease) TotalPlanNet Pension Fiduciary Pension Liability Net Position Liability/(Asset) (1) Balance at: 6/30/2013 (Valuation Date) $380,617,699$273,515,399 $107,102,300 Changes Recognized for the Measurement Period: Service Cos 10,220,233-10,220,233 t Interest on the Total Pension Liability 28,334,465- 28,334,465 Contribution from the Employe -11,684,174 (11,684,174) r Contributions from Employees -3,157,921 (3,157,921) (2) et Investment Income -47,649,285 (47,649,285) N Benefit Payments including Refunds of Employee (15,869,862) (15,869,862) - Contributions et Changes During 2013-14 22,684,836 46,621,518 (23,936,682) N (1) Balance at: 6/30/2014 (Measurement Date) $403,302,535$320,136,917 $ 83,165,618 _______________________________________ The fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary (1) self-insurance and OPEB expense. This may differ from the plan assets reported in the funding actuarial valuation report. (2) Net of administrative expenses. Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the City’s net pension liability, calculated using the discount rate of 7.50%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1% lower (6.50%) or 1% higher (8.50%) than the current rate: Miscellaneous Safety Combined et Pension Liability 1% Decrease in N Discount Rate to 6.5%$197,497,721$140,092,386 et Pension Liability at Current N Discount Rate of 7.5% $135,958,528$83,165,618 et Pension Liability 1% Increase in N Discount Rate to 8.5%$84,993,544$36,508,855 See Note 11 of the City’s Comprehensive Annual Financial Report included in “” for further APPENDIX B information about the Plan. 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. 41 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 243 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 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: PoliceFire 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. 42 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 244 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. 19 ANNUAL OPEB COST AND NET OPEB OBLIGATION 2011-12 2012-13 2013-14 2014-15 2010-11 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 cost1,578,000 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. 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. 20 OPEB COSTS AND NET OPEB OBLIGATION Percentage of FiscalAnnual Annual OPEB Cost Net OPEB Year OPEB Cost Contributed 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. 43 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 245 TABLE NO. 21 SCHEDULE OF FUNDING PROGRESS Actuarial Entry Age UAAL as a Valuation Actuarial Actuarial Unfunded Percentage of Date AccruedValue of AAL Funded Covered Covered June 30 (1)Liability Assets (UAAL) Ratio Payroll 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 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); 44 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 246 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. The aggregate change in the balance of claims payable as recorded in the Governmental Activities were as follows: Beinnin oClaims andBalance at ggf Fiscal Year Changes in Claims Fiscal Liability Estimates Payments 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 50.7% Federal Securities 40.1 Pooled Investments 7.9 Corporate Notes 1.3 Time Deposits 100.0% 45 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 247 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. 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. Concurrently with the issuance of the Bonds, the will execute and deliver its $8,000,000* 2016 Refunding Certificates of Participation (the “2016 Certificates”). Original AmountFinal Category of Indebtedness Obligation Outstanding Maturity (1) 2006 Certificates of Participation (Civic Center Phase 2) $20,325,000 $9,275,000 2036 (2) 2010 Certificates of Participation (Capital Facilities Refunding) 29,355,000 27,285,000 2033 (3) 2014 Refunding Certificates of Participation (Police Facility Project)45,920,000 42,835,000 2032 (4) 2015 Refunding Certificates of Participation (Civic Center Project) 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) To be refunded with proceeds of the 2016 Certificates. 77.8% of annual lease payments for the 2016 Certificates (approximately $295,000* through 2026 and $765,000* beginning in 2027) will be funded from the PFDIF, subject to the availability of funds. (2) To be refunded with proceeds of the Bonds. The City expects that approximately 71.5% of the annual lease payments for the Bonds (approximately $1,590,000* of a total $2,210,000*) will be funded from the PFDIF, subject to the availability of funds. (3) The City delivered its 2014 Refunding Certificates of Participation to refinance its outstanding 2002 Certificates of Participation, which originally provided 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 (approximately $1,643,000 of a total $3,700,000), subject to the availability of funds. (4) 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. The City expects that approximately $1,230,000 of the approximate $2,920,000 annual lease payments for the 2015 Certificates 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 the financial gap between energy conservation project capital costs and the available rebates _________________________________________ * Preliminary, subject to change. 46 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 248 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. 22 CITY OF CHULA VISTA DIRECT AND OVERLAPPING DEBT AS OF JUNE 30, 2015 2014-15 Assessed Valuation: $23,090,440,353 (1) OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable 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. 47 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 249 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 (2) City of Chula Vista Certificates of Participation 100. 117,590,000 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 (3) GROSS COMBINED TOTAL DEBT $1,118,979,023 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. 48 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 250 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 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. ” hereto for the audited financial statements for the Fiscal Year ended June 30, 2015. See “ APPENDIX B 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. Reporting obligations under Governmental Accounting Standards Board Statement (“GASB”) No. 68 - Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27 (“GASB No. 68”), and GASB Statement No. 71 - Pension Transitions for Contributions Made Subsequent to the Measurement Date-an amendment of GASB No. 68, commenced with financial statements for Fiscal Year 2014-15. Under GASB No. 68, an employer reports the net pension liability, pension expense and deferred outflows/deferred inflows of related to pensions in its financial statements as part of its financial position. The result of the implementation of these standards was to decrease the governmental activities net position at July 1, 2014 by $214.4 million and to decrease the business-type activities net position at July 1, 2014 by $28.7 million. The audited financial statements of the City for the Fiscal Year ended June 30, 2015 included in “” contain additional information about the retirement liability and the APPENDIX B application of GASB No. 68. See Notes 1 and 16 in the City’s audited financial statements attached in “” for a discussion APPENDIX B of additional accounting changes and prior period adjustments. Set forth in Table No. 23 below is the General Fund balance sheet for the last five fiscal years and Table No. 24 below presents a five year history of General Fund revenues, expenditures and changes in fund balances. 49 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 251 TABLE NO. 23 CITY OF CHULA VISTA GENERAL FUND BALANCE SHEET 2011 2012201320142015 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 - - - 9,591,661 Due from Successor Agency of Chula Vista RDA - 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 Retentionpayable 3,351 - 212,667 - - Settlement payable - - 8,000,000 - - Pass-throughpayable - - - - 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. 50 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 252 TABLE NO. 23 CITY OF CHULA VISTA GENERAL FUND BALANCE SHEET Continued from previous page. 2011 2012201320142015 DEFERRED INFLOWS OF RESOURCES : $ - $ - $ 3,669,767 $ 3,898,935 Unavailable revenues $ - Total Deferred inflows of resources $ - $ - $ - $ 3,669,767 $ 3,898,935 (1) Fund Balances : 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 (2) Nonspendable11,258,150 8,799,026 7,481,079 - - (2) Restricted 127,883 - 750,951 - - (2) Committed 7,178,838 4,375,207 2,298,088 - - (2) Assigned5,298,536 2,895,545 6,648,922 - - (2) Unassigned 11,876,992 11,969,280 10,790,135 14,511,252 16,412,878 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 ____________________________________ See “GASB Statement No 54” above. (1) Change in financial statement presentation to show individual components of the fund balance commitments (2) and designations. Source: City of Chula Vista Comprehensive Annual Financial Reports. 51 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 253 TABLE NO. 24 CITY OF CHULA VISTA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 2011 2012201320142015 REVENUES: (2) Taxes $ 69,441,761 $ 85,167,221 $ 75,841,123 $105,718,638 $100,738,431 (1) Intergovernmental 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) $ (1,830,350)$ (4,161,096)$ (1,469,554)$ 9,652,916 $ (1,326,853) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in $ 11,304,257 $ 9,850,345 $ 9,661,447 $ 9,571,300 $ 9,994,525 (2) Transfers out (6,915,308)(13,390,590)(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 Property Taxes In-Lieu of Motor Vehicle Fees in “Intergovernmental Revenues” in Fiscal Year 2010-11 and 2012-13, and in all other years 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. 52 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 254 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 53 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 255 Proceeds are insufficient. See “ APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - - Abatement of Base Rental Payments.” SUBLEASE 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 -” herein). The Lease Agreement does not require earthquake or flood Insurance DOCUMENTS - SUBLEASE 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 - Insurance Relating to the Property” herein). PAYMENT FOR THE BONDS 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. 54 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 256 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 55 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 257 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 “” herein. THE LEASED PROPERTY 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” 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” below. 56 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 258 Bankruptcy 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 57 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 259 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 of the property, and effectively prohibits the levying of any other ad valorem property the “full cash value” 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 (including for Fiscal Year 2016-17) as shown below: Tax Roll Percentage Tax Roll Percentage 1981-82 1.000% 2010-11 (0.237)% 1996-96 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 58 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 260 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 “ - Ad Valorem Property Taxes - Taxable Property and Assessed FINANCIAL INFORMATION 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 was $729,447,134. The City’s appropriations subject to the limit for 2015-16 were $293,415,405. 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 59 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 261 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. 60 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 262 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 61 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 263 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 “” herein, interest on the Bonds could become includable in TAX MATTERS 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. 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 62 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 264 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 ” hereto of the Indenture and the Lease Agreement, and as to the validity of the Bonds. See “ APPENDIX D 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. CONCLUDING INFORMATION Ratings on the Bonds Standard & Poor’s and Moody’s Investors Service has assigned their municipal bond rating of “__” and “__”, respectively, to the Bonds. Such ratings reflect only the views of the rating agencies and any desired explanation of the significance of such ratings should be obtained from the rating agencies. 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 Agreement, 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 ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of a 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. 63 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 265 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 enumerated 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 AGREEMENT 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”) issued prior to 2011, the City’s audit for Fiscal Year 2009-10 was timely filed on the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (“EMMA”) website (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 64 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 266 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 65 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 267 APPENDIX A SUMMARY OF PRINCIPAL LEGAL DOCUMENTS \[to be provided by Bond Counsel\] A-1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 268 APPENDIX B CITY AUDITED FINANCIAL STATEMENTS B-1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 269 APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT \[to be provided by Disclosure Counsel\] -1 C ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 270 APPENDIX D PROPOSED FORM OF BOND COUNSEL OPINION \[to be provided by Bond Counsel\] D-1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 271 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 E-1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 272 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 E-2 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 273 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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CONCLUDING INFORMATION In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Special Counsel, under This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circ existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, the interest (and original issue discount) with respect to the Certificates is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of Special Counsel, such interest (and original issue discount) is exempt from State of California personal income tax. Special Counsel expresses no opinion regarding any other tax consequences related to the te an offer to sell or a solicitation of an offer to buy nor shall there be any sal ownership or disposition of, or the accrual or receipt of interest with respect to, the Certificates. See “” herein. TAX MATTERS SAN DIEGO COUNTY STATE OF CALIFORNIA urisdiction. $8,000,000* 2016 REFUNDING CERTIFICATES OF PARTICIPATION (CIVIC CENTER PROJECT) Evidencing Undivided Proportionate Interests j would be unlawful under the securities laws of such in Lease Payments to be Made by the CITY OF CHULA VISTA, CALIFORNIA Pursuant to a Lease with the CHULA VISTA PUBLIC FINANCING AUTHORITY Dated: Date of DeliveryDue: March 1, as Shown on the Inside Front 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 ” herein for a discussion of special risk factors that should be considered in evaluating the investment quality of the FACTORS Certificates. The City of Chula Vista 2016 Refunding Certificates of Participation (Civic Center Project) (the “Certificates”) are being executed and delivered to (i) provide funds to refinance an obligation of the City of Chula Vista (the “City”) described herein, and (ii) pay the costs incurred in connection with the execution and delivery of the Certificates. The Certificates evidence undivided proportionate interests of the Owners in lease payments (“Lease Payments”) to be made by the City to the Chula Vista Public Financing Authority (the “Authority”) as rental for certain real property and the improvements thereon (referred to herein as the “Leased Premises”) consisting of the City’s Civic Center complex, the City’s Fire Station No. 7 and a City park pursuant to a Lease/Purchase Agreement, dated September 1, 2004, as amended by a First Amendment to Lease/Purchase Agreement dated as of March 1, 2006, a Second Amendment to Lease/Purchase Agreement dated as of September 1, 2015 and a Third Amendment to Lease Purchase Agreement dated as of June 1, 2016, each by and between the City and the Authority (as amended, the “Lease”), as described herein. See “” THE LEASED PREMISES herein. The City is required under the Lease to make Lease Payments in each fiscal year in consideration of the use and possession of the Leased Premises from any source of legally available funds, including certain funds held under a trust agreement, as described herein, and insurance or condemnation awards, in an amount sufficient to pay the annual principal and interest with respect to the Certificates, subject to abatement, as described herein. See “” and “” herein. SOURCES OF PAYMENT FOR THE CERTIFICATESRISK FACTORS urisdiction in which such offer, solicitation or sale Interest represented by the Certificates is payable on March 1, 2017, and semiannually thereafter on September 1 and March 1 of each year until maturity or earlier prepayment. See “ - General” and “ - Prepayment” herein. THE CERTIFICATESTHE CERTIFICATES this Preliminary Official Statement constitu THE CERTIFICATES DO NOT CONSTITUTE AN OBLIGATION OF THE CITY 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 MAKE LEASE PAYMENTS UNDER THE LEASE DOES NOT CONSTITUTE AN OBLIGATION OF THE CITY 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. NEITHER THE CERTIFICATES NOR THE OBLIGATION OF THE CITY TO MAKE LEASE PAYMENTS CONSTITUTES AN INDEBTEDNESS OF THE AUTHORITY, THE CITY, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. The Certificates are offered, when, as and if executed and delivered, subject to the approval as to their legality by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Special Counsel. Certain legal matters will be passed on for the City and the Authority by Glen R. Googins, as City Attorney, and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel and for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, San Francisco, California. It is anticipated that the Certificates, in book-entry form, will be available for delivery on or about June 21, 2016 through the facilities of The Depository Trust Company (see “-” herein). APPENDIX E THE BOOK-ENTRY SYSTEM The date of the Official Statement is __________, 2016. __________________________ j * Preliminary, subject to change. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 379 $8,000,000* 2016 REFUNDING CERTIFICATES OF PARTICIPATION (CIVIC CENTER PROJECT) Evidencing Undivided Proportionate Interests in Lease Payments to Be Made by the CITY OF CHULA VISTA, CALIFORNIA Pursuant to a Lease with the CHULA VISTA PUBLIC FINANCING AUTHORITY MATURITY SCHEDULE ® (Base CUSIP† 171294) Maturity Date Principal Interest Reoffering Reoffering ® March 1 Amount Rate Yield PriceCUSIP† 2017 2018 2019 2020 2021 2022 2023 2024 2024 2025 2025 2026 2026 2027 2027 2028 2029 2029 2030 2031 2032 2033 2034 2035 2036 __________________________ * Preliminary, subject to change. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the City, the Municipal Advisor or the Underwriter and are included solely for the convenience of the holders of the Certificates. None of the City, the Municipal Advisor or the Underwriter is responsible for the selection or use of these CUSIP numbers, and no representation is made as to their correctness on the Certificates or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the execution and delivery of the Certificates as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity 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 Certificates. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 380 GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT Use of Official Statement. This Official Statement is submitted in connection with the offer and sale of the Certificates 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 Certificates. 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 Certificates 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 City to give any information or to make any representations in connection with the offer or sale of the Certificates 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 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 Certificates 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 Certificates 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 Certificates, the Lease Agreement, the Trust Agreement or other documents, are made subject to the provisions of such documents and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the - Summaries Not Definitive.” City Clerk for further information. See “ INTRODUCTION 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. Certificates are Exempt from Securities Laws Registration. The execution, sale and delivery of the Certificates 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 Certificates 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 Certificates 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 Certificates unless specifically set forth or incorporated herein. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 381 CITY OF CHULA VISTA, CALIFORNIA CITY COUNCIL Mary Casillas Salas, Mayor John McCann, Councilmember Patricia Aguilar, Councilmember Pamela Bensoussan, Councilmember Steve Miesen, Councilmember ______________________________________________ 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 Glen R. Googins, City Attorney Donna Norris, CMC, City Clerk ______________________________________________ PROFESSIONAL SERVICES Special 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 Verifications Grant Thornton LLP Minneapolis, Minnesota ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 382 TABLE OF CONTENTS INTRODUCTION ...................................................... 1 Largest Taxpayers .................................................... 30 The City ..................................................................... 1State Legislative Shifts of Property Tax Allocation . 31 The Authority ............................................................. 1Local Taxes .............................................................. 31 Purpose ...................................................................... 2Motor Vehicle License Fees ..................................... 33 Security and Sources of Repayment .......................... 2Public Facilities Development Impact Fees ............. 33 Limited Obligation ..................................................... 3Personnel .................................................................. 35 Legal Matters ............................................................. 3Employee Relations and Collective Bargaining ....... 35 Professional Services ................................................. 3Retirement Programs ............................................... 35 Offering of the Certificates ........................................ 4Defined Contribution Pension Plan .......................... 41 Summaries Not Definitive ......................................... 4Other Post Employment Benefits ............................. 42 Risk Management .................................................... 44 THE CERTIFICATES ............................................... 4 City Investment Policy and Portfolio ....................... 45 General ....................................................................... 4 Outstanding Indebtedness of the City ...................... 46 Prepayment ................................................................ 5 Direct and Overlapping Debt ................................... 47 Scheduled Lease Payments ........................................ 6 Financial Statements ................................................ 48 THE FINANCING PLAN .......................................... 7 RISK FACTORS ....................................................... 53 The Refunding Program............................................. 7 The Lease Payments ................................................ 53 Verification ................................................................ 7 State Budget ............................................................. 55 Estimated Sources and Uses of Funds ....................... 7 Limited Recourse on Default; No Acceleration ....... 56 THE LEASED PREMISES ....................................... 8 Enforcement of Remedies ........................................ 56 Bankruptcy ............................................................... 56 SOURCES OF PAYMENT FOR THE Constitutional Limitation on Taxes and CERTIFICATES ...................................................... 9 Expenditures ......................................................... 57 General ....................................................................... 9 Early Prepayment Risk ............................................ 61 Lease Payments ....................................................... 10 Loss of Tax Exemption ............................................ 62 Reserve Fund ........................................................... 10 IRS Audit of Tax-Exempt Bond Issues .................... 62 Insurance Relating to the Leased Premises .............. 11 Secondary Market Risk ............................................ 62 Insurance and Condemnation Awards ...................... 12 LEGAL MATTERS .................................................. 62 Remedies on Default ................................................ 12 Encumbrances .......................................................... 13Enforceability of Remedies ...................................... 62 Approval of Legal Proceedings ................................ 63 THE CITY OF CHULA VISTA ............................... 13 TAX MATTERS ........................................................ 63 General Information ................................................. 13 General Organization ............................................... 13Litigation .................................................................. 65 Governmental Services ............................................ 14 CONCLUDING INFORMATION .......................... 65 Community Facilities and Services ......................... 14 Ratings on the Certificates ....................................... 65 Transportation .......................................................... 15 Underwriting ............................................................ 66 Population ................................................................ 16 The Municipal Advisor ............................................ 66 Per Capita Personal Income ..................................... 16 Continuing Disclosure ............................................. 66 Employment ............................................................. 17 References ................................................................ 67 Industry .................................................................... 18 Execution ................................................................. 67 Largest Employers ................................................... 19 APPENDIX A - SUMMARY OF PRINCIPAL Commercial Activity ................................................ 19 LEGAL DOCUMENTS Building Activity ..................................................... 21 APPENDIX B - CITY AUDITED FINANCIAL FINANCIAL INFORMATION ............................... 21 STATEMENTS Fiscal Policies .......................................................... 21 APPENDIX C - FORM OF CONTINUING Budgetary Process and Administration .................... 24 DISCLOSURE AGREEMENT Economic Conditions and Outlook .......................... 24 APPENDIX D - FORM OF SPECIAL COUNSEL Revenues and Expenditures ..................................... 25 OPINION Ad Valorem Property Taxes ..................................... 28 APPENDIX E - THE BOOK-ENTRY SYSTEM Taxable Property and Assessed Valuation ................ 28 Redevelopment Agencies ......................................... 29 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 383 OFFICIAL STATEMENT $8,000,000* 2016 REFUNDING CERTIFICATES OF PARTICIPATION (CIVIC CENTER PROJECT) Evidencing Undivided Proportionate Interests in Lease Payments to Be Made by the CITY OF CHULA VISTA, CALIFORNIA Pursuant to a Lease with the CHULA VISTA PUBLIC FINANCING AUTHORITY This Official Statement which includes the cover page and appendices (the “Official Statement”), is provided to furnish certain information concerning the sale, execution and delivery of 2016 Refunding Certificates of Participation (Civic Center Project) (the “Certificates”), in the aggregate principal amount of $8,000,000*, representing the undivided proportionate interests of Owners thereof in Lease Payments (defined below) to be made by the City of Chula Vista, California (the “City” or “Chula Vista”), as rental for certain property pursuant to a Lease/Purchase Agreement as more fully described herein with the Chula Vista Public Financing Authority (the “Authority”). 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 Certificates 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 “ herein). For RISK FACTORS” definitions of certain capitalized terms used herein and not otherwise defined, and the terms relating to the Certificates, see the summary included in “ APPENDIX A - SUMMARY OF PRINCIPAL LEGAL ” herein. DOCUMENTS 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 ” herein). County (see “ THE CITY OF CHULA VISTA The Authority 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 Redevelopment Agency of the City of Chula Vista (the “Redevelopment Agency”) formed the Authority by the execution of a joint exercise of powers agreement dated as of April 4, 1995 (the “Joint Powers Agreement”). Pursuant to Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code of the State of California, all redevelopment agencies in the State of California, including the Redevelopment Agency, were statutorily dissolved as of February 1, 2012, and the Successor Agency to the Redevelopment Agency of the City of Chula Vista (the “Successor Agency”) succeeded the interests of the former Redevelopment Agency in the JPA Agreement. __________________________ * Preliminary, subject to change. 1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 384 Pursuant to the Marks-Roos Local Bond Pooling Act of 1985, as amended, constituting Article 4 (commencing with Section 6584), of Chapter 5, Division 7, Title 1 of the Government Code of the State (the “Bond Law”), the Authority is authorized, among other things, to issue revenue bonds to provide funds to finance and refinance public capital facilities and to otherwise assist the City in financing and refinancing such facilities. The Authority is governed by a five-member Board which consists of all members of the City Council. The Mayor of the City is appointed the Chairperson of the Authority. The City Manager acts as the Executive Director of the Authority. There are two lawsuits currently pending in the Court of Appeal of the State of California challenging certain actions taken by a successor agency and a joint powers authority of which the successor agency is a member in connection with the issuance of bonds to finance capital improvements. See “ LEGAL - Litigation.” MATTERS Purpose The Certificates are being executed and delivered to refinance a portion of the existing Lease (as defined below) and to current refund all of the City’s 2015 Certificates of Participation (Civic Center Project – Phase 2) (the “2006 Certificates”), and to pay the costs of issuance of the Certificates. See “ THE ” herein. As described herein, the Certificates are secured by lease payments payable FINANCING PLAN on a parity with lease payments securing the City’s $33,405,000 outstanding 2015 Refunding Certificates of Participation (Civic Center Project) (the “2015 Certificates”). Security and Sources of Repayment The Certificates are being executed and delivered pursuant to an Amended and Restated Trust Agreement dated as of March 1, 2006 as amended by a First Supplement to Amended and Restated Trust Agreement dated as of September 1, 2015 and a Second Supplement to Amended and Restated Trust Agreement dated as of June 1, 2016 (as amended, the “Trust Agreement”), by and among the City, the Authority and U.S. Bank National Association, successor to The Bank of New York Mellon Trust Company, N.A, as trustee (the “Trustee”). Pursuant to a Site Lease, dated as of September 1, 2004 as amended pursuant to a First Amendment to Site Lease dated as of March 1, 2006, a Second Amendment to Site Lease dated as of September 1, 2015 and a Third Amendment to Site Lease dated as of June 1, 2016 (as amended, the “Site Lease”), each by and between the Authority and the City, the City has leased the Leased Premises, as described herein under the caption “” to the Authority. The Authority has subleased the Leased Premises to THE LEASED PREMISES, the City under the Lease/Purchase Agreement, dated as of September 1, 2004 as amended by a First Amendment to Lease/Purchase Agreement dated as of March 1, 2006 and a Second Amendment to Lease/Purchase Agreement dated as of September 1, 2015 and a Third Amendment to Lease/Purchase Agreement dated as of June 1, 2016, each by and between the City and the Authority (as amended, the “Lease”). Lease payments (the “Lease Payments”) are to be made by the City in accordance with the terms of the Lease. The Certificates, together with the 2015 Certificates, represent undivided proportionate interests in the Lease Payments to be made by the City to the Authority as the rental for the Leased Premises pursuant to the Lease. The Lease Payments are payable by the City from any source of legally available funds of the City, including certain funds held under the Trust Agreement and investment earnings thereon, and the net proceeds of insurance or condemnation awards (see “” SOURCES OF PAYMENT FOR THE CERTIFICATES, “” and “ FINANCIAL INFORMATIONAPPENDIX A - SUMMARY OF PRINCIPAL LEGALDOCUMENTS - ” herein). DEFINITIONS AND SUMMARY OF CERTAIN PROVISIONS OFTHE LEASE 2 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 385 The City has covenanted in the Lease to take such actions as may be necessary to include all Lease Payments in its annual budgets and to make the necessary annual appropriations for all such Lease Payments subject to complete or partial abatement of such Lease Payments resulting from a taking of the Leased Premises (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 Premises. All of the Authority’s right, title and interest in and to the Lease (apart from certain rights to receive Additional Payments to the extent payable to the Authority and to indemnification), including the right to receive Lease Payments under the Lease, are assigned to the Trustee for the benefit of the Owners of the Certificates, the 2015 Certificates and any Additional Certificates when and if issued, under an Assignment Agreement by and between the Authority and the Trustee dated as of September 1, 2004 as amended by a First Amendment to Assignment Agreement dated March 1, 2006, a Second Amendment to Assignment Agreement dated as of September 1, 2015 and a Third Amendment to Assignment Agreement dated as of June 1, 2016 (as amended, the “Assignment Agreement”). For a summary of the Trust Agreement, the Site Lease, the Lease and the Assignment Agreement, see ” herein. “ APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS The City is also required to pay any taxes and assessments levied on the Leased Premises and all costs of maintenance and repair of the Leased Premises. Except for the Authority’s right, title and interest in and to the Lease Payments and otherwise to the Lease 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 ” herein). (see “ RISK FACTORS The Lease is, in the opinion of Special Counsel, a valid and binding obligation of the City enforceable against the City in accordance with its terms, except to the extent enforceability thereof may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting creditors’ rights heretofore or hereinafter enacted and may be subject to the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases (see “Limited Recourse on Default; RISK FACTORS - No Acceleration” herein). The form of Special Counsel’s opinion is attached hereto as “.” APPENDIX D Limited Obligation THE OBLIGATION OF THE CITY TO PAY LEASE 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 LEASE PAYMENTS DOES NOT CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. Legal Matters The legal proceedings relating to the execution and delivery of the Certificates are subject to the approving opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Special Counsel. Certain legal matters will be passed on for the City by Glen R. Googins, as City Attorney and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel, and for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, San Francisco, California. Professional Services U.S. Bank National Association will serve as the Trustee under the Trust Agreement. 3 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 386 Harrell & Company Advisors, LLC (the “Municipal Advisor”) advised the City as to the financial structure and certain other financial matters relating to the Certificates. Fees payable to Bond Counsel, Disclosure Counsel and the Municipal Advisor are contingent on the delivery of the Certificates. Offering of the Certificates Authority for Execution and Delivery. The Lease has been entered into in accordance with the laws of the State of California (the “State”), and particularly Section 37350 of the Government Code of the State applicable to the City and the Authority. The Certificates are to be executed and delivered pursuant to the Bond Law, the Trust Agreement and Resolution No. ____ of the City adopted on May 24, 2016. Offering and Delivery of theCertificates. The Certificates are offered, when, as and if executed and delivered, subject to the approval as to their legality by Stradling Yocca Carlson & Rauth, Newport Beach, California, Special Counsel. It is anticipated that the Certificates, in book-entry form, will be available for delivery in New York, New York on or about June 21, 2016 through the facilities of The Depository Trust Company. See “.” APPENDIX E - THE BOOK-ENTRY SYSTEM Summaries Not Definitive The summaries and references contained herein with respect to the Trust Agreement, the Lease, the Site Lease, the Assignment Agreement, the Certificates 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 Certificates are qualified in their entirety by reference to the form thereof included in the Trust Agreement. Copies of the documents described herein are available for inspection during the period of initial offering of the Certificates at the offices of the Municipal Advisor. Copies of these documents may be obtained after delivery of the Certificates at the trust office of the Trustee, U.S. Bank National Association, Los Angeles, California or from the City at 276 Fourth Avenue, Chula Vista, California 91910, telephone (619) 691-5250. THE CERTIFICATES General The Certificates will be executed and delivered in the form of fully registered Certificates in principal amounts of $5,000 each or any integral multiple thereof. The Certificates will be dated their date of delivery and mature on March 1 in the years set forth on the inside front cover page hereof. Each Certificate will be payable with respect to interest on March 1 and September 1 of each year, commencing on March 1, 2017 at the respective rates of interest set forth on the inside front cover page hereof. The Certificates will be executed and delivered in book-entry form only and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), which will act as securities depository for the Certificates. Individual purchases of the Certificates will be made in book-entry form only. Purchasers of the Certificates will not receive certificates representing their ownership interests in the Certificates purchased. Principal, premium, if any, and interest payments due with respect to the Certificates are payable directly to DTC by the Trustee. Upon receipt of payments of principal, premium, if any, and interest, DTC will in turn distribute such payments to the beneficial owners of the Certificates. See “ - ” herein. APPENDIX ETHE BOOK-ENTRY SYSTEM 4 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 387 Prepayment Optional Prepayment. The 2016 Certificates maturing on or after March 1, 2027 are subject to prepayment prior to maturity in whole or in part on any date on or after March 1, 2026, at the option of the City, at a prepayment price equal to the principal component to be prepaid, plus accrued interest to the date fixed for prepayment, without premium. Extraordinary Prepayment. The Certificates and the 2015 Certificates are subject to prepayment prior to their respective maturity dates on any date, in whole or in part, pro-rata among maturities, from Net Proceeds which the Trustee transfers to the Prepayment Fund as provided in the Lease at least 45 days prior to the date fixed for prepayment, at a prepayment price equal to the principal amount thereof together with the accrued interest to the date fixed for prepayment, without premium. There can be no assurance that such Net Proceeds will be adequate to prepay all of the Certificates and the 2015 Certificates (see Insurance Relating to the Leased Premises” and “ “ SOURCES OF PAYMENT FOR THE CERTIFICATES - RISK The Lease Payments - Insurance” herein). In the event that Net Proceeds are to be applied to FACTORS - the prepayment of Certificates, or the 2015 Certificates and Additional Certificates, if any, are outstanding, the Net Proceeds will be applied to prepay a proportionate amount of Certificates, the 2015 Certificates and Additional Certificates based on the outstanding principal amount. Selection of Certificates for Prepayment. Whenever provision is made in the Trust Agreement for the optional prepayment of the Certificates and less than all Outstanding Certificates are called for optional prepayment, the Trustee shall select Certificates for optional prepayment from among maturities selected by the City and by lot within any maturity. For extraordinary prepayment of Certificates, the Trustee shall select Certificates for prepayment as nearly as practicable on a pro-rata basis between the Certificates, the 2015 Certificates and any Additional Certificates and among maturities and by lot within any maturity. Notice of Prepayment. When prepayment is authorized or required pursuant to the Trust Agreement, the Trustee shall give notice of the prepayment of the Certificates. Such notice shall specify: (a) the prepayment date, (b) the prepayment price, (c) if less than all of the Outstanding Certificates of a maturity are to be prepaid, the Certificate numbers (and in the case of partial prepayment, the respective principal amounts), (d) the series and CUSIP numbers of the Certificates to be prepaid, (e) the place or places where the prepayment will be made, (f) the original date of execution and delivery of the Certificates, and (g) any other descriptive information regarding the Certificates needed to identify accurately the Certificates being prepaid. Such notice shall further state that on the specified date there shall become due and payable upon each Certificate to be prepaid, the portion of the principal amount of such Certificate to be prepaid, together with interest accrued to said date, and that from and after such date, provided that moneys therefor have been deposited with the Trustee, interest with respect thereto shall cease to accrue and be payable. Notice of such prepayment shall be given to the respective Owners of any Certificates designated for prepayment by first class mail, postage prepaid at their addresses appearing on the Certificate registration books, at least thirty (30) days, but not more than sixty (60) days, prior to the prepayment date; provided that with respect to any Certificates held in book-entry form by the DTC, notice shall be provided in accordance with the procedures of the DTC. Neither failure to receive such notice nor any defect in any notice so given shall affect the sufficiency of the proceedings for the prepayment of such Certificates. Notice shall also be given to the municipal Securities Depository and to the Information Services on the date notice is given to the Owners, which notice shall be given by electronic or other means permitted under the procedures of each of such recipients. Conditional Notice of Prepayment. The City has the right to make any notice of the optional prepayment of the Certificates a conditional notice which may be rescinded by written notice to the Trustee on or prior to the date fixed for prepayment. Any notice of optional prepayment will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for prepayment for the payment in full of the Certificates then called for prepayment, and such cancellation will not constitute an Event of Default. The City and the Trustee shall have no liability to the Owners or any other party related to or arising from 5 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 388 such rescission of prepayment. The Trustee shall give notice of such rescission of prepayment in the same manner as the original notice of prepayment was sent. Effect of Notice of Prepayment. Notice of prepayment having been given as aforesaid and the deposit of the prepayment price having been made by the City, the Certificates or portions of Certificates so to be prepaid shall, on the prepayment date, become due and payable at the prepayment price therein specified, and from and after such date interest with respect to such Certificates or portions of Certificates shall cease to be payable. Upon surrender of such Certificates for prepayment in accordance with said notice, such Certificates shall be paid by the Trustee at the prepayment price. Scheduled Lease Payments The following is a schedule of annual payments of principal and interest represented by the Certificates, together with the annual payments of principal and interest represented by the 2015 Certificates, which comprise the total of the annual Lease Payments. Certificate Year Ending Total Lease March 1 PrincipalInterestAnnual Total2015 Certificates Payments 2017 $ 2,918,012.50 2018 2,926,062.50 2019 2,921,262.50 2020 2,922,262.50 2021 2,929,012.50 2022 2,921,012.50 2023 2,918,762.50 2024 2,921,762.50 2025 2,922,687.50 2026 2,924,437.50 2027 2,104,037.50 2028 2,105,787.50 2029 2,101,737.50 2030 2,100,175.00 2031 2,101,281.26 2032 2,100,362.50 2033 2,100,087.50 2034 2,103,587.50 2035 - 2036 - Total $46,042,331.26 6 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 389 THE FINANCING PLAN The Refunding Program On the Delivery Date, the City will irrevocably deposit a portion of the proceeds from the Certificates with the Trustee as escrow bank (the “Escrow Bank”), pursuant to an Escrow Agreement, dated as of June 1, 2016 (the “Escrow Agreement”) by and between the City and the Escrow Bank. The deposits will be in an amount sufficient to pay the prepayment price with respect to all of the $8,755,000 Certificates outstanding pursuant to an optional prepayment thereof on July 1, 2016. Special Counsel will deliver an opinion at closing to the effect that, assuming the sufficiency of the amounts deposited under the Escrow Agreement, the Refunded 2006 Certificates will be discharged and no longer be Outstanding under the Trust Agreement and will not be secured by the Lease or the Lease Payments due thereunder (see “ - Verifications of Mathematical Computations.”) Amounts CONCLUDING INFORMATION on deposit with the Escrow Bank are not available to pay debt service with respect to the Certificates. Verification Grant Thornton LLP will verify from the information provided to them the mathematical accuracy as of the date of the delivery of the Certificates 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 and (2) the computation of yield on the Certificates contained in the provided schedules used by Special Counsel in its determination that the interest with respect to the Certificates 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 Certificates. Estimated Sources and Uses of Funds Under the provisions of the Trust Agreement, the Trustee will receive the proceeds from the sale of the Certificates, together with other available funds, and will apply them as follows: Sources of Funds Par Amount of Certificates Funds Held by Trustee for 2006 Certificates et Original Issue Premium N Total Sources Uses of Funds Transfer to Escrow Bank Reserve Fund Underwriter’s Discount (1) Costs of Issuance Total Uses ________________________________ (1)Expenses include fees and expenses of Special Counsel, the Municipal Advisor, Disclosure Counsel and Trustee, rating fees, costs of printing the Official Statement, and other costs of delivery of the Certificates. 7 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 390 THE LEASED PREMISES Description of the Leased Premises. Pursuant to the terms of the Site Lease, the City leases the 7.9 acre Civic Center complex, Fire Station No. 7 and Montevalle Park and the existing improvements thereon (collectively the “Property”) to the Authority. Pursuant to the terms of the Lease, the Authority leases the Property, together with all improvements thereon, which together comprise the Leased Premises, back to the City. The Civic Center complex consists of three buildings on approximately 7.9 acres located in the City’s downtown. The 42,000 square foot City Hall building was constructed in 2005, and financed with a portion of proceeds of the 2004 Certificates. It houses the City Council chambers with fixed seating for 156 people, an overflow conference room, a press room and audio visual equipment area. The City Hall also contains offices for the City Council and Mayor, the City Manager, the City Attorney, the Finance Department, the Office of Communications and the City Clerk. The Public Services Building is approximately 31,500 square feet and contains the offices of the Engineering, Planning and Building/Code Enforcement Divisions of the Development Services Department. This building was renovated in 2006, the cost of which was financed with a portion of the proceeds of the 2006 Certificates. The Community Services Building is approximately 50,000 square feet. Departments and Divisions located in this building are Housing, Conservation, Economic Development, Environmental Services, Recreation Administration and Fire Administration. This building’s renovation was the third and final phase of the Civic Center Complex renovation. The City Fire Station No. 7 was constructed in 2003 on 1.7 acres. Montevalle Park is a 29-acre park located within the Rolling Hills Ranch community. A 21,000 square foot community center was constructed in 2006. The community center contains a gymnasium, annex/multi- purpose room, game room, dance room, craft room and court, offices, lobby and restrooms. Park amenities include three lighted multi-purpose fields, one lighted softball field, lighted tennis courts and basketball courts, skate area, off-leash dog area, tot lots and picnic shelters. All of the buildings located on the Property are insured for property damage in the total amount of $50,800,000. The City does not currently maintain earthquake insurance on the Leased Premises. The Leased Premises are not located in a 100 year Flood Plain. Pursuant to the Lease, the City and the Authority have agreed and determined that the Lease Payments required to be made under the Lease represent fair rental value of the Leased Premises. Substitution or Release of Property. Under the terms of the Lease, the City may substitute other property for the Leased Premises, or any portion thereof, and may release portions of the Leased Premises provided that certain conditions set forth in the Lease are met. See “ APPENDIX A - SUMMARY OF PRINCIPAL - LEGAL DOCUMENTSDEFINITIONS AND SUMMARY OF CERTAIN PROVISIONS OF THE LEASE - - Substitution or Release of the Leased Premises.” COVENANTS WITH RESPECT TO THE PROPERTY 8 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 391 SOURCES OF PAYMENT FOR THE CERTIFICATES General Each Certificate and each 2015 Certificate represents a direct, undivided proportionate interest in the Lease Payments to be made by the City to the Authority under the Lease. Under the Assignment Agreement, the Authority has assigned all of its rights under the Lease, including its rights to receive Lease Payments from the City and its remedies under the Lease (except certain rights to indemnification) to the Trustee for the benefit of the Owners of the Certificates and the 2015 Certificates. The Lease Payments are calculated to be sufficient to pay, when due, the annual principal and interest with respect to the Certificates and the 2015 Certificates. Principal and interest with respect to the Certificates and the 2015 Certificates will be paid from the Lease Payments payable by the City for the use and possession of the Leased Premises, insurance or condemnation Net Proceeds received with respect to the Leased Premises to the extent that such Net Proceeds are not used for repair or replacement, interest or other income derived from the investment of the funds held by the Trustee under the Trust Agreement, or, in certain instances, from the Reserve Fund established by the Trust Agreement. The City is obligated to pay Lease Payments from any source of legally available funds, and has covenanted in the Lease to include all Lease Payments coming due in its annual budgets and to make the necessary annual appropriations therefor. The Authority, pursuant to the Assignment Agreement, has assigned all of its rights under the Lease (excepting certain rights as specified therein), including the right to receive Lease Payments and prepayments, to the Trustee for the benefit of the Owners of the Certificates and the 2015 Certificates. By the fifteenth day of each February and August (if such day is not a Business Day, the next succeeding Business Day), the City must pay to the Trustee a Lease Payment (to the extent required under the Lease) which is expected to equal the amount necessary to pay the principal and interest with respect to the Certificates and the 2015 Certificates on the next succeeding Interest Payment Date. The City’s obligation to make Lease Payments will be abated in whole or in part to the extent of substantial interference with use and possession of the Leased Premises arising from damage, destruction, title defect or taking by eminent domain or condemnation of the Leased Premises. Abatement would not constitute a default under the Lease and the Trustee would not be entitled in such event to pursue remedies against the City. See “- The Lease Payments - Abatement” herein. RISK FACTORS Under the Lease, the City has agreed to pay certain taxes, assessments, utility charges, and insurance premiums charged with respect to the Leased Premises and expenses related to the Certificates and the 2015 Certificates, including the fees and expenses of the Trustee. The City is responsible for repair and maintenance of the Leased Premises during the term of the Lease. The City may at its own expense in good faith contest such taxes, assessments and utility and other charges if certain requirements set forth in the Lease are satisfied including obtaining an opinion of counsel that the Leased Premises will not be subjected to loss or forfeiture. Should the City default under the Lease, the Trustee, as assignee of the Authority, may terminate the Lease and re-lease the Leased Premises or may retain the Lease and hold the City liable for all Lease Payments thereunder on an annual basis. Under no circumstances will the Trustee have the right to accelerate Lease Payments. The exercise of the remedies provided to the Trustee is subject to various limitations on the - Limited Recourse on Default; No enforcement of remedies against public agencies. See “ RISK FACTORS Acceleration” herein. See also “ - The Lease Payments - Lease Payments are Limited Obligations of the City” RISK FACTORS herein. 9 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 392 Lease Payments Subject to the provisions of the Lease regarding complete or partial abatement in the event of loss of use and possession of any portion of the Leased Premises (see “- The Lease Payments - RISK FACTORS Abatement” herein) and prepayment of Lease Payments (see the provisions relating to prepayment under the caption “” above), the City agrees to pay to the Authority, its successors and assigns, THE CERTIFICATES the Lease Payments as annual rental for the use and possession of the Leased Premises. The Lease Payments are due and payable on February 15 and August 15 of each year (each, a “Lease Payment Date”). Any moneys held in the Lease Payment Fund on any Lease Payment Date (other than amounts resulting from the prepayment of the Lease Payments in part pursuant to the Lease and other amounts required for payment of past due principal or interest with respect to any Certificates not presented for payment) shall be credited to the payment of Lease Payments due and payable on such Lease Payment Date. The Trust Agreement requires that Lease Payments be deposited in the Lease Payment Fund maintained by the Trustee. Pursuant to the Trust Agreement, on March 1 and September 1 of each year, the Trustee will apply such amounts in the Lease Payment Fund as are necessary to make interest and principal payments (including sinking account payments), respectively, with respect to the Certificates and the 2015 Certificates, as the same shall become due and payable, in the amounts specified in the Lease. Reserve Fund A Reserve Fund was established by the Trust Agreement and a 2015 Certificates Account and a 2016 Certificates Account are established therein. The Reserve Fund is required to be maintained in an amount equal to the least of (i) maximum aggregate annual Lease Payments payable under the Lease in any Certificate Year (exclusive of Lease Payments attributable to Certificates, 2015 Certificates and Additional Certificates that have been defeased), (ii) 125% of the average annual aggregate Lease Payments (in any Certificate Year) then payable under the Lease (exclusive of Lease Payments attributable to Certificates, 2015 Certificates and Additional Certificates, if any, that have been defeased), or (iii) 10% of the face amount of the Certificates, the 2015 Certificates and any Additional Certificates, if any, (less original issue discount if in excess of two percent of the stated payment amount at maturity) (the “Reserve Requirement”). The full amount available in the Reserve Fund may be used by the Trustee to make payments due with respect to the Certificates, the 2015 Certificates and Additional Certificates, if any, in the event of abatement or a failure by the City to make Lease Payments when due. On the Closing Date, there will be $2,210,406 on deposit in the Reserve Fund from proceeds of the 2015 Certificates which will be held in the 2015 Certificates Account. The Trustee will deposit an additional $1,088,000* in the 2016 Certificates Account of the Reserve Fund from proceeds of the Certificates. The total amount on deposit in the Reserve Fund will equal maximum annual Lease Payments. The Reserve Requirement, or any portion thereof, may also be satisfied by the City by crediting to the Reserve Fund a letter of credit, a surety bond insurance policy, or any other comparable credit facility or any combination thereof which in the aggregate make funds available in the Reserve Fund in an amount equal to the Reserve Requirement. See “ APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - DEFINITIONS AND SUMMARY OF CERTAIN PROVISIONS OF THE TRUST AGREEMENT - .” DEFINITIONS __________________________ * Preliminary, subject to change. 10 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 393 Insurance Relating to the Leased Premises Fire and Extended Coverage Insurance. The City will procure and maintain, or cause to be procured and maintained, throughout the term of the Lease, insurance against loss or damage to any portion of the Leased Premises caused by fire and lightning, with extended coverage and theft, vandalism and malicious mischief insurance. Said extended coverage insurance will, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance, excluding flood and earthquake; provided, however, that a flood and earthquake rider shall be purchased if the City, in its reasonable discretion, determines that such coverage is available from reputable insurers at commercially reasonable rates. The City does not currently maintain earthquake insurance on the Leased Premises. The insurance shall be in an amount equal to the full replacement value of the Leased Premises, subject to a “deductible clause” not to exceed two hundred fifty thousand dollars ($250,000) for any one loss, or in the case of a flood and earthquake rider, ten percent (10%) of the coverage obtained. The term “full replacement value” as used in this paragraph shall mean the actual replacement cost of the improvements constituting the Leased Premises. Such insurance may be maintained as part of or in conjunction with any other insurance carried or required to be carried by the City, and, subject to compliance with the Lease, may be maintained in the form of self-insurance by the City or through a California joint powers authority of which the City is a member. .” The net proceeds of such insurance will be applied as provided under the caption See “ RISK FACTORS “Insurance and Condemnation Awards” below. . Rental Interruption Insurance The City will maintain, or cause to be maintained, rental income or use and occupancy insurance in an amount not less than the maximum remaining scheduled Lease Payments in any future 24-month period, to insure against loss of rental income from the Leased Premises caused by perils covered by the fire and extended coverage insurance. Such insurance may be maintained as part of or in conjunction with any other rental income or use and occupancy of insurance carried by the City, but may not be maintained in the form of self-insurance by the City. The Net Proceeds of such rental interruption insurance will be paid to the Trustee and deposited (1) in the Reserve Fund to make up any deficiencies therein, and (2) deposited in the Lease Payment Fund, to be credited towards the payment of the Lease Payments in the order in which such Lease Payments come due and payable. Title Insurance. The City will obtain and maintain throughout the term of the Lease title insurance on the Leased Premises, in the form of an ALTA title policy (with western regional exceptions), in an amount equal to the aggregate principal amount of the Certificates, the 2015 Certificates and any Additional Certificates outstanding issued by a company of recognized standing, duly authorized to issue the same, payable to the Trustee for the benefit of the Owners, subject only to Permitted Encumbrances. Said policy or policies will insure the City’s leasehold estate under the Lease in the Leased Premises, subject only to Permitted Encumbrances. All Net Proceeds received under said policy or policies will be deposited with the Trustee and applied as provided in the Trust Agreement and the Lease. If there are not sufficient insurance proceeds to complete repair of the Leased Premises, the Lease Payment schedule will be proportionally reduced in accordance with the Lease. Such reduced Lease Payments may not be sufficient to pay principal and interest with respect to the Certificates and the 2015 Certificates. Such reduction would not constitute a default under either the Trust Agreement or the Lease. See “ - The Lease Payments - Abatement” herein. RISK FACTORS 11 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 394 Insurance and Condemnation Awards Upon receipt of Net Proceeds of casualty and theft insurance or title insurance, the City shall deposit such amounts with the Trustee into the Net Proceeds Fund established under the Trust Agreement. Further, the City and/or the Authority will transfer to the Trustee any other Net Proceeds received by the City and/or Authority in the event of any accident, destruction, theft or taking by eminent domain or condemnation with respect to the Leased Premises, for deposit in the Net Proceeds Fund. The Trustee shall disburse moneys in the Net Proceeds Fund to repair and reconstruct the Leased Premises provided that it has received the written consent of Ambac Assurance Corporation (as insurer of the 2006 Certificates, so long as any 2006 Certificates are outstanding) and a certificate from the City to the effect that: (i) the Net Proceeds available for such purpose, together with any other funds supplied by the City to the Trustee in a subaccount of the Net Proceeds Fund for such purpose, are expected to equal at least 110% of the projected costs of replacement or repair, and (ii), in the event that the damage, destruction or taking is expected to result in abatement of Lease Payments, such replacement or repair can be fully completed within a period not in excess of the period in which rental interruption insurance proceeds together with other identified available moneys will be available to pay in full all Lease Payments coming due during such period. If the City notifies the Trustee that the foregoing certification cannot be made or that replacement or repair of any portion of the Leased Premises is not economically feasible or in the best interest of the City, then the Trustee shall promptly transfer the Net Proceeds to the Prepayment Fund as provided in the Trust Agreement and apply them to prepayment of the Certificates, the 2015 Certificates and any Additional Certificates as provided in the Trust Agreement and prepayment of Lease Payments as provided in the Lease; provided that in the event of damage or destruction in whole of the Leased Premises and in the event such Net Proceeds, together with funds then on hand in the Lease Payment Fund and Reserve Fund are not sufficient to prepay all the Certificates, the 2015 Certificates and any Additional Certificates then Outstanding, then the City shall not be permitted to certify that repair, replacement or improvement of all of the Leased Premises is not economically feasible or in the best interest of the City. In such event, the City shall proceed to repair, replace or improve the Leased Premises from legally available funds in the then-current fiscal year and amounts in the Net Proceeds Fund will be applied to repair and replace the Leased Premises. No assurance can be given that the proceeds of any insurance or condemnation award will be sufficient under all circumstances to repair or replace any damaged or taken Leased Premises or to prepay all Lease Payments with respect to the Leased Premises. Also, the City makes no representation as to the sufficiency of any insurance awards or the adequacy of any self-insurance to pay, when and as due, amounts payable under the Lease or the Certificates and the 2015 Certificates. Remedies on Default If the City defaults in performance of its obligations under the Lease, the Trustee, as assignee of the Authority, may elect not to terminate the Lease and may re-enter and relet the Leased Premises and may enforce the Lease and hold the City liable for all Lease Payments on an annual basis while re-entering and reletting the Leased Premises. Such re-entering and reletting shall not effect a surrender of the Lease. The City, in the event of default, will have no right to any rentals received by the Trustee through reletting of the Leased Premises except amounts in excess of the Lease Payments and other amounts due under the Lease. Alternatively, the Trustee may elect to terminate the Lease and may re-enter and relet the Leased Premises and seek to recover all costs, losses or damages caused by the City’s default. The City agrees to pay all costs, loss or damage howsoever occurring. See “ - Limited Recourse on Default; RISK FACTORS No Acceleration” and “- Enforcement of Remedies” and “ APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - DEFINITIONS AND SUMMARY OF CERTAIN PROVISIONS OF THE LEASE - EVENTS OF .” DEFAULT AND REMEDIES 12 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 395 Encumbrances The City and the Authority may not create any mortgage, pledge, lien, charge or encumbrance upon the Leased Premises other than “Permitted Encumbrances.” See “ APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - DEFINITIONS AND SUMMARY OF CERTAIN PROVISIONS OF THE TRUST .” AGREEMENT - DEFINITIONS THE 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 Certificates 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 2015-16, the City had 966 authorized full-time staff positions including sworn officers and fire personnel and has budgeted 984.25 positions in Fiscal Year 2016-17. Including part-time personnel, the City employs approximately ____ 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 Term Expires City Council Member Mary Casillas Salas, MayorDecember 2018 John McCannDecember 2018 Patricia Aguilar December 2018 Pamela Bensoussan December 2016 Steve MiesenDecember 2016 13 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 396 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 Governmental Services Public Safety and Welfare For Fiscal Year 2016-17, the City of Chula Vista Police Department has authorized total positions of ___, 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 __ 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. 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 commuting distance from Chula Vista in the San Diego metropolitan area. 14 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 397 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. 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. 15 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 398 Population The following table provides a comparison of population growth for Chula Vista and San Diego County between 2012 and 2016. TABLE NO. 1 CHANGE IN POPULATION CHULA VISTA AND SAN DIEGO COUNTY 2012 – 2016 CHULA VISTA SAN DIEGO COUNTY January 1 Percentage Percentage Year Population Change Population Change 2012 250,864 3,153,951 2013 256,741 2.3% 3,194,778 1.3% 2014 260,765 1.6% 3,230,278 1.1% 2015 263,347 1.0% 3,263,848 1.0% 2016 265,070 0.7% 3,288,612 0.8% % Increase Between 2012 - 2016 5.7% 4.3% __________________________________________ Source: State of California, Department of Finance, “E-4 Population Estimates for Cities, Counties, and the State, 2011-2016, with 2010 Census Benchmark” Sacramento, California, May 2016. 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. 16 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 399 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 Civilian Unemployment Year Labor Force EmploymentUnemployment 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. 17 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 400 Industry The City is located in the San Diego-CarlsbadMetropolitan 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 (1) WAGE AND SALARY WORKERS BY INDUSTRY (in Thousands) Industry 2011 2012 2013 2014 2015 Government 229.8231.2 233.1 236.6 240.3 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 ServiceProducing 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.” 18 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 401 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 3,135Education Rohr Inc./Goodrich Aerospace 2,468 Aerospace Manufacturing Southwestern Community College 1,918 Education Sharp Chula Vista Medical Center 1,878Hospital 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 “ - Local Taxes.” FINANCIAL INFORMATION 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.” 19 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 402 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 Services1,976,176 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.” 20 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 403 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 YearUnitsValuationBuildingsValuation 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. 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 willbe managed ina sound and prudent manner in order toensurethe continuedviability 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 recurringexpenditures.One-time revenues willbe used forcapital, reserveaugmentation,orother nonrecurring expenditures. Accounting systems will be maintained in accordance with Generally Accepted Accounting Principles. 21 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 404 Investment policy and practice willbein accordancewith State statutes thatemphasize safety and liquidity over yield, including quarterly status reportstotheCity Council. City operations will be managed and budgets preparedwith the goal of maintaining an available fundbalance in the GeneralFundofno less than 15% of the General Fund operating budget. General Fund fiscal status reportsreflecting comparisons of actual and projected performance with budgetallocations forboth revenueandexpenditures will bepresented 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, 2016 is expected to be ___% and the Economic Contingency Reserve is expected to be ___%. To date, the Catastrophic Event Reserve has not been funded. Revenue The City will endeavor to maintain a diversified and stable revenue base inorder to minimize the impact to programs from short-term economic fluctuations. Revenueprojectionswill be maintained for the current year andfour future fiscal years,and estimates will be basedonaconservative, analytical, andobjective process. In order tomaintain flexibility, except as required by law or funding source, the City will avoid earmarking any restricted revenues for a specific purpose or program. TheCity has established user fees to best ensurethat those whousea proprietary servicepayfor thatservicein proportion to the benefits received. With few exceptions, such as thoseservices 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 toensure that program costs continue tobe recovered and that the feesreflect changesinlevels of service delivery. TheCity willrecover the cost of newfacilities and infrastructure necessitated bynewdevelopment consistentwithStatelawandtheCity’s GrowthManagement Program. DevelopmentImpact Fees willbecloselymonitored and updated to ensure that they are maintained at a leveladequate to recovercosts. When considering newdevelopment alternatives, theCity will attempt todetermine thefiscal impact of proposed projects,annexations,etc.and ensure that mechanisms areputinplaceto providefunding for any projected negativeimpacts on City operations. Expenditures Budgetarycontrolwillbeexercised at theDepartment/category level,meaning that each department is authorizedto spend up to the total amount appropriated for that department within theexpenditure categories of Personnel Costs, Supplies &Services, Other Charges, Utilities,and Capital.Transfers ofappropriationsbetween expenditure categories of up to $15,000 may be 22 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 405 approved by the City Manager. Transfers of appropriations between expenditure categories in excess of $15,000, orbetween departments requireCity Council approval. Appropriations, other than for capital projects, remaining unspent at the end of any fiscal year will becancelled and returned to Available FundBalancewiththe exception of any appropriations encumbered astheresultof a validpurchase order or as approved for a specific project orpurpose by the City Council ortheCity Manager. Appropriations for capital projects willnecessarilybe carried over from yeartoyear until the project is deemed to be complete. TheCity will establish and maintain equipment replacement and facility maintenance funds as deemed necessary to ensure that monies are setaside andavailable tofund ongoing replacement needs. TheCity will attempt to compensate non-safety employees at rates above the middleofthelabor marketas measured by the median rate for similar jurisdictions. Capital Major capital projects willbeincluded in a capital improvement program budget (the “CIP Budget”) reflecting a five-year period. The CIP Budgetwillbe updated annually and presented to City Council for approval. Resources willbe formally appropriated (budgeted)for the various projects on anannual basis in accordance with the five-year plan. Capital Financing andDebtManagement TheCity willconsidertheuse of debt financing onlyforone-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 withbond legal covenants,including adherence to continuing disclosure requirements and federal arbitrage regulations. Inaddition to externally financeddebt, the City utilizes inter-fund loans wheneverpossible to reduce borrowing costsor provide for shorter term loans. When interest is charged oninternal loans,it is done at the same rate the City earns from itspooled 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 2016-2020. The City also adopted a Strategic Plan in 2012. The recently developed Long-Term 23 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 406 Financial Plan is anticipated to be adopted with the 2016-17 Budget. 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 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, 2017, 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 showed that sales tax revenues was increasing 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 2015-16 budget was prepared, and 4.7% or $1.4 million more than the 2014-15 actual sales tax. Current year 2015-16 trends show sales tax revenues improving, and continuing with this trend, sales taxes are estimated to grow 3% from the current projections (excluding one-time Triple Flip projected revenues described under “State Legislative Shifts of Property Tax Allocation” below). 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 three fiscal years the City’s assessed 24 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 407 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%. The trend is anticipated to continue and a 4% increase in assessed valuation is projected in fiscal year 2016-17. 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. Taking the trend into account, TOT is anticipated to be $3.7 million in 2016- 17. Staffing Levels. As revenues have improved, the City has continued the trend of slowly recovering it’s staffing levels previously reduced from 1,264 to 933 full time equivalent positions (“FTE”) as a result of the great recession. Since Fiscal Year 2011-12 the City has been able to achieve a modest increase in staffing, managing to keep pace with the population increase over the same time period, resulting in no net increase in FTE positions since 2011-12 of 3.7 FTE positions per 1,000 residents. 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 equaled 15.3% of the City’s General Fund in the Fiscal Year 2015-16 budget and are estimated at $23.7 million in 2016-17, or 16.2% of the Fiscal Year 2016-17 proposed budget. Over the last several years CalPERS has made a series 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 2016-17 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. Revenues The largest components of budgeted Fiscal Year 2016-17 General Fund revenues (including transfers) are sales tax (22.1%), property tax (21.3%) and property tax in lieu of motor vehicle license fees (13.4%). 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); 25 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 408 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 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 52.8% of the total budgeted General Fund expenditures (including transfers) for Fiscal Year 2016-17. As noted, Table No. 9 provides a comparison of results for Fiscal Years 2013-14 and 2014-15, the budget for Fiscal Year 2015-16 and the proposed budget for Fiscal Year 2016-17. Historical financial information is shown in Table No. 24. 26 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 409 TABLE NO. 9 CITY OF CHULA VISTA GENERAL FUND REVENUES AND EXPENDITURES 2013-14 2014-15 2015-16 2016-17 Actual Actual Budget Budget Revenues: Property Tax $ 28,492,215 $ 29,705,939 $ 29,896,924 Property Tax in Lieu of MVLF 16,773,957 17,779,353 18,597,204 Sales Tax 29,171,174 30,394,291 31,830,591 (1) Other Taxes 31,281,292 22,858,848 23,079,601 Licenses and Permits 1,315,445 1,281,656 1,309,447 Intergovernmental Revenue 2,477,214 1,933,114 2,789,541 Fines, Forfeitures and Penalties 1,009,736 1,638,251 1,133,800 Use of Money & Property 2,522,915 2,832,039 2,676,807 (2) Charges for Services 9,257,946 9,430,097 7,701,176 Other Revenue 1,381,502 3,538,553 940,970 Reimbursements from Other Funds 10,199,020 9,273,303 9,759,977 (2) Transfers In 9,571,300 9,994,525 9,988,321 Total Revenues 143,453,716 140,659,969 139,704,359 Expenditures: General Government 18,316,773 20,841,178 19,433,341 Public Safety - Police 43,683,206 46,484,920 48,608,964 Public Safety - Fire 25,093,218 26,024,758 24,680,343 Public Works 27,092,607 27,822,644 29,404,880 Recreation and Library 6,925,073 7,273,387 7,982,168 Planning and Building 2,269,389 2,464,305 2,476,400 Capital Outlay 849,234 1,081,105 1,019,016 (1) Transfers Out 14,234,482 6,082,780 6,099,247 Total Expenditures 138,463,982 138,075,077 139,704,359 Net Change in Fund Balances 4,989,734 2,584,892 - Beginning Unassigned Fund Balance 10,790,135 14,511,252 14,554,698 Change in Reserves (1,268,617) (683,266) - (3) Ending Unassigned Fund Balance $ 14,511,252 $ 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. 27 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 410 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 “ - Constitutional Limitation on Taxes and Expenditures - Article XIIIA” and “- Proposition RISK FACTORS 8 Adjustments” herein. 28 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 411 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)CollectionsLevy 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 29 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 412 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 “ - State Budget; RISK FACTORS Redevelopment Agency Legislation.” TABLE NO. 12 CITY OF CHULA VISTA TOTAL AND NET PROPERTY TAX VALUATIONS Total Redevelopment FiscalAssessed 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 2015-16 24,215,624,344 (1,344,869,101) 22,870,755,243 4.8 ____________________________________ 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 Valuation of Total Taxpayer 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. 30 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 413 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 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 - Constitutional Limitation on Taxes and Expenditures - Proposition 62” and “- (see “ RISK FACTORS 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 31 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 414 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 “ - The RISK FACTORS 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. 32 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 415 TABLE NO. 14 CITY OF CHULA VISTA TAX REVENUES BY SOURCE Budget Budget 2013 2014 2015 2016 2017 $ 31,175,000 Property Tax $27,876,534 $ 28,492,215$29,705,939 $ 29,896,924 19,692,000 Property Tax In Lieu of VLF (1) 16,253,826 16,773,957 17,779,353 18,597,204 32,350,000 Sales Tax 28,627,785 29,171,174 30,394,291 31,830,591 11,796,000 Franchise Fees 9,266,768 8,845,067 10,831,671 11,426,283 6,380,000 (2) Utility Users Tax 4,428,794 17,525,294 6,364,691 6,500,000 3,655,000 Transient Occupancy Tax 2,471,252 2,632,774 3,136,847 2,890,853 1,430,000 Business License Tax 1,260,622 1,328,554 1,407,145 1,429,643 1,018,000 Property Transfer Tax 1,125,252 949,603 1,118,494 832,822 $107,496,000 Total $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 2016-17 is $19.7 million, all of which is included in the City’s Fiscal Year 2016-17 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, the City reflected the VLF in “Intergovernmental Revenues” in Fiscal Year 2010-11 and 2012-13, and in all other years in “Taxes.” 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 .” The City utilizes the PFDIF to offset the cost of B - CITY AUDITED FINANCIAL STATEMENTS 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, 2016 is expected to be approximately $__ million and the interfund loans due to other funds from the PFDIF is expected to be $__ million. 33 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 416 FiscalPFDIF Year 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 Estimate _________ 2016-17 Budget _________ ____________________________________ (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 2016-17 includes $__ 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 $__ million fund balance. 34 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 417 Personnel Employee salaries and benefits account for over 80% of the City’s General Fund expenditures estimate for Fiscal Year 2016-17. 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 2016-17 based on authorized, budgeted full-time equivalent positions. TABLE NO. 15 CITY OF CHULA VISTA CITY PERSONNEL Number of Full TimeEmploees Per y Fiscal Year Permanent Employees 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 3.60 2016-17 984 3.70 ____________________________________ Source: City of Chula Vista. 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 This caption contains certain information relating to the California Public Employees Retirement System (“CalPERS”). The information is primarily derived from information produced by CalPERS, its independent accountants and its actuaries. The City has not independently verified the information provided by CalPERS and makes no representations nor expresses any opinion as to the accuracy of the information provided by CalPERS. The comprehensive annual financial reports of CalPERS are available on its Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information concerning benefits and other matters. The textual reference to such Internet website is provided for convenience only. None of the information on such Internet website is incorporated by reference herein. The City cannot guarantee the accuracy of such information. Actuarial assessments are “forward-looking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or be changed in the future. Plan Description. The City provides retirement benefits, disability benefits, periodic cost-of-living adjustments, and death benefits to plan members and beneficiaries (the “Plans”). The Plans are part of CalPERS, an agent multiple-employer plan administered by CalPERS, which acts as a common investment 35 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 418 and administrative agent for participating public employers within the State. Benefit provisions are established by State statute and by City contracts with employee bargaining groups. The Plans as described herein covers three separate employee groups – Miscellaneous, Safety Fire and Safety Police. 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” or “PEPRA”), which made changes to CalPERS Plans, most substantially affecting new employees hired after January 1, 2013 (the “Implementation Date”). For non-safety CalPERS participants hired after the Implementation Date, the Reform Act changed the normal retirement age by increasing the eligibility for the 2% age factor from age 55 to 62 and increased the eligibility requirement for the maximum age factor of 2.5% to age 67. The Reform Act also: (i) requires all new participants enrolled in CalPERS 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 to a maximum of 8% of salary, (ii) requires CalPERS 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. Benefit Tiers. In 2011 the City established two tiers of benefits for employees in each of the employee plans (Miscellaneous, Safety Fire and Safety Police), based on date of hire (“Tier 1” and “Tier 2”). Benefits were reduced for Tier 2 employees hired on or after April 22, 2011. Due to PEPRA, the City added a benefit tier in each employee group for employees subject to PEPRA (“PEPRA Tier”). 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. The Plans’ provisions and benefits in effect at June 30, 2015, are summarized as follows: Miscellaneous Plan Tier 1Tier 2PEPRA Tier Benefit Formula3% at 60 2% at 60 2% at 62 Benefit Vesting Schedule 5 years 5 years 5 years Earliest Retirement Age 505052 Maximum Benefit Factor 2.0% to 3.0% 1.092% to 2.418% 1.0% to 2.5% Final Compensation 12 months 36 months 36 months Required Employee Contribution Rates 8.0% 7.0% 6.25% Required Employer Contribution Rates 26.235% 26.235% 26.235% 36 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 419 Safety Fire Plan Tier 1Tier 2PEPRA Tier Benefit Formula3% at 503% at 552.7% at 57 Benefit Vesting Schedule 5 Years5 Years5 Years Earliest Retirement Age 505050 Maximum Benefit Factor 3.0%2.4% to 3.0%2.0% to 2.7% Final Compensation 12 Months36 Months36 Months Required Employee Contribution Rates 9.0%9.0%12.25% Required Employer Contribution Rates 28.857%28.857%28.857% Safety Police Plan Tier 1Tier 2PEPRA Tier Benefit Formula3% at 503% at 552.7% at 57 Benefit Vesting Schedule 5 Years5 Years5 Years Earliest Retirement Age 505050 Maximum Benefit Factor 3.0%2.4% to 3.0%2.0% to 2.7% Final Compensation 12 Months36 Months36 Months Required Employee Contribution Rates 9.0%9.0%12.25% Required Employer Contribution Rates 28.857%28.857%28.857% Funding Policy. Active members in the Plans are required to contribute a percent of their annual covered salary as shown in the charts above. All employees pay their own employee contributions towards retirement. Actuarial Methods and Assumptions Used to Determine Total Pension Liability. The total pension liabilities in the June 30, 2013 actuarial valuations, rolled forward to June 30, 2014, using standard update procedures, were determined using the following actuarial assumptions: Valuation Date June 30, 2013 Measurement Date June 30, 2014 Actuarial Cost Method Entry-Age Normal Cost Method Actuarial Assumptions: Discount Rate 7.5% Inflation 2.75% (1) Projected Salary Increase Varies (2) Investment Rate of Return 7.5% (3) Mortality Post Retirement Benefit Increase Contract cost of living adjustment up to 2.75% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.75% thereafter ____________________________________ (1) Varies by entry age and service. (2) Net of pension plan investment and administrative expenses, including inflation. (3) The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the CalPERS 2014 Experience Study. 37 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 420 All other actuarial assumptions used in the June 30, 2013 valuation were based on the results of a January 2014 actuarial experience study (“Experience Study”) for the period 1997 to 2011. Further details of the Experience Study can be found on the CalPERS website under Forms and Publications. Recent Changes in Actuarial Assumptions. In March 2012, CalPERS 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, CalPERS 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, CalPERS 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, CalPERS 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, CalPERS adopted new demographic assumptions regarding improved mortality rates. According to CalPERS, this could result in rates as much as 2% to 5% higher. The impact is phased in and affects rates beginning in Fiscal Year 2016-17. 38 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 421 Contribution Rates. The contribution requirements of Plan members and the City are established by CalPERS. The City’s percentage of payroll for CalPERS payments for Fiscal Years 2008-09 through 2016-17 and estimates for Fiscal Years 2017-18 through 2021-22 are shown in the table below. These rates do not include the employees’ contribution rates. TABLE NO. 16 EMPLOYER RETIREMENT CONTRIBUTION RATES Fiscal Year Miscellaneous Safety Fire Safety Police 2008-09 18.317% 23.936% 25.642% 2009-10 18.152% 23.228% 25.823 2010-11 19.599% 22.654% 25.145 2011-12 22.702% 26.134% 28.749 2012-13 23.668% 26.492% 29.153 2013-14 25.437% 27.316% 30.534 2014-15 26.235% 28.857% 34.020 2015-16 28.119% 30.431% 35.587 2016-17 2017-18* 2018-19* 2019-20* 2020-21* 2021-22* ____________________________________ * Projected by PERS based on various assumptions as of November 2015, including an investment return of 7.5%. Source: California Public Employees’ Retirement System. Annual Pension Costs. A five-year history of the City’s required annual pension costs is shown in the table below. The required contribution was determined as part of an annual actuarial valuation. The most recent actuarial assumptions are described under the caption “Actuarial Methods and Assumptions Used to Determine Total Pension Liability.” TABLE NO. 17 FIVE-YEAR TREND INFORMATION FOR ANNUAL PENSION COSTS ALL TIERS COMBINED Annual Pension Fiscal Year Cost (APC) 2010-11 $19,092,227 2011-12 23,996,289 2012-13 18,188,432 2013-14 16,215,564 2014-15 20,818,356 39 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 422 For Fiscal Years 2015-16 and 2016-17, the employer and employees’ share of CalPERS costs are shown below. BudgetEstimated Budget 2015-16 2015-16 2016-17 Employer Share Employees’ Share Total Annual Pension Cost Pension Liabilities. The City’s net pension liability for the Plans is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plans is measured as of June 30, 2014, using the annual actuarial valuation as of June 30, 2013 rolled forward to June 30, 2014 using standard update procedures. The City’s changes in net pension liability for the Plans between June 30, 2013 and 2014 was as follows: TABLE NO. 18 NET PENSION LIABILITY BY PLAN Miscellaneous Plan Increase (Decrease) TotalPlanNet Pension Fiduciary Pension Liability Net Position Liability/(Asset) (1) Balance at: 6/30/2013 (Valuation Date) $436,436,153 $279,540,671 $156,895,482 Changes Recognized for the Measurement Period: Service Cost 8,696,183 - 8,696,183 32,359,841 Interest on the Total Pension Liability 32,359,841 - Contribution from the Employer - 9,134,182 (9,134,182) Contributions from Employees - 4,555,300 (4,555,300) Net Investment Income (2) - 48,303,496 (48,303,496) Benefit Payments including Refunds of Employee Contributions (18,639,387) (18,639,387) - Net Changes During 2013-14 22,416,637 43,353,591 (20,936,954) Balance at: 6/30/2014 (Measurement Date) (1) $458,852,790 $322,894,262 $135,958,528 _______________________________________ (1) The fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary self-insurance and OPEB expense. This may differ from the plan assets reported in the funding actuarial valuation report. (2) Net of administrative expenses. (Continued on following page) 40 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 423 Safety Plan (combined Fire and Police) Increase (Decrease) TotalPlanNet Pension Fiduciary Pension Liability Net Position Liability/(Asset) (1) Balance at: 6/30/2013 (Valuation Date) $380,617,699$273,515,399 $107,102,300 Changes Recognized for the Measurement Period: Service Cos 10,220,233-10,220,233 t Interest on the Total Pension Liability 28,334,465- 28,334,465 Contribution from the Employe -11,684,174 (11,684,174) r Contributions from Employees -3,157,921 (3,157,921) (2) et Investment Income -47,649,285 (47,649,285) N Benefit Payments including Refunds of Employee (15,869,862) (15,869,862) - Contributions et Changes During 2013-14 22,684,836 46,621,518 (23,936,682) N (1) Balance at: 6/30/2014 (Measurement Date) $403,302,535$320,136,917 $ 83,165,618 _______________________________________ The fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary (1) self-insurance and OPEB expense. This may differ from the plan assets reported in the funding actuarial valuation report. (2) Net of administrative expenses. Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the City’s net pension liability, calculated using the discount rate of 7.50%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1% lower (6.50%) or 1% higher (8.50%) than the current rate: Miscellaneous Safety Combined et Pension Liability 1% Decrease in N Discount Rate to 6.5%$197,497,721$140,092,386 et Pension Liability at Current N Discount Rate of 7.5% $135,958,528$83,165,618 et Pension Liability 1% Increase in N Discount Rate to 8.5%$84,993,544$36,508,855 See Note 11 of the City’s Comprehensive Annual Financial Report included in “” for further APPENDIX B information about the Plan. 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. 41 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 424 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 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: PoliceFire 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. 42 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 425 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. 19 ANNUAL OPEB COST AND NET OPEB OBLIGATION 2011-12 2012-13 2013-14 2014-15 2010-11 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 cost1,578,000 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. 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. 20 OPEB COSTS AND NET OPEB OBLIGATION Percentage of FiscalAnnual Annual OPEB Cost Net OPEB Year OPEB Cost Contributed 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. 43 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 426 TABLE NO. 21 SCHEDULE OF FUNDING PROGRESS Actuarial Entry Age UAAL as a Valuation Actuarial Actuarial Unfunded Percentage of Date AccruedValue of AAL Funded Covered Covered June 30 (1)Liability Assets (UAAL) Ratio Payroll 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 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); 44 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 427 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. The aggregate change in the balance of claims payable as recorded in the Governmental Activities were as follows: Beinnin oClaims andBalance at ggf Fiscal Year Changes in Claims Fiscal Liability Estimates Payments 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 50.7% Federal Securities 40.1 Pooled Investments 7.9 Corporate Notes 1.3 Time Deposits 100.0% 45 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 428 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. 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. Concurrently with the execution and delivery of the Certificates, the Chula Vista Municipal Financing Authority will issue its $28,000,000* Lease Revenue Refunding Bonds, Series 2016 (the “2016 Bonds”). Original AmountFinal Category of Indebtedness Obligation Outstanding Maturity (1) 2006 Certificates of Participation (Civic Center Phase 2) $20,325,000 $ 9,275,000 2036 (2) 2010 Certificates of Participation (Capital Facilities Refunding) 29,355,000 27,285,000 2033 (3) 2014 Refunding Certificates of Participation (Police Facility Project)45,920,000 42,835,000 2032 (4) 2015 Refunding Certificates of Participation (Civic Center Project) 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) To be refunded with proceeds of the Certificates. 77.8% of annual lease payments for the Certificates (approximately $295,000* through 2026 and $765,000* beginning in 2027) will be funded from the PFDIF, subject to the availability of funds. (2) To be refunded with proceeds of the 2016 Bonds. The City expects that approximately 71.5% of the annual lease payments for the 2016 Bonds (approximately $1,590,000* of a total $2,210,000*) will be funded from the PFDIF, subject to the availability of funds. (3) The City delivered its 2014 Refunding Certificates of Participation to refinance its outstanding 2002 Certificates of Participation, which originally provided 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 (approximately $1,643,000 of a total $3,700,000), subject to the availability of funds. (4) 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. The City expects that approximately $1,230,000 of the approximate $2,920,000 annual lease payments for the 2015 Certificates 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 the financial gap between energy conservation project capital costs and the available rebates _________________________________________ * Preliminary, subject to change. 46 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 429 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. 22 CITY OF CHULA VISTA DIRECT AND OVERLAPPING DEBT AS OF JUNE 30, 2015 2014-15 Assessed Valuation: $23,090,440,353 (1) OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable 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. 47 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 430 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 (2) City of Chula Vista Certificates of Participation 100. 117,590,000 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 (3) GROSS COMBINED TOTAL DEBT $1,118,979,023 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. 48 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 431 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 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. ” hereto for the audited financial statements for the Fiscal Year ended June 30, 2015. See “ APPENDIX B 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. Reporting obligations under Governmental Accounting Standards Board Statement (“GASB”) No. 68 - Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27 (“GASB No. 68”), and GASB Statement No. 71 - Pension Transitions for Contributions Made Subsequent to the Measurement Date-an amendment of GASB No. 68, commenced with financial statements for Fiscal Year 2014-15. Under GASB No. 68, an employer reports the net pension liability, pension expense and deferred outflows/deferred inflows of related to pensions in its financial statements as part of its financial position. The result of the implementation of these standards was to decrease the governmental activities net position at July 1, 2014 by $214.4 million and to decrease the business-type activities net position at July 1, 2014 by $28.7 million. The audited financial statements of the City for the Fiscal Year ended June 30, 2015 included in “” contain additional information about the retirement liability and the APPENDIX B application of GASB No. 68. See Notes 1 and 16 in the City’s audited financial statements attached in “” for a discussion APPENDIX B of additional accounting changes and prior period adjustments. Set forth in Table No. 23 below is the General Fund balance sheet for the last five fiscal years and Table No. 24 below presents a five year history of General Fund revenues, expenditures and changes in fund balances. 49 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 432 TABLE NO. 23 CITY OF CHULA VISTA GENERAL FUND BALANCE SHEET 2011 2012201320142015 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 - - - 9,591,661 Due from Successor Agency of Chula Vista RDA - 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 Retentionpayable 3,351 - 212,667 - - Settlement payable - - 8,000,000 - - Pass-throughpayable - - - - 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. 50 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 433 TABLE NO. 23 CITY OF CHULA VISTA GENERAL FUND BALANCE SHEET Continued from previous page. 2011 2012201320142015 DEFERRED INFLOWS OF RESOURCES : $ - $ - $ 3,669,767 $ 3,898,935 Unavailable revenues $ - Total Deferred inflows of resources $ - $ - $ - $ 3,669,767 $ 3,898,935 (1) Fund Balances : 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 (2) Nonspendable11,258,150 8,799,026 7,481,079 - - (2) Restricted 127,883 - 750,951 - - (2) Committed 7,178,838 4,375,207 2,298,088 - - (2) Assigned5,298,536 2,895,545 6,648,922 - - Unassigned (2) 11,876,992 11,969,280 10,790,135 14,511,252 16,412,878 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 ____________________________________ See “GASB Statement No 54” above. (1) Change in financial statement presentation to show individual components of the fund balance commitments (2) and designations. Source: City of Chula Vista Comprehensive Annual Financial Reports. 51 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 434 TABLE NO. 24 CITY OF CHULA VISTA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 2011 2012201320142015 REVENUES: (2) Taxes $ 69,441,761 $ 85,167,221 $ 75,841,123 $105,718,638 $100,738,431 (1) Intergovernmental 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) $ (1,830,350)$ (4,161,096)$ (1,469,554)$ 9,652,916 $ (1,326,853) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in $ 11,304,257 $ 9,850,345 $ 9,661,447 $ 9,571,300 $ 9,994,525 (2) Transfers out (6,915,308)(13,390,590)(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 Property Taxes In-Lieu of Motor Vehicle Fees in “Intergovernmental Revenues” in Fiscal Year 2010-11 and 2012-13, and in all other years 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. 52 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 435 RISK FACTORS The purchase of the Certificates involves investment risk. If a risk factor materializes to a sufficient degree, it could delay or prevent payment of principal of and/or interest with respect to the Certificates. 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 Lease Payments Lease Payments are Limited Obligations of the City. The Lease Payments and other payments due under the Lease (including a proportionate share of the costs of improvement, repair and maintenance of the Leased Premises and taxes, other governmental charges and assessments levied against the Leased Premises) 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 Lease Payments and other payments due under the Lease. 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 Lease 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 Lease Payments may be decreased (see “- Outstanding Indebtednessof FINANCIAL INFORMATION the City” herein). Abatement. Except to the extent that amounts are available (i) in the Reserve Fund or the Lease Payment Fund under the Trust Agreement, (ii) from proceeds of rental interruption insurance, or (iii) as payments due from third parties due to a delay in reconstructing the Leased Premises, the amount of Lease 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 Premises or defects in the title with respect to the Leased Premises there is substantial interference with the use and possession of all or a portion of the Leased Premises by the City. The amount of such abatement shall be such that the resulting Lease Payments, exclusive of the amounts described above, do not exceed the fair rental value (as determined by an independent real estate appraiser selected by the City, who is not an employee of the City) for the use and possession of the portion of the Leased Premises 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 shall continue in full force and effect following an event of abatement and the City waives any right to terminate the Lease by virtue of an abatement event. In the event that such funds are insufficient to make all payments with respect to the Certificates during the period that the Leased Premises, 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 or Trust Agreement for nonpayment under such circumstances. Failure to pay principal, premium, if any, or interest with respect to the Certificates as a result of abatement of the City’s obligation to make Lease Payments under the Lease is not an event of default under the Trust Agreement or the Lease. In the event that Lease Payments are abated due to damage caused by earthquake or flood, such abatement may continue indefinitely, as no insurance for such damages is required under the Lease and the City cannot be compelled to repair or replace the damaged Leased Premises or to prepay the Certificates but has covenanted in the Lease to use its best efforts to repair or replace the Leased Premises from other lawfully available funds to the extent that the Net Proceeds are insufficient. See “ APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - DEFINITIONS AND SUMMARY OF CERTAIN PROVISIONS OF THE LEASE - AGREEMENT - Abatement of Lease Payments in Event of Loss of Use.” TO LEASE; TERM OF LEASE; LEASE PAYMENTS 53 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 436 Notwithstanding the provisions of the Lease and the Indenture specifying the extent of abatement of Lease 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 Lease Payments of the City may not be sufficient to pay all of the remaining principal and interest represented by the Certificates. Earthquake Risk. 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. The City is traversed by two potentially active faults, the Sweetwater Fault and La Nacion Fault and three inferred faults, the Otay River Fault, the Telegraph Canyon Fault and the San Diego Bay- Tijuana Fault. Seismic hazards encompass potential surface rupture, ground shaking, liquefaction and landslides. 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 City, a reduction in taxable values of property in the City and a reduction in revenues available to the General Fund to make Lease 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 any Leased Premises. Insurance. The Lease obligates the City to obtain and keep in force various forms of insurance, to assure repair or replacement of the Leased Premises in the event of damage or destruction to the Leased Premises (see “ APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - DEFINITIONS AND SUMMARY OF -” herein). The Lease does not require earthquake or CERTAIN PROVISIONS OF THE LEASE INSURANCE flood insurance unless the City, in its reasonable discretion, determines that such coverage is available from reputable insurers at commercially reasonable rates. The City currently does not maintain earthquake or flood insurance on the Leased Premises or other City facilities. 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. In addition, certain risks may not be covered by such property insurance (see “ SOURCES OF PAYMENT FOR - Insurance Relating to the Leased Premises” herein). THE CERTIFICATES In the event the Leased Premises is partially or completely damaged or destroyed due to any uninsured or underinsured event, it is likely that Lease Payments will be partially or completely abated. If any Leased Premises 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 Lease Payments. Discovery of a Hazardous Substance That Would Limit the Beneficial Use of the Leased Premises. 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 Premises be affected by a hazardous substance, might be to limit the beneficial use of the Leased Premises upon discovery and during remediation. The City is not aware of any such condition on the Leased Premises. 54 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 437 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 Certificates 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 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. 55 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 438 Limited Recourse on Default; No Acceleration If an event of default occurs and is continuing under the Lease, there is no remedy of acceleration of any Lease Payments which have not come due and payable in accordance with the Lease. The City will continue to be liable for Lease Payments as they become due and payable in accordance with the Lease if the Trustee does not terminate the Lease, and the Trustee would be required to seek a separate judgment each year for that year’s defaulted Lease 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 and the Trust Agreement could prove both expensive and time-consuming. The Lease permits the Trustee to take possession of and re-lease the Leased Premises in the event of a default by the City under the Lease. Even if the Trustee could readily re-lease the Leased Premises, the rents may not be sufficient to enable it to pay principal and interest with respect to the Certificates in full when due. Enforcement of Remedies The enforcement of any remedies provided in the Lease and the Trust Agreement could prove both expensive and time consuming. The rights and remedies provided in the Lease and the Trust Agreement 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” 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 Certificates 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 Certificates (including Special Counsel’s legal opinion) will be qualified, as to the enforceability of the Certificates, the Trust Agreement, the Site Lease, the Lease, 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” below. Bankruptcy In addition to the limitations on remedies contained in the Trust Agreement and the Lease, the rights and remedies in the Lease may be limited and are subject to the provisions of federal bankruptcy laws, as now or hereafter enacted, and to other laws or equitable principles that may affect the enforcement of creditors’ rights. Under Chapter 9 of the Bankruptcy Code (Title 11, United States Code) (the “Bankruptcy Code”), which governs bankruptcy proceedings of public entities such as the City, no involuntary bankruptcy petition may be filed against a public entity. However, upon satisfaction of certain prerequisite conditions, a voluntary bankruptcy petition may be filed by the City. The filing of a bankruptcy petition results in a stay against 56 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 439 enforcement of certain remedies under agreements to which the bankrupt entity is a party. A bankruptcy filing by the City could thus limit remedies under the Lease. A bankruptcy debtor may choose to assume or reject executory contracts and leases, such as the Lease. However, a debtor may not assume or reject executory contracts to loan money or to make a financial accommodation, such as the Trust Agreement. In the event of rejection of a lease by debtor lessee, the leased property is returned to the lessor and the lessor has a claim for a limited amount of the resulting damages. Under the Trust Agreement, the Trustee holds a security interest in the revenues in the funds pledged thereunder, including Lease Payments, for the benefit of the Owners of the Certificates, but such security interest arises only when the Lease Payments are actually received by the Trustee following payment by the City. The Leased Premises itself is not subject to a security interest, mortgage or any other lien in favor of the Trustee for the benefit of Owners. In the event of a bankruptcy filed by the City and the subsequent rejection of the Lease by the City, the Trustee would recover possession of the Leased Premises and would have a claim for damages against the City. The Trustee’s claim would constitute a secured claim only to the extent of revenues in the possession of the Trustee; the balance of such claim would be unsecured. Such a bankruptcy could adversely affect the payments under the Trust Agreement. 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 City or the commencement of any judicial or other action for the purpose of recovering or collecting a claim against the City and could prevent the Trustee from making payments from funds in its possession; (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 secured debt which may have priority of payment superior to that of the Owners of the Certificates; and (iv) the possibility of the adoption of a plan (the “Plan”) for the adjustment of the City’s debt without the consent of the Trustee or all of the Owners of the Certificates, 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 and in the best interests of creditors. In a bankruptcy of the City, if a material unpaid liability is owed to PERS or any other pension system (collectively the “Pension Systems”) on the filing date, or accrues thereafter, such circumstances could create additional uncertainty as to the City’s ability to make Lease Payments. Given that municipal pension systems in California are usually administered pursuant to state constitutional provisions and, as applicable, other state and/or city law, the Pension Systems may take the position, among other possible arguments, that their claims enjoy a higher priority than all other claims, that Pension Systems have the right to enforce payment by injunction or other proceedings outside of a City bankruptcy case, and that Pension System claims cannot be the subject of adjustment or other impairment under the Bankruptcy Code because that would purportedly constitute a violation of state statutory, constitutional and/or municipal law. It is uncertain how a bankruptcy judge in a City bankruptcy would rule on these matters. In addition, this area of law is presently very unsettled as issues of pension underfunding claim priority, pension contribution enforcement, and related bankruptcy plan treatment of such claims (among other pension-related matters) have been the subject of litigation in the Chapter 9 cases of several California municipalities, including the Cities of Stockton and San Bernardino. 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 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. 57 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 440 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 1975-96 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 (including for Fiscal Year 2016-17) 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 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 58 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 441 assessors statewide. The City experienced Proposition 8 reductions in property values between 2009 and 2013. See “ - Taxable Property and Assessed Valuation” herein. FINANCIAL INFORMATION 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 was $729,447,134. The City’s appropriations subject to the limit for 2015-16 were $293,415,405. 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 Lease Payments as required by the Lease. 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 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 59 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 442 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 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. 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%. 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. 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. 60 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 443 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, $4,488,610 of the City’s property tax revenues were diverted to the State as a result of a Proposition 1A suspension. The City participated in a Proposition 1A Securitization Program (the “Program”) sponsored by the California Statewide Communities Development Authority. The Program allowed the City to exchange its anticipated State property tax receivable for cash. 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 Lease 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 Prepayment Risk Early payment of the Lease Payments and early prepayment of the Certificates may occur in whole or in part without premium, on any date if the Leased Premises or a portion thereof is lost, destroyed or damaged beyond repair or taken by eminent domain and from the proceeds of title insurance (see “ THE - Prepayment - Extraordinary Prepayment”), or if the City exercises its right to prepay Lease CERTIFICATES Payments in whole or in part pursuant to the provisions of the Lease and the Trust Agreement. See “ THE - Prepayment - Optional Prepayment.” CERTIFICATES 61 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 444 Loss of Tax Exemption As discussed under the caption “” herein, the interest component of the Lease Payments TAX MATTERS could become includable in gross income for purposes of federal income taxation retroactive to the date the Certificates were executed and delivered as a result of future acts or omissions of the City in violation of its covenants contained in the Trust Agreement and the Lease. Should such an event of taxability occur, the Certificates are not subject to special prepayment or any increase in interest rate and will remain outstanding until maturity or until prepaid under one of the prepayment provisions contained in the Trust Agreement. 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 Certificates. Prospective purchasers of the Certificates should consult their own tax advisors regarding any pending or proposed federal tax legislation. The City can provide no assurance that federal tax law will not change while the Certificates are outstanding or that any such changes will not adversely affect the exclusion of the interest component of the Lease Payments from gross income for federal income tax purposes. If the exclusion of the interest component of Lease Payments from gross income for federal income tax purposes were amended or eliminated, it is likely that the market price for the Certificates 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 Certificates will be selected for audit by the Internal Revenue Service. It is also possible that the market value of the Certificates might be affected as a result of such an audit of the Certificates (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 Certificates, 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. LEGAL MATTERS Enforceability of Remedies The remedies available to the Trustee and the Owners of the Certificates upon an event of default under the Trust Agreement, the Lease, the Site Lease, the Assignment Agreement 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 Certificates will be qualified to the extent that the enforceability of certain legal rights related to the Trust Agreement, the Lease, the Site Lease, the Assignment Agreement 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. 62 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 445 Approval of Legal Proceedings Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Special Counsel, will render an opinion which states that the Lease represents a valid and binding obligation of the City and is enforceable against the City in accordance with its terms. The legal opinion of Special 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 “” hereto for the proposed form of Special Counsel’s opinion. APPENDIX D The City has no knowledge of any fact or other information which would indicate that the Trust Agreement, the Lease or the Certificates are not so enforceable against the City, 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 City by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel and by Glen R. Googins, as City Attorney and for the Underwriter by Jones Hall, A Professional Law Corporation, San Francisco, California, as Underwriter’s Counsel. Fees payable to Special Counsel, Disclosure Counsel, the Underwriter and Underwriter’s Counsel are contingent upon the delivery of the Certificates. Special Counsel and Disclosure Counsel represents the Underwriter on certain matters unrelated to the Certificates. TAX MATTERS In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Special Counsel, under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) with respect to the Certificates is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of Special Counsel, interest (and original issue discount) with respect to the Certificates is exempt from State of California personal income tax. Special Counsel notes that, with respect to corporations, interest (and original issue discount) with respect to the Certificates may be included as an adjustment in the calculation of alternative minimum taxable income which may affect the alternative minimum tax liability of such corporations. If the issue price of a Certificate (the first price at which a substantial amount of the Certificates of a maturity is to be sold to the public) is less than the stated payment price at maturity with respect to the Certificate, such difference constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to an owner of a Certificate (the “Certificate Owner”) before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Certificate Owner will increase the Certificate Owner’s basis in the applicable Certificate. In the opinion of Special Counsel, original issue discount that accrues to a Certificate Owner is excluded from gross income of such owner for federal income tax purposes, is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and is exempt from State of California personal income tax. Special Counsel’s opinion as to the exclusion from gross income of interest (and original issue discount) with respect to the Certificates is based upon certain representations of fact and certifications made by the City and others and is subject to the condition that the City complies with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the execution and delivery of the Certificates to assure that the interest (and original issue discount) with respect to the Certificates will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) with respect to the Certificates to be included in gross income for federal income tax purposes retroactive to the date of execution and delivery of the Certificates. The City has covenanted to comply with all such requirements. 63 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 446 The amount by which a Certificate Owner’s original basis for determining loss on sale or exchange in the applicable Certificate (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Certificate premium, which must be amortized under Section 171 of the Code; such amortizable Certificate premium reduces the Certificate Owner’s basis in the applicable Certificate (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Certificate premium may result in a Certificate Owner realizing a taxable gain when a Certificate is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Certificate to the Owner. Purchasers of the Certificates should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable Certificate premium. The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Certificates will be selected for audit by the IRS. It is also possible that the market value of the Certificates might be affected as a result of such an audit of the Certificates (or by an audit of similar certificates). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the execution delivery of the Certificates to the extent that it adversely affects the exclusion from gross income for federal income tax purposes of interest (and original issue discount) with respect to the Certificates or their market value. SUBSEQUENT TO THE EXECUTION AND DELIVERY OF THE CERTIFICATES, THERE MIGHT BE FEDERAL, STATE OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY INTERPRETATIONS OF FEDERAL, STATE OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE OR LOCAL TAX TREATMENT OF THE INTEREST WITH RESPECT TO THE CERTIFICATES OR THE MARKET VALUE OF THE CERTIFICATES. LEGISLATIVE CHANGES HAVE BEEN PROPOSED IN CONGRESS, WHICH, IF ENACTED, WOULD RESULT IN ADDITIONAL FEDERAL INCOME TAX BEING IMPOSED ON CERTAIN OWNERS OF TAX-EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE CERTIFICATES. THE INTRODUCTION OR ENACTMENT OF ANY OF SUCH CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE CERTIFICATES. NO ASSURANCE CAN BE GIVEN THAT, SUBSEQUENT TO THE EXECUTION AND DELIVERY OF THE CERTIFICATES, SUCH CHANGES (OR OTHER CHANGES) WILL NOT BE INTRODUCED OR ENACTED OR INTERPRETATIONS WILL NOT OCCUR. BEFORE PURCHASING ANY OF THE CERTIFICATES, ALL POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE CERTIFICATES. Special Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. Special Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Trust Agreement and the Tax Certificate relating to the Certificates permit certain actions to be taken or to be omitted if a favorable opinion of Special Counsel is provided with respect thereto. Special Counsel expresses no opinion as to the effect on the exclusion from gross income for federal income tax purposes of interest (and original issue discount) with respect to the Certificates if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth, a Professional Corporation. Although Special Counsel will render an opinion that interest (and original issue discount) with respect to the Certificates is excluded from gross income for federal income tax purposes provided that the City continues to comply with certain requirements of the Code, the ownership of the Certificates and the accrual or receipt of interest (and original issue discount) with respect to the Certificates may otherwise affect the tax liability of certain persons. Special Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any of the Certificates, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Certificates. 64 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 447 Should interest (and original issue discount) with respect to the Certificates become includable in gross income for federal income tax purposes, the Certificates are not subject to early prepayment and will remain outstanding until maturity or until prepaid in accordance with the Trust Agreement. The complete text of the final opinion that Special Counsel expects to deliver upon the issuance of the .” Certificates is set forth in “ APPENDIX D - FORM OF SPECIAL COUNSEL OPINION Litigation The City and the Authority will furnish a certificate dated as of the date of delivery of the Certificates that there is not now known to be litigation pending against the City or the Authority or threatened against the City or the Authority seeking to restrain or enjoin the execution or delivery of the amendments to the Trust Agreement or the Lease or the sale or delivery of the Certificates, or in any manner questioning the proceedings and authority under which the Certificates and the amendments to the Trust Agreement and the Lease are to be executed and delivered or affecting the validity thereof. There are two lawsuits currently pending against the City of San Diego (“San Diego”) its successor agency and a joint powers authority formed by San Diego and its successor agency which challenge the legality of certain actions taken by the joint powers authority in connection with the issuance of bonds to finance capital improvements. Rulings were entered in favor of San Diego in both cases in the Superior Court (Case No. 37-2014-00009217-CU-MC-CTL and Case No. Case No. 37-2014-00018335-CU-MC-CTL) following which the joint powers authority issued two series of bonds to finance capital improvements for San Diego. The plaintiff in both cases, San Diegans for Open Government, has appealed the Superior Court rulings to the Court of Appeal for the State of California Fourth Appellate District where the cases are now awaiting a decision by the court. One of plaintiff’s contentions is that with the passage of the Dissolution Act the joint powers authority lacked the power to issue the bonds because the Dissolution Act withdrew the power of a successor agency to enter into new transactions. Notwithstanding the pendency of these lawsuits involving San Diego, its successor agency and joint powers authority, Special Counsel is rendering its opinion that the Site Lease, the Lease and the Trust Agreement are valid and binding agreements of the City and the Authority. See “ APPENDIX D - FORM OF SPECIAL .” The City Attorney also will render opinions as counsel to the City and the Authority COUNSEL OPINION that the Site Lease, the Lease and the Trust Agreement are valid and binding agreements of the City and the Authority. None of the proceeds of the Prior Certificates or the Certificates have been or will be used to fund any projects of the City’s Successor Agency. CONCLUDING INFORMATION Ratings on the Certificates Standard & Poor’s and Moody’s Investors Service have assigned their municipal bond ratings of “___” and “___”, respectively to the Certificates. Such ratings reflects only the views of the rating agencies and any desired explanation of the significance of such ratings should be obtained from the rating agencies. 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 Agreement, the City undertakes no responsibility either to bring to the attention of the owners of any Certificates any downward revision or withdrawal of any rating obtained or to oppose any such revision or withdrawal. There is no assurance such ratings will continue for any given period of time or that the ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of the rating agencies, circumstances so warrant. Any such downward revision or withdrawal of a rating may have an adverse effect on the market price of the 65 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 448 Certificates. 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 Certificates were sold to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) pursuant to a Purchase Contract by and between the City and the Underwriter. The Underwriter is offering the Certificates at the prices set forth on the inside front 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 will purchase the Certificates at a price equal to $_________, which amount represents the principal amount of the Certificates, plus a net original issue premium of $__________, and 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 City with the assistance of the Harrell & Company Advisors, LLC, Orange, California, the City’s Municipal Advisor, who advised the City as to the financial structure and certain other financial matters relating to the Certificates. The information set forth herein has been obtained by the City 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 Certificates. 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 Reports or the notices of enumerated events and certain other terms of the continuing disclosure obligation are found in the form of the City’s Continuing Disclosure Agreement attached in “.” APPENDIX C - FORM OF CONTINUING DISCLOSURE AGREEMENT 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”) issued prior to 2011, the City’s audit for Fiscal Year 2009-10 was timely filed on the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (“EMMA”) website (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. 66 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 449 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 City and the purchasers or Owners of any of the Certificates. Execution The execution of this Official Statement by the Deputy City Manager/Chief Financial Officer has been duly authorized by the City of Chula Vista. CITY OF CHULA VISTA By: _____________________________________ Deputy City Manager/Chief Financial Officer 67 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 450 APPENDIX A SUMMARY OF PRINCIPAL LEGAL DOCUMENTS \[to be provided by Special Counsel\] A-1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 451 APPENDIX B CITY AUDITED FINANCIAL STATEMENTS B-1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 452 APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT C-1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 453 APPENDIX D FORM OF SPECIAL COUNSEL OPINION D-1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 454 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 Certificates, payment of principal, interest and other payments on the Certificates to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Certificates 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 Certificates (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Certificates (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 Certificates, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Certificates, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Certificates, 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 Certificates (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 E-1 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 455 Commission. More information about DTC can be found at www.dtcc.com. The information contained on this 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 E-2 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 456 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. E-3 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 457 CITY COUNCIL CITY OF CHULA VISTA RESOLUTION NO. _________ RESOLUTION OF THE CITY OF CHULA VISTAMODIFYING, IN PART, RESOLUTION NO. 2016-058ANDAUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF THE CHULA VISTA MUNICIPAL FINANCING AUTHORITY 2016 LEASE REVENUE REFUNDING BONDS 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, on April 5, 2016 the Board of Directors of the Chula Vista Municipal Financing Authority (the “Authority”) adoptedResolution No. 2016-058authorizing the execution and delivery of its Chula Vista Municipal Financing Authority 2016 Lease Revenue Refunding Bonds (the “Bonds”) in an aggregate principal amount not to exceed $40,000,000 for the purpose of refinancing the City of Chula Vista 2006 Certificates 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, on April 5, 2016 the City Councilof theCity ofChula Vista(the “City”) conducted a public hearing in accordance with Government Code Section 6586.5 andadopted Resolution No. 2016-058authorizing the execution and delivery ofvarious documents necessary to effectuate the issuance of the Bonds and the defeasance of the 2006 Certificates and the 2010 Certificates; WHEREAS, the City has advised the Authority that it is in the interest of the City to have the Bonds issued only for the purpose of refinancing the 2010 Certificates and that the City will be refinancing the 2006 Certificates through other means; WHEREAS, the City Councildesires to approve this resolution to modify Resolution No. 2016-058, in part, and to authorize the sale of the Bonds only for the purpose of refinancing the 2010 Certificates in order to achieve debt service savings and reduce the total lease payments to be made by the City; WHEREAS, Resolution No. 2016-058approved the forms of a Site Lease between the City and the Authority (the “Site Lease”) pursuant to which the City will lease certain real property described therein (the “Leased Assets”) 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), an Indenture by and among U.S. Bank National Association (the “Trustee”), the City and the Authority (the “Indenture”), an Assignment Agreement by and between the Authority and the Trustee (the “Assignment Agreement”), a Bond Purchase Agreement by and among Stifel, Nicolaus ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 458 & Company, Incorporated (the “Underwriter”), the City and the Authority (the “Bond Purchase Agreement”), a Continuing Disclosure Agreement by and between the City and Harrell & Company Advisors, LLC(the “Continuing Disclosure Agreement”)and an Escrow Agreement by and among U.S. Bank National Association, as escrow agent (the “Escrow Agent”), the City and the Authority (the “2006 Escrow Agreement”); WHEREAS, Resolution No. 2016-058also approved the form of the Preliminary Official Statement for the Bonds (the “Preliminary Official Statement”), a revised version of which has been presented to this City Councilat the meeting at which this Resolution is being adopted; 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 the refinancing of the 2010 Certificates as 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; 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 theCity 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. SECTION 2.The forms of the Site Lease, the Lease Agreement,the Indenture, the Bond Purchase Agreement, the Continuing Disclosure Agreement and the 2006 Escrow Agreement (together, the “City Documents”)were approved by Resolution No. 2016-058, 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, were authorized and directed, for and in the name and on behalf of the City, to execute and deliver the City Documentsin substantially theformson file with the City Clerk, 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 theexecution and delivery thereof.The Authorized Officers are hereby authorized and directed to make such changes to theCityDocuments as are necessary to reflect that the Bonds will refinance only the 2010 Certificates .The City Council hereby finds and determines that the annual lease payments and additional payments due in each fiscal year under the Lease Agreement willnot exceed the fair rental value of the Leased Assetsduring any fiscal year. SECTION 3.Notwithstanding any provision in Resolution No. 2016-058to the contrary, the Bonds shall be issued only for the purpose of refunding the 2010 Certificates and shall be issued in a principal amount not to exceed $30,000,000, bearing interest at the rates and maturing on the dates as specified in the Indenture as finally executed, is hereby authorized and approved. 2 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 459 SECTION 4.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 the City that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12promulgated under the Securities Exchange Act of 1934(except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). SECTION 5.The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorizedand 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 behalfof the City. SECTION 6.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 terms and 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 by the officers, employees and agents of the City with respect to the transactions set forth above are hereby approved, confirmed and ratified. SECTION 7.Except as expressly modified herein, Resolution No. 2016-058shall remain in full force and effect. This Resolution shall take effect immediately upon its passage. Presented byApproved as to form by David Bilby, MSBA, CPFOGlen R. Googins Director of Finance/TreasurerCity Attorney 3 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 460 CITY COUNCIL CITY OF CHULA VISTA RESOLUTION NO. _________ RESOLUTION OF THE CITY OF CHULA VISTA MAKING REQUIRED FINDINGS,AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATING TO THE SALE AND DELIVERY OF NOT TO EXCEED $10,000,0002016REFUNDING CERTIFICATES OF PARTICIPATION, (CIVIC CENTER PROJECT), AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION THEREWITH. WHEREAS, the City of Chula Vista (the “City”) is a municipal corporation and a charter city duly organized and existing under and pursuant to the Constitution and laws of the State of California (the “State”); and WHEREAS, the Chula Vista Public Financing Authority (the “Authority”) hasassisted the City infinancingthe construction, reconstruction, modernization and equippingof the City’s Civic Center Complex and certain other City facilitiesthrough the execution and delivery of the $37,240,000 City of Chula Vista 2004Certificates of Participation (Civic Center Project –Phase1) (the “2004Certificates”) and the $20,325,000Cityof Chula Vista 2006Certificates of Participation (Civic Center Project–Phase2) (the “2006Certificates”) WHEREAS, the Authority further assisted the City in refunding the outstanding 2004 Certificates and a portion of the outstanding 2006 Certificates throughthe execution and delivery of the $34,330,000 City of Chula Vista 2015Refunding Certificates of Participation (Civic Center Project) (the “2015Certificates”and together with the 2004 Certificates and the 2006 Certificates, the “Prior Certificates”)which are outstanding pursuant to that certain Amended and Restated Trust Agreement, dated as of March1, 2006, by and among the City, the Authority and U.S.Bank National Association, as successor to The Bank of New York Mellon Trust Company, N.A.,and BNY Western Trust Company, as trustee(the “Trustee”), as amended by that certain First Supplement to Amended and Restated Trust Agreement, dated as of September1, 2015 (together, the “Original Trust Agreement”); WHEREAS, in order to facilitate the execution and delivery of the PriorCertificates, the City has leased to the Authority the real property (the “Site”) set forth in Exhibit A to that certain Site Lease, dated as of September1, 2004, as amended by that First Amendment to Site Lease dated as of March1, 2006and the Second Amendment to Site Lease dated as of September1, 2015 (together, the “Original Site Lease”), eachby and between the City and the Authority, and the Authority has leased back the Site and the improvements located thereon, including those constructed with the proceeds of the 2004Certificatesand the 2006 Certificates(together, the “Leased Premises”) to the City pursuantto that certain Lease/Purchase Agreement, dated as of September1, 2004, as amended by that First Amendment to Lease/Purchase Agreement dated as of March1, 2006and that Second Amendment to Lease/Purchase Agreement dated as of September1, 2015 (together, the “Original Lease”), both by and between the City and the Authority; and ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 461 WHEREAS, the Original Trust Agreement, the Original Site Lease, the Original Leaseand the Assignment Agreement, dated as of September1, 2004and as amended by that certain First Amendment to Assignment Agreement dated as of March1, 2006 and that certain Second Amendment to Assignment Agreement dated as of September1, 2015 (together, the “Original Assignment Agreement”), each by and between the Authority and the Trustee, allow for the execution and delivery of Additional Certificates (as that term is defined in the Original Trust Agreement) to refund all or a portion of the PriorCertificates; and WHEREAS, the City desires to cause the Trustee to execute and deliver the 2016Refunding Certificates of Participation (Civic CenterProject), in the aggregate principal amount not to exceed $10,000,000(the “2016Certificates”), in order to refund all or a portion of the 2006Certificates; and WHEREAS, to accomplish the sale, preparation, execution and delivery of the 2016Certificates, the City desires to enter into that certain ThirdAmendment to Lease/Purchase Agreement, dated as of June1, 2016(the “ThirdAmendment to Lease/Purchase Agreement”), each by and between the City and the Authority, in order to make certain amendments thereto; and WHEREAS, to facilitate the execution and delivery of the 2016Certificates,the City desires to enter into that certain SecondSupplement to Amended and Restated Trust Agreement, dated as of June1, 2016(the “SecondSupplement to Amended and Restated Trust Agreement”), by and among the Authority, the City and the Trustee, and to approve the execution and delivery of that certain ThirdAmendment to Assignment Agreement, dated as of June1, 2016(the “Third Amendment to Assignment Agreement”), by and between the Authority and the Trustee; and WHEREAS, in order to facilitate the execution and delivery of the 2016Certificates, the City desiresto enter into a Purchase Contract(the “Purchase Contract”)for the 2016Certificates with Stifel Nicholas & Co.(the “Underwriter”); and WHEREAS, in order to facilitate the execution and delivery of the 2016Certificates, the City desires to approve and deliver a final Official Statement substantially in the form of the Preliminary Official Statement which has been presented to this City Council at the meeting at which this Resolution is being adopted (the “Preliminary Official Statement”); and WHEREAS, in order to refund and defease all or a portion of the 2006Certificates, the City desires to enter into an Escrow Agreement(the “Escrow Agreement”), by and amongthe City, the Authority and U.S. Bank National Association, as escrow bank (the “Escrow Bank”); and WHEREAS, the forms of the documents necessary for the execution and delivery of the 2016Certificatesare on file with the Clerk as described herein; and WHEREAS, all acts, conditions and things required by the Constitution and laws of the State to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of the 2016Certificates 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 financing for the purpose, in the manner and upon the terms herein provided; 2 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 462 NOW, THEREFORE, the City Council of the City of Chula Vista does hereby resolve as follows: SECTION 1. Findings. The City Council hereby specifically finds and declares that each of the statements, findings and determinations of the City set forth in the recitals set forth above and in the preambles of the documents approved herein are true and correct. SECTION 2. Authorization of 2016Certificates. The City Council hereby authorizes the refunding of all or a portion of the 2006Certificates through the preparation, sale and delivery of the 2016Certificates in an amount not to exceed $10,000,000. SECTION 3. ThirdAmendmentto Lease/Purchase Agreement. The form of the Third Amendmentto Lease/Purchase Agreementpresented to this meeting and on file with the Clerk (the “Clerk”), is hereby approved. 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 to the Authority the ThirdAmendmentto Lease/Purchase Agreementin substantially said form, with such changes therein as the Authorized Officer or Officers executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof by one or more of the Authorized Officers. As the annual lease payments due under the Original Lease will be reduced as a result of the execution and delivery of the 2016Certificates, the City Council hereby finds and determines that the annual lease payments and additional payments due in each fiscal year under the Original Lease as amended by the Third Amendmentto Lease/Purchase Agreementwill not exceed the fair rental value of the Leased Premises during anyfiscal year. SECTION 4. SecondSupplement to Amended and RestatedTrust Agreement. The form of the SecondSupplement to Amended and RestatedTrust Agreement presented to this meeting and on file with the Clerk, is hereby approved. 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 to the Authority and the Trustee the SecondSupplement to Amended and RestatedTrust Agreement in substantially said form, with such changes therein as the Authorized Officer or Officers executing the SecondSupplement to Amended and RestatedTrust Agreement may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof by one or more of the Authorized Officers. SECTION 5. Escrow Agreement. The form of the Escrow Agreement presented to this meeting and on file with the Clerk, is hereby approved. 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 to the Authority and the Escrow BanktheEscrow Agreement in substantially said form, with such changes therein as the Authorized Officer or Officers executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof by one or more of such Authorized Officers. SECTION6. ThirdAmendment to Assignment Agreement. The Third Amendment to Assignment Agreement substantially in the form on file with the Clerk is hereby approved for execution and delivery by the Authority. 3 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 463 SECTION 7. Purchase Contract. The form of the Purchase Contract, by and betweenthe City and the Underwriter presented to this meeting and on file with the Clerk and the sale of the 2016Certificates to the Underwriter pursuant thereto upon the terms and conditions set forth therein is hereby approved, and subject to such approval and subject to the provisions hereof, each of the Authorized Officers, acting alone, is hereby authorized and directed to evidence the City’s acceptance of the offer made by the Purchase Contractby executing and delivering the Purchase Contractin said form with such changes therein as the Authorized Officer or Authorized Officers executing the same may approve and such matters as are authorized by this Resolution, such approval to be conclusively evidenced by the execution and delivery thereof by any one of the Authorized Officers; provided, however, that the Purchase Contractshall be executed only if the aggregate principal amount of the 2016Certificates does not exceed $10,000,000, the Underwriter’s discount (exclusive of original issue discount) does not exceed six-tenths of onepercent (0.6%) of the principal amount of the 2016Certificates and the net present value savings realized by the City in terms of reduced lease payments, as confirmed by the City’s Financial Advisor, is not less than five percent (5%) of the principal amount of the 2006Certificates refunded. Each of the Authorized Officers, acting alone, is further authorized and directedto consult with the City’s Financial Advisor and to determine whether the refunding of all or a portion of the 2006Certificates is the best alternative for the City and to then direct the Underwriter to sell aprincipal amount of 2016Certificates to effect the full or partial refunding, as applicable. SECTION 8. Preliminary Official Statement. The form of the Preliminary Official Statement, presented to this meeting and on file with the Clerk, is hereby approved. Each of the Authorized Officers, acting alone, is hereby authorized to make such changes to the Preliminary Official Statement as arenecessary to make it final as of its date and are authorized and directed to execute and deliver a certificate deeming the Preliminary Official Statement final as of its date in accordance with Rule15c2-12 promulgated under the Securities Exchange Act of1934. Each of the Authorized Officers, acting alone, 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 the Authorized Officer executing such document may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof by an Authorized Officer. SECTION 9. Continuing Disclosure Agreement. The form of the Continuing Disclosure Agreement, dated as of June1, 2016(the “Continuing Disclosure Agreement”), by and between the City and Willdan Financial Services, as dissemination agent, presented to this meeting and on file with the Clerk, is hereby approved. 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 therein as the Authorized Officer or Officers executing such document may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof by one or more of such Authorized Officers. SECTION 10. Attestations. The Clerk and such person or persons as may have been designated by the Clerk to act on her behalf, are hereby authorized and directed to attest the signature of the Authorized Officers designated herein to execute any documents described herein, and to affix and attest the seal of the City, as may be required or appropriate in connection with the execution and delivery of the Third Amendmentto Lease/Purchase Agreement, the SecondSupplement to 4 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 464 Amended and Restated Trust Agreement, the Continuing Disclosure Agreement, theEscrow Agreementand the Official Statement. SECTION 11. Other Actions. The Authorized Officers are each hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents, including, but not limited to, any amendmentto the Original Site Lease,which each may deem necessary or advisable in order to consummate the sale, execution and delivery of the 2016Certificates and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, the 2016Certificates, the ThirdAmendmentto Lease/Purchase Agreement, the SecondSupplement to Amended and Restated Trust Agreement, the Continuing Disclosure Agreement, the Purchase Contract, the Escrow Agreement, the Preliminary Official Statement, and the Official Statement and are further authorized and directed to pay all costs of issuance approved by the Deputy City Manager or her designee, orthe Assistant Director of Finance. Such actions heretofore taken by such officers or designees are hereby ratified, confirmed and approved. SECTION12. Selection of Professionals. Harrell & CompanyAdvisors, LLCis hereby designated as the MunicipalAdvisor to the City for the 2016Certificates and Stradling Yocca Carlson & Rauth, a Professional Corporation is hereby designated as bond counsel and disclosure counsel for the 2016Certificates, 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 2016Certificates. SECTION 13. Effect. This Resolution shall take effect immediately upon its passage. Presented byApproved as to form by David Bilby, MSBA, CPFOGlen R. Googins Director of Finance/TreasurerCity Attorney 5 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 465 RESOLUTION NO. ________ CHULA VISTA MUNICIPAL FINANCING AUTHORITY RESOLUTION OF THE BOARD OF DIRECTORS OF THE CHULA VISTA MUNICIPAL FINANCING AUTHORITYMODIFYING, IN PART, RESOLUTION NO. 2016-002ANDAUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF THE CHULA VISTA MUNICIPAL FINANCING AUTHORITY 2016 LEASE REVENUE REFUNDING BONDS WHEREAS, on April 5, 2016 the Board of Directors of the Chula Vista Municipal Financing Authority(the “Authority”)adopted Resolution No. 2016-002authorizing the execution and delivery of its Chula Vista Municipal Financing Authority 2016 Lease Revenue Refunding Bonds (the “Bonds”) in an aggregate principal amount not to exceed $40,000,000 for the purpose of refinancing the City of Chula Vista2006Certificates of Participation (Civic Center Project –Phase 2) (the “2006 Certificates”) and theCity of Chula Vista 2010 Certificates of Participation (Capital Facilities Refunding Projects) (the “2010 Certificates”); WHEREAS, the City has advised the Authority that it is in the interest of the City to have the Bonds issued only for the purpose of refinancing the 2010 Certificates and that the City will be refinancing the2006Certificatesthrough other means; WHEREAS,theBoard of Directorsdesires to approve this resolution tomodify Resolution No. 2016-002, in part, and toauthorize the sale of the Bonds only for the purpose of refinancing the 2010 Certificatesin order to achieve debt service savings and reduce the total lease payments to be made by the City; WHEREAS, Resolution No. 2016-002approved the forms ofa Site Leasebetween the City and the Authority (the “Site Lease”) pursuant to which the City willlease certain real property described therein(the “Leased Assets”)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, an Indenture by and among U.S. Bank National Association (the “Trustee”), the City and the Authority (the “Indenture”), an Assignment Agreement by and between the Authority and the Trustee (the “Assignment Agreement”), and a Bond Purchase Agreement by and among Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), the City and the Authority (the “Bond Purchase Agreement”); WHEREAS, Resolution No. 2016-002also approved the form of the Preliminary Official Statementfor the Bonds(the “Preliminary OfficialStatement”), a revised version of which has been presented to this Board of Directors at the meeting at which this Resolution is being adopted; 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 therefinancingof the 2010 Certificates asauthorized hereby do exist, have ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 466 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 as follows: 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 2010 Certificatesby the execution and delivery of theLease 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, the Site Lease, the Assignment Agreement and the Bond Purchase Agreement (the “Authority Documents”) were approved by Resolution No 2016-002, and each of the Chairman, Vice Chairman, Executive Director, Chief Financial Officer and Secretary of the Authority, or the Chairman’s designee, (the “Authorized Officers”) wereauthorized and directed to execute and deliver the Authority Documents, in substantially theformson file with the Secretary of the Board, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require orapprove, such approval to be conclusively evidenced by theexecution and delivery thereof.The Authorized Officers are hereby authorized and directed to make such changes to the Authority Documents as are necessary to reflect that the Bonds will refinanceonly the 2010 Certificates. SECTION 3.Notwithstanding any provision in Resolution No. 2016-002to the contrary, the Bonds shall be issued only for the purpose of refunding the 2010 Certificates and shall be issued in a principal amountnot to exceed $30,000,000, bearing interest at the rates and maturing on the dates as specified in the Indenture as finally executed, is hereby authorized and approved. SECTION 4.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). SECTION 5.The preparation and delivery of an Official Statement, and itsuse 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 6.Except as expressly modified herein, Resolution No. 2016-002shall remain in full force and effect. This Resolution shall take effect from and after its date of adoption. ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 467 Presented byApproved as to form by David Bilby, MSBA, CPFOGlen R. Googins Chief Financial OfficerAuthority General Counsel ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 468 RESOLUTION NO. ________ CHULA VISTA PUBLIC FINANCING AUTHORITY RESOLUTION OF THE CHULA VISTA PUBLIC FINANCING AUTHORITY APPROVING THE EXECUTION AND DELIVERY OF DOCUMENTS IN CONNECTION WITH THE SALE AND DELIVERY OF THE CITY OF CHULA VISTA 2016REFUNDING CERTIFICATES OF PARTICIPATION, (CIVIC CENTER PROJECT) IN A PRINCIPAL AMOUNT NOT TO EXCEED $10,000,000 AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION THEREWITH. WHEREAS, the Chula Vista Public Financing Authority (the “Authority”) is a joint exercise of powers authority organized and existing under Article 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 financingthe construction, reconstruction, modernization and equippingof the City’s Civic Center Complex and other City facilitiesthrough the execution and delivery of the $37,240,000 City of Chula Vista 2004 Certificates of Participation (Civic Center Project –Phase 1) (the “2004 Certificates”) and the $20,325,000 City of Chula Vista 2006 Certificates of Participation (Civic Center Project –Phase 2) (the “2006 Certificates) WHEREAS, the Authority further assisted the City in refunding the outstanding 2004 Certificates and a portion of the outstanding 2006 Certificates through the execution anddelivery of the $34,330,000 City of Chula Vista 2015Refunding Certificates of Participation (Civic Center Project) (the “2015Certificates” and together with the 2004 Certificates and the 2006 Certificates, the “Prior Certificates”) which are outstandingpursuant to that certain Amended and Restated Trust Agreement, dated as of March1, 2006, by and among the City, the Authority and U.S.Bank National Association, as successor to The Bank of New York Mellon Trust Company, N.A.,and BNY Western Trust Company, as trustee (the “Trustee”), as amended by that certain First Supplement to Amended and Restated Trust Agreement, dated as of September1, 2015 (together, the “Original Trust Agreement”); WHEREAS, in order to facilitate the execution and delivery of thePriorCertificates, the City has leased to the Authority the real property (the “Site”) set forth in Exhibit A to that certain Site Lease, dated as of September1, 2004, as amended by that certain FirstAmendment to Site Lease, dated as of March1, 2006 and by that certain Second Amendment to Site Lease, dated as of September1, 2015 (together, the “Original Site Lease”), each by and between the City and the Authority, and the Authority hasleased back the Site and the improvements located thereon, including thoseconstructed with the proceeds of the 2004 Certificates and the 2006Certificates (together, the “Leased Premises”) to the City pursuantto that certain Lease/Purchase Agreement, ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 469 dated as of September1, 2004, as amended by that certain FirstAmendment to Lease/Purchase Agreement, dated as of March1, 2006and by that certain Second Amendment to Lease/Purchase Agreement, dated as of September1, 2015 (together, the “Original Lease”), both by and between the City and the Authority; and WHEREAS, the Original Trust Agreement, the Original Site Lease, the Original Leaseand the Assignment Agreement, dated as of September1, 2004and as amended by that certain First Amendment to Assignment Agreement dated as of March1, 2006(together, the “Original Assignment Agreement”), each by and between the Authority and the Trustee, allow for the execution and delivery of Additional Certificates (as that term is defined in the Original Trust Agreement) to refund all or a portion of the PriorCertificates; and WHEREAS, the City desires to cause the Trustee to execute and deliver the 2016Refunding Certificates of Participation (Civic Center Project), in the aggregate principal amount not to exceed $10,000,000(the “2016Certificates”), in order to refund all or a portion of the 2006Certificates; and WHEREAS, to accomplish the sale, preparation, execution and delivery of the 2016Certificates, the City desires to have the Authority enter into that certain ThirdAmendment to Lease/Purchase Agreement, dated as of June1, 2016(the “ThirdAmendment to Lease/Purchase Agreement”), each by and between the City and the Authority, in order to make certain amendments thereto; and WHEREAS, to facilitate the execution and delivery of the 2016Certificates,the City desires to have the Authority enter into that certain SecondSupplement to Amended and Restated Trust Agreement, dated as of June1, 2016(the “SecondSupplement to Amended and Restated Trust Agreement”), by and among the Authority, the City and the Trustee, and that certain Third Amendment to Assignment Agreement, dated as of July1, 2016(the “ThirdAmendment to Assignment Agreement”), by and between the Authority and the Trustee; and WHEREAS, in order to facilitate the execution and delivery of the Certificates, the City desiresto enter into a Purchase Contract(the “Purchase Contract”)for the 2016Certificates with Stifel Nicholas & Co.; and WHEREAS, in order to refund and defease all or a portion of the 2006Certificates, the City desires to have the Authority enter into an Escrow Agreement(the “Escrow Agreement”), by and amongthe City, the Authority and U.S. Bank National Association, as escrow bank (the “Escrow Bank”)for the 2006Certificatesto be refunded; and WHEREAS, the forms of the documents necessaryfor the execution and delivery of the 2016Certificatesare on file with the Secretary of the Board of Directors of the Authority as described herein; and WHEREAS, all acts, conditions and things required by the Constitution and laws of the State to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of the 2016Certificates 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 assist the City in consummating such financing for the purpose, in the manner and upon the terms herein provided; 2 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 470 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 each of 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. 2016Certificates. TheBoard of Directors hereby authorizes the preparation, sale and delivery of the 2016Certificates in an aggregate principal amount not to exceed $10,000,000. The purposes for which the proceeds of the sale of the 2016Certificates shall be expended are to refund all or a portion of the 2006Certificates and to pay the costs of the sale and delivery of the 2016Certificates. SECTION 3. 2016Certificate Documents. The ThirdAmendment to Lease/Purchase Agreement, the ThirdAmendment to Assignment Agreement, the SecondSupplement to Amended and Restated Trust Agreement and the Escrow Agreement (collectively, the “Agreements”) presented at this meetingare 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 sale and delivery of the 2016Certificates, the refunding of all or a portion of the 2006Certificates, and the execution of the Agreements and otherwise effectuate the purposes of this Resolution, 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. Presented byApproved as to form by David Bilby, MSBA, CPFOGlen R. Googins Chief Financial OfficerAuthority General Counsel 3 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 471 City of Chula Vista Staff Report File#:16-0264, Item#: 15. RATIFICATION OF APPOINTMENTS TO THE FOLLOWING BOARDS & COMMISSIONS International Friendship Commission: Ruth Serrato Miguel Duran Cultural Arts Commission: Roderick Reinhart City of Chula VistaPage 1 of 1Printed on 5/19/2016 powered by Legistar™ ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 472 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 473 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 474 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 475 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 476 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 477 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 478 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 479 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 480 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 481 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 482 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 483 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 484 ΑΏΐΕȃΏΔȃΑΓ !¦¤£ Packet0 ¦¤ 485