HomeMy WebLinkAboutAgenda Packet 2003/06/17
June 17, 2003
I oeclare un~er penalty 01 perjury that I am
employed by the City of Chula Vista in the
Office of the City Clerk and that I posted this
document on the bulletin board according to
Brown Act requirements.
AGENDA Dated~signed~
6:00 P.M.
CALL TO ORDER
ROLL CALL: Councilmembers Davis, McCann, Rindone, Salas, and Mayor Padilla
PLEDGE OF ALLEGIANCE TO THE FLAG, MOMENT OF SILENCE
SPECIAL ORDERS OF THE DAY
· PRESENTATION BY STEPHEN SILVERMAN, SECTION DIRECTOR FOR THE
SAN DIEGO CHAPTER OF THE AMERICAN PLANNING ASSOCIATION, OF THE
DISTINGUISHED SERVICE AWARD TO ROBERT A. LEITER, DIRECTOR OF
PLANNING AND BUILDING
.. · OATHS OF OFFICE: GUST A VO BIDART - HOUSING' ADVISORY COMMISSION
AND HUMBERTO PERAZA, JR. - CHARTER REVIEW COMMISSION
· PRESENTATION BY BOB RESLEY, VICE PRESIDENT OF RESOURCE
PLANNING AT SDG&E REGARDING THEIR 20-YEAR RESOURCE PLAN TO
PROVIDE ENERGY TO THE SAN DIEGO REGION
· PRESENTATION BY IRENE STILLINGS, EXECUTIVE DIRECTOR OF THE SAN
DIEGO REGIONAL ENERGY OFFICE REGARDING THE SAN DIEGO REGIONAL
ENERGY STRATEGY
CONSENT CALENDAR
(Items 1 thr~JUgh 13)
The Council will enact the staff recommendations regarding the following items
listed under the Consent Calendar by one motion, without discussion, unless a
Councilmember, a member of the public, or City staff requests that an item be
removed for discussion. If you wish to speak on one of these items, please fill out
a "Request to Speak" form (available in the lobby) and submit it to the City Clerk
prior to the meeting. Items pulled from the Consent Calendar will be discussed
after Action Items. Items pulled by the public will be the first items of business.
1. APPROVAL OF MINUTES oOune 9, 2003.
Staff recommendation: Council approve the minutes.
2. ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
AMENDING ORDINANCE NO. 2867 AND AUTHORIZING THE LEVY OF A
SPECIAL TAX WITHIN IMPROVEMENT AREA NO.2 OF COMMUNITY
FACILITIES DISTRICT NO. 07-M (EASTLAKE - WOODS, VISTAS AND LAND
SWAP) PURSUANT TO A REVISED RATE AND METHOD OF APPORTIONMENT
OF SPECIAL TAX
On April 15, 2003, the City Council initiated the Community Facilities District No. 07-
M, Improvement Area No. 2 (CFD 07-M, IA No. 2) change and modification
proceedings and the annexation proceedings. Adoption of the ordinance concludes the
formal proceedings to modify the special tax rates for CFD 07-M, IA No. 2. Special
taxes levied within CFD 07-M will fund the perpetual operation and maintenance of
slopes, medians and parkways and storm water treatment facilities associated with
Eastlake Woods and Vistas and the Land Swap parcel. The City has retained the services
of MuniFinancial as special tax consultant and Best Best and Krieger LLP as legal
counsel to provide assistance during the proceedings. (Director o f Engineering)
Staffrecommendation: Council place the ordinance on second reading for adoption.
3. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING THE MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN
THE CITY OF CHULA VISTA AND THE CHULA VISTA ELEMENTARY SCHOOL
DISTRICT REGARDING JOINT OPERATION OF THE DYNAMIC AFTER SCHOOL
HOURS (DASH) AFTER SCHOOL RECREATIONAL PROGRAM, AND THE SAFE
TIME FOR RECREATION, ENRICHMENT, AND TUTORING FOR CHILDREN
(STRETCH) EXTENDED SCHOOL DAY EDUCATIONAL PROGRAM; AND
AUTHORIZING THE MAYOR TO EXECUTE THE MOU
The current Memorandum of Understanding (MOU) between the City and the Chula
Vista Elementary School District, in effect until June 30, 2003, authorizes the operation
of two after school programs at elementary school sites. The STRETCH program, with
its emphasis on literacy and arts e~ichment, is currently offered at seven district schools.
The MOU also authorizes the operation of a structured sports and recreation program.
Adoption of the resolution approves an updated MOU between the City and the Chula
Vista Elementary School District for Fiscal Year 2003/2004. (Deputy City Manager
Palmer)
Staff recommendation: Council adopt the resolution.
4. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING A MEMORANDUM OF UNDERSTANDING WITH THE UNIFIED
PORT OF SAN DIEGO FOR AN EDUCATIONAL OUTREACH PROGRAM
PARTNERSHIP AT THE CHULA VISTA NATURE CENTER
The Unified Port of San Diego approached staff from the Nature Center to partner in the
coordination of educational field trips for schools that are located within watershed areas
of San Diego Bay. The goal of the program is to increase participation in existing Nature
Center programs that promote environmental stewardship and educate students and
visitors about the importance of conserving coastal resoumes. (Nature Center Director)
Staff recommendation: Council adopt the resolution.
5. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
ACCEPTING BIDS, REJECTING THE LOWEST BID AND THE APPARENT
SECOND LOWEST BID, AND AWARDING THE CONTRACT FOR THE HILLTOP
PARK REHABILITATION (PROJECT PR-232) TO STAR PAVING, INC., IN THE
AMOUNT OF $231,064
Page 2 ~ Council Agenda 06/17/03
On Wednesday, April 16, 2003, sealed bids were received for this project. The project
provides for the removal and replacement of sidewalk, two pedestrian bridges, three
picnic shelters and the construction of one additional picnic shelter within portions of
Hilltop Park. Hilltop Park is located along both sides of Telegraph Canyon Creek
between First Avenue and Hilltop Drive. (Director of Engineering)
Staff recommendation: Council adopt the resolution.
6. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING SIXTH AMENDMENT TO THE AGREEMENT BETWEEN SAN
DIEGO TRANSIT CORPORATION (SDTC) AND CITY OF CHULA VISTA FOR
UNIFIED TELEPHONE INFORMATION SYSTEM (UTIS)
Adoption of the resolution renews Chula Vista Transit's participation in the UTIS via an
agreement. Council approved previous agreement on June 16, 1998. This service
provides Chula Vista Transit (CVT) riders and persons outside the region with telephone
and online schedule information both on CVT and on all fixed route transit systems
operating in the County. This agreement for Fiscal Year 2003/2004 continues CVT's
participation in this regional transit information system at a cost of $56,470, which is a
combination of $51,573 for telephone information services and $4,897 for web site
management. (Director of Engineering)
Staff recommendation: Council adopt the resolution.
7. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
GRANTING A 12-FOOT WIDE UTILITY EASEMENT TO SAN DIEGO GAS &
ELECTRIC AS NEEDED TO PROVIDE SERVICE TO THE LITTLE LEAGUE
FIELDS AT THE REINSTRA SPORTS FACILITY NEXT TO LOMA VERDE PARK,
1500 MAX AVENUE, AND AUTHORIZING THE MAYOR TO EXECUTE THE
EASEMENT
On March 7, 2003, San Diego Gas & Electric submitted a letter requesting a permanent
easement within the City-owned Reinstra Sports Facility, next to Loma Verde Park,
located at 1500 Max Avenue. The easement is needed to install a new power pole and
overhead utilities to enable SDG&E to provide enhanced electrical service to the park.
(Director of Engineering)
Staff recommendation: Council adopt the resolution.
8. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
AMENDING THE FISCAL YEAR 2002/2003 BUDGET BY APPROPRIATING
$123,746 FROM THE UNAPPROPRIATED BALANCE OF THE EQUIPMENT
REPLACEMENT FUND AND AWARDING PURCHASE AGREEMENT OF $243,736
TO M-B COMPANIES, INC. OF WISCONSIN FOR A STREET LINE PAINT
STRIPER TRUCK THROUGH A COOPERATIVE PURCHASE WITH THE COUNTY
OF MADERA (4/5THS VOTE REQUIRED)
Page 3 - Council Agenda 06/17/03
In Fiscal Year 2002/2003, a street line paint striper was approved for its normal
replacement cycle in the equipment replacement fund for the street sign maintenance
section of Public Works Operations. A truck-mounted street line paint striper was
selected to meet the City's needs, and the cost exceeded the amount budgeted. Adoption
of the resolution appropriates the amount needed for the purchase and awards the
purchase agreement. The City of Chula Vista Municipal Code Section 2.56.140 and
Council Resolution No. 6132 authorize the Purchasing Agent to participate in cooperative
bids with other government agencies for the purchase of materials of common usage.
There are no vendors in the City of Chula Vista that normally furnish this type of heavy
equipment. (Director of Public Works Operations, Director of Finance)
Staffrecomxnendation: Council adopt the resolution.
9. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING A PURCHASE AGREEMENT IN THE AMOUNT OF $203,285 WITH
PARK SPECIALTIES FOR PLAYGROUND EQUIPMENT AND INSTALLATION
SERVICES AT BONITA LONG CANYON, DISCOVERY, AND TERRA NOVA
PARKS, AND AUTHORIZING THE PURCHASING AGENT TO EXECUTE SAID
AGREEMENT; APPROVING A PURCHASE AGREEMENT IN THE AMOUNT OF
$175,477 WITH PARK SPECIALTIES FOR PLAYGROUND EQUIPMENT AND
INSTALLATION SERVICES AT ROHR AND SDG&E WEST PARKS, AND
AUTHORIZING THE PURCHASING AGENT TO EXECUTE SAID AGREEMENT,
CONTiNGENT UPON COUNCIL APPROVAL OF FUNDING 1N THE FISCAL
YEAR 2004/2005 CAPITAL IMPROVEMENT PROGRAM
In Fiscal Year 2002/2003, Council, under the Capital Improvement Program, approved
various CIP projects, which included funding for playground equipment at various parks.
The Public Works Operations Department is now requesting Council's approval of a
purchasing agreement between the City and Park Specialties, for new playground
equipment and installations at Bonita Long Canyon Park, Terra Nova Park, and
Discovery Park. (Director of Public Works Operations, Director of Finance)
Staff recommendation: Council adopt the resolution.
10. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
RATIFYING THE AMENDMENT TO HEARTLAND COMMUNICATIONS
FACILITY AUTHORITY JO1NT POWERS AGREEMENT
Member agencies of the Heartland Communications Facility Authority have been
requested to ratify an amended joint powers agreement with Heartland Commtmications
Facility Authority. The amended agreement would add the Bonita-Sunnyside Fire
Protection District and the Cities of Coronado, Imperial Beach and National City as
member agencies. (Fire Chief)
Staff recommendation: Council adopt the resolution.
Page 4 - Council Agenda 06/17/03
1t. RESOLUTION OF THE CiTY COUNCIL OF THE CITY OF CHULA VISTA
AUTHORIZiNG A ONE-HALF PERCENT INCREASE iN THE RECYCLING FEE
APPLIED TO SOLID WASTE RATES TO FUND RECYCLiNG, SOLID WASTE
AND HOUSEHOLD HAZARDOUS WASTE RECYCLING AND EDUCATION
PROGRAMS, AND ACCEPTING THE MAXIMUM RATE SCHEDULE FOR FISCAL
YEAR 2003/2004 AS SUBMITTED BY PACIFIC WASTE SERVICES
The California Integrated Waste Management Act of 1989 (AB 939) authorized cities and
counties to establish a fee to pay for the cost of developing and implementing the'
programs designed to meet the state mandate to divert up to 50% of their annual waste
from landfills. The City established a 1% fee in Fiscal Year 1994/1995, and increased
that fee to 2% to cover household hazardous waste programs when the County sold the
landfills and stopped providing regional household hazardous services. Additionally, the
Amended and Restated Solid Waste Franchise provides for an annual consumer price
index (CPI) increase of 50% for the first three years and 66% for each additional year the
agreement is in effect. The increase goes into effect on or about July 1 of each year
following staff review for compliance with the "guaranteed lowest rate concept." (Special
Operations Manager)
Staff recommendation: Council adopt the resolution.
12. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
ESTABLISHING A CERTIFIED LIST OF APPROVED DESIGN/BUILD FIRMS FOR
THE CONSTRUCTION OF PUBLIC FACILITIES (EXCLUDING FIRE STATIONS)
Adoption of the resolution enables the City to expeditiously seek requests for proposals
from pre-approved design/build contractors for the design and construction of libraries,
recreation centers, parks, maintenance facilities and other City facilities (excluding fire
stations). (Director of Building and Park Construction)
Staff recommendation: Council adopt the resolution.
13. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING THE FIRST AMENDMENT TO THE AFFORDABLE HOUSiNG
AGREEMENT RELATED TO OTAY RANCH VILLAGE SIX BETWEEN THE CITY
AND MCMILLIN OTAY RANCH, LLC, AND AUTHORIZiNG THE MAYOR TO
SIGN THE AGREEMENT
An affordable housing agreement was executed in June 2002, to ensure satisfaction of
McMillin Otay Ranch, LLC's obligation to provide affordable housing within Otay
Ranch Village Six. The developer is requesting to satisfy such obligation through the use
of existing low income housing credits and the construction of second dwelling units as.
contemplated within the agreement. The developer is also requesting the release from the
obligation of those properties within the project not identified for the provision of low
and moderate income housing. The first amendment to the agreement has been prepared
for Council's consideration to address the developer's request. (Director of Community
Development)
Staff recommendation: Council adopt the resolution.
Page 5 - Cotmcil Agenda 06/17/03
ORAL COMMUNICATIONS
Persons speaking during Oral Communications may address the Council on any
subject matter within the Council's jurisdiction that is not listed as an item on the
agenda. State law generaHy prohibits the Council from taking action on any issue
not included on the agenda, but, if appropriate, the Council may schedule the
topic for future discussion or refer the matter to staff Comments are limited to
three minutes.
PUBLIC HEARINGS
The following items have been advertised as public hearings as required by law.
If you wish to speak on any item, please fill out a "Request to Speak" form
(available in the lobby) and submit it to the City Clerk prior to the meeting.
14. CONSIDERATION OF THE PROPOSED CHANGE AND MODiFICATIONS OF THE
RATE AND METHOD OF APPORTIONMENT FOR COMMUNITY FACILITIES
DISTRICT NO. 08-I (OTAY RANCH VILLAGE SIX)
On May 13, 2003, the City Council approved the Resolution of Intention to consider
changes and modifications to the Rate and Method of Apportionment Community
Facilities District No. 08-I (Otay Ranch Village Six) ("CFD-08-I") and set the public
hearing for June 17, 2003. Adoption of the resolution continues the formal proceedings
to consider the modification of the Rate and Method of Apportionment for Community
Facilities District' No. 08-I (Otay Ranch Village Six), subject to the approval of the
qualified electors. (Director of Engineering)
Staff recommendation: Council conduct the public hearing and adopt the following
resolution:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
MAKING CERTAIN DETERMINATIONS AND AUTHORIZING THE
SUBMITTAL OF THE PROPOSED CHANGES TO THE RATE AND
METHOD OF APPORTIONMENT OF SPECIAL TAXES AUTHORIZED TO
BE LEVIED WITHIN COMMUNITY FACILITIES DISTRICT NO. 08-I
(OTAY RANCH VILLAGE SIX) TO THE QUALIFIED ELECTORS
THEREOF
15. CONSIDERATION OF ADOPTION OF AN ORDINANCE AMENDiNG SECTIONS
19.04 AND 19.54; AND ADDING CHAPTER 19.69 TO THE CHULA VISTA
MUNICIPAL CODE TO DEFINE AND PROVIDE LOCAL PROVISIONS FOR
SURFACE MINTNG OPERATIONS WITHIN THE CITY OF CHULA VISTA
(APPLICANT: CITY OF CHULA VISTA)
Page 6 - Council Agenda 06/17/03
Adoption of the ordinance amends and adds the appropriate portions to the Municipal
Code to establish local authority and standards for the regulation of surface mining
operations as mandated by the State Public Resources Code Sections 2710 et seq.
(Director of Planning and Building).
Staff recommendation: Council conduct the public hearing and place the following
ordinance on first reading:
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
AMENDING SECTIONS 19.04 AND 19.54, ADDING CHAPTER 19.69 TO
THE CHULA VISTA MUNICIPAL CODE TO DEFINE AND PROVIDE
LOCAL PROVISIONS FOR SURFACE M1NING OPERATIONS WITHIN THE
CITY OF CHULA VISTA
ACTION ITEMS
The items listed in this section of the agenda will be considered individually by
the Council, and are expected to elicit discussion and deliberation. If you wish to
speak on any item, please fill out a "Request to Speak" form (available in 'the
lobby) and subrnit it to the City Clerk prior to the meeting.
16. CONSIDERATION OF ACCEPTANCE OF A REPORT REGARDING THE
GENERAL PLAN UPDATE DRAFT VISION AND GOALS AND STATUS REPORT
As initially presented to Council at the May 22 workshop, the City is now entering the
next major phase of the General Plan Update, and is preparing for the second Town Hall
community meeting to be held on June 21 at Bonita Vista High School. The Town Hall
meeting will begin the process of preparing and evaluating preliminary land use and
transportation alternatives. This report summarizes the General Plan Update status, the
Draft Vision & Goals Report, a summary of what will be presented at the June 21 Town
Hall meeting, and anticipated activities in the coming months. (Director of Planning and
Building)
Staff recommendation: Council accept the report, and authorize staff to use the report in
ongoing development of the General Plan Update, preliminary land use and
transportation altematives, and provide any comments to staff regarding the General Plan
Update status, process, and the upcoming Town Hall meeting.
17. CONSIDERATION OF ADOPTION OF A RESOLUTION APPROVING AN
iNDIVIDUAL PARK MASTER PLAN AND NEIGHBORHOOD PARK NAME FOR
PARK P-13 OF OTAY RANCH SPA ONE, VILLAGE ONE WEST
The Otay Ranch Project, LLC, has prepared an individual park master plan for the
neighborhood park site (P-13) located in the Otay Ranch SPA One Village One project
area. The Parks and Recreation Commission recommended approval of the individual
park master plan and park name (Horizon Park). (Director of Building and Park
Construction)
Staff recommendation: Council adopt the following resolution:
Page 7 - Council Agenda 06/17/03
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING AN INDIVIDUAL PARK MASTER PLAN AND
NEIGHBORHOOD PARK NAME FOR PARK P-13 OF OTAY RANCH SPA
ONE, VILLAGE ONE WEST
18. CONSIDERATION OF ADOPTION OF A RESOLUTION iNCREASING THE
MAXIMUM PRINCIPAL AMOUNT OF THE 2003 SPECIAL TAX BONDS OF
COMMUNITY FACILITIES DISTRICT NO. 2001-2 (MCMILLIN OTAY RANCH
VILLAGE SIX), AUTHORIZED TO BE ISSUED, AND APPROVING THE FORM OF
A REVISED PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH
THE ISSUANCE AND SALE THEREOF
On August 13, 2002, the City Council took action to establish CFD No. 2001-2. On
August 20, 2002, the qualified electors of CFD No. 2001-2 voted to authorize the levy of
special taxes within CFD No. 2001-2 and to authorize the issuance of bonds secured by
such special taxes. On February 4, 2003, the City Council authorized the issuance of
bonds by CFD No. 2001-2 and approved the forms of various documents related to the
issuance of such bonds, including the Bond Indenture, the Bond Purchase Agreement, the
Preliminary Official Statement and other documents, and authorized certain actions in
connection with the issuance of such bonds. Due to the subsequent establishment of the
traffic monitoring system, the issuance of the bonds was delayed from March 2003 until
July 2003. Development within CFD No. 2001-2 is subject to this monitoring system.
(Director of Engineering)
Staff recommendation: Council adopt the following resolution:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
INCREASING THE MAXIMUM PRINCIPAL AMOUNT OF THE 2003
SPECIAL TAX BONDS OF COMMUNITY FACILITIES DISTRICT NO. 2001-
2 (MCMILL1N OTAY RANCH VILLAGE SIX), AUTHORIZED TO BE
ISSUED AND APPROVING THE FORM OF A REVISED PRELIMINARY
OFFICIAL STATEMENT 1N CONNECTION WITH THE ISSUANCE AND
SALE THEREOF
ITEMS PULLED FROM THE CONSENT CALENDAR
OTHER BUSINESS
19. CITY MANAGER'S REPORTS
20. MAYOR'S REPORTS
21. COUNCIL COMMENTS
Page 8 - Council Agenda 06/17/03
CLOSED SESSION
Announcements of actions taken in Closed Session shall be made available by
noon on kVednesday following the Council Meeting at the City Clerk's office in
accordance with the Ralph M. Brown Act (Government Code 54957. 7).
22. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO
GOVERNMENT CODE SECTION 54956.8
Property: San Diego Gas & Electric - Gas and Electricity Franchise (Pertaining to
Public Rights of Way throughout the City of Chula Vista)
Agency negotiators: David Rowlands, Jr., Sid Morris, Michael Meacham, Glen
Googins
Negotiating Parties: City of Chula Vista, San Diego Gas & Electric
Under Negotiation: Price and Terms of Payment
ADJOURNMENT to the Regular Meeting of July 8, 2003, at 6:00 p.m. in the Council
Chambers.
Page 9 - Cotmcil Agenda 06/17/03
ORDINANCE NO.
7T7
CALIFORNIA, AMENDING ORDINANCE NO. 2'8~'~ AND AUTHORIZING
THE LEVY OF A SPECIAL TAX IN IMPROVEMENT AREA NO. 2 OF
COMMUNITY FACILITIES DISTRICT NO. 07M (EASTLAKE - WOODS,
VISTAS AND LAND SWAP) PURSUANT TO A REVISED RATE AND
METHOD OF APPORTIONMENT OF SPECIAL TAX
WHEREAS, the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA (the
~'City Council"), has initiated proceedings, held a public hearing, conducted an election and
received a favorable vote from the qualified electors authorizing the levy of separate special
taxes in separate improvement areas of a community facilities district, all as authorized 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 City of Chula Vista under Sections 3, 5 and 7 of Article XI of the
Constitution of the State of Calilbrnia (the ~'Ordinance") (the Act and the Ordinance may be
referred to collectively as the "Community Facilities District Law"). This Community Facilities
District is designated as COMMUNITY FACILITIES DISTRICT NO. 0TM (EASTLAKE -
WOODS, VISTAS AND LAND SWAP) (the "District") and the improvement areas therein are
designated as IMPROVEMENT AREA NO. 1 and IMPROVEMENT AREA NO. 2; and
WHEREAS, the City Council, acting as the legislative body of the District, previously
enacted Ordinance No. 2867 to attthorize the levy of special taxes within Improvement Area A
aud Improvement Area No. 2 pursuant to a separate rate and method of apportionment applicable
fo each respective hnprovement Area; and
WHEREAS, the City Council, has initiated proceedings, held a public hearing, conducted
an election and received a favorable vote fi'om the qualified electors of Improvement Area No. 2
authorizing the levy of special taxes therein pursuant to a revised rate and method of
apportionment thereof.
The City Council of the City of Chula Vista, California, acting as the legislative body of
Community Facilities District No. 07M (EastLake - Woods, Vistas and Land Swap), does hereby
ordain as follows:
SECTION 1. This City Council does, by the passage of this ordinance, authorize the
levy of special taxes on taxable properties located in Improvement Area No. 2 pursuant to the
Revised Rate and Method of Apportionment of Special Taxes as set forth in Exhibit
attached hereto and incorporated herein by this reference (the "Revised Rate and Method").
SECTION 2. This City Council, acting as the legislative body of the District, is hereby
further authorized, by Resolution, to annually determine the special tax to be levied within
Improvement Area No. 2 for the then current tax year or future tax years; provided, however, the
1
Special tax t9 be levied in Improvement Area No. 2 shall not exceed the maximum special tax
authorized to be levied pursuant to the Revised Rate and Method.
SECTION 3. The special taxes herein authorized to be levied within Improvement Area
No. 2, 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; provided, however, the District may utilize a
direct billing procedure for any special taxes that cannot be collected on the County tax roll or
may, by resolution, elect to collect the special taxes at a different time or in a different manner if
necessary to meet its financial obligations.
SECTION 4. The special taxes authorized to be levied in Improvement Area No. 2 shall
be secured by the lien imposed pursuant to Sections 3114.5 and 3115.5 of the Streets and
Highways Code of the State of California, which lien shall be a continuing lien and shall secure
each levy of the special tax. The lien of the special tax shall continue in force and effect until the
special tax obligation is prepaid, permanently satisfied and canceled in accordance with Section
53344 of the Government Code of the State of California or until the special tax ceases to be
levied by the City Council in the manner provided in Section 53330.5 of said Government Code.
SECTION 5. This Ordinance shall, upon becoming effective, amend and supercede any
and all provisions of Ordinance No. 2867 pertaining to the authorization to levy special taxes
within Improvement Area No. 2 of the District. All provisions of Ordinance No. 2867 pertaining
to the authorization to levy special taxes within Improvement Area No. 1 of the District shall
remain in full force and effect.
SECTION 6. This Ordinance shall be effective thirty (30) days after its adoption.
Within fifteen (15) days after its adoption, the City Clerk shall cause this Ordinance to be
published in a newspaper of general circulation in the City pursuant to the provisions of
Government Code Section 36933.
Introduced at a regular meeting of the City Council of the City of Chula Vista, California, on
,2003;
ATTEST APPROVED AS TO FORM:
Cliff Swanson Ann Moore
Director of Engineering City Attorney
COUNCIL AGENDA STATEMENT
Item: .;
Meeting Date: 6/17/2003
ITEM TITLE: Resolution approving the Memorandum of
Understanding between the City of Chula Vista and the Chula
Vista Elementary School District regarding joint operation of the
Dynamic A~er School Hours (DASH) after school recreational
program, and the Safe Time for Recreation, Enrichment, and
Tutoring for Children (STRETCH) extended school day
educational program; and authorizing the Mayor to execute the
MOU.
SUBMITTED BY: Assistant City Manager Palmer~
REVIEWED BY: City Manage/d/!~ ~,0~ (4/5ths Vote: Yes No X )
The current MOU between the City and the Chula Vista Elementary School District, in
effect until June 30, 2003, authorizes the operation of two after school programs at
elementary school sites. The STRETCH Program, with its emphasis on literacy and arts
enrichment, is currently offered at seven district schools. The MOU also authorizes the
operation of a structured sports and recreation program called DASH (Dynamic After
School Hours), at 21 district schools.
The intent of this report is to present an updated MOU between the City and the Chula
Vista Elementary School District for FY 2003-04.
STAFF RECOMMENDATION: That Council approve the Memorandum of
Understanding between the City of Chula Vista and the Chula Vista Elementary School
District regarding joint operation of the DASH (Dynamic After School Hours) after
school recreational program, and the STRETCH (Safe Time for Recreation, Enrichment,
and Tutoring for CHildren) extended school day educational program; and authorize the
Mayor to execute the MOU.
BOARDS/COMMISSIONS RECOMMENDATIONS: n/a
DISCUSSION:
The STRETCH and DASH programs continue to be a success, popular not only with
parems and school-age children, but with the City's partner, the Chula Vista Elementary
School District.
The City and the District are now ready to enter into a new Memorandum of
Understanding for FY 2003-04 (Attachment A). The new MOU authorizes:
Item: ~ , Page 2
Meeting Date: 6/17/2003
* Continuation of DASH at 21 elementary school sites. These sites include: Allcm,
Arroyo Vista, Casillas, Chula Vista Hills, Clear View, Cook, Discovery,
EastLake, Halecrest, Heritage, Hilltop, Kellogg, Thurgood Marshall, McMillin,
Olympic View, Palomar, Parkview, Rogers, Rosebank, Tiffany, and Valle Lindo
Elementary Schools.
Continuation of the STRETCH program at seven elementary school sites,
including Harborside, Lauderbach, Loma Verde, Montgomery, Mueller, Otay, and
Rice Elementary Schools. (Current levels of state grant funding allow for an
increase in service from 60 children per day to 80 children per day at Harborside
Elementary. Montgomery and Otay serve 80 children per day; all other sites serve
60.)
As in previous MOUs, the City will recruit, hire, train and supervise staffto conduct both
STRETCH and DASH. The District will actively promote communication, cooperation
and coordination among and between school personnel and city personnel.
FISCAL IMPACT:
The proposed FY2003-04 budget for STRETCH and DASH is $1,392,858. The City will
provide $466,278 (plus in-kind expenses), the Elementary School District will provide
$500,000 and the State will provide (via the District) $426,580. These funds will be
appropriated as part of the FY2003-04 budget.
ATTACHMENT 'A'
M~EMORANDUM OF UNDERSTANDING
BETWEEN
TFfE CITY OF CHULA VISTA
CHULA VISTA ELEMENTARY SCHOOL DISTRICT
This MOU is entered into by the City Manager of the City of Chula Vista and the
Superintendent of the Chula Vista Elementary School District.
CHULA VISTA "STRETCH" MISSION STATEMENT
Safe Time for Recreation, Enrichment, & Tutoring for CHildren
Our mission is to promote the physical and mental well being of young people through safe,
nurturing, extended school day programs that support academic achievement, offer opportunities
for cultural and artistic enrichment, and provide organized recreational activities. The
"STRETCH" program brings together community stakeholders, blends and maximizes resources,
and finks staffto create programs that respond to individual communities' needs.
The parties agree that the Chula Vista Elementap/School District's responsibilities shah be
to:
Facilitate communication of STRETCH mission, goals, and objectives to all school
sites, in particular to principals, PTA's and School Site Councils.
Actively promote cooperation and coordination among and between school sites
and all personnel involved in STRETCH activities.
Participate in the development and actualization of a strategic plan.
Participate in the preparation and submittal of grants and other funding proposals
to further the STRETCH mission.
Provide a staffliaison with the City as a key contact.
The parties agree that the City of Chula Vista's responsibilities shall be to:
Provide a Library/Recreation Department Manager to coordinate STRETCH
activities in cooperation with District staff..
Facilitate communication of STRETCH mission, goals, and objectives to all city
staff participating in STRETCH activities.
Participate in the development and actua!i?ation of a strategic plan.
Participate in the preparation and submittal of grants and other funding proposals
to further the STRETCH mission.
This Memorandum of Understanding shall remain in effect for 12 months commencing
Suly 1, 1998 and ending June 30tu, 1999, and may be renewed yearly if both parties are in
agreement. If either party does not wish to renew this Memorandum of Understanding
they shall indicate so in writing no less than 60 days prior to the end of the fiscal year.
ATTACHlvlENT &PAGE 2
The parties agree that a joint decision-making panel shall be created to govern the
STRETCH program. The panel is comprised of the following City and District employees:
Assistant Superintendent for Instructional Services and Sttpport, Chula Vista
Elementary School District
Director, Chula Vista Library & Recreation Department, City of Chula Vista
District Coordinator of Earty Intervention, Chula Vista Elementary School District
Educational Services Manager, City of Chula Vista
The panel will receive input via district schools from parents and children on their after-
school needs, and from an advisory committee made up of community stakeholders,
including principals, staff from the district, the city, and a variety of community agencies.
In FY 1998-99, the City of Chula Vista will contribute $289,000 (plus the cost of pre-
negotiated salary increases) to the STRETCH program. In FY 1998-99, the Chula Vista
Elementary School District will provide $250,000 to the City for the STRETCH program.
The City of Chula Vista will act as fiscal agent for these combined funds. The duties of
fiscal agent include, but are not limited to, appropriating, expending, tracking and
reporting funds. The combined City/District funds shall be used to pay for an after-school
recreation program at 28 school sites within the City of Chula Vista on school days (plus
sports events on some Saturdays); a full-time Educational Services Manager to coordinate
the STRETCH program; and a .25 FTE Administrative Office Assistant. The above-
mentioned par~el will determine how best to appropriate the remaining funds
(approximately $240,000), as well as any additional funds procured through grants or
donations for the STRETCH program.
The parties further agree that measures to determine the effectiveness of the program will
be jointly determined, and will be specific to activities undertaken at various school sites.
The parties envision that a large portion of the available funds'will be used to leverage
additional grant funds from the California Department of Education. Grant monies are for
the operation of extended school day programs in communities where the needs are
highest, as documented by the percentage of children who qualify for fi'ee or reduced
lunch.
CHULA VISTA ELEMENTARY CITY OF CHULA VISTA
SCHOOL DISTRICT
By: By:
Date: Date:
ATTACHMENT A. PAGE 3
ADDENDUM TO THE MEMORANDUM OF UNDERSTANDING.
re EX'rENDED SCHOOL (STKETCH) PROGRAM
The parties agree to defend, indemnify and hold harmless each other against any and all
claims asserted or liability established for damages or injuries, including death, to any
person or property, including an officer, agent or employee of one of the parties, which
arise from or are connected with or are caused or claimed to be caused by the negligent
acts or omissions of the District or the City in carrying out the terms of this agreement;
provided, however, that no duty to indemnify or hold harmless one party shall arise or
exist regarding the established sole negligence or willful misconduct of that party.
CHULA VISTA ELEMENTARY CITY OF CHULA VISTA
SCHOOL DISTRICT
By: By:
Date: Date:
ATTACHMENT A
MEMORANDUM OF UNDERSTANDING
BETWEEN
THE CITY OF CHULA VISTA
AND
CHULA VISTA ELEMENTARY SCHOOL DISTRICT
This MOU is entered into by the City Manager of the City of Chula Vista and the Superintendent
of Chula Vista Elementary School District.
This is an agreement to operate an after school recreational program (DASH - Dynamic After
School Hours), and an extended school day educational program (STRETCH - Safe Time for
Recreation, Enrichment and Tutoring for CHildren) in Chun Vista Elementary School District
schools in FY 1999-2000.
The parties agree that the Chula Vista Elementary School District's responsibilities shall be to:
· Facilitate communication of the DASH and STRETCH Programs' missions, goals and
objectives to all participating school sites, in particular to principals, PTAs and School Site
Councils.
· Actively promote cooperation and coordination among and between school sites and all
personnel involved in DASH and STRETCH activities.
· Participate in the development and actualization of a plan to evaluate the DASH and
STRETCH Programs.
,, Provide a staff liaison with the City as a key contact.
· Provide the City of Chula Vista $596,000 in FY 1999~2000 towards the cost of operating the
DASH and STI~ETCH Programs, payable upon receipt of four quarterly invoices from the
City of Chula Vista.
The parties agree that the City of Chula Vista's responsibilities shall be to:
· Provide a Library and Recreation Department Manager to oversee and coordinate the DASH
and STRETCH Programs' activities, in cooperation with Dislrict staff.
· Facilitate communication of the DASH and STRETCH Programs' missions, goals and
objectives to all participating staff.
· Actively promote cooperation and coordination among and between school sites and all
personnel involved in DASH and STRETCH activities.
· Participate in the development and actualization of a plan to evaluate the DASH and
STRETCH Programs.
· Operate the DASH Program at the following 12 District Schools: Allen/Ann Daly, CasilIas,
Chula Vista Hills, Clear View Charter, Cook, Feaster-Edison Charter, Halecrest, Hilltop,
Olympic View, Palomar. Rogers, and Valle Lindo.
· Recruit, hire, and train 26 part-time DASH Leaders, under the supervision of a full-time
DASH Supervisor.
· Operate the STRETCH Program at the following 8 District Schools: Harborside,
Lauderbach. Loma Verde Comer, Los Altos, Montgomery, Mueller Charter, Otay, and Rice.
· Recruit, hire, and train 8 part-time, benefited STRETCH School Site Coordinators, and 24
part-time Youth Leaders, under the supervision of a full-time STRETCH Supervisor.
· Provide individual participating schools with detailed terms of agreement regarding specific
program hours, staffing, programrmng, shared use of facilities, etc.
Page ! of 2
· Conduct a Citywide after school intramural sports program for children from all
Chula Vista Elementary School District schools through the City's Community
Centers
,, Provide $351,000 in FY 1999-2000 towards the cost of operating the DASH and
STRETCH Programs. Citywide overhead is contributed in-kind.
· Act as fiscal agent for the combined District and City funds, the duties of which
include but are not limited to budgeting, appropriating, expending, tracking, and
reporting funds.
The parties agree that a joint decision-making panel shall continue to govern the DASH
and STRETCH Programs. The panel is comprised of the following District and City
employees:
Chula Vista Elementary School District:
Assistant Superintendent for Instructional Services and Support
District Coordinator of Early Intervention
City of Chula Vista
Director, Chula Vista Library and Recreation Department
Educational Services Manager
The parties further agree to hold harmless each other against any and all claims asserted
or liability established for damages or injuries, including death, to any person or property,
including an officer, agent or employee of one of the parties, which arise from or are
connected with or are caused or claimed to be caused by the negligent acts or omissions
of the District or the City in carrying out the terms of this agreement; provided, however,
that no duty to hold harmless one party shall arise or exist regarding the established sole
negligence or willful misconduct of that party.
CHULA VISTA ELEMENTARY CITY OF CHULA VISTA
SCHOOL DISTRICT
By: ~a ~. t~ By:
Date: September 2~ 1999 Date:
Page 2 of o
MEMORANDUM OF UNDERSTANDING
BETWEEN
THE CITY OF CHULA VISTA
AND
CHULA VISTA ELEMENTARY SCHOOL DISTRICT
This MOU is entered into by the Mayor of the City of Chula Vista and the Superintendent
of Chula Vista Elementary School District.
This is an agreement to operate an after school recreational program ("DASH" -
Dynamic After School Hours), and an extended school day educational program
(STRETCH - Safe Time for Recreation, Enrichment and Tutoring for CHildren) in Chula
Vista Elementary School District schools in FY 2000-2001.
The parties agree that the Chula Vista Elementary School District's responsibilities shall
be to:
Facilitate communication of the DASH and STRETCH Programs' missions, goals
and objectives to ail participating school sites, in particular to principals, PTAs and
School Site Councils.
Actively promote cooperation and coordination among and between school sites and
all personnel involved in DASH and 'STRETCH activities.
Participate in the development and actualization of a plan to evaluate the DASH and
STRETCH programs.
Provide a staff liaison with the City as a key contact.
Coordinate the daily delivery of snacks for participating children through Child
Nutrition Services
[] Provide the City of Chula Vista $662,000 in FY 2000-2001 towards the cost of'
operating the DASH and STRETCH Programs, payable within 30 days of receipt of
four quarterly City of Chula Vista invoices of $165,500 each, on 7/15/00, 10/15/00,
1/15/01, and 4/15/01.
The parties agree that the City of Chula Vista's responsibilities shall be to:
Provide a Library and Recreation Department Manager to oversee and coordinate the
DASH knd STRETCH Programs' activities, in cooperation with District staff.
Facilitate communication of the DASH and STRETCH Programs' missions, goals
and objectives to all participating staff
[] Actively promote cooperation and coordination among and between school sites and
all personnel involved in DASH and STRETCH activities.
[] Participate in the development and actualization of a plan to evaluate the DASH and
STRETCH programs.
Operate the DASH Program at the following 14 District Schools: Allen, Casillas,
Chula Vista Hills, Clear View, Cook, Eastlake, Feaster-Edison, Halecrest, Hilltop,
Olympic View, Palomar, Rogers, Rosebank, and Valle Lindo Elementary Schools.
Page 1 of 1
Recruit, hire, and train 30 part-time DASH Leaders, under the supervision of a full-
time DASH Supervisor.
Operate the STRETCH Program at the following 8 District Schools: Harborside,
Landerbach, Loma Verde, Los Altos, Montgomery, Mueller, Otay, and Rice
Elementary Schools.
Recruit, hire, and train 8 part-time, benefited STRETCH School Site Coordinators,
and 24 part-time Youth Leaders, under the supervision of a full time STRETCH
Supervisor
ca Provide individual participating schools with detailed terms of agreement regarding
specific program hours, staffing, programming, shared use of facilities, etc.
ca Contribute the following:
$348,265 in STRETCH/DASH budgeted general funds; a .5 FTE Library
Administrative Assistant ($15,000, in-kind); City wide overhead (human resources,
payroll, finance, MIS, purchasing, and other City Departments) - in kind.
c~ Act as fiscal agent for the combined District and City funds the duties of which
include but are not limited to budgeting, appropriating, expending, tracking,, and
reporting funds.
The part/es agree that a joint decision-making panel shall continue to govern the DASH
and STRETCH Programs. The panel is compr/sed of the following District and City
employees:
Chula Vista Elementary School District: ~
Assistant Superintendent for Instructional Services and Support
District Coordinator of Early Intervention
City of Chula Vista
Director, Chula Vista Library and Recreation Department
Educational Services Manager
The parties further agree to hold harmless each other against any and all claims asserted
or liability established for damages or injuries, including death, to any person or property,
including an officer, agent or employee of one of the parties, which arise from or are
connected with or are caused or claimed to be caused by the negligent acts or omissions
of the District or the City in carrying out the terms of this agreement; provided, however,
that no duty to hold harmless one party shall arise or exist regarding the established sole
negligence 9r willful misconduct of that party.
CHULA VISTA ELEMENTARY CITY OF CHULA VISTA
SCHOOL DISTRICT
By: By:
Date: Date:
Page 2 of 2
MEMORANDUM OF UNDERSTANDING
BETWEEN
THE CITY OF CHULA VISTA
AND
CHULA VISTA ELEMENTARY SCHOOL DISTRICT
This MOU is entered into by the Mayor of the City of Chula Vista and the Superintendent
o£ Chula Vista Elementary School District.
This is an agreement to operate an after school recreational program ("DASH" -
Dynamic After School Hours), and an extended school day educational program
(STRETCH - Safe Time for Recreation, Enrichment and Tutoring for CHildren) in Chula
Vista Elementary School District schools in FY 2001-2002.
The parties agree that the Chula Vista Elementary School District's responsibilities shall
be to:
Facilitate communication of the DASH and STRETCH Programs' missions, goals
and objectives to all participating school sites, in particular to principals, PTAs and
School Site Councils.
Actively promote cooperation and coordination among and between school sites and
all personnel involved in DASH and STRETCH activities.
Participate in the development and actualization of a plan to evaluate the DASH and
STRETCH programs.
Provide a staff liaison with the City as a key contact.
Coordinate the daily delivery of snacks for participating children through Child
Nutrition Services.
a Provide the City of Chula Vista $764,160 in FY 2001-2002 towards the cost of
operating the DASH and STRETCH Programs, payable within 30 days of receipt of
four quarterly City of Chula Vista invoices of $t91,040 each, on 7/15/01, 10/15/01,
1/15/02, and 4/15/02.
The parties agree that the City of Chula Vista's responsibilities shall be to:
Provide a Library Department Manager to oversee and coordinate the DASH and
STRI~TCH Programs' activities, in cooperation with District staff.
Facilitate communication of the DASH and STRETCH Programs' missions, goals
and objectives to all participating staff.
Actively promote cooperation and coordination among and between school sites and
all personnel involved in DASH and STRETCH activities.
n Participate in the development and actualization of a plan to evaluate the DASH and
STRETCH programs.
Operate the DASH Program at the following I8 District Schools: Allen, Casillas,
Chula Vista Hills, Clear View, Cook, Eastlake, Feaster-Edison, Halecrest, Hilltop,
Kellogg, McMillin, Olympic View, Palomar, Parkview, Rogers, Rosebank, Tiffany,
and Valle Lindo Elementary Schools.
Page I of 2
Recruit, hire, and train 39 part-time DASH Leaders, under the supervision of 2 full-
time DASH Supervisors.
Operate the STRETCH Program at the following 8 District Schools: Harborside,
Lauderbach, Loma Verde, Los Altos, Montgomery, Mueller, Otay, and Rice
Elementary Schools.
Recruit, hire, and train 8 part-time, benefited STRETCH School Site Coordinators,
and 26 part-time Youth Leaders, under the supervision of a full rime STRETCH
Supervisor
Provide individual participating schools with detailed terms of agreement regarding
specific program hours, staffing, programming, shared use of facilities, etc.
n Contribute the following:
$393,656 in STRETCH/DASH budgeted general funds; a .5 FTE Library
Administrative Assistant ($18,000, in-kind); City wide overhead (human resources,
payroll, finance, MIS, purchasing, and other City Departments) - in kind.
ca Act as fiscal agent for the combined District and City fimds the duties of which
include but are net limited to budgeting, appropriating, expending, tracking, and
reporting funds.
The parties agree that a joint ~lecision-making panel shall continue to govern the DASH
and STRETCH Programs. The panel is comprised of the following District and City
employees:
Chula Vista Elementary School District:
Assistant Superintendent for Instructional Services and Support
District Director of Early Intervention
City of Chula Vista
Deputy City Manager/Chula Vista Public Library Director
Educational Services Manager
The parties further agree to hold harmless each other against any and all claims asserted
or liability estabhshed for damages or injuries, including death, to any person or property,
including an officer, agent or employee of one of the parties, which arise from or are
connected with or are caused or claimed to be caused by the negligent acts or omissions
of the District or the City in carrying out the terms of this agreement; provided, however,
that no duty to hold harmless one party shall arise or exist regarding the established sole
negligence or willful misconduct of that party.
CHULA VISTA ELEMENTARY CITY OF CHULA VISTA
SCHOOL DISTRiCT
By: By:
Date: Date:
Page 2 of 2
MEMORANDUM OF UNDERSTANDING
BETWEEN
TFIF, CITY OF CHULA VISTA
AND
CHULA VISTA ELEMENTARY SCHOOL DISTRICT
This MOU is entered into by the Mayor of the City of Chula Vista and the Superintendent
of' Chula Vista Elementary School District.
This is an agreement to operate an after school recreational program ("DASH" -
Dynamic After School Hours), and an extended school day educational program
(STRETCH - Safe Time for Recreation, Enrichment and Tutoring for CHildren) in Chula
Vista Elementary School District schools in FY 2002-2003.
Thc parties a~rcc that the Chuta Vista Elementary School District's responsibilities shall
be to:
Facilitate communication of' the DASH and STRETCH Programs' missions, goals
and objectives to all participating school sites, in particular to principals, PTAs and
School Site Councils.
Actively promote cooperation and coordination among and between school sites and
all personnel involved in DASH and STRETCH activities.
Participate in the development and actualization of a plan to evaluate the DASH and
STRETCH programs.
Provide a staff liaison with the City as a key contact.
Coordinate the daily delivery of snacks for participating children through Child
Nutrition Services.
c2 Provide the City of Chula Vista $839,992 in FY 2002-2003 towards the cost of
operating the DASH and STRETCH Programs, payable within 30 days of receipt of
four quarterly City of Chula Vista invoices of $209,998 each, on 7/15/02, 10/15/02,
1 / 15/03, and 4/I 5/03.
The parties agree that the City of Chula Vista's responsibilities shall be to:
Provide a Library Department Manager to oversee and coordinate the DASH and
STRETCH Programs' activities, in cooperation with District staff.
Facilitate communication of the DASH and STRETCH Programs' missions, goals
and objectives to all participating staff.
Actively promote cooperation and coordination among and between school sites and
all personnel involved in DASH and STRETCH activities.
c2 Participate in the development and actualization of a plan to evaluate the DASH and
STRETCH programs.
Operate the DASH Program at the tbllowing 21 District Schools: Allen~ Arroyo Vista
(new in 02-03), Casillas, Chula Vista Hills, Clear View, Cook, Discovery Charter
(new in '02-03), EastLake, Halecrest, Heritage (new in '02-03), Hilltop, Kellogg,
Page lofl ?'~~: ~'
Thurgood Marshall, McMillin, Olympic View, Palomar, Parkview, Rogers,
Rosebank, Tiffany, and Valle Lindo Elementary Schools.
Recruit, hire, and train 47 part-time DASH Leaders, under the supervision of 2 full-
time DASH Supervisors.
[] Operate the STRETCH Program at the following 7 District Schools: Harborside,
Lauderbach, Loma Verde, Montgomery, Mueller, Otay, and Rice Elementary
Schools.
Recruit, hire, and train 7 part-time, benefited STRETCH School Site Coordinators,
and 26 part-time Youth Leaders, under the supervision of a full time STRETCH
Supervisor
Provide individual participating schools with detailed terms of agreement regarding
specific program hours, staffing, programming, shared use of facilities, etc.
ca Contribute the following:
$432,765 in STRETCH/DASH budgeted general funds; a .5 FTE Library
Administrative Assistant ($19,000, in-kind); City wide overhead (human resources,
payroll, fmance, MIS, purchasing, and other City Departments) - in kind.
[] Act as fiscal agent for the combined District and City funds the duties of which
include but are not limited to budgeting, appropriating, expending, tracking, and
reporting funds.
The parties agree that a joint decision-making panel shall continue to govern the DASH
and STRETCH Programs. The panel is comprised of the following District and City
employees:
Chula Vista Elementary School District:
Assistant Superintendent for Community and Government Services
District Director of Early Intervention
City of Chula Vista
Deputy City Manager/Chula Vista Public Library Director
Educational Services Manager
The parties further agree to hold harmless each other against any and all claims asserted
or liability established for damages or injuries, including death, to any person or property,
including an officer, agent or employee of one of the parties, which arise from or are
connected with or are caused or claimed to be caused by the negligent acts or omissions
of the District or the City in carrying out the terms of this agreement; provided, however,
that no duty to hold harmless one party shall arise or exist regarding the established sole
negligence or willful misconduct of that party.
CHULA VISTA ELEMENTARY CITY OF CHULA VISTA
SCHOOL DISTRICT
By: By:
Date: Date:
Page2 of 2 :~,, ~/~
RESOLUTION NO. 2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE MEMORANDUM OF
UNDERSTANDING BETWEEN THE CITY OF CHULA VISTA
AND THE CHULA VISTA ELEMENTARY SCHOOL DISTRICT
REGARDING JOINT OPERATION OF THE DASH (DYNAMIC
AFTER SCHOOL HOURS) AFTER SCHOOL RECREATIONAL
PROGRAM, AND THE STRETCH (SAFE TIME FOR
RECREATION, ENRICHMENT, AND TUTORING FOR
CHILDREN) EXTENDED SCHOOL DAY EDUCATIONAL
PROGRAM, AND AUTHORIZING THE MAYOR TO EXECUTE
THE MOU
WHEREAS, in FY 1998/99 the City entered into a unique partnership with the Chula
Vista Elementary School District, the purpose of which was to examine the City's existing after
school program offerings and, xvith District input, to revamp them based on individual school needs
and priorities; and
WHEREAS, the current Menrorandum o f Understanding (MOU) between the City
and the Chula Vista Elementary School District, in effect until June 30th, 2003 authorizes the
operation of the STRETCH Program (Safe Time for Recreation, Enrichment and Tutoring for
Children) with its emphasis on literacy, and arts enrichment, at seven district schools; and the DASH
Program (D3q~amic After School Hours), a structured sports and recreation program at 21 district
schools; and
WHEREAS, the City and the District are prepared to enter into a new Memorandum
of Understanding for FY 2003~04, authorizing the continuation of DASH at twenty-one (21)
elementary school sites, and the STRETCH program at seven (7) elementary school sites; and
WHEREAS, an updated MOU between the City and the Chula Vista Elementary
School District for FY 2003-04 is presented for approval.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista
does hereby approve the Memorandum of Understanding between the City of Chula Vista and the
Chula Vista Elementary School District regarding joint operation of the DASH (Dynamic After
School Hours) after school recreational program, and the STRETCH (Safe Time for Recreation,
Enrichment, and Tutoring for Children) extended school day educational program, a copy of which
shall be kept on file in the office of the City Clerk.
BE IT FURTHER RESOLVED that the Mayor is hereby authorized to execute said
Memorandum of Understanding.
Presented by Approved as to form by
Assistant City Manager 7y Attorney ~}
i:',al~orncy\reso~,MOU~STRETCH AND DASH 034)4
2
MEMORANDUM OF UNDERSTANDING
BETWEEN
THE CITY OF CHULA VISTA
AND
CHULA VISTA ELEMENTARY SCHOOL DISTRICT
This MOU is entered into by the Mayor of the City of Chula Vista and the Superintendent of Chula
Vista Elementary School District.
This is an agreement to operate an after school recreational program ("DASH" - Dynamic After
School Hours), and an extended school day educational program (STRETCH - Safe Time for
Recreation, Enrichment and Tutoring for CHildren) in Chula Vista Elementary School District
schools in FY 2003-2004.
The parties agree that the Chula Vista Elementary School District's responsibilities shall be to:
,, Facilitate communication of the DASH and STRETCH Programs' missions, goals and objectives
to all participating school sites, in particular to principals, PTAs and School Site Councils.
· Actively promote cooperation and coordination among and between school sites and all personnel
involved in DASH and STRETCH activities.
· Participate in the development and actualization of a plan to evaluate the DASH and STRETCH
progralns.
· Provide a staff liaison with the City as a key contact.
· Coordinate the daily delivery of snacks for participating children through Child Nutrition
Services.
· Provide the City of Chula Vista $926.580 in FY 2003-2004 towards the cost of operating the
DASH and STRETCH Programs, payable within 30 days of receipt of four quarterly City of
Chula Vista invoices of $231,645 each, on 7/15/03, 10/15/03, 1/15/04, and 4/15/04.
The parties agree that the City of Chula Vista's responsibilities shall be to:
,, Provide a Library Department Manager to oversee and coordinate the DASH and STRETCH
Programs' activities, in cooperation and coordination with District staff.
· Facilitate a communication of the DASH and STRETCH Programs' missions, goals and
objectives to all participating staff.
· Actively promote cooperation and coordination among and between school sites and all personnel
involved in DASH and STRETCH activities.
· Participate in the development and actualization of a plan to evaluate the DASH and STRETCH
programs.
· Operate the DASH Program at the following 21 District Schools: Allen, Arroyo Vista, Casillas,
Chula Vista Hills, Clear View, Cook~ Discovery Charter, Eastlake, Halecrest, Heritage, Hilltop,
Kellogg, Thurgood Marshall, McMillin, Olympic View, Palomar, Parkview, Rogers, Rosebank,
Tiffany, and Valle Lindo Elementary Schools.
· Recruit, hire and train 47 part-time DASH Leaders, under the supervision of 2 fulltime DASH
Supervisors.
· Operate the STRETCH Program at the following 7 District Schools: Harborside, Lauderbach,
Loma Verde, Montgomery, Mueller, Otay, and Rice Elementary Schools.
· Recruit, hire and train 7 part-time, benefited STRETCH School Site Coordinators, and 27 part-
time Youth Leaders, under the supervision of a full time STRETCH Supervisor.
· Provide individual participating schools with detailed terms of agreement regarding specific
program hours, staffing, programming, shared use of facilities, etc.
· Contribute the following:
$466,278 in STRETCH/DASH budgeted general funds: City wide overhead (human resources,
payroll, finance, MIS, purchasing and other City Departments) - in kind.
· Act as fiscal agent for the combined District and City funds the duties of which include but are
not limited to budgeting, appropriating, expending, tracking, and reporting funds.
The parties agree that a joint decision-making panel shall continue to govern the DASH and
STRETCH Programs. The panel is comprised of the following District and City employees:
Chula Vista Ele~nentary School District:
Assistant Superintendent for Community and Government Services
District Director of Early Intervention
City of Chula Vista
Deputy City Manager/ChuIa Vista Public Library Director
Educational Services Manager
The parties further agree to hold harmless each other against any and all claims asserted or liability
established for damages or injuries, including death, to any person or property, including an officer,
agent or employee of one of the parties, which arise from or are connected with or are caused or
claimed to be caused by the negligent acts or omissions of the District or the City in carrying out the
terms of this agreement; provided, however, that no duty to hold harmless one party shall arise or
exist regarding the established sole negligence or willful misconduct of that party.
CHULA VISTA ELEMENTARY CITY OF CHULA VISTA
SCHOOL DISTRICT
D~ ~(~2~///~"'0~~t~' ~Ya:te:
COUNCIL AGENDA STATEMENT
Item: ~
Meeting Date: 6/17/03
ITEM TITLE: Resolution Approving a Memorandum of Understanding
with the Unified Port of San Diego for an Educational Outreach Program
Partnership at the Chula Vista Nature Center.
SUBMITTED BY: Nature Center Directo/~
REVIEWED BY: City Manage ,~., ~ ~,~
~ ~ (4/Sths Vote: Yes No X )
The Unified Port of San Diego approached staff from the Nature Center to partner in the
coordination of educational field trips for schools which are located within watershed areas of
San Diego Bay. The goal of the program is to increase participation in existing Nature Center
programs which promote environmental stewardship and educate students and visitors about
the importance of conserving coastal resources.
RECOMMENDATION: That the Council adopt the Resolution approving the memorandum of
understanding with the Unified Port of San Diego.
BOARDS/COMMISSIONS RECOMMENDATION: The Nature Center Board of Trustees has
adopted a policy supporting activities which increase participation in Nature Center educational
programs by San Diego county schools. The Board was briefed on the Port's proposal at their
meeting of May15 and was supportive.
DISCUSSION:
The Unified Port of San Diego ("Port") approached staff from the Nature Center to partner in the
coordination of educational field trips for schools which are located within watershed areas of
San Diego Bay. The goal of the program is to increase participation in existing Nature Center
programs which promote environmental stewardship and educate students and visitors about
the importance of conserving coastal resources.
The mission of the Pod's Environmental Education Program is to provide memorable
experiences that will promote environmental stewardship and instill an understanding of the
importance of a healthy San Diego Bay. The program serves as an integral part of the Port's
compliance with the San Diego County Municipal Storm Water Permit of 2001 (National
Pollutant Discharge Elimination System Permit No. CAS0108758). Through the formation of
partnerships with local environmental organizations, outreach to the public makes a difference
to help reduce sources of pollution, ultimately protecting San Diego Bay.
The Mission of the Nature Center ("CVNC") is to serve the public by providing a quality nature
center/living museum in order to promote coastal resource conservation and environmental
stewardship through education.
The proposed project makes use of the existing CVNC educational programs for elementary
school students. For sixteen years, CVNC has been offering field trips to San Diego County
school children. Approximately 10,000 students visit CVNC and the Sweetwater Marsh National
Item #: ~
Meeting Date: 6/17/03
Wildlife Refuge annually. Including the students, the annual visitation to CVNC is approximately
50,000. CVNC exhibits, and education programs emphasize, the Sweetwater River watershed
and what each individual can do to protect the watershed and, ultimately, the Bay and the
ocean.
Because of major funding cutbacks by the State of California, many schools cannot afford to pay
even the modest CVNC fees for teacher training and student admissions or for transportation to
the Center.
According to the terms of the agreement, the City will provide the following components of the
project at CVNC:
· Curriculum and instruction of the program for approximately 90 classes (potentially
involving 2,700 students and 90 teachers). These 90 classes will consist of approximately
30 third grade classes within the District's School Partnership Program (Logan, Bayside,
Harborside, Silver Gate, Silver Strand, Perkins, and Kimball), and for up to, but not
exceeding, 60 other classes (of all grades) from other schools within San Diego Bay's
watershed.
· Curriculum and instruction of the teacher training program for the teachers participating in
the project.
· Program administration
· Educational staff required to run the program
· Program facilities
The Port agrees to pay the City a total amount not to exceed Twenty Thousand dollars
($20,000) per contract year, for services performed during the term of this agreement. It is
anticipated that services under this agreement would commence early in FY 2003-04.
FISCAL IMPACT: The agreement will provide an increase of $20,000 in annual general fund
revenue for Nature Center operations. Actual additional costs to support the program (such as
production of additional sets of teaching materials, etc.) are expected to be minimal and can
easily be absorbed by the approved operating budget.
RESOLUTION NO. 2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A MEMORANDUM OF
UNDERSTANDING WITH THE UNIFIED PORT OF SAN DIEGO
FOR AN EDUCATIONAL OUTREACH PROGRAM
PARTNERSHIP AT THE CHULA VISTA NATURE CENTER
WHEREAS, the Unified Port of San Diego ("Port") approached the Nature Center to
partner in the coordination of educational field trips for schools which are located within watershed
areas of San Diego Bay; and
WHEREAS, the goal of the program is to increase participation in existing Nature
Center programs which promote environmental stewardship and educate students and visitors about
the importance of conserving coastal resources; and
WIIEREAS, the mission of thc Port's Environmental Education Program is to
providc memorable experiences that will promote euvironmental stewardship and instill an
understanding of the importance of a healthy San Diego Bay and serves as an integral part of the
Port's compliance with the San Diego County Municipal Storm Water Permit of 2001 (National
Pollutant Discharge Elinrination System Permit No. CAS0108758); and
WHEREAS, the mission of the Chula Vista Nature Center is to serve the public by
providing a quality nature center/living museum in order to promote coastal resource conservation
and environmental stewardship through education; and
WHEREAS, the proposed project makes use of the existing Chula Vista Nature
Center educational programs for elementary school students through exhibits and emphasis on the
Sweetwater River watershed and what each individual can do to protect the watershed, the Bay and
the ocean.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista
does hereby approve the Memorandum of Understanding with the Unified Port of San Diego for an
Educational Outreach Program Partnership at the Chula Vista Nature Center, a copy of which will be
kept on file in the office of the City Clerk.
BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista is hereby
authorized to execute said Memorandum of Understm~ding on behalf of thc City of Chula Vista.
Presented by Approved as to form by
Dan Beintema A~i'p~Vl~° ° r e ~' //I '
Nature Center Director /~j(y Attorney ~ j
J:\AItorney\RESO~,MOU\MOU Edu OLitrcach
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
City A~tomey
Dated: June 12, 2003
COOPERATIVE AGREEMENT BETWEEN SAN DIEGO
UNIFIED PORT DISTRICT AND THE CITY OF
CHULA VISTA
Cooperative Agreement
This agreement ("Agreement") is between the San Diego Unified Port District
("District"), a public corporation, and the City of Chula Vista ("City"), a municipal
corporation.
"Parties"
A. The District has an Environmental Education Program with a mission to provide
memorable experiences to the public that will promote environmental stewardship
and instill an understanding of the importance of a healthy San Diego Bay. The
program serves as an integral part of the District's compliance with the San Diego
County Municipal Storm Water Permit of 2001 (National Pollutant Discharge
Elimination System Permit No. CAS0108758). Through the formation of partnerships
with local environmental organizations, outreach to the public makes a difference to
help reduce sources of pollution, ultimately protecting San Diego Bay.
B. The Mission of the City's Chula Vista Nature Center ("CVNC") is to serve the
public by providing a quality nature center/living museum in order to promote coastal
resource conservation and environmental stewardship through education.
C. The Parties desire to combine efforts in order to establish an ongoing educational
outreach program partnership enabling students who live near San Diego Bay and
those who live within the watershed of the Bay to be able to visit the CVNC in order
to learn more about the importance of conserving coastal resources ("Project").
D. The Project will make use of the existing CVNC educational programs for
elementary school students. For sixteen years, CVNC has been offering field trips to
San Diego County school children. Approximately 10,000 students visit CVNC and
the Sweetwater Marsh National Wildlife Refuge annually. Including the students, the
annual visitation to CVNC is approximately 50,000. CVNC exhibits and education
programs emphasize the Sweetwater River watershed, and what each individual can
do to protect the watershed and, ultimately, what an individual can do to protect the
Bay and the ocean. Because of major funding cutbacks by the State of California,
many schools cannot afford to pay even the modest CVNC fees for teacher training
and student admissions, or for transportation to the CVNC.
District and City Agree as Follows:
1. Services Provided by City. City commits to provide the following components
of the Project:
a) Curriculum and instruction of the program for approximately 90 classes
(potentially involving 2,700 students and 90 teachers). These 90 classes
will consist of approximately 30 third grade classes within the District's
School Partnership Program (Logan, Bayside, Harborside, Silver Gate,
Silver Strand, Perkins, and Kimball), and for up to but not exceeding 60
other classes (of all grades) from other schools within the San Diego Bay
watershed.
b) Curriculum and instruction for the teacher training program for the teachers
participating in the Project.
c) Program administration.
d) Educational staff required to run the Project.
e) Project facilities.
f) A report on the effectiveness of the Project, with two copies provided to the
District.
2. Services provided by the District. The District commits to provide the following
component of the Project:
Funding for the Project as set forth in Paragraph #5.
3. Representatives. The CVNC's Director, or his/her designee, shall represent
the City in all matters pertaining to services rendered pursuant to this Agreement and
shall administer this Agreement on behalf of the City. The District's Director of
Recreation and Environmental Services, or his designee, shall represent the District
in all matters per[aining to this Agreement and shall administer this Agreement on
behalf of the District.
4. Term. The term of this Agreement shall commence on the date of execution of
this document and shall extend for a period of not more than three years subject to
annual renewal by the District and the availability of funds. Either party, however,
may terminate this Agreement at any time upon thirty days prior written notice to the
other party.
5. Compensation. The District agrees to pay to the City a total amount not to
exceed Twenty Thousand dollars (920,000) per contract year, for services
performed during the term of this Agreement.
6. Notices. Any notice or notices required or permitted to be given pursuant to
this Agreement may be personally served on the other party by the party giving such
notice, or may be served by certified mail, postage prepaid, return receipt requested,
to: for the San Diego Unified Port District, P. O. Box 120488, San Diego, CA, 92112-
0488; and for the City of Chula Vista, 276 Fourth Avenue, Chula Vista, CA, 91910-
1201.
7. Amendments. This Agreement may not be modified in any manner other than
by an Agreement in writing signed by the Parties hereto.
8. Ownership of Documents. All reports, studies, information, data, statistics,
forms, designs, plans, procedures, systems, and any other material or properties
produced under this Agreement shall be the property of the District and the City. No
such materials or properties, produced in whole or in par[ under this Agreement, shall
be subject to private use, copyrighted, or patent right in the United States or in other
countries. Both parties shall have unrestricted authority to publish, disclose,
distribute, and otherwise use, in whole or in part, any such reports, studies, data,
statistics, forms, or other materials or properties ~roduced under this Agreement.
9. Recordkeeping. The City agrees to maintain and/or make available within San
Diego County accurate books and accounting records relative to all its activities
related to this Project. The City will permit the District to examine and make excerpts
or transcripts from such data and records, and to examine all invoices, materials,
payrolls, records of personnel, and other data relating to all matters covered by this
Agreement. The City shall maintain all data and records three years after termination
of this Agreement.
10. Independent Contractor. Neither the District nor any of its commissioners,
agents or employees shall have any control over the manner, mode or means by
which the City, its officers, agents, subcontractors or employees perform the services
required herein. The City shall perform all services required herein as an
independent contractor of the District and shall remain at all times as to the District a
wholly independent contractor with only such obligations as are consistent with that
role.
11. Insurance Requirements. The City shall at all times during the term of this
Agreement maintain, at its expense, the following minimum levels and types of
insurance or a self-insured program:
A. Commercial General Liability (including, without limitation, Contractual
Liability, Personal and Advertising Injury, and Products/Completed Operations
coverages written on an "occurrence," not "claims made" basis): one million
dollars ($1,000,000) per occurrence.
B. Protection and Indemnity Insurance in an amount of not less than one
million dollars ($1,000,000) per occurrence.
C. Worker's Compensation and Employer's Liability: In the amounts
required by California State law, and Employer's Liability of not less than one
million dollars ($1,000,000).
D. City shall furnish to District certificates of insurance or proof of any self-
insured program for all policies described above upon execution of this
Agreement, and upon renewal of any of these policies. A Certificate of
Insurance in the form acceptable to the District, an exemplar Certificate of
Insurance is attached hereto as "Exhibit A" and made a part hereof,
evidencing the existence of the necessary insurance policies and
endorsements required shall be kept on file with the District. Except in the
event of cancellation for non-payment of premium, in which case notice shall
be ten (10) days, all such certificates shall indicate that the insurer must notify
District in writing at least thirty (30) days in advance of any change in, or
cancellation of, coverage.
E. Special Instruction: Mail the Certificate and Endorsement to:
San Diego Unified Port District
David Merk, Recreation & Environmental Services
P.O. Box 120488
San Diego, CA 92112-0488
12. Indemnification. The City shall to the fullest extent permitted by law, defend,
indemnify and hold harmless the District and its officers, employees, and agents
against any claims for damages to persons or property arising out of the conduct,
negligent acts, errors or omissions or wrongful acts of conduct of the City, or its
employees, agents or subcontractors in connection with the execution of the work
covered by this Agreement, except for those claims arising through the sole active
negligence or willful misconduct of District. The City's indemnification shall include
any and all costs, expenses, attorneys' fees, expert fees and liability against such
claims or lawsuits, whether the same proceed to judgment or not. Further, the City at
its own expense shall, upon written request by the District, defend any such suit or
action brought against the District, its officers, agents, or employees resulting or
arising from the conduct, tortuous acts, or omissions of the City. This indemnity
obligation shall apply for the entire time that any third party can make a claim against
or sue the District for liabilities arising out of the City's provision of services under this
Agreement.
13. Effectiveness. It is an express condition of this Agreement that said Agreement
shall not be complete or effective until signed by either the Executive Director or his
authorized designee on behalf of the District and by the other party.
SAN DIEGO UNIFIED PORT DISTRICT
By. Dated: ,2003
District Attorney
By Dated: ,2003
CITY OF CHULA VISTA
By Dated: ,2003
Stephen C. Padilla, Mayor
Approved as to Form:
Dated: ,2003
City Attorney
COUNCIL AGENDA STATEMENT
Item ~
Meeting Date 6/17/03
ITEM TITLE: Resolution Accepting bids, rejecting the lowest bid and the
apparent second lowest bid, and awarding the contract for the "Hilltop Park
Rehabilitation, in the City of Chula Vista, CA (PR-232)" project to Star
Paving, Inc. in the amount of $231,064.00.
SUBMITTED BY: Director of Engineering~,,~
REVIEWED BY: City Manager?~?'~' ~/" (4/Sths Vote: Yes __ No X )
At 2:00 p.m~ on Wednesday, April 16, 2003, the Director of Public Works received sealed bids for
the "Hilltop Park Rehabilitation, in the City of Chula Vista, CA (PR-232)" project. This project
provides for the removal and replacement of sidewalk, two pedestrian bridges, three picnic shelters
and the construction of one additional picnic shelter within portions of Hilltop Park. Hilltop Park is
located along both sides of Telegraph Canyon Creek between First Avenue and Hilltop Drive. The
improvement work to be done includes some grading, excavation and compaction, demolition of
existing improvements (sidewalk, bridges and picnic shelters), some irrigation and landscaping,
fencing, hardscape areas; and the construction of ADA accessible walkways from the parking lot to
the new picnic shelters and two ADA accessible pedestrian bridges crossing Telegraph Canyon
Creek.
RECOMMENDATION:
1. That Council reject the bids submitted by the two (2) apparent lowest bidders for the "Hilltop
Park Rehabilitation, in the City of Chula Vista, CA (PR-232)" project.
2. That Council accept bids and award the contract for the "Hilltop Park Rehabilitation, in the
City of Chula Vista, CA (PR-232)" project to the actual second lowest bidder, Star Paving,
Inc. of San Diego, in the mnount of $231,064.00.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
General
During Fiscal Year 1993-1994, portions of Hilltop Park were renovated, including, the children's
playground, comfort station and portions of the sidewalk, landscaping and irrigation. Additional
work is still required at this park, primarily to make is ADA compliant.
The proposed improvements to Hilltop Park include minor grading, excavation and compaction for
the walkways, demolition of existing bridges and picnic shelters, fencing, construction of ADA
accessible picnic shelters, ADA accessible walkways from First Avenue, through the park, across the
_5 /
Page 2, Item 5o
Meeting Date 6/17/03
ADA accessible bridges and connecting the picnic shelters with the parking lot on Hilltop Drive.
The work also includes all labor, material, equipment, transportation, protection and restoration of
existing improvements, traffic control, and all appurtenances and other work necessary for
completion of the project. These improvements will tie together the new picnic shelters with the
previous improvements, making most of the park facilities ADA accessible from First Avenue and
the parking lot on Hilltop Drive.
Bidding Process
Staff received and opened bids for the project at 2:00 p.m. on Wednesday, April 16, 2003. Bids were
received from fourteen (14) contractors to perform the work as follows (listed in order of base bid
amount):
Contractor Corrected Bid Submitted Bid
Amount Amount
HAR Construction, Inc. $209,974.63 $233,359.31 (~
Star Paving $246,274.00
MJC Construction $246,800.00
Nieman Construction $248,940.00 $239,900.00 ~
3-D Enterprises $263,800.00
Heftier Co. Inc. $283,599.30
CDM Construction Inc. $285,816.00
Famania Construction, Inc. $297,907.50
Stevens Construction $299,920.00
New Century Construction $305,600.00
Scheidel Construction & $310,161.50
Firestone Builders $349,062.00
T. B. Penick & Sons, Inc. $360,620.14
HTA Engineering and $393,350.00
The apparent lowest bid was submitted by HAR Construction, Inc. However, after the bid opening,
it was discovered that the bid proposal included several math errors. The contractor's bid items
totaled $209,974.63 instead of $233,359.31 as the contractor intended. The bid of $233,359.31 was
ruled unacceptable and the contractor declined to perform the work for $209,974.63.
The apparent second low bidder, Nieman Construction, also made some math errors thus making
their bid, in actuality, the fourth lowest. Engineering staffconcluded, after discussions with the City
Attorney's office that the two apparent lowest bids should be rejected based on the inaccuracies of
both contractors' bid proposals.
City Staff contacted and sent letters to HAR Construction, Inc. and Nieman Construction (see
attachments) explaining the status of their bid proposals and the recommendations for rejection.
Provisions were also included within the letters allowing the contractors the opportunity to contest
the recommendation if they desired; the deadline for contesting was set at May 28, 2003. Neither
HAR Construction, Inc. or Nieman Construction submitted any objections contesting their rejection.
Page 3, Item ~
Meeting Date 6/17/03
Based on the disqualification of the apparent two lowest bids for the project, the apparent third
lowest bid for the project, $246,274.00, submitted by Star Paving, Inc., was reviewed by City staff
for potential award of the contract. The bid by Star Paving, Inc. is above the Engineer's estimate of
$235,000.00 by$11,274.00 or 4.8%. All documents required bythe bid proposal were submitted by
the subject contractor and their bid package was complete. It is staff's opinion that the bid submitted
by Star Paving, Inc. is responsive. To keep the project within budget and with the concurrence of the
contractor we have eliminated one (1) picnic shelter from the project reducing the construction cost
to $231,064.00. If the project is completed within the budget and enough contingencies are
remaining, the picnic shelter will be added back into the project.
Engineering staff checked three references provided by Star Paving, Inc. The references were
verified and their work has been satisfactory. Their Contractor's License No. 704737 is clear and
current. Staff, therefore, recommends awarding the contract to Star Paving, Inc. of San Diego,
California, for $231,064.00.
Disclosure Statement
Attached is a copy of the contractor's Disclosure Statement.
Environmental Status
The Environmental Review Coordinator has reviewed the proposed project for compliance with the
California Environmental Quality Act and has determined that the project qualifies for a Class
1/Class 3 categorical exemption pursuant to Sections 15301 and 15303 of the State CEQA
Guidelines. Thus, no further enviromnental review is necessary.
This project is funded through CIP funds consisting of Residential Construction Tax (RCT). Based
on the current project funding guidelines, no prevailing wage requirements were necessary as part of
the bid documents.
FISCAL IMPACT:
FUNDS REQUIRED FOR CONSTRUCTION
A. Contract Amount (Star Paving, Inc.) $231,064.00
B. Contingencies (approximately 10%) $23,000.00
C. Staff Costs (Design, Inspection, Administration) $16,158.00
TOTAL FUNDS REQUIRED FOR CONSTRUCTION $270,222.00
Page4, Item 5
Meeting Date 06/17/03
FUNDS AVAILABLE FOR CONSTRUCTION
A. Residential Construction Tax (RCT) $270,222.00
TOTAL FUNDS AVAILABLE FOR CONSTRUCTION $270,222.00
The above action of awarding the contract will authorize a total expenditure of $270,222.00 fi.om the
budgeted CIP project. After construction, only routine City maintenance will be required.
Attachments: Letters to Contractor
Contractor's Disclosure Statement
J:\Engmeer~AGENDA~PR232AI13.doc; mji (06/10/2003)(4:19 PM)
CHULAVISTA
DEPARTMENT OF ENGINEERING
May 16, 2003
0735-010-PR232
Art Nieman
Nieman Construction Co. Inc. Certified Mail
7028 Keighley Street
San Diego, California 92120
HILLTOP PARK REHABILITATION PROJECT
This letter is to inform you, as discussed on the phone, that your original bid proposal submitted
on April 16, 2003 for the subject project was rejected due to apparent mathematical errors.
In your bid proposal, the sum of your unit prices times the appropriate quantifies was not
consistent with the Grand Total identified at the bottom of your bid.
You have the opportunity to provide objections to the rejection of your bid. You must submit any
and all arguments or evidence in support of your position on the matter, in writing on or before
Wednesday, May 28, 2003, at 3:00 p.m. at the Engineering Counter in the City of Chula Vista
PuNic Services Building, located at 276 Fourth Avenue, Chula Vista, California, 91910.
If~ou have any gfi/estions please call Mario Ingrasci at (619) 397-6093 or me at (619) 397-6068.
~' Jim Hol~es
,' CIVIL ENGINEER
Cc: Bart Miesfeld, Assistant City Attorney
Cliff Swanson, Director of Engineering
Frank Pdvera, Assistant Director of Engineering
-l:\Engineer\DESIGN\Pr232\RejectLtrNiemman.doc
For written replies, respond to:
[] 276 FOURTH AVENUE / CHULA VISTA, CALIFORNIA 91910-2631 / (619) 691-5021
[] 1800 MAXWELL ROAD / CHULA VISTA, CALIFORNIA 91911-6158 / (619) 691-5021
~ ~o~ co~,..~ ,~y~,~ .~ ~--~ .5-
CHULAVISTA
DEPARTMENT OF ENGINEERING
May 16, 2003
0735-010-PR232
Hector Romero
HAP, Construction, Inc. Certified Mail
3103 Market Street
San Diego, California 92102
[IILLTOP PARK REHABILITATION PROJEC¥
This letter is to inform you, as discussed on the phone, that your original bid proposal submitted
on April 16, 2003 for the subject project was rejected due to apparent mathematical errors.
In your bid proposal, the sum of your trait prices times the appropriate quantities was not
consistent with the Grand Total identified at the bottom of your bid.
You have the opportunity to provide objections to the rejection of your bid. You must submit any
and all arguments or evidence in sup'port of your position on the matter, in writing on or before
Wednesday, May 28, 2003, at 3:00 p.m. at the Engineering Counter of the City of Chula Vista
Public Services Building, located at 276 Fourth Avenue, Chula Vista, California, 91910.
If you have any que~oons please call Mario Ingrasci at (619) 397-6093 or me at (619) 397-6068.
CIVIL ~N~INEER
Cc: Bart Miesfeld, Assistant City Attorney
Cliff Swanson, Director of Engineering
Frank Rivera, Assistant Director of Engineering
J :\Engineer\DESIGN \Pr232\RejectklrHAR.doc
For written repli.es, respond to:
[] 276 FOURTH AVENUE / CHULA VISTA, CALIFORNIA 91910-2631 / (619) 691-50~1
[] 1800 MAXWELL ROAD / CHULA VISTA, CALIFORNIA 91911-6158 / (619) 691~5021
City of Chula Vista Disclosure Statement
Pursuant to Council Policy 101-01, prior to any action upon matters that will require discretionary action by
the Council, Planning Commission and all other official bodies Of the City, a statement of disclosure of
certain ownersb./p or financial interests, payments, or campaign contributions for a City of Chula Vista
election must be file& The following information must be disclosed:
1. List the names of all persons having a financial interest in the property that is the subject of the
application or the contract, e.g., owner, applicant, contractor, subcontractor, material supplier.
/
2. Ifanyperson* identified pursuant to ( 1 ) above is a corporation or partnership, list the names of
all individuals with a $2000 investment in the business (corporation/partnership) entity.
/
/
3. If any person* identified pursuant to (1) above is a non-profit organization or trust, list the names of
any person serving as d/rector of the non-profit organ/zation or as trustee or beneficiary or trustor of
the trust.
4. Please identify every person, including any agents, employees, consultants, or independent
contractors you have assigned to represent you before the City in this matter?
5. Has any person* associated with th/s contract had any financial dealings with an official** of the
City of Chula Vista as it relates to this contract within the past 12 months. Yes No
JAEnomneerL~DMIN~CONTRAC'~PR232_Contract.doc
'~-- ~ (3/18/03)
If Yes, briefly describe the nature of the financial interest the official** may have in this contract?
6. Have you made a contributi6n of more than $250 within the past twelve (12) months to a current
member of the Chula Vista City Council? No .X~ Yes __ If yes, which Council member?
7. Have you provided more than $340 (or an item of equivalent value) to an official** of the City of
Chula Vista in the past twelve (12) months? (This includes being a source of income, money to retire
a legal debt, gift, loan, etc.) Yes No
If Yes, which official** and what was the nature of item provided?
Date: ~to<')/ /g;~tgo7
Signa .~ bf Con~t~/Applic~t
~nt or ~e nme of Con~ct~/Applic~t
* P~son is de.ed ~: ~y mdihdml, fi~, c~p~ers~p, jolt v~e, ~sociafion, social club,
~t~al orgmfion, co~omfion, estate, ~t, receive, s~dicate, ~y o~ co~W, ci~,
m~icipali~, ~s~c~ or o~ political subdihsio~ mr ~y o~ ~oup or comb~afiun ac~g as a
Officml ~ncludes, but ~s not b~ted m. Mayor, Co.cfi memb~, Plmg Comshon~, Mm~ of
a bo~d, comssion, or com~ of~e Ciw, employee, or mffmembers.
J:kEngineerkt~DMINXCONTRAC%PR232.Contract.doc 14 ~ (~
(3/18/035
RESOLUTION NO. 2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING BIDS, REJECTING THE
LOWEST BID AND THE APPARENT SECOND LOWEST BID,
AND AWARDING THE CONTRACT FOR THE "HILLTOP
PARK REHABILITATION, iN THE CITY OF CHULA VISTA,
CA (PR-232)" PROJECT TO STAR PAVING, INC., 1N THE
AMOUNT OF $231,064.00
WHEREAS, Hilltop Park is located along both sides of Telegraph Canyon Creek between
First Avenue and Hilltop Park; and
WHEREAS, during FY 1993-1994, portions of Hilltop Park were renovated, including
the children's playground, comfort station and portions of the sidewalk, landscaping and
irrigation; and
WHEREAS, additional work is required at Hilltop Park primarily to make it ADA
compliant; and
WHEREAS, this project provides for the removal and replacement of sidewalk, two
pedestrian bridges, three picnic shelters and the construction of one additional picnic shelter within
portions of Hilltop Park; and
WHEREAS, the improvements further include the construction of ADA accessible
walkways from the parking lot to the new picnic shelters and two ADA accessible pedestrian
bridges crossing Telegraph Canyon Creek; and
WHEREAS, at 2:00 p.m. on March 13, 2002, the Director of Public Works received
sealed bids for the "Hilltop Park Rehabilitation, in the City of Chula Vista, CA (PR-232)"
project; and
WHEREAS, the first two apparent lowest bids contained significant inaccuracies in the
bid proposals resulting in Star Paving, Inc., as the contractor submitting the lowest accurate bid.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does hereby accept bids, reject the lowest bid and the apparent second lowest bid, and
awarding the contract for the "Hilltop Park Rehabilitation, in the City of Chula Vista, CA (PR-
232)" project to Star Paving, Inc., in the amount of $231,064.00.
Presented by Approved as to form by
Clifford Swanson -,~et~n M6or~ ~ f
Director of Engineering City Attorney
COUNCIL AGENDA STATEMENT
Item ~
Meeting Date 6/17/03
ITEM TITLE: Resolution Approving Sixth Amendment to Agreement between San
Diego Transit Corporation (SDTC) and City Of Chula Vista for Unified
Telephone Information System (UTIS)
SUBMITTED BY: Director of Engineerin~V
REVIEWED BY: City Manager ~ v (4/Sths Vote: Yes __ No X )
This resolution would renew CVT's participation in the UTIS via an agreement. Council approved
previous agreement on.June 16, 1998. This service provides Chula Vista Transit (CVT) riders and
persons outside the region with telephone and online schedule information both on CVT and on all
fixed route transit systems operating in the County. This agreement for FY 2003-04 continues CVT's
participation in this regional transit information system at a cost of $56,470, which is a combination
of $51,573 for telephone infom~ation services and $4,897 for web site management.
RECOMMENDATION: That Council approve Resolution approving Sixth Amendment to
Agreement between San Diego Transit Corporation and City of Chula Vista for Unified Telephone
Information System for the period FY 2003-04.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable
DISCUSSION:
The following transit operators participate in the regional UTIS operated by SDTC: San Diego
Trolley, North County Transit District, San Diego Transit, MTDB Contract Services, National City
Transit, Coaster and CVT. City residents receive schedule and transfer information on all systems
operating in the County. The telephone information system is available 7 days a week between the
hours approximately 5:30 a.m. and 11:00 p.m. There is also a 24 hour automated telephone
information system and an online transit information site.
As part of providing a seamless transit system under the Metropolitan Transit System (MTS), SDTC
is the only agency in charge of operating and maintaining the UTIS for MTS. As part ofMTS, CVT
is obligated to participate in the regional UTIS. Non-participation would create a complicated
situation for our riders and for the region when it comes to accessing and providing transit route and
schedule information.
The total estimated SDTC transit information system cost for next year is $1,309,195, a 2.45% over
the current total system cost of $1,277,790. The total system cost is allocated to each transit operator
based on the percentage share of calls originating from each operator's service area. These percent
allocations are based on the previous three-year totals calls answered and are updated annually. As
indicated on Exhibit A to the attached agreement, the City Of Chula Vista's calls increased t¥om
3.80% of the total regional calls to 4.06% next fiscal year. Exhibit B shows the three-year
Page 2, Item
Meeting Date 6/17/03
breakdown of calls of each transit system for the periods March 2000 to February 2003, and March
1999 to February 2002. As shown on Exhibit B, the City Of Chula Vista's percentage of calls have
increased 23.8% during these two periods (from 168,829 total calls between March 1999 and
February 2002 and 209,011 total calls between March 2000 and February 2003).
Although CVT's share of the total information system cost for next fiscal year increased 10.04%,
CVT's total calls increased 23.8% between the two three year periods shown on Exhibit B.
Consequently, the average cost per call will decrease by 10.99%, from $0.91 to $0.81 under this
agreement.
FISCAL IMPACT: The City Of Chula Vista's share of the FY 2003-04 UTIS cost is $ 56,470.
This cost is contained in the Transit Division budget, which is funded by MTS Consolidated TDA
Article 4.0 funds. No City Of Chula Vista's General Fund contributions support this agreement.
Attachment: Unified Telephone Information System Agreement
H:\ENGINEER~TRANSI'I~A113 Unified Telephone lnlbrmation System doc
RESOLUTION NO. 2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING SIXTH AMENDMENT TO
AGREEMENT BETWEEN SAN DIEGO TRANSIT
CORPORATION (SDTC) AND CITY OF CHULA VISTA FOR
UNIFIED TELEPHONE INFORMATION SYSTEM (UTIS)
WHEREAS, the City Council approved an agreement with SDTC on June 16, 1998;
the operation of a Unified Telephone lnfom~ation System (UTIS); and
WHEREAS, this service provides Chula Vista Transit (CVT) riders and persons
outside the region with telephone and online schedule information both on CVT and on'all fixed
route transit systems operating in the Coanty; and
WHEREAS, as part of providing a seamless transit system under the Metropolitan
Transit System (MTS), SDTC is the ouly agency in charge of operating and maintaining the UTIS for
MTS; and
WHEREAS, as part of MTS, CVT is obligated to participate in the regional UTIS;
and
WHEREAS, this agreement for FY 2003-04 continues CVT's participation in this
regional transit information system at a cost of $56,470.00, which is a combination of $51,573.00 for
telephone information services and $4,897.00 for web site management; and
WHEREAS, the total system cost is allocated to each transit operator based on the
percentage share of calls originating lrom each operator's service area.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista
does hereby approve the Sixth Alnendment to agreement betxveen San Diego Transit Corporation
and City of Chula Vista for Unifi ed Telephone Information System on the terms presented, a copy of
which shall be kept on file in the office of the City Clerk.
Prescnted by Approved as to form by
Clifford Swanson
Director of Engineering
J :\attm ncy\reso'amcndn~ents\6~h Amcndment SD Transit Cmp
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
~ City Att~?/ ~J
Dated: June 12, 2003
AGREEMENT BETWEEN THE SAN DIEGO TRANSIT
CORPORATION (SDTC) AND CITY OF CHULA VISTA
FOR UNIFIED TELEPHONE INFORMATION SYSTEM
SIXTH AMENDMENT TO THE AGREEMENT
Agreement between the San Diego Transit Corporation (SDTC)
and
City of Chula Vista
for
Unified Telephone Information System
SIXTH AMENDMENT TO THE AGREEMENT
In accordance with Sections 7A and 8 of the above mentioned agreement, the following changes
in the agreement as of July 1, 2003, are hereby agreed upon:
Recitals
WHEREAS, City operates Chula Vista Transit (CVT), a fixed-route bus system;
and
WHEREAS, SDTC has jointly in the past maintained a Transportation
Information System providing information to telephone callers about CVT
operations and relating to fare, route and other operational information; and
WHEREAS, such a relationship has benefited both SDTC and City in terms of
effectiveness and efficiency; and
WHEREAS, SDTC and City desire to continue this relationship.
NOW, THEREFORE, in consideration of the recitals and the mutual obligation of
the parties set forth herein, SDTC and City agree as follows:
Section 2. Obli~lations of City
Delete Paragraphs A and B and replace as follo:vs:
A. City agrees to pay to SDTC the sum of fifty-six thousand, four hundred seventy
dollars ($56,470) in return for the use of its Telephone Information System (TIS)
to disseminate rider information by telephone during the period of July 1, 2003
through June 30, 2004.
Amendment to the Agreement
between SDTC and City of ChulaVista
Page 2
The calculation of the $56,470 is shown on Exhibit A attached to this agreement. This
calculation is based upon the number of calls received for each agency during a 36-month
period--which for this year will be from March 2000 to February 2003. This 36-month
period will roll forward one year each successive amendment,
B. Payment for this sum shall be made on a monthly basis no later than ten (10) days after
receipt of invoice fi'om SDTC. Payment for each month shall be the amount of four
thousand, seven hundred five dollars and eighty-three cents ($4,705.83).
Section 7. Term of Agreement and Termination
Delete Paragraph A. and replace as follows:
A. This amendment shall become effective at 12:01 a.m. on July 1, 2003 and shall expire at
12:00 midnight on June 30, 2004, unless otherwise terminated as provided herein, or
unless mutually extended by written agreement prior to such expiration date.
All other provisions of this agreement shall remain in tome.
SAN DIEGO TRANSIT CORPORATION CITY OF CHULA VISTA
by~~ ~~-~(--~'~ by.
~an~ C. Pfiwell - Mayor
Pre~eneml Manager
Date: ,..),..4~- /2~7 '~'-~ Date:
Attest:
City Clerk
Approved as to Form:
City Attorney
Attachment: Exhibit A
SAN DIEGO TRANSIT CORPORATION
FISCAL YEAR 2004 TELEPHONE CHARGE OUT Exhibit A
Proposed FY04/
FY04 FY04 FY03 FY03 FY03
Percentage Cost Percentage Cost Change
CHULA VISTA 0.0406 51573 0.038 47246 0.091584
COUNTY 0.0623 79138 0.0609 75718 0.045168
NATIONAL CITY 0.0208 26422 0.0189 23,~99 0.124388
NORTH COUNTY 0.0784 99590 0.0927 115130 -0.134978
COASTER 0.0674 85617 0.0689 85664 -0.000549
SDTC 0.562 713896 0.5647 702345 0.016446
TROLLEY 0.1142 145066 0.113 140494 0.032542
MTDB 0.0542 68849 0.0428 53214 0.293814
TOTAL 0.9999 1270151 0.9999 1243310 0.021588
EXHIBIT B
TOTAL CALLS
3 Year Rolling Totals Percentages
Mar' O0 to Mar' 99 to Change in Total Calls Mar' 99 to Mar' 98 to Change in
Feb' 03 Feb' 02 % # Feb ' 02 Feb ' 01 %
CHULA VISTA 209011 168829 0.238 40182 0.0406 0.038 0.26
COUNTY 320797 270407 0.186 50390 0.0623 0.0609 0.14
NATIONAL CITY 107184 84051 0.275 23133 0.0208 0.0189 0.19
NORTH COUNTY 403584 410871 -0.018 -7287 0.0784 0.0927 -1.43
COASTER 346690 305735 0.134 40955 0.0674 0.0689 -0.15
SDTC 2892805 2507630 0.154 385175 0.562 0.5647 -0.27
TROLLEY 587149 501128 0.172 86021 0.1142 0.113 0.12
MTDB 278913 189860 0.469 89053 0.0542 0.0428 1.14
TOTAL 5146133 4438511 0.159 707622 0.9999 0.9999
COUNCIL AGENDA STATEMENT
Item 7
Meeting Date 6/17/03
ITEM TITLE: Resolution Granting a 12 foot wide utility easement to San Diego
Gas & Electric as needed to provide service to the Little League fields at the
Reinstra Sports Facility next to Loma Verde Park, 1500 Max Avenue and
authorizing the Mayor to execute the easement.
SUBMITTED BY: Director of Engineering/.~
REVIEWED BY: City Manage 0 ¢/ (4/5tbs Vote: Yes __ No~
On March 7, 2003, San Diego Gas & Electric submitted a letter requesting a permanent easement within
the City owned Reinstra Sports Facility next to Loma Verde Park located at 1500 Max Avenue. The
easement is needed to install a new power pole and overhead utilities to enable SDG&E to provide
enhanced electrical servide to the park.
RECOMMENDATION: That Council adopt the subject resolution granting a 12 foot wide utility
easement to San Diego Gas & Electric as needed to provide service to the Little League fields at the
Reinstra Sports Facility next to Loma Verde Park, 1500 Max Avenue and authorizing the Mayor to
execute the easement.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
The proposed easement is located on a parcel owned by the City within the Reinstra Sports Facility next
to Loma Verde Park located at 1500 Max Avenue north of East Orange Avenue. Staff from the Public
Works Operations Department worked with SDG&E to find a suitable location for the easement and
utilities that would not be in conflict with existing landscaping, access drives and ball fields within the
park. The easement is 12 feet wide and approximately 100 feet long (total area of 1,220 sq. ft.) and is
located approximately 425 feet west of Max Avenue within the park (see Exhibit "A").
Public Works Operations staff determined that a new upgraded electrical service was needed for the
park. In order to provide the new service, SDG&E required replacement of an old damaged power pole
that no longer met local codes, with a new power pole. The location for the new power pole had to be
moved from the existing pole location and, therefore, created the need for the easement.
The language in the easements has been reviewed by the City's Engineering Department and approved
by the City Attorney's office (see Exhibit "B").
FISCAL IMPACT: There is no cost to the General Fund.
Exhibit: A Easement Plat
B - Easement Document
.I:\EnginecrkAGENDA\PF313 Reso doc
RHO DE LA NACION \ ~
POR 1/4 SEC 117 .. 5~'~' ,~ ~~~
" MAP NO. 166 . r~-~' flmC~X ',k 22~
~ --~ ..~f~ n~TM ~ /
/
~ ~ ~ ~]f W'LY COR OF LOT 221, MAP
/ k- ~ 217
/ / POR FRAC SEC 13
-~ / 5-23-75
o/sc o~ ~:oo ~ ; ~ ~
' ' P.~. J825 /
S~ 9~GO GAS ~ ~I.RCT~IC ~ ACK o~ ~o ~.~
SU~D ~: R~ OK: 256465--010
~ mE~. ~ro~ PDC/DLL COS~. NO.
CI~ OF CHU~ VISTA o~w. ~:
PDC/CRM 2756520
1550 MAX AVE ~m ~. a~s.
1-50-2005 1550-F4 D~NG NO.
CHU~ VI~A, CA ~: 1'=1oo' C-
NO. SUP~E~ ~:
Recording Requested by
San Diego Gas & Electric Company
When recorded, mail to:
San Diego Gas & Eleclxic Company
8335 Century Park Court, Suite 100
San Diego, CA 92123-1569
Attn: Real Estate Records - CP11D
SPACE ABOVE FOR RECORDER'S USE
Project No.: 236465-010
Const. No.: 2756520
A.P.N.: 624-101-73 Transfer Tax None
Drawing No. C-4875
SAN DIEGO GAS 8,: ELECTRIC COMPANY
EASEMENT
THE CITY OF CHULA VISTA, a municipal corporation (Grantor), grants to SAN
DIEGO GAS & ELECTRIC COMPANY, a corporation (Grantee), a non-exclusive easement and right
of way in, upon, over, under and across the lands hereinafter described, to erect, construct, change the
size of, improve, reconstruct, relocate, repair, maintain and use facilities consisting of:
1. Poles, wires, cables and appurtenances for the transmission and distribution of
electricity.
2. Communication facilities, and appurtenances.
The above facilities will be installed at such locations and elevations upon, along, over
and under the hereinafter described easement as Grantee may now or hereafter deem convenient or
necessary,. Grantee also has the right of ingress and egress, to, from and along this easement in, upon,
over and across the hereinafter described lands. Grantee further has the right, but not the duty to clear
and keep this easement clear from explosives, buildings, structures and materials.
The property in which this easement and fight of way is hereby granted is situated in the
County of San Diego, State of California, described as follows:
That portion of Fractional Section 13, Township 18 South, Range 2 West, San
Bemardino Meridian, in said County, according to Record of survey No. 3307, Records of said County,
described in a Deed recorded March 12, 1973 at Recorder's File/Page 73-063640, of Official Records of
said County of San Diego.
s. land:data, lraforrns.'distrib. D-8. doc 800475-S
9,97REt~020] -1- ~ ~, ?~
~;rde;hf' The easement in the aforesaid lands shall be more particularly described in Exhibit "A'
own and delineated on Drawing No. C-4875~ attached hereto and by this reference made a part
Grantor grants to Grantee the right to erect and maintain on Grantor's property adjacent to
this easement such anchorage as may be necessary for Grantee's purposes.
Except as expressly provided herein, Grantor reserves all right, title and interest to the
easement properB,, including continued use of the surface thereof. Grantor also reserves any and all
emergency authority and police powers with respect to the easement. Grantor agrees, however, not to
erect, place or construct, nor permit to be erected, placed or constructed, any building or other structure,
plant any tree, drill or dig any well, within this easement in any way that adversely impacts Grantee's
use of the easement allowed hereunder without Grantee's prior approval.
Grantor shall not increase or decrease the ground surface elevations within this easement
after installatioh of Grantee's facilities, without prior x~q-itten consent of Grantee, which consent shall not
unreasonably be withheld.
This easement is not assignable without Grantor's prior written approval, which said
approval shall not be unreasonably withheld, delayed or conditioned. Any attempted assignment in
violation of this provision shall be void.
Grantee shall have the right but not the duty., to trim or remove trees and brush along or
adjacent to this easement and remove roots from within this easement whenever Grantee deems it
necessary. Said right shall not relieve Grantor of the duW as owner to trim or remove trees and brush to
prevent danger or hazard to property or persons.
The legal description for this easement was prepared by San Diego Gas &
Electric Company pursuant to Section 8730 of the Business and Professions Code, State of
California.
This easement shall be binding upon and inure to the benefit of successors, heirs,
executors, administrators, permittees, licensees, agents or assigns of Grantor and Grantee.
IN WITNESS WHEREOF, Grantor executed this instrument this __ day of
,200
THE CITY OF CHULA VISTA, a municipal corporation
By:
Its:
By:
Its:
Prepared: Metsker/EPIC
STATE OF )
COUNTY OF )SS.
On , before me
(name, title of officer), appeared
personally 'known to me
proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Signature
s.'land, data.'lr(~ormx.distrib D-$.doc 800475-S
9 97REI~ 0201
EXHIBIT ~A"
LEGAL DESCRIPTION
THAT PORTION OF FRACTIONAL SECTION 13, TOWNSHIP 18 SOUTH, RANGE 2 WEST,
SAM BERNARDINO MERIDIAN, AND THAT PORTION OF QUARTER SECTION 117 OF
PJ%NCHO DE LA NACION, ACCORDING TO MAP THEREOF NO. 166, RECORDED IN THE
OFFICE OF SAID COUNTY RECORDER, MAY 11, 1869, IN THE CITY OF CHULA VISTA,
COUNTY OF SAM DIEGO, STATE OF CALIFOR/~IA, MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
A STRIP OF LAND 12.00 FEET IN WIDTH THE CENTERLINE OF WHICH IS DESCRIBED
AS FOLLOWS:
COMMENCING AT A FOUND TACK AND DISK STAMPED "RCE 10284" AS SHOWN ON
pARCEL MAP NO. 3825, RECORDED IN THE OFFICE OF SAID COUNTY RECORDER, MAY
23, 1975, SAID MONUMENT MARKS A 6.00 FOOT OFFSET TO THE MOST WESTERLY
COENER OF LOT 221 OF LARKHAVEN CHULA VISTA UNIT NO. 3, ACCORDING TO MAP
THEREOF NO. 7590, RECORDED IN THE OFFICE OF SAID COUNTY RECORDER, APRIL
2, 1973, AND BEARS NORTH 18°12'40" WEST 347.94 FEET (347.99 FEET RECORD
PER SAID PARCEL MAP) FROM A FOUND TACK AND DISK STAMPED "RCE 10284" AS
SHOWN ON SAID PARCEL MAP, SAID MONUMENT M3LRKS A 6.00 FOOT OFFSET TO THE
MOST WESTERLY COENER OF LOT 216 OF SAID MAP NO. 7590; THENCE SOUTH
61o29'22" WEST 446.70 FEET TO THE TRUE POINT OF BEGINNING OF THE HEREIN
DESCRIBED CFENTERLINE; THENCE NORTH 21°31' 24" EAST 99.90 FEET.
CONTAINING 0.028 ACRE MORE OR LESS.
PETER C. GOLDING DATE
LS 4768
EXPIRATION DATE 3/31/04
T:EEngr~400k2400~0~EGALDESCRlPTION.doc PAGE 1 OF 1
I RH0 DE LA NACION
P0R 1/4 SEC 117 ~,~
MAP NO. 166 · ~.~'~"'/'~'~' 22~
.-"
~ ~ ~ ' ~¥~' ~-' 6.00 OFFSET OF THE MOST
~ ' ~ ~// WrY COR OF LOT 221, MAP
89781 ~ ' -~ N
P I O. 7590. '
218
217
POR FRAC SEC 13
T18S R2W
S.B.M.
P.M. 3825 --
~ 5-23-75
~ ~NO~ES FOUND TACK ~ 86
~T~PED "RCE 1028~" A5
/ ~ ~
P.D.C. FILe 2400-40. D*0 9UR R-~O /
SDG~E JOB: PDCO51012-O00 5UR A~-5~7
S~ DI~GO GAS ~ ~CTRIC o~?om o~ ~o ~ ~¢ ~o.
ACK
~ DI~, ~ORN~ SU~ED ~: R/W OK: 236465-010
"~/~ ~o~.
CI~ 0F CHU~ VISTA o~w. ~:
PDC/CR~ 2756520
~ 530 MAX AVE OAT~: mos. ~os.
~-~0-200~ ~330-F4 O~N~ NO.
CHU~ VISTA, CA s~: ~"=~0o'
$UPPLEME~
RESOLUTION NO. 2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA GRANTING A 12 FOOT WIDE UTILITY
EASEMENT TO SAN DIEGO GAS AND ELECTRIC AS
NEEDED TO PROVIDE SERVICE TO THE LITTLE LEAGUE
FIELDS AT THE REINSTRA SPORTS FACILITY NEXT TO
LOMA VERDE PARK, 1500 MAX AVENUE AND
AUTHORIZING THE MAYOR TO EXECUTE THE
EASEMENT.
WHEREAS, on March 7, 2003, San Diego Gas & Electric submitted a letter requesting a
permanent easement within the City owned Loma Verde Park located at 1500 Max Avenue; and
WHEREAS, the easement is needed to install a new power pole and overhead utilities to
enable SDG&E to provide enhanced electrical service to the park; and
WHEREAS, City Public Works Operations staff determined new upgraded electrical
service was needed for the park; and
WHEREAS, in order to provide new service, SDG&E required replacement of an old
damaged power pole that no longer met local codes, with a new power pole; and
WHEREAS, the location for the new power pole had to be moved from existing pole
location and therefore created the need for the easement; and
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula
Vista does hereby adopt the subject resolution granting a 12 foot wide utility easement to San
Diego Gas and Electric as needed to provide service to the Little League fields at Loma Verde
Park, 1500 Max Avenue and authorizing the Mayor to execute the easement.
Presented by Approved as to form by
c iffswa,,so , D
Director of Engineering City~tomey
J:\Attorncy\RESO\casement\l 2 foot utility casemenl
1
COUNCIL AGENDA STATEMENT
ltem~
Meeting Date: 06/I7/03
ITEM TITLE: Resolution Amending the FY02/03 budget by appropriating
$123,746 from the unappropriated balance of the Equipment Replacement
Fund and awarding purchase agreement of $243,736 to M-B Companies,
Inc. of Wisconsin for a street line paint striper truck through a cooperative
purchase with the County of Madera
SUBMITTED BY: Director of Publ~orks Operatio~ Director of Finance ~
r~ ~ (4/5ths Vote: Yes X No )
REVIEVqED BY: City Manage ¢ I '
In FY 2002/2003, a street line paint striper was approved for its normal replacement cycle in the
Equipment Replacement Fund for the Striping and Signing Section of the Public Works
Operations Department. The street line paint striper truck that is being replaced was purchased
in 1990. However, due to new upgrades in technology over the past 12 years, the cost to replace
the striper has increased significantly. This resolution will appropriate the amount needed for
the purchase and award the purchase agreement. The City of Chula Vista Municipal Code
Section 2.56.140 and Council Resolution No. 6132 authorize the Purchasing Agent to participate
in cooperative bids with other government agencies for the purchase of materials of common
usage. There are no vendors in the City of Chula Vista that normally furnish this type of heavy
equipment.
RECOMMENDATION: That the City Council amend the FY02/03 Equipment Replacement
Fund by appropriating $123,746 from the tm-appropriated balance of the Equipment
Replacement Fund and award purchase agreement to M-B Companies, Inc. of Wisconsin for a
street line paint striper truck.
BOARD/COMMISSION RECOMMENDATION: Not Applicable
DISCUSSION:
The street line paint striper truck purchased in 1990 is a conventional spray unit that applies
paint with atomized air from paint pots that are under pressure. The lines that it sprays lack
definition and often look fuzzy when compared to an airless unit similar to the one requested.
The existing striper is undersized for the amount of lane miles that the City is now responsible to
maintain, which results in increased downtime because crews must return to the Public Works
Center after painting only four miles of double yellow. In addition, the old striper does not offer
any protection for the operator from dust, fumes, noise, or the sun.
Item ~
Meeting Date: 06/17/03
The new striper has the following advantages over the older (existing) striper:
· High-pressure airless paint pumping system to maintain proper atomization. Air
atomized units will not disperse these paints properly;
· Heat exchangers for white, yellow, and black paint. This will allow equal and consistent
viscosity of paint for line widths and thickness and will improve paint drying times on
higher speed streets;
· Increased paint capacity to a maximum unladen weight that a two-axle truck can haul.
This will allow the section to meet the demands of new growth areas with collector
streets such as Olympic Parkway, Telegraph Canyon Road, East H Street, and Otay Lakes
Road, which will reduce downtime by not having to reload paint as often;
· Provides a Green Light Laser Pointer System in addition to a front mounted hydraulic
pointer to provide guidance after the operator has raised the pointer;
· A rear operator cab is also included that encloses the paint system console, all controls,
and the rear operator, which will keep the operator from the fumes, dust, sun and reduce
the noise. Air ride seats and temperature control are also included; and
· Two additional paint guns will also be included to accommodate an 8-inch wide stripe
for all turn pockets. This improves coverage and appearance.
Therefore, staff requests approval of a truck-mounted street line paint striper that is larger and
more sophisticated than the current striper, which is needed to meet the current and future
requirements for the City based on the increased workload due to continued growth.
FISCAL IMPACT:
The net total cost including taxes is $243,736. The total required funds, including the additional
appropriation of $123,746, would be provided by the Equipment Replacement Fund. Therefore,
there is no impact to the General Fund.
RESOLUTION NO. 2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING THE FY02/03 BUDGET BY
APPROPRIATING $123,746 FROM THE UNAPPROPRIATED
BALANCE OF THE EQUIPMENT REPLACEMENT FUND AND
AWARDING PURCHASE AGREEMENT OF $243,736 TO M-B
COMPANIES, INC. OF WISCONSIN FOR A STREET LiNE
PAINT STRIPER TRUCK THROUGH A COOPERATIVE
PURCHASE WITH THE COUNTY OF MADERA
WHEREAS, in FY 2002/2003, a street line paint striper was approved for its normal
replacement cycle in the Equipment Replacement Fund for the Striping and Signing Section of the
Public Works Operations Department; and
WHEREAS, the street line paint striper track that is being replaced was purchased
in 1990 and is a conventional spray unit that applies paint with atomized air from paint pots that are
under pressure; and
WHEREAS, the existing striper is undersized for the amount of lane miles that the
City is now responsible to maintain and does not offer any protection for the operator from dust,
fumes, noise, or the sun; and
WHEREAS, the City of Chula Vista Mmficipal Code section 2.56.140 and Council
Resolution No. 6132 authorize the Purchasing Agent to participate in cooperative bids with other
government agencies for the purchase of materials of common usage; and
WHEREAS, there are no vendors in the City of Chula that normally furnish this
type of heavy equipment; and
WHEREAS, the approval of a larger and more sophisticated track-mounted street-
line paint striper would meet the current and future requirements for the City based on continued
growth.
NOW, THEREFORE, BE IT RESOLVED that the City Council of City of Chula
Vista does hereby mnend the adopted FY2002-03 budget appropriating $123,746 from the
unappropriated balance of the Equipment Replacement Fund and awarding purchase agreement of
$243,736 to M-B Companies, Inc. of Wisconsin for a street line paint striper truck through a
cooperative purchase with the County of Madera.
Presented by Approved as to form by
Dave Byers Ann Moore
Director of Public Works City Attorney
COUNCIL AGENDA STATEMENT
Item ·
Meeting Date 6/17/03
ITEM TITLE: Resolution: 1) Approving a purchase agreement in the
amount of $203,285 with Park Specialties for playground
equipment and installation services at Bonita Long Canyon,
Discovery, and Terra Nova Parks and authorizing the Purchasing
Agent to execute said agreement; and, (2) Approving a purchase
agreement in the amount of $175,477 with Park Specialties for
playground equipment and installation services at Rohr and SDGE
West Parks and authorizing the Purchasing Agent to execute said
agreement, contingent upon Council approval of funding in the FY
04/05 Capital Improvement Program.
SUBMITTED BY: Director of Public Works Operation ~,
Director of Finance
REVIEWED BY: City Manager ~ (4/5 Vote Req. Yes No x )
In FY 02/03, Council, under the Capital Improvement Program, approved various ClP
projects, which included funding for playground equipment at various parks. The Public
Works Operations Department is now requesting Council's approval of a purchase
agreement between the City and Park Specialties, for new playground equipment and
installation services at Bonita Long Canyon Park, Terra Nova Park, and Discovery Park
in the amount of $203,285.
Staff is further recommending Council's approval of a purchase agreement in the
amount of $175,477 with Park Specialties for playground equipment and installation
services at Rohr and SDGE West Parks, contingent upon Council approval of funding in
the FY 04/05 Capital Improvement Program.
STAFF RECOMMENDATION: That Council adopt the resolution authorizing the
Purchasing Agent to execute a purchasing agreement with Park Specialties.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION: In the FY02/03 Capital Improvement Program, Council approved funding
for various park projects that are almost complete. There are sufficient funds remaining
in PR 228 for playground equipment renovation at Bonita Long Canyon, Discovery, and
Terra Nova Parks. Staff is requesting funds in FY 04/05 for playground equipment at
Rohr Parks and SDG&E West.
Item ~
Meeting Date 6117103
The RFP Process
The RFP was advertised in the Star News on February 28, 2003. Sealed proposals for
playground equipment were received on March 27, 2003. Eleven (11) potential
suppliers were contacted; seven (7) submitted proposals. Proposals were received
from the following companies:
Respondent (Equipment Manufacturer)
CLS Landscape Management, Inc. (Dave Bang Associates)
G&G Builders, Inc. (Gametime, Inc.)
Little Tikes Commercial (Pacific Design Concepts)
Park Specialties (Coast Recreation)
Progressive Design Playgrounds
Zasueta Contracting, Inc. (Miracle Recreation Equipment Co.)
Pacific Site Complements (equipment only, no installation)
Total costs from the vendors to equip/install at the respective parks are as follows:
Vendor Bonita
Long Cyn Discovery Terra Nova Rohr SDGE West Total
Park
Specialties $70,600 $59,100 $73,585 $85,150 $90,327 $378,762
(Group
Discount)
Park
$82,500 $68,195 $85,150 $100,765 $97,105 $433,715
Specialties
CLS
$68,511 $78,652 $85,921 $101,067 $127,113 $461,364
Landscape
G&G Builders $74,578 $93,923 $80,682 $99,157 $124,949 $473,289
Progressive $77,450 $83,950 $89,950 $108,985 $123,996 $484,331
Design
Zasueta $77,819 $87,854 $95,098 $115,779 $119,018 $495,568
Little Tikes $84,571 $96,782 $102,240 $100,588 $123,685 $507,867
Pacific Site Bid on equipment only, no installation
Staff recommends that the City enter into a purchasing agreement with Park
Specialties, the overall Iow acceptable respondent, for Bonita Long Canyon, Discovery,
and Terra Nova Parks. It is further recommended that a purchasing agreement for Rohr
and SDGE West Parks be issued if funding is approved through the FY 04/05 CIP
process. Park Specialties has agreed to hold prices firm through FY 04/05.
Item ~6
Meeting Date /17/03
$555,000 was the projected cost for playground equipment at all five (5) park sites. The
recommended award is approximately 32% ($176,238) under the projected estimate.
Park Specialties offered a "group discount"; whereby, if all park sites were awarded to
them, an additional discount would apply that was extremely favorable for the City.
However, should funding not be approved for either Rohr or SDGE West Parks,
individual site rates would apply that would increase the total for Bonita Long Canyon,
Discovery, and Terra Nova Parks by $32,560 to $235,845. Should this be the case,
adequate funding is available in the current fiscal year project acco. unt and the initial
purchase agreement would be adjusted accordingly.
Staff has dealt with Park Specialties on prior projects and has found them to be highly
dependable. The warranty service is excellent, the products are reliable, and they
complete requests in a timely manner.
FISCAL IMPACT: Approximately $256,000 is available in PR 228 to complete three (3) of
these projects - Bonita Long Canyon, Discovery, and Terra Nova Parks. The remaining
two (2) parks, Rohr and SDGE West, will be completed once the FY 04/05 CIP budget
has been approved.
L:\Public Works Operations~A113's 2003\PlayEquip,doc
CHULA VISTA ·
PURCHASING DIVISION
NOTICE OF INTENT TO AWARD
PLAYGROUND EQUIPMENT
RFP #2-02/03
City Council approval for the Playground Equipment contract to Park Specialties has been
rescheduled for Tuesday, June 3, 2003 at 4:00 p.m. The meeting will be held at the City of
Chula Vista, Public Ser','ices Building, Council Chambers, 276 Fourth Avenue, Chula Vista,
CA91910.
John P. Coggins, C.P.M. May 20, 2003
Purchasing Agent
276 FOURTH AVENUE · CHULA VISTA · CALIFORNIA 91910 · {619) 69'~-5141 · FAX (619) 691-5174
CI1Y OF
CHUBS, VISTA
PURCHASING DIVISION
PLAYGROUND EQUIPMENT
REQUEST FOR PROPOSAL
RFP/42-02/03
ADDENDUM NO. 1
NOTICE IS HEREBY GIVEN THAT THE FOLLOWING CHANGES TO THE
SPECIFICATIONS ARE IN EFFECT AS OF THIS DATE:
1. General Conditions, Page 8, Insurance shall read:
Successful respondent shall, throughout the duration of this a~eement, maintain comprehensive
general liability and property damage insurance, including products and completed operations
liability coverage, for all operations of the respondent, its agents and employees, including but
not limited to premises and automobile, with minimum coverage of one million dollars
('SI.()()O.O00) combined single limit.
Evidence of such coverage, in the form ora Certificate oflnsurance and Policy Endorsement that
names the City of Chula Vista as an additional insured, shal~ be submitted to the Purchasing
Division within ten (10) days ofnotification of award. This endorsement must be on a separate
"Sci~edule B".
Thirty (30) day written notice to the City of Chula Vista of cancellation or material change shall
be provided. Insurance Certificates shall not include "Modified Occurrence" restrictions. No
substitutions shall be allowed.
Proof of Workers Compensation coverage shall also be provided.
All other ternls and conditions remain unchanged.
John P. Co~ins, C.PM. March 6, 2003
Purchasing Agent
276 FOURTH AVENUE · CALIFORNIA 91910 · (619) 691-5047 · FAX (619) 691-5174
CI'IY OF
CHU[A VI SI'A
PURCHASING DIVISION
REQUEST FOR PROPOSALS
PLAYGROUND EQUIPMENT
RFP #2-02/03
The City of Chula Vista is accepting proposals for the purchase and installation of
Playground Equipment at various sites within Bonita and the City of Chula Vista.
A pre-bid meeting and job site walk-thru is scheduled for Tuesday, March 11, 2003,
from 9:00 am - 12:00 am. Prospective respondents shall meet at Bonita Long Canyon
Park, 1745 Coltridge Avenue, Chula Vista. CA 91902. Bidders shall attend at their sole
expense. ¢,q-file not required, prospective respondents are strongly encouraged to attend
this meeting.
Proposals shall be submitted directly to the Purchasing Division, 276 Fourth Avenue.
Chula Vista, CA 91910, where they will be received until 5:00 pm, Thursday, March
27, 2003.
February 28, 2003 John P. Coggins, C.P.M.
Purchasing Agent
276 FOURTH AVENUE * CALIFORNIA 91910 · (619) 691-5047 · FAX (619) 691-5174
RFP NO. 2-02/03 Page 1
CHUJA VISTA
REQUEST FOR PROPOSAL (RFP)
NOTICE IS HEREBY GIVEN, THAT SEALED PROPOSALS ON A FORM
OBTAINED FROM THE PURCHASING DIVISION WILL BE RECEIVED UNTIL
5:00 P.M. ON THE 27TH DAY OF MARCH 2003 FOR FURNISHING THE CITY
OF CHULA VISTA WITH:
PLAYGROUND EQUIPMENT
PROSPECTIVE RESPONDENTS ARE HEREBY REFERRED TO THE PROPOSAL
INSTRUCTIONS, GENERAL PROVISIONS, SPECIFICATIONS, AND TERMS
AND CONDITIONS ON FILE IN THE OFFICE OF THE PURCHASING DIVISION
FOR FULL DETAILS AND DESCRIPTION OF MATERIALS AND/OR SERVICES.
REQUIRED.
FOR FURTHER INFORMATION AND COPIES OF PROPOSAL INSTRUCTIONS,
CONTACT THE PURCHASING DIVISION.
Mailing Address: Physical Location:
CITY OF CHULA VISTA CITY OF CHULA VISTA
PURCHASING DIVISION PURCHASING DIVISION
276 FOURTH AVENUE 430 DAVIDSON STREET, SUITE C
CHULA VISTA, CA 91910 CHULA VISTA, CA 91910
TELEPHONE (619) 691-5141 FAX (619) 691-5174
ALL PROPOSALS MUST BE SUBMITTED TO THE PURCHASING DMSION
IN SEALED ENVELOPES PLAINLY MARKED WITH THE RFP NAME,
NUMBER, AND DATE AND TIME DUE. PROPOSALS RECEIVED AFTER
THE DUE DATE WILL BE REJECTED.
THE CITY FURTHER RESERVES THE RIGHT TO REJECT ANY OR ALL
PROPOSALS RECEIVED, ANY PORTION OF ANY PROPOSAL, AND TO
WAIVE ANY IRREGULARITIES OR INFORMALITIES IN PROPOSALS OR
THE RFP PROCESS.
JOHN P. COGGINS, C.P.M. DATED: FEBRUARY 28, 2003
PURCHASING AGENT
RFP NO. 2-02/03 Page 2
CHUIA VISTA
Scope of Work
The City of Chula Vista is seeking proposals from qualified suppliers to furnish and install
playground equipment at five (5) park sites within Bonita and the City of Chula Vista. The sites
are listed below:
Site Location Installation Area Age Range Budget
Bonita Long Canyon 5,625 ft2 5 -12 years S80,000
1745 Coltridge Avenue
Discovery Park 5,022 f~z 2-5 and 5-12 years $100,000
700 Buena Vista Way
Rohr Park
4548 Sweetwater Road 7,920 ft2 2-5 and 5-12 years $125,000
SDG&E West Park
1450 Hilltop Drive 11,524 fP 2-5 and 5-12 years $125,000
Terra Nova Park
450 Hidden Vista Drive 6,320 ftz 2-5 and 5-12 years $125,000
Equipment proposed shall be selected to promote physical skills and help muscle development.
Proposal Format
Respondents shall provide the following information:
· Total cost (materials, delivery, set-up/assembly, and applicable sales tax)
· Detailed product list (include item descriptions and unit costs)
· Comprehensive specifications
,, Color swatches/paint chips
· Plan view drawings
· Color photographs or other similar renditions
· Delivery and installation schedule
· Maintenance instructions and schedule
· Warranties
· Quality control/safety features
· Environmental considerations/practices (e.g. use of recycled materials)
Individual proposals shall be provided for each separate installation. Information provided will
be used as a basis for comparison of responses.
RFP NO. 2-02/03 Page 3
CHULA VISTA
Proposal Submittal
Submit three (3) complete copies of written proposals to the City of Chula Vista Purchasing
Division no later than 5:00 pm, Thursday, March 27, 2003. There will be no public bid
opening. Late proposals will not be accepted.
Proposals shall be concise and to the point. However, proposals must be in sufficient detail to
allow for thorough evaluation and comparative analysis. Costly bindings, glossy brochures, etc.,
are neither necessary nor recommended. Examples of' previous work may be submitted but
should be kept to a minimum.
After written proposals have been reviewed, interviews and/or additional information may be
requested from prospective firms. A principal from your firm who will be directly responsible
for the installation should be present for any interviews. Interviews may be conducted over the
phone or in person at the City of Chula Vista. Respondents shall attend any required interviews
at their sole expense.
This request for proposal does not commit the City to award a contract or to pay any costs
incurred for services related to submitting a proposal. The City, at its sole discretion, reserves
the right to accept or reject any or all proposals received as a result of this request, to negotiate
with any qualified respondents, or to cancel in part or in its entirety this request for proposal. All
proposals shall become the property of the City of Chula Vista, and will not be returned. If any
proprietary information is contained in the proposal, it should be clearly identified.
Respondents may submit proposals for any or all sites. The City reserves the right to award as a
lot, by site, by equipment type, by groups of sites or equipment, or in any combination of sites or
equipment types as may be in the City's best overall interests.
Alternate Proposals
Respondents are free to submit alternate proposals. The City will consider alternate proposals in
the evaluation and selection process.
RFP NO. 2-02/03 Page 4
CHUIA VIS-FA
Evaluation
Evaluation will be based on the following criteria:
· Cost
· Quality of product
· Maximum public benefit
· Product warranty
· Capacity and resources of the firm to perform the work
· Past performance
· Experience
· References
The City shall be the sole judge of evaluation criteria applicability and relevance.
Selection Process
The Purchasing Agent and Deputy Director of Parks will be responsible for both reviewing the
proposals and, if necessary, conducting candidate interviews. Each firm will be ranked
according to the evaluation criteria outlined above. Presentations or responses to additional
questions regarding the proposals may be required.
The City may further request representative work samples or conduct site visits. Work samples
shall be provided within forty-eight (48) hours of request and at no cost to the City. Work
samples may not be returned. References of the top ranked firms will be checked.
RFP NO. 2-02/03 Page 5
CHUI. A VIS'FA
References
Please list three (3) different customers for whom you have provided comparable services. The
ideal reference would be a government agency of similar size to Chula Vista.
1) Company Name:
Address:
Contact Person & Phone Number:
Date(s) Service Provided:
Description of Work Provided:
2) Company Name:
Address:
Contact Person & Phone Number:
Date(s) Service Provided:
Description of Work Provided:
3) Company Name:
Address:
Contact Person & Phone Number:
Date(s) Service Provided:
Description of Work.Provided:
RFP NO. 2-02/03 Page 6
CHUtA VISTA
Payment Terms
Terms: % Days
Prompt payment discounts offered for less than fifteen (15) days will not be considered in
evaluating bids for award. In the absence of terms, payment shall be Net Thirty (30) Days.
Proposal & Offer to Contract
The respondent, herein sometimes called contractor, supplier or vendor, submits a proposal and
offers to enter into this contract with the City of Chula Vista, herein called City, this 27th day of
March, 2003 as follows:
This Proposal & Offer to Contract, subject to the specifications, terms and conditions,
and General Provisions herein, xvhen duly accepted by the City shall constitute the
contract between the parties.
In consideration of the payments to be provided by the City, and in accordance with the
conditions expressed in the proposal forms and specifications attached and by this
reference incorporated herein, contractor agrees to furnish Playground Equipment to
the City of Chula Vista.
Company Name
Address
City State __ Zip
Telephone Fax
Print Name Title
Signature Date
RFP NO. 2-02/03 Page 7
CHUIA VISI'A
General Conditions
Unit Pricing
Unit pricing shall include all bid preparation expense, design costs, field measurements, site
visits, materials, labor, fabrication, assembly, set-up, installation, insurance, permits, fees,
shipping, transportation, clean-up and disposal.
Prices quoted shall remain firm for a minimum of 120 days from proposal submittal date.
FOB - Destination
Prices quoted and all work performed shall be FOB - Destination. Ship-to points are listed in the
table on page 2, under Scope of Work.
Contractor is responsible for field measurements, assessing delivery accessibility, and verifying
Site conditions.
Workmanlike Product
Contractor shall provide all service and materials in a workmanlike manner. Contractor shall
further establish and maintain quality assurance policies and procedures to ensure a first-rate
installation. Workmanship shall be in accord with generally accepted industry standards.
Subcontracting
Subcontracting is allowed, provided that at least 50% of the work performed for the City is done
in-house. The City further reserves the right to approve or disallow use of subcontractors.
Brokers will not be considered in award of contract.
Rejection of Product
The City will reject any product that does not meet City standards. Any rejected item shall he
replaced at no additional cost to the City. Multiple instances (three or more) of substandard
work may be cause for termination of agreement. The City shall be the sole judge as to what
constitutes acceptable work.
Storage Container
A storage container may be temporarily situated at the park site. Prior City approval is required
as to container type, duration of storage, and location. Con~-actor shall be solely responsible for
any damage, theft, or vandalism of containers left at installation sites.
RFP NO. 2-02/03 Page 8
CrIY O~
CHUtA VIS1-A
Work Area
Work area shall be fenced off or otherwise kept secure by Contractor. All cartons, debris,
packaging material, and unused materials shall be removed and disposed of in a legal manner.
Insurance
Successful respondent shall, throughout the duration of this agreement, maintain comprehensive
general liability and property damage insurance covering all operations of the respondent; its
agents and employees, including but not limited to premises and automobile, with minimum
coverage of one million dollars ($1,000,000.00) combined single limit. Evidence of such
coverage, in the form of a Certificate of Insurance and Policy Endorsement that names the City
of Chula Vista as an additional insured, shall be submitted to the Purchasing Division within ten
(10) days of notification of award. This endorsement must be on a separate "Schedule B".
Thirty (30) day written notice to the City of Chula Vista of cancellation or material change shall
be provided. Insurance Certificates shall not include "Modified Occurrence" restrictions. No
substitutions shall be allowed.
Proof of Workers Compensation coverage shall also be provided.
Performance and Payment Bond
A 100% performance and payment bond is required for any work awarded in association with
this Request for Proposal.
RFP NO. 2-02/03 Page 9
CHUIA VISTA
Specifications
Materials
All materials shall be structurally sound and suitable for safe play. Durability shall be ensured
on all metal parts by the use of factory-applied coatings such as zinc plating, zinc-nickel plating,
baked-on enamel, powder coating, etc. Manufacturer color samples shall be provided.
Ground Cover
"Soft Fall" wood chips shall be provided in an adequate amount and per manufacturer's
specifications for all play areas. Alternate materials may be provided with prior City approval.
Ground cover proposed shall be hypoallcrgenic and non-toxic.
Contractor shall excavate and remove sand, dirt or rock to a depth of at least 12" from the curb
linc. Contractor shall install a felt base, or equivalent as approved by the City, in each play area
prior to filling with ~vood chips.
ADA Accessibility
Playground equipment materials and configuration shall conform to Americans with Disabilities
Act Accessibility Guidelines (ADAAG). Furnishing and installation of an ADA compliant ramp
in each play area shall be contractor's sole responsibility.
Wood Decking/Posts
Wood decking/posts should not be proposed and may be cause for disqualification.
Ultraviolet Protection
UV stabilizers shall be incorporated to maintain color fastness.
Graffiti Resistance
City-approved graffiti resistant treatment shall be applied to exposed surfaces at supplier's sole
expense.
Touch-Up Paint
Touch-up paint shall be provided at no additional cost to cover graffiti or other damage.
Dangerous Materials
No dangerous treatments, preservatives, or chemicals shall be used in the manufacture, cleaning,
or maintenance or playground equipment purchased. There shall further be no spurs, burrs,
protrusions, and jagged or sharp edges.
RFP NO. 2-02/03 Page 10
CHUtA VISI'A
Height Restrictions
There are no height restrictions up to nine (9) feet.
Earthquake Stability
Contractor shall provide seismic bracing and anchorage to meet all local, state, and national
codes and provisions.
Tamperproof Connections
Locking, tamperproof connections shall be incorporated whenever possible. Any special tools
required for disassembly or maintenance of playground equipment shall be supplied to the City
at no additional cost.
Maintenance
Maintenance instructions (adjustments, alignment, calibrations, lubrication, g~ornmet/washer
changes, etc.) and schedule shall be included as part of the proposal.
Signage & Instructions
City-approved signage shall be provided noting playground equipment limitations and
i'nstructions. Signage shall be provided in both English and Spanish. Company name may be
noted, however advertising is prohibited.
RFP NO. 2-02/03 Page 11
CIIY Ot~
CHUtA VISTA
GENERAL PROVISIONS
Please Read Carefully
These Provisions A re a Part of Your Bid and any Contract A warded
The bidder agrees that:
A. Bidder has carefully examined the specifications, and all provisions relating to the item(s) to be fumisbed
or the work to be done; understands the meaning, intent, and requirements; and
B. Bidder will enter into a written contxact and furnish the item(s) or complete the work in the time specified,
and in strict conformity with the City of Chula Vista specifications for the prices quoted.
Note: Bidder is defined as any individual, partnership, or corporation submitting a bid,proposal, or quotation in
response to a request for bid, req.~est for proposal, or request for quotation. A bidder may also be referred
to as consultant, contractor, supplier, or vendor.
1. Prices:
All prices and notations must be in ink or typewritten. Mistakes may be crossed out and corrections typed or
written with ink adjacent to the error; the person signing the bid must initial corrections in ink.
Bids shall indicate the unit price extended to indicate the total price for each item bid. Any difference between
the unit price correctly extended and the total price shown for all items bid shall be resolved in favor of the umt
prices, except when the bidder clearly indicates that the total price for all items bid is based on consideration of
being awarded the entire hit and that an adjustment of the total price is being made in consideration of receiving
the entire bid.
2. Bidder's Security:
A bid deposit in an amount equal to at least 10% of the bid may be required as a bid security by the City. The
bid security may only be in cash, a cashier's check, a certified check made payable to the City of Chula Vista, or
a bidder's bond. If the bid security is a bond, it shall be executed by a surety insurer authorized to issue surety
bonds in the State of California. The bid security must be executed by the bidder and enclosed with the bid
proposal in the sealed bid envelope.
3. Items Offered:
If the item offered has a trade name, brand and/or catalog number, such shall be stated in the bid. If the bidder
proposes to furnish an item of a manufacturer or vendor other than that mentioned on the face hereof, bidder
must specify maker, brand, quality, catalog number, or other trade designation. Unless such is noted on the bid
form, it will be deemed that the item offered is that designated even though the bid may state "or equal".
4. Brand Names:
Whenever reference to a specific brand name is made, it is intended to describe a component that has been
determined to best meet operational, performance, or reliability standards of the City, thereby incorporating
these standards by reference within the specifications. An equivalent (~or equal") may be offered by the bidder,
subject to evaluation and acceptance by the City. It is the bidder's responsibility to provide, at bidder's expense,
samples, test data, or other documentation the City may require to fully evaluate and determine acceptability of
an offered substitute. The City reserves the sole right to reject a substituted component that will not meet or
exceed City standards.
5. Samples:
Samples may be required for bid evaluation and testing purposes. Bidders shall agree to provide samples within
forty-eight (48) hours upon request and at no additional cost to the City.
RFP NO. 2-02/03 Page 12
CHUtA VISI'A
6. Verify Quotations:
Prices shall be verified prior to bid submittal, as xvithdrawal or correction may not be permitted after the bid has
been opened.
7. Firm Prices:
Prices on bid shall be firm prices not subject to escalation. In the event the specifications provide for escalation,
the maximum limit shall be shown, or the bid shall not be considered. In the event of a decline in market price
below a price bid, the City of Chula Vista shall receive the benefit of such decline.
8. Modification or Withdrawal of Bids:
Bids may be modified or xvithdrawn by v~xitten or facsimile notice received prior to the exact hour and date
specified for receipt of bid. A bid may also be withdrawn in person by a bidder, or bidder's authorized
representative, prior to the exact hour and date set for receipt of bids. Telephone withdrawals are not permitted.
9. Late Bids, Modifications, or Withdrawals:
(a) Bids, modifications of bids, or bid withdrawals received after the exact time and date specified for receipt
will not be considered unless receipt is before the contract is awarded and the City determines that late
receipt was due solely to City error.
(b) Modification of a successful bid that makes the terms of the bid more favorable to the City will be
considered at any time.
10. Mistake in Bid:
(a) If the bidder discovers a mistake in bid prior to the hour and date specified for receipt of bid, bidder may
correct the mistake by modifying or withdrawing the bid in accordance with Items 8 and 9 above.
(b) If within seventy-two hours of the bid closing and prior to the issuance of a purchase order or a contract,
the apparent Iow and best bidder discovers a mistake in bid of a serious and significant nature which is
unfavorable to bidder, bidder may request consideration be given to modifying the bid if it remains the
lowest bid or to withdrawal of the bid if the result of the correction of the mistake makes another bidder
lowest and best bidder. The mistake must be evident and provable. The fight is reserved by the City to
reject any and all requests for correction of mistakes in bids received after the hour and date of the bid
closing. The decision of the Purchasing Agent is final as regards acceptance or rejection of requests for
correction of bids.
(c) A mistake in bid cannot be considered once a purchase order or contract is issued.
11. Signature:
All bids shall be signed and the title and f'm'n name indicated. A bid by a corporation shall be signed by an
authorized officer, employee or agent with his or her title.
12. NO Bids:
If no bid is to be submitted, the bid should be marked UNo Bid" and returned to maintain the bidder's name in
the vendor file for future solicitations. A letter or postcard may be submitted. Ifa bidder fails to respond to a
reasonable number of bids without returning a "No Bid", the Purchasing Agent reserves the right to delete the
bidder from the vendor file for future solicitations.
47- t'9
RFP NO. 2-02/03 Page 13
CHUtA VIS'FA
13. Alternative Proposals:
To be responsive to the bid, bidder must submit a proposal that meets all specific bid requirements. Once
bidder has proposed a product which is responsive to the specification, bidder may include with the bid any
additional proposals or alternative products that bidder believes can meet or exceed the City's requirements and
that may offer additional advantages, benefits, or cost savings. The City reserves the right to evaluate, and
accept or reject, such alternatives as though they were part of the original specifications without advertising for
further bids, when in the best interests of the City. Any awards so made will be based on operational and cost
analysis considerations that would result in the optimum econormc advantage to the City.
14. Confidential Information:
Any information deemed confidential or proprietary should be dearly identified by the bidder as such. It may
then be protected and treated with confidentiality only to the extent permitted by state law. Otherwise the
information shall be considered a public record. Information or data submitted with a bid will not be returned.
15. Quality:
Unless otherwise required in the specifications, all goods furnished shall be new and unused.
16. Litigation Warranty:
The bidder, by bidding, warrants that bidder is not currently involved in litigation or arbitration concerning the
materials or bidder's performance concerning the same or s/milar material or service to be supplied pursuant to
this contract of specification, and that no judgments or awards have been made against bidder on the basis of
bidder's performance in supplying or installing the same or similar material or service, unless such fact is
disclosed to the City in the bid. Disclosure may not disqualify the bidder. The City reserves the right to
evaluate bids on the basis of the facts surrounding such litigation or arbitration and to require bidder to fia'xtish
the City with a surety bond executed by a surety company authorized to do business in the State of California
and approved by The City of Chula Vista in a sum equal to one hundred percent (100%) of the contract price
conditional on the faith~l performance by bidder of the conmact in the event the bid is awarded to bidder,
notwithstanding the litigation or arbitration.
17. Royalties, Licenses and Patents:
Unless otherwise specified, the bidder shall pay all royalties, license and patent fees. The bidder warrants that
the materials to be supplied do not infringe any patent, trademark or copyright and further agrees to defend any
and all suits, actions and claims for infringement that are brought against the City, and to defend, indemnify and
hold harmless the City from all loss or damages, whether general, exemplary or punitive, as a result of any
actual or claimed infringement asserted against the City, the bidder or those furnishing material to bidder
pursuant to this contract.
18. Performance Standards:
Performance of work and acceptability of equipment or materials supplied pursuant to any contract or award
shall be to the satisfaction of the City.
19. Warranties:
(a) All material, labor or equipment provided under the contract shah be warranted by bidder and/or
manufacturer for at least twelve (12) months after acceptance by City. Greater warranty protection will be
accepted. Lesser warranty protection must be indicated by bidder on the bid proposal as an exception.
RFP NO. 2-02/03 Page 14
CHUtA VISTA
19. Warranties (continued):
(b) Bidder shall be considered primarily responsible to the City for all warranty service, parts and labor
applicable to the goods or equipment provided by bidder under this bid or award, in'espective of whether
bidder is an agent, broker, fabricator or manufacturer's dealer. Bidder shall be responsible for ensuring that
warranty work is performed at a local agency or facility convenient to City and that services, pacts and
labor are available and provided to meet City's schedules and deadlines. City may require bidder to post a
performance bond after con~'act award to guarantee performance of these obligations. Bidder may
establish a service conU'act with a local agency satisfactory to City to meet this obligation if bidder does not
ordinarily provide warranty service.
20. Addenda:
The effect of all addenda to the bid documents shall be considered in the bid, and said addenda shall be made
part of the bid documents and shall be returned with them. Before submitting a bid, each bidder shall ascertain
whether or not any addenda have been issued, and failure to cover in this bid any such addenda issued may
render the bid L~valid and result in its rejection.
21. Specifications to Prevail:
The detailed requirements of the specifications shall supersede any conflicting reference in these General
Provisions that are in conflict therewith.
22. Taxes:
The City will furnish Exemption Certificates for Federal Excise Tax. The City is liable for State, City and
County Sales Taxes. Do not include this tax in the amount bid. However, tax is to be added by the successful
bidder to the net amount invoiced. All or any portion of the City Sales Tax returned to the City will be
considered in the evaluation of bids.
23. Conflict of Interest:
No City employee or elected or appointed member of City government, or member of the employee's
immediate family, may participate directly or indirectly in the procurement process pertaining to this bid if they:
(a) Have a financial interest or other personal interest that is incompatible with the proper discharge of their
official duties in the public interest or would tend to impair their independence, judgroetu or action in the
performance of their official duties.
(b) Are negotiating for or have an arrangement concerning prospective employment x¼th bidder. The bidder
wan'ants to the best of his knowledge that the submission of the bid will not create such conflict of interest.
In the event such a conflict occurs, the bidder is to report it bnmediately to the Purchasing Agent. For
breach or violation of this warranty, the City shall have the right to annul this contract without liability at
its discretion, and bidder may be subject to damages and/or debarment or suspension.
24. Gratuities:
The City may rescind the right of the bidder to proceed under this agreement if it is found that gratuities in the
form of entertainment, gifts, or otherwise are offered or given by the bidder, or any agent or representative of
the bidder, to any officer or employee of the City with the intent of infiuencing award of this agreement or
securing favorable t~eatment with respect to performance of this agreement.
RFP NO. 2-02/03 Page 15
cn~OF
CHU[A VISTA
25. Faithful Performance Bond:
Successful bidder may be required to furnish the City with a surety bond conditioned upon the faithful
performance of the contract. This may take the form of a bond executed by a surety company authorized to do
business in the State of California and approved by the City of Chuta Vista, an endorsed Certificate of Deposit,
or a money order or a certified check drawn on a solvent bank. The bond shall be in a sum equal to one
hundred percent (100%) of the amount of the contract price. Such bond or deposit shall be forfeited to the City
in the event that bidder receiving the contract shall fail or refuse to fulfill the requirements and all terms and
conditions of the contract.
26. Insurance:
Should work be required on City premises, bidder shall provide proof of liability and property damage
insurance prior to performance of duties. Coverage shaIl be from a company authorized to transact business in
the State of California and shall be in an amount not less than $1,000,000 combined single limit (CSL), unless
otherwise specified. The City of Chula Vista shall be named as an additional insured and thirty (30) days notice
of cancellation shall be indicated. Worker's Compensation coverage for each employee engaged in work on
City premises is required. Bidder is solely responsible for all insurance premitLm payments.
27. Indemnification:
Bidder shall defend, indemnify, protect and hold harmless the City, its elected and appointed officers,
employees, and agents, from and against all claims for damages, liability, and expenses (including attorney's
fees) arising out of this agreement and/or bidder's performance hereunder, except as to such damages, liability,
and expenses due to the sole negligence or willful acts of the City, its officers, employees or agents.
28. Award of Contract:
(a) Bids will be analyzed and award will be made to the lowest, responsive and responsible bidder whose bid
conforms to the solicitation and whose bid is considered to be most advantageous to the City, price and
other factors considered. Factors to be considered may include, but are not limited to: bidder's past
performance, total unit cost, economic cost analysis, life cycle costs, warranty and quality, maintenance
cost, durability, the operational requirements of the City and any other factors which will result in the
optimum economic benefit to the City.
(b) The City reserves the right to reject any item or items, to waive informalities, technical defects and minor
irregularities in bids received; and to select the bid(s) deemed most advantageous to the City. The City
will, however, consider bids submitted on an "all or nothing" basis if the bid is clearly designated as such.
(c) The City reserves the right to award one or more contracts on the bids submitted, either by award of all
items to one bidder or by award of separate items or groups of items to various bidders as the interests of
the City may require, unless the bidder clearly specifies otherwise in his bid.
(d) For the purpose of evaluating bids for multiple awards, the sum of $100.00 is considered to be the
administrative cost to the City for issuing and administering each contxact awarded under this solicitation,
and individual awards will be made for the items and combinations of items which result in the lowest
aggregate price to the City, including such administrative cost.
(e) Upon acceptance by the City of Chula Vista, the solicitation, bid, proposal, or price quotation and a
purchase order issued to the successful bidder shall be deemed to result in a binding contract incorporating
those terms and these General Provisions without further action required by either pa,-Xy. Items are to be
furnished as described in the bid and in strict conformity with all instzuctions, conditions, specifications,
and provisions in the complete contract, as defined by this clause 28 or any related integrated agreement.
RFP NO. 2-02/03 Page 16
CHULA VISTA
29. Bid Results:
To obtain bid results, Either (1) attend bid opening or (2) provide a self-addressed, stamped envelope
referencing bid number, and bid tabulation will be mailed to you upon verification of extensions or (3) visit the
Purchasing Department no sooner than three (3) working days after bid opening to review bid tabulation. Due
to time constraints, bid results cannot be given out over the phone.
30. Protests:
Protests by unsuccessful bidders to the selection for award shall be submitted in writing to the Purchasifig Agent
no later than ten (10) calendar days afier award recommendation. The unsuccessful bidder shall have the fight
to appear at the City Council to protest any award to be conftrmed by Council. Failure to submit a timely
written protest to the Purchasing Agent shall bar consideration of such protest.
31. Documentation:
Due to the time constraints that affect contxact performance, all required documents, certificates of insurance
and bonds shall be provided to the City within ten (10) calendar days folJowing award or date of request by
City, whichever is later. Any failure to comply may result in bid being declared non-responsive and rejected,
and at City's option the bid bond may be attached for damages suffered.
32. Discounts:
(a) Prompt payment discounts offered for payment within less than fifteen (15) calendar days will not be
considered in evaluating bids for axvard. However, offered discounts of less than 15 days will be taken if
payment is made within the discount period, even though not considered in the evaluation of bids.
(b) In connection with any discount offered, time will be computed from date of delivery and acceptance, or
invoice receipt, whichever is later. Payment is deemed to be made for the purpose of earning the discount
on the date of mailing of the City check.
(c) Any discount offered other than for prompt payment should be included in the net price quoted and not
included ia separate terms. In the event this is not done, the City reserves the right to accept the discount
offered and adjust prices accordingly on the Purchase Order.
33. Seller's Invoice:
Invoices shall be prepared and submitted in duplicate to address shown on the Purchase Order. Separate
invoices are required for each Purchase Order. Invoices shall contain the following information: Purchase
Order number, item number, description of supplies or services, sizes, unit of measure, quantity, unit price and
extended totals.
34. Inspection and Acceptance:
Inspection and acceptance will be at destination unless specified otherwise, and will be made by the City
departrnent shown in the shipping address or other duly authorized representative of the City. Until delivery
and acceptance, and after any rejection, risk of loss will be on .the bidder unless loss results from negligence of
the City.
35. Lost and Damaged Shipments:
Risk of loss or damage to items prior to the time of their receipt and acceptance by the City is upon the bidder.
The City has no obligation to accept damaged shipments and reserves the right to return at the bidder's expense
damaged merchandise even though the damage was not apparent or discovered until after receipt of the items.
36. Late Shipments:
Bidder is responsible to notify the City department receiving the items and the Purchasing Agent of any late or
delayed shipments. The City reserves the right to cancel all or any part of an order if the shipment is not made
as promised.
RFP NO. 2-02/03 Page 17
CHULA VISYA
37. Document Ownership:
(a) All technical documents and records originated or prepared pursuant to this contract, including papers,
reports, charts, and computer programs, shall be delivered to and become the exclusive property of the City
and may be copyrighted by the City. Bidder assigns all copyrights to City by undertaking this agreement.
(b) All inventions, discoveries, enhancements, changes, or improvements of computer programs developed
pursuant to this conlxact shall be the property of the City, and all patents or copyrights shall be assigned to
City, unless otherwise agreed. Bidder agrees that City may make modifications to computer software
furnished by bidder without infringing bidder's copyright or any license granted to City.
38. Advertisements, Product Endorsements:
City employees and agencies or organizations funded by the City of Chula Vista are prohibited from making
endorsements, either implied or direct, of commercial products or services without written approval of the City
Manager. No bidder may represent that the City of Chula Vista has endorsed their product or service without
the Purchasing Agent's prior xwitten approval.
39. City. Provisions to Prevail:
Except as indicated in the specifications, the City's standard General Provisions shall govern any contract
award. Any standard terms and conditions of bidder submitted by bidder shall not be acceptable to City unless
expressly agreed to by the City. The City reserves the right to reject bidder's bid as non-responsive, to consider
the bid without bidder's standard terms and conditions, or to require bidder to delete reference to such as a
condition of evaluation or award of the bid. If, after award of contract, bidder (contxact vendor) shall provide
materials or services accompanied by new or additional standard terms or conditions, they too shall be
considered void and City may require deletion as a further condition of performance by vendor. To the extent
not otherwise provided for by the contxact documents, the California Commercial Code shall apply.
40. Invalid Provisions:
In the event that any one or more of the provisions of this agreement shall be found to be invalid, illegal or
unenforceable, the remaining provisions shall remain in effect and be enforceable.
41. Amendments and Modifications:
The Purchasing Agent may at any time, by written order, and without notice to the sureties, make a
modification to the contract or an amendment to the Purchase Order, within the general scope of this contxact, in
(1) quantity of materials or service, whether more or less; (2) drawings, designs, or specifications, where the
supplies to be fin-nished are to be specially manufactured for the City; (3) method of shipment or packing; and
(4) place of delivery. If any such change causes an increase or decrease in the cost or the time required for the
performance of this contxact, an equitable adjnstxnent shall be made by written modification of the contract or
amendment to the Purchase Order. Any claim by the bidder for adjustment under this clause must be asserted
within 30 calendar days from the notification date.
42. Assignment:
Vendor shall not assign or delegate duties or responsibilities under this agreement, in whole or in part, without
prior written approval of the City.
43. Disputes:
Except as otherwise provided in these provisions, any dispute concerning a question of fact arising under this
contxact which is not disposed of by agreement shall be decided by the Purchasing Agent, who shall reduce this
decision to writing and mail a copy to the bidder. The decision of the Purchasing Agent shall be final and
conclusive, unless bidder requests mediation within ten (10) calendar days. Pending £mal decision of a dispute,
the
RFP NO. 2-02/03 Page 18
CHUIA VISI'A
43. Disputes (continued):
bidder shall proceed diligently with the performance of the contract and in accordance with the Purchasing
Agent's decision.
44. Mediation:
Should an uuresolved dispute arise out of this agreement, any party may request that it be submitted to
mediation. The parties shall meet in mediation within thirty (30) days of a request. The mediator shall be
agreed to by the mediating par~ies; in the absence of an agreement, the parties shall each submit one name from
mediators listed by either the American Arbitration Association, the California State Board of Mediation and
Conciliation, or other agreed-upon service. The mediator shall be selected by a ~blindfold' process.
The cost of mediation shall be borne equally by both parties. Neither party shall be deemed the prevailing
party. No par~ shall be permitted to file a legal action without first meeting in mediation and making a good
faith attempt to reach a mediated settlement. The mediation process, once commenced by a meeting with the
mediator, shall last until agreement is reached by the parties but not more than sixty (60) days, unless the
maximum time is extended by both parties.
45. Lawful Performance:
Vendor shall abide by all Federal, State and Local Laws, Ordinances, Regulations, and Statutes as may be
related to the performance of duties under this agreement. In addition, all applicable permits and licenses
required shall be obtained by the vendor, at vendor's sole expense.
46. Annual Appropriation of Funds:
Multi-year term supply and service cuntracts and leases are subject to annual appropriation of fimds by the City
Council. Payments made under term contracts and leases are considered items of current expense. Purchase
Orders are funded when issued; therefore, they are current expense items and are not subject to any subsequent
appropriation of funds.
In the event sufficient funds are not appropriated for the payment of lease payments or anticipated term contract
payments required to be paid in the next occurring lease or contract term, and if no funds are legally available
from other sources, the lease or contract may be terminated at the end of the original term or renewal term and
the City shall not be obligated to make further payments beyond the then current original or renewal term. The
City vail provide notice of its inability to continue the lease or contract at such time as the Purchasing Agent is
aware of the non-appropriation of funds. However, failure to notify does not renew the term of the lease or
contract. The City has no monetary obligation in event of termination or reduction of a term contract since such
contracts represent estimated quantifies and is not funded as a contract except to the extent of the Purchase
Orders issued.
47. Extension:
When in the City's best interest, this agreement may be extended on a daily, month-to-month, or annual basis by
mutual agreement of both partxes. Services and/or materials received under an extension shall be in accordance
with pricing, terms, and conditions, as described herein.
48. Debarment:
The Purchasing Agent may recommend to the City Council that the person or business be debarred from
consideration for award of contracts. The period of debarment will be contingent upon the severity of cause.
Causes for debarment include:
(a) Conviction under state or federal statutes of embeT~lement, theft, forgery, bribery, falsification or
destruction of records, receiving stolen property, or other offense indicating a lack of business integrity or
business honesty which directly affects responsibility as a City bidder.
RFP NO. 2-02/03 Page 19
cnYo~
CHUI. A VISTA
48. Debarment (continued):
(b) Violation of contract provisions which is regarded by the Purchasing Agent to be so serious as to justify
debarment action, including:
(1) Deliberate failure without good cause to perform in accordance xvith the specifications or within the
time limit provided in the contract; or
(2) A recent record of failure to perform or of unsatisfactory performance in accordance with the terms
of one or more contracts;
(3) Two or more claims of computational error in bid submission within a two year period~
(c) Debarment by another governmental entity.
(d) Any other cause the Purchasing Agent deems to be so serious and compelling as to affect responsibility, as a
City bidder. A bidder may be permanently debarred for the following causes:
( 1 ) Collusion in bidding.
(2) Conviction for commission of a criminal offense as an incident to obtaining or attempting to obtain a
contract or subcontract with the City of Chula Vista or in the performance of such contract or
subcontract.
(3) Conviction under State or Federal antitrust statutes arising Out of the submission of bids or
proposals.
49. Termination:
The City may terminate this agreement and be relieved of any consideration to the vendor should vendor fail to
perform in the manner required. Furthermore, the City may ternUnate this agreement for any reason without
penalty upon giving thirty (30) days written notice to the vendor. In the event of termination, the full extent of
City liability shall be limited to an equitable adjustment and payment for materials and/or services authorized by
and received to the satisfaction of the City prior to termination.
50. Venue:
This agreement shall be governed by and interpreted according to the laws of the State of California, and venue
for any proceeding shall be in the County of San Diego.
(REV ~t0o)
RESOLUTION NO.2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA (1) APPROVING A PURCHASE AGREEMENT
1N THE AMOUNT OF $203,285 WITH PARK SPECIALTIES FOR
PLAYGROUND EQUIPMENT AND INSTALLATION AT
BONITA LONG CANYON, DISCOVERY, AND TERRA NOVA
PARKS AND AUTHORIZING THE PURCHASING AGENT TO
EXECUTE SAID AGREEMENT; AND, (2) APPROVING A
PURCHASE AGREEMENT IN THE AMOUNT OF $175,477
WITH PARK SPECIALITIES FOR PLAYGROUND EQUIPMENT
AND INSTALLATION SERVICES AT ROHR AND SDGE WEST
PARKS AND AUTHORIZING THE PURCHASING AGENT TO
EXECUTE SAID AGREEMENT, CONTINGENT UPON COUNC1L
APPROVAL OF FUNDING IN THE FY 04/05 CAPITAL
IMPROVEMENT PROGRAM
WHEREAS, in FY 02/03 the City Council, under the Capital Improvement Program,
approved various CIP projects, which included funding for playground equipment at various parks;
and
WHEREAS, there are sufficient funds remaining in PR 228 for playground equipment
renovation at Bonita Long Canyon, Discovery, and Terra Nova Parks; and
WHEREAS, staff is requesting funds in FY 04/05 for playground equipment at Rohr Parks
and SDG&E West; and
WHEREAS, a Request for Proposals for new playground equipment and installation was
advertised in the Star News on February 28, 2003; and
WHEREAS, staffalso contacted 11 potential suppliers; and
WHEREAS, on March 27, 2003, the following seven (7) suppliers submitted proposals; and
Installation Company - (Equipment Manufacturer)
CLS Landscape Management, Inc. (Dave Bang Associates)
G&G Builders Inc. (Gametime, Inc.)
Little Tykes Commercial (Pacific Design Concepts)
Park Specialties (Coast Recreation)
Progressive Design Playgounds
Zasueta Contracting, lnc. (Miracle Recreation Equipment Co.)
Pacific Sites Complements
WHEREAS, the total costs from the vendors to supply the equipment and install at the
respective parks are as follows:
VENDOR Bonita Long Discovery Terra Rohr SDGE TOTAL
Nova West
Park Specialties $ 70,600 $ 59,100 $ 73,585 $85,150 $90,327 $378,762
(Group Discount)
1. Park Specialties $82,500 $68,195 $85,150 $100,765 $97,105 $433,715
2. CLS Landscape. $ 68,511 $ 78,652 $ 85,921 $101,067 $127,113 $461,364
3. G&G Builders $ 74,578 $ 93,923 $ 80,682 $99,157 $124,949 $473,289
4. Progressive $ 77,450 $ 83,950 $ 89,950 $108,985 $123,996 $484,331
Design
5. Zasueta $ 77,819 $ 87,854 $ 95,098 $115,179 $119,018 $495,568
6. Little Tykes $ 84,571 $ 96,782 $102,240 $100,588 $123,685 $507,867
7. Pacific Sites Bid on equipment only, no installation
WHEREAS, staff recommends that the City enter into a purchasing agreement with Park
Specialties, the overall acceptable respondent, for Bonita Long Canyon, Discovery, and Terra Nova
Parks; and
WHEREAS, staff further recommends that a purchasing agreement for Rohr and SDG&E
West Parks be issued if funding is approved through the FY 04/05 CIP process; Park Specialties has
agreed to hold prices firm through FY 04/05; and
WHEREAS, City retains its Full and sole discretion as to whether to appropriate sufficient
funds for Rohr and SDG&E West Parks in FY 04/05; and
WHEREAS, staff has dealt with Park Specialties on prior projects and has found them to be
highly dependable; and
WHEREAS, the warranty service is excellent, the products are reliable and they complete any
requests in a timely manner.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does
hereby approve a purchasing agreement with Park Specialties for playground equipment and
installation at Bonita Long Canyon, Discovery and Terra Nova Parks and authorizing the Purchasing
Agent to execute said agreement.
BE IT FURTHER RESOLVED, the City Council of Chula Vista does hereby approve a
Purchasing Agreement with Park Specialties for playground equipment and installation services at
Rohr and SDG&E West Parks and authorizing the Purchasing Agent to execute said agreement if the
City Council, in its unfettered discretion, approves funding in the FY 04/05 Capital Improvement
Program for said project.
Presented by Approved as to form by
Clifford Swanson A~/~y At~e
Director of Engineering y ~'~
J:\attomey\mso\A(iRl~l~MEN I S\playg*ound equipment
COUNCIL AGENDA STATEMENT
Item: /
Meeting Date: 06/17/03
ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA RATIFYING THE AMENDMENT TO
HEARTLAND COMMUNICATIONS FACILITY AUTHORITY
JOINT POWERS AGREEMENT
Fire Chief
SUBMITTED
BY:
City Manage~,~ (4/5ths Vote: Yes No X )
REVIEWED BY:
Member agencies of the Heartland Communications Facility Authority have been
requested to ratify an amended Joint Powers Agreement with Heartland
Communications Facility Authority. The amended agreement would add the
Bonita-Sunnyside Fire Protection District, City of Coronado, Imperial Beach and
City of National City as member agencies.
BOARDS/COMMISSIONS RECOMMENDATION: N/A
RECOMMENDATION: That Council ratify the amendment to the Headland
Communications Facility Authority Joint Powers Agreement.
DISCUSSION
The Headland Communications Facility Authority was created in 1986 to provide
dispatch services to member agencies. As of July 2001, member agencies
consist of the Cities of Chula Vista, El Cajon, Lemon Grove, Santee, La Mesa,
and the fire protection districts of Alpine, East County, Lakeside, and San Miguel.
The Bonita-Sunnyside Fire Protection District, the City of Coronado, Imperial
Beach and the City of National City have requested to join the Heartland
Communication Facility Authority. Section 13 of the Heartland JPA allows public
agencies to become parties by amendment of the agreement and payment of
buy-in fees established by the Commission. If all four agencies join on July 1,
2003, the buy in fees will be as follows:
Public Agency Buy-in Cost
Bonita-Sunnyside Fire Protection District $21,518
City of Coronado $41,977
City of Imperial Beach $35,509
City of National City $91,679
The City of Chula Vista will benefit from cost savings associated with shared
costs of infrastructure and overhead. Thus, staff recommends the City Council
approve the amendment allowing the mentioned agencies to participate in the
Heartland Communications Facility Authority. Other member agency have also
requested their governing bodies approve the amendment.
FISCAL IMPACT: Ratification of the amended agreement will result in a shared
savings to member agencies.
RESOLUTION NO. 2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
RATIFYING THE AMENDMENT TO HEARTLAND COMMUNICATIONS
FACILITY AUTHORITY JOINT POWERS AGREEMENT
WHEREAS, The Heartland Communications Facility Authority was created in 1986
to provide dispatch services to member agencies.
WHEREAS, As of July 2001, member agencies consist of the Cities of Chula
Vista, E1 Cajon, Lemon Grove, Santee, La Mesa, and the fire protection districts of
Alpine, East County, Lakeside, and San Miguel.
WHEREAS, Member agencies of the Heartland Communications Facility Authority
have been requested to ratify an amended Joint Powers Agreement with Heartland
Communications Facility Authority.
WHEREAS, The amended agreement would add the Bonita-Sunnyside Fire
Protection District, City of Coronado, hnperial Beach and City of National City as
member agencies.
WHEREAS, Section 13 of the Heartland JPA allows public agencies to become
parties by amendment of the agreement and payment of buy-in fees established by the
Commission.
WHEREAS, The City of Chula Vista will benefit from cost savings associated
with shared costs of infrastructure and overhead.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Chula Vista does hereby ratify the amendment to thc Heartland Communications
Facility Authority Joint Powers Agreement.
Prescnted by: Approved as to form by:
as% Pen-y~..-~ --Xnn Moore-
Fire Ch~"F Q.~ City Attorney
Council Agenda Statement
//
cHY ot: Item
CH[JLA Vlb-[A Meeting Date June 17, 2003
ITEM TITLE: Resolution Authorizing a One Half Percent Increase in the Recycling
Fee Applied to Solid Waste Rates to Fund Recycling, Solid Waste and
Household Hazardous Waste Recycling and Education Programs, and
Accepting the Maximum Rate Schedule for Fiscal Year 2003/04 As Submitted
by Pacific Waste Services.
SUBMITTED BY: Michael T. Meacham, S~cial Operations Manager ~~
REVIEWED BY: David D. Rowlands, J~ity Manager
(4/Sths Vote Yes X No )
BACKGROUND: The California Integrated Waste Management Act Of 1989 (AB 939) authorized
cities and counties to establish a fee to pay for the cost of developing and implementing the programs
designed to meet the state mandate to divert up to 50% of their annual waste from landfills. The City
established a 1% fee in 1994/95 fiscal year, and increased that fee to 2% to cover household hazardous
waste programs when the County sold the landfills and stopped providing regional household
hazardous waste services. Additionally, the Amended and Restated Solid Waste Franchise provides
for an annual consumer price index (CPI) increase in maximum rates of 50% for the first three years
and 66% for each additional year the agreement is in effect. Annual CPI increases go into effect on or
about July 1, of each year following staffreview for compliance with the "guaranteed lowest rate
concept." Finally, the Agreement between the City and Pacific Waste Services provides for a one-time
"true-up" on the new variable rate program based on the number of actual customers subscribing to
each service rate option, as compared to the projected subscription rates.
RECOMMENDATION: Staff recommends that Council adopt the resolution authorizing a ½ percent
increase in the recycling fee to fund the City's recycling and solid waste education and diversion
programs as presented, and accepting the recycling and solid waste maximum rate schedule as
proposed.
BOARD AND COMMISION RECOMMENDATION: Not applicable. The Resource
Conservation Commission reviewed and recommended approval of the Source Reduction and
Recycling Element (SRRE), and Household Hazardous Waste Element (HHWE), which describe in
detail the programs, designed to meet the state solid waste diversion mandate. The Council and the CA
Integrated Waste Management Board subsequently approved the SRRE and HHWE.
DISCUSSION: The City's recycling and other diversion programs provide public education, technical
assistance and programs for residential, commercial and industrial generators. Since the 2% AB 939
fee was established in 1998 to fund City programs, the City has experienced significant population,
and commercial growth. The proposed change in the AB 939 fee will fund program enhancements that
focus primarily on recycling opportunities for commercial and industrial generators. Those programs
include the state requirement to formally adopt a Space Allocation Plan. The Space Allocation Plan
would require new or remodeled commercial and industrial facilities to provide adequate space to
facilitate greater commercial recycling, composting and other forms of diversion. The program
Page 2, Item II
Meeting Date; June 17, 2003
enhancements also include a construction and demolition-recycling program. Staffis working with all
the other jurisdictions in the county and the industry to develop a uniform reporting process and end
markets for the regions construction and demolition materials.
The proposed fee adjustment will also fund the City's program response to new regulations that have
generated un-funded requirements since the fee was established in 1998. Cathode Ray Tubes (CRT's)
such as televisions and computer monitors have been declared hazardous and may no longer be
disposed of at landfills. Residents pay a $5 co-payment to cover the cost of handling, however, the
City pays $15 t o $20 per CRT, depending on weight, to have the television and computer monitors
processed as hazardous waste. The City also pays at least $68 per vehicle load delivered by a resident
at the household hazardous waste facility to dispose of paint, solvents, pesticides and other household
hazardous wastes. Residents pay a $5 to $15 co-payment depending on the size of the load brought to
the center.
Recycling service and participation are both mandatory for residential dwellings. That component of
the City's recycling program has been very successful. Recycling is also mandatory for commercial
and industrial businesses however, for the first ten years of the program the City has given businesses
the option of choosing their own service. To encourage commercial participation, Staff and Council
have negotiated with Pacific Waste Services to provide fhe lowest commercial recycling rates in the
county. More than 300 businesses have responded to the public education and technical assistance
provided by the City's recycling specialist. These businesses are contributing to the City's effort to
meet the state mandated 50% recycling goal, however the majority of commercial establishments in
the City still do not take advantage of the service offered or provide their own recycling. The funds
generated by this change will allow staff to place a greater focus on commercial and industrial
recycling and other diversion programs for commercial generators. It will also allow the City to meet
the demand for household hazardous waste diversion under the new regulations. This is the first
increase in the recycling program funding mechanism since 1998. The impact to the average
residential and small business rate customer for this fee is $0.07 per month. The impact to average
commercial rate customer will be approximately $0.39 per month.
The state has recommended and Staff is in the process of filling for a new "base year," and will report
back to Council this summer with a definitive response regarding our progress on the 50% recycling
mandate.
Also, attached for your information is a copy of the adjusted maximum recycling and solid waste rates
for fiscal year 2003/04. Under the existing agreement Pacific Waste Services receives an increase in
rates equivalent to 66% of the CPI for the San Diego Area, All Urban Consumers as long as the rate
continues to be the lowest equivalent rate in the County after franchise fee and AB 939 fee
adjustments. Additionally, Section 6.2.27.e., of the Agreement between the City and Pacific Waste
Services provided for a "true-up" of variable rates applied to the 32-gallon, 64-gallon and 96- gallon
trash service. The "tree-up" was intended to allow for an adjustment in the variable rates to account
for a material difference in the subscription level that formed the basis for the variable rate program,
and actual subscription levels. The actual subscription rates are very close to what Staff and Pacific
Waste predicted for the program and though a small rate increase was indicated, no rate increase is
recommended by Pacific Staff. The "true-up" of rates is a one-time opportunity; therefore, the "true-
up" issue is closed.
Page3, Item //
Meeting Date; June ! 7, 2003
FISCAL IMPACT: Council approval of the resolution as submitted will generate an estimated
$75,000 per fiscal year. The 2003/04 annual budget appropriates these funds and describes the program
changes to the Special Operations Division that will use these funds to enhance the City's ability to
meet the state mandated diversion goals.
Attachment I: Recycling and Solid Waste Rates
tt-5
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE ,HILY l, 2003
EXHIBIT G
2YD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WITH
RATE # WKLY YARDS 7/1/02 FF = 8% TO = 2.5% FF ~ 8%
LEVEL BINS LIFTS /MO AB939 = 2% AB939 = 2.5%
BASIS SERV1CE I I 9 58.07 1.35 0.26 59.68
EXPANDED SERV 1 1 9 69.05 1.61 0.31 70.97
BASIS SERVICE 1 2 17 146.87 3.42 0.66 150.95
EXPANDED SERV ] 2 17 166.53 3 88 0.75 171.16
BASIS SERVICE I 3 26 208.26 4.85 0.94 214.05
EXPANDED SERV l 3 26 237.69 5.54 1.07 244.30
BASIS SERVICE I 4 35 274.99 6.41 1.24 282.64
EXPANDED SERV 384.82 8.97 1.73 395.52
BASIS SERVICE ~ il iill 6 52 406.27 9.47 1.83 417.57
EXPANDED SERV I 6 52 464.65 10.83 2.09 477.57
BAS IS SERVICE I 7 61 479.54 11.17 2.16 492.87
EXPANDED SERV ~ 540.63 12.60 2~43 555.66
]ASIS SERVICE 2 I 17 153.93 3.59 0.69 158.21
EXPANDED SERV 2 1 17 177.82 4.14 0.80 182.76
BASIS SERVICE 2 2 35 287.94 6.71 1.30 295.95
EXPANDED SERV 2 2 35 314.87 7.34 1.42 323.63
BASIS SERVICE 2 3 52 39660 9.24 1.78 407.62
BASIS SERVICE 2 4 69 518.52 12.08 2.33 532.93
EXPANDED SERV 2 4 69 571.98 13.33 2.57 587.88
BASIS SERVICE 2 5 87 648.33 15.11 2.92 666.36
EXPANDED S ERV 2 5 87 699.81 16.31 3.15 719.27
EXPANDED SERV 2 6 104 849.44 19.79 3.82 873.05
EXPANDED S ERV 2 7 121 992.19 23.12 4.46 1,019.77
BASIS SERVICE 3 1 26 224.42 5.23 1.01 230.66
EXI~ANDED SERV 3 I 26 261.25 6.09 1.18 268.52
BASIS SERVICE 3 2 52 40531 9.44 1.82 416.57
EXPANDED SERV 3 2 52 452.90 10.55 2.04 465.49
BASIS SERVICE 3 3 78 571.37 13.31 2.57 587.25
EXPANDED SERV 3 3 78 677.42 15.78 3.05 696.25
BASIS SERV1CE 3 4 104 760.85 17.73 3.42 782.00
EXPANDED SERV 3 4 104 822.63 19.17 3.70 845.50
BASIS SERVICE 3 5 130 950.04 22.14 4.28 976.46
EXPANDED SERV 3 5 130 1,015.32 23.66 4.57 1,043.55
BASIS SERVICE 3 6 156 1,166.95 27.19 5.25 1,199.39
EXPANDED SERV 3 6 156 1,194.96 27.84 5.38 1,228.18
BASIS SERVICE 3 7 182 1,397.57 32.56 6.29 1,436.42
EXPANDED SERV / 3 ] 7 ] 1821 1,432.12 33.37 6.44 1,471.93
EXHIBIT G - PAGE 5 J/'~ff
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY 1, 2003
EXHIBIT G
2YD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WITH
BINS LIFTS /MO AS OF CPI = 2.33% FROM = 2% CPI = 2.33%
RATE # WKLY YARDS 7/1/02 FF = 8% TO = 2.5% FF = 8%
LEVEL AB939 = 2% AB939 = 2.5%
BASIS SERVICE 295.49 6.88 1.33 303.70
EXPANDED SERV 342.42 7.98 1.54 351.94
[~ASIS SERVICE 520.27 12.12 2.34 534.73
EXPANDED SERV 580.69 13.53 2.61 596.83
BASIS SERVICE 753.89 17.57 3.39 774.85
EXPANDED SERV 828.49 19.30 3.73 851.52
EXPANDED SERV 1,064.11 24.79 4.79 1,093.69
BASIS SERVICE 1,294.59 30A6 5.83 1,330.58
EXPANDED SERV 1,312.06 30.57 5.90 1,348.53
BASIS SERVICE 1,567.92 36.53 7.06 1,611.5 l
EXPANDED SERV 1,630.59 37.99 7.34 1,675.92
BASIS SERVICE 1,840.98 42.89 8.28 1,892.15
EXPANDED SERV 1,903.57 44.35 8.57 ~
BASIS SERVICE 5 1 42 363.83 8.48 1.64 373.95
EXPANDED SERV 5 1 43 420.80 9.80 1.89 432.49
BASIS SERVICE 5 2 87 660.40 15.39 2.97 678.76
EXPANDED SERV 5 2 87 716.41 16.69 3.22 736.32
BASIS SERVICE 5 [ 3 [ 13(~ 962.05 22.42 4.33 988.80
EXPANDED SERV 5I 3[ 130 971.99 22.65 4.37 999.0I
BASIS SERVICE 5 4 173 1,27260 29.65 5.73 1,307.98
EXPANDED SERV 5 4 173 1,307,59 30.47 5,88 1,343,94
BASIS SERVICE 5 5 217 1,575.97 36.72 7.09 1,619.78
EXPANDED SERV 5 5 217 1,697.37 39.55 7.64 1,744,56
BASIS SERVICE 5 6 260 1,884.54 43.91 8.48 1,936.93
EXPANDED SERV 5 [ 6 / 260 2,048.95 47.74 9.22 2,105.91
BASIS SERVICE 5] 7/ 303 2,243.30 52.27 10.09 2,305.66
EXPANDED SERV 5 7 303 2,278,64 53.09 i 10.25 2,341.98
BASIS SERVICE 6 2 104 790~04 18.41 3.56 812.0l
EXPANDED SERV 6 2 104 842.26 19.62 3.79 865.67
BASIS SERVICE 6 3 156 1,142.77 26.63 5.14 1,174.54
5XPANDED SERV 6 3 156 1,194.79 27.84 5.38 1,228.01
3ASiS SERVICE 6 4 208 1,49044 34~73 6.71 1,531.88
EXPANDED SERV 6 4 208 1,571.82 36.62 7.07 1,615.51
BASIS SERVICE 6 5 260 1,841.61 42.91 8.29 1,892.81
EXPANDED SERV 6 5 260 1,990.70 46.38 8.96 2,046.04:
BASIS SERVICE ] 6 I 6 I 312 / 2,208.20 51.45 9.94 2,269.59
,EXPANDED SERV/ 6/ 6/ 312/ 2,441.90 56.90 10.99 2,509.79
BASIS SERVICE 6 7 364 2,595.37 60.47 11.68 2,667.52
EXPANDED SERV 6 7 364 2,83792 66.12 12.77 2,916.8I
EXHIBIT G - PAGE 6
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY l, 2003
EXHIBIT G
2Yl) CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 ] 2003 RATE AB939 2003 RATES
RATE I INCREASE INCREASE WITH
BINS LIFTS /MO AS OF CPI = 2.33% FROM = 2% CPI = 2.33%
RATE # WKLY YARDS 7/1/02 FF = 8% TO = 2.5% FF = 8%
LEVEL AB939 = 2% AB939 = 2.5%
BASIS SERVICE 7 1 61 504.07 11.74 2.27 518.08
EXPANDED SERV 7 1 61 583.14 13.59 2.62 599.35
BASIS SERVICE 7 2 121 921.73 21.48 4.15 947.36
EXPANDED S ERV 7 2 121 982.64 22.90 4.42 1,009.96
BASIS SERVICE 7 3 182 1,333.22 31.06 6.00 1,370.28
EXPANDED SERV 7 3 182 1,393.90 32.48 6.27 1,432.65
BASIS SERVICE 7 4 242 1,738.86 40.52 7.82 1,787.20
EXPANDED SERV 7 4 242 1,833.81 42.73 8.25 1,884.79
BASIS SERVICE 7 5 303 2,148.54 50.06 9.67 2,208.27
EXPANDED SERV 7 5 303 2,322.49 54.11 10.45 2,387.05
BASIS SERVICE 7 6 364 2,576.23 60.03 11.59 2,647.85
EXPANDED SERV 7 6 364 2,848.88 66.38 12.82 2,928.08
BASIS SERVICE 7 7 424 3,027.91 70.55 13.63 3,1 I2.09
EXPANDED S ERV 7 7 424 3,310 91 77 14 14.90 3,402.95
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY I, 2003
EXHIBIT G
3YD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WITH
AS OF CPI = 2.33% FROM = 2% CPI = 2.33%
RATE 7/1/02 FF = 8% TO = 2.5% FF = 8%
LEVEL AB939 = 2% AB939 = 2.5%
BASIS SERVICE 78.75 1.83 0.35 80.93
90.70 2.11 0.41 93.22
BASIS SERVICE 166.99 3.89 0.75 171.63
EXPANDED SERV 188.57 4,39 0.85 193.81
BASIS SERVICE 237.28 5.53 1.07 243.88
EXPANDED SERV 269.5 6.28 1.21 277.07
BASIS SERVICE 313.41 7.30 1.41 322.12
BASIS SERVICE 38T06 9.02 1.74 397.82
EXPANDED SERV 436.88 10.18 1.97 449.03
BASIS SERVICE 463.32 10.80 2.08 476.20
EXPANDED SERV 527.42 12.29 2.37 542.08
BASIS SERVICE 546.62 12.74 2.46 561.82
EXPANDED SERV 613.68 14.30 2.76 630.74
174.75 4.07 0.79 179.61
200.97 4.68 0.90 206.55
327.63 7.63 1.47 336.73
EXPANDED SERV 35720 8.32 1.61 367.1
BASIS SERVICE 452.72 10.55 2.04 465.31
499.94 11.65 2.25 513.84
BASIS SERVICE 59232 13.80 2.67 608.79
651 02 15.17 2.93 669.12
BASIS SERVICE 740.54 17.25 3.33 761.I2
797.09 18.57 3.59 819.25
BASIS SERVICE 898.l I 20.93 4.04 923.08
967.12 22.53 4.35 994.00
BASIS SERVICE 1,055.67 24.60 4.75 1,085.02
1,129.58 26.32 5.08 1,I60.98
BAS IS SERVICE 255.03 5.94 I. 15 262.12
EXPANDED SERV 295.47 6.88 1.33 303.68
BASIS SERVICE 462.27 10.77 2.08 475.12
EXPANDED SERV 514.50 11.99 2.32 528.81
BASIS SERVICE 653.19 15.22 2.94 671.35
EXPANDED SERV 769.59 17.93 3.46 790.98
BASIS SERVICE 86987 2027 3.91 894.05
EXPANDED SERV 937.66 21.85 4.22 963.73
BASIS SERVICE 1,086.20 25.31 4.89 1,116.40
EXPANDED SERV 1,157.87 26.98 5.21 1,190.06
BASIS SERVICE 1,332.98 31.06 6.00 1,370.04
EXPANDED SERV 1,363.72 3177 6.14 1,401.63
BASIS SERVICE 1,594.79 37.16 7.18 1,639. l 3
EXPANDED SERV 1,632.72 38.04 7.35 1,678.11
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY I, 2003
EXHIBIT G
3YD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 I 2003 RATE AB939 2003 RATES I
RATE INCREASE INCREASE WITH
BINS LIFTS /MO AS OF CPI = 2.33% FROM = 2% CPI = 2.33%
RATE # WKLY YARDS 7/1/02 FF = 8% TO = 2.5% FF = 8%
LEVEL AB939 = 2% AB939 = 2.5%
BASIS SERVICE 4 I 52 335.91 7.83 1.51 345.25
EXPANDED SERV 4 I 52 387.43 9.03 1.74 398.20
[IASIS SERVICE 4 2 104 594.24 13.85 2.67 610.7
BASIS SERVICE 4[ 3/ 156 862.22 20.09 3.88 886.19
EXPANDED SERV 4 4 156 944.11 22.00 4.25 970.36
EXPANDED SERV 4 4 208 t,214.30 28.29 5.46 1,248.05
BASIS SERVICE 4 5 260 1,478.88 34.46 6.65 1,519.99
EXPANDED SERV 4 5 260 1,498.05 34.90 6.74 1,539.69
BASIS SERVICE 4 6 312 !,790.47 41.72 8.06 1,840.25
EXPANDED SERV 4 6 312 1,859.26 43.32 8.37 1,910.95
BASIS SERVICE 4/ 7/ 364I 2,101.76 48.97 9.46 2,160.19
EXPANDED SERV 4 7 364 2,170.45 50.57 9.77 2,230.79
BASIS SERVICE 413.83 9.64 1.86 425.33
EXPANDED SERV 476.38 11.10 2.14 489.62
BASIS SERVICE 753.81 17.56 3.39 774.76
EXPANDED SERV 815.33 19.00 3.67 838.00
BASIS SERVICE 1,099.39 25.62 4.95 1,129.96
1,110.31 25.87 5.00 1,141.18
BASIS SERVICE 1,454.73 33.90 6.55 1,495.18
EXPANDED SERV 1,493.13 34.79 6.72 1,534.64
BASIS SERVICE 1,802.18 41.99 8.11 1,852.28
EXPANDED SERV 1,935.45 45.10 8.71 1,989.26
BASIS SERVICE 2,155.34 50.22 9.70 2,215.26
EXPANDED SERV 2,335.84 54.43 10.51 2,400.78
BASIS SERVICE 2,563.59 59.73 11.54 2,634.86
EXPANDED SERV 2,60240 60.64 11.71 2,674.75
491.62 11.45 2.21 505.28
566.04 I3.19 2.55 581.78
BASIS SERVICE 901.90 21.01 4.06 926.97
959.21 22.35 4.32 985.88
1,306.45 30.44 5.88 1,342.77
1,363.54 31.77 6.14 1,401.45
] ,705.40 39.74 7.67 1,752.81
1,794.73 41.82 8.08 1,844.63
2,108.22 49.12 9.49 2,166.83
2,271.89 52.94 10.22 2,335.05
2,527.93 58.90 l 1.38 2,598.21
2,784.51 64.88 12.53 2,861.92
2,970.26 69.21 13.37 3,052.84
3,236.55 75.41 14.56 3,326.52
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY 1, 2003
EXHIBIT G
3Yl) CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002I2003 RATE AB939 2003 RATES
RATEJ 1NCREASE INCREASE WITH
AS OF CPI = 2.330/0 FROM = 2% CPI = 2.33%
RATE # WKLY YARDS 7/1/02 FF = 8% TO = 2.5% FF = 8%
LEVEL AB939 = 20/0 AB939 = 2.50/0
BASIS SERVICE I 7 I 1 I 91 573.55 13.36 2.58 589.49
EXPANDED SERV 7 1 91 660.3 15.39 2.97 678.71
BASIS SERVICE 7 2 182 1,052.23 24.52 4.74 1,081.49
EXPANDED SERV 7 2 182 1,119.09 26~07 5.04 1,150.20
]ASIS SERVICE 7 3 273 1,524.17 35.51 6.86 1,566.54
EXPANDED SERV 7 [ 3 / 273 1,590.79 37.07 7.16 1,635.02
BASIS SERVICE 7[ 4I 364 1,989.63 46.36 8.95 2,044.94
EXPANDED SERV 7 ~ 4 I 364 2,093.86 48.79 9.42 2,152.07
BASIS SERVICE 7/ 5[ 455 2,459.57 57.31 11.07 2,527.95
EXPANDED SERV 7 5 455 2,650.52 61.76 11.93 2,724.21
BASIS SERVICE 7 6 546 2,949.26 68.72 13.27 3,031.25
EXPANDED SERV 7 6 546 3,248.59 75.69 14.62 3,338.90
EXPANDED SERV 7 7 637 3,775~98 87.98 16.99 3,880.95
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY 1, 2003
EXHIBIT G
4YD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WITH
BINS LIFTS /MO AS OF CPI = 2.33% FROM = 2% CPI= 2.33%
RATE # WKLY YARDS 7/1/02 FF = 8% TO ~ 2.5% FF = 8%
LEVEL AB939 = 2% AB939 = 2,5%
[~ASIS SERVICE 1 I 1 17 125.41 2.92 0.56 128.89
EXPANDED SERV I] l 17 141.52 3.30 0.64 145.46
~ASIS SERVICE I 2 35 220.73 5.14 099 226.86
'EXPANDED SERV I 2 35 249.24 5.81 1.12 256.17
BASIS SERVICE 1 3 52 313.66 7.3l 1.41 322.38
EXPANDED SERV 1 3 52 356.31 8.30 1.60 366.21
BASIS SERVICE 1 4 69 414.3l 9.65 1.86 425.82
BASIS SERVICE I 5 87 511.69 11.92 2.30 525.91
EXPANDED SERV I 5 87 577.46 13,45 2.60 593.51
BASIS SERVICE I 6 104 612.48 14.27 2.76 629.5 I
EXPANDED SERV 1 6 104 697. l 0 16.24 3.14 716.48
BASIS SERVICE [ I
I 7 121 722.60 16.84 3.25 742.69
EXPANDED S ERV I 7 121 811.15 18.90 3.65 833.70
BASIS SERVICE 230.98 5.38 1.04 237.40
EXPANDED SERV 265.60 6.19 1.20 272.99
BASIS SERVICE 433.07 10.09 1.95 445.11
EXPANDED SERV 472.12 I 1.00 2.12 485.24
BASIS SERVICE 598.49 13.94 2 69 615.12
EXPANDED SERV 660.84 15.40 2.97 679.21
BASIS SERVICE 783.07 18.25 3.52 804.84
EXPANDED SERV 860.56 20.05 3.87 884.48
BASIS SERVICE 979.03 22.81 4.41 1,006.25
EXPANDED SERV 1,053.66 24.55 4.74 ~,082.95
BASIS SERVICE 1,187.31 27.66 5.34 1,220.31
EXPANDED SERV 1,278.41 29.79 5.75 1,313.95
BASIS SERVICE 1,395.63 32.52 6.28 1,434.43
EXPANDED SERV 1,493.20 34.79 6.72 1,534.71
BASIS SERVICE 3 I 52 337.08 7.85 1.52 346.45
EXPANDED SERV 3 I 52 390.46 9.10 1.76 401.32
BASIS SERVICE 3 2 104 61 lA0 14.24 2.75 628.09
EXPANDED SERV 3 2 104 680.06 [ 5.85 3.06 698.97
BASIS SERVICE 3 3 156 863.57 20.12 3.89 887.58
EXPANDED SERV 3 3 156 1,017.26 23.70 4.58 1,045.54
BASIS SERVICE 3 4 208 1,150.01 26.80 5.18 1,181.99
EXPANDED SERV 3 4 208 1,239.53 28.88 5.58 1,273.99
BASIS SERVICE 3 5 260 1,436.03 33.46 6.46 1,475.95
EXPANDED SERV 3 5 260 1,530.64 35.66 6.89 1,573.19
BASIS SERVICE 3 6 312 1,762.26 41.06 7.93 1,811.25
EXPANDED SERV 3 6 312 1,802.83 42.01 8.11 1,852.95
BASIS SERVICE 3 7 364 2,108.33 49.12 9.49 2,166.94
EXPANDED SERV 3 7 364 2,158.43 50.29 ~ 2,218.43
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY 1, 2003
EXHIBIT G
4YD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WlTH
BINS LII~rS /MO AS OF CPI = 2.33% FROM = 2% CPI = 2.33%
RATE # WKLY YARDS 7/1/02 FF = 8% TO = 2.5% FF = 8%
LEVEL AB939 = 2% AB939 = 2.5%
BASIS SERVICE 4 I 69 444.02 10.35 2.00 456.37
EXPANDED SERV 4 I 69 512.04 11.93 2.30 526.27
BASIS SERVICE 4 2 139 785.62 18.30 3.54 807.46
EXPANDED SERV 4 2 139 873.15 20.34 3.93 897.42
BAS1S SERVICE 4 3 208 1,139.93 26.56 5.13 1,171.62
EXPANDED SERV 4 4 208 1,248.03 29.08 5.62 1,282.73
EXPANDED SERV 4 4 277 1,605.32 37.40 7.22 1,649.94
BASIS SERVICE 4 5 346 1,955.13 45.55 8.80 2,009.48
EXPANDED S ERV 4 5 346 1,980.44 46.14 8.91 2,035.49
BASIS SERVICE 4 6 416 2,367.05 55.15 10.65 2,432.85
EXPANDED SERV 4 6 416 2,457.88 57.27 11.06 2,526.21
BASIS SERVICE 4 7 485 2,778.55 64.74 12.50 2,855.79
EXPANDED SERV 4 7 485 2,869.24 66.85 12.91 2,949.00
3ASIS SERVICE 547.03 12.75 2.46 562.24
EXPANDED SERV 629.60 14.67 2.83 647.10
BASIS SERVICE 996.55 23.22 4.48 1,024.25
EXPANDED SERV 1,077.71 25.11 4.85 1,107.67
BASIS SERVICE 1~453.48 33.87 6.54 1,493.89
EXPANDED SERV 1,467.88 34.20 6.61 1,508.69
BASIS SERV1CE 1,923.25 44.81 8.65 1,976.71
EXPANDED SERV 1,97396 45.99 8.88 2,028.83
BASIS SERVICE 2,382.64 55.52 10.72 2,448.88
EXPANDED SERV 2,558.56 59.61 [ 1.51 2,629.68
BASIS SERVICE 2,849.59 66.40 12.82 2,928.81
EXPANDED SERV 3,087 87 71.95 13.90 3,173.72
BASIS SERV1CE 3,389.23 78.97 15.25 3,483.45
EXPANDED SERV 3,440.46 80.16 15.48 3,536.10
BASIS SERVICE 6 1 104 649.86 15.14 2.92 667.92
EXPANDED SERV 6 t 104 748.07 17.43 3.37 768.87
BASIS SERVICE 6 2 208 1,192.34 27.78 5.37 1,225.49
EXPANDED SERV 6 2 208 1,268.00 29.54 5.71 1,303.25
BAS IS SERVICE 6 3 312 1,727.21 40.24 7.77 1,775.22
EXPANDED SERV 6 3 312 1,802.59 42.00 8.11 1,852.70
BASIS SERVICE 6 4 416 2,254.76 52.54 10.15 2,317.45
EXPANDED SERV 6 4 416 2,372.71 55.28 10.68 2,438.67
BASIS SERVICE 6 5 520 2,787.39 64.95 12.54 2,864.88
EXPANDED SERV 6 5 520 3,003.44 69.98 13.52 3,086.94
BASIS SERVICE 6 6 I 6241 3,342.31 77.88 15.04 3,435.23
EXPANDED SERV I 6 I 6 I 624 I 3,681.01 85.77 16.56 3,783.34
EXPANDED SERV 6 7 727 4,278.62 99.69 19.25 4,397.56
EXHIBIT G - PAGE 12
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY 1, 2003
EXHIBIT G
4YD CONTAINER SERVICE
Note: "Expanded Serviee" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WITH
AS OF CPI = 2.33% FROM = 2% CPi = 2.33%
RATE # WKLY YARDS 7/1/02 FF = 8% TO = 2.5% FF = 8%
LEVEL BINS LIFTS /MO AB939= 2% AB939 =2.5%
BASIS SERVICE 7 1 121 758.16 17.67 3.41 779.24
EXPANDED SERV 7 I 121 ~ 20.34 3.93 897.02
BASIS SERVICE 7 2 242 1,391.07 ~ 6.26 1,429.74
EXPANDED SERV 7 2 242 1,479.34 34.47 6.66 1,520.47
BASIS SERVICE 7 3 364 ' 2,015.09 46.95 9.07 2,071.11
EXPANDED SERV 7 3 364 2,103.04 49.00 9.46 2,161.50
BASIS SERVICE 7 4 485 2,630.54 61.29 11.84 2,703.67
EXPANDED SERV 7 4 485 2,768.14 64.50 12.46 2,845.10
BASIS SERVICE 7 5 606 3,251.94 75.77 14.63 3,342.34
EXPANDED SERV 7 5 606 3,504.01 81.64 15.77 3,601.42
[~ASiS SERVICE 7 6 727 3,899.38 90.86 17.55 4,007.79
EXPANDED SERV 7 6 727 4,294.53 100.06 19.33 4,413.92
BASIS SERVICE 7 7 849 4,581.60 106.75 ~ 4,708.97
EXPANDED SERV 7 7: 849 4,991.73 116.3I 22.46 5,130.50
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY I, 2003
EXHIBIT G
SYD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WITH
AS OF CPI = 2.33% FROM = 2% CPI = 2.33%
RATE 7/1/02 FF = 8% TO = 2.5% FF = 8%
LEVEL AB939 = 2% AB939 = 2.5%
BASIS SERVICE 156.75 3.65 0.71 161,11
EXPANDED SERV 176.92 4.12 0.80 181.84
BASIS SERVICE 275.92 6.43 1.24 283.59
EXPANDED SERV 311.55 7.26 1.40 320.21
BASIS SERVICE 392. l 0 9.14 1.76 403.00
EXPANDED SERV 445.39 t0.38 2.00 457~77
BASIS SERVICE 517.93 12.07 2.33 532.33
BASIS SERVICE 639,59 14.90 2.88 657.37
EXPANDED SERV 721.81 16.82 3.25 741.88
BASIS SERVICE 765.61 17.84 3.45 786.90
EXPANDED SERV 871.38 20.30 3.92 895.60
BASIS SERVICE 903.27 21.05 4.06 928.38
EXPANDED SERV 1,013.94 23.62 4.56 1,042.12
BASIS SERVICE 2 I 43 288.73 6.73 1.30 296.76
EXPANDED SERV 2 I 43 331.99 7.74 1.49 341.22
BASIS SERVICE 2 2 87 541.35 12.61 2.44 556.40
EXPANDED SERV 2 2 87 590.18 13.75 2.66 606.59
BASIS SERVICE 2 3 130 748.09 17.43 3.37 768.89
EXPANDED SERV 2 3 130 826.04 19.25 3.72 849.01
BASIS SERVICE 2 4 173 978.82 22.81 4.40 1,006.03
EXPANDED SERV 2 4 173 ~,075.68 25.06 4.84 1,105.58
BASIS SERVICE 2 5 217 1,223~79 28.51 5.51 1,257.81
EXPANDED SERV 2 5 217 1,317.09 30.69 5.93 1,353.71
BASIS SERVICE 2 6 260 1,484.15 34.58 6.68 1,525.41
EXPANDED SERV 2 6 260 1,598.02 37.23 7.19 1,642.44
BASIS SERVICE 2 7 303 1,744.54 40.65 7.85 1,793.04
EXPANDED SERV 2 7 303 1,866.49 43.49 8.40 1,918.38
BASIS SERVICE 421.36 9.82 1.90 433.08
EXPANDED SERV 488.08 11.37 2.20 501.65
BASIS SERVICE 763.87 17.80 3.44 785.11
EXPANDED SERV 850.07 19.81 3.83 873.7I
BASIS SERVICE 1,079.49 25.15 4.86 1,109.50
EXPANDED SERV 1,271.57 29.63 5.72 1,306.92
BASIS SERVICE 1,437.52 33.49 6.47 1,477.48
EXPANDED S ERV 1,549.43 36.10 6.97 1,592.50
BASIS SERVICE 1,795.05 41.82 8.08 1,844.95
EXPANDED SERV 1,913.32 44.58 8.61 1,966.51
BASIS SERVICE 2,202.82 51.33 9.91 2,264.06
EXPANDED SERV 2,253.55 52.51 I0.14 2,316.20
BASIS SERVICE 2,635.40 61.40 l 1.86 2,708.66
EXPANDED SERV 2,69803 62.86 12.14 2,773.03
EXH1BIT G - PAGE 14 //~/,~
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY 1, 2003
EXHIBIT G
5YD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 2S feet.
REVISED 6/10/03RATE2002 INCREASE2003 RATEINCREASEToAB939= 2,$% 2003WiTHRATES
BINS LIFTS /MO AS OF CPI = 2.33¥oFROM = 2% CPI = 2.33%
RATE # WKLY YARDS 7/1/02 FF = 8% FF = 8%
LEVEL AB939 = 2% AB939 = 2.5%
BASIS SERVICE 4 1 87 555.04 12.93 2.50 570.47
EXPANDED SERV 4 1 87 640.07 14.91 2.88 · 657.86
BASIS SERVICE 4 2 173 981.99 22.88 4.42 1,009.29
EXPANDED S ERV 4 2 173 1,091.44 25.43 4.91 I, 121.78
BASIS SERVICE 4 3 260 1,424.94 33.20 6.41 1,464.55
EXPANDED SERV 4 4 260 1,560.05 36.35 7.02 1,603.42
EXPANDED SERV 4 4 346 2,006.65 46.75 9.03 2,062.43
BASIS SERVICE 4 5 433 2,443.93 56.94 I 1.00 2,511.87
EXPANDED SERV 4 5 433 2,475.58 57.68 11.14 2,544.40
BASIS SERVICE 4 6 520 2,958.83 68.94 13.31 3,041.08
EXPANDED SERV 4 6 520 3,072.34 71.59 13.83 3,157.76
BASIS SERVICE 4 7 606 3,473.19 80.93 15.63 3,569.75
EXPANDED SERV 4 7 606 3,586.57 83.57 16.14 3,686.28
BASIS SERVICE 683.78 15.93 3.08 702.79
EXPANDED SERV 786.99 18.34 3.54 808.87
BASIS SERVICE 1,245.70 29.02 5.61 1,280.33
EXPANDED SERV 1,347.16 31.39 6.06 1,384.61
BASIS SERVICE 1,816.81 42.33 8.18 1,867.32
EXPANDED SERV 1,834.85 42.75 8.26 1,885.86
BASIS SERVICE 2,40408 56.02 10.82 2,470.92
EXPANDED SERV 2,467.47 57.49 11.10 2,536.06
BASIS SERVICE 2,978.29 69.39 13.40 3,061.08
EXPANDED SERV 3,I98.20 74.52 14.39 3,287.11
BASIS SERVICE 3,561.98 8299 1603 3,661.00
EXPANDED SERV 3,859.84 89.93 ~ 3,967.14
BASIS SERVICE 4,236.54 98.71 19.06 4,354.31
EXPANDED SERV 4,300.60 100.20 19.35 4,420.15
BASIS SERVICE 812.31 18.93 3.66 834.90
EXPANDED SERV 935.09 21 79 4.21 961.09
BASIS SERVICE 1,490 43 34.73 6.71 1,531.87
EXPANDED SERV 1,585.00 36.93 7.13 1,629.06
BASIS SERVICE 2,159.03 50.31 9.72 2,219.06
EXPANDED SERV 2,253.25 52.50 I 0.14 2,315.89
BASIS SERVICE 2,818.46 65.67 12.68 2,896.81
EXPANDED SERV 2,965.90 69.11 13.35 3,048.36
BASIS SERVICE 3,484.23 81.18 15.68 3,581.09
EXPANDED SERV 3,754.31 87.48 16.89 3,858.68
3ASIS SERVICE 4~177.89 97.34 18.80 4,294.03
EXPANDED SERV 4,601.27 107.21 20.71 4,729.19
~ASIS SERVICE 4,908.86 114.38 22.09 5,045.33
EXPANDED SERV 5,348.28 124.61 24.07 5,496.96
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY 1, 2003
EXHIBIT G
5Yl) CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WITH
FROM= 2'/o°~ CP1=2.33%
AS OF CPI = 2.33% TO = 2.5%
RATE # WKLy YARDS 7/1/02 FF = 8% FF = 8%
LEVEL BINS LIFTS /MO AB939 = 2% AB939 = 2.5%
3ASIS SERVICE 7 1 152 947.71 22.08 4.26 974.05
EXPANDED SERV 7 1 152 1,092.16 25.45 4.91 1,122.52
~ASIS SERVICE 7 2 303 1,738.83 40.51 7.82 1,787.16
EXPANDED SERV 7 2 303 1,849.17 43.09 8.32 1,900.58
BASIS SERVICE 7 3 455 2,518.87 58.69 11.33 2,588.89
EXPANDED SERV 7 I 3 455 2,628.79 61.25 11.83 2,701.87
BASIS SERVICE 7 4 606 3,288.20 76.62 14.80 3,379.62
EXPANDED SERV 7 4 606 3,460.20 80.62 15.57 3,556.39
BASIS SERVICE 7 5 758 4,064.92 94.71 18.29 4,177.92
EXPANDED SERV 7 5 758 4,380.01 102.05 19.71 4,501.77
BASIS SERVICE 7 6 909 4,874.21 113.57 21.93 5,009.7l
EXPANDED SERV 7 6 909 5,368.16 125.08 24.16 5,517.40
BASIS SERVICE 7 7 1061 5,727.00 133.44 25.77 5,886.21
EXPANDED SERV 7 7 ]06l 6,239.67 145.38 28.08 6,413.13
EXHIBIT G- PAGE 16 //_/~
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY 1, 2003
EXHIBIT G
6YD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WITH
AS OF CPI = 2.33% FROM = 2% CP1 = 2.33%
RATE 7/1/02 FF = 8% TO = 2.5% FF = 8%
LEVEL AB939 = 2% AB939 = 2.5%
BASIS SERVICE t 88.10 4.38 0.85 193.33
EXPANDED SERV 212.29 4.95 0.96 218.20
BASIS SERVICE 331.11 7.71 1.49 340.31
EXPANDED SERV 373.85 8.71 1.68 384.24
BASIS SERVICE 470.52 10.96 2.12 483.60
EXPANDED SERV 534.49 12145 2.41 549.35
BASIS SERVICE 621.50 14.48 2.80 638.78
BASIS SERVICE 767.52 17.88 3.45 788.85
EXPANDED SERV 866.18 20.18 3.90 890.26
BASIS SERVICE 918.72 21.41 4.13 944.26
EXPANDED SERV 1,045.64 24.36 4.71 1,074.71
BASIS SERVICE 1,083.90 25.25 4.88 1,114.03
EXPANDED SERV 1,216.71 28.35 5.48 1,250.54
BASIS SERVICE 346.49 8.07 1.56 356.12
EXPANDED SERV 398.40 9.28 1.79 409.47
BASIS SERVICE 649.6! 15.14 2.92 667.67
EXPANDED SERV 708.20 16.50 3.19 727.89
BASIS SERVICE 897.71 20.92 4.04 922.67
EXPANDED SERV 991.25 23.10 4.46 1,018.81
BASIS SERVICE 1,174.58 27.37 ~ 1,207.24
EXPANDED SERV ],290.82 30.08 5.81 1,326.71
BASIS SERVICE 1,468.56 34.22 6.61 1,509.39
EXPANDED SERV 1,580.51 36.83 7.11 1,624.45
BASIS SERVICE 1,780.97 41.50 8.01 1,830.48
EXPANDED SERV 1,917.63 44.68 8.63 1,970.94
BASIS SERVICE 2,093.46 48.78 9.42 2,151.66
EXPANDED SERV 2,239.79 52.19 10.08 2,302.06
BASIS SERVICE 505.66 11.78 2.28 519.72
EXPANDED SERV 585.71 13.65 2.64 602.00
BASIS SERVICE 916.63 21.36 4.12 942.11
EXPANDED SERV 1,020.09 23.77 4.59 1,048.45
BASIS SERVICE 1,295.38 30.18 5.83 1,331.39
EXPANDED SERV 1,525.89 35.55 6.87 1,568.31
BASIS SERVICE 1,725.02 40.19 7.76 1,772.97
1,859.31 43.32 8.37 1,911.00
BASIS SERVICE 2,154.05 50.19 9.69 2,213.93
EXPANDED SERV 2,295.98 53.50 10.33 2,359.81
BASIS SERVICE 2,643.36 61.59 11.90 2,716.85
EXPANDED SERV 2,704.25 63.01 12.17 2,779.43
[IASIS SERVICE 3,162.50 73.69 14.23 3,250.42
EXPANDED SERV 3,237.63 75.44 i 14.57 3,327.64
EXHIBIT G- PAGE 17 //--~0
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY 1, 2003
EXHIBIT G
6YD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WITH
BINS LIFTS /MO AS OF CPI = 2.33% FROM = 2% CPI = 2.33%
RATE # WKLY YARDS 7/1/02 FF = 8% TO = 2.5% FF = 8%
LEVEL AB939 = 2% AB939 = 2.5%
BASIS SERVICE 666.04 15.52 3.00 684.56
EXPANDED SERV 768.09 17.90 3.46 789.45
BASIS SERVICE 1,178.39 27.46 5.30 1,211.15
EXPANDED SERV 1,309.72 30.52 5.89 1,346.13
BASIS SERVICE 1,709.93 39.84 7.69 1,757.46
EXPANDED SERV 1,872.06 43.62 8.42 1,924.10
EXPANDED SERV 2,407.99 56.11 10.84 2,474.94
BASIS SERVICE 2,932.75 68.33 13.20 3,014.28
EXPANDED SERV 2,970.68 69.22 13.37 3,053.27
BASIS SERVICE 3,550.58 82.73 15.98 3,649.29
EXPANDED SERV 3,686.81 85.90 I6.59 3,789.30
BASIS SERVICE 4,167.82 97.11 18.76 4,283.69
EXPANDED SERV 4,303.89 100.28 19.37 4,423.54
BASIS SERVICE 820.52 19.12 3.69 843.33
EXPANDED SERV 944.4, 22.00 4.25 970.65
BASIS SERVICE 1,494.83 34.83 6.73 1,536.39
EXPANDED SERV 1,616.59 37.67 7.27 1,661.53
[~ASIS SERVICE 2,180.19 50.80 9.81 2,240.80
EXPANDED SERV 2,201.81 51.30 9.91 2,263.02
[~ASIS SERVICE 2,884.89 67.22 12.98 2,965.09
EXPANDED SERV 2,960.97 68.99 13.32 3,043.28
[~ASIS SERVICE 3,573.97 83.27 16.08 3,673.32
EXPANDED SERV 3,837.87 89.42 17.27 3,944.56
SASIS SERVICE 4,274.35 99.59 19.23 4,393.17
EXPANDED SERV 4,631.79 107.92 20.84 4,760.55
SASIS SERVICE 5,083.85 l 18.45 22.88 5,225.18
EXPANDED S ERV 5,160.70 120.24 23.22 5,304.16
BASIS SERVICE 6 1 ] 56 974.78 22.71 4.39 1,001.88
~EXPANDED SERV 6 I 156 1,122A0 26.14 5.05 1,153.29
BASIS SERVICE 6 2 312 1,788.52 41.67 8.05 1,838.24
EXPANDED SERV 6 2 312 1,902.01 44.32 8.56 1,954.89
BASIS SERVICE 6 3 468 2,590.84 60.37 I 1.66 2,662.87
EXPANDED SERV 6 3 468 2,703.89 63.00 12.17 2,779.06
BASIS SERVICE 6 4 624 3,382~15 78.80 15.22 3~476. ! 7
EXPANDED SERV 6 4 624 3,559.06 82.93 16.02 3,658.01
BASIS SERVICE 6 5 779 4,181.04 97.42 18.81 4,297.27
EXPANDED SERV 6 5 779 4,505.16 104.97 20.27 4,630.40
BASIS SERVICE / 6 I 6 [ 935 I 5,013.48 116.81 22.56 5,152.85
EXPANDED SERV I 6 I 6 935 5,521.53 128.65 24.85 5,675.03
BASIS SERVICEI 6[ 7 1091 5,890.64 137.25 26.51 6,054.40
EXPANDED SERV 6 7 1091 6,417.96 149.54 ~ 6,596.38
EXHIBIT G - PAGE 18
CITY OF CHULA VISTA
2003 COMMERCIAL TRASH RATES - EFFECTIVE JULY I, 2003
EXHIBIT G
6YD CONTAINER SERVICE
Note: "Expanded Service" is defined as a container pushout in excess of 25 feet.
REVISED 6/10/03 2002 2003 RATE AB939 2003 RATES
RATE INCREASE INCREASE WITH
AS OF CPI = 2.33% FROM = 2% CPI = 2.33%
RATE # WKLY YARDS 7/1/02 FF=8% TO ~ 2.5% FF=8%
LEVEL BINS LIFTS /MO AB939 = 2% AB939 = 2.5%
BASIS SERVICE 7 ! 182 1,137.22 26.50 5.12 1,168.84
EXPANDED SERV 7 I 182 1,309.12 30.50 5.89 1,345.51
BASIS SERVICE 7 2 364 2,086.61 48.62 9.39 2,144.62
EXPANDED SERV 7 2 364 2,219.02 51.70 9.99 2,280.71
BASIS SERVICE 7 3 546 3,022.63 70.43 13.60 3,106.66
EXPANDED SERV 7 3 546 3,154.55 73.50 14.20 3,242.25
BASIS SERVICE 7 4 727 3,945.83 91.94 17.76 4,055.53
EXPANDED SERV 7 4 727 4,152.24 96.75 18.69 4,267.68
BASIS SERVICE 7 5 909 4,877.88 113.65 21.95 5,013.48
EXPANDED SERV 7 5 909 5,256.01 122.47 23.65 5,402.13
BASIS SERVICE 7 6 1091 5,849.07 136.28 26.32 6,011.67
EXPANDED SERV 7 6 1091 6,441.82 150.09 28.99 6,620.90
BASIS SERVICE 7 7 1273 6,872.41 160.13 30.93 7,063.47
EXPANDED SERV 7 7 1273 7,487.61 174.46 33.69 7,695.76
RESOLUTION NO. 2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING A ONE HALF PERCENT
INCREASE 1N THE RECYCLING FEE APPLIED TO SOLID
WASTE RATES TO FUND RECYLING, SOLID WASTE AND
HOUSEHOLD HAZARDOUS WASTE RECYCLING AND
EDUCATION PROGRAMS, AND ACCEPTING THE RATE
SCHEDULE FOR FISCAL YEAR 2003/2004 AS SUBMITTED
BY PACIFIC WASTE SERVICES
WHEREAS, the California Integrated Waste Management Act of 1989 (AB 939)
authorized cities and counties to establish a fee to pay for the cost of developing and
implementing the programs designed to meet the state mandate to divert up to 50% of their
annual ~vaste from landfills; and
WHEREAS, the City established a one percent (1%) fee in 1994/95 fiscal year, and
increased that fee to two percent (2%) to cover household hazardous waste programs when the
County sold the landfills and stopped providing regional household hazardous services; and
WHEREAS, the City's recycling and other diversion programs provide public education,
technical assistance and programs for residential, commercial and industrial generators; and
WHEREAS, the change in the AB 939 fee will fund program enhancements that focus
primarily on recycling opportunities for commercial and industrial generators; and
WHEREAS, those programs include the state requirement to formally adopt a Space
Allocation Plan, which would require new or remodeled commercial and industrial facilities to
provide adequate space to facilitate greater commercial recycling, composting and other forms of
diversion; and
WHEREAS, the program enhancements also include a construction and demolition-
recycling program; and
WHEREAS, the fee adjustment will also fund the City's program response to new
rcgulations that have generated un-funded requirements since the fee was established in 1998;
and
WHEREAS, the funds generated by this change will provide a greater focus on
commercial and industrial recycling and other diversion programs for commercial generators;
and
WHEREAS, this is the first increase in the recycling program funding mechanism since
1998; and
WHEREAS, under section 7.3.a of the existing Franchise, Pacific Waste is entitled to an
increase in its maximum rates equal to 66% of the previous year's CPI increase; and
WHEREAS, the increase may not exceed the County median rate or any other equivalent
rate (less local surcharges) within the County; and
WHEREAS, pursuant to section 6.2.27.e of the Franchise, Pacific Waste is also entitled
to a one-time "true-up" in its volume rate thresholds to account for any different than projected
subscription levels in the three different volume rate categories; and
WHEREAS, after analyzing subscription levels, Pacific Waste and staff have determined
that no true-up is necessary or appropriate; and
WHEREAS, staff has reviewed Pacific Waste's proposed rate sheet and has determined
that the rates presented are consistent with the alloxved increases and limitations set forth in the
existing Franchise agreement.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does hereby authorize a one-half percent (1/2%) increase in the recycling fee applied to
solid waste rates to fund recycling, solid waste and household hazardous waste recycling and
education programs, and accept the maximum rate schedule for Fiscal Year 2003-2004 as
submitted by Pacific Waste Services.
Presented by Approved as to form by
MichaelT. Meacham i A~n Q~ ~
Special Operations Manager C ey
COUNCIL AGENDA STATEMENT
Item:
Meeting Date: 6/17/03
ITEM TITLE: Resolution Establishing a certified list of approved
Design/Build firms for the construction of Public Facilities (excluding Fire
Stations).
SUBMITTED BY: Andy Campbell, Director of Building and Park Construction
REVIEWED BY: City Manage 0~ (4/Sths Vote: Yes No X
The City Council previously approved a Construction Management Services Priority List of six
consulting teams on June 20, 2000. This list will be expiring in the coming months. In order to
continue to utilize the Design/Build process and to expeditiously pursue public facility projects, a
new list of certified Design/Build firms will be established. On April 17, 2003, the City issued a
Request for Qualifications (RFQ) for Design/Build Services. A total of 42 RFQ's were
distributed to potential respondents. On May 2, 2003, the City received twelve responses to the
RFQ. Please see Attachment 1 for a complete list of the firms that provided submittals. A
selection committee appointed by the City Manager reviewed and ranked the submittals. Nine of
the respondents were interviewed on May 28, 2003 and May 29, 2003. This resolution will
establish the certified list of approved Design/Build firms which will remain in effect for five
years.
RECOMMENDATION: That City Council approve a resolution establishing a new certified
list of Design/Build firms which can be utilized for the design and construction Of public
facilities (excluding fire stations) in accordance with the City's Design/Build Ordinance.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
Over the past two years, the City has increasingly found that the Design/Build project delivery
system provides significant benefits over the design/bid/build process or the construction
manager process. As additional public facilities such as libraries, recreation centers, parks,
maintenance facilities and other City facilities need to be constructed, renovated or replaced, it
was determined to seek proposals from qualified firms to establish a new certified list of
design/build firms. The City's existing Construction Management Services Priority List expires
this year.
To accomplish this goal an RFQ was issued by the City on April 17, 2003. A total of 42 RFQ's
were distributed to potential respondents. On May 2, 2003, the City received twelve proposals
Page 2, Item:
Meeting Date: 6/17/03
(Respondents listed on Attachment 1). Nine of these respondents were interviewed on May 28,
2003 and May 29, 2003. City staff recommends that the following nine firms be certified as
approved design/build firms for a period of five years:
(In alphabetical order)
1. Bamhart, Inc.
2. Erickson-Hall Construction Company
3. Highland Partnership, Inc.
4. Lusardi Construction Company
5. Rudolph & Sletten
6. PCL Construction Services, Inc.
7. Swinerton Builders
8. Sundt Construction Company
9. Turner Construction Company
The establishment of this certified list of design/build firms does not mean that the City must use
the design/build process in all cases. The City retains the retention to utilize any selection
process permitted by law or to seek design/builders outside of the approved list. It should be
noted that not every public facility project will lend itself to the design/build process and the City
may determine that any of the other lawful project delivery methods would result in a better
project. This determination will be made on a case by case basis and the recommendation to
deviate fi.om the design/build method may include consideration of the size, cost, complexity or
other project specific factors.
THE SELECTION PROCESS
The Selection Committee was comprised of Jack Griffin, Assistant Director of Building and Park
Construction, Elizabeth Hull, Deputy City Attorney, Matt Little, Senior Civil Engineer and
Gordon Day, Building Projects Supervisor. Messrs. Griffin and Little performed the initial
review of the submittals and forwarded nine of the twelve respondents forward to be
interviewed. Ms. Hull, Mr. Little and Mr. Day comprised the interview panel.
The twelve submittals went through an initial screening process and were reviewed for the
following:
· Understanding of RFQ
· Relevant Experience
· Qualityand Completeness of Proposal
· Current Firm Workload
· Technical Strength of Resources
· Local Experience
· Understanding of the Design/Build Process
· Collaborative Approach
· Fit with the City Team
· Fee Structure
Page 3, Item:
Meeting Date: 6/17/03
· Project Management Resources
Presentations and interviews were scheduled with the nine firms that were viewed as the most
qualified to perform the tasks that the City will require. After the interviews were completed, it
was the unanimous view of the interview panel that all nine firms were qualified and that by
certifying all nine as approved design/build contractors the City would have a competent and
varied list of contractors from which to seek specific project proposals. It should be noted that
the scope of projects that the City may elect to construct via the design/build process may vary
significantly in scope, complexity and cost and, for this reason, it was a desire of staff to have an
approved list of contractors that would provide a mix of size and expertise in different types of
construction. The list that is presented for Council's consideration includes firms that have a
national and international presence along with others that are more concentrated in the San Diego
or southern California area.
THE DESIGN/BUILD PROCESS
The design/build process employs a single entity, either a general contractor or an architect,
which provides both design and construction services. In the typical scenario, a design/build
oriented general contractor provides the design and construction services. Alternatively, an
architectural firm may provide the design services and hire the general contractor on a consulting
basis for the construction phase. In this later scenario, the architectural firm will be held
responsible for all aspects of the project. Generally, utilization of a design/build process will
provide savings in cost and time because the entire project is managed and constructed by a
single entity, thereby eliminating the difficulties of dealing with multiple entities and overhead
on one project.
The design/build process provides the City the flexibility to work with the best contractors in the
County as it does not necessarily require award to the lowest responsible bidder. The following
are other benefits of using design/build as a construction delivery method:
· Quality Because the design builder is responsible for both the design and
construction of the project, it assumes all responsibility for every aspect of
construction of high quality, fully functional facilities. The greater
responsibilities and accountabilities implicit in the design/build process serve as
motivation for high quality and proper performance of building systems. The
staff fully expects that the design builder will deliver a project that will meet or
exceed the design criteria. Under the terms of the City's typical design/build
contract, the design builder will be responsible through the post-occupancy
warranty period for the performance of the various components and their integral
parts as defined in the plans and specifications. This guarantee of performance,
which the design builder can offer because it controls both the design and
construction, motivates the design builder to assure the quality of both the design
and construction in order to mitigate the risk of performance failure. Effectively,
the design/build process requires the design builder to accept and adopt the City's
quality objectives.
· Construction Cost and Value - Value engineering and constructability reviews are
utilized more effectively when the designers and builders work 'as one body
Page 4, Item:
Meeting Date: 6/17/03
during the design process. Cost savings, however, is not a goal in itself but rather
is part of the design builder's broader objective of creating value. Staff believes
the design builder will possess a comprehensive knowledge of labor and material
costs and an awareness of the cost relationships between the various project
components. This important knowledge will allow the design/build team, which
will include City staff, to maximize the project's value while reducing its overall
cost.
,, Time Savings - Because design and construction can be done concurrently and
because general contract bidding periods and re-design time are eliminated, total
design and construction time can be significantly reduced. However, the
concurrent processing of overlapping phases has the potential of producing cost
overruns. This becomes likely in the event where changes in one phase affect
subsequent phases. On every project, the design builder will implement a project
schedule in which the design process parallels procurement and construction. The
schedule also incorporates review and approval periods by the City.
· Reduced City Administration - While it is clear that the design/build process does
require the City to provide prudent oversight of the design and construction
phases, the administration time and effort is considerably less time-consuming.
The time savings comes mainly as a result of interaction in the typical
design/bid/build.
· Early Knowledge of Firm Costs - Since the design builder is responsible for
design and estimating of construction costs, the design builder will be able to
conceptualize the completed project at an early stage in design development and
provide the City with a Guaranteed Maximum Price (GMP) at a point in the
project agreed upon between the City and the design builder. This point in time
can be near the end of completion of construction documents or earlier in the
design process if the specific project lends itself to setting the GMP earlier. This
benefit permits early establishment of budgeting or financing, if needed, and
reduced exposure to cost escalation and avoids the risk of committing substantial
time and money for architectural and engineering services only to learn that the
cost of the project or one of its components is prohibitive.
Risk Management - Under design/build, change orders due to errors and omissions in the
construction documents are eliminated because the correction of such will be the
responsibility of the design builder and not the City. When a change order does occur, the
City will outline its needs and expect to receive different design solutions and cost proposals
representing the best thinking of key team players.
FISCAL IMPACT:
There are no fiscal impacts associated with action on this resolution.
Attachments: Attachment 1 List of Twelve Respondents
Page 5, Item:
Meeting Date: 6/17/03
JSBPC~BPC Administration\Council Agenda\Design Build Certification List\Design Build Certification List A113.doc
Attachment 1
LIST OF RESPONDENTS (in alphabetical order)
DESIGN/BUILD FIRMS
Barnhart, Inc.
Erickson-Hall Construction Company
GKK Corporation
Harper Construction Company, Inc.
Highland Partnership, Inc.
Jaynes Corporation of California
Lusardi Construction Company
Rudolph & Sletten
PCL Construction Services, Inc.
Swinerton Builders
Sundt Construction Company
Turner Construction Company
RESOLUTION NO. 2003 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ESTABLISHING A CERTIFIED LIST OF
APPROVED DESIGN/BUILD FIRMS FOR THE CONSTRUCTION
OF PUBLIC FACILITIES (EXCLUDING FIRE STATIONS)
WHEREAS, the City Council previously approved a Construction Management
Services Priority List of six consulting teams on June 20, 2000; and
WHEREAS, the City's existing Construction Management Services Priority List
expires this year; and
WHEREAS, the City has increasingly found that the Design/Build project
delivery system for constructing public facilities provides significant benefits over the
design/bid/build process or the construction manager process; and
WHEREAS, as additional public facilities such as libraries, recreation centers,
parks, maintenance facilities and other City facilities need to be constructed, renovated or
replaced, it was determined to seek proposals from qualified finns to establish a new
certified list of design/build firms; and
WHEREAS, to accomplish this goal, an RFQ was issued by the City on April 17,
2003; a total of 42 RFQ's were distributed to potential respondents; and
WHEREAS, on May 2, 2003, the City received twelve (12) proposals, nine (9) of
the respondents were interviewed on May 28, 2003 and May 29, 2003; and
WHEREAS, this resolution will establish the certified list of approved
Design/Build firms which will remain in effect for five (5) years; and
WHEREAS, staff recommends the following nine firms be certified as approved
design/build fim~s for award of public facilities:
1. Bamhart, Inc.
2. Erickson-Hall Construction Company
3. Highland Partnership, Inc.
4. Lusardi Construction Company
5. Rudolph & Sletten
6. PCL Construction Services, h~c.
7. Swinerton Builders
8. Sundt Construction Company
9. Turner Construction Company
WHEREAS, City retains its sole discretion to utilize any of the Design/Builder
selection process set out in Municipal Code Chapter 2.57; and
WHEREAS, City retains its sole discretion to utilize Design/Build firms not
included on the certified list.
NOW, THERFORE, BE 1T RESOVLED the City Council of the City of Chula
Vista does hereby certify the above list of fim~s as the list of approved Design/Build firms
for the construction of Public Facilities (excluding Fire Stations) for five (5) years from the
date of approval of this Resolution.
Presented by Approved as to form by
Andy Campbell ~nn/Moore //
Director of Building and Park Construction C-fly Attorney c ~/
J:\Attorncy\Rb2SO\Design-Build l~rm list
PAGE 1, ITEM NO.: ]~
MEETING DATE: 06/17/03
CITY COUNCIL AGENDA STATEMENT
ITEM TITLE: CONSIDERATION OF AN AMENDMENT TO THE OTAY RANCH
VILLAGE SIX-MCMILLIN AFFORDABLE HOUSING AGREEMENT
RESOLUTION APPROVING THE FIRST AMENDMENT TO THE
AFFORDABLE HOUSING AGREEMENT RELATED TO OTAY RANCH
VILLAGE SIX BETWEEN THE CITY AND MCMILLIN OTAY RANCH, LLC
AND AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT
SUBMITTED BY: COMMUNITY DEVELOPMENT DIRECTOR ~-~ ~/~
REVIEWED BY: CITY MANAGER~--
?
4/STNS VOTE: YES ~ NO ~
BACKGROUND
On June 18, 2002, the City and McMillin Otay Ranch, LLC (the "Developer") executed an Affordable
Housing Agreement for Otay Ranch Village Si× (the "Project")'for purposes of further implementing
its affordable housing obligation for the Project. Subsequently, the City executed a Low Income
Housing Credit Transfer Agreement with Rancho del Rey Investors, L.P. and the Developer assigning
the Developer seventeen (17) Iow income housing credits from Rancho del Ray SPA III upon payment
of $14,000 per affordable housing unit credit.
Based on a total of 694 residential housing units which are currently allowed to be constructed
within Otay Ranch Village Six under the Developer's ownership (the "Project"}, the Developer has
an obligation to provide 35 units affordable to Iow income households and 35 affordable to
moderate income households within the Project. The Developer is requesting to satisfy its
affordable housing obligation through the use of available Iow income housing credits and the
construction of second dwelling units within the Project. Additionally, the Developer is requesting
that the City release those properties not identified as affordable housing sites within the
Affordable Housing Plan from any obligation to provide affordable housing. An Amendment to
the Agreement for Otay I~anch Village Six-McMillin has been prepared for Council's consideration
and approval to address the Developer's request.
RECOMMENDATION
That Council adopt the resolution approving the First Amendment to the Affordable Housing
Agreement for Otay Ranch Village Six-McMillin and authorizing the Mayor to execute such
Agreement on behalf of the City.
PAGE 2, ITEM NO.: ~
MEETING DATE: 06/17/03
BOARDS/COMMISSIONS RECOMMENDATION
Not applicable.
DISCUSSION
Under the City's Balanced Communities Policy of the Housing Element, the Developer has an
obligation to provide 10 percent of those new residential housing units within the Project as
affordable to Iow and moderate-income families (5% low and 5% moderate). Based on a total of
694 residential housing units which are currently allowed to be constructed within Otay Ranch
Village Six under the Developer's ownership, the Developer has an obligation to provide 35 units
affordable to Iow income households and 35 affordable to moderate income households within
the Projed.
The City and the Developer have executed an Affordable Housing Agreement to ensure
satisfaction of this obligation. As specified within the Agreement, the Developer may satisfy such
obligation through several possible actions: 1) Use of existing credits; 2) Construction of units;
and/or 3) Deferral of the obligation.
The Developer has available a total of 29 unit Iow income housing credits. The Developer may
apply the 17 affordable housing unit credits created through the development of the Cordova
Village affordable apartment community in Rancho Del Rey to satisfy the Developer's affordable
housing obligation. The Developer has executed a Transfer Agreement for the use of these
credits and has made payment to the City the amount of $14,000 for each affordable housing
unit credit.
Additionally, the Developer may, with the City's approval, be entitled to obtain credit for any units
created in excess of the affordable housing obligation for this SPA ("Surplus Units"). A total of
twelve Surplus Units were created through the development of the Teresina at Lomas Verdes
apartment community located in Otay Ranch Village One.
The Developer is electing to use the available credits to satisfy in part the 35-unit Iow-income
housing obligation. The Developer is also requesting to satisfy the remaining six (6) unit
obligation through the creation of second dwelling units.
As stipulated within the Agreement, in order to receive a one unit credit towards the Developer's
affordable housing obligation, the second dwelling unit must have in place deed restridions
which will require the properly to be certified as occupied by an eligible Iow income household
and rented at a rate affordable to a Iow income household of one and a half persons.
Developer may opt to have no income or rental rate restrictions for the property, provided that
the Developer shall receive a 0.5 credit towards satisfaction of the Developer's affordable
housing obligation. The Developer does not wish to have such deed restrictions placed on the
PAGE 3, ITEM NO.: /, ~
MEETING DATE: 06/17/03
properties and therefore will provide a minimum of twelve (12) second dwelling units to satisfy
their six (6) unit obligation.
The Iow income accessory second dwelling units would be located in the northwestern area (Blue
Phase) of the planned community within the areas identified in the Otay Ranch Village Six
Development Phasing Plan as Neighborhoods R1 and R3. The moderate-income housing units will
be located in Neighborhood R10.
The Developer is requesting that all other properties within the Proiect be released from any
further affordable housing obligations. Staff has determined that Neighborhoods R1, R3 and
R10 can accommodate the Developer's remaining duty to build Iow and moderate income
housing. Therefore, staff recommends the execution of a Partial Termination of the Affordable
Housing Agreement as it relates to all properties within the Project, with the exception of
Neighborhoods R1, R3, and R10.
CEG~A Compliance
The proposed First Amendment to the Agreement for Otay Ranch Village Six-McMillin has been
reviewed for compliance with CEQA. The proposed Amendment is a mechanism for
implementation of affordable housing within the prescribed densities and maximum unit count of the
Otay Ranch Village Six-McMillin General Development Plan and SPA plan. Approval and execution
of the Amendment would not, therefore, result in the construction of any housing beyond that
anticipated in the GDP and SPA plans and the environmental review documents previously certified
for those plans. Therefore, no additional CEQA action is necessary.
FISCAL IMPACT
Agreement and any subsequent Amendments.
Potential Affordable Housing Sites
A-I Potential Location of Low Income "Accessory Second Units"
to satisfy McMillin's Iow-income requirement
A~ Location of units to satis~ McMillin's
'"" 35 unit Moderate Income requirement
B-1 Potential Location of Low Inco_me "Accessory Second Units" I,
to satisfy Otay Ranch Company's Iow-income requirement. ,
B-2 Potential location of units to satis~ Otay Ranch Cos ,.,
67 Moderate Income requirement.
Village Six
RESOLUTION NO. 2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE FIRST AMENDMENT TO
THE AFFORDABLE HOUSING AGREEMENT RELATED
TO OTAY RANCH VILLAGE SIX BETVVEEN THE CITY
AND MCMILLIN OTAY RANCH, LLC AND AUTHORIZING
THE MAYOR TO SIGN THE AGREEMENT
WHEREAS, on June 18, 2002, the City of Chula Vista and McMillin Otay
Ranch, LLC (the "Developer") executed an Affordable Housing Agreement (Doc No.
2002-0679120) as recorded by the San Diego County Recorder's Office for the Otay
Ranch Village One Sectional Planning Area (SPA) for purposes of further implementing
the Developer's affordable housing obligation under the City's Balanced Communities
Policy of the Housing of the General Plan;
WHEREAS, on December 20, 2002, a Low Income Housing Credit
Transfer Agreement was executed between the City, Rancho del Rey Investors, L.P.
and the Developer assigning the Developer seventeen (17) Iow income housing credits
created through the development of the Cordova Village affordable apartments in the
Rancho del Rey SPA III community and Developer has made payment to the City in the
total amount of $238,000 or $14,000 per housing unit credit;
WHEREAS, Section 2.b. of said Affordable Housing Agreement provides
that twelve (12) units created in excess of the affordable housing obligation for Otay
Ranch Village One SPA ("Surplus Units") are available to further satisfy Developer's
Iow-income housing obligation;
WHEREAS, Section 2.c. of said Affordable Housing Agreement allows the
Developer to satisfy, in part, its affordable housing obligation through the creation of
second dwelling units;
WHEREAS the Iow-income accessory second dwelling units would be
located within the areas identified in the Otay Ranch Village Six Development Phasing
Plan as Neighborhoods R1 and R3. The moderate-income housing units will be located in
Neighborhood R10. The City has determined that Neighborhoods R1, R3 and R10 can
accommodate the Developer's remaining duty to build Iow and moderate income
housing;
WHEREAS, the Developer is requesting to satisfy its affordable housing
obligation through the use of available Iow income housing credits and the construction
of second dwelling units within the Project;
WHEREAS, the Developer is also requesting the release of all properties
within their ownership in Otay Ranch
Village Six from the affordable housing obligation, with the exception of those
Neighborhoods known as R1, R3 and RIO; and,
WHEREAS, to comply with the Developer's requests, the City has
prepared the First Amendment to the Affordable Housing Agreement for the Otay Ranch
Village Six Planned Community for City Council's consideration and approval; and
WHEREAS, this Agreement implements affordable housing requirements
and impacts previously analyzed in the certified EIR for the Otay Ranch GDP and SPA
Plan, therefore, no additional action is required under CEQA.
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of
Chula Vista that this City Council does hereby approve in the form presented the First
Amendment to the Affordable Housing Agreement related to Otay Ranch Village Six
under Developer's ownership, a copy of which shall be kept on file in the Office of the
City Clerk.
BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista is
hereby authorized to execute said First Amendment and all associated documents for
and on behalf of the City of Chula Vista.
Presented by Approved as to form by
Laurie A. Madigan (~nn~.'Moore //~ '-
Community Development Director C~'~, Attorney ~/
[Hines] J:\HOME\COMMDEV\RESOS\CC Reso OTR V6 McMillin Amendment
THE ATTACHED AGREEMENT HAS BEEN P~VIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
Ann Mq~
City' Attorney
Dated: June 11, 2003
FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT
(OTAY RANCH VILLAGE SIX-McMILLIN)
Recording Requested By:
CITY CLERK
When Recorded Mail To:
CITY CLERK'S OFFICE
276 Fourth Avenue
Chula Vista, CA 91910
SPACE ABOVE FOR RECORDER'S USE ONLY
FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT
[OTAY RANCH VILLAGE SIX-MCMILLIN]
THIS FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT
("Agreement") is made as of ..~L~, ~L, , 2003, by and between the CITY OF
CHULA VISTA, a California municipal corporation ("City"), and McMILLIN OTAY RANCH,
LLC, a Delaware limited liability company ("Developer"), with reference to the following
facts:
A. Developer and City are parties to that certain Affordable Housing Agreement
dated as of June 18, 2002 and recorded in the Official Records of San Diego County,
California, on Aug 12, 2002 as Document No. 2002-0679120 (the "Village Six Agreement")
relating to the satisfaction of the City's Iow and moderate income housing requirements for
Village Six of Otay Ranch. Terms defined in the Village Six Agreement will have the same
meaning when used in this Amendment.
B. The Village Six Agreement provides that Developer may satisfy its Affordable
Housing Obligation through a combination of (i) use of seventeen (17) Iow income housing
credits created in satisfaction of the obligation of Rancho del Rey SPA III, upon assignment
of those credits to Developer and payment of a $14,000 per affordable housing unit credit
fee to City, (ii) use of twelve (12) affordable housing credits created through construction
of Surplus Units in Teresina at Lomas Verdes, and (iii) providing the remaining six (6) units
by one of the alternative methods described in the Village Six Agreement.
C. Pursuant to a Low Income Housing Credit Transfer Agreement dated
December 20, 2002, between Rancho del Rey Investors, L.P., a California limited
partnership, Developer and City, Developer was assigned the seventeen (17)Iow income
housing credits from Rancho del Rey SPA III, and Developer paid the Citythe $14,000 per
affordable housing unit credit fee.
Otay Ranch Village Six
May 12, 2003 1 045600-0033 266093
D. Developer has elected to satisfy its Affordable Housing Obligation as more
particularly described in this Amendment.
E. Developer has requested the release from the Village Six Agreement of
certain portions of Village Six of Otay Ranch more particularly described on I~xhibit A (the
"Released Land"), and the City has determined that the remaining land within Village Six
described on Exhibit B (the "Remaining Land")will accommodate Developer's duty to build
Iow income housing units. Accordingly, City has determined to release the Released Land
from the Village Six Agreement.
NOW THEREFORE, the parties agree as follows:
1. Use of Low Income Housing Credits. Developer elects to use the
seventeen (17) credits from Rancho del Rey SPA III and the twelve (12) credits from
Teresina at Lomas Verdes to satisfy twenty-nine (29) out of thirty-five (35) units of its
Affordable Housing Obligation.
2. Remaining Low Income Housing Units. Developer presently intends to
satisfy the remaining six (6) units of its Affordable Housing Obligation through the
construction of at least twelve (12) second dwelling units on the Remaining Land.
However, Developer reserves its rights to pursue any of its alternatives under the Village
Six Agreement to satisfy this remaining portion of the obligation.
3. Release of Land. The City has determined that the Remaining Land will
accommodate Developer's remaining duty to build Iow income housing units and agrees
to release the Released Land from the Village Six Agreement. Concurrently with the
execution of this Amendment, the City shall execute and acknowledge a Partial
Termination of Affordable Housing Agreement in the form of Exhibit C and promptly cause
it to be recorded in the Official Records of San Diego County, California.
4. General Provisions.
a. Further Assurances. The parties shall at their own cost and expense
execute and deliver such further documents and instruments and shall take such other
actions as may be reasonably required or appropriate to carry out the intent and purposes
of this Agreement.
b. Entire Aqreement. This Amendment and the other agreements
referenced in this Amendment contain the entire agreement between the parties relating
to the transaction contemplated hereby and all prior or contemporaneous agreements,
understandings, representations and statements, oral or written, are merged herein.
c. Attorney's Fees and Costs. If either party commences litigation for the
judicial interpretation, reformation, enforcement or rescission hereof, the prevailing party
will be entitled to a judgment against the other for an amount equal to reasonable
attorney's fees and court and other costs incurred.
Otay Ranch Village Six
d. Successors. All terms of this Amendment will be binding upon and
inure to the benefit of the parties and their respective administrators or executors,
successors and assigns.
e. Counterparts. This Amendment may be executed in any number of
counterparts, each of which will be deemed to be an original, but all of which together will
constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
as of the date set forth above.
McMILLIN OTAY RANCH, LLC, a Delaware limited
liability company
By: McMILLIN COMPANIES, LLC, a Delaware limited
liability company
Its: Managing Member
/l '
By ~ ¢~"'q
Title
THE CITY OF CHULA VISTA,
a California municipal coq~oration
ATTEST By
City Clerk City Manager
Approved as to form by:
City Attorney
Otay Rench Village Six
May 12, 2003 3 045600-0033 26609.3
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On~.] ()"~ ¢,~ ,200_,~,beforeme, k~,-~L~\ L.--' ~-~"~ ,
Notary public in and fore,said ,~tate, personally appeared .~' F¢/i~ (,~,, (-~,~ (~z~?Ct~
~ , personally known to me/~
p.r_oved to ,,mc. o,'~ t,he basis of sctlsf2.ctory cv~dr.,,ce) to be the perso~¢~ .~'~/¢hose narr~..~)
--~J/are subscribed to the within instrument and acknowle~g.ed to m~-~hat t-~/e~/they
executed ~e same in I~/h~r/their authorized capacit~(ies~, and that by b, ieCt,~/their
signatu~rffC..s-) on the instrument, the persor~, or the en~B~ upon behalf of which the
perso (~) acted, executed the instrument.
S i'g "at u r e~..~...~/"J ~ ~' ~k. '~
· STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On ,200__, before me,
Notary Public in and for said State, personally appeared
, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument, the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal·
Signature (Seal)
Exhibit A
Leqal Description of the Released Land
Lots 1 through 92, inclusive, and Lots A, B and C of CITY
TRACT NO. 02-03, McMILLIN OTAY RANCH, VILLAGE 6, R-
4, in the City of Chula Vista, County of San Diego, State of
California, according to Map thereof No. 14494, filed with the
County Recorder of San Diego County, California, on
November 19, 2002.
Lots 1 through 126, inclusive, Alleys A through D, inclusive,
.a~.d.~.~t~A~thcoeg~.~,.incl~s-'~, of CITY TRACT NO. 02-03,
~c~ILLIN OTAY RANCH, V[~LLAGE 6, R-6, in the City of
rChula Vista, County of San Diego, State of California,
ac~qrding to Map thereof No.!,14495, filed with the County
Recorder of San .Diego,.Cou~y~ California, on November 19,
20~0'~.
Exhibit B
Legal Description of the Remaining Land
Lots 1 through 101, inclusive, of CITY TRACT NO. 02-03,
McMILLIN OTAY RANCH, VILLAGE 6, R-l, in the City of
Chula Vista, County of San Diego, State of California,
according to Map thereof No. 14492, filed with the County
Recorder of San Diego County, California, on November 19,
2002.
Lots 1 through 164, inclusive, of CITY TRACT NO. 02-03,
McMILLIN OTAY RANCH, VILLAGE 6, R-3, in the City of
Chula Vista, County of San Diego, State of California,
according to Map thereof No. 14493, filed with the County
Recorder of San Diego County, California, on November 19,
2002.
Lot 7 of CITY TRACT NO. 02-03, McMILLIN OTAY RANCH
VILLAGE 6, "A" Map, in the City of Chula Vista, County of San
Diego, State of California, accord lng to Map thereof No. 14432,
filed with the County Recorder of San Diego County, California,
on August 30, 2002.
Exhibit C
Form of Release
WHEN RECORDED MAIL TO:
NAME CITY OF CHULA VISTA
ADDRESS 278 FOURTH AVENUE
CITY, STATE & ZiP CHULAVISTA, CA 91910
PARTIAL TERMINATION OF AFFORDABLE HOUSING AGREEMENT
This Partial Termination of Affordabfe Housing Agreement ("Termination") is entered into effective as of ,2003 by and
between the City of Chula Vista, a California Municipal Corporation ("City") and McMILLIN OTAY RANCH, LLC, a Delaware limited liability
company ("Developer").
The CITY OF CHULA VISTA, a California Municipal Corporation, does hereby remise, release, and discharge the real property described
on Exhibit "1" and all personal property thereon from any lien imposed thereon bythe filing and recording of the certain "AFFORDABLE
HOUSING AGREEMENT" dated as of June 18, 2002 (known as Instrument No. 2002-0679120 of Official Records in the Office of the
County Recorder of San Diego County, California recorded on August 12, 2002).
IN WITNESS WHEREOF, City of Chula Vista, a California Municipal Corporation, as Trustee, has caused its corporate name and seal to
be hereto affixed by its duly authorized officer.
Dated C~TY OF CHULA VISTA, a California Municipal Corporation
· As Trustee
By
Juan Arroyo, Housing Manager
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
On the day of ,200 , before me, the undersigned, personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed t~
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(les), and that by
his/her/their sig nature(s) on the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
Olay Ranch Village Six
Exhibit "1"
LeRa Description of the Released Land
Lots I through 92, inclusive, and Lots A, B and C of CITY TRACT NO. 02-03, McMILLIN OTAY
RANCH, VILLAGE 6, R-4, in the City of Chula Vista, Coun[y of San Diego, State of California,
according to Map thereof No. 14494, filed with the County Recorder of San Diego County, California,
on November 19, 2002.
Lots 1 through 126, inclusive, AJleys A through D, inclusive, and Lots A through I, inclusive, of CITY
TRACT NO. 02-03, McMILLIN OTAY RANCH, VILLAGE 6, R-6, in the City of Chula Vista, County of
San Diego, State of California, according to Map thereof No. 14495, filed with the County Recorder
of San Diego County, California1 on November 19, 2002.
Otay Ranch Village Six
WHEN RECORDED MAIL TO:
NAME CITY OF CHULA VISTA
ADDRESS 278 FOURTH AVENUE
CITY, STATE & ZIP CHULA WSTA, CA 91910
PARTIAL TERMINATION OF AFFORDABLE HOUSING AGREEMENT
This Partial Termination of Affordable Housing Agreement ("Termination") is entered into effective as of
2003 by and between the City of Chula Vista, a California Municipal Corporation ("City") and McMILLIN OTAY RANCH, LLC,
a Delaware limited liability com party ("Developer"),
The CITY OF C HU LA VISTA, a California Municipal Corporation, does hereby rem ise, release, and discharge the real property
described on Exhibit "1" and all personal property thereon from any lien imposed thereon by the filing and recording of the
certain "AFFORDABLE HOUSING AGREEMENT" dated as of June 18, 2002 (known as Instrument No. 2002-0679120 of
Official Records in the Office of the County Recorder of San Diego County, California recorded on August 12, 2002).
IN WITNESS WHEREOF, City of Chula Vista, a California Municipal Corporation, as Trustee, has caused its corporate name
and seal to be hereto affixed by its duly authorized officer.
Dated CITY OF CHULA VISTA, a California Municipal Corporation
As Trustee
By
Juan Arroyo, Housing Manager
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
On the ___ day of , 200___, before me, the undersigned, personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and thatby his/her/their signature(s)on the instrument, the person(s), orthe entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
,
Signature (Seal)
/ 3 ¢'/~ t'45600'0033 267fiq' 2
Exhibit "t"
Le.qal Descr ption of the Released Land
Lots 1 through 92, inclusive, and Lots A. B and C of CITY TRACT N O. 02-03. McMILL[N OTAY
RANCH. VILLAGE 6, R-4. in the City of Chula Vista. County of San Diego, State of California.
according to Map thereof No. 14494, fi[ed with the County Recorder of San Diego County.
California, on November 19. 2002.
Lots 1 through 126. inclusive, Alleys A through D. inclusive, and Lots A through I. inclusive.
of CiTY TRACT NO. 02-03. McMILLIN OTAY RANCH. VILLAGE 6. R-6. in the City of Chula
Vista, County of San Diego, State of California. according to Map thereof No. 14495. flied with
the County Recorder of San Diego County. California. on November 19, 2002.
Page 1, Item / ~
Meeting Date 6/17/03
COUNCIL AGENDA STATEMENT
ITEM TITLE: Public Hearing to take public testimony regarding the proposed change and
modify the Rate and Method of Apportionment for Community Facilities
District No. 08-1 (Otay Ranch Village Six)
Resolution of the City Council of the City of Chula Vista,
making certain determinations and authorizing the submittal of the proposed
changes to the Rate and Method of Apportionment of Special Taxes
authorized to be levied within Community Facilities District No. 08-I (Otay
Ranch Village Six) to the Qualified Electors thereof
SUBMITTED BY: Director ofEngineering~,~/
Director of Financ~
REVIEWED BY: City Manage/-~z.~ F (4/Sths Vote: Yes No
On May 13, 2003, the City Council approved the Resolution of Intention to consider changes and
modifications to the Rate and Method of Apportionment Community Facilities District No. 08-1
(Otay Ranch Village Six) ("CFD-08-I") and set the Public Hearing for June 17, 2003.
Tonight's action will continue the formal proceedings to consider the modification of the Rate and
Method of Apportionment for'Community Facilities District No. 08-I (Otay Ranch Village Six),
subject to the approval of the qualified electors.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
RECOMMENDATION: That Council:
· Open the Hearing, take public testimony, close the public hearing;
· Approve the Resolution. making certain determinations and authorizing the submittal of the
proposed changes to the Rate and Method of Apportionment of Special Taxes authorized to
be levied within Community Facilities
DISCUSSION:
Background
This public hearing is for the purpose of taking public testimony related to the proposed change and
modification to the Rate and Method of Apportionment for Community Facilities District No. 08-I
(Otay Ranch Village Six).
Page 2, Item_~
Meeting Date 6/17/03
These changes and modifications of the rate and method of apportionment of the special taxes (the
"Rate and Method") authorized to be levied within CFD No. 08I adjust the Assigned Special Tax
related to the Undeveloped Property and Backup Special Tax for all of the property within CFD-08-I.
The Developer has requested that the Assigned Special Tax rate be increased to enable the principal
amount of the bonds which may be issued for CFD No. 08I to be increased from approximately $18.4
million to $20.3 million. The increase in the principal amount of the bonds that may be supported by
the special taxes levied pursuant to the RMA, as proposed to be modified, will increase bond proceeds
available to acquire authorized public improvements from approximately $14.6 million up to $16.2
million. This will allow the City to acquire additional TDIF and Non-TDIF facilities. Th/s adjustment
will still fall within the Council's Policy that limits the aggregate of all annual taxes and assessments
to 2% of the sale price of the house. In addition to the RMA, the Special Tax Report will need to be
amended to reflect the revised values and Special Tax Rates.
The City's financing team and City staff has recommend that the existing Rate and Method of
Apportionment of special taxes for CFD-08-I be modified to increase the Assigned Undeveloped
Property and Backup Special Tax rate applicable to Developed and Undeveloped Property. These
proposed changes will be reflected within the Amended Rate and Method of Apportionment (Exhibit
A) and an Amended Special Tax Report (Exhibit B).
Resolution
There is one resolution on today's agenda that, if adopted, will accomplish the following:
RESOLUTION MAKING DETERMINATIONS is the formal action of the City Council making
necessary determinations related to the proposed modification of the RMA and submitting to the
qualified electors of CFD-08-I a proposition to change and modify the RMA of special taxes for
Community Facilities District No. 08-1 and performs the following:
· Adjusts the Assigned Special Tax Rates for the Undeveloped Property and Backup
Special Tax Rates in the Amended RMA for Community Facilities District No. 08-1 (Otay
Ranch Village Six).
· Submits a ballot Proposition to the Property Owners
· Establishes an election procedure
Notice
All property owners have been notified of the Public Hearing and a notice in the Star News for these
proceedings has been published at least seven days prior to the Public Hearing.
Future Actions
Approval of tonight's Resolution will change and modify the Rate and Method of Apportio~maent for
CFD-08-1, direct staff to prepare the necessary ballots, and to hold a special election on June 24, 2003
in the City Clerk's office for the landowners to vote on the modification. The City Council on July 8,
2003 will hear and certify the election results and assuming the ballot measures are passed by the
requisite vote of the qualified electors, will adopt the resolution.
Page 3, Item
Meeting Date 6/17/03
FISCAL IMPACT: All costs related to this modification proceeding for CFD-08-I are being borne
by the Developer. The City will receive the benefit of the full cost recovery of staff time involved with
this District modification.
Attachments:
Attachment 1 Amended Special Tax Report
Exhibit A: Amended Rate and Method of Apportionment for CFD-08-I
J:\Eng~neer~AGENDA~CAS, CFD 08I PH, 6-17-03 doc
ATTACHMENT ~
COMMUNITY FACILITIES DISTRICT
MELLO-ROOS COMMUNITY FACILITIES ACT 1982
AMENDED SPECIAL TAX REPORT
COMMUNITY FACILITIES DISTRICT NO. 08-1
OTAY RANCH VILLAGE SlX
For the
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
CI'IY OF
CHULA VISI'A
Prepared by
McGill Martin Self, Inc.
344 F Street
Suite 100
Chula Vista, California 91910
January 9, 2003
Revised April 16, 2003
TABLE OF CONTENTS
Page
I. INTRODUCTION ................................................................................. 1
II. PROJECT DESCRIPTION ......................................................................... 2-3
III. DESCRIPTION AND ESTIMATED COST OF PROPOSED FACILITIES ........................ 3-4
A. Description of Proposed Public Improvements ................................... 3-4
B. Estimated Cost of Proposed Public Improvements .............................. 4
IV. BONDED INDEBTEDNESS AND INCIDENTAL EXPENSES .................................... 4
A. Projected Bond Sales ............................................................... 4-5
B. Incidental Bond Issuance Expenses to be Included in the Proposed Bonded
Indebtedness .........................................................................5
C. Incidental Expenses to be Included in the Annual Levy of Special Taxes. 5
V. AMENDED RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX ......... 5-6
A. Explanation for Special Tax Apportionment .................................... 6-7
B. Assigned Special Tax Rates ................................................ 7
C. Backup Special Tax ................................................................ 7
D. Maximum Annual Special Tax Rate ................................................. 7
E. Accuracy of Information ........................................................... 7-8
VI. BOUNDARIES OF COMMUNITY FACILITIES ])ISTRICT .................................. 8
VII. GENERAL TERMS AND CONDITIONS ....................................................... 8
A. Substitution Facilities .............................................................. 8
B. Transportation Enhancement Facilities .......................................... 8
C. Appeals .............................................................................. 8
EXHIBITS
Exhibit A Recorded Boundary Map
Exhibit B Amended Rate and Method of Apportionment
Exhibit C Amended Assigned Maximum Special Tax Rates
INTRODUCTION
WHEREAS, the City of Chula Vista did, pursuant to the provision 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 Califomia (hereinafter referred to as the "Act"), and
specifically Section 53321.5 thereof, expressly order the filing of a written "Report" with the
legislative body of the proposed Community Facilities District. This Community Facilities
District being Community Facilities District No. 08-I (Otay Ranch Village Six) shall hereinafter
be referred to as:
"CFD-08-I"; and
WHEREAS, the Resolution Ordering and Directing the Preparation of a Report for Proposed
Community Facilities District No. 08-1 (Otay Ranch Village Six) did direct that said Report
generally contain the following:
FACILITIES: A full and complete description of the public facilities the acquisition of
which are proposed to be financed through the CFD.
COST ESTIMATE: A general cost estimate setting forth costs of acquiring such facilities.
SPECIAL TAX: Further particulars and documentation regarding the Amended Rate and
Method of Apportionment for the authorized special tax.
NOW, THEREFORE, I, Cliff Swanson P.E., the Director of Engineering of the City of Chula
Vista, and the appointed responsible officer directed to prepare this Special Tax Report or cause
the Report to be prepared pursuant to the provisions of the Act, do hereby submit this Report.
Community Facilities District No. 084 Page 1
Otay Ranch Village Six January 2003, Revised.dpri116, 2003
II. PROJECT DESCRIPTION
This Community Facilities District No. 08-I (CFD-08-I) encompasses approximately 189 gross
acres of land located in south San Diego County within the City of Chula Vista and is an area
known as "Otay Ranch Village Six". Refer to Exhibit A for a reduced copy of the Recorded
Boundary Map. Of this acreage, approximately 93 acres is expected to he developed by several
affiliated merchant builders for approximately 1,353 residential urfits, 2.9 acres of commercial
development, 7.5 acres for Community Purpose Facilities, along with 7.5 acres for a park and 7.7
acres slated for an elementary school.
The property within Village Six that is owned by Otay Project, LP and which will be included in
CFD-08-I is divided into two distinct sections, one in the Southwest Quadrant and another in the
Northeast Quadrant o£Village Six.
CFD-08-I is divided into two tax zones (Zone A and Zone B), for Special Tax consistency
purposes. Refer to Exhibit A for the location of Zones A and B.
Zone A
Zone A consists of Planning Areas R-2A, R-2B, R-SA, R-SB and R-gA. All of these planning
areas are currently sold to or are planned to be sold to a£filiated merchant builders. This Tax
Zone consists of all single family detached units with Planning Area R-2A consisting of 92 units,
Planning area R-2B consisting o£ 106 units, Planning area R-SA consisting of 51 units,
Planning area R-$B consisting of 55 units, Planning area R-gA Phase 1 consisting of 99 units
and Planning area R-gA Phase 2 consisting of 40 units.
At build-out, it is expected that Zone A will consist of approximately 443 single family detached
units. The single family detached uses are anticipated to generate approximately 961,095 square
feet of residential building square footage. The total taxable acreage for this Tax Zone is
approximately 45.53 acres.
Zone B
Zone B consists of Plarming Areas R-7A, R-7B, R-8, R~gB, R-gD, S-l, C-1 and CPF-1 and CPF
1-x. All o£ these planning areas are currently sold to or are plarmed to be sold to affiliated
merchant builders. This Tax Zone consists of single family detached units, single £amily attached
units, apartments, commercial property, a park, a school, and Commmfity Purpose Facilities.
Plarming Area R-7A consists of 92 single family attached units, Planning Area R-7B consists of
201 single £amily attached units, Planning Area R-8 consists o£ 336 Apartments, Planning Area
R-gB consists of 159 single family attached and 73 single family detached units, Planning Area
R-gD consists 0£49 single family detached units, S-1 consists of an Elementary School Site, C-1
consists of a Commercial site, CPF-1 consists of a Church and CPF-lx consists of a proposed
Swim Center.
Community Facilities District No. 084 Page 2
Otay Ranch Village Six January 2003, Revised ~4pril 16, 2003
At build-out, it is expected that Zone B will consist of approximately 73 single family detached
units, 501 single family attached units, 336 Apartments, a 2.9 acre commemial site, a 7.5 acre
park, a 7.7 acre school site, a 4.5 acre church site and a 1.5 acre swim club site. The residential
uses are anticipated to generate approximately 1,075,040 square feet of residential building
square footage. The total taxable acreage for this Tax Zone is approximately 47.13 acres.
Special taxes for CFD No. 08-I (Otay Ranch Village Six) for Zone A and Zone B shall be levied
to Taxable Property to satisfy the Special Tax Requirement as follows:
· First, to Developed Property within Zone A and Zone B up to the Maximum Annual Special
Tax;
· Second, if necessary, to Undeveloped Property within Zone A and Zone B up to the
Maximum Annual Special Tax for Undeveloped Property;
· Third, if necessary, the Maximum Annual Special Tax within Zone A and Zone B derived by
the application of the Backup Special Tax increased proportionately from the Assigned
Special Tax up to the Maximum Annual Special Tax and;
· Fourth, if necessary, Special Tax within Zone A and Zone B increased proportionately on all
Provisional Undeveloped Property up to the Maximum Annual Special Tax.
IlL DESCRIPTION AND ESTIMATED COST OF PROPOSED FACILITIES
A. Description of Proposed Public Improvements
A community facilities district may provide for the purchase, construction, expansion, or
rehabilitation of any real or tangible property, including public facilities and
infrastructure improvements with an estimated useful life of five (5) years or longer,
which is necessary to meet increased demands placed upon local agencies as a result of
development or rehabilitation occurring within the community facilities district. In
addition, a community facilities district may pay in full all amounts necessary to
eliminate any fixed special assessment liens or to pay, repay, or dcfcase any obligation to
pay or any indebtedness secured by any tax, fee, charge, or assessment levied within the
area of thc community facilities district.
The facilities described in this Repor~ are all facilities which the legislative body creating
CFD-08-I is authorized to own, construct, or finance, and which arc required, in part, to
adequately meet thc needs o£ CFD-08-I. The approved Acquisition/Financing Agreement
sets the priority for the financing of these facilities. In addition, the facilities meet the
criteria for authorized public facilities set forth in the City's Statement of Goals and
Policies regarding the establishment of Community Facilities Districts. Thc actual
facilities described herein are those currently expected to be required to adequately meet,
in part, the needs of CFD-08-I. Because the actual needs of CFD~08-I arising as
development progresses therein may differ from those currently anticipated, CFD-08-I
reserves the right to modify the priority of the facilities proposed herein to the extent
CFD-08-I deems necessary, in its sole discretion to meet those needs.
Community Facilities District No. 08-1 Page 3
Otay Ranch Village Six January 2003, Revised April 16, 2003
The Special Taxes required to pay the construction or financing of said facilities will
be apportioned as described in the Amended Rate and Method of Apportionment
(Amended RMA ) of the Special Tax for CFD-08-I.
Proceeds of the proposed bonded indebtedness of CFD-08-I will be used to finance
backbone streets and associated improvements (i.e., grading, sewer, streets, landscaping,
utilities, etc.), public facilities, DIt: Improvements and Traffic Enhancement Facilities.
Following is a general description of the proposed facilities:
· La Media Road
· Olympic Parkway (Landscaping)
· Otay Lakes Road
· Birch Road
· East Palomar Street
· ViewPark Street
· Magdalena Avenue
· Santa Elisabeth Avenue
· Sutter Buttes Street
· "Traffic Enhancement Facilities"(Telegraph Canyon)
· Street A
· Facilities to be financed by Development Impact Program Fees
B. Estimated Cost of Proposed Public Improvements
The facilities and the estimated costs herein are subject to review and confirmation. The
costs listed in Table 1 are estimates only, based upon current construction and land costs
and actual costs may differ from those estimates herein.
TABLE 1
Proposed Public Facilities
Facilities Improvements Estimated Cost
· La Media Road $ 2,945,210
· Olympic Parkway $1,054,647
(Landscaping)
· Otay Lakes Road $3,100,000
· BirchRoad $2,401,116
· East Palomar Street $3,311,793
· ViewPark Street $1,431,082
· Magdalena Avenue $545,696
Community Facilities District No, 08-1 Page 4
Otay Ranch Village $~c January 2003,Revised April 16, 2003
· Santa Elisabeth Avenue $885,278
· Sutter Buttes Street $429,413
· Telegraph Canyon $3,000,000
· Street A $1,310,175
· Ped Bridge $1,000,000
IV. BONDED INDEBTEDNESS AND INCIDENTAL EXPENSES
A. Proiected Bond Sale
For CFD-08-I there is proposed to be one issuance of bonds. The bond amount for CFD-
08-I will be approximately $20.3 million, which will finance approximately $16.2 million
in facilities. The bonds for are presently planned to be sold in the Fall of 2003. The bonds
issued by CFD-08-I will meet the terms and conditions of special tax bonds set forth in
the City's Statement of Goals and Policies Regarding the Establishment of Community
Facilities Districts.
B. Incidental Bond Issuance Expenses to be Included in the Proposed Bonded
Indebtedness for CFD-08-I
Pursuant to Section 53345.3 of the Act, bonded indebtedness may include all costs and
estimated costs incidental to, or connected with, the accomplishment of the purpose for
which the proposed debt is to be incurred, including, but not limited to, the costs of legal,
fiscal, and financial consultant fees; bond and other reserve funds; discount fees; interest
on any bonds of the district due and payable prior to the expiration of one year from the
date of completion of the facilities, not to exceed two years; election costs; and all costs '
of issuance of the bonds, including, but not limited to, fees for bond counsel, costs of
obtaining credit ratings, bond insurance premiums, fees for letters of credit, and other
credit enhancement costs, and printing costs. The reserve fund is estimated to be the
maximum allowable under Federal Tax Law. All other incidental bond issuance expenses
are estimated at 4 % of the face amount of the bonds.
C. Incidental Expenses to be Included in the Annual Levy of Special Taxes for
CFD~08-I.
Pursuant to Section 53340 of the Act, the proceeds of any special tax may only be used to
pay, in whole or part, the cost of providing public facilities, services and incidental
expenses. As defined by the Act, incidental expenses include, but are not limited to, the
cost of planning and designing public facilities to be financed, including the cost of
environmental evaluations of those facilities; the costs associated with the creation of the
district, issuance of bonds, determination of the amount of taxes, collection of taxes,
payment of taxes, or costs otherwise incurred in order to carry out the authorized
purposes of the district; any other expenses incidental to the construction, completion,
and inspection of the authorized work; and the retirement of existing bonded
Community Facilities District No. 08-1 Page 5
Otay Ranch Village Six January 2003, Revised April 16, 2003
indebtedness. While the actual cost of administering CFD-08-I may vary, it is anticipated
that the amount of special taxes, which can be collected, will be sufficient to fund at least
$75,000 in annual administrative expenses.
V. AMENDED RATE AND METHOD OF APPORTIONMENT OF TItE
SPECIAL TAX
All of thc property located within CFD-08-I, unless exempted by law, shall bc taxed for thc
purpose of providing necessary facilities to serve CFD-08-I. Pursuant to Section 53325.3 of thc
Act, thc tax imposed "is a Special Tax and not a special assessment, and there is no requirement
that the tax be apportioned on thc basis of benefit to any property." Thc Special Tax "may be
based on benefit received by parcels of real property, thc cost of making facilities or authorized
services available to each parcel or other reasonable basis as determined by thc legislative body,"
although the Special Tax may not be apportioned on an ad valorem basis pursuant to Article
XIIIA of the California Constitution.
As shown in Exhibit B, the Amended Rate and Method of Apportionment (AMENDED RMA )
provided information sufficient to allow each property owner within CFD~08-I to estimate the
maximum annual Special Tax he or she will be required to pay. Sections A through C below,
provide additional information on the Amended Rate and Method of Apportionment
(AMENDED RMA ) of the Special Tax for CFD-08-I.
A. Explanation for Special Tax Apportionment
When a community facilities district is formed, a Special Tax may be levied on each
parcel of taxable property within the CFD to pay for the construction, acquisition and
rehabilitation of public facilities, to pay for authorized services or to repay bonded
indebtedness or other related expenses incurred by CFD-08-I. This Special Tax must be
apportioned in a reasonable manner; however, the tax may not be apportioned on an ad
valorem basis.
When more than one type of land use is present within a community facilities district,
several criteria may be considered when apportioning the Special Tax. Generally, criteria
based on building square footage, acreage, and land uses are selected, and categories
based on such criteria are established to differentiate between parcels of property. These
categories are a direct result of the developer's projected product mix, and are reflective
of the proposed land use types within that community facilities district. Specific Special
Tax levels are assigned to each land use class, with all parcels within a land use class
assigned the same Special Tax rate.
The Act does not require the Special Taxes to be apportioned to individual parcels based
on benefit received. However, in order to insure fairness and equity, benefit principles
have been incorporated in establishing the Special Tax rates for CFD-08-I.
Community Facilities District No, 08-1 Page 6
Otay Ranch Village Six January 2003,Revised.dpri116, 2003
/¥-/i
The major assumption inherent in the Special Tax rates set forth in the Amended Rate
and Method of Apportionment is that the level of benefit received fi.om the proposed
public improvements is a function of land use. This assumption is borne out through an
examination of commonly accepted statistical measures.
For example, in measuring average weekday vehicle trip-ends, the Institute of
Transportation Engineer's 1995 Trip Generation report identifies land use as the primary
determinant of trip-end magnitude. Commercial land uses typically generate more trip-
ends than do single family residential land use. Similarly, larger single family detached
dwellings typically generate a greater number of trip-ends than do smaller single family
detached homes, and therefore, will tend to receive more benefit fi.om road grading, road
landscaping and road improvements.
Drainage and flood control requirements generally vary with the amount of impervious
ground cover per parcel. It follows that larger homes which have more impervious
ground cover will create relatively more drainage flow than smaller homes.
Special taxes for CFD-08-I shall be levied to Taxable Property to satisfy the Special Tax
Requirement as outlined in the Amended RMA for CFD-08-I.
The Land Use Class Categories of Taxation have been established for CFD-08-I. The
categories are defined as follows:
~ Developed residential Parcels (single and multi-family residences) are taxed on the
square footage of the building and a tax per unit basis; and
> Developed non-residential Parcels are taxed based on the acreage of the parcel.
Based on the types of public facilities that are proposed for CFD-08-I and the factors
described above, the Special Taxes assigned to specific land uses are generally
proportionate to the relative benefits received by them, and, accordingly, the Special
Taxes in CFD-08-I can be considered fair and reasonable.
B. Assigned Sl~ecial Tax Rates
Exhibit C lists the Assigned Special Tax rates that are proposed to be levied against
Residential Property and Non Residential Property within CFD-08-I. This is the proposed
Special Tax for Developed Property to meet the debt service obligation to pay for the
Bonds.
C. Backup Special Tax
When a Final Subdivision Map is recorded within CFD-08-I, the Backup Special Tax for
Assessors Parcels of Developed Property classified as Residential Property or Non-
Residential Property will be determined pursuant to Section C. 1.b of the Amended RMA.
This Special Tax can be used if the Assigned Special Tax does not cover the current debt
service obligation.
Community Facilities District No. 08-1 Page 7
Otay Ranch Village Six January 2003, Revised April 16, 2003
D. Maximum Annual Special Tax Rate
The City Council will annually determine the actual amount of thc Special Tax levy on
property based on the method described in the Amended RJVLA's and subject to the
Maximum Annual Special Tax. Thc Maximum Annual Special Tax Rate for Developed
Residential Property is the greater of the Assigned Special Tax or the Backup Special
Tax. The Maximum Annual Special Tax for Non-Residential, Undeveloped and
Provisional Undeveloped Property is $16,858 per Acre for Zone A and $26,445 per Acre
for Zone B. Thc City will levy a Special Tax to the extent necessary, sufficient to meet
thc Special Tax Requirement.
E. Accuracy of Information
In order to establish the Assigned Special Tax rates and the Backup Special Tax as set
forth in thc Amended Rate and Method of Apportionment for CFD-08-I, McGill Martin
Self, Inc. has relied on information including, but not limited to absorption, land-usc
types, building square footage, and net taxable acreage which were provided to McGill
Martin Self, Inc. by others. McGill Martin Self, Inc. has not independently verified such
data and disclaims responsibility for thc impact of inaccurate data provided by others, if
any, on thc Amended Rate and Method of Apportionment for CFD-08-I, including the
inability to mcct thc financial obligations of CFD-08-I.
VI. BOUNDARIES OF COMMUNITY FACILITIES DISTRICT
Thc boundaries of CFD-08-I include all land on which the Special Taxes may be levied.
Thc Recorded Boundary Map of the area included within CFD-08-I is provided as
Exhibit A.
VII. GENERAL TERMS AND CONDITIONS
A. Substitution Facilities
The description of the public facilities, as set forth herein, are general in their nature. The
final nature and location of improvements and facilities will be determined upon the
preparation of final plans and specifications. The final plans may show substitutes, in
lieu or modifications to the proposed work in order to accomplish the work of
improvement, and any such substitution shall not be a change or modification in the
proceedings as long as the facilities provide a service and are of a type substantially
similar to that as set forth in this Report.
Community Facilities District No. 08-1 Page 8
Otay Ranch Village Six January 2003,Revised ~4pri116, 2003
B. Transportation Enhancement Facilities
Thc City may, in its sole discretion, elect to authorize and make the proceeds of any
subsequent series of bonds available to pay the cost of construction or the purchase price
for the acquisition of Improvements for Transportation Enhancement Facilities. This
could result in the revision of the facilities priority structure in the Acquisition and
Financing Agreement for the utilization of such proceeds.
C. Appeals
Any landowner who feels that the amount of the Special Tax is in error may file a notice
with thc City Administrator, appealing the levy of the Special Tax pursuant to thc
procedure specified in Exhibit B. As appropriate thc City Administrator will then review
the appeal and, if necessary, meet with the applicant. If the findings of the City
Administrator verify that the amount of the Special Tax should bc modified or changed,
then, as appropriate, the Special Tax levy shall be corrected, pursuant to Section F. of thc
Amended RMA.
Community Facilities District Noi 08-1 Page 9
Otay Ranch Village Six January 2003, Revised April 16, 2003
/¢,-/¢
EXHIBIT A
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 08-I
(OTAY RANCH VILLAGE SIX)
RECORDED BOUNDARY MAP
Community Facilities District No, 08-1 Page 10
Otay Ranch Village Six January 2003,Revised April 16, 2003
EXHIBIT B
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 08-I
(OTAY RANCH VILLAGE SIX)
AMENDED RATE AND METHOD OF APPORTIONMENT
Community Facilities District No. 08-1 Page I 1
Otay Ranch Village Six January2003, Revised ~tpri116, 2003
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
CALIFORNIA, MAKING CERTAIN DETERMINATIONS AND
AUTHORIZING THE SUBMITTAL OF THE PROPOSED CHANGES TO
THE RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES
AUTHORIZED TO BE LEVIED WITHIN COMMUNITY FACILITIES
DISTRICT NO. 08-1 (OTAY RANCH VILLAGE SIX) TO THE QUALIFIED
ELECTORS THEREOF
WItEREAS, the City Council of thc City of Chula Vista, California, (the "City Council")
previously hgs previously undertaken proceedings to form Community Facilities District No 08I
(Otay Ranch Village Six) (the "District") and to authorize the levy of special taxes therein pursuant
to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (Government
Code Section 53311 and ~%llowing) (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") to finance
the acquisition or construction of certain authorized facilities.
WHEREAS, the qualified electors of the District, voting in a special election held on January
16, 2003, approved the authorization to levy special taxes within the District pursuant to a rate and
method of apportionment of such special taxes ("Existing Rate and Method"); and
WHEREAS, subsequent to the formation of the District and such election, The Otay Ranch
Company ("Otay Ranch"), the master developer of the property within the District, requested that
that the City Council, acting in its capacity as the legislative body of the District, initiate proceedings
to consider modifying the Existing Rate and Method; and
WHEREAS, the City Council has adopted its Resolution No. __declaring its intention to
consider changes to the Existing Rate and Method to authorize the levy of special taxes within the
District pursuant to a revised rate and method of apportionment of special taxes set forth in Exhibit
A attached hereto and incorporated herein by this reference (the "Revised Rate and Method");
WHEREAS, notice ora public hearing to consider the authorization to levy the special taxes
pursuant to the Revised Rate and Method has been given in the form and manner required by the
Community Facilities District Law; and
WHEREAS, it has now been determined that written protests have not been received by 50%
or more of the registered voters residing within the District and/or property owners representing
more than one-half (1/2) or more of the area of land within the District to the proposed changes to
the Existing Rate and Method; and,
1
WHEREAS, inasmuch as there have been less than twelve (12) persons registered to vote
within the District for each of the 90 preceding days, this legislative body desires to submit the
question of authorizing the changes to the Existing Rate and Method to the landowners of the
District, said landowners being the qualified electors as authorized by law.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA,
ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 08-I (OTAY RANCH VILLAGE SIX), DOES HEREBY RESOLVE, DECLARE,
FIND, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. RECITALS. The above recitals are all true and correct.
SECTION 2. DETERMINATIONS It is detemfined by this City Council that:
A. all proceedings related to the proposed modification to the Existing Rate and Method prior
hereto were valid and taken in conformity with the requirements of law; and specifically the
provisions of the Community Facilities District Law;
B. the proposed changes to the Existing Rate and Method conform with the City of Chula Vista
Statement of Goals and Policies Regarding thc Establishment of Community Facilities
Districts;
C. less than twelve (12) registered voters have resided within the District for each of the ninety
(90) days preceding the close of the public hearing and, consequently, the qualified electors
shall be the landowners of the District and each landowner who is the owner of record as of
the close of the public hearing, or the authorized representative thereof, shall have one vote
for each acre or portion of an acre of land that she or he owns within the District;
D. the qualified electors have consented to the shortening of time for conducting the special
election to present the question to authorize the levy of special taxes within the District
pursuant to the Revised Rate and Method, therefore, such special election may be conducted
less than 90 following the date of the public hearing to consider the changes to the Existing
Rate and Method.
SECTION 3. PROPOSED CHANGES TO THE EXIST1NG RATE AND METHOD.
Except to the extent that funds are otherwise available to the District to pay for the public facilities
previously authorized to be financed by the District, this City Council hereby approves, subject to the
approval by the qualified electors of the District, changes to the Existing Rate and Method to
authorize the levy of special taxes within the District pursuant to the Revised Rate and Method. Such
special taxes shall be secured by recordation of a continuing lien against all non-exempt real property
within the District, shall be levied annually within the District, and shall be collected in the same
2
manner as ordinary ad valorem property taxes, or in such other manner at this Board or its designee
shall determine, including direct billing of thc affected property owners. Under no cimumstances will
the special tax levied against any parcel used for private residential purposes be increased by more
than 10% as a consequence of delinquency or default by the owner of any other parcel or parcels
within the District. A parcel shall be considered "used for private residential purposes" not later than
the date on which an occupancy permit or the equivalent for private residential use is issued for such
parcel. Such special tax shall be utilized to pay directly for the types of facilities described below, to
pay debt service on bonds issued by the District to assist in financing such types of facilities, to
replenish any reserve fund established for such bonds, and to pay the costs of administering the
bonds and the District:
Streets, landscaping within public rights-of-way, sewers and public utilities as may
be authorized by the goals and policies of the City Council pertaining to the use of
the Community Facilities District Law.
The Revised Rate and Method sets forth the conditions under xvhich the special tax obligation
lbr any parcel may be prepaid and permanently satisfied in whole or in part.
SECTION 4. ELECTION The proposition to authorize the levy of special taxes within the District
pursuant to the Revised Rate and Method shall be submitted to the qualified electors of the District,
said electors being the landowners, with each landowner having one (1) vote for each acre or portion
thereof of land which he or she owns within the District. The special election shall be held on June
24, 2003 or such other date as the City Clerk, acting as the election official for such special election
(the "Election Official"), and all ol'the qualified electors within the District may agree and consent.
If the proposition to authorize the levy of the special tax pursuant to the Revised Rate and Method
receives the approval of more than two-thirds (2/3) of the votes cast on the proposition, the special
tax may be levied pursuant to the Revised Rate and Method as provided for in this Resolution.
SECTION 5. BALLOT The ballot proposal to be submitted to the qualified voters at the election
shall generally be as follows:
PROPOSITION A
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 08-I
(OTAY RANCH VILLAGE SIX)
Shall City o fChula Vista Community Facilities District No. 08I (Otay Ranch Village
Six), subject to accountability measures set forth in Resolution No. _ , be
authorized to levy a special tax pursuant to the re¥ised rate and method of
apportionment as set forth in such Resolution for thc purposes of paying debt service
3
on bonds of such District, replenishing the reserve fund for such bonds, paying costs
of administering such indebtedness and such district and paying directly for the types
of facilities described in such Resolution?
SECTION 6. VOTE The appropriate mark placed in the box after the word "YES" shall be counted
in favor of the adoption of the proposition, and the appropriate mark placed in the box after the word
"NO" in the manner as authorized, shall be counted against the adoption of said proposition.
SECTION 7. ELECTION PROCEDURE Tire Election Official is hereby authorized to take any and
all steps necessary for the holding of said election. Said Election Official shall perform and render
all services and proceedings incidental to and connected with the conduct of said election, and said
services shall include, but not be limited to the following:
A. Prepare and furnish to the election officers necessary election supplies for the
conduct of the election.
B. Cause to be printed the requisite number of official ballots, tally sheets and other
necessary forms.
Furnish and address official ballots for the qualified electors of the District.
D. Cause the official ballots to be mailed and/or delivered, as required by law.
E. Receive the returns of the election.
F. Sort and assemble the election material and supplies in preparation for the canvassing
of the returns.
G. Canvass the returns of the election.
H. Farnish a tabulation of the number of votes given in the election.
1. Make all arrangements and take the necessary steps to pay all costs of the election
incurred as a result of services performed for the District and pay costs and expenses
of all election officials.
/40/
J. Conduct and handle all other matters relating to the proceedings and conduct of the
election in the manner and fom~ as required by law.
PREPARED BY: APPROVED AS TO FORM BY:
Clifford Swanson Ann Moore
Director of Engineering City Attorney '
J:\Atlorney\Rcso'~Decs le Changes Io RMA - CFD No 08 (~-I
5
EXHiBIT~,
AMENDED
RATE AND METHOD OF APPORTIONMENT FOR
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 08-I
(Otay Ranch Village Six)
A Special Tax as hereinafter defined shall be levied on each Assessor's Parcel of Taxable
Property within thc City of Chula Vista Community Facilities District No. 08-I (Otay Ranch
Village Six) collected each Fiscal Year commencing in Fiscal Year 2003-2004 in an amount
determined by thc City Council through the application of the appropriate Special Tax for
"Developed Property", "Undeveloped Property", and "Provisional Undeveloped Property" as
described below. All of the Taxable Property in CFD-08-I, unless exempted by law or by thc
provisions hereof, shall be taxed for thc purposes, to thc extent and in thc manner herein
provided.
A. DEFINITIONS
Thc terms hereinafter set forth have the following meaning:
"'A' Map" shall mean a master final subdivision or parcel map, filed in accordance with
the Subdivision Map Act and thc Chula Vista Municipal Code, which subdivides the land
or a portion thereof shown on a tentative map into "super block" lots corresponding to
units or phasing ora combination of units as shown on such tentative map and which may
further show open space lot dedications, backbone street dedications and utility easements
required to serve such "super block" lots.
"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, parcel map, condominium plan, record of
survey, or other recorded document creating or describing the land area. If the preceding
maps for a land area are not available, the Acreage of such land area shall be determined by
the City Engineer.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being
Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Fees and Expenses" means the actual or reasonably estimated costs
directly related to the administration of CFD-08-I including, but not limited to, the
following: the costs of computing the Special Taxes and preparing the annual Special Tax
collection schedules (whether by the City or designee thereof or both); the costs of
collecting the Special Taxes (whether by the County, the City, or otherwise); the costs of
remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal
counsel) in the discharge of the duties required of it under the Indenture; the costs to the
City, CFD-08-I, or any designee thereof of complying with arbitrage rebate requirements;
the costs to the City, CFD-08-I, or any designee thereof of providing continuing disclosure;
the costs associated with preparing Special Tax disclosure statements and responding to
City of Chula Vista 11-25-02 ,Revised Apri118, 2003
Community Facilities District No. 08-1 / ~ ~) 3
Otay Ranch Village Six / Page I
public inquiries regarding the Special Taxes; the costs of the City, CFD-08-I, or any
designee thereof related to any appeal of the levy or application of the Special Tax; and the
costs associated with the release of funds from an escrow account, if any. Administrative
Expenses shall also include amounts estimated or advanced by the City or CFD-08-I, for
any other administrative purposes of CFD-08-I, including, but not limited to attorney's fees
and other costs related to commencing and pursuing to completion any foreclosure on an
Assessor's Parcel with delinquent Special Taxes.
"Assessor's 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 County Assessor designating
parcels by Assessor's Parcel number.
"Assigned Special Tax" means the Special Tax for each Land Use Class of Developed
Property as determined in accordance with Section C. 1.a.
"Available Funds" means (a) the balance in the reserve fund established pursuant to the
terms of the Indenture in excess of the reserve requirement as defined in such Indenture, (b)
delinquent Special Tax payments not required to fund the Special Tax Requirement for any
preceding Fiscal Year,(c) that portion of Special Tax prepayments allocated to the payment
of interest on Bonds, and (d) other sources of funds available as a credit to the Special Tax
Requirement as specified in such Indenture.
"Backup Special Tax" means the Special Tax amount set forth in Section C. 1.b.
"Bonds" means any bonds or other debt (as defined in the Act), whether in one or more
series, issued or incurred by CFD-08-I under the Act.
"Bond Year" means a one-year period beginning on September 2nd in each year and
ending on September 1st in the following year, unless defined otherwise in the applicable
Indenture.
"CFI) Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement and providing for the levy and collection of the
Special Taxes.
"CFD-08-I" means City of Chula Vista Community Facilities District No. 08-I.
"City" means the City of Chula Vista.
"Community Purpose Facility Property" means all Assessor's Parcels which are (a)
classified as community purpose facilities and meet the requirements of City of Chula Vista
Ordinance No. 2002-2883 as amended on November 5, 2002 or (b) designated with
specific boundaries and acreage on an 'A' Map or Final Subdivision Map as a community
purpose facility.
City of Chula Vista 11-25-02 ,Revised April 18, 2003
Community Facilities District No. 08-1 /: ! 9 ~
Otay Ranch Village Six Page 2
"Council" means the City Council of the City, acting as the legislative body of CFD-08-I.
"County" means the County of San Diego.
"Developed Property" means, for each Fiscal Year, all Taxable Property for which a
building permit for new construction was issued prior to March 1 of the prior Fiscal Year
in which the Special Tax is being levied.
"Exempt Property" means property not subject to the Special Tax due to its classification
as either Public Property, Property Owner Association Property, Community Purpose
Facility Property, public or utility easements in accordance with section E. 1.
"Final Subdivision Map" means a subdivision of property, created by recordation of a
final subdivision map, parcel map or lot line adjustment, approved by the City pursuant to
the Subdivision Map Act (California Government Code Section 66410 et seq.) or
recordation of a condominium plan pursuant to California Civil Code 1352, that creates
individual lots for which residential building permits may be issued without further
subdivision of such property.
"Fiscal Year" means the period starting July 1 and ending on the following June 30.
"Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or
other instrument pursuant to which Bonds are issued, as modified, amended and/or
supplemented from time to time, and any instrument replacing or supplementing the same.
"Laud Use Class" means any of the classes listed in Table 1 of Section C. 1..a.
"Lot(s)" means an individual legal lot created by a Final Subdivision Map for which a
building permit for residential construction has been or could be issued.
"Maximum Annual Special Tax" means the maximum annual Special Tax, determined
in accordance with the provisions of Section C, which may be levied in any Fiscal Year on
any Assessor's Parcel of Taxable Property.
"Non-Residential Property" means all Assessor's Parcels of Developed Property, for
which a building permit(s) was issued for a non-residential use, excluding Community
Purpose Facility Property.
"Open Space" means property within the boundaries of CFD 08-I which (a) has been
designated with specific boundaries and acreage on an 'A' Map or Final Subdivision Map
as open space, (b) is classified by the County Assessor as open space (c) has been
irrevocably offered for dedication as open space, prior to June 1st of the preceding Fiscal
Year, to the federal government, the State of Califomia, the County, the City, any other
public agency or (d) is encumbered by an easement or other restriction required by the
City limiting the use of such property to open space.
City of Chula Vista 11-25-02 ,Revised Apri118, 2003
Community Facilities District No. 08-1
I
Otay Ranch Village Six ] Page 3
"Outstanding Bonds" mean all Bonds, which remain outstanding as defined in the
Indenture.
"Property Owner Association Property" means any property within the boundaries of
CFD-08-I which is (a) owned by a property owner association or (b) is designated with
specific boundaries and acreage on an 'A' Map or Final Subdivision Map as property
owner association property. As used in this definition, a Property Owner Association
Property includes any master or sub-association.
"Proportionately" means for Developed Property that the ratio of the actual Special Tax
levy to the Assigned Special Tax or Backup Special Tax is equal for all Assessors' Parcels
of Developed Property within CFD-08-I. For Undeveloped Property or Provisional
Undeveloped Property "Proportionately" means that the ratio of the actual Special Tax
levy per Acre to the Maximum Annual Special Tax per Acre is equal for all Assessor's
Parcels of Undeveloped Property and equal for all Assessor's Parcels of Provisional
Undeveloped Property within CFD-08-I.
"Provisional Undeveloped Property" means all Assessor's Parcels of Public Property,
Property Owner Association Property, Comanunity Purpose Facility Property, Open Space
or other property that would otherwise be classified as Exempt Property pursuant to the
provisions of Section E, but cannot be classified as Exempt Property because to do so
would reduce the Acreage of all Taxable Property below the required minimum acreage as
set forth in Section E.1 for Zone A or Zone B as applicable.
"Public Property" means any property within the boundaries of CFD-08-1 that which (a)
is owned by a public agency, (b) has been irrevocably offered for dedication, prior to June
1st of the preceding Fiscal Year, to a public agency or (c) is designated with specific
boundaries and acreage on an 'A' Map or Final Subdivision Map as property which will
be owned by a public agency. For purposes of this definition, a public agency includes the
federal government, the State of California, the County, the City or any other public
agency.
"Residential Property" means all Assessor's Parcels of Developed Property for which a
building permit has been issued for purposes of constructing one or more residential
dwelling units.
"Residential Floor Area" means all of the square footage of living area within the
perimeter of a residential structure, not including any carport, walkway, garage, overhang,
patio, enclosed patio, or similar area. The determination of Residential Floor Area shall
be made by the CFD Administrator by reference to appropriate records kept by the City's
Building Department. Residential Floor Area for a residential structure will be based on
the initial building permit(s) issued for such structure.
"Special Tax" means the annual special tax to be levied in each Fiscal Year on each
Assessor's Parcel of Taxable Property to fund the Special Tax Requirement.
City of Chula Vista 11-25-02 ,Revised April 18, 2003
Community Facilities District No. 08-1
/
Otay Ranch Village Six L[~. 9c~ Page4
"Special Tax Requirement" means that mount of Special Tax revenue required in any
Fiscal Year for CFD~08-I to: (i) pay annual debt service on all Outstanding Bonds due in
the Bond Year beginning in such Fiscal Year; (ii) pay other periodic costs on Outstanding
Bonds, including but not limited to, credit enhancement and rebate payments; (iii) pay
Administrative Fees and Expenses; (iv) pay any amounts required to establish or replenish
any reserve funds for all Outstanding Bonds in accordance with the Indenture; and (v) pay
directly for acquisition and/or construction of public improvements which are authorized
to be financed by CFD-08-I provided that the inclusion of such amount does not cause an
increase in the levy of Special Tax on the Undeveloped Property; (vi) less a credit for
Available Funds.
"State" means the State of California.
"Taxable Property" means all of the Assessor's Parcels within the boundaries of
CFD-08-I that are not exempt from the Special Tax pursuant to law or Section E below.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture.
"Undeveloped Property" means, for each Fiscal year, all Taxable Property not classified
as Developed Property.
"Zone A" means a specific geographic area as depicted in Exhibits A and B
attached hereto.
"Zone B" means a specific geographic area as depicted in Exhibits A and B
attached hereto.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, all Assessor's Parcels of Taxable Property within CFD-08-I shall be (a)
categorized as being located in either Zone A or Zone B, (b) classified as Developed
Property, Undeveloped Property or Provisional Undeveloped Property and (c) subject to
the levy of annual Special Taxes determined pursuant to Sections C and D. Furthermore,
all Developed Property shall then be classified as Residential Property or Non-Residential
Property.
C. MAXIMUM ANNUAL SPECIAL TAX RATE
1. Developed Property
The Maximum Annual Special Tax for each Assessor's Parcel of Residential
Property or Non-Residential Property shall be the greater of (1) the Assigned Special
Tax described in Table 1 which follows or (2) the Backup Special Tax computed
pursuant to lb. which follows.
City of Chula Vista 11-25-02 ,Revised April 18, 2003
Community Facilities District No. 08-1
Otay Ranch Villaf, e Six / L~( C~ 7 Page5
a. Assigned Special Tax
The Assigned Special Tax for each Assessor's Parcel of Developed Property is
shown in Table 1.
TABLE 1
Assigned Special Tax for Developed Property within Zone A and Zone 13:
Land Use
Class Description Assigned Special Tax
1 Residential Property $800 per unit plus $.35 per square foot of
Residential Floor Area
2 Non-Residential $6,000 per Acre
Property
b. Backup Special Tax
When a Final Subdivision Map is recorded within Zone A or Zone B the Backup
Special Tax for Residential Property, Non-Residential Property and Undeveloped
Property shall be determined as follows:
For each Assessor's Parcel of Residential Property or Undeveloped Property to be
classified as Residential Property upon its development within the Final Subdivision
Map area, the Backup Special Tax shall be the rate per Lot calculated according to
the following formula:
Zone A
$ 16,858x A
L
Zone B
$ 26,445 x A
L
The terms above have the following meanings:
B = Backup Special Tax per Lot in each Fiscal Year.
A = Acreage classified or to be classified as Residential Property in
such Final Subdivision Map.
L = Lots in the Final Subdivision Map which are classified or to be
classified as Residential Property.
City of Chula Vista 11-25-02 ,Revised April 18, 2003
Community Facilities District No. 08-1
Otay Ranch Village Six / 7- Page 6
For each Assessor's Parcel of Non-Residential Property or Undeveloped Property
to be classified as Non-Residential Property upon the development thereof within the
Final Subdivision Map area, the 13ackup Special Tax shall be determined by
multiplying $16,858 for Zone A and $26,445 for Zone 13 by the total Acreage of all
Non-Residential Property and Undeveloped Property to be classified as Non-
Residential Property upon the development thereof within the Final Subdivision Map
area.
Notwithstanding the foregoing if an Assessor's Parcel of Residential Property, Non-
Residential Property or Undeveloped Property for which the Backup Special Tax has
been determined are subsequently changed or modified by recordation of a new or
amended Final Subdivision Map, then the Backup Special Tax applicable to such
Assessor's Parcel shall be recalculated to equal the amount of Backup Special Tax
that would have been generated if such change did not take place.
2. Undeveloped Property and Provisional Undeveloped Property
The Maximum Annual Special Tax for each Assessor's Parcel of Undeveloped
Property or Provisional Undeveloped Property shall be $16,858 per Acre for Zone A
and ~26,445 per Acre for Zone B.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2003-04 and for each following Fiscal Year, the Council
shall determine the Special Tax Requirement and shall levy the Special Tax until the
amount o£ Special Taxes equals the Special Tax Requirement. The Special Tax shall be
levied each Fiscal Year as follows:
First: The Special Tax shall be levied Proportionately on all Developed Property within
Zone A and Zone t3 at a rate up to 100% of the applicable Assigned Special Tax to satisfy
the Special Tax Requirement.
Second: If additional monies are needed to satisfy the Special Tax Requirement after the
first step has been completed, the Special Tax shall be levied Proportionately on all
Undeveloped Property within Zone A and Zone 13, at a rate up to 100% of the Maximum
Annual Special Tax for Undeveloped Property. In determining the Acreage o£ an
Assessor's Parcel of Undeveloped Property for purposes of determining the annual Special
Tax to be levied on such Assessor's Parcel, the CFD Administrator shall not include any
Acreage shown on any applicable tentative subdivision map or other land use entitlement
approved by the City that designates such Acreage for a use that would be classified as
Open Space, Property Owner Association Property, Community Purpose Facility or Public
Property.
City of Chula Vista 11-25-02 ,Revised April 18, 2003
Community Facilities District No. 08-1
Otay Ranch Village Six / ~ '~l Page7
Third: If additional monies are needed to satisfy the Special Tax Requirement after the
first two steps have been completed, the Special Tax to be levied on each Assessor's Parcel
of Developed Property whose Maximum Annual Special Tax is derived by the application
of the Backup Special Tax shall be increased Proportionately from the Assigned Special
Tax up to the Maximum Annual Special Tax for each such Developed Property..
Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the
first three steps have been completed, then the Special Tax shall be levied Proportionately
on all Provisional Undeveloped Property at a rate up to 100% of the Maximum Annual
Special Tax for Undeveloped Property.
Notwithstanding the above, under no circumstances will the Special Tax levied against any
Assessor's Parcel of Residential Property be increased by more than ten percent per year as
a consequence of delinquency or default in the payment of Special Taxes by the owner of
any other Taxable Property.
E. EXEMPTIONS
1. The CFD Administrator shall classify, the following as Exempt Property: (i)
Public Property, (ii) Property Owner Association Property, (iii) Community
Purpose Facility Property, (iv) Open Space and (v) Assessor's Parcels with public
or utility easements making impractical their utilization for other than the
purposes set forth in the easement; provided, however, that no such classification
shall reduce the sum of all Taxable Property to less than 40.98 Acres in Zone A
and 42.43 Acres in Zone B. Property which cannot be classified as Exempt
Property because such classification would reduce the Acreage of all Taxable
Property to less than 40.98 Acres in Zone A and 42.43 Acres in Zone B will be
classified as Provisional Undeveloped Property and shall be taxed pursuant to the
fourth step of Section D. Tax exempt status for purposes of this paragraph will be
assigned by the CFD Administrator in the chronological order in which property
becomes Exempt Property.
2. The Maximum Annual Special Tax obligation for any property which would be
classified as Public Property upon its transfer or dedication to a public agency but
which is classified as Provisional Undeveloped Property pursuant to paragraph 1
of Section E shall be prepaid in full by the seller pursuant to Section H.1, prior to
the transfer/dedication of such property to such public agency. Until the
Maximum Annual Special Tax obligation for any such Public Property is prepaid,
the property shall continue to be subject to the levy of the Special Tax as
Provisional Undeveloped Property.
3. If the use of an Assessor's Parcel of Exempt Property changes so that such
Assessor's Parcel is no longer classified as one of the uses set forth in paragraph 1
that would make such Assessor's Parcel eligible to be classified as Exempt
Property, such Assessor's Parcel shall cease to be classified as Exempt Property
and shall be deemed to be Taxable Property.
City of Chula Vista 11-25-02 ,Revised April 18, 2003
Community Facilities District No. 08-1
,/
Otay Ranch Villag~e Six ? ~' '~ Pa~e 8
F. REVIEW/APPEAL COMMITTEE
Any landowner or resident who feels that the amount of the Special Tax levied on their
Assessor's Parcel is in error shall 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
levied on 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 CFD-08-I 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.
G. MANNER OF COLLECTION
The annual Special Tax shall be collected in the same manner and at the same time as
ordinary ad valorem property taxes; provided, however, that CFD-08-I, may directly bill
the Special Tax, may collect Special Taxes at a different time or in a different manner if
necessary to meet its financial obligations, and may covenant to foreclose and may actually
foreclose on Assessor's Parcels of Taxable Property that are delinquent in the payment of
Special Taxes.
Tenders of Bonds may be accepted for payment of Special Taxes upon the terms and
conditions established by the Cotmcil pursuant to the Act. However, the use of Bond
tenders shall only be allowed on a case-by-case basis as specifically approved by the
Council.
H. PREPAYMENT OF SPECIAL TAX
The following definition applies to this Section H:
"CFI) Public Facilities" means those public facilities authorized to be financed by
CFD-08-I.
"CFD Public Facilities Costs" means either $20 million, or such lower number as shall
be determined either by (a) the CFD Administrator as sufficient to finance the CFD Public
Facilities, or (b) the Council concurrently with a covenant that it will not issue any more
Bonds to be secured by Special Taxes levied under this Amended Rate and Method of
Apportionment.
City of Chula Vista 11-25-02 ,Revised April 18, 2003
Community Facilities DistriCt No. 08-1 ~
Otay Ranch Village Six / // ~ ~ / Page 9
"Construction Fund" means an account specifically identified in the Indenture to hold
funds which are currently available for expenditure to acquire or construct the CFD Public
Facilities.
"Future Facilities Costs" means the CFD Public Facilities Costs minus that (a) portion of
the CFD Public Facilities Costs previously funded (i) from the proceeds of all previously
issued Bonds, (ii) fi.om interest earnings on the Construction Fund actually earned prior to
the date of prepayment and (iii) directly from Special Tax revenues and (b) the amount of
the proceeds of all previously issued Bonds then on deposit in the Construction Fund.
"Outstanding Bonds" means all previously issued Bonds which will remain outstanding
after the first interest and/or principal payment date following the current Fiscal Year,
excluding Bonds to be redeemed at a later date with the proceeds o£prior prepayments of
Maximum Annual Special Taxes·
1. Prepayment in Full
The Maximum Annual Special Tax obligation may only be prepaid and permanently
satisfied for an Assessor's Parcel of Developed Property, Undeveloped Property for which a
building permit has been issued, or Provisional Undeveloped Property. The Maximum
Annual Special Tax obligation applicable to such Assessor's Parcel may be fully prepaid
and the obligation of such Assessor's Parcel to pay the Special Tax permanently satisfied as
described herein; provided, however that a prepayment may be made only if there are no
delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment.
An owner of an Assessor's Parcel intending to prepay the Maximum Annual Special Tax
obligation shall provide the CFD Administrator with written notice of intent to prepay.
Within 30 days of receipt of such written notice, the CFD Administrator shall notify such
owner of the prepayment amount of such Assessor's Parcel. The CFD Administrator may
charge a reasonable fee for providing this figure, which can be collected prior to preparing
such calculation.
The prepayment amount shall be calculated as summarized below (capitalized terms as
defined below):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Prepayment Fees and Expenses
less Reserve Fund Credit
less Capitalized Interest Credit
Total: equals Prepayment Amount
City of Chula Vista 11-25-02 ,Revised April 18, 2003
Community Facilities District No. 08-1
Ota? Ranch Village Six ! I
· ~'~ ~ Pa~e 10
As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be
calculated as follows:
Step No.:
1. For Developed Property, compute the Maximum Annual Special Tax for the
Assessor's Parcel to be prepaid. For Undeveloped Property for which a building
permit has been issued to be prepaid, compute the Maximum Annual Special Tax for
that Assessor's Parcel as though it was already designated as Developed Property,
based upon the building permit, issued for that Assessor's Parcel. For Provisional
Undeveloped Property to be prepaid, compute the Maximum Annual Special Tax for
such Assessor's Parcel using the Maximum Annual Special Tax for Undeveloped
Property.
2. Divide the Maximum Annual Special Tax computed pursuant to step 1 by the sum of
the total expected Maximum Annual Special Tax revenues which may be levied
within CFD-08-I excluding any Assessor's Parcels for which the Maximum Annual
Special Tax obligation has been previously prepaid.
3. Multiply the quotient computed pursuant to step 2 by the principal amount of the
Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and
prepaid (the "Bond Redemption Amount").
4. Multiply the Bond Redemption Amount computed pursuant to step 3 by the
applicable redemption premium on the next possible Bond call date, if any, on the
Outstanding Bonds to be redeemed (the "Redemption Premium").
5. If all the Bonds authorized to be issued for CFD-08-I have not been issued, compute
the Future Facilities Costs.
6. Multiply the quotient computed pursuant to step 2 by the amount if any, determined
pursuant to step 5 to compute the amount of Future Facilities Costs to be allocated to
such Assessor's Parcel (the "Future Facilities Amount'S.
7. Compute the amount needed to pay interest on the Bond Redemption Amount from
the first bond interest and/or principal payment date following the current Fiscal Year
until the earliest redemption date for the Outstanding Bonds.
8. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
9. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal
Year, which have not yet been paid.
10. Determine the fees and expenses of CFD-08-I, including but not limited to, the costs
of computation of the prepayment, the costs to invest the prepayment proceeds, the
costs of redeeming Bonds fi.om the proceeds of such prepayment, and the cost of
City of Chula Vista 11-25-02 ,Revised ,4pril 18, 2003
Community Facilities District No. 08-1
Otay Ranch Village Six Page 11
recording any notices to evidence the prepayment and the redemption (the
"Prepayment Fees and Expenses")
11. Compute the amount the CFD Administrator reasonably expects to derive fi.om the
reinvestment of the prepayment amount less the Prepayment Fees and Expenses, as
determined pursuant to step 10, from the date of prepayment until the redemption date
for the Outstanding Bonds to be redeemed with the prepayment.
12. Add the amounts computed pursuant to steps 7 and 9 and subtract the amount
computed pursuant to step 11 (the "Defeasance Amount").
13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the
expected reduction in the reserve requirement (as defined in the Indenture), if any,
associated with the redemption of Outstanding Bonds as a result of the prepayment,
or (b) the amount derived by subtracting the new reserve requirement (as defined in
the Indenture) in effect after the redemption of Outstanding Bonds as a result of the
prepayment from the balance in the reserve fund on the prepayment date, but in no
event shall such amount be less than zero.
14. If any capitalized interest for the Outstanding Bonds will not have been expended at
the time of the first interest payment following the current Fiscal Year, a capitalized
interest credit shall be calculated by multiplying the quotient computed pursuant to
step 2 by the expected balance in the capitalized interest fund after such first interest
payment (the "Capitalized Interest Credit").
15. The Maximum Annual Special Tax prepayment is equal to the sum of the amounts
computed pursuant to steps 3, 4, 6, 10, and 12, less the amounts computed pursuant to
steps 13 and 14 (the "Prepayment Amount").
16. From the Prepayment Amount, the amounts computed pursuant to steps 3, 4, 12, 13,
and 14 shall be deposited into the appropriate fired as established under the Indenture
and be used to retire Outstanding Bonds or make debt service payments. The amount
computed pursuant to step 10 shall be retained by CFD-08-I. The amount computed
pursuant to step 6 shall be deposited in the Construction Fund.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of
Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be
retained in the appropriate fund established under the Indenture to be used with the next
prepayment of Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax levy as determined
under step 9 above, the CFD Administrator shall remove the current Fiscal Year's Special
Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any
Assessor's Parcel that is prepaid, the Council shall cause a suitable notice to be recorded in
compliance with the Act, to indicate the prepayment of Special Taxes and the release of the
Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to
pay the Special Tax shall cease.
City of Chula Vista 11-25-02 ,Revised April 18, 2003
Community Facilities District No 08-1
Otay Ranch Village Six / ¢~ ~ ~ Page l2
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the
mount of Maximum Annual Special Taxes that may be levied on Taxable Property within
CFD-08-I, both prior to and after the proposed prepayment is at least 1.1 times the
maximum annual debt service on all Outstanding Bonds.
2. Prepayment in Part
The Maximum Annual Special Tax on an Assessor's Parcel of Developed Property or an
Assessor's Parcel of Undeveloped Property for which a building permit has been issued
may be partially prepaid. The amount of the prepayment shall be calculated as in Section
H.1, except that a partial prepayment shall be calculated according to the following
formula:
PP = (PE x F) + A
These terms have the following meaning:
PP -- the partial prepayment
PE = the Prepayment Amount calculated according to Section H.1, minus Prepayment Fees
and Expenses determined pursuant to step 10.
F -- the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the
Maximum Annual Special Tax.
A= the Prepayment Fees and Expenses determined pursuant to step 10.
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Annual
Special Tax shall notify the CFD Administrator of (i) such owner's intent to partially
prepay the Maximum Annual Special Tax, (ii) the percentage by which the Maximum
Annual Special Tax shall be prepaid, and (iii) the company or agency that will be acting as
the escrow agent, if applicable. The CFD Administrator shall provide the owner with a
statement of the amount required for the partial prepayment of the Maximum Annual
Special Tax for an Assessor's Parcel within 30 days of the request and may charge a
reasonable fee for providing this service.
With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute
the funds remitted to it according to step 16 of Section H.1, and (ii) indicate in the records
of CFD-08-I that there has been a partial prepayment of the Maximum Annual Special Tax
and that a portion of the Maximum Annual Special Tax equal to the outstanding percentage
(1.00 - F) of the remaining Maximum Annual Special Tax shall continue to be authorized
to be levied on such Assessor's Parcel pursuant to Section D.
I. TERM OF MAXIMUM ANNUAL SPECIAL TAX
The Maximum Annual Special Tax shall be levied commencing in Fiscal Year 2003-2004
to the extent necessary to fully satisfy the Special Tax Requirement and shall be levied for
a period no longer than the 2039-2040 Fiscal Year.
City of Chula Vista 11-25-02 ,Revised April 18, 2003
Community Facilities District No. 08-1 ] ' 15 ~
Otay Ranch Village Six [ ~ Page 13
/~-37
EXHIBIT C
CITY OF CHULA VISTA
COMMLrNITY FACILITIES DISTRICT NO. 08-I
(OTAY RANCH VILLAGE SIX)
ASSIGNED SPECIAL TAX RATES FOR DEVELOPED PROPERTY
Annual Special Tax for Developed Property in Land Use Class 1
Community Facilities District No. 08-1
Residential Developed Parcels Maximum Annual Special Tax
$800 per unit plus $.35 per square foot of
Land Use Class 1 - Zone A
Residential Floor Area
$800 per unit plus $.35 per square foot of
Land Use Class 1 - Zone B
Residential Floor Area
Annual Special Tax for Developed Property in Land Use Class 2 Community Facilities
District No. 08-I
Non-Residential Developed Parcels Maximum Annual Special Tax
Land Use Class 2 - Zone A $6,000 per acre of Non-Residential Property
Land Use Class 2 Zone B $6,000 per acre of Non-Residential Property
Community Facilities District No. 08-1 Page 12
Otay Ranch Village Six January 2003,Revised ~Ipri116, 2003
CITY COUNCIL AGENDA STATEMENT
Item: /3~
Meeting Date: 6/17/03
ITEM TITLE: Public Hearing: Proposal to adopt an ordinance amending Sections 19.04,
19.54, and adding Chapter 19.69 of the Chula Vista Municipal Code to define
and provide local provisions for surface mining operations within the City of
Chula Vista; (PCA-01-02). Applicant: City of Chula Vista.
Ordinance of the City Council of the City of Chula Vista modifying Sections
19.04 and 19.54; and adding Chapter 19.69 to Title 19 of the Chula Vista
Municipal Code.~ ~
SUBMITTED BY: Director of Planning and Buildin
REVIEWED BY: City Manage£'''~ff-~
The proposal is to adopt local standards for surface mining operations pursuant to the provisions of
the State of California's Surface Mining and Reclamation Act of 1975 (SMARA, Public Resources
Code §§ 2710 et seq.).
The Environmental Review Coordinator has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that there is no possibility that
the activity may have a significant effect on the environment; therefore, pursuant to Section
15061(b)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no
environmental review is necessary.
RECOMMENDATION:
That the City Council adopt the attached ordinance amending Sections 19.04 and 19.54; and adding
Chapter 19.69 to the Zoning Ordinance of the Chula Vista Municipal Code to define and provide
local provisions for surface mining operations within the City of Chula Vista.
BOARDS/COMMISSIONS RECOMMENDATION:
The Planning Commission held a Public Hearing on June 11, 2003 and voted [6-0-1-0] to
recommend approval of the proposed ordinance with two minor revisions. The first revision
incorporates a reconunendation by the State Department of Conservation to change language
regarding annual inspections of mining operations. The final language is reflected in section
19.69.120b. The second revision incorporates new language regarding reclamation standards. This
revision, reflected in section 19.69.080b(4), clarifies the possibility that restored mined lands could
be adjacent to either natural resource areas or other land uses consistent with land use policies office
Page 2, Item No.: ] ~
Meeting Date: 6/17/03
City.
At the Planning Commission hearing representatives from Hanson Aggregates, operators of the only
surface mining operation currently within the City of Chula Vista, requested additional language in
the ordinance to allow staff approval of minor modifications to approved plans. The Commission
supported such a provision and discussed whether such discretion should be included in the
ordinance, or be dealt with on a case-by-case basis. No language was proposed for the ordinance;
however, staff subsequently met with the Hanson Aggregates representatives to clarify what their
concerns was. Staff agrees that the inclusion of language dealing with minor modifications would be
helpful in implementing the ordinance. As such, language has been proposed for Council
consideration for inclusion in Section 19.69.110 (underlined) to specify a method for dealing with
minor modifications to a conditional use permit or reclamation plan. Staff believes this is in keeping
with the intent of the Planning Commission discussion and recommendation.
DISCUSSION:
The State of California passed SMARA to ensure adverse environmental impacts caused by surface
mining activities are mitigated through prudent reclamation practices. SMARA requires all cities
having surface mines within their jurisdictions to adopt surface mining ordinances in accordance
with state policy that establishes procedures for the review and approval of reclamation plans,
financial assurances, and the issuance of permits to conduct surface mining operations. [PRC
§2774(a)]
Currently, one surface mining operation, known as the Nelson & Sloan Otay Ranch Pit (CA Mine
ID#91-37-0035), is operating within the City Of Chula Vista's jurisdiction. This operation was
previously permitted under the jurisdiction of the County of San Diego and, upon annexation to
Chula Vista in 1996, came under the purview of the City. In 1998, the State Mining and Geology
Board (SMGB) informed the City that because of this existing operation, the City is required to
adopt a SMARA Mining Ordinance and have it certified by the SMGB, per PRC §2774. In the
interim, SMGB has served as the lead agency for the review and approval of reclamation plans and
financial assurances, including annual inspections for compliance with approved reclamation plans.
Upon certification of the City's ordinance, the City will become the lead agency with authority to
review and approve any amendments to the current reclamation plan for the Otay Ranch Pit and any
future applications for surface mining.
In summary these ordinance amendments will:
· Add a Chapter to Title 19 (Zoning) providing definitions for mining related terminology
and establishing a process for reviewing surface mining operations.
Page 3, Item No.: [ ~
Meeting Date: 6/17/03
· Set standards for Reclamation of mined lands to ensure the lands are restored to a usable
condition and are readily adaptable for alternative land uses consistent with the general
plan.
· Establish a process for reviewing and approving financial assurances which will ensure
reclamation is completed in accordance with approved Reclamation Plans.
· Establish a process for regular inspection of mined lands to ensure continuing compliance
with the Conditional Use Permit and the Reclamation Plan.
· Allow the City to become the lead agency for monitoring the existing surface mining
operation within the City boundary and to any future revisions to this operation or the
establishment of other future operations.
The proposed ordinance was prepared in conformance with guidelines provided by SMGB and
would be an implementation tool for the Conservation and Open Space Element of the General Plan.
This element recognizes that sand and rock deposits in the Otay Valley and Rock Mountain areas are
valuable resources that will be needed by the City and the region. The reclamation plan
requirements of the proposed ordinance will help meet the General Plan goal of allowing sand and
gravel extraction without compromising "future open space, natural preserve, agriculture and other
open space compatible uses of the Otay Valley."
The City Engineer, City Attorney and representatives of the local mining industry have reviewed the
draft ordinance. SMGB has also reviewed the draft ordinance and comments provided were
incorporated into the document.
CONCLUSION:
Staff believes that the proposed ordinance satisfies the requirements of SMARA and establishes the
needed process for the review of any existing and future surface mining operations within the City.
Staff therefore recommends that the City Council adopt the attached draft ordinance amending
Sections 19.04 and 19.54, and adding Chapter 19.69, Surface Mining Operations, to the Chula Vista
Municipal Code.
FISCAL IMPACT: None.
Attachments:
1. Planning Commission resolution
JSPlanning\DAWN\CaseFiles\cc reports & resos\SMARA Staffreport-cmail.doc
/5-5
RESOLUTION NO. PCA-01-02
RESOLUTION OF THE CITY OF CHULA VISTA PLANNING
COMMISSION RECOMMENDING THE CITY COUNCIL ADOPT AN
ORDINANCE AMENDING SECTIONS 19.04 AND 19.54; AND ADDING
CHAPTER 19.69 TO THE CHULA VISTA MUNICIPAL CODE TO DEFINE
AND PROVIDE LOCAL PROVISIONS FOR SURFACE MINING
OPERATIONS WITHIN THE CITY OF CHULA VISTA.
WHEREAS, the Surface Mining and Reclamation Act (SMARA, Public Resources
Code Section ~710 et seq.) requires every lead agency to adopt ordinances in accordance
with State Policy that establish procedures for the review and approval of reclamation plans,
£mancial assurances, and the issuance of a permit to conduct surface mining operations
within the lead agency's jurisdiction and the City is therefore obligated to adopt a local
SMARA ordinance; and
WHEREAS, the State Mining and Geology Board has informed the City of Chula
Vista that the Nelson & Sloan Otay Ranch Pit (CA Mine ID#91-37-0035) is operating within
the City's jurisdiction; and,
WHEREAS, to date the City of Chula Vista has not adopted local standards and the
State Mining and Geology Board (SMGB) has served as the interim lead agency for the
approval of any reclamation plans and financial assurances submitted by mine operators until
the City Of Chala Vista obtains a SMGB certified mining ordinance; and
WHEREAS, the Environmental Review Coordinator has reviewed the proposed
activity for compliance with the California Environmental Quality Act (CEQA) and has
determined that there is no possibility that the activity may have a significant effect on the
environment; therefore, pursuant to Section 15061(b)(3) of the State CEQA Guidelines the
activity is not subject to CEQA; and
WHEREAS, the Planning Commission set the time and place for a hearing on said
ordinance amendment and notice of said heating, together with its purpose, was given by its
publication in a newspaper of general circulation in the City as least ten days prior to the
hearing, and,
WHEREAS, the hearing was held at the time and place as advertised, namely June
11, 2003, at 6:00 p.m. in the Council Chambers, 276 Fourth Avenue, before the Planning
Commission and said hearing was thereafter closed.
NOW, THEREFORE, BE IT RESOLVED THAT FROM THE FACTS
PRESENTED AT THE HEAR1NG, THE PLANNING COMMISSION recommends that the
City Council hdopt an ordinance amending Sections 19.04 and 19.54; and adding Chapter
19.69 to the Zoning Ordinance of the Chula Vista Municipal Code to define and provide
local provisions for surface mining operations within the City of Chula Vista, as shown in
Attachment "A."
Page 2
BE IT FURTHER RESOLVED THAT a copy of this resolution be transmitted to the
City Council.
PASSED AND APPROVED BY THE PLANNING COMMISION OF THE CITY OF
CHULA VISTA, CALIFORNIA, this 11m day of June, 2003, by the following vote, to-
wit:
AYES: MADRID, O'NEILL, CORTES, HALL, HOM, FELBER
NOES:
ABSENT: CASTANEDA
ABSTENTIONS:
Russ Hall, Chair
Diana Vargas u
Secretary tO Planning Commission
J:~Planning~DAWNXCaseFiles\pc reports&resos\pca-01-02 reso.doc
ORDINANCE NO.
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
AMENDING SECTIONS 19.04 AND 19.54 AND ADDING CHAPTER 19.69
TO THE CHULA VISTA IVIUNICIPAL CODE TO DEFINE AND PROVIDE
LOCAL PROVISIONS FOR SURFACE M1NING OPERATIONS WITHIN
THE CITY OF CHULA VISTA
WHEREAS, the Surface Mining and Reclamation Act (SMARA, Public Resources Code
Sections 2710 et seq.) declares that the extraction of minerals is essential to the continued
economic well-being of the state and to the needs of society, and the reclamation of mined lands
is necessary to prevent or minimize adverse effects on the environment and to protect the public
health and safety; and
WHEREAS, SMARA requires every lead agency to adopt ordinances in accordance with
state policy which establishes procedures for the review and approval of reclamation plans and
financial assurances and the issuance of a permit to conduct surface mining operations; and
WHEREAS, it is an objective of the Conservation and Open Space Element of the City's
General Plan to protect and manage sand and gravel resources for the benefit of the general
public; and
WHEREAS, the Environmental Review Coordinator has reviewed the proposed activity
for compliance with the California Environmental Quality Act (CEQA) and has determined that
there is no possibility that the activity may have a significant effect on the environment;
therefore, pursuant to Section 1506l(b)(3) of the State CEQA Guidelines the activity is not
subject to CEQA; and
WHEREAS, the City Council proposes to amend Title 19 (Zoning) of the Chula Vista
Municipal Code (CVMC) to provide specific regulations to review plans and issue permits for
surface mining operations a within any zones of Title 19 (Zoning) of the CVMC; and
V~IEREAS, the Planning Commission held a duly noticed public hearing on June 11,
2003 and has forwarded a recommendation to the City Council to adopt the proposed
amendments and additions to the CVMC.
NOW, THEREFORE, the City Council of the City of Chula Vista does hereby ordain:
SECTION I. That Section 19.04.291 is added to Chapter 19.04 of the Chula Vista Municipal
Code as follows:
Section 19.04.291 Surface Mining Operations
"Surface Mining Operations" means alk or part of~ the process involved in the
mining of minerals on mined lands~ as defined in CVMC 19.69~ by removing overburden
and mining directly from the mineral deposits~ open-pit mining of minerals naturally
exposed, minine bv the au~ler method~ dredging and qnarr~in~l, or surface ~vork incident to
ATTACHMENT 2 '-
Ordinance
Page 2
an underground mine. Surface mining operations include~ but are not limited toT inplace
distillation or retorting or leaching~ the production and disposal of mining waste~
orosoectin~ and exploratory activities, borrow pitting, streambed skimming~ and
se~reeation and stockpiling of mined materials (and recovery of same).
SECTION II. That Chapter 19.54 (Unclassified Uses) of the Chula Vista Municipal Code is
amended to read:
Section 19.54.020-Unclassified Uses
Operations: See Section 19.69
SECTION II1. That Chapter 19~69 of the Chula Vista Municipal' Code is hereby added to read
as follows:
Chapter 19.69
SURFACE MINING OPERATIONS
Sections:
19.69.010 Purpose and Intent
19.69.020 Scope
19.69.030 Definitions
19.69.040 Vested Rights
19.69.050 Incorporation by Reference
19.69.060 Conditional Use Permit, Reclamation Plan and Financial Assurance
Process
19.69.070 Standards for Reclamation
19.69.080 Findings for Approval
19.69.090 Financial Assurances for Reclamation
19.69.100 General Provisions
19.69.110 Modification to Approved Surface Mining Operation
19.69.120 Inspection, Reporting and Violations
19.69.130 Idle Mining Operations
19. 09.010 Purpose and Intent
Ordinance
Page 3
The purpose and intent of this Chapter is to ensure the continued availability of important
mineral resources, while regulating surface mining operations as required by California's Surface
Mining and Reclamation Act of 1975 (Public Resources Code Sections 2710 et seq.), as
'amended, hereinafter referred to as "SMARA", Public Resources Code (PRC) Section 2207
(relating to annual reporting requirements), and State Mining and Geology Board regulations
(hereinafter referred to as "State regulations") for surface mining and reclamation practice to
ensure that:
(a) Adverse environmental effects are prevented or minimized and that mined lands are
reclaimed to a usable condition which is readily adaptable for alternative land uses.
(b) The production and conservation of minerals are encouraged, while giving consideration
to values relating to recreation, watershed, wildlife, range and forage, and aesthetic
enjoyment.
(c) Residual hazards to the public health and safety are eliminated.
19.69.020 Scope.
Except as provided in this Chapter, no person shall conduct Surface Mining Operations, as
defined in 19.04.291, unless the City has first approved a Conditional Use Permit pursuant to
Section 19.14.060 through 19. I4.130, a Reclamation Plan, and financial assurances for
reclamation.
Activities not subject to these regulations are those listed in the Surface Mining and
Reclamation Act of 1975 (PRC§2714). Any applicable exemption from these requirements does
not automatically exempt a project or activity from the application of other regulations,
ordinances or policies of the City, including but not limited to, the California Environmental
Quality Act (CEQA), the requirement of Building Permits, the payment of development impact
fees, or the imposition of other dedications and exactions as may be permitted under the law.
19.69.030 Definitions.
Unless otherwise stated, the following definitions pertain to this chapter:
Borrow Pits: Excavations created by the surface mining of rock, geologic deposits or soil to
provide material (borrow) for use elsewhere.
Mined Lands: The surface, subsurface, and ground water of an area in which surface mining
operations will be, are being, or have been conducted, including private ways and roads
appurtenant to any such area, land excavations, workings, mining waste, and areas in which
structures, facilities, equipment, machines, tools, or other materials or property which result
from, or are used in, surface mining operations are located.
Ordinance
Page 4
Operator: Any person or business entity who is engaged in surface mining operations, or who
contracts With others to conduct operations on his/her behalf, except a person who is engaged in
surface mining operations as an employee with wages as his/her sole compensation.
Reclamation: The combined process of land treatment that minimizes wa~er degradation, air
pollution, damage to aquatic or wildiife habitat, flooding, erosion, and other adverse effects from
surface mining operations, including adverse surface effects incidental to underground mines, so
that mined lands are reclaimed to a usable condition which is readily adaptable for alternate land
uses and create no danger to public health or safety. The process may extend to affected lands
surrounding mined lands, and may require backfilling, grading, resoiling, revegetation, soil
compaction, stabilization, or other measures.
Idle Mining Operations: To curtail a surface mining operation for a period of one year or more
by more than 90 percent of the operation's previous maximum annual mineral production, with
the intent to resume those surface mining operations at a future date.
19.69.040 Vested Rights
No person who obtained a vested right to conduct Surface Mining Operations in
accordance with the California Surface Mining and Reclamation Act of 1975 (SMARA) shall be
required to secure a Conditional Use Permit to mine pursuant to the provisions of this Chapter
provided that no change or expansion of use has occurred beyond those vested rights.
19.69.050 Incorporation by Reference
The provisions of SMARA (PRC §2710 et seq.), PRC §2207, State regulations CCR
§3500 et seq. and CCR§3700 et seq., as those provisions and regulations may be amended from
time to time, are made a part of this Chapter by reference with the same force and effect as if the
provisions therein were specifically and fully set out herein, excepting that when the provisions
of this Chapter are more restrictive than correlative State provisions, this Chapter shall prevail.
19.69.060 Conditional Use Permit, Reclamation Plan and Financial Assurance Process
a) Conditional Use Permits.
i) All applications for a Conditional Use Permit for surface mining shall be made,
considered and granted or denied pursuant to Section 19.14.060 through 19.14.130,
19.54.010 and shall be accompanied by an application for a Reclamation Plan, and
Financial Assurances in accordance with the provisions set forth in this Chapter and
as further required by SMARA and State regulations.
ii) Within thirty (30) days of acceptance of an application for a Conditiondl Use Permit
for surface mining operations as complete, the City shall notify the State Department
of Conservation of the filing of the application.
Ordinance
Page 5
b) Reclamation Plans and Financial Assurances.
i) All Reclamation Plans shall include all elements required by and comply with the
provisions of SMARA(§§2772-2773), State regulations (CCR §§3500-3505), and any
additional information necessary to evaluate the proposed plan. All engineering plans
and geological analyses shall be approve6.and signed by ~a civil engineer and a
geologist, respectively, both of which are licensed to practice in the State of
California.
ii) Prior to final approval of a Reclamation Plan or financial assurances, the City shall
certify to the State Department of Conservation that the Reclamation Plan and/or
financial assurance complies with the applicable requirements of State law, and
submit the plan and/or assurance to the State Department of Conservation for review,
Pursuant to PRC§2774(d). The City shall evaluate written comments received, if any,
from the State Department of Conservation. Staft"gliiall prepare a written response
describing the disposition of the major issues raised by the state for the City Council's
approval.
19.69.070 Standards for Reclamation
a) Ali Reclamation Plans shall comply with the provision5 of SMARA (§2772 and §2773)
and State regulations (CCR §3500-3505). All new Reclamation Plans, and any existing
Reclamation Plans for which a modification is proposed, shall also comply with the
requirements for reclamation performance standards in CCR§3700 et seq., as may be
modified fi:om time to time
b) The City may impose additional performance standards as developed either in review of
individual projects, as warranted, or through the formulation and adoption of citywide
performance standards.
c) Reclamation activities shall be initiated at the earliest, possible time on those portions of
the mined lands that will not be subject to furthe~ disturbance. InterLm reclamation may
also be required for mined lands that have been disturbed and that may be disturbed
again in future operations. Reclamation may be done on an annual basis, in stages
compatible with continuing operations or on completion of all excavation, removal, or
fill, as approved by the City. Each phase of rec!agaation shall be specifically described
in the Reclamation Plan and shall include (i) the beginning and expected ending dates
for each phase; (ii) all reclamation activities required; (iii) criteria for measuring
completion of specific reclamation activities; and, (iv) estimated costs for completion of
each phase of reclamation.
Ordinance
Page 6
19.69.080 Findings for Approval
a) Conditional Use Permit Approvals. In addition to the findings required by Section
19.14.080, Conditional Use Permit approvals for surface mining operations shall include
a finding that ihe project complies with the provisions of SMARA. and State regulations.
b) Reclamation Plan Approvals. In addition to the f'mdings required by the City for the
conditional use permit, approvals for Reclamation Plans for surface mining operations
shall include the following fmdings:
(1) That the Reclamation Plan complies with SMARA §2772 and §2773, and any
other applicable provisions, and with applicable requirements of State regulations
(CCR §§3500-3505, and §§3700-3713).
(2) That the Reclamation Plan and potential use of reclaimed land pursuant to the
plan are consistent with this Chapter, the City's General Plan and any applicable
resource plan or element.
(3) That the Reclamation Plan has been reviewed pursuant to CEQA and the City's
environmental review guidelines, and all significant adverse hnpacts from
reclamation of the surface mining operations are mitigated to the maximum extent
feasible as determined the CEQA document either through adoption of mitigation
measures or a statement of overriding considerations.
(4) That the land and/or resources to be reclaimed will be restored to a condition that
is compatible with, and blends in with, the existing surrounding natural
environment, topography, and other resources or land uses. If the City determines
that on-site restoration is not feasible, suitable off-site lands may be set aside to
compensate for related disturbance to resource values.
(5) That the Reclamation Plan will restore the mined lands to a usable condition that
is readily adaptable for alternative land uses consistent with the General Plan and
MSCP.
(6) That a written response to the State Department of Conservation has been
prepared, describing the disposition of major issues raised by that Department.
Where the City's position is at variance with the recommendations and objections
raised by the State, said response shall address, in detail, why specific comments
and suggestions were not accepted.
19.69.090 Financial Assurances for Reclamation
' a) Financial assurances shall be required to ensure compliance with elements of the
Reclamation Plan, including but not limited to, revegetation and landscaping
requirements, restoration of aquatic or wildlife habitat, restoration of water bodies and
water quality, slope stability and erosion and drainage control, disposal of hazardous
materials, and other measures, if hecessary.
b) Cost estimates for the financial assurance shall be submitted to the Planning Department
for review and approval prior to the Operator securing financial assurances. The amount
Ordinance
Page 7
of the financial assurance shall be based upon the estimated costs of reclamation for the
years or phases stipulated in the approved Reclamation Plan.
c) In projecting the costs of financial assurances, it shall be assumed without prejudice or
insinuation that the surface mining operation could be abandoned by the Operator and,
consequently, the City may need to contract with a third party cdmmercial company for
reclamation of the site.
d) Financial Assurances shall be in a form and an amount satisfactory to the City Attorney
and City Risk Manager and may include the following:
i) Surety bond issued by a California admitted surety insurer;
ii) Irrevocable letter of credit.
e) Revisions to financial assurances shall be submitted to the Director of Planning and
Building each year prior to the anniversary date for approval of the financial assurances.
The. financial assurance shall cover the cost of existing disturbance and anticipated
activities for the next calendar year, including any required interim reclamation. If
revisions to the financial assurances are not required, the Operator shall explain, in
writing, why revisions are not required.
f) The financial assurances shall remain in effect and shall be released when the City
determines that reclamation has been completed in accordance with the approved
Reclamation Plan. If a mining operation is sold or ownership is transferred to another
person, the existing financial assurances shall remain in full force and effect and shall be
released by the City upon receipt of financial assurances from the new owner in a form
and an amount satisfactory to the City Attorney and Risk Manager.
19.69.100 General Provisions
a) Whenever any uncompleted surface mining operation or portion of an operation that is
subject to this Chapter is sold, assigned, conveyed, exchanged, or otherwise transferred,
the successor in interest shall be bound by the provisions of the Reclamhtion Plan
required by this Chapter.
b) Nothing in this ordinance shall exempt the Operator from complying with the
regulations of the State Water Resources Control Board, and the San Diego Regional
Water Quality Control Board, as well as the City of Chula Vista Grading and Storm
Water Management and Discharge Control Ordinances.
c) All mining and other related mining activities shall be consistent with the objectives,
guidelines, and recommendations in the City's .General Plan, the California Surface
Mining and Reclamation Act of 1975, City of Chula Vista Grading Ordinance, and
National Pollutant Discharge Elimination System General Permit for Storm Water
Discharges Associated with Industrial Activities, and Air Pollution Control District
regulations as each may be amended from time to time.
d) All mining and other related mining activities must be consistent' with Article 77 of
Uniform Fire Code and all blasting activities are subject to any and all permits required
by the Chula Vista Fire Department.
Ordinance
Page 8
19.69.110 Modification to Approved Surface Mining Operation
An approved Conditional Use Permit, Reclamation Plan, or any conditions thereof, may be
revised or modified in the same manner as provided for a new application, including the
requirement for environmental impact review. Requests tbr minor modifications ma,/be
submitted to the Director of Planning and Building. If in the Director's sole determination
the requested modification is in substantial conformance with approved plans and permits,
the Director ma,/approve said modification.
19.69.120 Inspection, Reporting and Violations
a) Surface mining operators shall forward an annual surface mining report to the State
Department of Conservation and to the City. New mining operations shall file an initial
snrface mining report with the State Department of Conservation within 30 days of
pem~it approval, or before commencement of operations, whichever is sooner.
b) A schedule of periodic inspections by the City of the site shall be established to evaluate
continuing compliance with the Conditional Use Permit and the Reclamation Plan. The
inspections shall occur no less frequently than once per calendar year and within six
months of receipt of the annual report.
c) The Operator shall provide to thc Director of Engineering by each July 1, aerial
photographs of the mining site taken in the same month of the second quarter of each
year. The aerial photographs shall consist of:
i) Defined, marked and permanent ground controls; and
ii) Planimetric map of the mining site based on the aerial models with 5' contours and
drawn to 1"-200' scale.
Upon the request of an Operator, the Director of Engineering may waive the requirement
for the aerial photographs on a case by case basis, such as when no excavation has been
accomplished since the last inspection, or may adjust the quarter of each year in which
the aerial photographs are taken.
d) If the City finds the Operator is not in compliance with the provisions of the Conditional
Use Permit, Reclamation Plan and/or the provisions of this Chapter, the subject violations
will be handled in conformance with PRC§2774.1 and {}2774.2, as well as the provisions
of'the Chula Vista Municipal Code concerning violations and penalties.
e) Each Operator shall pay an annual inspection deposit to the City by July 1 of each year
unless otherwise stated in an approved Reclamation Plan.
19.69.130 Idle Mining Operations
Ordinance
Page 9
a) Within 90 days of a surface mining operation becoming idle, the Operator shall submit to
the City a proposed Interim Management Plan (IMP). The proposed IMP shall provide
measures the Operator will implement to maintain the site in a stable condition, taking
into consideration public health and safety. The proposed IMP shall be submitted
forms provided by the City, and shall be processed as an amendment to the Reclamation
Plan.
b) The IMP may remain in effect for a period not to exceed five years, at which time the
City may renew the IMP for another period not to exceed five years, or require the
Operator to commence reclamation in accordance with its approved Reclamation Plan.
c) Financial assurances for idle operations shall be maintained as though the operation were
active.
SECTION VII. This Ordinance shall take effect and be in full force on the thirtieth day from and
after its adoption.
Submitted by Approved as to form by
Robert A. Leiter At)ti Moore
Planning and Building Director ~ity Attorney
COUNCIL AGENDA STATEMENT
Item No: /~
Meeting Date: 06/17/03
ITEM TITLE: REPORT; General Plan Update Draft Vision and Goals, and Status Report
SUBMITTED BY: Director of Planning and Building/~t~7
REVIEWED BY: City Manaeer(~ {~ ~ (4/Sths Vote: Yes No X )
As initially presented at the Council workshop on May 22, 2003, the City is now entering the next
major phase of the General Plan Update, and is preparing for the second Town Hall community
meeting to be held on June 21 at Bonita Vista High School. The Town Hall meeting will begin the
process of preparing and evaluating preliminary land use and transportation alternatives. An
important component of that process is a vision and goals to help guide preparation of alternatives.
The GPU Steering Committee and three Subcoinmittees have been meeting since November 2002
to review initial community input from the "visioneering" program, and to discuss and prepare
initial draft vision and goal statements. The Steering Committee has now completed synthesizing
those into a Draft Vision and Goals Report for presentation to the City Council.
This report summarizes the General Plan Update status, the Draft Vision & Goals Report, what will
be presented to the public at the June 21 Town Hall meeting, and anticipated activities in the
coming months.
RECOMMENDATION: That the City Council; (1) accept the Draft Vision & Goals Report, and
authorize staff to use the Report in ongoing development of the General Plan Update, and
preliminary land use and transportation altematives, and (2) provide any comments to staff
regarding the General Plan Update status, process and/or the upcoming Town Hall meeting.
BOARDS/COMMISSIONS RECOMMENDATION: The Planning Comanission considered and
unanimously accepted the Draft Vision & Goals Report on May 28, 2003. A summary of their
comments is included in Attachment 1.
DISCUSSION:
General Plan Update (GPU) Status-
The GPU overall work program is divided into four major phases. The following provides a
brief description and status of the first three phases which are either completed or underway.
The final Phase IV will not commence until November 2003.
Page 2, Item No.: I ~
Meeting Date: 6/17/03
Phase I (Apr.-Oct. 2002) - Preparation of program and budget, and initial community
outreach and input (completed).
This phase included the initial Town Hall meeting in April 2002, and the Visioneering
Program conducted from May-September 2002. This phase concluded with the
establishment of the four GPU Citizen Committees in October 2002 (Steering Committee,
and 3 Subcommittees; Economic Development, Environment & Open Space, and
Inftastmcture & Services).
· Phase II (Nov. 2002-Jun. 2003) - Issues, Vision & Goals, Background Studies
(substantially complete).
A Preliminary Issues Report based on the Visioneering Program inputs was published in
November 2002, and subsequently reviewed with the four citizen committees. Using that
report, along with their own perspectives, the committees held discussions and the Steering
Committee synthesized that information into the Draft Vision & Goals Report (May 2003)
discussed later in this agenda statement. Staff and consultants are also near to completing
numerous "Areawide Studies" presenting background conditions covering approximately 27
different topic areas spanning from infrastructure and services, to demography, to
environmental baseline conditions. The Subcommittees have been reviewing these studies,
and will continue to do so into July. Phase II will culminate with preparation of a Policy
Implications Report in August.
· Phase III (Jun.-Oct. 2003)- Draft Plan Alternatives and Policy Development (currently
commencing).
Three interdepartmental staff land use and transportation teams have been formed. There is
one team for each of the major planning subareas; Northwest (including the bayfront),
Southwest and East/Otay Ranch.
These teams, along with some consultant assistance, are now xvorking with the Steering
Committee to develop a range of conceptual planning proposals for further public input. As
many areas of the City are considered to be stable, and will not be recommended for any
General Plan change, eflbrts are being focused on specific "Opportunity Areas" where changes
are most appropriate and/or likely to occur. These include, for instance, areas indicated in the
adopted EDS, and areas along existing and future transit station locations as presented in the
South Bay Transit First Study.
A range of conceptual land use and transportation proposals within each of these Opportunity
Areas will be presented to the community at the June 21 Town Hall meeting. Based on meeting
inputs, staff will then work with the Steering Committee to identify several, citywide
Preliminary Land Use & Transportation Alternatives for testing and review during July and
Page 3, Item No.: I ~
Meeting Date: 6/17/03
August. This will include local community meetings within each of the 3 major planning
subareas (northwest, southwest and east/Otay Ranch). These alternatives and the results of the
initial testing will then be presented to the community at another Town Hall meeting in
September. Based on the community's inpm, the alternatives would be finalized, and a
preferred alternative developed. Completion of the General Plan study documents and the EIR
would be based on these altematives.
Phase IV (Nov. 2003-May 2004) - GP Document Preparation, and Public Hearings &
Plan Adoption (future).
Draft Vision & Goals Report -
As a 20-year strategy to address community planning issues, and future growth and
development, the City's General Plan is intended to represent the community's ideal vision
for its future, supported on a foundation of key community goals that the city will use to
guide its planning decisions. Establishing the community's shared vision and key goals for
the future is a critical initial step in providing a framework and direction for preparing the
General Plan Update (GPU).
Process for developing the Report-
With meeting facilitation assistance from MIG, Inc., information from the Preliminary Issues
Report was presented to the four GPU citizen committees. Both the Infrastructure &
Services, and Environment, Open Space & Sustainable Development Subcommittees met
several times from December 2002 to February 2003 to review and discuss issues, and to
prepare draft vision statements and key goals from their focused perspectives. In the case of
Economic Development, the vision and goal inputs were taken directly from the City's
Economic Development Strategy (EDS) prepared through the Economic Development
Commission over the preceding 15 months.
The Steering Committee then received these Subconunittee inputs and was tasked with
reviewing and combining those into an overall, draft citywide vision and set of goals. They
held 5 meetings from late February through April 2003 to accomplish this, and on May 12
approved their Draft Vision & Goals Report (see Attachment 2).
Report Organization and Content -
Collectively, community input from the "visioneering" program centered around the
following seven major themes which are being used to organize the Draft Vision and Goals
Report. These themes very closely align with the five "strategic themes" recently identified
by the City Council.
Page 4, Item No.: / ~
Meeting Date: 6/17/03
A. Strong Community Character & Image
B. Healthy & Sustainable Economy
C. Strong & Safe Neighborhoods
D. Improved Mobility
E. Healthy & Sustainable Environment
F. High Quality Community Services
G. Effective Growth Management & Plan Implementation
The Report presents an introductory statement which outlines six, integrated elements that
the Steering Committee felt were key to Chula Vista's character and vision. Those six
elements are:
· Our unique physical and natural environment including the Bay, Sweetwater and Otay
River valleys, the mountains and the Otay Lakes.
· Healthy and well-planned neighborhoods.
· A broad range of quality business and employment opportunities.
· Abundant parks, open space and recreation opportunities.
· High quality educational, cultural, and artistic resources.
· A rich history, heritage and strong sense of conununity.
The Report then presents a vision statement and related set of goals for each of the above
identified themes (A-G).
Purpose and Uses of the Report-
The draft visions and goals presented in the Report are intended to serve as a starting point
from which to launch the process of preparing a range of preliminary GPU land use and
transportation alternatives. They assist in developing a range of possibilities that should be
explored and evaluated through the General Plan Update process. The vision statements
express an imagination, or dream as to what Chula Vista could or should be like 20 years
from now, and serve as a desired end-reference point toward which we should aspire as a
community. The goals are intended to serve as more measurable expressions of what the
community should hope to achieve as tries to attain the vision over the next 20 years. They
are short in length yet broad in scope, and are open to possibilities for action.
As these preliminary General Plan alternatives are prepared and refined through further study
and community input, the vision and goals will also evolve in conjunction with developing a
final, preferred General Plan for consideration by the Planning Commission and City
Council. As a result, the entitling of this Report as a "Draft" is intended to reflect that it is, in
fact, a living document.
Page 5, Item No.: ] ~
Meeting Date: 6/17/03
The June 21, 2003 Town Hall Meeting -
As previously noted, the General Plan process has now entered Phase III where the City will
be working with the community to develop and evaiuate preliminary land use and
transportation alternatives for study. The June 21 Town Hall meeting is intended to serve 3
main purposes-
Provide thc public with an orientation on the City's General Plan Update, including key
issues, thc Draft Vision and Goals, and major citywide planning framework
considerations such as the EDS and Transit First.
· Provide thc public an opportunity to review a range of initial, proposed land use and
transportation concepts within the various Opportunity Areas, and to register their
preferences on these concepts, and/or to suggest other concepts. The concepts will be
presented both in writing and with photo examples.
· An understanding of the next steps in thc process, and how to stay informed and
involved.
It is intended that thc Steering Committee would informally host thc meeting, which would
be supported by staff, consultants and a facilitator. The general format for the meeting is as
follows:
· Attendees will enter through a reception station where they will be greeted and receive an
orientation and information package that explains the meeting, and provides instructions
on how to review thc planning concepts and register their preferences.
· There will then be a facilitated welcome and backgrotu~d presentation outlining meeting
purposes and format, providing a GPU overview, and reviewing the Steering
Committee's Vision & Goals, and citywide planning framework considerations such as
economic development, Transit First and thc Greenbelt Plan. Attendees will participate
in an interactive exercise regarding the Vision & Goals.
· Attendees will the proceed to a series of "stations" where staff will present exhibits
containing alternative land usc and transportation planning concepts for their review, and
where they will be able to ask questions and provide comments on these concepts. There
~vill be a station for each of the 3 major planning subareas (northwest, southwest and'
east/Otay Ranch), and a station ~vher¢ information on Citywide planning concepts, such
as the Transit First system, Greenbelt concept, and concepts from the Economic
Development Strategy such as Regional Technology Park are presented. Staff members
and steering committee members will attend each station to assist the public, clarify the
various proposals, and answer questions.
Page 6, Item No.: ] ~
Meeting Date: 6/17/03
Next Steps in the GPU Process-
Staff will return to the Planning Commission and City Council in July to report the outcomes of
the Town Hall meeting. Staff will subsequently work with the Steering Committee to define
three preliminary, citywide land use and transportation alternatives to be studied by staff and
our consultants during July and August. This will include local community meetings within
each of the 3 major planning subareas (northwest, southwest and east/Otay Ranch). Staff will
hold a workshop with the Planning Conunission and Council in August to review those
alternatives, and the outcomes of the initial testing. We will then present the results of those
studies and the prelinfinary alternatives to the community at another Town Hall meeting in
September.
We will also continue to inform and involve the Planning Commission and City Council in the
alternatives preparation process through periodic reports.
Attachments
1. Planning Commission comments sheet
2. Draft Vision & Goals Report
(home/planning/ed/gp public outreach/committees administration/steering committee/CC Reporl Draft V&G 06-11-03)
SUMMARY OF PLANNING COMMISSION COMMENTS ON THE GENERAL
PLAN UPDATE DRAFT VISION & GOALS REPORT (5/28/03)-
Planning Commissioners unanimously accepted the noted Report at their May 28, 2003
meeting, and offered the following generalized comments to be passed on to the City
Council:
· As noted in the adopted Econonfic Development Strategy (EDS), increasing
industrial/business park land supply is critical to the City's future. Added land to
support creation of higher-value jobs is central to a better local jobs/housing
balance, and to the generation of revenue necessary to support desired amenities
and quality-of-life, including the financial ability to set aside lands for open space
and environmental protection. Sufficient lands to support economic expansion as
presented in the EDS must be included in the updated General Plan.
· Focus should be given to planning for expanded amenities in southwest Chula
Vista. While it is said that western Chula Vista (in general) suffers from facility
deficits, the southwest is particularly deficient, and has been so since the
Montgomery annexation in 1986. The notion that western Chula Vista is
subsidized by development in the east must be dispelled. The Montgomery area
was a fiscal positive to the City, and continues to generate a substantial sales tax
base. Ensuring provision of sufficient and equitable amenities is important to
avoiding polarizing effects in the community.
· The notion of a cultural arts focus area, combined with a central gathering place
or park, could and should potentially be considered in areas other than just
downtown Third Ave.
· Significant improvements in circulation connections between eastern and western
Chula Vista is critical to achieving community cohesion. The ability to manifest
the downtown Third Ave. area as a focal place for all residents is directly related
to the ability to get them there in a convenient and timely manner. Eastern Chula
Vista residents can currently get to downtown San Diego or Mission Valley in
about the same time it takes them to travel to downtown Third Ave.
· Goal C.2 should also take into consideration the concept of "defensible
neighborhoods". The City of San Diego Police Department prepared a study on
this.
· Parks should built and opened in a timely manner.
· Parks acreage standards should be equalized throughout the City, and a "level
playing field" for amenities established.
ATTACHMENT 1
Repor~
Chula Vista Vision 2020 - General Plan Update
This Report was developed by the
Chula Vista General Plan Update
Steering Committee
With input from the
following three
General Plan Update Subcommittees
Economic Development
Environment, Open Space & Sustainable Development
Infrastructure & Services
May 12, 2003
Published by
The City Of Chula Vista
Planning and Building Department
Chula Vista Vision 2020- General Plan Update
CITIZEN COMMITTEES MEMBERSHIP
Steering Committee
Mitch Thompson (C) - Housing
Patricia Aguilar (VC)- Sweetwater/Bonita
Gregory Alabado - Transportation
Russ Hall - Economic Development Subcommittee
Randall Krogman - Eastern Chula Vista
Paul Nieto -- Finance / Real Estate
Kevin O Neill- Planning Commission
Gary Nordstrom -- Chula Vista Urban Development Committee
Rudy Ramirez -- Southwestern Chula Vista
Diana Rude -- Northwestern Chula Vista
Stephen Savel - Education
Teresa Thomas -- Environment, Open Space & Sustainable Development
Subcommittee
Bill Tripp -- Infrastructure & Services Subcommittee
Economic Development Subcommittee
William Tunstall (C) -- Economic Development Commission (EDC)
Kevin Carlson -- EDC
Russ Hall -- EDC
William Hall- EDC
Charles Moore -- EDC
Ramin Moshiri- EDC
Daniel Munoz- EDC
Dr. Carl Nelson - EDC
Nate Rubin-- EDC
Scott Vinson -- EDC
Mary Wylie - EDC
Environment, Open Space & Sustainable Development Subcommittee
Doug Reid (C) -- Resource Conservation Commission (RCC)
Frank Ohrmund (VC) --Otay Valley Regional Park Citizen's Advisory Committee
Pamela Bensoussan -- RCC
John Chavez - RCC
Juan Diaz - RCC
Stanley Jasek - RCC
Susan Fuller -- Nature Center Board of Trustees
Theresa Acerro -- Sierra Club
Vista Vision 2020 - General Plan Update
CITIZEN COMMITTEES MEMBERSHIP {con't)
Environment, Open Space & Sustainable Development Subcommittee
Theresa Thomas - RCC
Michael Beck -- Endangered Habitats League
Laura Hunter- Environmental Health Coalition
Allison Rolfe -- San Diego Audubon Society
Infrastructure & Services Subcommittee
Arthur Garcia (C) -- Growth Management Oversight Commission (GMOC)
(Education)
Richard Arroyo -- GMOC (Business)
Marco Polo Cortez -- GMOC (Planning Commission)
David Krogh -- GMOC (Sweetwater / Bonita)
Rafael Munoz -- GMOC (Eastern Territories)
Gary Nordstrom -- GMOC (Development)
Steve Palma -- GMOC (Southwest)
Michael Spethman -- GMOC (Center City)
Bill Tripp -- GMOC (Environment)
Mary Jo Buettner- Chula Vista Coordinating Council
Joanne Clayton -- Housing Advisory Commission
Al Gore -- Cultural Arts Commission
Bob Strahl- Parks & Recreation Commission
;-1Chula Vista Vision 2020 - General Plan Update 3
Table of Contents
~ii] I. Background ..................................................................... page 1
i~] II. Purposes & Uses of Report .......................................................... page 3
Ill. Vision Statements & Goals
Introduction ................................................................... page 4
A. Strong Community Character & Image ......................... page 5
B. Healthy & Sustainable Economy ................................. page 7
C. Strong & Safe Neighborhoods .................................... page 9
D. Improved Mobility ................................................... page 10
E. Healthy & Sustainable Environment ............................ page 12
F. High Quality Community Services ............................. page 13
G. Effective Growth Management & Plan
Implementation ........................................... page 15
Appendix - Committees Organizational Diagram
Chula Vista Vision 2020 - General Plan Update
I. BACKGROUND
About the General Plan Update Citizen Committees
As part of its approval of an overall public outreach and participation program for
the General Plan Update, the City Council authorized the formation of citizen
committees. The committees are intended to help guide the process and assist
in preparation of the Update by providing a means for ongoing involvement by
key community stakeholder interests (e.g. education, business, environment,
housing, community services, etc.), select City boards and commissions, and
residents.
The committee structure consist of a Steering Committee, and three
Subcommittees related to major topic areas of the General Plan Update;
Economic Development, Environment & Open Space, and Infrastructure &
Services. The selection and appointment of Steering Committee and
Subcommittee members was administered through the City's General Plan
IVlanagement Team with ratification by the City Council. To ensure that varying
perspectives are reflected, each Subcommittee consists of 13-14 people and
includes representation from City boards and commissions, community
organizations and residents. The Steering Committee has 13 members, which
includes one representative from each of the Subcommittees. An organizational
chart is included as an Appendix to this report.
The Steering Committee provides oversight to the GPU process, and facilitates
communication among key stakeholders by providing a conduit for sharing
information, issues and the perspectives of diverse interests in the community.
[ts principle tasks are to synthesize information coming from various technical
studies and the Subcommittees in the preparation of an overall vision for Chula
Vista, and in the development of land use and transportation alternatives for the
GPU.
The three Subcommittees are primarily intended to serve as a means to identify
and discuss issues and concerns, opportunities and constraints, and key goals
and objectives related to each of their particular subject areas. They will also
review information from related technical studies, and advance this information
and any recommendations to the Steering Committee.
Chula Vista Vision 2020 - General Plan Update
About the General Plan Update Process
Chula Vista's General Plan is the city's long-term strategy to address community
planning issues, and future growth and development. It is intended to represent
the community's ideal vision for its future, and rests on a foundation of key
community goals that the city will use to guide its planning decisions.
Establishing the community's shared vision and key goals for the future is a
critical initial step in providing a framework and direction for the General Plan
Update (GPU).
The process for establishing the vision and goals began with the gathering of
initial community input as part of the "visioneering" program during summer and
fall 2002. That program solicited input about likes, dislikes, hopes and fears for
Chula Vista both today and in the future. Those inputs were then reviewed,
organized and published in a document entitled Preliminary Issues Report
(November 2002). Collectively, the community's comments centered around the
following seven major themes which are being used to organize the vision and
goals:
A. Strong Community Character & Image
B. Healthy & Sustainable Economy
C. Strong & Safe Neighborhoods
D. Improved Mobility
E. Healthy & Sustainable Environment
F. High Quality Community Services
G. Effective Growth Management & Plan Implementation
Information from the Preliminary Issues Report was presented to the four GPU
citizen committees consisting of a Steering Committee, and three
subcommittees; Infrastructure & Services, Economic Development, and
Environment, Open Space & Sustainable Development. Each of the
Subcommittees met several times from December 2002 to February 2003 to
review and discuss issues, and to prepare a vision statement and key goals, from
their focused perspectives. The Steering Committee then received their inputs
and was tasked with reviewing and combining those into an overall, draft
citywide vision and set of goals.
The results of those Steering Committee discussions (which took place from late
February through April 2003) are presented in the Vision Statements and Goals
on following pages.
1'I. PURPOSE & USES OF THE REPORT
l~n the context of a General Plan Update effort, the Draft Visions and Goals
presented in this report are intended to serve as a starting point from which to
launch the process of preparing and analyzing possible Plan alternatives.
As developed by the citizen committees, the Visions express an imagination, or
dream as to what Chula Vista could or should be like 20 years from now. They
serve as a desired, end reference point toward which we should aspire as a
community. They are not intended to be specific in nature, nor to cover every
aspect of the City, but rather are generalized statements highlighting those
elements and characteristics of the City which will be central to defining our
uniqueness, and to maintaining and enhancing the community. As with dreams,
visions are not absolutes and may or may not be fully realized, but are none-the-
less important in establishing ideals to strive for.
In moving toward the ideals expressed in a vision, there is more than one
course, or alternative, that could be taken in getting you there. Likewise, there
are various achievements that could be made along the way as a measure of
making progress on a particular course. The Goals provided with each of the
Vision Statements in this Report are intended to serve as more "measurable"
expressions of what the community should hope to achieve during the next 20
years. They are short in length yet broad in scope, and are open to possibilities
for action. As such, they serve as a starting point for preparing various,
preliminary General Plan alternatives to share with the community in setting the
range of possibilities which should be explored and evaluated through the
General Plan Update process.
As these preliminary General Plan alternatives are prepared and refined through
further study and community input, the vision and goals will also evolve in
conjunction with developing a final, preferred General Plan for consideration by
the City Council. As a result, the entitling of this Report as a "Draft" is intended
to reflect that it is, in fact, a "living" document.
Chula Vista Vision 2020 - General Plan Update
III. VISION STATEMENTS & GOALS
Introduction
The City of Chula Vista is a great place to live, work, learn and play, and is
becoming the hub of civic and cultural activity in the South San Diego County
region. At the same time, the City faces a number of challenges as it continues
to develop.
In updating the City's General Plan, it is important to have a good understanding
of where we are, and a clear vision of where we want to be. There are several
critical, integrated elements that are giving shape to Chula Vista's character and
vision:
· A unique physical environment, positioned on the South San Diego Bay,
and bounded by the Sweetwater River to the north, mountains and the
Otay Lakes to the east, and Otay River to the south;
· Healthy and well-planned neighborhoods,
· A broad range of quality business and employment opportunities,
· Abundant parks, open space and recreation opportunities,
· High quality educational, cultural, and artistic resources, and
· A rich history, heritage and strong sense of community.
We want to preserve and enhance the unique features that give Chula Vista its
identity, while at the same time improving our community and meeting the
opportunities and challenges that lie ahead. This is our vision for Chula Vista in
the year 2020 which will better be accomplished through strong citizen
participation and sound growth management.
Chula Vista Vision 2020- General Plan Update
A. VISION STATEMENT - Strong Community Character and Image
Chula Vista will continue to develop as a city with a distinct identity that its
citizens are proud to call home. This identity will be characterized through
celebration, preservation, restoration, and enhancement of Chula Vista's unique
natural and historic resources, and through strong development standards that
enhance the City's beauty and pride. The community will treasure the culture,
values, and history of its unique location on the Pacific Rim and Pacific Flyway,
linking the mountains, rivers, bay, and border region. Following are some of the
most notable elements that will define our identity:
The City's unique physical features provide an opportunity to develop a
magnificent network of open space, trails and recreational activities. Enhancing
the network of local lands within the San Diego National Wildlife Refuge, the
Chula Vista Greenbelt will connect the Bayfront, Sweetwater and Otay River
valleys, and Otay Lakes and mountains through an open space system which
visually and functionally surrounds the city, and links many of the City's principal
recreation and natural resources.
The City's Bayfront will become a water-oriented gathering and focal point for all
Chula Vistans, and will emerge as the premier waterfront experience in the South
Bay. A diversity of uses will support its vitality and sustainability, and promote
use by all citizens.
The historic downtown area of Chula Vista will serve to draw citizens together
through its unique charm, and combination of public, civic, commercial,
entertainment and residential uses. Chula Vista will celebrate its diversity
through culture and the arts, and the downtown will become the focus for
cultural and arts facilities, further strengthening its role as the heart of the City
and a place that all Chula Vistans can point to with pride.
The Otay Ranch Eastern Urban Center will serve as an important regional retail
and business center for the South County area. With the establishment of a
four-year college or university on an adjoining site overlooking the Otay Lakes
and mountains, the Eastern Urban Center will also reinforce Chuia Vista's
reputation as a community that places a high value on educational excellence.
Chula Vista Vision 2020- General Plan Update
GOALS:
A.! Support academic excellence throughout the city at all levels,
including attracting a major four-year college or university, and
encouraging expansion of Southwestern College.
A,2 Create a cultural & performing arts district in the downtown Third
Ave area.
A.3 Establish a landmark park or public space as a point of common
identity serving the entire City as a central gathering place.
A.4 Create distinct gateways to the City from major north, south, and
western entry points.
A.5 Enhance connections between eastern and western Chula Vista to
create and maintain a cohesive community.
A.6 Protect and preserve the City's important historic resources through
a comprehensive approach to historic preservation.
A.7 Accommodate a full diversity of housing options and types
throughout the city.
A.8 Define the City's form and character through preservation of
natural landforms, habitats and historic resources, including the
Chula Vista Greenbelt which serves as a border for the City.
(Related goal: E.3)
B. VTSTON STATEMENT - Healthy and Sustainable Economy
Chula Vista will continue to expand its local economy through providing a broad
range of business, employment and housing opportunities that support an
excellent standard of living, and improve the ability for residents to live and work
locally. This economy will generate revenues sufficient for sustaining exemplary
public facilities and services, and for maintaining the community's desired quality
of life. The city will promote an entrepreneurial spirit that fosters investment in
local business and real estate, as well as in cultural and environmental resources.
Chula Vista recognizes that its prosperity depends upon its people, their skills,
and a compet t ve and healthy workplace based on principles of environmental
and economic sustainability.
The city also recognizes the important relationship of regional factors and
influences on our local economy. Chula Vista will continue to be an active
participant in developing collaborative regional approaches that support our local
economy, and the improvement of local facilities and services that enhance our
quality of life.
GOALS:
B.1 Develop a large and diversified economic base, while maintaining
or increasing the existing sources of employment.
B.2 Become the South County hub for leisure, recreational, shopping,
entertainment, and governmental activities. (Related goal: A. 2)
B.3 Promote educational excellence and training to ensure a qualified
workforce.
8.4 Plan and develop the Third Ave. corridor between E and H Street to
strengthen its position as the City's business, cultural and
entertainment hub.
B.5 Create a strong land use and transportation linkage between the
downtown, bayfront, southwestern and eastern areas of the City.
B.6 Provide a diverse economic base with a variety of job opportunities
to improve Chula Vista's jobs / housing balance.
Chula Vista Vision 2020- General Plan Update
B.7 Support small and midIsized businesses that are economically and
environmentally sustainable, and neighborhood-based.
B.8 Increase investment in western Chula Vista, particularly through
uses which will serve the entire City.
B.9 Become a center for applied technology innovation by attracting
and supporting technology-based product R&D, manufacturing and
services.
B.10 Facilitate entrepreneurship by supporting the start-up and growth
of small manufacturing businesses in targeted industries.
B.11 Promote cross-border and international trade.
B.12 Generate fiscal resources sufficient to provide and maintain
exemplary public facilities and services.
C. VISION STATEMENT - Strong and Safe Neighborhoods
Chula Vista is a diverse yet integrated community that celebrates its
neighborhoods as the building blocks that make it a great place to live. Each
neighborhood will continue to express its individuality and character, and will be
safe and attractive, with good access to necessary facilities and services, along
with convenient transportation options that link neighborhoods internally and to
one another. Citizens will feel safe to walk within and among neighborhoods,
and to allow their children to do the same. Chula Vista will also take a leadership
and collaborative role in ensuring the safety of its citizens on a citywide and
regional level.
GOALS:
C.1Revitalize deteriorating neighborhoods and maintain and enhance
the quality of stable neighborhoods.
C.2 Strengthen neighborhoods through safe play/activity centers for
children.
C.3 Protect citizens through comprehensive and proactive planning for
safety and security related to natural and man-made disasters.
C.4 Conserve existing safe and sound affordable housing opportunities.
C.5 Promote housing types that encourage a variety of incomes
throughout the City.
C.6 Ensure that an adequate and diverse housing supply is available
throughout the City to meet the City's existing and future needs.
C.7Provide homeownership opportunities for Iow- and moderate-
income households.
C.8 Reduce and/or remove, to the greatest extent possible artificial
constraints to the development, maintenance and improvement of
housing.
C.9 Upgrade and improve housing stock in areas of western Chula
Vista.
Chula Vista Vision 2020 - General Plan Update
D. VISION STATEMENT - Improved Mobility
Chula Vista will provide a wide range of convenient and affordable mobility
options that allow people to go from where they are to where they want to be in
a safe, pleasant, rapid, cost-effective and environmentally friendly manner.
Transportation will become a unifying element of the City and the region,
connecting regional and local activity centers and neighborhoods through a
network of major east/west and north/south corridors. This network will also be
linked to local transportation services such as for intra-city express and shuttle
loops, and expanded bus routes. The City will also have a system of bicycle and
pedestrian paths that connect neighborhoods, activity centers and recreation
facilities throughout the City.
GOALS:
D.1 Coordinate with appropriate regional and local agencies to create
an effective regional transportation network (freeways, roads,
transit, etc.)
D.2 improve transportation connections between eastern and western
Chula Vista, particularly transit connections between major activity
centers.
D.3 Continue efforts to develop and maintain a safe and efficient
transportation system with adequate roadway capacity to serve
future residents while preserving the unique character and integrity
of recognized communities within the City.
D.4 Increase the use of non-polluting and renewable options for
mobility through a system of bicycle & pedestrian paths and trails.
D.5 Coordinate with the regional transit agency to develop a state of
the art transit system that provides excellent service to residents,
workers and students and the disabled both within the City and to
regional destinations.
D.6 Encourage a network of secure parking facilities to support use of
public transit.
Page 10 of 1S
Chula Vista Vision 2020 - General Plan Update
5
D.7 Make transit-friendly roads and arteries a top consideration in land
use and development design.
!~1 D.8 Provide a linked system of bicycle and pedestrian paths and trails
throughout the Cib/.
D.9 Provide for safe, pleasant and efficient pedestrian movement.
D.IO Integrate land use and transportation planning and related
'~i facilities.
D.11 Provide convenient, affordable and efficient alternatives to the
automobile to reduce the impact of growth on the road system.
Chula Vista Vision 2020 - General Plan Update
E. VISION STATEMENT - Healthy & Sustainable Environment
The residents of Chula Vista cherish our open space and natural resources, and
will continue to protect, enhance and preserve them. The City's Greenbelt will
serve not only to define the unique character of our community, but will also
serve as an interconnected ecosystem tying together the rich mosaic of habitats
within the General Plan area, including the Bayfront, Sweetwater and Otay River
Valleys, the Otay Lakes, and surrounding mountains, portions of which are within
the San Diego National Wildlife Refuge.
Chula Vista will aggressively promote the use of conservation technologies and
sustainability practices that reduce or eliminate the use of non-renewable
resources, and will develop local non-polluting and renewable energy, water, and
material resources, in a way that allows us to meet our present needs while
ensuring future generations the ability to meet their needs.
GOALS:
E.1 Balance the City's future demands for water in relation to planned
water supply, and minimize the impacts of growth and
development on water resources and water quality.
E.2 Support and encourage sustainability concepts such as solid waste
reduction, energy and water conservation, transportation
management, and careful integration of land use and
transportation in both public and private development and
redevelopment.
E.3 Preserve and enhance the City's natural resources, including the
bayfront, by incorporation into an expanded open space system,
recognizing that open space, habitats and corridors are critical to
the integrity of the system and the sustainability of these natural
resources.
Chula Vista Vision 2020 - General Plan Update
F. VISION STATEMENT - High Quality Community Services
Chula Vista will continue to place a high priority on exemplary community
services and facilities, (such as police and fire protection, libraries, and parks and
recreation) and will continue to ensure that services and infrastructure expand to
match needs created by growth and redevelopment. All areas of the city of
Chula Vista will enjoy an equitable balance of services and infrastructure,
recognizing their respective and unique situations.
The community will encourage integrated health and human services that are
provided with dignity, are conveniently and equitably located, and are recognized
as community centers that sustain families and residents.
GOALS:
F.1 Upgrade necessary infrastructure (curbs, gutters, sidewalks and
drainage) in southwestern Chula Vista.
F.2 Encourage water conservation, reclamation, attainment of
adequate supply, and evaluate new technologies.
F.3 Encourage an integrated, neighborhood-based approach to the
delivery of health and human services.
F.4 Evaluate, address and provide resources for homelessness.
F.5 Distribute parks and recreation facilities citywide in a manner that
ensures convenient access for all city residents, and provides for
sufficient land to meet adopted standards.
F.6 Acquire and develop additional park space, and upgrade existing
facilities and sites in established neighborhoods in western Chula
Vista.
F.7 Ensure that new park facilities in new communities and
redeveloping areas are built in a timely manner to meet established
park standards.
Chula Vista Vision 2020 - General Plan Update
F.8 Participate in the regional decisionImaking process regarding the
expansion of the existing Metro sewage system and to control the
growth in demand for wastewater treatment within the general
plan area,
F.9 Provide for the expansion of the library system in accordance with
City standards.
F.iO Encourage safe, affordable, consistently good quality childcare that
is available and assessable to all economic segments of the
community.
F.I! Coordinate land use planning with the local school districts to
ensure adequate facilities and avoid overcrowding.
F.12 Provide the physical infrastructure (roads, utilities, etc.) needed to
support economic prosperity.
Chula Vista Vision 2020 - General Plan Update
G. Effective Growth Management & Plan Implementation
GOALS:
G.1 Provide and maintain adequate public improvements, facilities, and
services to support residential growth and redevelopment in an
effective manner consistent with standards.
adopted
city
G.2 Direct and coordinate both new growth and redevelopment policies
in ways that maintain and consistently strive to improve the quality
of life for current and future residents of Chula Vista.
G.3 Identify and consider all community interests, including property
owners, when reviewing land use decisions
G.4 Provide for city staffing and organization in a manner which is
supportive and responsive to the needs of both existing and
prospective businesses.
G.5 Implement and regulate development in ways which will protect
the significant natural environment and create high quality urban
environments for living and working.
G.6 Conduct workshops and public hearings to both involve and solicit
input from concerned citizens and owners of businesses and
properties concerning future development and redevelopment of the
city, for both private and publicly-initiated projects.
G.7 Implement a comprehensive facility phasing and capital improvement
program based on anticipated land development impacts.
G.8 Facilitate and support volunteer and non-profit organizations in the
performance of their missions of service to our community.
G.9 Ensure Chula Vista's responsiveness to customers' needs.
~]
Page 1, Item: /
Meeting Date: 06/17/03
COUNCIL AGENDA STATEMENT
ITEM TITLE: Resolution to approve an individual Park Master Plan and
Neighborhood Park Name for Park P-13 of Otay Ranch SPA One, Village
One West.
SUBMITTED BY: Director of Building and P_ark Constm%ion
Director o f Public Wor,~erationsfi~..
Dire/c, tor.~o f Recfeatior~_~') '-
INTRODUCTION: The Offal Ranch Company is requesting approval of a public neighborhood
Park Master Plan and park name for park P- 13 located at the western edge of
Village One West.
STAFF RECOMMENDATION:
The City Council adopt a resolution approving the Park Master Plan and
park name "Horizon Park" for the 5.3 acre public neighborhood park site
located in the Otay Ranch SPA One Village One West project.
BOARDS/COMMISSIONS RECOMMENDATION:
The Parks and Recreation Commission at their regular meeting held on May
15, 2003 voted to recommend approval of the Draft Park Master Plan for the
5.3-acre public neighborhood park site in the Otay Ranch Village One West
subdivision and approval of the park's name "Horizon Park".
DISCUSSION:
Park Context/History
The proposed public neighborhood park site is located in Otay Ranch Village One West, which is
governed by the Otay Ranch General Development Plan (GDP) and SPA One. The Otay Ranch
GDP, adopted in October 1993, is based on a neo-traditional concept where each village contains a
central focus, either a village square or main street; however, Village One West's character is a
combination of the traditional subdivision design and the neo-traditionaI concept, which results in a
character that blends with its adjacent communities; the Sunbow subdivision at its west, and Village
One proper at its east.
The P- 13 park site in Village One West is located approximately one mile west of Heritage Park, and
is the third public neighborhood park in Village One, (see Attachment A.) Village One park
locations and sizes have been identified in the previously approved GDP and Otay Ranch SPA One;
Parks, Recreation, Open Space and Trails Master Plan documents. The documents state that the
concept of the village park system is to provide diverse park and recreation opportunities within Otay
Ranch SPA One to meet the recreational and open space needs of each village. The design of the
neighborhood park is consistent with the conceptual park plan identified in those documents.
/%/
Page 2, Item: I~
Meeting Date: 06/17/03
The Otay Ranch SPA One Parks, Recreation, Open Space and Trails Master Plan envisioned its
neighborhood parks oriented to the residents of the neighborhood or sub-community area in which
they are located and providing a balanced recreation activities system when combined with other
parks and recreation facilities.
Park Programming
The Landscape Architect consultant (Wimmer Yamada and Caughey) met with City staff and the
Otay Ranch Company on numerous occasions to review alternate design schemes for the park site.
The following is a general description of the proposed Master Plan, (see Attachment B.)
The P-13 site is a 5.3 net acre neighborhood park located south of East Palomar Street; and east of
the soon to be constructed cul-de- sac (Brashears Place) that will serve both Hedenkamp Elementary
School and the park. To the east of the park site is Chance Mountain Place cul-de-sac, a private
residential street. Single-family residences are located south and east of the park site.
The park's recreational facilities include: one softball field with one overlaid multi-purpose turf area,
and two overlaid micro-soccer fields; children's play area with accessible play equipment, picnic
facilities, a basketball court (not lighted), pedestrian walkways and paths, a comfort station, on-site
parking, and pedestrian and security lighting.
Vehicular access to the park is via a park entrance driveway from the proposed cul-de-sac (Brashears
Place) south of East Palomar Street. Pedestrian access to the park occurs along the East Palomar
adjacent sidewalk, and at the Wildwood Place cul-de-sac. The children's play area is situated in the
.western portion of the park. Two separate play equipment areas for 2-5 year-olds and 5- 12 year-olds
are provided. An additional feature at the park is the council ring that serves as a gathering area for
informal socializing. Poetry and literature phrases embedded within the concentric circles radiating
out from the circular seating of the council ring bring a unique experience to this park. Picnic
facilities located at the park include two shade structures with tables, as well as, additional picnic
tables on concrete pads in turf areas. A majority of the park site is planted with turf. Turf covered
sculptural landforms provide variation and interest in the landscape. A perimeter pathway
surrounding the multi-purpose turf area reinforces pedestrian circulation through the site, between
the parking lot area and the neighborhood park entry on the east side of the park. The design of the
neighborhood park entry adjacent to Wildwood Place responds well to the concentric ring theme
related to the council ring feature. Accent planting on the site include palm trees.
The comfort station is conveniently located adjacent to the parking lot with proximity to the tot lot
and picnic areas. The floor plan of the comfort station responds to the park's budget by providing
the minimum facilities considered appropriate for the park's size and function. The park's comfort
station design takes into consideration the architectural vernacular of the modernized agrarian theme
of the Otay Ranch. The construction materials, (community stone accents, painted stucco, metal
seamed roof, and galvanized gates,) are consistent with the materials approved for use in the other
Otay Ranch area parks, (see Attachment C for Comfort Station elevations.)
Page 3, Item: ~/
Meeting Date: 06/17/03
The proposed park's design is consistent with the concept plan contained in the Otay Ranch SPA
One; Parks, Recreation, Open Space and Trails Plan document in that it incorporated key recreational
facilities envisioned for the site. Once approved, the Master Plan will be the basis for the preparation
of construction drawings and specifications that are used to build the park.
Park Name
The park name proposed by the applicant is "Horizon Park". The name refers to the views of the
horizon and nearby mountain ranges to the east and to the south viewed from the park as a result
of its higher elevation setting. Staff is of the opinion that the park's name responds well to the
park site's location.
Environmental Review
The Environmental Review Coordinator has reviewed the proposed project for compliance with
the California Environmental Quality Act (CEQA), and has determined that the proposed project
was adequately covered in the previously adopted SPA One Annexation Final Second-Tier
Environmental Impact Report (EIR 95-01) and the Final Second-Tier Environmental Impact
Report for the proposed Otay Ranch SPA One and GDP/SRP Amendments (EIR 97-03).. Thus,
no further environmental review or documentation is necessary.
Parks and Recreation Commission
The members of the Parks and Recreation Commission reviewed the overall park design focusing
discussion on secondary security lighting proposed for the park as well as options for the potential of
providing lighting of the basketball court at a future date. The Commission approved the proposed
Park Master Plan with the condition added to provide underground infrastructure to support the
future potential for lighting of the court. The Commission deemed the proposed park name "Horizon
Park" as appropriate.
FISCAL IMPACT:
Staff has performed a review of the preliminary park construction estimate of probable cost provided
by the Landscape Ar6hitect consultant. The overall estimated cost of construction is within the
established budget for the park ($1.5 million). While changes to the cost estimate are anticipated as
the Park Master Plan evolves into construction drawings, staffis of the opinion that the estimates are
a reliable representation of anticipated costs. Construction cost will be borne by the developer in
response to the Park.Acquisition and Development (PAD) Fee obligation requirements of SPA One,
and as defined by the Otay Ranch Parks Agreement. Long-term park maintenance costs for public
parks will be addressed through the City's General Fund.
Attachments:
A, Park Location Plan
B. Village One West Park P-13 Master Plan
C. Village One West Park P-13 Comfort Station Elevations
Parks and Recreation Commission draft meeting minutes (May t5, 2003)
Attachment A
Attachment
Z
Attachment C
....... NOIIVlS lUOJ~O0 YOM
0
Attachment D
City of Chula Vista
Parks and Recreation Commission
~inutes
Thursday - 6:30 p.m. May 15, 2003
Public Works Center 1800 Maxwell Rd
Meeting called to order by Chair Larry Perondi at 6:30 p.m.
Staff Present: Buck Martin, Direclor of Recreation
Dave Byers, Director of Public Works Operations
Shauna Stokes, Assistant Director of Recreation
Jack Griffin, Assistant Director of Building and Parks Construction
Mary Hofmockel, Principal Landscape Architect
Ed Hall, Principal Recreation Manager
Brian Cox, Principal Recreation Manager
-Joe Gamble, Landscape Planner II
Ted Nelson, Recreation Supervisor
Margarita Cellano, Recording Secretary
Guests: John Willett, C.V. Resident, Representative, Otay Valley Regional Park
Janeen Reed, Trails in Open Space
Mark Kukucher, Horse Trails
Jori Rilling, Otay Land Company
Peter Watry, Chula Vista Resident, Crossroads II Representative
Susan Warty, Chula Vista Resident
Cynthia Drake, Chula Vista Resident
Olsie Owens, Chula Vista Resident
Don Ross,
Pat Caughey, Weimer, Yamada and Coughey Landscape Architects
Brad Hiluker,
1. Roll Call/Motion to Excuse
Members Present: Commissioner Salcido, Commissioner Ramos, Commissioner
Perondi, Commissioner Strahl, Commissioner Rios
Members Absent: Commissioner Weidner, Commissioner Rude
MSC (Rios/Ramos) to excuse Commissioner Weidner and Commissioner Rude from
tonight's meeting
2. Public Comments - Mr. Watry and Ms. Reed will address the Commission when their item
of interest comes up on the Agenda.
3. Action Items
a. Minutes of April 9, 2003 Special Meeting - MSC (Strahl/Rios) (Vote 5-0-0-2
Weidner and Rude absent) to move this item to the June 2003 Parks and
Recreation Commission Meeting.
b. Minutes of April 17, 2003 - MSC (Rios/Salcido) (Vote 5-0-0-2 Weidner and Rude
absent) to approve the minutes as presented
c. Otay Ranch Neighborhood Park Village 1 West - Mr. Pat Coughey of Weimer,
Yamada, and Coughed discussed the park elements and programming of
Parks and Recreation Commission
,,, Ma'y.L.5, 2003 Page 2
Otay Ranch Neighborhood Park. Items discussed include: park is 5.7 acres
and is located on East Palomar Street and a soon 1o be constructed cul-de-
sac that will serve an upcoming Elementaw school and park.
Elements and programming include: one softball field with an overlaid multi-
purpose turf area, children's play area with accessible play equipment, picnic
facilities, basketball court (not lighted), pedestrian walkways and paths,
comfort station, on-site parking (25 spaces), and pedestrian and security
lighting. Additional feature in the park includes a council ring that serves as a
gathering area for informal socializing. Poetw phrases are embedded within
the concrete circles to serve as a discussion and focal point.
The comfort station is located within proximity to the tot lot and picnic areas.
The floor plan design takes into consideration the architectural vernacular of
the modernized agrarian theme. Construction materials include, stone
accenls, painted stucco, and galvanized gates.
Commissioner Strahl asked if the walk-way/path went around lhe park, and if
provisions for dog deposit stations were strategically placed and accessible.
Mr. Caughey responded lhat the path/walk way did go around the
parameter of the park, and dog deposit stations were placed throughout the
park. These items are standard in all parks.
Commissioner Salcido asked if secondary lighting was a provision in the park
for security purposes.
Mr. Gamble (Landscape Planner II) responded that security lighting was a
provision along the concrete pathways.
Commissioner Strahl commented that he would like to see the basketball
courts lit.
Ms. Hofmockel (Principal Landscape Architect) responded that discussion on
lighting program elements in parks would be discussed at the June meeting.
The Commission discussed the proposed name "Horizon Park", and decided
that it would fit the park well.
MSC (Salcido/Rios) (Vote 5-0-0-2 Weidner and Rude absent) to approve the
proposed Park Master Plan in Otay Ranch Village 1 West as presented with the
caveat that lights to the basketball cou~ be stubbed underground, and
approve the proposed name of the park as "Horizon Park."
d. Proposed Greenbelt Master Plan - Mr. Duane Ba771e (Principal Planner)
introduced himself and the consultant, Peggy Gentry. Mr. Bazzle also
informed the commission on the intent and purpose of the Greenbelt
Master Plan, which is indented to link existing and future parks that occur
within the City and surrounding municipalities. A Power Point Presentation
was provided to commission on tf~e Greenbelt Master Plan, and briefly
discussed key elements that include: General Plan Concept, Goals,
Specific Segment Issues and Recommendations, and Implementation and
Management. This Master Plan is tentatively scheduled for presentation to
the Planning Commission on May 28. Mr. Bazzle discussed specific
segments, issues, and recommendation related each element.
?
Parks and Recreation Commission
May 15, 2003 Page
Chair Perondi commented that this was a well thought out planned concept,
and he could see the strong cooperation between all municipalities.
Chair Perondi opened the floor for comments by the public.
Mr. Peter Warty, representative of Crossroads II talked briefly about lhe
presentation. Mr. Watry stated that he was an enthusiastic supporter of the
Greenbelt concept when it was developed 15-years ago, and thai over the
years, the concept was changed without public input. He also stated that
there is no buffer between municipalities. He also informed the Commission
that he submitted his Greenbelt concerns and changes to the Planning
Department earlier in the day for consideration. He asked that the
Commission, and city staff change their culture in decision making that would
include public input. In addition, Mr. Watry requested that the Parks and
Recreation Commission not fake action on the Greenbelt Master Plan, until
they have sufficient time to review all the information from the public.
Ms. Janeen Reed, representative of Bonita Trails Organization talked briefly
about the Open Space Trails, and greenbelt areas and stated that these
areas are all important in the concept. She asked that the Commission not
move the horse rink from it's present location in Rohr Park because currently,
this is the last public horse arena in the area.
Commissioner Strahl stated lhat before he takes action on the Greenbelt
Master Plan, he would like to receive more information that includes the
Planning Department's comments and public comments.
MSC (Slrahl/Rios) (Vote: 5-0-0-2 Weidner and Rude Absent) that the Parks and
Recreation Commission approves the Master Plan in a conceptual way with its
many positive attributes, but cannot approve it until they receive more public
input and Planning Commission input. It is requested that Mr. Bazzle returns in
June with comments from the Planning Commission.
e. Rohr Park Master Plan Existing Conditions - Mr. Byers (Director of Public Works
Operations) presented a map of the current Rohr Park conditions.
Commissioner Strahl informed the Commission that he would like them to
consider and recommend to the City Council that the Master Plan be
updated and include Rohr Recreation area, golf course, 3-acres of land, and
the land by Central Avenue. He went on to say that public input is needed
on how they see this recreation area.
Discussion took place as to whether the City of Chula Vista is allowed fo utilize
the three-acres adjacent to the golf course for purposes not related to the
golf course or City use. The Commission raised the question as to how the
property was acquired and whether that acquisition and its associated
financing allowed the lease of the property to the County of San Diego for a
library or other uses or purposes.
Mr. Griffin (Assistant Director of Building and Park Construction) stated that he
would talk with the City Attorney's office, and will report back to the
Commission as soon as he has an answer.
Parks and Recreation Commission
May 15, 2003 Page 4
MSC (Strahi/Salcido) (Vote: 5-0-0-2 Weidner and Rude Absent) that the Chula
Vista City Council support the Parks and Recreation Commission's
recommendation that an updated Rohr Park Master Plan be developed for
the Rohr Park Recreational Area to include community and stakeholder input
defined as Rohr Park, the Chula Vista Municipal Golf Course, and yet to
developed land adjacent to the golf course, (i.e., 3-acreas west of the South
Bay Banquet Center and 2 triangle parcels along Bonita Road and
Sweetwater/Central Avenue.
Ms. Stokes (Assistant Recreation Director] stated that this item could be
presented to the City Council under Boards and Commissions, and that a
report would be developed, and could possibly be presented at either the
June or July meeting.
Commissioner Strahl stated that he would like to address the City Council
when this item is brought forward to them.
4. Information Items
a. Consideration of Proposed Recreation Strategic Plan Initiatives and Goals - Mr.
Martin IDirector of Recreation) discussed the proposed Recreation Strategic Plan
Initiatives and Goals, and briefly discussed the Strategic Plan process. He also
went on ta say that this Strategic Plan would be reviewed on a quarterly basis,
and serves as a guide for the Recreation Department.
The Commission endorsed the Recreation Department's Proposed Five Year
Recreation Strategic Plan Initiatives and Goals and the mission, vision, and values
statements.
b. Capital Improvement Project Program - Mr. Griffin (Assistant Director of Building
and Park Conslruction) informed the Commission of the Chula Vista Five-Year CIP
Projections. Mr. Griffin informed the Commission that this item would be
presented to the City Council on May 20, 2003. In addition, Mr. Griffin discussed
the Western Chula Vista Infrastructure Financing Program, and the main objective
is to focus resources in the western portion of the City.
c. Veteran's Park Status - Mr. Griffin (Assistant Director of Building and Park
Construction) discussed status of Veteran's Park. He informed the Commission
that it is anticipated that the park would be completed by August 2005. Mr.
Griffin briefly talked about the Design Build process for this project.
d. Design Build Status - This item relates to Montevalle Park (Salt Creek). The City has
pre-approved lists for design build contractors. In the process of creating a new
list of design builders for libraries, parks, etc. an RFQ was sent out, and the
department received information on 12 contractors. Interviews will be
conducted next week, and going to Council in June for approval. Mr. Griffin
discussed the process and intent of the Design Build process.
e. Rohr Park Ballfield #18 Update - Mr. Cox IPrincipal Recreation Manager) provided
an update on Ballfield #18. Mr. Cox stated that Recreation staff met with Bonita
Rebels Soccer regarding concerns with the Department's allocation of Rohr Ball
Field #18. Through discussion, the department has agreed to release one
additional evening per week for utilization by YSC organizations through the
twice-yearly allocation process.
Parks and Recreation Commission
May 15, 2003 Page 5
f. Olay Park Master Plan - Ms. Hofmockel (Principal Landscape Architect) provided
a copy of the Otay Park Master Plan for information.
5. Unfinished Business - None
6. New Business - None
7. Written Communications - None
8. Commission Comments -
Commissioner Perondi asked to be excused from the June 19, 2003 Commission Meeting.
9. Staff Comments -
a. Recreation Monthly Report - Mr. Martin (Director of Recreation) discussed the
May monthly Recreation Report.
b. Jim Thomas, Recreation Supervisor II Retirement - Retirement party on
Wednesday, 5/21/03 at the Woman's Club from 4-7 p.m. RSVP to Margarita
Cellano at 409-5979.
10. Other - None
Meeting adjourned at 9:30 p.m. to next meeting of June 19, 2003, which will be held at the
Public Works Center at 6:30 p.m.
Submitted by:
Margarita Cellano
Recording Secretary
RESOLUTION NO. 2003-
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROVING AN INDIVIDUAL
PARK MASTER PLAN AND NEIGHBORHOOD PARK
NAME FOR PARK P-13 OF OTAY RANCH SPA ONE,
VILLAGE ONE WEST
WHEREAS, the proposed public neighborhood park site is located in Otay
Ranch Village One West, which is governed by the Otay Ranch General Development
Plan (GDP) and SPA One; and
WHEREAS, the P-13 park site in Village One West is located approximately
one mile west of Heritage Park, and is the third public neighborhood park in Village
One; and
WHEREAS, the park's design as set tbrth in the proposed Master Plan is
consistent with the concept plan contained in the Otay Ranch SPA One Parks,
Recreation, Open Spacc and Trails Master Plan by incorporating key recreational
facilities envisioned for the site; and
WHEREAS, the Parks and Recreation Commission at its regular meeting held
on May 15, 2003 voted to recommend approval of the Draft Park Master Plan for the
5.3-acre public neighborhood park site in the Otay Ranch Village One West
subdivision and approval of the park's name "Horizon Park."
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Chula Vista does hereby approve an individual Park Master Plan and Neighborhood
Park Name of"tIorizon Park" for Park P-13 of Otay Ranch SPA One, Village One
West.
Presented by Approved as to form by
Andy Campbell Ann ~o~e ¢.-
Director of Building and Park City Attorney
Construction
Item
Meeting Date 6/17/03
COUNCIL AGENDA STATEMENT
ITEM TITLE: Resolution of the City Council of the City of Chula Vista,
increasing the maximum principal amount of the 2003 Special Tax Bonds of
Community Facilities District No. 2001-2 (McMillin Otay Ranch Village
Six) authorized to be issued and approving the form of a revised Preliminary
Official Statement in connection with the issuance and sale thereof
SUBMITTED BY: Director of Engineeri~g/~
Director of Finan~e~
REVIEWED BY: City Manage~~ (4/Sths Vote: Yes No X )
On August 13, 2002, the City Council, following a public hearing to take public testimony on the
formation of Community Facilities District No. 2001-2 (McMillin Otay Ranch Village Six)
("CFD No. 2001-2" or the "District") (see Attachment 1 for a recorded map of the boundaries of
CFD No. 2001-2) and the authorization to levy special taxes and to incur a bonded indebtedness
secured by such special taxes within CFD No. 2001-2, took action to establish CFD No. 2001-2. On
August 20, 2002 the qualified electors of CFD No. 2001-2 voted to authorize the levy of special
taxes within CFD No. 2001-2 and to authorize the issuance of bonds secured by such special taxes.
On February 4, 2003 City Council adopted Resolution No. 2003-45 (the "Resolution of Issuance")
authorizing the issuance of bonds by CFD No. 200I-2 in a maximum principal amount not to exceed
$10,250,000 and approving the forms of various documents related to the issuance of such bonds,
including the Bond Indenture, the Bond Purchase Agreement, the Preliminary Official Statement and
other documents, and authorizing certain actions in connection with the issuance of such bonds.
Due to the subsequent establishment of the traffic monitoring system, the issuance of the bonds was
delayed from March 2003 until July 2003. This monitoring system places a cap on the amount of
building permits to be pulled on both an annual (all building permits within the City of Chula Vista)
and per project basis for selected developments within the Eastern Territories over the next three
years. This monitoring system was discussed and approved by Council in April 2003. Development
within CFD No. 2001-2 is subject to this monitoring system. Also due to lower interest rates the
maximum principal amount of the Special Tax Bonds authorized to be issued has increased to
$11,000,000.
In tonight's action, Council will: 1) consider the approval of the form of a revised Preliminary
Official Statement (Exhibit A) which reflects discussions on the monitoring system, how building
permits will be allocated under the agreements with the owners of the properties subject to the
monitoring system and updates of the various tables, and 2) increase the maximum principal amount
of the Special Tax Bonds authorized to be issued from $10,250,000 to $11,000,000.
RECOMMENDATION: That Council:
Page 2, Item { '~
Meeting Date 6/17/03
· Approve the Resolution approving the increase of maximum principal amount o£the Special
Tax Bonds authorized to be issued and the form o£the revised Preliminary Official Statement
for Community Facilities District No. 2001-2 and authorizing certain actions in connection
therewith.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
Background
On August 13, 2002, the City Council took action following a public hearing to establish Community
Facilities District No. 2001-2, and on August 20, 2002 the qualified electors of CFD No. 2001-2
voted to approve the levy of special taxes within CFD No. 2001-2 and the issuance of bonds by CFD
No. 2001-2 to be secured by the levy of such special taxes.
On February 4, 2003 Council approved the Resolution of Issuance authorizing the issuance of not to
exceed $10,250,000 principal amount of bonds by CFD No. 2001-2 and approving the forms of
various documents related to the issuance of the bonds including, among others, the Preliminary
Official Statement, Bond Indenture and Bond Purchase Agreement. CFD No. 2001-2 was planning to
sell bonds in March of 2003. As mentioned previously, the City of Chula Vista was simultaneously
implementing a monitoring system, which the City financing team determined was necessary to be
disclosed in the Preliminary Official Statement. Therefore the sale of bonds was delayed to allow
time for the appraisal and market absorption study to be updated to reflect the impact, if any, of the
monitoring system and revision of the Preliminary Official Statement to discuss the monitoring
system and to reflect the updated appraisal and market absorption study.
Bruce W. Hull & Associates has conducted an updated appraisal (dated May 1, 2003) on the taxable
property within CFD No. 2001-2. Attachment 2 illustrates a bond sale of $9.85 million, which will
result in an overall lien ratio of 7.46:1. All of the planning areas within CFD No. 2001-2 have a lien
ratio of greater than 4: 1. Therefore, the proposed bond sale will continue to satisfy the value to debt
requirements of the City of Chula Vista Statement of Goals and Policies Regarding the
Establishment of Community Facilities Districts, as amended. This proposed bond sizing was an
initial estimate and could vary due to interest rates.
Resolution
There are is one resolution on today's agenda that, if adopted, will accomplish the following:
THE RESOLUTION APPROVING THE INCREASE OF THE MAXIMUM PRINCIPAL
AMOUNT OF THE BONDS TO BE AUTHORIZED AND THE FORM OF THE PRELIMINARY
OFFICIAL STATEMENT performs the following:
· Approves the increase of the maximum principal an~ount of the Special Tax Bonds
authorized to be issued from $10,250,000 to $11,000,000.
Page 3, Item [~/
Meeting Date 6/17/03
· The form of the revised Preliminary Official Statement (Exhibit A) which describes the
Community Facilities District and type of bonds, including terms and conditions thereof, for
the bondholders.
It should be noted that Council would only be approving the form of the aforementioned document.
The resolution authorizes the Director of Finance to approve the final form of the Preliminary
Official Statement when such form satisfies the requirements of the Securities and Exchange
Commission.
Future Actions
Adoptions of tonight's Resolutions will approve the increase the maximum principal amount of the
Special Tax Bonds authorized and the form of the revised Preliminary Official Statement documents.
The issuance of the bonds is anticipated in July 2003. The acquisition of selected public
improvements will be audited only after 100% of the project is deemed complete.
FISCAL IMPACT: The City's General Fund receives 1% of the bond sale amount in accordance
with the CFD Policy for the use of the City's bonding capacity. The developer will pay all formation
costs and has deposited money to fund initial consultant costs, and City costs in accordance with the
approved Reimbursement Agreement. The Citywill receive the benefit of the full cost recovery for
staff time involved in district formation and administration activities. Staff anticipates that most of
the CFD No. 2001-2 administration will be contracted out.
Attachments:
Attachment 1: Recorded Boundary Map for CFD No. 2001-2
Attachment 2: Estimated Value to Lien Ratios Based on Appraisal
Exhibit A: Revised Preliminary Official Statement for CFD No. 2001-2
J 2Engineer~AGENDA\CAS 6-17-03 CFD 2001-02.doc
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA,
INCREASING THE MAXIMUM PRINCIPAL AMOUNT OF THE 2003 SPECIAL
TAX BONDS OF COMMUNITY FACILITIES DISTRICT NO. 200l-2
(MCMILLIN OTAY RANCH VILLAGE SIX) AUTHORIZED TO BE ISSUED
AND APPROVING THE FORM OF A REVISED PRELIMINARY OFFICIAL
STATEMENT IN CONNECTION WITH THE ISSUANCE AND SALE THEREOF
WHEREAS, on February 4, 2003, the City Council of the City of Chula Vista, California
(this "City Council"), acting in its capacity as the legislative body of Community Facilities District
No. 2001-2 (McMillin Otay Ranch Village Six) (the "Community Facilities District"), adopted its
Resolution No. 2003-45 (the "Resolution of Issuance") pursuant to the terms and provisions of the
"Mello-Roos Conmrunity 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 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") to authorize the issuance by the Commanity Facilities District of its 2003
Special Tax Bonds (the "Bonds") in a maximum principal amount not to exceed $10,250,000; and,
WHEREAS, by adoption of the Resolution of Issuance the City Council also approved the
form of various documents related to the issuance and sale of the Bonds including the form of a
preliminary official statement (the "Preliminary Official Statement"); and,
WHEREAS, subsequen~ to the adoption of the Resolution of Issuance but prior to the sale
and delivery of the Bonds, the City Council adopted its traffic monitoring program which
encompasses, together with certain other development projects, the development within the
Community Facilities District; and
WHEREAS, in order to adequately disclose the traffic monitoring plan to potential
purchasers of the Bonds, the Preliminary Official Statement has been revised to disclose the traffic
monitoring plan, a revised market absorption analysis and appraisal of the property within the
Community Facilities District that consider the impact of the traffic monitoring program and the
change in the status of development within the Community Facilities District since the adoption of
the Resolution of Issuance; and
WHEREAS, the form of the revised Preliminary Official Statement (the "Revised
Preliminary Official Statement") has been presented to this City Council for its review and approval;
WHEREAS, subsequent to the adoption of the Resolution of Intention, conditions in the
municipal bond market have improved and as a result of more favorable interest rates, it is
anticipated that the principal amount of the Bonds that can be supported by the authorized special
taxes will exceed the $10,250,000 maximum principal amount authorized to be issued by the
Resolution of Issuance; and
WHEREAS, the maximum principal amount of the Bonds authorized to be issued by the
qualified electors of the Community Facilities District is $13,000,000; and
WHEREAS, increasing the maximum principal amount of the Bonds from $10,250,000 to
$11,000,000 will comply and be consistent with the City of Chula Vista Statement of Goals and
Policies Regarding the Establishment of Community Facilities Districts, as amended to date (the
"Goals and Policies").
NOW, THEREFORE, 1T IS HEREBY RESOLVED BY THE CITY COUNCIL, ACTING IN
ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FAC[LITEIS DISTRICT NO.
2001-2 (MCMILLIN OTAY RANCH VILLAGE SLX), AS FOLLOWS:
SECTION 1. Recitals. The above recitals are true and correct.
SECTION2. Determinations. This legislative body hereby makes the following
determinations pertaining to the proposed issuance of the Bonds in a not to exceed maximum
principal amount of $11,000,000:
The Goals and Policies generally require that the full cash value of the properties within the
Community Facilities District subject to the levy of the special taxes must be at least 4 times
the principal amount of the Bonds and the principal amount of all other bonds outstanding
that are secured by a special tax levied pursuant to the Act on property within the Community
Facilities District or a special assessment levied on property within the Community Facilities
District (collectively, "Land Secured Bonded lndebtedness").The Act authorizes the City
Council, acting as the legislative body of the Community Facilities District, to sell the Bonds
only if the City Council has determined prior to the award of the sale of the Bonds that the
value of such properties within the Colmnunity Facilities District will be at least 4 times the
amount of such Land Secured Indebtedness.
The value of the property within the Community Facilities District which will be subject to
the special tax to pay debt service on the Bonds will be at least 4 times the amount of the
Land Secured Bonded Indebtedness assuming the principal amount of the Bonds is
$11,000,000.
The Goals and Policies further provide that the full cash value of each development area for
which no final subdivision map has been filed must also be at least 4 times the Land Secured
Bonded Indebtedness allocable to each such property. "B" Maps have bee~ approved and
recorded for all of the property within the Community Facilities District, therefore, there are
no development areas that are subject to this valuation test.
The foregoing determinations are based upon the full cash value of such properties and
development areas as shown upon an appraisal of the subject properties prepared by Bruce
W. Hull & Associates, a state certified real estate appraiser, as defined in Business and
:
Professions Code Section 11340(c). Such detem1ination was made in a manner consistent
with the Goals and Policies.
SECTION 3. Maximum Principal Amount of the Bonds. The Bonds in an aggregate
principal amount not to exceed $1 1,000,000 are hereby authorized to be issued subject to all other
terms and conditions as set forth herein and in the Resolution ofIssuance.
SECTION 2. Official Statement. The City Council hereby approves the form ofthe Revised
Preliminary Official Statement as presented to this City Council and on file with the City Clerk,
together with any changes therein or additions thereto deemed advisable by the Director of Finance
or, in the absence of the Director of Finance, another Authorized Officer (as such term is defined in
the Resolution ofIssuance). Pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934
(the "Rule") the Director of Finance or, in the absence of the Director of Finance, another Authorized
Officer is authorized to determine when the Revised Preliminary Official Statement is deemed final
(the "Deemed Final Preliminary Official Statement"), and the Director of Finance or such other
Authorized Official is hereby authorized and directed to provide written certification thereof. The
execution of a final official statement (the "Final Official Statement"), which shall include such
changes and additions to Deemed Final Preliminary Official Statement as are deemed advisable by
the Director of Finance or, in the absence of the Director of Finance, another Authorized Officer
pursuant to the Rule, shall be conclusive evidence of the approval of the Final Official Statement by
the Community Facilities District. The City Council hereby authorizes the distribution of the final
form of the Deemed Final Preliminary Official Statement by Stone & Youngberg LLC (the
"Underwriter") to all prospective purchasers of the Bonds and directs that the Underwriter distribute
the Final Official Statement to all purchasers of the Bonds as required pursuant to the Rule.
SECTION 4. Conflict or Inconsistency with Resolution of Issuance. If terms of this
Resolution shall govern and prevail over any inconsistent or conflicting term or terms of the
Resolution of]ssuance. All other terms of the Resolution of Issuance shall remain in ful1 force and
effect.
SECTION 5. Effective Date. This resolution shall take effect from and after its adoption.
Presented by
Approved as to form by
rÀ~
Ann Moore
City Attorney
Clifford Swanson
Director of Engineering
J:\Attomcy\Rcso\approvlIlg revised P~S 6.5.03
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Stradling Yocca Car/son & Rauth
Draft of 6/1 0/03
PRELIMINARY OFFICIAL STATEMENT DATED AS OF
NEW ISSUE - BOOK-ENTRY-ONLY
,2003
NO RATING
In the opinion of Best Hest & Krieger LLP, Bond Counsel,_ based on an analysis afexisting laws, regulations, rulings and court decisions,
and assuming, among other matters, compliance with certam covenants, intcrest on the Bonds IS excluded from gross income for fèderal
income tax purposes under Section 103 oJ the Internal Revenue Code of 1986 and is e:œmpl ¡¡-om State of California personal income taxes.
1n the further opinion of Bond Counsel, interest on the Bonds is not a specific preference llemfòr purposes offederal individual or corporate
alternate minimum taxes,. although Bond Counsel observes that such interest is included in aqjusted current earnings in calculating federal
corporate alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other federal or state income tax
consequences relating to the ownership or disposition of, or the accrual or receipt a/interest on, the Bonds. See "TAX MATrERS'" herein.
$9,850,000'
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 2001-2
(McMILLIN - OT A Y RANCH - VILLAGE SIX)
2003 SPECIAL TAX BONDS
Dated: Date of Delivery Due: September I, as shown on the inside page
The City ofChu]a Vista Community Facilities District No. 2001-2 (McMillin - Otay Ranch - Village Six) 2003 Special Tax Bonds
(the '·Bonds") are being issued and delivered to finance various public improvements needed to develop property located within District
No. 2001-2 (McMillin - Otay Ranch - Village Six) (the "District"). The District has been formed by and is located in the City ofChula Vista
(the "City"), County of San Diego, California.
The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Sections 53311
€.! §SS1. of the Government Code of the State of California), and pursuant to a Bond Indenture (the "Indenture") dated as of July L 2003, by
and between the District and U.S. Bank National Association, as fiscal agent (the "fiscal AgenC). The Bonds are special obligations of the
District and are payable solely from revenues derived from certain annual Special Taxes (as defined herein) to be levied on thc taxable land
within the District and from certain other funds pledged under the Indenture, all as further described herein. The Special Taxes are to be
levied according to the rate and method of apportionment approved by the City Council of the City and the qualified electors within the
District. See "SOURCES OF PAYMENT FOR THE BONDS - Rate and Method of Apportionment." The City Council oftbe City is the
legislative body of the District.
The Bonds are issuable in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The
DepositoI)' Trust Company, New York, New York ("DTC'). Individual purchases may be made in principal amounts of $5,000 and integral
multiples thereof and will be in bookMentry form only. Purcha."ers of Bonds will not receive certificates representing their beneficial
ownership of the Bonds but will receive credit balances on the books of their respective nominees. The Bonds \vill not be transferable or
exchangeable except for transfer to another nominee of DTC or as otherwise described herein. Interest on the ßonds \vill be payable on
March 1, 2004 and semiannually thereafter on each March 1 and September I. Principal of and interest on the Bonds vvi!! be paid by the
Fiscal Agent to DTC for subsequent disbursement to DTC Participants who are obligated to remit such payments to the beneticial owners of
the Bonds. See "THE BONDS - Description of the Bonds" herein.
lv'either the faith and credit nor the taxing power of the City, the County of San Diego, the State of California or any political
subdivision thereof is pledged to the payment of the Bonds. Except for [he Special Taxes, no other taxes are pledged to the payment qf the
Bonds. The Bonds are special tax obligations a/the District payable solely from Special Taxes and other amounts held under the Indenture
as morefully described herein.
The Bonds are subject to optional redemption, extraordinary mandatory redemption and mandatory sinking fund redemption prior
to maturity as set forth herein. See 'THE BONDS - Redemption of Bonds" herein.
CERTAIN EVENTS COULD AFFECT THE ABILITY OF THE DISTRICT TO PAY THE PRINCIPAL OF AND
INTEREST ON THE BONDS WHEN DUE. THE PURCHASE OF THE BONDS INVOLVES SIGNIFICANT RISKS, AND THE
BONDS ARE NOT SUITABLE INVESTMENTS FOR ALL INVESTORS. SEE THE SECTION OF THIS OFFICIAL
STATEMENT ENTITLED "SPECIAL RISK FACTORS" FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD
BE CONSIDERED. IN ADDITION TO THE OTHER MATTERS SET FORTH HEREIN, IN EV ALUA TING THE INVESTMENT
QUALITY OF THE BONDS.
This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms
of this issue. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed
investment decision.
MATURITY SCHEDULE
(See Inside Cover Page)
The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as 10 their legality by Best
Best & Krieger LLP, Bond CounseL and subject to certain other conditions. Certain legal matters will be passed on for the City and the
District by the City Attorney and for the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California, as counsel to the Underwriter. It is anticipated that the Bonds in book-entry form wil! be available for delivery to DTC in New
York, New York, on or about ,2003.
Stone & Youngberg LLC
Dated:
.2003
Preliminary, .rubjecI 10 change
DOCSOC\932761 v9\22245.0 140
Maturity
Date
(September I)
Principal
Amount
$
$
Interest
Rate
MA TURITY SCHEDULE
,
(Base CUSIP: )
Yield
CUS¡p'
Maturity
Dute
(September I)
_% Term Bonds due September 1,2027 Price:
_% Term Bonds due September 1,2033 Price:
Principal
Amount
Interest
Rate
Yielil
CUS¡p'
Copyright 2002, American Bankers Association CUSIP data herein is provided by Standard & Poor's, Cf/Sf!' Service Bureau, a division of
The McGraw-Hill Companies, ¡ne
DOCSOC\932761 v9\222450 140
% - CUSIP:
% - CUSIP:
CITY OF CHULA VISTA, CALIFORNIA
CITY COUNCIL
Steve C. Padilla, Mayor
Jerry Rindone, Mayor Pro Tern
John C. McCann, Councilrnernber
Patty Davis, Councilrnernber
Mary Salas, Councilrnernber
CITY STAFF
David D. Rowlands, Jr., City Manager
Sid Morris, Assistant City Manager
George Krernpl, Assistant City Manager
Cheryl Fruchter, Assistant City Manager
Ann Moore, City Attorney
Maria Kachadoorian, Director of Finance
Susan Bigelow, City Clerk
Clifford Swanson, Director of Engineering
BOND COUNSEL
Best Best & Krieger LLP
San Diego, California
FINANCIAL ADVISOR TO THE CITY
Fieldrnan Rolapp & Associates
Irvine, California
SPECIAL TAX CONSULTANT
REAL ESTATE APPRAISER
McGill Martin Self, Inc.
Chula Vista, California
Bruce W. Hull & Associates, Inc.
Ventura, California
MARKET ABSORPTION CONSULTANT
FISCAL AGENT
The Meyers Group
Solana Beach, California
u.S. Bank National Association
Los Angeles, California
DOCSOC\932761 v9\22245.0 140
Except where otherwise indicated, all information contained in this Official Statement has
been provided by the District. No dealer, broker, salesperson or other person has been authorized by
the District, the City, the Fiscal Agent or the Underwriter 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 representations Ú1USt not be relied upon as having
been authorized by the District, the City, the Fiscal Agent 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.
This Official Statement is not to be construed as a contract with the purchasers or Owners of
the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or
matters of opinion, whether or not expressly so described herein, are intended solely as such and are
not to be construed as representations of fact. This Official Statement, including any supplement or
amendment hereto, is intended to be deposited with a nationally recognized municipal securities
depository.
The Underwriter has provided the following sentence for inclusion in this Official Statement:
The Underwriter has reviewed the information in this Official Statement in accordance with,
and as part of, its responsibilities to investors under the federal securities laws as applied to the facts
and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or
completeness of such information.
The infonnation set forth herein which has been obtained from third party sources is believed
to be reliable but is not guaranteed as to accuracy or completeness by the District or the City. The
information and expressions of opinion 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 District, the City or any
other parties described herein since the date hereof. All summaries of the Indenture or other
documents are made subject to the provisions of such documents respectively 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 District for further information in connection therewith.
Certain statements included or incorporated by reference in this Official Statement constitute
"forward-looking statements" within the meaning of the United States Private Securities Litigation
Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended,
and Section 27 A of the United States Securities Act of 1933, as amended. Such statements are
generally identifiable by the terminology used such as "plan," "expect," "estimate," "project,"
"budget" or other similar words. Such forward-looking statements include, but are not limited to,
certain statements contained in the information under the caption "THE COMMUNITY
FACILITIES DISTRICT" and "THE DEVELOPMENT AND PROPERTY OWNERSHIP."
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECT A nONS
CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE
ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRlBED TO BE
MATERlALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
DOCSOC\932761 v9\2224 5.0140
·
STATEMENTS. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR
REVISIONS TO THE FORWARD-LOOKING STATEMENT SET FORTH IN THIS OFFICIAL
STATEMENT.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER
MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAYBE DISCONTINUED AT ANY TIME.
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH
ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES LAWS OF ANY STATE.
DOCSOC\932761 v9\22245.0 140
TABLE OF CONTENTS
Page
INTRODUCTION .................................................................................................................................. I
General....................................................................................................................... ...................... I
The District........................... .................. ................. ...................... ................. .......................... ....... I
Sources of Payment for the Bonds............ ............... ........................ ...... ................................. .........3
Description of the Bonds.... .................... ................ ........................ ............ .... ........................ .........4
Tax Matters.......................... ................... ................ ....................... ........................ ................. ......... 5
Professionals Involved in the Offering ............................................................................................5
Continuing Disclosure.... ..................... .................. .................... ............... .................................. .....5
Bond Owners' Risks....... ....................... ...................................... ...................... ..............................5
Forward Looking Statements.............. .................. ....................... ........................ ............................6
Other Information............ .................... ................. ....................... ................. ...................................6
ESTIMATED SOURCES AND USES OF FUNDS..............................................................................7
THE BONDS .........................................................................................................................................7
Authority for Issuance.... ..................... ................. .................... ........................................................7
Purpose of the Bonds.... ..................... ................. .................... ................................ .........................7
Description of the Bonds ................... ................. .................... ........................ .... ... ..........................7
Redemption of Bonds ....................... .................. .................. ............................... ... .........................8
Notice and Selection of Bonds for Redemption.............................................................................10
Notice of Redemption ....................... .................. .................... ............................. ........:................. 11
Effect of Redemption ... ..................... ................. .................... .................................. ...................... 11
Transfer and Exchange of Bonds ................................................................................................... 12
Debt Service Schedule for the Bonds ............................................................................................ 13
SOURCES OF PA YMENT FOR THE BONDS ................................................................................. 13
Limited Obligations.. ........................ .................. ................... ................................. ....................... 13
Special Taxes ............ ........................ ................. .................. ...................................... .................... 14
Reserve Fund ............ ....................... ................ ................. .......................................... ................... I 8
Issuance of Parity Bonds .................. ................ .................. ......................................... .............:..... 1 9
THE COMMUNITY FACILITIES DISTRlCT...................................................................................19
General Description of the District ...............................................................................................19
Description of Authorized Facilities .................. ................ ...................................... ...................... 19
Status of Public Improvements........ ................. ................... ................................. .........................21
Prine ipal Taxpayers. ......................... ................ .................. ..................................... ......................21
Estimated Direct and Overlapping Indebtedness ........................................................................... 21
Expected Tax Burden..................... ................. .........:............ ....................................... ..................24
Estimated V alue-to- Lien Ratios..... ................... ................... ........................................ ..................25
Permitted Land Use........................ .................. ................... ....................................... ....................28
THE DEVELOPMENT AND PROPERTY OWNERSHIP ................................................................28
General Description and Location ofthe District..........................................................................29
The Developer............ ....................... .................. .................. ................................... ......................29
Development Plan...... ....................... .................. .................. .................................... .....................30
Merchant Builders....... ...................... .................. .................. ................................... ......................3 I
Financing Plan ............ ...................... ................. .................. ..................................... .....................32
Status of Entitlement Approvals....... ................. .................. ....................................... ...................34
-1-
DOCSOC\932761 v9\22245.0 140
TABLE OF CONTENTS
Page
En v ironmental Constraints............................................................................................................. 34
Infrastructure Requirements and Construction Status ...................................................................34
Potential Limitations on Development....... ............... ........................ ........ ............................ ........ 3 5
Appraisal........ ............................ .................. ................ ....................................................... ...........36
Market Absorption Study........... .................. ................. .................................................... .............38
SPECIAL RISK FACTORS............... .................. .................. ............................................... ...............38
Concentration of Ownership............ ................ .................. ............................................. ...............38
Limited Obligations ....................... .................. ................. .............................................. ...............39
Insufticiency of Special Taxes....... .................. .................. .......................................... ..................39
Tax Delinquencies ........................... .................. ................. ......................................... ..................39
Failure to Develop Properties.......... ................. ................. ....................................... .....................40
Future Land Use Regulations and Growth Control Initiatives ......................................................41
Water A vailabi lity ..... ........................ .................. ................... .................................. ......................42
Endangered Species.... ....................... ................. ................... ............................. ...........................42
Natural Disasters......... ....................... ................. ................... ......................... ..... ..........................43
Hazardo us Substances.................................................................................................................... 4 3
Parity Taxes, Special Assessments and Land Development Costs ................................................43·
Disclosures to Future Purchasers......... ................. ....................... ........... .......... .............................44
Non-Cash Payments of Special Taxes. ................... ..................... .......... ...... ..................................45
Payment of the Special Tax is not a Personal Obligation ofthe Owners ......................................45
Land Values...................... ..................... .................. ...................... ................................................45
T errori sm............................................................................................................................ ............46
FD I CIF ederal Government Interests in Properties... ....................... .............. ..... .................... ........ 46
Bankruptcy and Foreclosure.. .................... ................ .......................... .................................... ...... 47
No Acceleration Provision..... .................... ................. ......................................................... .......... 48
Loss of Tax Exemption........... .................... .................. ....................................................... ..........48
Limitations on Remedies.......... .................... ................. .................................................. ..............49
Limited Secondary Market........ ................... ................... .............................................. ................49
Proposition 2 I 8 .... ...................... .................. ..................... ............................................ ... ..............49
Ballot Initiati ves... .......................... ................. .................... ........................................ ...................50
CONTINUING DISCLOSURE ...........................................................................................................51
TAX MATTERS... ............ ....................... ................ ..................... ....................... ............................. ...52
LEGAL MATTERS ............ ..................... .................. .................... ...................... .......................... ...... 52
LITI GA TI ON ...................... ........................ ................. ........................ ........................................ ........ 5 3
NO RA TIN G ............................. ................... ..................... ................................................................... 5 3
UNDERWRITING ............................................................................................................................... 53
FINAN CIAL INTERESTS ................. .................. ................... ......................................... ...................54
PEN D IN G LEGIS LA TI ON ..................... ................. .................. ........................ ...... ...........................54
ADDITIONAL INFORMATION ........................................................................................................54
-11-
DOCSOC\932761 v9\22245.0J 40
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX 0
APPENDIX E
APPENDIX F
APPENDIX G
APPENDIX H
APPENDIX I
TABLE OF CONTENTS
Page
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX .............A-1
SUMMARY OF MARKET ABSORPTION STUDy........................................ B-1
APPRAISAL REPORT ...................................................................................... C-I
INFORMATION REGARDING THE CITY OF CHULA VISTA ...................D-I
SUMMARY OF INDENTURE .......................................................................... E-1
CONTINUING DISCLOSURE AGREEMENT OF THE DISTRlCT .............. F-I
CONTINUING DISCLOSURE AGREEMENT OF THE DEVELOPER.........G-I
FORM OF OPINION OF BOND COUNSEL ....................................................H-I
DTC AND THE BOOK ENTRY ..SySTEM...................................................... [- [
DOCSOC\932761 v9\22245.0 140
-111-
[DISTRICT LOCATION MAP]
DOCSOC\932761 v9\22245.0 140
[AERIAL PHOTO]
DOCSOC\932761 v9\22245 .0140
$9,850,000'
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 2001-2
(McMILLIN - OTAY RANCH - VILLAGE SIX)
2003 SPECIAL TAX BONDS
INTRODUCTION
General
This introduction is not a summary of this Official Statement. It is only a brief description of
and guide to, and is qualified by, more complete and detailed information contained in the entire
Official Statement and the documents summarized or described herein. A full review should be
made of the entire Official Statement. The sale and delivery of Bonds to potential investors is made
only by means of the entire Official Statement. All capitalized terms used in this Official Statement
and not defined shall have the meaning set forth in Appendix A - "RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAXES" or Appendix E - "SUMMARY OF INDENTURE"
herein.
The purpose of this Official Statement, which includes the cover page, the table of contents
and the attached appendices (collectively, the "Official Statement"), is to provide certain information
concerning the issuance of the $9,850,000' City of Chula Vista Community Facilities District
No. 2001-2 (McMillin - Otay Ranch - Village Six) 2003 Special Tax Bonds (the "Bonds"). The
proceeds of the Bonds will be used to construct and acquire various public improvements needed
with respect to the proposed development within Community Facilities District No. 2001-2
(McMillin - Otay Ranch - Village Six) (the "District") formed by the City of Chula Vista (the
"City"), to fund the Reserve Fund securing the Bonds, to pay costs of issuance of the Bonds and to
capitalize interest on the Bonds through September 1,2003.
The Bonds are authorized to be issued pursuant to the Act (as defined herein) and a Bond
Indenture (the "Indenture") dated as of July I, 2003, by and between the District and U.S. Bank
National Association (the "Fiscal Agent"). The Bonds are secured under the Indenture by a pledge of
and lien upon Special Tax Revenues (as defined herein) and all moneys in the funds and accounts
under the Indenture other than the Rebate Fund, the Acquisition Fund and the Administrative
Expense Fund.
The District
Formation Proceedings. The District has been formed by the City pursuant to the Mello-
Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the Government
Code of the State of California) (the "Act"), and the City of Chula Vista Community Facilities
District Ordinance.
The Act was enacted by the California legislature to provide an alternative method of
financing certain public capital facilities and services, especially in developing areas of the State.
Any local agency (as defined in the Act) may establish a community facilities district to provide for
and finance the cost of eligible public facilities and services. Generally, the legislative body of the
. Preliminary', subject 1o change
DOCSOC\93276] v9\22245.0 ]40
local agency which forms a community facilities district acts on behalf of such district as its
legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance
with the other provisions of the Act, a legislative body of a local agency may issue bonds for a
community facilities district and may levy and collect a special tax within such district to repay such
indebtedness. The City Council of the City acts as the legislative body of the District.
Pursuant to the Act, the City Council adopted the necessary resolutions stating its intent to
establish the District, to authorize the levy of Special Taxes on taxable property within the
boundaries of the District, and to have the District incur bonded indebtedness for the purpose of
financing an authorized list of facilities. Following public hearings conducted pursuant to the
provisions of the Act, the City Council adopted resolutions establishing the District, and calling
special elections to submit the levy of the Special Taxes and the incurring of bonded indebtedness to
the qualified voters of the District. On August 20, 2002, at an election held pursuant to the Act, the
landowners who comprised the qualified voters of the District, authorized the District to incur
bonded indebtedness in the aggregate principal amount not to exceed $13,000,000 to be secured by
the levy of Special Taxes (defined below) on taxable property within the District. On that same date,
the landowners within the District approved the rate and method of apportionment of the Special
Taxes on land within the District (the "Special Taxes") to pay the principal of and interest on the
bonds of the District (the "Rate and Method") which is set forth in Appendix A hereto. On
January 21, 2003, a second election was held for the purpose of expanding the list of authorized
facilities to be financed by the District. The facilities authorized to be financed by the District are
referenced to herein as the "Facilities." See "THE COMMUNITY FACILITIES DISTRICT -
Description of Authorized Facilities."
Description and Development. The District encompasses approximately 215 gross acres.
The District is located approximately 2Y, miles east of Interstate 805 and south of Telegraph Canyon
Road at the southeast corner of La Media Road and Olympic Parkway. The District is located in the
newly developing eastern portion of the City and is bounded to the north by the previous developed
villages of Lomas Verdes and by The Otay Ranch to the east and west. Undeveloped land comprises
the area south of the District.
The land use entitlements for the District permit development in sub-areas known as
"planning areas." The District has been divided into five residential planning areas. Based on
current land use approvals and projections, the land within the residential planning areas is expected
to be developed into 482 single family detached units and 212 single family attached units. As
planned, the District does not contain any commercial planning areas. See 'THE DEVELOPMENT
AND PROPERTY OWNERSHIP - Potential Limitations on Development."
The grading within the District is substantially complete, and construction of both the
backbone infrastructure and the intract infrastructure is underway to a point where the landowners
expect to pull initial building permits beginning in June, 2003. For a more detailed description of
development activity within the District, see 'THE COMMUNITY FACILITIES DISTRICT ~
Status of Public Improvements."
Developer. The master developer of the property in the District is McMillin Otay Ranch,
LLC, a Delaware limited liability company (the "Developer"). The two members of the Developer
are McMillin Companies, LLC and Merced Partners, L.P. For certain information concerning the
Developer, see 'THE DEVELOPMENT AND PROPERTY OWNERSHIP - The Developer."
2
DOCSOC\932761 v9\22245.0 140
The Developer purchased the land within the District in September 1997. In October, 2002,
the Developer completed the sale of one planning area, consisting of approximately 12 acres planned
for 212 single family attached units, to Cornerstone Communities LLC. In November and
December, 2002, the Developer sold most of the remaining residential planning areas to
homebuilding entities related to the Developer (the "McMillin Entities"). One of the McMillin
Entities has an option to purchase the remaining 76 lots in planning area R-3 owned by the
Developer. "THE DEVELOPMENT AND PROPERTY OWNERSHIP - Development Plan" and
"- Merchant Builders."
Appraisal. Bruce W. Hull & Associates, Inc. (the "Appraiser") has conducted an appraisal
(the "Appraisal") of land within the District and has concluded, based upon the assumptions and
limiting conditions contained in the Appraisal that as of May 23, 2003, the aggregate value of such
land was $73,500,000. The Meyers Group (the "Market Absorption Consultant") prepared a Market
Analysis and Absorption Projection report dated May 21, 2003 (the "Market Absorption Study") for
the purpose of developing a build-out projection for the 482 single family detached units and 212
single tàmily attached units planned in the District. The Market Absorption Study concludes that the
residential units within the District should be built-out and sold-out in the 2003 to 2005 period
assuming continued development with no unanticipated delays in construction and with competitive
pricing of the units. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP - Appraisal"
and "- Market Absorption Study," Appendix B - "SUMMARY OF MARKET ABSORPTION
STUDY" and Appendix C - "APPRAISAL REPORT."
Monitoring Program. In response to the conclusions in the most recent traffic study, the City
has implemented a building permit monitoring program for a number of projects in the Otay Ranch,
including those within the District. The Developer and the City have entered into the Monitoring
Agreement which provides that up to 278 building permits may be issued for units within the District
between April I, 2003 and March 31, 2004, 307 permits between April I, 2004 and March 31,2005
and 109 permits between April 1, 2005 and March 31, 2006. The allocation of permits for the period
from April 1, 2005 to March 31, 2006 is dependent upon the completion of three roadway
improvements listed in the Monitoring Agreement. See "THE DEVELOPMENT AND PROPERTY
OWNERSHIP - Potential Limitations on Development."
Sources of Payment for the Bonds
Special Taxes. As used in this Official Statement, the term "Special Tax" is that tax which
has been authorized pursuant to the Act to be levied against certain land within the District pursuant
to the Act and in accordance with the Rate and Method. See "SOURCES OF PAYMENT FOR THE
BONDS - Special Taxes" and Appendix A - RATE AND METHOD OF APPORTIONMENT OF
SPECIAL TAX." Under the Indenture, the District has pledged to repay the Bonds from the Special
Tax Revenues and amounts on deposit in the funds and accounts established under the Indenture
other than the Acquisition Fund, the Rebate Fund and the Administrative Expense Fund. Special Tax
Revenues are defined in the Indenture to include the proceeds of the Special Taxes received by the
District, including any scheduled payments and prepayments thereof, interest and penalties thereon
and the proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the
delinquent Special Taxes in the amount of said lien and interest and penalties thereon.
The Special Taxes are the primary security for the repayment of the Bonds. In the event that
the Special Taxes are not paid when due, the only sources of funds available to pay the debt service
3
DOCSOC\932761 v9\22245.0] 40
on the Bonds are amounts held by the Fiscal Agent, including amounts held in the Reserve Fund.
See "SOURCES OF PAYMENT FOR THE BONDS - Reserve Fund."
Foreclosure Proceeds. The District has covenanted for the benefit of the owners of the
Bonds that it will commence, and diligently pursue to completion, judicial foreclosure proceedings
against Assessor's Parcels under common ownership with delinquent Special Taxes in the aggregate
in excess of $5,000 by the October I following the close of the fIscal year in which such Special
Taxes were due, and it will commence and diligently pursue to completion judicial foreclosure
proceedings against all Assessor's Parcels under common ownership with delinquent Special Taxes
in the aggregate in excess of $2,500 by the October I following the close of any tlscal year if the
amount in the Reserve Fund is less than the Reserve Requirement. See "SOURCES OF PAYMENT
FOR THE BONDS - Proceeds of Foreclosure Sales" herein. There is no assurance that the
property within the District can be sold for the appraised value or assessed values described herein,
or for a price sufficient to pay the principal of and interest on the Bonds in the event of a default in
payment of Special Taxes by the current or future landowners within the District. See "SPECIAL
RISK FACTORS - Land Values" and Appendix C - "SUMMARY APPRAISAL REPORT"
herein.
EXCEPT FOR THE SPECIAL TAXES, NO OTHER TAXES ARE PLEDGED TO
THE PAYMENT OF THE BONDS, THE BONDS ARE NOT GENERAL OR SPECIAL
OBLIGATIONS OF THE CITY NOR GENERAL OBLIGATIONS OF THE DISTRICT, BUT
ARE SPECIAL OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM SPECIAL
TAXES AND AMOUNTS HELD UNDER THE INDENTURE AS MORE FULLY
DESCRIBED HEREIN.
Description of the Bonds
The Bonds will be issued and delivered as fully registered Bonds, registered in the name of
Cede & Co. as nominee of The Depository Trust Company, New York, New York CDTC"), and will
be available to actual purchasers of the Bonds (the "Beneficial Owners") in the denominations of
$5,000 or any integral multiple thereof, under the book-entry system maintained by DTC, only
through brokers and dealers who are or act through DTC Participants as described herein. Beneficial
Owners will not be entitled to receive physical delivery of the Bonds. In the event that the book-
entry-only system described herein is no longer used with respect to the Bonds, the Bonds will be
registered and transferred in accordance with the Indenture. See Appendix I - "DTC AND THE
BOOK ENTRY SYSTEM."
Principal of, premium, if any, and interest on the Bonds is payable by the Fiscal Agent to
DTC. Disbursement of such payments to DTC Participants is the responsibility of DTC and
disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants.
In the event that the book-entry-only system is no longer used with respect to the Bonds, the
Beneficial Owners will become the registered owners of the Bonds and will be paid principal and
interest by the Fiscal Agent, all as described herein. See "BOOK-ENTRY-ONL Y SYSTEM" herein.
The Bonds are subject to optional redemption, extraordinary mandatory redemption and
mandatory sinking tùnd redemption as described herein. For a more complete descriptions of the
Bonds and the basic documentation pursuant to which they are being sold and delivered, see "THE
BONDS" and Appendix E - "SUMMARY OF INDENTURE" herein.
4
DOCSOC\932761 v9\22245.0 140
Tax Matters
In the opinion of Bond Counsel, based on an analysis of existing laws, regulations, rulings
and court decisions, and assuming, among other matters, compliance with certain covenants, interest
on the Bonds is excluded from gross inc~me for federal income tax purposes under Section 103 of
the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In
the further opinion of Bond Counsel, interest on the Bonds is not a specific preference item for
purposes of federal individual or corporate alternate minimum taxes, although Bond Counsel
observes that such interest is included in adjusted current earnings in calculating federal corporate
alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other
federal or state income tax consequences relating to the ownership or disposition of, or the accrual or
receipt of interest on, the Bonds. See 'TAX MATTERS" herein.
Professionals Involved in the Offering
u.S. Bank National Association will act as Fiscal Agent under the Indenture and as the initial
Dissemination Agent under the Continuing Disclosure Agreement to be entered into by the City and
the Developer Continuing Disclosure Agreement to be entered into by the Developer and. the
McMillin Entities. See Appendices F and G. Stone & Youngberg LLC is the Underwriter of the
Bonds. All proceedings in connection with the issuance and delivery of the Bonds are subject to the
approval of Best Best & Krieger LLP, San Diego, Bond Counsel. Fieldman Rolapp & Associates is
acting as Financial Advisor to the City in connection with the Bonds. Certain legal matters will be
passed on for the City and the District by the City Attorney, and for the Underwriter by Stradling
Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Underwriter's
Counsel. Other professional services have been performed by McGill Martin Selt~ Inc. as Special
Tax Consultant, Bruce W. Hull & Associates, Inc. as Appraiser, and The Meyers Group, as Market
Absorption Consultant.
For information concerning the respects in which certain of the above-mentioned
professionals, advisors, counsel and agents may have a financial or other interest in the offering of
the Bonds, see "FINANCIAL INTERESTS" herein.
Continuing Disclosure
Each of the District and the Developer and the McMillin Entities has agreed to provide, or
cause to be provided, to each nationally recognized municipal securities information repository and
any public or private repository or entity designated by the State as a state repository for purposes of
Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission certain financial
information and operating data. The District has further agreed to provide notice of certain material
events. These covenants have been made in order to assist the Underwriter in complying with
Rule 15c2-12(b)(5). See "CONTINUING DISCLOSURE" herein, Appendix F and Appendix G
hereto for a description of the specific nature of the reports to be tiled by the District and by the
Developer and the McMillin Entities and notices of material events to be provided by the District.
Bond Owners' Risks
Certain events could affect the timely repaynient of the principal of and interest on the Bonds
when due. See the section of this Official Statement entitled "SPECIAL RISK FACTORS" for a
discussion of certain factors which should be considered, in addition to other matters set forth herein,
5
DOCSOC\932761 v9\22245.0 140
.
in evaluating an investment in the Bonds. The Bonds are not rated by any nationally recognized
rating agency. The purchase of the Bonds involves significant risks, and the Bonds are not suitable
investments for all investors. See "SPECIAL RISK FACTORS" herein.
Forward Looking Statements
Certain statements included or incorporated by reference in this Official Statement constitute
"forward-looking statements" within the meaning of the United States Private Securities Litigation
Reform Act of 1995, Section 2 I E of the United States Securities Exchange Act of 1934, as amended,
and Section 27 A of the United States Securities Act of 1933, as amended. Such statements are
generally identitiable by the terminology used such as "plan," "expect," "estimate," "project,"
"budget" or other similar words. Such forward-looking statements include, but are not limited to,
certain statements contained in the information under the caption "THE COMMUNITY
FACILITIES DISTRICT" and "THE DEVELOPMENT AND PROPERTY OWNERSHIP."
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS
CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE
ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE
MA TERIALL Y DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR
REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL
STATEMENT.
Other Information
This Official Statement speaks only as of its date, and the information contained herein is
subject to change.
Brief descriptions of the Bonds and the Indenture are included in this Official Statement.
Such descriptions and information do not purport to be comprehensive or definitive. All references
herein to the Indenture, the Bonds and the constitution and laws of the State as well as the
proceedings of the City Council, acting as the legislative body of the District, are qualified in their
entirety by references to such documents, laws and proceedings, and with respect to the Bonds, by
reference to the Indenture. Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Indenture.
Copies of the Indenture and other documents and information referred to herein are available
for inspection and (upon request and payment to the City of a charge for copying, mailing and
handling) for delivery from the City at 276 Fourth Avenue, Chula Vista, CA 9] 9] 0, Attention:
Director of Finance.
6
DOCSOC\932761 v9\222450 140
ESTIMATED SOURCES AND USES OF FUNDS'
The following table sets forth the expected uses of Bond proceeds:
Sources of Funds
Principal Amount of Bonds
$
TOTAL SOURCES
$
Uses of Funds
Interest Account(l)
Project Fund
Reserve Fund
Cost of Issuance Fund
Underwriter's Discount
Administrative Expense Fund
$
TOTAL USES
$
(I) Represents gross funded capitalized interest on the Bonds through September I, 2003.
THE BONDS
Authority for Issuance
The Bonds in the aggregate principal amount of $9,850,000' are authorized to be issued by
the District under and subject to the terms of the Indenture, the Act and other applicable laws of the
State of California.
Purpose of the Bonds
The Bonds are being issued to provide funds to: (i) finance the costs of constructing and
acquiring certain public facilities related to the proposed development within the District (See "THE
COMMUNITY FACILITIES DISTRICT - Description of Authorized Facilities"); (ii) pay costs
related to the issuance of the Bonds; (iii) fund the Reserve Fund for the Bonds in the initial amount of
$ '; and (iv) gross fund capitalized interest on the Bonds through September 1,2003. See
"ESTIMATED SOURCES AND USES OF FUNDS."
Description of the Bonds
The Bonds will be issued as fully registered bonds without coupons in denominations of
$5,000 and any integral multiple thereof and shall be dated the date of delivery thereof. The Bonds
will be issued in book-entry only form and The Depository Trust Company, New York, New York
("DTC") will act as securities depository for the Bonds. So long as the Bonds are held in book-entry
only form, principal of, premium, if any, and interest on the Bonds will be paid directly to DTC for
. Preliminary, .rubject to change.
7
DOCSOC\932761 v9\22245.0 140
distribution to the beneficial owners of the Bonds in accordance with the procedures adopted by
DTC. See Appendix I - "DTC AND THE BOOK ENTRY ONLY SYSTEM." The Bonds will
mature on September I, in the principal amounts and years, and bearing rates of interest, as shown on
the inside cover of this Official Statement.
Interest on the Bonds will be payable semiannually on March I and September 1 of each
year, commencing March I, 2004 (each, an "Interest Payment Date") and will be computed on the
basis of a 360-day year comprised of twelve 30-day months. Each Bond will bear interest from the
Interest Payment Date next preceding the date of authentication, thereof, unless (i) such date of
authentication is an Interest Payment Date, in which event interest shall be payable from such date of
authentication, (ii) the date of authentication is after a Record Date but prior to the immediately
succeeding Interest Payment Date, in which event interest shall be payable from the I nterest Payment
Date immediately succeeding the date of authentication or (iii) the date of authentication is prior to
the close of business on the first Record Date, in which event interest shall be payable from the date
of the Bonds; provided, however, that if at the time of authentication of a Bond, interest is in default,
interest on that Bond shall be payable from the last Interest Payment Date to which the interest has
been paid or made available for payment.
Interest on any Bond shall be paid to the person whose name shall appear in the books of
registration as the owner of such Bond as of the close of business on the Record Date immediately
preceding such Interest Payment Date. Such interest shall be paid by check of the Fiscal Agent
mailed to such Bondowner at his or her address as it appears on the books of registration or, upon the
request in writing prior to the Record Date of a Bondowner of at least $1,000,000 in aggregate
principal amount of Bonds, by wire transfer in immediately available funds to an account in the
United States designated by such Owner.
Redemption of Bonds'
Optional Redemption. The Bonds maturing on and after September I, 2012 may be
redeemed at the option of the District prior to maturity as a whole, or in part on any Interest Payment
Date on and after September 1, 201 I, from such maturities as are selected by the District, and by lot
within a maturity, from any source of funds, at the following redemption prices (expressed as
percentages of the principal amount of the Bonds to be redeemed), together with accrued interest to
the date of redemption:
Redemption Date
Septem ber 1, 20 I I and March 1, 2012
September 1,2012 and March 1,2013
September 1, 20 I 3 and thereafter
Redemption Price
102%
101
100
* Preliminary, subject to change.
8
DOCSOC\93276 ¡ v9\22245.0 ¡ 40
Extraordinary Mandatory Redemptionfrom Special Tax Prepayment. The Bonds are subject
to redemption on any Interest Payment Date, prior to maturity, as a whole or in part on a pro rata
basis among maturities from the proceeds of the prepayment of Special Taxes pursuant to the Rate
and Method. Such extraordinary mandatory redemption of the Bonds shall be at the following
redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed),
together with accrued interest thereon to the date of redemption:
Redemption Date
September 1, 2003 through March 1, 2011
September 1, 2011 and March 1, 2012
September 1, 2012 and March I, 2013
September 1, 2013 and thereafter
Redemption Price
103%
102
101
100
See "SOURCES OF PAYMENT FOR THE BONDS - Special Taxes - Prepayment of Speciai
Taxes" and Section _ of Appendix A for a description of how a property owner may prepay, or will
be required to prepay, Special Taxes.
Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20_ are
subject to mandatory sinking fund redemption, in part, by lot, on September I in each year
commencing , at a redemption price equal to the principal amount of the Bonds to
be redeemed, plus accrued and unpaid interest thereon to the date fixed for redemption, without
premium, in the aggregate principal amounts and in the years shown on the following redemption
schedule.
Redemption Date
(September 1)
Principal
Amount
9
DOCSOC\932761 v9\22245.0 140
The Bonds maturing on September 1, 2033 are subject to mandatory sinking fund
redemption, in part, by lot, on September 1 in each year commencing , at a
redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued and unpaid
interest thereon to the date fixed for redemption, without premium, in the aggregate principal
amounts and in the years shown on the following redemption schedule.
Redemption Date
(September 1)
Principal
Amount
In the event of a partial optional redemption or special mandatory redemption of the Bonds,
each of the remaining mandatory sinking íùnd payments for such Bonds, as applicable, will be
reduced, as nearly as practicable, on a pro rata basis.
Purchase in Lieu of Redemption. In lieu of such an optional, extraordinary mandatory or
mandatory sinking fund redemption, the District may elect to purchase such Bonds at public or
private sale at such prices as the District may in its discretion determine; provided, that, unless
otherwise authorized by law, the purchase price (including brokerage and other charges) thereof shall
not exceed the principal amount thereof plus accrued interest to the purchase date.
Notice and Selection of Bonds for Redemption
In the event the District shall elect to redeem Bonds as provided in the Indenture, the District
shall give written notice to the Fiscal Agent of its election to so redeem, the redemption date, the
principal amount of the Bonds to be redeemed, the maturities from which such Bonds are to be
redeemed and the principal amount of the Bonds to be redeemed from each such maturity, the Bonds
or portions thereof to be selected for redemption.
The notice to the Fiscal Agent shall be given not less than 60 days prior to the redemption
date or such shorter period as shall be acceptable to the Fiscal Agent. If less than all of the Bonds
Outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to
be redeemed shall be in the principal amount of $5,000 or a multiple thereof, and, in selecting
portions of such Bonds for redemption, the District shall treat each such Bond as representing that
]0
DOCSOC\932761 v9\22245.0 140
number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such
Bond to be redeemed in part by $5,000.
Notice of Redemption
Notice by Mail to Registered Owners. The Fiscal Agent shall mail, at least 30 days but not
more than 45 days prior to the date of redemption, notice of intended redemption, by first-class mail,
postage prepaid, to the original purchasers of the Bonds and the respective registered Owners of the
Bonds at the addresses appearing on the Bond registry books. The notice of redemption shall state:
(a) the redemption date; (b) the redemption price; (c) the bond registration numbers, dates of maturity
and CUSIP numbers of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part,
the respective principal portions to be redeemed; provided, however, that whenever any call includes
all Bonds of a maturity, the numbers of the Bonds of such maturity need not be stated; (d) that such
Bonds must be surrendered at the Principal Corporate Trust Office of the Fiscal Agent; (e) that
further interest on such Bonds will not accrue from and after the designated redemption date; (f) the
date of the issue of the Bonds as originally issued; (g) the rate of interest borne by each Bond being
redeemed; and (h) that any other descriptive information needed to identify accurately the Bonds
being redeemed as the District shall direct.
Further Notice. Further notice of redemption shall be sent at least two days before the notice
of redemption is mailed to the Bondholders, as described above, by registered or certiíied mail or
overnight delivery service to the registered securities depositories and to the national information
services listed in the Indenture or, in accordance with the then-current guidelines of the Securities
and Exchange Commission, such other securities depositories and services providing information on
called bonds, or such other securities depositories and services, as the District may determine in its
sole discretion.
Failure to Receive Notice. So long as notice by íirst class mail has been provided as set forth
above, the actual receipt by the Owner of any Bond of notice of such redemption shall not be a
condition precedent to redemption, and failure to receive such notice shall not affect the validity of
the proceedings for redemption of such Bonds or the cessation of interest on the date fixed for
redemption.
Certificate of Giving Notice. The notice or notices described above shall be given by the
Fiscal Agent on behalf of the District. A certificate by the Fiscal Agent that notice of call and
redemption has been given to the registered Owners of the Bonds as herein provided shall be
conclusive against all parties, and no Owner whose Bond is called for redemption may object thereto,
or object to cessation of interest on the redemption date, by any claim or showing that he failed to
receive actual notice of call and redemption.
Notice from DTC to Beneficial Owners. So long as the Bonds are held in book-entry-form,
notice of redemption will be sent by the Fiscal Agent only to DTC or its nominee. Conveyance of
redemption notice by DTC to Beneíicial Owners is determined by DTC and its participants and is not
the responsibility of the District. See Appendix 1- "DTC AND THE BOOK ENTRY SYSTEM."
Effect of Redemption
When notice of redemption has been given, and when the amount necessary for the
redemption of the Bonds called for redemption is set aside for that purpose in the Redemption Fund,
II
DOCSOC\93276] v9\222450] 40
the Bonds designated for redemption shall become due and payable on the date fixed for redemption
thereof, and upon presentation and surrender of said Bonds at the place specified in the notice of
redemption, with the form of assignment endorsed thereon executed in blank, said Bonds shall be
redeemed and paid at the redemption price out of the Redemption Fund and no interest will accrue on
such Bonds or portions of Bon~s called for redemption from and after the redemption date specified
in said notice, and the Owners of such Bonds so called for redemption after such redemption date
shall look for the payment of principal and premium, if any, of such Bonds or portions of Bonds only
to said Redemption Fund.
All Bonds redeemed shall be canceled forthwith by the Fiscal Agent and shall not be
reissued. Upon surrender of Bonds redeemed in part, a new Bond or Bonds of the same maturity
shall be registered, authenticated and delivered to the registered Owner at the expense of the District,
in the aggregate principal amount of the unredeemed portion. All unpaid interest payable at or prior
to the date fixed for redemption shall continue to be payable to the respective registered owners of
such Bonds or their order, but without interest thereon.
Transfer and Exchange of Bonds
There shall be kept by the Fiscal Agent, sufficient books for the registration and transfer of
the Bonds and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable
regulations as it may prescribe, register or transfer or cause to be registered or transferred, ·on said
register, Bonds. The ownership of the Bonds shall be established by the Bond registration books
held by the Fiscal Agent. Whenever any Bond or Bonds shall be surrendered for registration of
transfer or exchange, the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of the
same maturity, for a like aggregate principal amount of authorized denominations; provided that the
Fiscal Agent shall not be required to register transfers or make exchanges of (i) Bonds for a period of
15 days next preceding the date of any selection of the Bonds to be redeemed, or (ii) any Bonds
chosen for redemption.
Bonds may be exchanged at the Principal Corporate Trust Office, for a I ike aggregate
principal amount of Bonds of authorized denominations, interest rate and maturity, subject to the
terms and conditions of the Indenture, including the payment of certain charges, if any, upon
surrender and cancellation of a Bond. Upon such transfer and exchange, a new registered Bond or
Bonds of any authorized denomination or denominations of the same maturity and for the same
aggregate principal amount will be issued to the transferee in exchange therefor.
The transfer of any Bond may be registered only upon such books of registration upon
surrender thereof to the Fiscal Agent, together with an assignment duly executed by the Owner or his
attorney or legal representative, in satisfactory form. Upon any such registration of transfer, a new
Bond or Bonds shall be authenticated and delivered in exchange for such Bond, in the name of the
transferee, of any denomination or denominations authorized by the Indenture, and in an aggregate
principal amount equal to the principal amount of such Bond or Bonds so surrendered. In all cases in
which Bonds shall be exchanged or transferred, the Fiscal Agent shall authenticate the Bonds in
accordance with the provisions of the Indenture. All Bonds surrendered in such exchange or transfer
shall forthwith be canceled. The Fiscal Agent may make a charge for every such exchange or
registration of transfer of Bonds sufficient to reimburse it for any tax or other governmental charge
required to be paid with respect to such exchange or registration or transfer.
12
DOCSOC\932761 v9\22245.0 140
Debt Service Schedule for the Bonds'
Period Ending Principal Interest Total Debt Service
(September 1) on Bonds on Bonds on Bonds
2003 $ $ $
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
Total $ $ $
SOURCES OF PAYMENT FOR THE BONDS
Limited Obligations
The Bonds are special, limited obligations of the District payable only from amounts pledged
under the Indenture and from no other sources.
The Special Taxes are the primary security for the repayment of the Bonds. Under the
Indenture, the District has pledged to repay the Bonds from the Special Tax Revenues remaining
after the funding of the annual Administrative Expense Requirement of $75,000 and from amounts
held in the funds and accounts under the Indenture, other than amounts held in the Project Fund, the
Rebate Fund and the Administrative Expense Fund. Special Tax Revenues are defined in the
Indenture to include the proceeds of the Special Taxes received by the District, including any
" Preliminary, subject 1o change.
13
DOCSOC\932761 v9\22245.0 140
scheduled payments and prepayments thereof, interest and penalties thereon, the proceeds of the
redemption of delinquent Special Taxes or sale of property sold as a result of foreclosure of the lien
of delinquent Special Taxes in the amount of said lien, and interest and penalties thereon.
In the event that the Special Tax Revenues are not received when due, the only sources of
funds available to pay the debt service on the Bonds are amounts held by the Fiscal Agent, including
amounts held in the Reserve Fund, for the exclusive benefit of the Owners of the Bonds.
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY,
THE COUNTY OF SAN DIEGO, THE STATE OF CALIFORNIA OR ANY POLITICAL
SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT
FOR THE SPECIAL TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF
THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL OBLIGATIONS OF THE
CITY BUT ARE SPECIAL OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY
FROM THE SPECIAL TAXES AND OTHER AMOUNTS PLEDGED UNDER THE
INDENTURE AS MORE FULLY DESCRIBED HEREIN.
Special Taxes
Authorization and Pledge. In accordance with the provisions of the Act, the City Council
established the District on August 13, 2002 for the purpose oftinancing the acquisition, construction
and installation of various public improvements to serve the District. At a special election held on
August 20, 2002, the owners of the property within the District authorized the District to incur
indebtedness secured by Special Taxes levied on property in the District in an amount not to exceed
$13,000,000, and approved the Rate and Method which authorized the Special Tax to be levied to
repay District indebtedness for the District, including the Bonds. At an election held on January 21,
2003 the landowners within the District authorized an addition to the list of facilities eligible for
financing by the District.
The District has covenanted in the Indenture that by July I of each year (or such later date as
may be authorized by the Act) it will levy Special Taxes within the District up to the maximum rates
permitted under the Rate and Method in the amount required for the payment of principal of and
interest on any Outstanding Bonds becoming due and payable during the ensuing calendar year,
including any necessary replenishment or expenditure of the Reserve Fund and the amount estimated
to be sufficient to pay the Administrative Expenses during such calendar year.
The Special Taxes levied in any tiscal year may not exceed the maximum rates authorized
pursuant to the Rate and Method. See Appendix A - "RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAX" hereto. There is no assurance that the Special Tax
proceeds will, in all circumstances, be adequate to pay the principal of and interest on the Bonds
when due. See "SPECIAL RISK FACTORS - Insufficiency of Special Taxes" herein.
Rate and Method. Under the Rate and Method, all Taxable Property within the District is to
be classified as Developed Property or Undeveloped Property and is subject to the levy of annual
Special Taxes as described below. Developed Property is to be further classified as Residential
Property or Non-Residential Property.
14
DOCSOC\932761 v9\22245.0 140
The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property or
Non-Residential Property shall be the greater of (1) the Assigned Special Tax described below or
(2) the Backup Special Tax computed as described below.
The Assigned Special Tax for each Assessor's Parcel of Developed Property is shown in the
table below.
Assigned Annual Special Tax for Developed Property
Land Use Class
De~Tription
Residential Property
2
Non-Residential
Property
Assif<ned Annual Special Tax
$440 per unit plus $0.34 per
square foot of Residential
Floor Area
$11,365 per Acre
When a Final Subdivision Map is recorded within the District, the Backup Special Tax for
Assessor's Parcels of Developed Property classified as Residential Property or Non-Residential
Property shall be determined according to the provisions of the Rate and Method, generally at the
rate of $11 ,365 per acre.
The Maximum Annual Special Tax for each Assessor's Parcel classified as Undeveloped
Property shall be $11,365 per acre.
Commencing with Fiscal Year 2003-04 and for each following Fiscal Year, the City Council
shall determine the Special Tax Requirement (as defined in the Rate and Method) and shall levy the
Special Tax until the amount of Special Taxes equals the Special Tax Requirement. The Special Tax
shall be levied each Fiscal Year as follows:
First: The Special Tax shall be levied Proportionately on each Assessor's Parcel of
Developed Property at a rate up to 100% of the applicable Assigned Special Tax to satisfy the
Special Tax Requirement.
Second: If additional monies are needed to satisfy the Special Tax Requirement after the first
step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of
Undeveloped Property, excluding any Assessor's Parcels classified as Undeveloped Property
pursuant to paragraphs 2 and 3 in Section E of the Rate and Method, at a rate up to 100% of the
Maximum Annual Special Tax for Undeveloped Property.
Third: If additional monies are needed to satisfy the Special Tax Requirement after the first
two steps have been completed, the Special Tax to be levied on each Assessor's Parcel of Developed
Property whose Maximum Annual Special Tax is derived by the application of the Backup Special
Tax shall be increased Proportionately from the Assigned Special Tax up to the Maximum Annual
Special Tax for each such Assessor's Parcel.
15
DOCSOC\932761 v9\22245 0140
Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first
three steps have been completed, then the Special Tax shall be levied Proportionately on each
Assessor's Parcel classified as Undeveloped Property pursuant to paragraphs 2 and 3 in Section E of
the Rate and Method at a rate up to 100% of the Maximum Annual Special Tax for Undeveloped
Property.
Notwithstanding the above, under no circumstances will the Special Tax levied against any
Assessor's Parcel of Occupied Residential Property be increased by more than ten percent per year as
a consequence of delinquency or default in the payment of Special Taxes by the owner of any other
Taxable Property.
Prepayment ol Special Taxes. There are certain events that will result in a required
prepayment of Special Taxes as described in the following paragraph. In addition, under the Rate
and Method, the owner of a parcel for which a building pennit has been issued or the owner of any
Public Property may prepay the Special Tax obligation applicable to such parcel in whole or in part.
Any required or voluntary prepayment of Special Taxes will result in an extraordinary redemption of
Bonds. See "THE BONDS - Redemption - Extraordinary Mandatory Redemption from Special
Tax Prepayment."
A required prepayment of Special Taxes will occur on a parcel to the extent necessary to
comply with the City's policy that the total annual taxes and assessments on such a parcel, exclusive
of special taxes for services, including City maintenance community facilities districts, will not
exceed two percent (2%) of the sales price of such a parcel to a residential homeowner. Pursuant to
the Acquisition Financing Agreement, the Developer has agreed to comply with the policy and the
Developer and the City expect that the current merchant builders will also agree to comply with the
policy. The Developer has agreed with the City to require all merchant builders to comply with this
policy. Based on estimated retail home sales prices, the Developer currently does not anticipate that
the total taxes and assessments, exclusive of special taxes for services, will exceed 2% of the sales
price. As shown in Table 5 under the caption "THE COMMUNITY FACILITIES DISTRICT -
Expected Tax Burden," the projected tax burden (excluding taxes allocable to City maintenance
community facilities distri
16
DOCSOC\932761 v9\22245 0140
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Stradling Yocca Carlson & Rauth
Drafi of 6/1 0/03
PRELIMINARY OFFICIAL ST A TEMENT DATED AS OF
NEW ISSUE - BOOK-EN TRY-ONLY
,2003
NO RATING
In the opinion Qf Best Best & Krieger LLP, BondCounsel, based on an analysis of existing laws, regulations, rulings and court decisions,
qnd assuming. among other matters, compliance wIth certain covenants, interest on the Bonds IS excluded (rom $ross income jòr federal.
mcome tax purposes under Section 103 oJ the Internal Revenue Code· of 1986 and is exempt from State of Califorma personal income taxes
ln the further opinion of Bond Counsel, interest on the Bonds is not a specific preference Item for purposes offederal individual or corporate
alternate minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings in calculating federal
corporate alternallve minimum taxable income. Bond Counsel expresses no opinion regarding any other federal or state income tax
consequences relating to the ownership or disposition of, or the accrual or receipt of interest on, the Bonds. See "TAX MATTERS" herein.
$9,850,000'
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 2001-2
(McMILLIN - OTAY RANCH - VILLAGE SIX)
2003 SPECIAL TAX BONDS
Due: September I, as shown on the inside page
Dated: Date of Delivery
The City ofChula Vista Community Facilities District No. 2001~2 (McMillin - Otay Ranch - Village Six) 2003 Special Tax Bonds
(the "Bonds") are being issued and delivered to finance various public improvements needed to develop property located within District
No. 2001-2 (McMillin - Otay Ranch - Village Six) (the "District"). The District has been formed by and is located in the City ofChula Vista
(the "City"), County of San Diego, California.
The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Sections 53311
f1~. of the Government Code of the State of California), and pursuant to a Bond Indenture (the "Indenture") dated as of July I, 2003, by
and between the District and U.S. Bank National Association, as fiscal agent (the "Fiscal Agent''). The Bonds are special obligations of the
District and are payable solely from revenues derived from certain annual Special Taxes (as defined herein) to be levied on the taxable land
within the District and from certain other funds pledged under the Indenture, all as further described herein. The Special Taxes are to be
levied according to the rate and method of apportionment approved by the City Council of the City and the qualified electors within the
District. See "SOURCES OF PAYMENT FOR THE BONDS - Rate and Method of Apportionment." The City Council of the City is the
legislative body of the District.
The Bonds are issuable in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The
Depository Trust Company, New York, New York ("DTC"). Individual purchases may be made in principal amounts of$5,000 and integral
multiples thereof and will be in book-entry form only. Purchasers of Bonds will not receive certificates representing their beneficial
ownership of the Bonds but will receive credit balances on the books of their respective nominees. The Bonds will not be transferable or
exchangeable except for transfer to another nominee of DTC or as otherwise described herein. Interest 011 the Bonds vvill be payable on
March L 2004 and semiannually thereafter on each March I and September 1. Principal of and interest on the Bonds wi!! be paid by the
Fiscal Agent to DTC for subsequent disbursement to DTC Participants \\'ho are obligated to remit such payments to the beneficial owners of
the Bonds. See "THE BONDS - Description of the Bonds" herein.
Neither the faith and credit nor the taxing power of the City, the County oI San Diego, the ,-)'tate of California or any political
subdivision thereof is pledged to the payment of the Bonds. Except for the 5'pecial Taxes. no other taxes are pLedged to the payment of the
Bonds. The Bonds are special tax obligations of the District payable solely from 5'pecial Taxes and other amounts held under the indenture
as more fully described herein.
The Bonds are subject to optional redemption, extraordinary mandatory redemption and mandatory sinking fund redemption prior
to maturity as set forth herein. See 'THE BONDS - Redemption of Bonds" herein.
CERTAIN EVENTS COULD AFFECT THE ABILITY OF THE DISTRICT TO PAV THE PRINCIPAL OF AND
INTEREST ON THE BONDS WHEN DUE. THE PURCHASE OF THE BONDS INVOLVES SIGNIFICANT RISKS, AND THE
BONDS ARE NOT SUITABLE INVESTMENTS FOR ALL INVESTORS. SEE THE SECTION OF THIS OFFICIAL
STATEMENT ENTITLED "SPECIAL RISK FACTORS'· FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD
BE CONSIDERED, IN ADDITION TO THE OTHER MATTERS SET FORTH HEREIN, IN EVALUATING THE INVESTMENT
QUALITY OF THE BONDS.
This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms
of this issue. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed
investment decision.
MATURITY SCHEDULE
(See Inside Cover Page)
The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to thcir legality by Best
Best & Krieger LLP, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the City and the
District by the City Attorney and for the Underwriter by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach.
California, as counsel to the Underwriter. It is anticipated that the Bonds in book-entry form wil! be avai]able for delivery to DTC ¡n New
York, New York, on or about ,2003.
Stone & Youngberg LLC
Dated:
,2003
DOCSOC\932761 v9\22245.0 140
Maturity
Date
(September I)
Principal
Amount
Interest
Rate
$
$
MATURITY SCHEDULE
.
(Base CUSIP: )
Yield
Maturity
Date
CUS/P' (September I)
Principal
Amoullt
Interest
Rate
Yield
CUS/P'
% Term Bonds due September 1,2027 Price:
% Term Bonds due September 1,2033 Price:
% - CUSIP:
% - CUSIP:
Copyright 2002, American Bankers Association. CUSJP data herein is provided by Standard & Poor's, CUSIP Service Bureau, a division of
The McGraw-Hill Companies, /ne
DOCSOC\932761 v9\22245.0 140
CITY OF CHULA VISTA, CALIFORNIA
CITY COUNCIL
Steve C. Padilla, Mayor
Jerry Rindone, Mayor Pro Tern
John C. McCann, Councilmember
Patty Davis, Councilmember
Mary Salas, Councilmember
CITY STAFF
David D. Rowlands, Jr., City Manager
Sid Morris, Assistant City Manager
George Krempl, Assistant City Manager
Cheryl Fruchter, Assistant City Manager
Ann Moore, City Attorney
Maria Kachadoorian, Director of Finance
Susan Bigelow, City Clerk
Clifford Swanson, Director of Engineering
BOND COUNSEL
Best Best & Krieger LLP
San Diego, California
FINANCIAL ADVISOR TO THE CITY
Fieldman Rolapp & Associates
Irvine, California
SPECIAL TAX CONSULTANT
REAL ESTATE APPRAISER
McGill Martin Self, Inc.
Chula Vista, California
Bruce W. Hull & Associates, Inc.
Ventura, California
MARKET ABSORPTION CONSULTANT
FISCAL AGENT
The Meyers Group
Solana Beach, California
U.S. Bank National Association
Los Angeles, California
DOCSOC\932761 v9\22245.0140
Except where otherwise indicated, all information contained in this Official Statement has
been provided by the District. No dealer, broker, salesperson or other person has been authorized by
the District, the City, the Fiscal Agent or the Underwriter 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 representations must not be relied upon as having
been authorized by the District, the City, the Fiscal Agent 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.
This Official Statement is not to be construed as a contract with the purchasers or Owners of
the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or
matters of opinion, whether or not expressly so described herein, are intended solely as such and are
not to be construed as representations of fact. This Official Statement, including any supplement or
amendment hereto, is intended to be deposited with a nationally recognized municipal securities
depository.
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 infonnation.
The information set forth herein which has been obtained from third party sources is believed
to be reliable but is not guaranteed as to accuracy or completeness by the District or the City. The
information and expressions of opinion 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 District, the City or any
other parties described herein since the date hereof. All summaries of the Indenture or other
documents are made subject to the provisions of such documents respectively 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 District for further information in connection therewith.
Certain statements included or incorporated by reference in this Official Statement constitute
"forward-looking statements" within the meaning of the United States Private Securities Litigation
Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended,
and Section 27 A of the United States Securities Act of 1933, as amended. Such statements are
generally identitiable by the terminology used such as "plan," "expect," "estimate," "project,"
"budget" or other similar words. Such forward-looking statements include, but are not limited to,
certain statements contained in the information under the caption "THE COMMUNITY
FACILITIES DISTRICT" and "THE DEVELOPMENT AND PROPERTY OWNERSHIP."
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS
CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE
ACTUAL RESUL TS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE
MA TERIALL Y DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
DOCSOC\932761 v9\22245.0 140
STATEMENTS. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR
REVISIONS TO THE FORWARD-LOOKING STATEMENT SET FORTH IN THIS OFFICIAL
STATEMENT.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER
MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF SUCH 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 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH
ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES LAWS OF ANY STATE.
DOCSOC\932761 v9\22245.0 140
TABLE OF CONTENTS
Page
INTRODUCTION .................................................................................................................................. I
General....................................................................................................................... ...................... I
The District............. ................. ................... ............... ........................ .... .................................. ........ 1
Sources of Payment for the Bonds .............. ................. ......................... ............................... ............ 3
Description of the Bonds............. ................ ................ ........ ............................................... .............4
Tax Matters..... ............................ ................. ................. ................................................... ..... ...........5
Professionals Involved in the Offering.......... ............... ................................................... ................5
Continuing Disclosure ................. .................. ................. ................................................................. 5
Bond Owners' Risks ..................... ................. .................. .............................................. ..................5
Forward Looking Statements........ .................. ................ ................................................ .................6
Other Information ........................ ................... ................. ............................................. ...................6
ESTIMATED SOURCES AND USES OF FUNDS.............................................................................. 7
THE BONDS .........................................................................................................................................7
Authority for Issuance...... ..................... ................. ...................... ........................ ............................7
Purpose of the Bonds....... ..................... ................. ..................... ............... ...................................... 7
Description of the Bonds... .................... ................ ...................... ................................................ .... 7
Redemption of Bonds.......... ................... .................. ..................... ........................................... ....... 8
Notice and Selection of Bonds for Redemption.............................................................................10
Notice of Redemption............ ................... ................. ...................... ........... ............................ ....... II
Effect of Redemption.............. ................... ................. ............................................................ ....... I I
Transfer and Exchange of Bonds ................................................................................................... 12
Debt Service Schedule for the Bonds ............................................................................................13
SOURCES OF PAYMENT FOR THE BONDS .................................................................................13
Limited Obligations... ....................... .................. ................. ....................................... ................... ] 3
Special Taxes.. .............. ..................... ................. ..................... .................... ..... ............................. 14
Reserve Fund................. ..................... ................. ....................... ....................... ............................ 18
Issuance of Parity Bonds .................... .................. ..................... ......................... ............................ I 9
THE COMMUNITY F ACILlTlES DlSTRlCT...................................................................................19
General Description of the District ...............................................................................................19
Description of Authorized Facilities ..............................................................................................19
Status of Public Improvements ................. ................... ........................................................ ..........21
Principal Taxpayers ................... .................. ................. ...................................................... ...........21
Estimated Direct and Overlapping Indebtedness........... .................................................. ..............21
Expected Tax Burden..................... .................... ............... ..............'............................. ..................24
Estimated V alue-to- Lien Ratios....... .................. ................. .................................... .......................25
Perm ¡tted Land Use........ ..................... .................. ..................... ................ ....................................28
THE DEVELOPMENT AND PROPERTY OWNERSHIP ................................................................28
General Description and Location of the District ..........................................................................29
The Deve I oper.......................................................................................................................... ......29
Development Plan ........................ ................. ................ .................................................... .............30
Merchant B ui Iders.......................... ................. ................. ................................................. .............31
Financing Plan ........... ..................... ................ ..................... ......................................... .................32
Status of Entitlement Approvals........ ............... .................. ........................................ ...................34
-I-
DOCSOC\932761 v9\22245.0 140
TABLE OF CONTENTS
Page
Environmental Constraints ................... ................ ................. .................................... .....................34
Infrastructure Requirement~ and Construction Status ...................................................................34
Potential Lim ¡tations on Development .............. .................. ....................................... ...................35
Appraisal....................... ..................... ............... .................. .......................................... .................36
Market Absorption Study................... .............. ................. .................................................. ...........38
SPECIAL RISK FACTORS................. ................ ............... ................................................................. 3 8
Concentration of Ownership....... ................. ................ ....................................................... ........... 3 8
Limited Obi igations ..................... ................ ................ ........................................................ ....... ... 39
Insufficiency of Special Taxes... ................. ................. ........................................................ ..........39
Tax Delinquencies ..................... ................ ................. ........................ ................................. .......... 39
Failure to Develop Properties.. .................. ................ ..................... ........................................ ....... 40
Future Land Use Regulations and Growth Control Initiatives ......................................................41
Water A vailabil ity................ ................... ................ ...................... .............................................. ... 42
Endangered Species........... .................... ............... ........................ .................... .............................42
Natural Disasters................ .................. .................. ..................... ............................ .......................43
Hazardo us Substances.................................................................................................................... 43
Parity Taxes, Special Assessments and Land Development Costs ................................................43
Disclosures to Future Purchasers....... ................ ................... ... ................................... ...................44
Non-Cash Payments of Special Taxes ............... ................ ........................................... .................45
Payment of the Special Tax is not a Persçmal Obligation of the Owners ......................................45
Land Values ................ ..................... ................. ................ ............................................ .................45
T errori sm............................................................................................................................ ............46
FD I C/F ederal Government Interests in Properties.......... .................................................... ...... .....46
Bankruptcy and Foreclosure.......... .............. .................. ....................................................... ..... .... 47
No Acceleration Provision............. ................ .................. .............................................................. 48
Loss of Tax Exemption.................. ................. ............... ....................................................... ..... ....48
Limitations on Remedies........... ................. ................ ........................................................... ........ 49
Limited Secondary Market......... ................. ................ ........................................................ .......... 49
Proposition 21 8 . ... ...................... ................. ................ ......................... ............................... ........... 49
Ballot Initiatives.... .................... ................. ................ ....................... ..................................... ........ 50
CONTINUING DISCLOSURE ........................................................................................................... 51
TAX MATTERS .................................................................................................................................. 52
LEGAL MATTERS ............................................................................................................................. 52
LITI GA TI ON .......................... ...................... ............... ....................... ............................................ ..... 53
N 0 RATING ........................... ................... ................. ....................... ...................... ......................... ... 53
UNDERWRITING ............................................................................................................................... 53
FINANCIAL INTERESTS..... .................... ................. ................... .................................................. ... 54
PEND IN G LEGlSLA TI ON . ...................... ............... ................... .................................. ......................54
ADDITIONAL INFORMATION ........................................................................................................ 54
-11-
DOCSOC\932761 v9\22245.0 140
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
APPENDIX F
APPENDIX G
APPENDIX H
APPENDIX I
TABLE OF CONTENTS
Page
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX .............A-I
SUMMARY OF MARKET ABSORPTION STUDY........................................B-I
APPRAISAL REPORT ...................................................................................... C-I
INFORMATION REGARDING THE CITY OF CHULA VISTA ...................0-1
SUMMARY OF INDENTURE .......................................................................... E-I
CONTINUING DISCLOSURE AGREEMENT OF THE DISTRICT .............. F-I
CONTINUING DISCLOSURE AGREEMENT OF THE DEVELOPER.........G-I
FORM OF OPINION OF BOND COUNSEL....................................................H-I
DTC AND THE BOOK ENTRY SYSTEM........................................................ I-I
DOCSOC\932761 v9\22245.0 140
-111-
[DISTRICT LOCA nON MAP]
DOCSOC\932761 v9\2224S0140
[AERIAL PHOTO]
DOCSOC\932761 v9\22245.0 140
$9,850,000*
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 2001-2
(McMILLIN - OTAY RANCH - VILLAGE SIX)
2003 SPECIAL TAX BONDS
INTRODUCTION
General
This introduction is not a summary of this Official Statement. It is only a brief description of
and guide to, and is qualified by, more complete and detailed information contained in the entire
Official Statement and the documents summarized or described herein. A full review should be
made of the entire Official Statement. The sale and delivery of Bonds to potential investors is made
only by means of the entire Official Statement. All capitalized terms used in this Official Statement
and not defined shall have the meaning set forth in Appendix A - "RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAXES" or Appendix E - "SUMMARY OF INDENTURE"
herein.
The purpose of this Official Statement, which includes the cover page, the table of contents
and the attached appendices (collectively, the "Official Statement"), is to provide certain information
concerning the issuance of the $9,850,000' City of Chula Vista Community Facilities District
No. 2001-2 (McMillin - Otay Ranch - Village Six) 2003 Special Tax Bonds (the "Bonds"). The
proceeds of the Bonds will be used to construct and acquire various public improvements needed
with respect to the proposed development within Community Facilities District No. 2001-2
(McMillin - Otay Ranch - Village Six) (the "District") formed by the City of Chula Vista (the
"City"), to fund the Reserve Fund securing the Bonds, to pay costs of issuance of the Bonds and to
capitalize interest on the Bonds through September 1, 2003.
The Bonds are authorized to be issued pursuant to the Act (as defined herein) and a Bond
Indenture (the "Indenture") dated as of July I, 2003, by and between the District and U.S. Bank
National Association (the "Fiscal Agent"). The Bonds are secured under the Indenture by a pledge of
and lien upon Special Tax Revenues (as defined herein) and all moneys in the funds and accounts
under the Indenture other than the Rebate Fund, the Acquisition Fund and the Administrative
Expense Fund.
The District
Formation Proceedings. The District has been formed by the City pursuant to the Mello-
Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the Government
Code of the State of California) (the "Act"), and the City of Chula Vista Community Facilities
District Ordinance.
The Act was enacted by the California legislature to provide an alternative method of
financing certain public capital facilities and services, especially in developing areas of the State.
Any local agency (as defined in the Act) may establish a community facilities district to provide for
and finance the cost of eligible public facilities and services. Generally, the legislative body of the
. Preliminary, subject to change.
DOCSOC\93276] v9\22245.0] 40
local agency which forms a community facilities district acts on behalf of such district as its
legislative body. Subject to approval by two-thirds of the votes cast at an election and compliance
with the other provisions of the Act, a legislative body of a local agency may issue bonds for a
community facilities district and may levy and collect a special tax within such district to repay such
indebtedness. The City Council of the City acts as the legislative body of the District.
Pursuant to the Act, the City Council adopted the necessary resolutions stating its intent to
establish the District, to authorize the levy of Special Taxes on taxable property within the
boundaries of the District, and to have the District incur bonded indebtedness tòr the purpose of
financing an authorized list of facilities. Following public hearings conducted pursuant to the
provisions of the Act, the City Council adopted resolutions establishing the District, and calling
special elections to submit the levy of the Special Taxes and the incurring of bonded indebtedness to
the qualified voters of the District. On August 20, 2002, at an election held pursuant to the Act, the
landowners who comprised the qualified voters of the District, authorized the District to incur
bonded indebtedness in the aggregate principal amount not to exceed $13,000,000 to be secured by
the levy of Special Taxes (defined below) on taxable property within the District. On that same date,
the landowners within the District approved the rate and method of apportionment of the Special
Taxes on land within the District (the "Special Taxes") to pay the principal of and interest on the
bonds of the District (the "Rate and Method") which is set forth in Appendix A hereto. On
January 21, 2003, a second election was held for the purpose of expanding the list of authorized
facilities to be financed by the District. The facilities authorized to be financed by the District are
referenced to herein as the "Facilities." See "THE COMMUNITY FACILITIES DISTRICT ~
Description of Authorized Facilities."
Description and Development. The District encompasses approximately 215 gross acres.
The District is located approximately 2\1, miles east of Interstate 805 and south of Telegraph Canyon
Road at the southeast corner of La Media Road and Olympic Parkway. The District is located in the
newly developing eastern portion of the City and is bounded to the north by the previous developed
villages of Lomas Verdes and by The Otay Ranch to the east and west. Undeveloped land comprises
the area south of the District.
The land use entitlements for the District permit development in sub-areas known as
"planning areas." The District has been divided into five residential planning areas. Based on
current land use approvals and projections, the land within the residential planning areas is expected
to be developed into 482 single family detached units and 212 single family attached units. As
planned, the District does not contain any commercial planning areas. See 'THE DEVELOPMENT
AND PROPERTY OWNERSHIP ~ Potential Limitations on Development."
The grading within the District is substantially complete, and construction of both the
backbone infrastructure and the intract infrastructure is underway to a point where the landowners
expect to pull initial building permits beginning in June, 2003. For a more detailed description of
development activity within the District, see "THE COMMUNITY FACILITIES DISTRICT -
Status of Public Improvements."
Developer. The master developer of the property in the District is McMillin Otay Ranch,
LLC, a Delaware limited liability company (the "Developer"). The two members of the Developer
are McMillin Companies, LLC and Merced Partners, L.P. For certain information concerning the
Developer, see "THE DEVELOPMENT AND PROPERTY OWNERSHIP ~ The Developer."
2
DOCSOC\932761 v9\22245.0 140
The Developer purchased the land within the District in September 1997. In October, 2002,
the Developer completed the sale of one planning area, consisting of approximately 12 acres planned
for 212 single family attached units, to Cornerstone Communities LLC. In November and
December, 2002, the Developer sold most of the remaining residential planning areas to
homebuilding entities related to the Developer (the "McMillin Entities"). One of the McMillin
Entities has an option to purchase the remaining 76 lots in planning area R-3 owned by the
Developer. 'THE DEVELOPMENT AND PROPERTY OWNERSHIP - Development Plan" and
"- Merchant Builders."
Appraisal. Bruce W. Hull & Associates, Inc. (the "Appraiser") has conducted an appraisal
(the "Appraisal") of land within the District and has concluded, based upon the assumptions and
limiting conditions contained in the Appraisal that as of May 23, 2003, the aggregate value of such
land was $73,500,000. The Meyers Group (the "Market Absorption Consultant") prepared a Market
Analysis and Absorption Projection report dated May 21, 2003 (the "Market Absorption Study") for
the purpose of developing a build-out projection for the 482 single family detached units and 2 I 2
single family attached units planned in the District. The Market Absorption Study concludes that the
residential units within the District should be built-out and sold-out in the 2003 to 2005 period
assuming continued development with no unanticipated delays in construction and with competitive
pricing of the units. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP - Appraisal"
and "- Market Absorption Study," AppendixB - "SUMMARY OF MARKET ABSORPTION
STUDY" and Appendix C - "APPRAISAL REPORT."
Monitoring Program. In response to the conclusions in the most recent traffic study, the City
has implemented a building permit monitoring program for a number of projects in the Otay Ranch,
including those within the District. The Developer and the City have entered into the Monitoring
Agreement which provides that up to 278 building permits may be issued for units within the District
between April 1, 2003 and March 31, 2004, 307 permits between April I, 2004 and March 31, 2005
and 109 permits between April I, 2005 and March 31, 2006. The allocation of permits for the period
from April I, 2005 to March 31, 2006 is dependent upon the completion of three roadway
improvements listed in the Monitoring Agreement. See 'THE DEVELOPMENT AND PROPERTY
OWNERSHIP - Potential Limitations on Development."
Sources of Payment for the Bonds
Special Taxes. As used in this Official Statement, the term "Special Tax" is that tax which
has been authorized pursuant to the Act to be levied against certain land within the District pursuant
to the Act and in accordance with the Rate and Method. See "SOURCES OF PAYMENT FOR THE
BONDS - Special Taxes" and Appendix A - RATE AND METHOD OF APPORTIONMENT OF
SPECIAL TAX." Under the Indenture, the District has pledged to repay the Bonds from the Special
Tax Revenues and amounts on deposit in the funds and accounts established under the Indenture
other than the Acquisition Fund, the Rebate Fund and the Administrative Expense Fund. Special Tax
Revenues are defined in the Indenture to include the proceeds of the Special Taxes received by the
District, including any scheduled payments and prepayments thereof, interest and penalties thereon
and the proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the
delinquent Special Taxes in the amount of said lien and interest and penalties thereon.
The Special Taxes are the primary security for the repayment of the Bonds. In the event that
the Special Taxes are not paid when due, the only sources of funds available to pay the debt service
3
DOCSOC\93276Iv9\22245.0 140
on the Bonds are amounts held by the Fiscal Agent, including amounts held in the Reserve Fund.
See "SOURCES OF PAYMENT FOR THE BONDS - Reserve Fund."
Foreclosure Proceeds. The District has covenanted for the benefit of the owners of the
Bonds that it will commence, and diligently pursue to completion, judicial foreclosure proceedings
against Assessor's Parcels under common ownership with delinquent Special Taxes in the aggregate
in excess of $5,000 by the October 1 following the close of the fiscal year in which such Special
Taxes were due, and it will commence and diligently pursue to completion judicial foreclosure
proceedings against all Assessor's Parcels under common ownership with delinquent Special Taxes
in the aggregate in excess of $2,500 by the October I following the close of any fiscal year if the
amount in the Reserve Fund is less than the Reserve Requirement. See "SOURCES OF PA YMENT
FOR THE BONDS - Proceeds of Foreclosure Sales" herein. There is no assurance that the
property within the District can be sold for the appraised value or assessed values described herein,
or for a price suftìcient to pay the principal of and interest on the Bonds in the event of a default in
payment of Special Taxes by the current or tùture landowners within the District. See "SPECIAL
RISK FACTORS - Land Values" and Appendix C - "SUMMARY APPRAISAL REPORT"
herein.
EXCEPT FOR THE SPECIAL TAXES, NO OTHER TAXES ARE PLEDGED TO
THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL
OBLIGATIONS OF THE CITY NOR GENERAL OBLIGATIONS OF THE DISTRICT, BUT
ARE SPECIAL OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM SPECIAL
TAXES AND AMOUNTS HELD UNDER THE INDENTURE· AS MORE FULLY
DESCRIBED HEREIN.
Description of the Bonds
The Bonds will be issued and delivered as fully registered Bonds, registered in the name of
Cede & Co. as nominee of The Depository Trust Company, New York, New York CDTC"), and will
be available to actual purchasers of the Bonds (the "Beneficial Owners") in the denominations of
$5,000 or any integral multiple thereof, under the book-entry system maintained by DTC, only
through brokers and dealers who are or act through DTC Participants as described herein. Beneficial
Owners will not be entitled to receive physical delivery of the Bonds. In the event that the book-
entry-only system described herein is no longer used with respect to the Bonds, the Bonds will be
registered and transferred in accordance with the Indenture. See Appendix I - "DTC AND THE
BOOK ENTRY SYSTEM."
Principal of, premium, if any, and interest on the Bonds is payable by the Fiscal Agent to
DTC. Disbursement of such payments to DTC Participants is the responsibility of DTC and
disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants.
In the event that the book-entry-only system is no longer used with respect to the Bonds. the
Beneficial Owners will become the registered owners of the Bonds and will be paid principal and
interest by the Fiscal Agent, all as described herein. See "BOOK-ENTRY-ONL Y SYSTEM" herein.
The Bonds are subject to optional redemption, extraordinary mandatory redemption and
mandatory sinking tùnd redemption as described herein. For a more complete descriptions of the
Bonds and the basic documentation pursuant to which they are being sold and delivered, see "THE
BONDS" and Appendix E - "SUMMARY OF INDENTURE" herein.
4
DOCSOC\932761 v9\22245.[) 140
Tax Matters
In the opinion of Bond Counsel, based on an analysis of existing laws, regulations, rulings
and court decisions, and assuming, among other matters, compliance with certain covenants, interest
on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of
the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In
the further opinion of Bond Counsel, interest on the Bonds is not a specitic preference item tòr
purposes of federal individual or corporate alternate minimum taxes, although Bond Counsel
observes that such interest is included in adjusted current earnings in calculating federal corporate
alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other
federal or state income tax consequences relating to the ownership or disposition of, or the accrual or
receipt of interest on, the Bonds. See "TAX MATTERS" herein.
Professionals Involved in the Offering
u.s. Bank National Association will act as Fiscal Agent under the Indenture and as the initial
Dissemination Agent under the Continuing Disclosure Agreement to be entered into by the City and
the Developer Continuing Disclosure Agreement to be entered into by the Developer and the
McMillin Entities. See Appendices F and G. Stone & Youngberg LLC is the Underwriter of the
Bonds. All proceedings in connection with the issuance and delivery of the Bonds are subject to the
approval of Best Best & Krieger LLP, San Diego, Bond Counsel. Fieldman Rolapp & Associates is
acting as Financial Advisor to the City in connection with the Bonds. Certain legal matters will be
passed on for the City and the District by the City Attorney, and tòr the Underwriter by Stradling
Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Underwriter's
Counsel. Other professional services have been performed by McGill Martin Self, Inc. as Special
Tax Consultant, Bruce W. Hull & Associates, Inc. as Appraiser, and The Meyers Group, as Market
Absorption Consultant.
For intòrmation concerning the respects in which certain of the above-mentioned
professionals, advisors, counsel and agents may have a financial or other interest in the offering of
the Bonds, see "FINANCIAL INTERESTS" herein.
Continuing Disclosure
Each of the District and the Developer and the McMillin Entities has agreed to provide, or
cause to be provided, to each nationally recognized municipal securities information repository and
any public or private repository or entity designated by the State as a state repository tòr purposes of
Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission certain financial
information and operating data. The District has further agreed to provide notice of certain material
events. These covenants have been made in order to assist the Underwriter in complying with
Rule 15c2-12(b)(5). See "CONTINUING DISCLOSURE" herein, Appendix F and Appendix G
hereto tòr a description of the specitic nature of the reports to be filed by the District and by the
Developer and the McMillin Entities and notices of material events to be provided by the District.
Bond Owners' Risks
Certain events could affect the timely repayment of the principal of and interest on the Bonds
when due. See the section of this Official Statement entitled "SPECIAL RISK FACTORS" for a
discussion of certain factors which should be considered, in addition to other matters set forth herein,
5
DOCSOC\93276 J v9\22245.0 J 40
in evaluating an investment in the Bonds. The Bonds are not rated by any nationally recognized
rating agency. The purchase of the Bonds involves sign(ficant risks, and the Bonds are not suitable
investments for all investors. See "SPECIAL RISK FACTORS" herein.
Forward Looking Statements
Certain statements included or incorporated by reference in this Oftìcial Statement constitute
"forward-looking statements" within the meaning of the United States Private Securities Litigation
Reform Act of 1995, Section 2IE of the United States Securities Exchange Act of 1934, as amended,
and Section 27 A of the United States Securities Act of 1933, as amended. Such statements are
generally identifiable by the terminology used such as "plan," "expect." "estimate," "project,"
"budget" or other similar words. Such forward-looking statements inclùde, but are not limited to,
certain statements contained in the information under the caption "THE COMMUNITY
FACILITIES DISTRICT" and "THE DEVELOPMENT AND PROPERTY OWNERSHIP."
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECT A TrONS
CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE
ACTUAL RESUL TS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE
MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORW ARD-LOOKING
STATEMENTS. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR
REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL
STATEMENT.
Other Information
This Official Statement speaks only as of its date, and the information contained herein is
subject to change.
Brief descriptions of the Bonds and the Indenture are included in this Official Statement.
Such descriptions and information do not purport to be comprehensive or detìnitive. All references
herein to the Indenture, the Bonds· and the constitution and laws of the State as well as the
proceedings of the City Council, acting as the legislative body of the District, are qualified in their
entirety by references to such documents, laws and proceedings, and with respect to the Bonds, by
reference to the Indenture. Capitalized tenns not otherwise defined herein shall have the meanings
set forth in the Indenture.
Copies of the Indenture and other documents and information referred to herein are available
for inspection and (upon request and payment to the City of a charge for copying, mailing and
handling) for delivery from the City at 276 Fourth Avenue, Chula Vista, CA 9[ 9[0, Attention:
Director of Finance.
6
DOCSOC\932761 v9\22245.0 140
ESTIMATED SOURCES AND USES OF FUNDS'
The following table sets forth the expected uses of Bond proceeds:
Sources of Funds
Principal Amount of Bonds
$
TOTAL SOURCES
$
Uses of Funds
Interest Account(l)
Project Fund
Reserve Fund
Cost oflssuance Fund
Underwriter's Discount
Administrative Expense Fund
$
TOTAL USES
$
(I) Represents gross funded capitalized interest on the Bonds through September 1,2003.
THE BONDS
Authority for Issuance
The Bonds in the aggregate principal amount of $9,850,000' are authorized to be issued by
the District under and subject to the terms of the Indenture, the Act and other applicable laws of the
State of California.
Purpose of the Bonds
The Bonds are being issued to provide funds to: (i) finance the costs of constructing and
acquiring certain public facilities related to the proposed development within the District (See "THE
COMMUNITY FACILITIES DISTRICT - Description of Authorized Facilities"); (ii) pay costs
related to the issuance of the Bonds; (iii) fund the Reserve Fund for the Bonds in the initial amount of
$ '; and (iv) gross fund capitalized interest on the Bonds through September 1, 2003. See
"ESTlMA TED SOURCES AND USES OF FUNDS."
Description ofthe Bonds
The Bonds will be issued as fully registered bonds without coupons in denominations of
$5,000 and any integral multiple thereof and shall be dated the date of delivery thereof. The Bonds
will be issued in book-entry only fonn and The Depository Trust Company, New York, New York
CDTC") will act as securities depository for the Bonds. So long as the Bonds are held in book-entry
only form, principal of, premium, if any, and interest on the Bonds will be paid directly to DTC for
. Preliminary, subject to change.
7
DOCSOC\932761 v9\22245.0 140
distribution to the beneficial owners of the Bonds in accordance with the procedures adopted by
DTC. See Appendix I - "DTC AND THE BOOK ENTRY ONLY SYSTEM." The Bonds will
mature on September], in the principal amounts and years, and bearing rates of interest, as shown on
the inside cover of this Official Statement.
Interest on the Bonds will be payable semiannually on March 1 and September I of each
year, commencing March I, 2004 (each, an "Interest Payment Date") and will be computed on the
basis of a 360-day year comprised of twelve 30-day months. Each Bond will bear interest from the
Interest Payment Date next preceding the date of authentication, thereof, unless (i) such date of
authentication is an Interest Payment Date, in which event interest shall be payable I¡·om such date of
authentication, (ii) the date of authentication is after a Record Date but prior to the immediately
succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment
Date immediately succeeding the date of authentication or (iii) the date of authentication is prior to
the close of business on the first Record Date, in which event interest shall be payable from the date
of the Bonds; provided, however, that if at the time of authentication of a Bond, interest is in default,
interest on that Bond shall be payable from the last Interest Payment Date to which the interest has
been paid or made available for payment.
Interest on any Bond shall be paid to the person whose name shall appear in the books of
registration as the owner of such Bond as of the close of business on the Record Date immediately
preceding such Interest Payment Date. Such interest shall be paid by check of the Fiscal Agent
mailed to such Bondowner at his or her address as it appears on the books of registration or, upon the
request in writing prior to the Record Date of a Bondowner of at least $1,000,000 in aggregate
principal amount of Bonds, by wire transfer in immediately available funds to an account in the
United States designated by such Owner.
Redemption of Bonds'
Optional Redemption. The Bonds maturing on and after September I, 2012 may be
redeemed at the option of the District prior to maturity as a whole, or in part on any Interest Payment
Date on and after September 1, 2011, from such maturities as are selected by the District, and by lot
within a maturity, from any source of funds, at the following redemption prices (expressed as
percentages of the principal amount of the Bonds to be redeemed), together with accrued interest to
the date of redemption:
Redemption Date
September 1,20] I and March 1,2012
September I, 2012 and March I, 2013
September 1, 2013 and thereafter
Redemption Price
102%
101
100
. Preliminwy, subject 10 change.
8
DOC50C\93276 ¡ v9\22245.0 140
Extraordinary Mandatory Redemplionfrom Special Tax Prepayment. The Bonds are subject
to redemption on any Interest Payment Date, prior to maturity, as a whole or in part on a pro rata
basis among maturities from the proceeds of the prepayment of Special Taxes pursuant to the Rate
and Method. Such extraordinary mandatory redemption of the Bonds shall be at the following
redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed),
together with accrued interest thereon to the date of redemption:
Redemption Date
September 1,2003 through March 1,20] 1
September 1, 20] 1 and March], 2012
September 1, 2012 and March ], 2013
September], 2013 and thereafter
Redemption Price
]03%
]02
101
100
See "SOURCES OF PAYMENT FOR THE BONDS - Special Taxes - Prepayment of Special
Taxes" and Section _ of Appendix A for a description of how a property owner may prepay, or will
be required to prepay, Special Taxes.
Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20_ are
subject to mandatory sinking fund redemption, in part, by lot, on September] in each year
commencing , at a redemption price equal to the principal amount of the Bonds to
be redeemed, plus accrued and unpaid interest thereon to the date fixed for redemption, without
premium, in the aggregate principal amounts and in the years shown on the following redemption
schedule.
Redemption Date
(September 1)
Principal
Amount
9
DOCSOC\932761 v9\22245.0 140
·
The Bonds maturing on September I, 2033 are subject to mandatory sinking fund
redemption, in part, by lot, on September I in each year commencing , at a
redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued and unpaið
interest thereon to the date fixed for redemption, without premium, in the aggregate principal
amounts and in the years shown on the following redemption schedule.
Redemption Date
(September 1)
Principal
Amount
In the event of a partial optional redemption or special mandatory redemption of the Bonds,
each of the remaining mandatory sinking fund payments for such Bonds, as applicable, will be
reduced, as nearly as practicable, on a pro rata basis.
Purchase in Lieu of Redemption. In lieu of such an optional, extraordinary mandatory or
mandatory sinking fund redemption, the District may elect to purchase such Bonds at public or
private sale at such prices as the District may in its discretion determine; provided, that, unless
otherwise authorized by law, the purchase price (including brokerage and other charges) thereof shall
not exceed the principal amount thereof plus accrued interest to the purchase date.
Notice and Selection of Bonds for Redemption
[n the event the District shall elect to redeem Bonds as provided in the Indenture, the District
shall give written notice to the Fiscal Agent of its election to so redeem, the redemption date, the
principal amount of the Bonds to be redeemed, the maturities from which such Bonds are to be
redeemed and the principal amount of the Bonds to be redeemed from each such maturity, the Bonds
or portions thereof to be selected for redemption.
The notice to the Fiscal Agent shall be given not less than 60 days prior to the redemption
date or such shorter period as shall be acceptable to the Fiscal Agent. If less than all of the Bonds
Outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to
be redeemed shall be in the principal amount of $5,000 or a multiple thereof, and, in selecting
portions of such Bonds for redemption, the District shall treat each such Bond as representing that
10
DOCSOC\932761 v9\22245.0 140
number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such
Bond to be redeemed in part by $5,000.
Notice of Redemption
Notice by Mail to Registered Owners. The Fiscal Agent shall mail, at least 30 days but not
more than 45 days prior to the date of redemption, notice of intended redemption, by first-class mail,
postage prepaid, to the original purchasers of the Bonds and the respective registered Owners of the
Bonds at the addresses appearing on the Bond registry books. The notice of redemption shall state:
(a) the redemption date; (b) the redemption price; (c) the bond registration numbers, dates of maturity
and CUSIP numbers of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part,
the respective principal portions to be redeemed; provided, however, that whenever any call includes
all Bonds of a maturity, the numbers of the Bonds of such maturity need not be stated; (d) that such
Bonds must be surrendered at the Principal Corporate Trust Office of the Fiscal Agent; (e) that
further interest on such Bonds will not accrue from and after the designated redemption date; (I) the
date of the issue of the Bonds as originally issued; (g) the rate of interest borne by each Bond being
redeemed; and (h) that any other descriptive information needed to identify accurately the Bonds
being redeemed as the District shall direct.
Further Notice. Further notice of redemption shall be sent at least two days before the notice
of redemption is l)1ailed to the Bondholders, as described above, by registered or certified mail or
overnight delivery service to the registered securities depositories and to the national information
services listed in the Indenture or, in accordance with the then-current guidelines of the Securities
and Exchange Commission, such other securities depositories and services providing information on
called bonds, or such other securities depositories and services, as the District may determine in its
sole discretion.
Failure to Receive Notice. So long as notice by first class mail has been provided as set forth
above, the actual receipt by the Owner of any Bond of notice of such redemption shall not be a
condition precedent to redemption, and failure to receive such notice shall not affect the validity of
the proceedings for redemption of such Bonds or the cessation of interest on the date fixed for
redemption.
Certificate of Giving Notice. The notice or notices described above shall be given by the
Fiscal Agent on behalf of the District. A certificate by the Fiscal Agent that notice of call and
redemption has been given to the registered Owners of the Bonds as herein provided shall be
conclusive against all parties, and no Owner whose Bond is called for redemption may object thereto,
or object to cessation of interest on the redemption date, by any claim or showing that he failed to
receive actual notice of call and redemption.
Notice from DTC to Beneficial Owners. So long as the Bonds are held in book-entry-form,
notice of redemption will be sent by the Fiscal Agent only to DTC or its nominee. Conveyance of
redemption notice by DTC to Beneficial Owners is determined by DTC and its participants and is not
the responsibility of the District. See Appendix I - "DTC AND THE BOOK ENTRY SYSTEM."
Effect of Redemption
When notice of redemption has been given, and when the amount necessary for the
redemption of the Bonds called for redemption is set aside for that purpose in the Redemption Fund,
11
DOCSOC\93276] v9\22245.0] 40
the Bonds designated for redemption shall become due and payable on the date fixed for redemption
thereof, and upon presentation and surrender of said Bonds at the place specified in the notice of
redemption, with the form of assignment endorsed thereon executed in blank, said Bonds shall be
redeemed and paid at the redemption price out of the Redemption Fund and no interest will accrue on
such Bonds or portions of Bonds called for redemption from and after the redemption date specified
in said notice, and the Owners of such Bonds so called for redemption after such redemption date
shall look for the payment of principal and premium, if aRY, of such Bonds or portions of Bonds only
to said Redemption Fund.
All Bonds redeemed shall be canceled forthwith by the Fiscal Agent and shall not be
reissued. Upon surrender of Bonds redeemed in part, a new Bond or Bonds of the same maturity
shall be registered, authenticated and delivered to the registered Owner at the expense of the District,
in the aggregate principal amount of the unredeemed portion. All unpaid interest payable at or prior
to the date fixed for redemption shall continue to be payable to the respective registered owners of
such Bonds or their order, but without interest thereon.
Transfer and Exchange of Bonds
There shall be kept by the Fiscal Agent, sufficient books for the registration and transfer of
the Bonds and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable
regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said
register, Bonds. The ownership of the Bonds shall be established by the Bond registration books
held by the FiscaJ Agent. Whenever any Bond or Bonds shall be surrendered for registration of
transfer or exchange, the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of the
same maturity, for a like aggregate principal amount of authorized denominations; provided that the
Fiscal Agent shall not be required to register transfers or make exchanges of (i) Bonds for a period of
15 days next preceding the date of any selection of the Bonds to be redeemed, or (ii) any Bonds
chosen for redemption.
Bonds may be exchanged at the Principal Corporate Trust Office, for a like aggregate
principal amount of Bonds of authorized denominations, interest rate and maturity, subject to the
terms and conditions of the Indenture, including the payment of certain charges, if any, upon
surrender and cancellation of a Bond. Upon such transfer and exchange, a new registered Bond or
Bonds of any authorized denomination or denominations of the same maturity and for the same
aggregate principal amount will be issued to the transferee in exchange therefor.
The transfer of any Bond may be registered only upon such books of registration upon
surrender thereof to the Fiscal Agent, together with an assignment duly executed by the Owner or his
attorney or legal representative, in satisfactory form. Upon any such registration of transfer, a new
Bond or Bonds shall be authenticated and delivered in exchange for such Bond, in the name of the
transferee, of any denomination or denominations authorized by the Indenture, and in an aggregate
principal amount equal to the principal amount of such Bond or Bonds so surrendered. In all cases in
which Bonds shall be exchanged or transferred, the Fiscal Agent shall authenticate the Bonds in
accordance with the provisions of the Indenture. All Bonds surrendered in such exchange or transfer
shall forthwith be canceled. The Fiscal Agent may make a charge for every such exchange or
registration of transfer of Bonds sufficient to reimburse it for any tax or other governmental charge
required to be paid with respect to such exchange or registration or transfer.
]2
DüCSOC\932761 v9\22245.0 140
Debt Service Schedule for the Bonds'
Period Ending Principal Interest Total Debt Service
(September 1) on Bonds on Bonds on Bonds
2003 $ $ $
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
Total $ $ $
SOURCES OF PAYMENT FOR THE BONDS
Limited Obligations
The Bonds are special, limited obligations of the District payable only from amounts pledged
under the Indenture and from no other sources.
The Special Taxes are the primary security for the repayment of the Bonds. Under the
Indenture, the District has pledged to repay the Bonds from the Special Tax Revenues remaining
after the funding of the annual Administrative Expense Requirement of $75,000 and from amounts
held in the funds and accounts under the Indenture, other than amounts held in the Project Fund, the
Rebate Fund and the Administrative Expense Fund. Special Tax Revenues are defined in the
Indenture to include the proceeds of the Special Taxes received by the District, including any
. Preliminary, subject to change
13
DOCSOC\93276] v9\22245.0] 40
scheduled payments and prepayments thereof, interest and penalties thereon, the proceeds of the
redemption of delinquent Special Taxes or sale of property sold as a result of foreclosure of the lien
of delinquent Special Taxes in the amount of said lien, and interest and penalties thereon.
In the event that the Special Tax Revenues are not received when due, the only sources of
funds available to pay the debt service on the Bonds are amounts held by the Fiscal Agent, including
amounts held in the Reserve Fund, for the exclusive benefit of the Owners of the Bonds.
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY,
THE COUNTY OF SAN DIEGO, THE STATE OF CALIFORNIA OR ANY POLITICAL
SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT
FOR THE SPECIAL TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF
THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL OBLIGATIONS OF THE
CITY BUT ARE SPECIAL OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY
FROM THE SPECIAL TAXES AND OTHER AMOUNTS PLEDGED UNDER THE
INDENTURE AS MORE FULLY DESCRIBED HEREIN.
Special Taxes
Authorization and Pledge. In accordance with the provisions of the Act, the City Council
established the District on August 13, 2002 for the purpose of financing the acquisition, construction
and installation of various public improvements to serve the District. At a special election held on
August 20, 2002, the owners of the property within the District authorized the District to incur
indebtedness secured by Special Taxes levied on property in the District in an amount not to exceed
$13,000,000, and approved the Rate and Method which authorized the Special Tax to be levied to
repay District indebtedness for the District, including the Bonds. At an election held on January 21,
2003 the landowners within the District authorized an addition to the list of facilities eligible for
financing by the District.
The District has covenanted in the Indenture that by July I of each year (or such later date as
may be authorized by the Act) it will levy Special Taxes within the District up to the maximum rates
permitted under the Rate and Method in the amount required for the payment of principal of and
interest on any Outstanding Bonds becoming due and payable during the ensuing calendar year,
including any necessary replenishment or expenditure of the Reserve Fund and the amount estimated
to be sufficient to pay the Administrative Expenses during such calendar year.
The Special Taxes levied in any fiscal year may not exceed the maximum rates authorized
pursuant to the Rate and Method. See Appendix A - "RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAX" hereto. There is no assurance that the Special Tax
proceeds will, in all circumstances, be adequate to pay the principal of and interest on the Bonds
when due. See "SPECIAL RISK FACTORS -Insufficiency of Special Taxes" herein.
Rate and Method. Under the Rate and Method, all Taxable Property within the District is to
be classified as Developed Property or Undeveloped Property and is subject to the levy of annual
Special Taxes as described below. Developed Property is to be further classified as Residential
Property or Non-Residential Property.
14
DOCSOC\932761 v9\22245.0 140
The Maximum Annual Special Tax for each Assessor's Parcel of Residential Property or
Non-Residential Property shall be the greater of (1) the Assigned Special Tax described below or
(2) the Backup Special Tax computed as described below.
The Assigned Special Tax for each Assessor's Parcel of Developed Property is shown in the
table below.
Assigned Annual Special Tax for Developed Property
Land Uye Class Description Assif!ned Annual Special Tax
2
Non-Residential
Property
$440 per unit plus $0.34 per
square foot of Residential
Floor Area
$] ] ,365 per Acre
Residential Property
When a Final Subdivision Map is recorded within the District, the Backup Special Tax for
Assessor's Parcels of Developed Property classified as Residential Property or Non-Residential
Property shall be determined according to the provisions of the Rate and Method, generally at the
rate of $11 ,365 per acre.
The Maximum Annual Special Tax for each Assessor's Parcel classified as Undeveloped
Property shall be $11,365 per acre.
Commencing with Fiscal Year 2003-04 and for each following Fiscal Year, the City Council
shall determine the Special Tax Requirement (as defined in the Rate and Method) and shall levy the
Special Tax until the amount of Special Taxes equals the Special Tax Requirement. The Special Tax
shall be levied each Fiscal Year as follows:
First: The Special Tax shall be levied Proportionately on each Assessor's Parcel of
Developed Property at a rate up to 100% of the applicable Assigned Special Tax to satisfy the
Special Tax Requirement.
Second: If additional monies are needed to satisfy the Special Tax Requirement after the first
step has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of
Undeveloped Property, excluding any Assessor's Parcels classified as Undeveloped Property
pursuant to paragraphs 2 and 3 in Section E of the Rate and Method, at a rate up to 100% of the
Maximum Annual Special Tax for Undeveloped Property.
Third: If additional monies are needed to satisfy the Special Tax Requirement after the first
two steps have been completed, the Special Tax to be levied on each Assessor's Parcel of Developed
Property whose Maximum Annual Special Tax is derived by the application of the Backup Special
Tax shall be increased Proportionately from the Assigned Special Tax up to the Maximum Annual
Special Tax for each such Assessor's Parcel.
]5
DOCSOC\932761 v9\22245.0 140
Fourth: If additional monies are needed to satisfy the Special Tax Requirement after the first
three steps have been completed, then the Special Tax shall be levied Proportionately on each
Assessor's Parcel classified as Undeveloped Property pursuant to paragraphs 2 and 3 in Section E of
the Rate and Method at a rate up to 100% of the Maximum Annual Special Tax for Undeveloped
Property.
Notwithstanding the above, under no circumstances will the Special Tax levied against any
Assessor's Parcel of Occupied Residential Property be increased by more than ten percent per year as
a consequence of delinquency or default in the payment of Special Taxes by the owner of any other
Taxable Property.
Prepayment of Special Taxes. There are certain events that will result in a required
prepayment of Special Taxes as described in the following paragraph. In addition, under the Rate
and Method, the owner of a parcel for which a building permit has been issued or the owner of any
Public Property may prepay the Special Tax obligation applicable to such parcel in whole or in part.
Any required or voluntary prepayment of Special Taxes will result in an extraordinary redemption of
Bonds. See 'THE BONDS - Redemption - Extraordinary Mandatory Redemption from Special
Tax Prepayment."
A required prepayment of Special Taxes will occur on a parcel to the extent necessary to
comply with the City's policy that the total annual taxes and assessments on such a parcel, exclusive
of special taxes for services, including City maintenance community facilities districts, will not
exceed two percent (2%) of the sales price of such a parcel to a residential homeowner. Pursuant to
the Acquisition Financing Agreement, the Developer has agreed to comply with the policy and the
Developer and the City expect that the current merchant builders will also agree to comply with the
policy. The Developer has agreed with the City to require all merchant builders to comply with this
policy. Based on estimated retail home sales prices, the Developer currently does not anticipate that
the total taxes and assessments, exclusive of special taxes for services, will exceed 2% of the sales
price. As shown in Table 5 under the caption "THE COMMUNITY FACILITIES DISTRICT -
Expected Tax Burden," the projected tax burden (excluding taxes allocable to City maintenance
community facilities districts) on a typical single family detached unit and single family attached
unit, based on the weighted averages of the respective unit sizes and current prices and taxes, will be
approximately 1.66%. When the projected tax burden associated with Chula Vista Maintenance CFD
No. 08-M, formed for the purpose of financing certain landscaping and storm water control
maintenance, is considered, the total expected tax burden rises to approximately 1.94% in the case of
a single family detached unit and 1.79% in the case of a single family attached unit. The percentage
for the single family detached units is projected to rise to approximately 2.0% if a proposed rate
increase for CFD No. 08-M is approved. Under the policy, prior to the closing of an escrow for the
sale of a residential unit, the merchant builder is to deposit into escrow the amount needed to
partially prepay the Special Taxes or other special taxes or assessments so that following such
prepayment the parcel will be in compliance with the policy. Upon the closing of the escrow, any
prepayment of the Special Taxes will be paid to the Director of Finance of the City and will be sent
to the Fiscal Agent to redeem Bonds.
Collection and Application of Special Taxes. The Special Taxes are levied and collected by
the Treasurer-Tax Collector of the County in the same manner and at the same time as ad valorem
property taxes, but may be collected in any other manner the legislative body of the District may
choose.
16
DOCSOC\932761 v9\22245.0 140
The District has made certain covenants in the Indenture for the purpose of ensuring that the
current maximum Special Tax rates and method of collection of the Special Taxes are not altered in a
manner that would impair the District's ability to collect sufficient Special Taxes to pay debt service
on the Bonds and Administrative Expenses when due. First, the District has covenanted that, to the
extent it is legally permitted to do so, it will not reduce the maximum Special Tax rates and will
oppose the reduction of maximum Special Tax rates by initiative where such reduction would reduce
the maximum Special Taxes payable from parcels on which a completed structure is located to less
than I 10% of Maximum Annual Debt Service on the Outstanding Bonds and any other bonds issued
on a parity with the Bonds as permitted by the Indenture. See "SPECIAL RISK FACTORS -
Proposition 218." Second, the District has covenanted not to permit the tender of Bonds in payment
of any Special Taxes except upon receipt of a certificate of a Special Tax Consultant that to accept
such tender will not result in the District having insufficient Special Tax Revenues to pay the
principal of and interest when due on the Bonds remaining Outstanding following such tender. See
"SPECIAL RISK FACTORS - Non-Cash Payment of Special Taxes."
Although the Special Taxes constitute liens on Taxable Property within the District, they do
not constitute a personal indebtedness ofthe owners of such property within the District. Moreover,
other liens for taxes and assessments already exist on the property located within the District and
other such liens could come into existence in the future in certain situations without the consent or
knowledge of the City or the landowners therein. See "SPECIAL RISK FACTORS - Parity Taxes,
Special Assessments and Land Development Costs" herein. There is no assurance that property
owners will be financially able to pay the annual Special Taxes or that they will pay such taxes even
if tinancially able to do so, all as more fully described in the section of this Official Statement
entitled "SPECIAL RISK FACTORS."
Under the terms of the Indenture, not later than the tenth Business Day after receipt, all
Special Tax Revenues received by the District are to be deposited in the Special Tax Fund. Special
Tax Revenues (with the exception of Special Tax Revenues representing Prepayments) are to be
applied by the Fiscal Agent under the Indenture in the following order of priority: (I) to deposit
annually up to $75,000 to the Administrative Expense Fund, (2) to pay the principal of and interest
on the Bonds when due, (3) to replenish the Reserve Fund to the Reserve Requirement, (4) to make
any required transfers to the Rebate Fund and (5) to pay Administrative Expenses of the District
above the $75,000 referenced in (I) above. See Appendix E - "SUMMARY OF INDENTURE."
Special Tax Revenues representing Prepayments shall be transferred to the Bond Service Fund as
provided for in the Indenture and used to redeem Bonds. See "THE BONDS - Redemption of
Bonds - Extraordinary Mandatory Redemption from Prepayment."
Proceeds of Foreclosure Sales. The net proceeds received following a judicial foreclosure
sale of land within the District resulting from a landowner's failure to pay the Special Taxes when
due are included within the Special Tax Revenues pledged to the payment of principal of and interest
on the Bonds under the Indenture.
Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of
any Special Tax or receipt by the District of Special Taxes in an amount which is less than the
Special Tax levied, the City Council, as the legislative body of the District, may order that Special
Taxes be collected by a superior court action to foreclose the lien within specified time limits. In
such an action, the real property subject to the unpaid amount may be sold at a judicial foreclosure
sale. Under the Act, the commencement of judicial foreclosure following the nonpayment of a
Special Tax is not mandatory. However, the District has covenanted for the benefit of the owners of
17
DOCSOC\932761 v9\22245.0140
the Bonds that it will commence and diligently pursue to completion, judicial foreclosure
proceedings against (i) properties under common ownership with delinquent Special Taxes in the
aggregate of $5,000 or more by the October 1 following the close of the Fiscal Year in which such
Special Taxes were due, and (ii) against all properties with delinquent Special Taxes in the aggregate
of $2,500 or more by the October 1 following the close of any Fiscal Year if the amount in the
Reserve Fund is less than the Reserve Requirement. See Appendix E - "SUMMARY OF
INDENTURE - Other Covenants of the District" herein.
If foreclosure is necessary and other funds (including amounts in the Reserve Fund) have
been exhausted, debt service payments on the Bonds could be delayed until the foreclosure
proceedings have ended with the receipt of any foreclosure sale proceeds. Judicial foreclosure
actions are subject to the normal delays associated with court cases and may be further slowed by
bankruptcy actions, involvement by agencies of the federal government and other factors beyond the
control of the City and the District. See "SPECIAL RISK FACTORS - Bankruptcy and
Foreclosure" herein. Moreover, no assurances can be given that the real property subject to
foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, that the proceeds of such
sale will be sufficient to pay any delinquent Special Tax installment. See "SPECIAL RISK
FACTORS - Land Values" herein. Although the Act authorizes the District to cause such an action
to be commenced and diligently pursued to completion, the Act does not impose on the District or
the City any obligation to purchase or acquire any lot or parcel of property sold at a foreclosure sale
if there is 1)0 other purchaser at such sale. However, the City does have the ability to use the
foreclosure judgment to purchase property by credit bid at a foreclosure sale, in which case the City
would have no obligation to pay such credit bid for 24 months. The Act provides that, in the case of
a delinquency, the Special Tax will have the same lien priority as is provided for ad valorem taxes.
Reserve Fund
In order to secure further the payment of principal of and interest on the Bonds, the District is
required, upon delivery of the Bonds, to deposit in the Reserve Fund and thereafter to maintain the
Reserve Fund at an amount equal to the Reserve Requirement. The Indenture provides that the
amount in the Reserve Fund shall, as of any date of calculation, equal the lesser of (i) 10% of the sale
proceeds of the Bonds, (ii) the maximum annual debt service of the Bonds, or (iii) one hundred
twenty-five percent (125%) of the average annual debt service on the proceeds of the Bonds (the
"Reserve Requirement").
Subject to the limits on the maximum annual Special Tax which may be levied within the
District, as described in Appendix A, the District has covenanted to levy Special Taxes in an amount
that is anticipated to be sufficient, in light of the other intended uses of the Special Tax proceeds, to
maintain the balance in the Reserve Fund at the Reserve Requirement. Amounts in the Reserve Fund
are to be applied to (i) pay debt service on the Bonds, to the extent other monies are not available
therefore, (ii) redeem the Bonds in whole or in part, and (iii) pay the principal and interest due in the
final year of maturity of the Bonds. In the event of a prepayment of Special Taxes, under certain
circumstances, a portion of the Reserve Fund will be added to the amount being prepaid. As
described in the Rate and Method, this Reserve Fund Credit will be equal to the lesser of: (a) the
expected reduction in the Reserve Requirement, if any, as a result of prepayment, or (b) the amount
derived by subtracting the new Reserve Requirement in effect after the redemption from the balance
in the Reserve Fund, but in no event shall such amount be less than zero. See Appendix E -
"SUMMARY OF INDENTURE" herein.
18
DOCSOC\932761 v9\22245.0 140
Issuance of Parity Bonds
The District covenanted in the Indenture not to issue any other obligations payable from the
Special Taxes levied on land within the District which have, or purport to have, any lien upon the
Special Taxes superior to or on a parity with the lien of the Bonds, other than refunding bonds which
satisfy the requirements below. Nothing in the Indenture prevents the District from issuing and
selling, pursuant to law, refunding bonds or other refunding obligations payable from and having a
first lien upon the Special Taxes on a parity with the Outstanding Bonds so long as the issuance of
such refunding bonds or other refunding obligations results in a reduction in the Annual Debt Service
on the Bonds and such refunding bonds or other refunding obligations taken together.
THE COMMUNITY FACILITIES DISTRICT
General Description of the District
The District consists of approximately 2 I 5 acres and is located approximately 2 Y2 miles east
of Interstate 805 and south of Telegraph Canyon Road at the southeast corner of La Media Road and
Olympic Parkway. The District is divided into five residential planning areas. As planned, the
District will not contain any taxable, non-residential acreage. The Bonds will be secured by Special
Taxes levied on Taxable Property within the District. At buildout, the residential planning areas are
expected to be developed into 482 single family detached units and 2 I 2 single family attached units.
The Developer has sold the planning area for the 212 proposed single family attached units to
Cornerstone Communities LLC. The Developer has sold substantially all of the remaining four
planning areas to the McMillin Entities, which are homebuilding entities related to the Developer
who will act as merchant builders for the single family detached units planned in the District. The
Developer still owns 76 lots which are under option to be sold to one of the McMillin Entities. See
'THE DEVELOPMENT AND PROPERTY OWNERSHIP - Development Plan."
Description of Anthorized Facilities
The facilities authorized to be acquired or constructed by the District with the proceeds of the
Bonds consist of various public improvements, described in Table 1 below, to serve property within
the District. In addition to or in substitution for the facilities listed below, the City and the Developer
may agree to finance additional or different eligible facilities. As set forth in Table I below, the
Developer expects to finance a portion of the cost of the facilities from the proceeds of lot sales and
other cash on hand. See Table 9 herein.
19
DOCSOC\932761 v9\22245.0 140
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Status of Public Improvements
As of May 2003, the entire project to be constructed within the District has been graded to
finish grade. Olympic Parkway has been completed and turned over to the City and is open for use
by the public. La Media Road (from Olympic Parkway to Santa Venetia) has been graded and paved
with the storm drainage, water, and sewer improvements installed. Dry utilities are under
construction, and finish paving will follow dry utilities. Santa Venetia Street has been graded and
paved, with storm drainage, sewer and water installed. Water improvements are currently under
construction. Magdalena A venue has been graded with storm drainage, sewer and water
improvements installed. Birch Road has just been graded to its full width with storm drain installed.
For a description of development activity within certain individual planning areas, see 'THE
DEVELOPMENT AND PROPERTY OWNERSHIP - Merchant Builders."
Principal Taxpayers
Table 2 below sets forth the percentage of the Special Taxes that the property owners in the
District would pay in tiscal year 2003-04 based on a projected Special Tax levy of $786,692.
TABLE 2
PROJECTED PRINCIPAL TAXPAYERS FOR
FISCAL YEAR 2003-04
Planning Area
Owner (/)
Fiscal Year 2003-
2004 Special Tax(2)
% 0.1 Total
Merchant Builder Owned Planning Area
TOTAL
$110,271 1.4.02%
$176,527 22.44%
$128,025 16.27%
$111,838 14.22%
$133,079 16.92%
$126,953 16.14%
$676,421 85.98%
$786,692 100.00%
R-10
Cornerstone Communities
R-I
R-3
R-3
R-4
R-6
Subtotal
McMillin Plannin2 Areas
McMillin Mandalay 101, LLC
McMillin Sienna II, LLC
McMillin Otay Ranch, LLC
McMillin Auburn Lane II , LLC
McMillin Jasmine 126, LLC
(1) Ownership information from Developer as of May 1,2003.
(2) Estimated Special Tax Levy for Fiscal Year 2003-04.
Source: McGill Martin Self Inc.
Estimated Direct and Overlapping Indebtedness
Within the District's boundaries are numerous overlapping local agencies providing public
services. Some of these local agencies have outstanding bonds or other forms of indebtedness which
are secured by taxes and assessments on the parcels within the District and others have authorized
but unissued bonds which, if issued, will also be secured by taxes and assessments levied on parcels
21
DOCSOC\932761 v9\22245.0 140
within the District. The approximate amount of the direct and overlapping debt secured by such
taxes and assessments on the parcels within the District for fiscal year 2002-03 is shown in Table 3
below (the "Debt Report").
The Debt Report has been derived from data assembled and reported to the District by
California Municipal Statistics, Inc. Neither the District, the City nor the Underwriter has
independently verified the information in the Debt Report and do not guarantee its completeness or
accuracy.
22
DOCSOC\932761 v9\22245.0 ¡ 40
TABLE 3
DIRECT AND OVERLAPPING DEBT SUMMARY
COMMUNITY FACILITIES DISTRICT NO. 2001-2
(McMILLIN - OTAY RANCH - VILLAGE SIX)
2002-03 Local Secured Assessed Valuation: $14,301,905
DIRECT AND OVERLAPP1NG TAX AND ASSESSMENT DEBT: % Applicable
Metropolitan Water District 0.001%
San Diego County Water Authority 0.007
Otay Municipal Water District, 1.0. No. 27 0.136
Southwestern Community College District 0.062
Sweetwater Union High School District 0.074
Chula Vista Elementary School District 0.106
City ofChula Vista Community Facilities District No. 2001-2 100.
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT
OVERLAPPING GENERAL FUND OBLIGATION DEBT:
San Diego County General Fund Obligations
San Diego County Pension Obligations
San Diego County Superintendent of Schools Obligations
Otay Municipal Water District Certificates of Participation
Southwestern Community College District General Fund Obligations
Sweetwater Union High School District Certificates of Participation
Chula Vista Elementary School District
City of Chula Vista Certificates of Participation
City of Chula Vista Pension Obligations
TOTAL GROSS OVERLAPPING GENERAL FUND OBLlGA nON DEBT
Less: Otay Municipal Water District Certificates of Participation
TOTAL NET OVERLAPPING GENERAL FUND OBLlGATlON DEBT
GROSS COMBINED TOTAL DEBT
NET COMBINED TOTAL DEBT
0.007%
0.007
0.007
0.119
0.067
0.081
0.112
0.132
0.132
Debt 5/1/03
$ 4,443
115
14,470
24,515
26,725
53,705
(I)
$123,973
$ 33,977
57,708
145
30,976
2,315
19,452
88,855
122,635
1 7,466
$373,529
30,976
$342,553
$497,502 (2)
$466,526
(1) Excludes Mello-Roos Act bonds to be sold.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation
bonds and non-bonded capital lease obligations.
Ratios to 2002-03 Assessed Valuation:
Direct Deb!....... ................... ................................................... - %
Total Direct and Overlapping Tax and Assessment Debt.........0.87%
Gross Combined Total Debt .....................................................3.48%
Net Combined Total Debt.........................................................3.26%
STATE SCHOOL BU1LDlNG AID REPA YABLE AS OF 6/30/02: $0
Source: California Municipal Statistics, Inc.
23
DOCSOC\93276] v9\222450 ] 40
The authorized but unissued debt of existing community facilities districts with boundaries
overlapping the District as of March I, 2003 is summarized in Table 4 below. Other publ ic agencies
may from time to time form additional districts that impose special taxes or assessments payable by
landowners within the District. See "SPECIAL RISK FACTORS - Parity Taxes, Special
Assessments and Land Development Costs."
TABLE 4
SUMMARY OF OVERLAPPING COMMUNITY FACILITIES DISTRICTS
District
Purpose
Undeveloped
Land Special
Tax Per
Acri])
Developed
Residential
Special Tax
Per Sq. Ft.
Authorized
Deht
Chula Vista Elementary School District CFD No. 11 (I)
Sweetwater Union High School District CFD No. 11(1)
Elementary Schools
High Schools
$3,266
$4,022
$ .2649
.3263(3)
$250,000,000
250.000.000
(1) On July I of each year, the maximum special tax rates shall be increased prior to development of a parcel by the greater of (i) the
annual percentage change in the Engineering News Record building cost index fOf the City of Los Angeles determined every
May 31 for the prior 12·month period, or (ii) two percent per fiscal year, and after development of a parcel at the rate of 2% per
tìscal year.
(2) An Undeveloped Property Tax is provided tor in each district if the debt service is not satistìed through the levy of the Special Tax
on Residential Property. To date, the Chula Vista Elemental)' School District CFD No. II and the Sweetwater Union High School
District CFD No. II have not been required to levy a Special Tax on Undeveloped Property.
(3) These amounts are currently pledged to pay lease payments with respect to certain certiticates of participation of the Sweet\A,'atcr
Union High School District and are also expected be pledged to lease payments with respect to one or more future series of
certificates of participation.
Source: McGill Martin Se!t~ Inc.
Expected Tax Burden
It is expected that the total tax burden on residential units in the District will be slightly less
than 2% of the initial base sales price of the units. Table 5 below sets forth an estimated property tax
bill for a typical single family detached unit of 2,341 square feet (such square footage being the
expected weighted average of unit sizes of the planned single family detached units) and 1,316
square feet in the case of a typical single family attached unit (such square footage being the
expected weighted average of unit sizes of the planned single family attached units). The total
effective tax rate for a typical single family detached unit is projected to be 1.94% and for a typical
single family attached unit 1.79% of the initial base sales price. An increase in the CFD No. 08-M
maintenance tax for single family detached units was approved to increase the total effective tax rate
on a typical single family unit to approximately 2.0% of initial base sales price.
24
DOCSOC\932761 v9\22245.0 140
TABLE 5
SAMPLE PROPERTY TAX BILL
PROJECTED FOR FISCAL YEAR 2003-2004
FORA SINGLE FAMILY DETACHED UNIT AND SINGLE FAMILY ATTACHED UNIT
Percent oj
Total
A.-.se!¡sed
Valuation
Single Family
Attached Unit
House Square Footage (Weighted Average)
Base Sales Price
Total Assessed Value
1,467
$ 287,500.00
$ 280,50000
Basic Levy
MWD
County Water Authority
Chula Vista Elementary School District G.O. Bond
Sweetwater High School District G.O. Bond
Southwestern Community College 0.0. Bond
Otav Water ID #27
Total Taxes Based on Assessed Value
1. 00000%
0.00670
0.00075
0.02645
0.02] 96
0.01304
0.0] 500
$ 2,805.00
18.79
2.10
74.19
61.60
36.58
42.08
$ 3,040.34
Chula Vista Elementary CFD No. 11
Chula Vista Elementary CFD No. 11 G.O. Credit
Sweetwater Union High School CFD No. ] ]
Sweetwater UHSD No. 11 G.O. Credit
Chula Vista Maintenance CFD No. 08-M (I)
(Improvement Area I)
Chula Vista Preserve CFD No. 97-2
City ofChula Vista CFD 2001-2
Mosquito/Rat Control
MWD Water Standby Charge
Otay Water A vai]ability
CWA Water Availability
Total Assessments and Parcel Charges
Total All Property Taxes
Total Effective Tax Rate
Total Effective Tax Rate Excluding City Maintenance CFD's
388.6]
(74.19)
478.68
(61.60)
378.49(1)
20.54
938.78
2.29
] ] .50
10.00
10.00
$ 2,]03.10 $
L~ 5.11334 $
1.79%
J.~6'Z<>
Single Family
Detached Unit
2,822
$ 445,682.00
$ 438,682.00
$
4,386.82
29.39
3.29
] 16.03
96.33
57.20
65.80
4,754.86
$
747.55
(116.03)
920.82
(96.33)
959.48
39.51
1,339.48
2.29
11.50
10.00
10.00
3,888.28
8,643J 3
1.94%
1.72~
(I) This tax is based on the rate from the Chula Vista Maintenance CFD No. 08-M's Rate and Method of Apportionment
assuming these units are classified as multi-family units.
Source: McGill Martin Self: Inc.
Estimated Value-to-Lien Ratios
The value of the land within the District is significant because in the event of a delinquency
in the payment of Special Taxes the District may foreclose only against delinquent parcels in the
District. Table 6 summarizes the estimated appraised value-to-lien ratios for property in the District
based on the expected principal amount of the Bonds. The appraised value of the land within the
District based on the assumptions and limiting conditions contained in the Appraisal is $73,500,000.
The estimated appraised value-to-lien ratio for the property within the District currently subject to the
levy of the Special Tax, based upon land values and property ownership described in the Appraisal,
25
DOCSOC\932761 v9\222450 ] 40
is approximately 7.46 to I'. The estimated appraised value-to-lien ratio for the land owned by
entities related to the Developer is approximately 7.29 to I'. Table 6 does not include the
overlapping debt which is payable from taxes and assessments on land within the District, which, as
set forth in Table 3 above, is currently estimated at $123,973. If the overlapping debt were included,
the estimated appraised value-to-lien ratio for the District as a whole would be 7.37 to I'.
The assessed value of the land within the District for fiscal year 2002-03 is $14,301,905. A
portion of the land within the District is exempt from the levy of the Special Tax. The fiscal year
2002-03 assessed value of the portion of the property within the District which is expected to be
taxed in fiscal year 2003-04 is $8,059,505. The estimated assessed value-to-lien ratio of the property
within the District expected to be subject to the Special Tax levy, based on the fiscal year 2002-03
Assessor's roll and the expected principal amount of the Bonds is 0.82 to I'. Table 6 will be updated
annually by the District in the Annual Report filed pursuant to the Continuing Disclosure Agreement
based on the assessed value of the taxable property within the District.
. Preliminary. subject to change.
26
DOCSOC\932761 v9\22245.0 140
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Permitted Land Use
Table 7 below describes the currently approved land uses within the District.
TABLE 7
LAND USE SUMMARY OF
COMMUNITY FACILITIES DISTRICT
Use
Residential (Attached/Detached)
Community Purpose Facility(I)(2)
Elementary School(I)(3)
Open Space, Roads and Homeowners (HOA)(I)
Total
Acres
Dwelling
Units
113.6
51.2
2.8
47.4
215.0
694
694
(I)
(2)
(3)
Will be exempt from the levy of the Special Tax.
Roman Catholic Church/School property.
This acreage accounts for two parcels that are a part of a larger elementary school site located within Otay Ranch and
McMillin Village Six.
Source: Developer
THE DEVELOPMENT AND PROPERTY OWNERSHIP
Except for the information under the captions "-Appraisal" and "-Market Absorption
Study, " the Developer has provided the information in this section.
The information herein regarding ownership of property in the District has been included
because it is considered relevant to an informed evaluation of the Bonds. The inclusion in this
Official Statement of information related to existing owners of property should not be construed to
suggest that the Bonds, or the Special Taxes that will be used to pay the Bonds, are recourse
obligations of the property owners. A property owner may sell or otherwise dispose of land within
the District or a development or any interest therein at any time.
No assurance can be given that the proposed development within the District will occur as
described below. As the proposed land development progresses and parcels are sold, it is expected
that the ownership of the land within the District will become more diversified. Although planning
for the development of the District is at an advanced stage, actual construction of improvements is as
described below under the caption "Infrastructure Requirements and Construction Status." No
assurance can be given that development of the land within the District will continue to completion,
or that it will occur in a timely manner or in the configuration or intensity described herein, or that
any landowner described herein will obtain or retain ownership of any of the land within the District.
The Bonds and the Special Taxes are not personal obligations of any landowners and, in the event
that a landowner defaults in the payment of the Special Taxes, the District may proceed with judicial
foreclosure but has no direct recourse to the assets of any landowner. As a result, other than as
provided herein, no financial statements or information is, or will be, provided about the Developer
or other landowners. The Bonds are secured solely by the Special Taxes and other amounts pledged
28
DOCSOC\93276 ¡ v9\22245.0 140
under the Indenture. See "SOURCES OF PAYMENT FOR THE BONDS" and "SPECIAL RISK
FACTORS. "
General Description and Location of the District
The District comprises approximately 215 gross acres in the City and is located east of
Interstate 805. Existing residential developments in the area include Otay Ranch, Lomas Verdes,
Rancho Del Rey, Sunbow, Rolling Hills Ranch, San Miguel Ranch and Eastlake. The District is
bounded to the north by previous developed villages of Lomas Verdes and by undeveloped land to
the east, west and south. East of the District are the Upper and Lower Otay Reservoirs and
unincorporated lands. Approximately 482 single tàmily detached units, and 212 single family
attached units are to be constructed within the District.
The Bond proceeds and additional amounts expended and to be expended by the Developer
will be used to develop the infrastructure for 694 homes. The infrastructure will include storm
drains, backbone roads including Traffic Enhancement Program improvements to Telegraph Canyon
Road, La Media Road South from East Palomar to Olympic Parkway, Olympic Parkway, Birch
Road, and Magdalena Street, a sewer system, a reclaimed water system, traffic signals, street lights
and landscaping. Also eligible to be financed are those facilities included in the City's Public
Facilities Development Impact Fee program and the Pedestrian Bridge Development Impact Fee
program.
The Developer intends to complete the land development process within the District. To
date, the Developer has sold all but 76 of the single family lots planned within the District. The
McMillin Entities have purchased all of residential planning areas R-l, R-4 and R-6, and 87 of the
163 lots in planning area R-3. One ofthe McMillin Entities has an option to purchase the remaining
76 lots in planning area R-3. Cornerstone Communities purchased all of planning area R-l 0 which is
planned for 212 single family attached units.
The Developer
The Developer, McMillin Otay Ranch, LLC, a Delaware limited liability company, was
formed on August 14, 1998. The two members of the Developer are the McMillin Companies, LLC
("McMillin Companies") and Merced Partners LP, a Delaware limited partnership. McMillin
Companies is the managing member. The Developer was formed for the purpose of owning,
developing, improving, and ultimately selling the sites to merchant builders in the master planned
community known as "McMillin Lomas Verdes," which includes the District and other surrounding
properties being developed by McMillin Companies. A Management Committee, consisting of two
representatives of each of the members is empowered to make all major and substantive decisions
with respect to the Developer's day to day affairs.
McMillin Companies is a privately held entity beneficially owned entirely by the McMillin
family headed by Macey L. "Corky" McMillin. Corky McMillin started the McMillin organization
42 years ago as a real estate development and construction company. Today, the Corky McMillin
Companies ("McMillin") operates in five areas including land development, home building,
commercial, realty, and mortgage. McMillin is San Diego's largest and oldest, privately owned
locally based developer of mixed-use projects.
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DOCSOC\932761 v9\22245.0 140
The other member of the Developer, Merced Partners LP, is an investment fund managed by
EBF and Associates. EBF and Associates is an investment management firm based in Minnesota.
Merced Partners LP has already invested the equity that will be required of it to develop the property
initially acquired by the Developer in the Otay Ranch and all of this equity has been repaid by the
Developer.
McMillin has developed several master planned commUnItIes in Southern California,
including Scripps Ranch, Rancho Del Rey, Bonita Long Canyon, Orange Crest, Temeku Hills and
Calavera I. Other projects developed and completed by McMillin in the City include Bonita Long
Canyon, Bonita Highlands, and Terra Nova.
Development Plan
History of Development. The Developer acquired a 1,026-gross acre site, which includes the
District and surrounding property, in August 1997 with General Plan approvals for approximately
5,000 dwelling units and 150 acres of commercial development. The Developer has already
developed Sectional Planning Area I ("SPA I") which encompassed portions of Villages I and ~ in
the Otay Ranch master-planned community. SPA I is situated on the south side of Telegraph Canyon
at the intersection of La Media Road. This SPA has an existing community facilities district in place
and is known as "City of Chula Vista Community Facilities District No. 97-3" ("CFD 97-3"). CFD
No. 97-3 is built out and contains approximately 699 single-family units, 820 multi-family units,
10,000 square feet of commercial space, a community purpose facility ("CPF") site which was sold
to Calvary Chapel, a school site which has been developed with the Corky McMillin Elementary
School, and a neighborhood park site which has been developed and is now known as Cottonwood
Park.
The District is located in McMillin 6 (a portion of Village 6) which totals approximately
215 gross acres divided into five residential planning areas, a private high school site, and a
community purpose site. The residential planning areas total 113.6 gross acres. These planning
areas are designated for 482 single family detached units and 212 single family attached units, for a
total of 694 units. The private high school and community purpose facility site has been sold to the
Catholic Dioceses, which is in the planning stage for developing this property for a private high
school and church.
Phases I and 2 (of Village 7) total approximately 142 acres and are proposed for 301 single-
family units, 559 multi-family units, open space and street rights-of-way. Freeway Commercial
consists of approximately 80 acres for automobile oriented commercial use. The Eastern Urban
Center totals approximately 255 acres and is proposed for 1,750 multi-family units, 110 acres
consisting of commercial and urban center uses, and the balance is for CPF uses, an elementary
school site, and a community park site.
Residential Planning Areas. The approved tentative tract map applicable to the District
'allows for the development of 694 dwelling units. Upon buildout, development within the District is
anticipated to include 482 single family detached units and 212 single family attached units, along
with approximately 51 acres of community purpose property and approximately 47 acres of open
space, roads and homeowner association property.
As of the date of the Appraisal, the Developer had sold one planning area to Cornerstone
Communities LLC and, except for 76 lots, the remaining four planning areas to the McMillin
30
DOCSOC\932761 v9\22245.0] 40
Entities. Lots were delivered to the merchant builders as blue top individual lots and certified by the
civil and soils engineer with the utilities stubbed into the tract boundary. The Developer is
responsible for completing intract improvements such as sewer, water, dry utilities and street
improvements and the merchant builders will reimburse the Developer for these costs. The
Developer is responsible for the completion of all other improvements adjacent to the tracts including
master backbone sewer and water, storm drains, dry utilities, streets, master landscaping and trails,
parks and any offsite improvements.
Table 8 below summarizes proposed development within the District.
TABLE 8
SUMMARY OF DEVELOPMENT PROPOSED BY MERCHANT BUILDERS
Number
of
Residential Proposed Number
Planning Product Minimum Unit!>, of Units Average Projected Home
Area Type Lot Size Merchant Builder Total Closetf2) Home Size Price Range
R-I SFO 6400 sf McMillin Mandalay JO 1, LLC 101 0 3,100 sf $450,000-500.000
R-] SFO 5200 sf McMillin Sienna II, LLC 163(1) 0 2.800 sf $415.000-475.000
R-4 SFO 5200 sf McMillin Auburn Lane II, LLC 92 0 3,000 sf $450.000-484.000
R-6 SFD 4000 sf McMillin Jasmine 126, LLC 126 0 2.500 sf $379.000-436,000
R-IO Attached Attached Cornerstone Communities 212 0 1.175-1.760 sf $250.000-325.000
(II McM-illin Sienna II, LLC has acquired 87 lots and has an option to purchase the remaining 76 lots from the Developer.
(2) Represents units sold to individual owners for which escrow has closed.
Source: Developer
While the overall development of the District is expected to last through 2005, the
infrastructure improvements within the District, inclusive of non-District financed infrastructure
improvements, are expected to be substantially complete by the end of 2003.
Merchant Bnilders
There are five merchant builders in the District, four of which are the McMillin Entities who
are related to the Developer. The merchant builders are summarized below.
Cornerstone Communities. Cornerslone Communities was founded as a San Diego-based
homebuilder with operations in Sacramento, San Diego and Riverside counties. Cornerstone was
formed in 1994 with a management group which was developed, mapped, and/or constructed over
8,000 homes and/or lots in over 50 developments throughout California. Cornerstone purchased
planning area R-IO. The R-lO project, known as "Treviana," will comprise 212 single family
attached units with homes ranging in size from 1,175 to 1,760 square feet priced from the mid
$200,000's to mid $300,000's. Cornerstone is anticipated to pull model home permits in July 2003
and building permits for its first phase in August 2003.
McMillin Entities. Two of the McMillin Entities purchased and closed on planning areas R-I
and R-6 on November 20, 2002, and November 22, 2002, respectively. Planning area R-l closed
under the entity name McMillin Mandalay 101, LLC. [t includes 101 single-family lots and the
project will be known as "Mandalay." The average home size is expected to be approximately 3,100
square feet and priced in the mid $400,000 range. McMillin Jasmine 126, LLC closed on planning
area R-6. It closed on 126 single-family lots and the project will be known as "Jasmine". The
average home size is expected to be approximately 2,500 square feet and priced in the high
31
OOCSOC\932761 v9\22245.0 140
$300,000's to low $400,000's. McMillin Mandalay 101, LLC anticipates it will pull model home
permits for planning area R-I in June 2003 and building permits for the first phase in July 2003.
McMillin Jasmine 126, LLC anticipates it will pull model home permits in July 2003 and building
permits for the first phase in August 2003 for planning area R-6.
McMillin Sienna 11, LLC purchased and closed on 87 of the 163 lots in planning area R-3 on
November 27, 2002. The project will be known as "Sienna." This entity has exercised its option to
purchase the remaining 76 lots from the Developer, and expects to close on these remaining lots on
November 29, 2003. The average home size will be approximately 2,800 square tèet and priced in
the low to mid $400,000's. McMillin Sienna 11, LLC has pulled model home permits and building
permits for the first phase with respect to the 87 lots purchased in planning area R-3.
McMillin Auburn Lane 11, LLC purchased and closed on planning area R-4 on December 10,
2002. The entity closed on 92 single-family lots and the project will be known as "Auburn Lane".
The average home size will be approximately 3,000 square feet and priced in the mid $400,000's.
McMillin Auburn Lane 11, LLC anticipates it will pull model home permits in July 2003 and building
permits for the first phase in July 2003 for planning area R-4.
Financing Plan
Developer Financing Plan. The development of the District will require large expenditures
of funds to develop fully the property and the required infrastructure. The development of the
infrastructure and the lots by the Developer requires funds in addition to the Bond proceeds. All of
the funds will be spent to benefit the property within the District. The cash sources outside of the
Bond proceeds necessary to complete development of the lots and the infrastructure are expected to
come from the Developer's cash on hand, the sale of the remaining 76 lots and reimbursements that
the merchant builders are contractually obligated to pay to the Developer once the Developer
completes additional infrastructure improvements in the District. The Developer's cash on hand was
derived primarily from land sales in the District. Although the Developer is permitted to spend its
cash balances reflected in Table 9 for purposes other than completing the work within the District, it
plans to use the cash balances reflected in Table 9 to complete the proposed development and to
make distributions to its members. The Developer has no loans outstanding which are secured by
property within the District and does not anticipate obtaining any loans for this purpose. The
merchant builders are expected to obtain loans as described below. See "Merchant Builder
Financing."
The ultimate buildout of the District as planned is dependent upon a number of external
factors, including the general and local economy and the health of the local real estate market and the
ability of the merchant builders to obtain the financing and all required permits to build the units.
Table 9 represents the Developer's current estimate of the sources and uses of funds to complete its
portion of the work. While Table 9 represents the current estimate of the sources and uses of funds
for the Developer's operations, there can be no assurance there will not be substantial changes to the
sources and uses funds presented.
The projected sources and uses of funds in Table 9 has been prepared based on actual land
sales through April 2002, and projected future revenues from the sale of the remaining 76 lots,
reimbursements to the Developer, Bond proceeds, development costs, operating costs, property taxes
and other items. The absorption estimates used for the sources and uses of funds may differ from
those derived by the Appraiser. The actual revenues projected in Table 9 may vary; however, 92% of
32
DOCSOC\932761 v9\22245.0 140
the total SPA II land sales and reimbursements have either closed escrow, or are under contract.
Detailed construction plans have not been approved or developed for all of the work which is
contemplated within the District. As such, there is no assurance that the actual costs will not be
greater than projected or occur sooner than projected. There can be no assurance that the actual
revenues will not be less or the actual costs more than projected or occur later than projected by the
Developer.
To the extent that actual revenues are less than projected in Table 9 or are received more
slowly than projected in Table 9, other financing projected by the merchant builders is not put into
place, the merchant builders do not contribute funds as projected, or actual expenses are greater than
or occur earlier than projected above, there could be a shortfall in the cash required to complete the
land development operations being undertaken by the Developer.
TABLE 9
DEVELOPER'S PROJECTED SOURCES AND USES OF FUNDS
Through
2002 2003 2004 Total
SOURCES OF CASH
Land Sales and Reimbnrsements $ 55,840 $ 14,833 $ 1,270 $ 71,943
Net Bond Proceeds for Public 1rpprovements 0 5,637 2,790 8,427
Total Sources of Cash $ 55,840 $ 20,470 $ 4,060 $ 80,370
USES OF CASH
Land Development CostS(I) $ (17,882) $ (19,663) $ (3,299) $ (40,844)
Overhead(2) (3,077) (2,844) (567) (6,488)
Total Uses of Cash $ (20,959) $ (22,507) $ (3,866) $ (47,332)
DISTRIBUTIONS TO MEMBERS(J) $ 19,581 $ 12,263 $ 1,194 $ 33,038
WORKING CAPITAL ACTIVITY $ 15,300 $ (14,300) $ (1,000) $ 0
WORKING CAPITAL BALANCE $ 15,300 $ 1,000 $ 0
(1) Includes for District Authorized Facilities.
(2) Includes general and administrative overhead, taxes, management fee and legal costs.
(3) Distributions will be made to the member entities comprising the Developer
Source: Developer
Merchant Builder Financing. Currently, there is financing committed by outside lenders for
the four neighborhoods owned by the McMillin Entities and for Cornerstone as described below.
The entity name for R-l is McMillin Mandalay 101, LLC. The entity consists of McMillin
Companies, LLC and EBF and Associates (an investment fund management firm based in
Minnesota). The lender for this planning area is Comerica who has committed to provide a
$10,425,000 acquisition and development loan.
The entity name for R-3 is McMillin Sienna II, LLC. The entity consists of only the
McMillin Companies, LLC. The lender for this planning area is Comerica who has committed to
provide a $9,100,000 acquisition and development loan on the first take down of 87 lots.
33
DOCSOC\932761 v9\22245.0 140
The entity name for R-4 is McMillin Auburn Lane II, LLC. The entity consists of only the
McMillin Companies, LLC. The lender for this planning area is Royal Bank of Canada who has
committed to provide $12,238,000 in acquisition and development loans.
The entity name for R-6 is McMillin Jasmine 126, LLC. The entity consists of McMillin
Companies, LLC and EBF and Associates. The lender for this planning area is California Bank &
Trust who has committed to provide a $8,455,000 acquisition and development loan.
The entity name for R-IO is Treviana at Lomas Verdes, L.P. The entity consists only of
Cornerstone Communities LLC. The lender for this planning area is Comerica who has committed to
provide a $11,690,000 acquisition and development loan.
Status of Entitlement Approvals
The District was zoned Planned Community ("PC") as part of the General Development Plan
("GDP") planning process. The PC zone required a multi-phase planning process beginning with a
GDP, followed by the preparation of a Sectional Planning Area ("SPA") Plan. The SPA Plan is to be
used as a supplement to other existing City regulations, and supersedes those established in the City
Zoning Ordinance. Incorporated into the SPA Plan is the Site Utilization Plan, which designates the
zoning on the District. The SPA Plan was adopted by the City on January 22, 2002 by Resolution
No. 2002-022. Per the SPA Plan, the District is designated for residential and commercial
development and open space lands, park lands, two school sites, a community purpose facility site, a
fire station site and both major circulation and internal streets.
The District is covered by the Tentative Map for McMillin Otay Ranch Village Six allowing
for 482 single family detached lots and 212 single family attached units.
The Developer believes that all discretionary approvals required for the development of the
District have been obtained.
In response to the conclusions in the most recent traffic study, the City has implemented
building permit monitoring program for a number of projects in the Otay Ranch, including those
within the District. See "- Potential Limitations on Development"
Environmental Constraints
The land within the District has undergone extensive environmental and biological review
and has received the necessary permits for the development of the entire property covered by the
tentative map. The Developer believes that it has obtained all permits and approvals required by any
environmental laws and regulations which are needed to complete the proposed development within
the District.
Infrastrncture Requirements and Construction Status
The infrastructure requirements for the District can be grouped into two categories as
follows:
Major Backbone Infrastructure. Work on the backbone infrastructure improvements for the
District are either complete or under construction. Olympic Parkway, a six lane prime arterial forms
the northern boundary and La Media Road forms the western boundary of the District. Olympic
34
DOCSOC\932761 v9\22245.0 140
Parkway has been improved to its full improvement width. La Media (from Olympic Parkway to
Santa Venetia), a six lane prime arterial, has been graded to its full width, and storm drainage, water
and sewer improvements have been installed. Dry utilities are currently under construction, with
paving to follow dry utilities. Santa Venetia Street, a village promenade street, has been graded to its
full width, storm drainage and sewer have been installed, water improvements are currently under
construction. Magdalena A venue, a village promenade street, has been graded to its ftill width, storm
drainage and sewer have been installed, and water improvements are currently under construction.
Birch Road, a six lane major road has been graded to it full width with storm drains installed.
1ntract Infrastructure. Neighborhoods R-I (Mandalay) and R-3 (Sienna) have been graded to
finish pads, water and sewer have been installed, dry utilities are currently under construction, and
paving of streets will follow. Neighborhoods R-4 (Auburn Lane) and R-6 (Jasmine) have been
graded to finish pads, and sewers have been installed. Water improvements are currently under
construction. Neighborhood R-lO (Cornerstone's property) has been graded to finish pads. The
Catholic Diocese church and school site have been graded to finish pads.
Potential Limitations on Development
Growth Management Oversight Commission ("GMOC"). The City has established a
Threshold Standards Policy (the "Threshold Policy") through the adoption of a Growth Management
Ordinance, which established eleven public facility and service area "quality of life" measures. The
eleven public facility and service thresholds include police, fire and emergency medical services,
traffic, schools, parks and recreation, libraries, sewer, drainage, fiscal impact, air quality and water.
The Threshold Policy established goals, objectives, standards or thresholds and applicable
implementation measures for the eleven services. The GMOC was created to provide an annual
independent review for compliance with the Threshold Policy.
The GMOC review for compliance occurs on a fiscal year cycle. The Threshold Policy calls
for preparation of short-range, 12 to 18 month, and mid-range, five to seven year, development
forecasts. These forecasts are utilized by City staff and external service agencies to evaluate
projected service levels, identify any potential threshold problems and address implementation
measures to avoid level of service problems.
As a condition to developing property within the District, a landowner must, prior to final
map approval for a parcel, enter into an agreement with the City acknowledging that building permits
may be withheld if any of the required development threshold limits set in the City transportation
planning phase are exceeded. The tentative map conditions for the land within the District also
subject the land to the provisions of the GMOC.
The Threshold Policy includes traffic thresholds which require that level of service "c" be
maintained on the arterial street system except level of service "0" can occur for no more than two
hours of the day. The level of service is a descriptive and qualitative measure of the degree of traffic
congestion experienced by motorists. There are six levels of congestion, assigned letters' A' through
'F.' Levels of service 'A' Through '0' represent generally acceptable levels of service with level of
service 'A' corresponding to no congestion and level of service 'C' represents a range in which the
ability of vehicles to maneuver is affected by the presence of other vehicles and speeds begin to show
some reduction. Level of service' 0' is approaching roadway capacity with the ability to maneuver
being severely restricted and traffic is subject to speed reductions. Level of service 'E' is at roadway
capacity with unstable speeds. Level of service 'F' occurs when roadway capacity is exceeded,
35
DOCSOC\932761 v9\22245.0 140
excessive delays are experienced and stop-and-go traffic conditions exist. Should the traffic
threshold standard be exceeded, the Growth Management Ordinance calls for a building permit
moratorium to be considered by the City Council until the threshold problem can be mitigated. There
can be no guarantee that any such moratorium would exclude the District, even if the traffic
congestion leading fo such moratorium occurs outside of the Disfrict's area.
Throughout the fall of 2002 and the spring of 2003, the City monitored the traffic conditions
on the major east-west arterials east of 1-805 to measure compliance with the levels of service
described in the GMOC.
In response to the conclusions in the most recent traffic study, the City has implemented a
building permit monitoring program (the "Monitoring Program") for a number of projects in the Otay
Ranch, including those within the District. The Developer and the City have entered into an
agreement (the "Monitoring Agreement") which provides that up to 278 building penn its may be
issued for units within the District between April I, 2003 and March 31, 2004, 307 permits between
April 1, 2004 and March 31, 2005 and 109 permits between April 1, 2005 and March 31, 2006. The
allocation of permits for the period from April I, 2005 to March 31, 2006 is dependent upon the
completion of three roadway improvements listed in the Monitoring Agreement. If a roadway
improvement is not completed by the date set forth in the Monitoring Agreement, then, until it is
completed, the corresponding number of building permits attributed to such improvements will be
deducted from the total number of permits to be issued for the last 12 months of the Monitoring
Program. The amount deducted will be prorated against all developers included within the
Monitoring Program on a proportionate basis. In arriving at the conclusions in the Market
Absorption Study and the Appraisal, both the Market Absorption Consultant and the Appraiser
considered the impact of the Allocation Agreement and have assumed that permits for all 694 units
planned within the District will be available and will not be reduced as a result of a failure to
complete any of the roadway improvements referenced in the Monitoring Agreement.
The quality of life thresholds of the GMOC and the Thresholds Policy remain in effect and
supersede the provisions of the Monitoring Agreement. Should the City determine that the standards
of the Threshold Policy are not being met, it could impose further limitations or a moratorium on the
issuance of building permits within the District. The City does not currently anticipate that it will
need to further restrict or prohibit the issuance of building permits within the District; however,
currently unforeseen events could result in further action by the City under the GMOC.
A development slowdown beyond that resulting from the Monitoring Program imposed in the
Monitoring Agreement or a moratorium on development could adversely impact the rate of
development in the District and presents certain risks to the owners of the Bonds. See "SPECIAL
RISK FACTORS - Failure to Develop Properties" and "- Future Land Use Regulations and
Growth Control Initiatives."
Investors should note that, in particular, the City may amend its Growth Management
Ordinance from time to time and no assurance can be given that its terms will not be more restrictive
on development than those currently in effect.
Appraisal
The information regarding ownership of property in the District included in the Appraisal
has been included because it is considered relevant to an informed evaluation of the Bonds. The
36
DOCSOC\932761 v9\22245.0 140
inclusion in this Official Statement of information related to existing owners of property should not
be construed to suggest that the Bonds, or the Special Taxes that will be used to pay the Bonds, are
recourse obligations of the property owners. A property owner may sell or otherwise dispose of land
within the District or a development or any interest therein at any time. Development may also be
abandoned at any time.
The Appraiser valued the property within the District, taking into consideration the lien of the
Special Taxes, based upon a number of assumptions and limiting conditions contained in the
Appraisal as set forth in Appendix C. The Appraiser has valued the property owned by Cornerstone
based upon a sales comparison approach to value and the remaining land owned by the McMillin
Entities using a sales comparison approach coupled with a discounted cash flow analysis. Under the
sales comparison approach to value, the Appraisal takes into account the development status of the
residential lots, analyzes the market for similar properties and compares these properties to the
properties in the District. Under the discounted cash flow analysis, the Appraiser values the
undeveloped acreage by discounting the cost of developing finished lots and the probable proceeds
from the sale of the finished lots. The Appraiser first estimates the retail value of the finished lots,
the costs of developing the finished lots, the estimated absorption period and the marketing, sales and
carrying costs. The Appraiser then applies a discount rate to the projected cash flow that accounts
for the risk associated with the development of the lots, the time value of money and a profit due to
the owner of the lots. The Appraiser projects that the residential lots owned by the McMillin Entities
could be sold within a one year period. Based on historical information, the Appraiser has assumed
annual appreciation of 4% on land sales and 3% on development costs. A discount rate of 18% per
year has been used by the Appraiser in arriving at the estimate of value for the lots owned by the
McMillin Entities.
The Appraiser is of the opinion that the aggregate "as is" value of the land within the District
as of May 1,2003, assuming the completion of all improvements to be financed with proceeds of the
Bonds was $73,500,000, with the land owned by the McMillin Entities valued at $61,725,000 and the
Cornerstone property at $11,775,000. Certain land that is expected to become exempt from the levy
of Special Taxes in the future was not assigned a value in the Appraisal.
In arriving at its statement of value, the Appraiser assumes that the remaining development
costs provided by the Developer are accurate, there are no hidden or unapparent conditions of the
property or subsoil that render it more or less valuable, that all required licenses, certificates of
occupancy or other legislative or administrative authorizations from governmental agencies or
private entities or organizations have been or can be obtained, that no hazardous waste and/or toxic
materials are located on the property within the District that would affect the development process,
that the improvements to be funded with the Bonds are completed and that the proposed development
is constructed in a timely manner with no adverse delays (i.e., construction will proceed as proposed
with no limitations on development occurring beyond those imposed by the Monitoring Agreement).
See "- Potential Limitations on Development" above.
No assurance can be given that the assumptions made by the Appraiser will, in fact, be
realized, and, as a result, no assurance can be given that the property within the District could be sold
at the appraised values included in the Appraisal.
37
DOCSOC\932761 v9\22245.0 140
Market Absorption Study
The Market Absorption Study dated May 2003 has been prepared by the Market Absorption
Consultant. An executive summary of the Market Absorption Study dated May 21, 2003 is included
herein as Appendix B. The Market Absorption Consultant has estimated, based upon the analysis of
relevant demographic and economic conditions in the Chula Vista area, the number of housing units
in the District that can be expected to be marketed annually using the estimated absorption schedules
for each of the product types. The Market Absorption Study concludes that given market conditions
and the Monitoring Agreement it will take until 2005 for the residential units within the District to be
constructed and sold. The Market Absorption Study projects that, ofthe 694 single family and multi-
family units proposed within the District, 188 will be absorbed in 2003, 363 in 2004 and 143 in 2005.
The Market Absorption Study assumes that all required governmental approvals will be
obtained in a timely manner and that there will be no slowdown in the issuance of permits due to the
City's GMOC beyond those contained in the Monitoring Agreement, that there are no physical
impediments to construction such as earthquakes and hazardous waste, that the public infrastructure
necessary to develop will be provided in a timely manner, that the developers and merchant builders
in the District will respond to market conditions with products that are competitively priced and have
the features and amenities desired by purchasers, that the developers and merchant builders and their
lenders have sufficient financial strength to fund adequately the projects and that they have sufficient
cash flow reserves to supplement their cash flow positions in the event that adverse economic or
market conditions occur. The actual absorption of units could be adversely affected if one or more of
the foregoing assumptions is not realized. See Appendix B - "SUMMARY OF MARKET
ABSORPTION STUDY."
SPECIAL RISK FACTORS
The purchase of the Bonds involves a high degree of investment risk and, therefore, the
Bonds are not appropriate investments for many types of investors. The following is a discussion of
certain risk factors which should be considered, in addition to other matters set forth herein, in
evaluating the investment quality of the Bonds. This discussion does not purport to be
comprehensive or definitive. The occurrence of one or more of the events discussed herein could
adversely affect the ability or willingness of property owners in the District to pay their Special
Taxes when due. Such failures to pay Special Taxes could result in the inability ofthe City to make
full and punctual payments of debt service on the Bonds. In addition, the occurrence of one or more
of the events discussed herein could adversely affect the value of the property in the District. See
"Land Values" and "Limited Secondary Market" below.
Concentration of Ownership
As of the date of the Appraisal, all of the taxable land within the District was owned by six
landowners. Based on land use status, approximately 86% of the projected fiscal year 2003-2004
Special Tax levy will be paid by the McMillin Entities and 14% will be paid by Cornerstone. See
"THE COMMUNITY FACILITIES DISTRICT - Principal Taxpayers." Until the completion and
sale of additional parcels, the receipt of the Special Taxes is dependent on the willingness and the
ability of such landowners to pay the Special Taxes when due. Failure of the current landowners, or
any successor, to pay the annual Special Taxes when due could result in a defàult in payments of the
principal of, and interest on, the Bonds, when due. See "- Failure to Develop Properties" below.
38
DOCSOC\932761 v9\22245.0 140
No assurance can be made that such landowners, or their successors, will complete the
intended construction and development in the District. See "- Failure to Develop Properties"
below. As a result, no assurance can be given that such landowners will continue to pay Special
Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See "-
Bankruptcy and Foreclosure" below, for a discussion of certain limitations on the District's ability to
pursue judicial proceedings with respect to delinquent parcels.
Limited Obligations
The Bonds and interest thereon are not payable from the general funds of the City. Except
with respect to the Special Taxes, neither the credit nor the taxing power of the District or the City is
pledged for the payment of the Bonds or the interest thereon, and, except as provided in the
Indenture, no Owner of the Bonds may compel the exercise of any taxing power by the District or the
City or force the forfeiture of any City or District property. The principal ol~ premium, if any, and
interest on the Bonds are not a debt of the City or a legal or equitable pledge, charge, lien or
encumbrance upon any of the City's or the District's property or upon any of the City's or the
District's income, receipts or revenues, except the Special Taxes and other amounts pledged under
the Indenture.
Insufficiency of Special Taxes
Under the Rate and Method, the annual amount of Special Tax to be levied on each taxable
parcel in the District will generally be based on whether such parcel is categorized as Undeveloped
Property or as Developed Property and on the land use class to which a parcel of Developed Property
is assigned. See Appendix A - "RATE AND METHOD OF APPORTIONMENT OF SPECIAL
TAXES" and "SOURCES OF PAYMENT FbR THE BONDS - Method of Apportionment of
Special Tax."
The Rate and Method governing the levy of the Special Tax expressly exempts property
owned by public agencies or a property owners association provided that no such exemption shall
reduce the sum of all taxable property to less than 75.48 acres.
Moreover, if a substantial portion of land within the District became exempt from the
Special Tax because of public ownership, or otherwise, the maximum Special Tax which could
be levied upon the remaining property within the District might not be sufficient to pay
principal of and interest on the Bonds when due and a default could occur with respect to the
payment of such principal and interest.
Tax Delinquencies
Under provisions of the Act, the Special Taxes, trom which lùnds necessary for the payment
of principal of, and interest on, the Bonds are derived, are customarily billed to the properties within
the District on the ad valorem property tax bills sent to owners of such properties. The Act currently
provides that such Special Tax installments are due and payable, and bear the same penalties and
interest for non-payment, as do ad valorem property tax installments. See "SOURCES OF
PA YMENT FOR THE BONDS - Special Taxes," for a discussion of the provisions which apply,
and procedures which the District is obligated to follow under the Fiscal Agent Agreement, in the
event of delinquencies in the payment of Special Taxes. See "- Bankruptcy and Foreclosure"
below, for a discussion of the policy of the Federal Deposit Insurance Corporation (the "FDIC")
39
DOCSOC\93276! v9\12245.0] 40
regarding the payment of special taxes and assessment and limitations on the District's ability to
foreclosure on the lien of the Special Taxes in certain circumstances.
The Developer is not currently delinquent in the payment of any Special Taxes or .
assessments and has no history of such delinquency since its formation.
Failure to Develop Properties
Undeveloped or partially developed land is inherently less valuable than developed land and
provides less security to the Bondowners should it be necessary for the District to foreclose on the
property due to the nonpayment of Special Taxes. The failure to complete development of the
required infrastructure for development in the District as planned, or substantial delays in the
completion of the development or the required infrastructure for the development due to litigation or
other causes may reduce the value of the property within the District and increase the length of time
during which Special Taxes will be payable from undeveloped property, and may affect the
willingness and ability of the owners of property within the District to pay the Special Taxes when
due.
Land development is subject to comprehensive federal, State and local regulations. Approval
is required from various agencies in connection with the layout and design of developments, the
nature and extent of improvements, construction activity, land use, zoning, school and health
requirements, as well as numerous other matters. There is always the possibility that such approvals
will not be obtained or, if obtained, will not be obtained on a timely basis. Failure to obtain any such
agency approval or satisfy such governmental requirements would adversely affect planned land
development. Finally, development ofland is subject to economic considerations.
Additionally, the Developer and the merchant builders may need to obtain financing to
complete the development of the units that they are developing. No assurance can be given that the
required funding will be secured or that the proposed development will be partially or fully
completed, and it is possible that cost overruns will be incurred which will require additional funding
beyond what the Developer has projected, which mayor may not be available. See "THE
DEVELOPMENT AND PROPERTY OWNERSHIP ~ Finance Plan" herein.
The future development of the vacant land within the District may be adversely affected by
existing or future governmental policies, or both, restricting or controlling the development of vacant
land in the District. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP - Potential
Limitations on Development" for a discussion of certain significant limitations on the ability of the
Developer and merchant builders to complete the projected development of the District. Specifically,
investors should consider the broad power of the City to halt or delay development under its Growth
Management Ordinance. There can be no assurance that the owners of the vacant land in the District
will be able to secure the necessary discretionary approvals if they choose to develop their properties.
See also" - Future Land Use Regulations and Growth Control Initiatives" below.
There can be no assurance that land development operations within the District will not be
adversely affected by a future deterioration of the real estate market and economic conditions or
future local, State and federal governmental policies relating to real estate development, the income
tax treatment of real property ownership, or the national economy, or the direct or indirect
consequences of military and/or terrorist activities in this country or abroad. A slowdown of the
development process and the absorption rate could adversely affect land values and reduce the ability
40
DOCSOC\932 761 v9\222450 140
or desire of the property owners to pay the annual Special Taxes. In that event, there could be a
default in the payment of principal of, and interest on, the Bonds when due.
Bondowners should assume that any event that significantly impacts the ability to develop
land in the District to a degree not considered by the Appraiser would cause the property values
within the District to decrease substantially from those estimated by the Appraiser and could affect
the willingness and ability of the owners of land within the District to pay the Special Taxes when
due.
The payment of principal of and interest on the Bonds depends upon the receipt of Special
Taxes levied on undeveloped property. Undeveloped property is less valuable per unit of area than
developed land, especially if there are no plans to develop such land or if there are severe restrictions
on the development of such land. The undeveloped property also provides less security to the
Bondowners should it be necessary for the District to foreclose on undeveloped property due to the
nonpayment of the Special Taxes. Furthermore, an inability to develop the land within the District as
currently proposed will make the Bond owners dependent upon timely payment of the Special Taxes
levied on undeveloped property for a longer period of time than projected. Because all of the land
within the District is currently owned by just six owners, five of which are affiliated, the timely
payment of the Bonds depends upon the willingness and ability of such owners to pay the Special
Taxes levied on the undeveloped property when due. See "- Concentration of Ownership" above.
A slowdown or stoppage in the continued development of the District could reduce the willingness
and ability of such owners to make Special Tax payments on undeveloped property and could greatly
reduce the value of such property in the event it has to be foreclosed upon. See "- Land Values"
below.
Future Land Use Regulations aud Growth Control Initiatives
The City currently has the authority under its GMOC to limit or halt development within the
District if certain quality of life standards are not met within the City. See 'THE DEVELOPMENT
AND PROPERTY OWNERSHIP - Potential Limitations on Development."
In addition, it is possible that future growth control initiatives could be enacted by the voters
or future local, state or federal land use regulations could be adopted by governmental agencies and
be made applicable to the development of the vacant land within the District with the effect of
negatively impacting the ability of the owners of such land to complete the development of such land
if they should desire to develop it. Development could also be delayed or prohibited under the City's
existing Growth Management Ordinance. This possibility presents a risk to prospective purchasers
of the Bonds in that an inability to complete desired development increases the risk that the Bonds
will not be repaid when due. The owners of the Bonds should assume that any reduction in the
permitted density, significant increase in the cost of development of the vacant land or substantial
delay in development caused by growth and building permit restrictions or more restrictive land use
regulations would cause the values of such vacant land within the District to decrease. A reduction
in land values increases the likelihood that in the event of a delinquency in payment of Special Taxes
a foreclosure action will result in inadequate funds to repay the Bonds when due. In completing their
analyses, both the Appraiser and the Market Absorption Consultant have assumed that there will be
no delays in development due to land use regulations or growth control initiatives.
Completion of construction of any proposed structures on the vacant land within the District
is subject to the receipt of approvals from a number of public agencies concerning the layout and
41
DOCSOC\932761 v9\22245.0 140
design of such structures, land use, health and safety requirements and other matters. The failure to
obtain any such approval could adversely affect the planned development of such land.
Under current State law, it is generally accepted that proposed development is not exempt
from future land use regulations until building permits have been issued and substantial work has
been performed and substantial liabilities have been incurred in good faith reliance on the permits.
Because future development of vacant property in the District could occur over several years, if at
all, the application of future land use regulations to the development of the vacant land could cause
significant delays and cost increases not currently anticipated, thereby reducing the development
potential of the vacant property and the ability or willingness of owners of such land to pay Special
Taxes when due or causing land values of such land within the District to decrease substantially from
those in the Appraisal.
Water Availability
The development of the land within the District is dependent upon the availability of water
for the planned units. The Otay Municipal Water District (the "Water District") is the agency
responsible for providing water to the District. The Water District receives a significant portion of its
water from the Metropolitan Water District ("MWD"), which is the primary supplier of wholesale
water in Southern California. On December 31, 2002, the federal government suspended the delivery
of surplus water from the Colorado River to MWD as a result of the failure of certain water agencies
in the State to reach agreement on the transfer of water rights from the Imperial Irrigation District to
coastal San Diego County. While MWD states that it has sufficient reserves for the foreseeable
future, the ultimate impact of the federal government's decision to suspend the delivery of the
Colorado River surplus water to California is not yet known.
The Developer and the City believe that the Water District will be able to provide water to
the District to permit the construction of the planned units. No assurance can be given, however, that
water service will be available at the time that building permits are applied for, and the lack of water
availability could adversely affect the planned development in the District. A slowdown or stoppage
in the continued development of the District could reduce the willingness and ability of such owners
to make Special Tax payments on undeveloped property and could greatly reduce the value of such
property in the event it has to be foreclosed upon. See "- Land Values" below.
Endangered Species
In recent years there has been an increase in activity at the State and federal levels related to
the possible listing of certain plant and animal species found in the southern San Diego County area
as endangered species. An increase in the number of endangered species could curtail development
in the southern San Diego County area. Any action by the State or federal governments to protect
species located on or adjacent to the property within the District could negatively impact the ability
of the owners of that land to develop it. This, in turn, could reduce the likelihood of timely payment
of the Special Taxes levied against such that land and would likely reduce the value of such land and
the potential revenues available at the foreclosure sale for delinquent Special Taxes. See "- Failure
to Develop Land" above.
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DOCSOC\932761 v9\22245.0 140
Natural Disasters
The District, like all California cOmmUnIties, may be subject to unpredictable seismic
activity, fires, flood, or other natural disasters. Southern California is a seismically active area.
Seismic activity represents a potential risk for damage to buildings, roads, bridges and property
within the District. In addition, land susceptible to seismic activity may be subject to liquefaction
during the occurrence of such event.
In the event of a severe earthquake, fire, flood or other natural disaster, there may be
significant damage to both property and infrastructure in the District. As a result, a substantial
portion of the property owners may be unable or unwilling to pay the Special Taxes when due. In
addition, the value of land in the District could be diminished in the aftermath of such a natural
disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the
payment of the Special Taxes.
Hazardous Substances
A serious risk in terms of the potential reduction in the value of a parcel is a claim with
regard to a hazardous substance. In general, the owners and operators of a parcel may be required by
law to remedy conditions of the parcel 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 operator is obligated to remedy a
hazardous substance condition of property whether or not the owner or operator has anything to do
with creating or handling the hazardous substance. The effect, therefore, should any of the taxed
parcels be affected by a hazardous substance, is to reduce the marketability and value of the parcel by
the costs of remedying the condition, because the purchaser, upon becoming owner, will become
obligated to remedy the condition just as is the seller.
Further, it is possible that liabilities may arise in the future with respect to any of the parcels
resulting from the existence, currently, on the parcel of a substance presently classified as hazardous
but which has not been released or the release of which is not presently threatened, or may arise in
the future resulting from the existence, currently on the parcel of a substance not presently classified
as hazardous but which may in the future be so classified. Further, such liabilities may arise not
simply from the existence of a hazardous substance but from the method of handling it. All of these
possibilities could significantly affect the value of a parcel that is realizable upon a delinquency.
Neither the City nor the Developer has knowledge of any hazardous substances being located
on the property within the District.
Parity Taxes, Special Assessments and Land Development Costs
Property within the District is subject to the lien of several overlapping districts. See "THE
COMMUNITY FACILITIES DISTRICT - Estimated Direct and Overlapping Indebtedness"
The Special Taxes and any penalties thereon will constitute a lien against the lots and parcels
of land on which they will be annually imposed until they are paid. Such lien is on a parity with all
special taxes and special assessments levied by the City and other agencies and is co-equal to and
43
DOCSOC\932761 v9\222450 140
independent of the lien for general property taxes regardless of when they are imposed. The Special
Taxes have priority over all existing and future private liens imposed on the property except,
possibly, for liens or security interests held by the Federal Deposit Insurance Corporation. See "-
Bankruptcy and Foreclosure" below.
Development of land within the District is contingent upon construction or acquisition of
major public improvements such as arterial streets, water distribution facilities, sewage collection
and transmission facilities, drainage and flood protection facilities, gas, telephone and electrical
facilities, schools, parks and street lighting, as well as local in-tract improvements and on-site
grading and related improvements. Certain of these improvements have been acquired and/or
completed; however, there can be no assurance that the remaining improvements will be constructed
or will be constructed in time for development to proceed as currently expected. The cost of these
additional improvements plus the public and private in-tract, on-site and off-site improvements could
increase the public and private debt for which the land within the District is security. This increased
debt could reduce the ability or desire of the property owners to pay the annual Special Taxes levied
against the property. In that event there could be a default in the payment of principal of, and interest
on, the Bonds when due.
Neither the City nor the District has control over the ability of other entities and
districts to issne indebtedness secured by special taxes or assessments payable from all or a
portion of the property within the District. In addition, the landowners within the District
may, without the consent or knowledge of the City, petition other public agencies to issue
public indebtedness secured by special taxes or assessments. Any such special taxes or
assessments may have a lien on such property on a parity with the Special Taxes and could
reduce the estimated value-to-lien ratios for property within the District described herein.
Disclosures to Future Purchasers
The willingness or ability of an owner of a parcel to pay the Special Tax even if the value of
the parcel is sufticient may be affected by whether or not the owner was given due notice of the
Special Tax authorization at the time the owner purchased the parcel, was informed of the amount of
the Special Tax on the parcel should the Special Tax be levied at the maximum tax rate and the risk
of such a levy and, at the time of such a levy, has the ability to pay it as well as pay other expenses
and obligations. The City has caused a notice of the Special Tax lien to be recorded in the Office of
the Recorder for the County against each parcel. While title companies normally refer to such
notices in title reports, there can be no guarantee that such reference will be made or, if made, that a
prospective purchaser or lender will consider such Special Tax obligation in the purchase of a
property within the District or lending of money thereon.
The Act requires the subdivider (or its agent or representative) of a subdivision to notify a
prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special
tax of the existence and maximum amount of such special tax using a statutorily prescribed form.
California Civil Code Section II 02.6b requires that in the case of transfers other than those covered
by the above requirement, the seller must at least make a good faith effort to notify the prospective
purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the
property to comply with the above requirements, or failure by a purchaser or lessor to consider or
understand the nature and existence of the Special Tax, could adversely affect the willingness and
ability of the purchaser or lessor to pay the Special Tax when due.
44
DOCSOC\932761 v9\22245.0 140
Non-Cash Payments of Special Taxes
Under the Act, the City Council as the legislative body of the District may reserve to itself
the right and authority to allow the owner of any taxable parcel to tender a Bond in full or partial
payment of any installment of the Special Taxes or the interest or penalties thereon. A Bond so
tendered is to be accepted at par and credit is to be given for any interest accrued thereon to the date
of the tender. Thus, if Bonds can be purchased in the secondary market at a discount, it may be to
the advantage of an owner of a taxable parcel to pay the Special Taxes applicable thereto by
tendering a Bond. Such a practice would decrease the cash flow available to the District to make
payments with respect to other Bonds then outstanding; and, unless the practice was limited by the
District, the Special Taxes paid in cash could be insufficient to pay the debt service due with respect
to such other Bonds. In order to provide some protection against the potential adverse impact on
cash flows which might be caused by the tender of Bonds in payment of Special Taxes, the Indenture
includes a covenant pursuant to which the District will not authorize owners of taxable parcels to
satisfy Special Tax obligations by the tender of Bonds unless the District shall have first obtained a
report of a Special Tax Consultant certifying that doing so would not result in the District having
insufficient Special Tax Revenues to pay the principal of and interest on all Outstanding Bonds and
any Parity Bonds when due.
Payment of the Special Tax is not a Personal Obligation of the Owners
An owner of a taxable parcel is not personally obligated to pay the Special Tax. Rather, the
Special Tax is an obligation which is secured only by a lien against the taxable parcel. If the value of
a taxable parcel is not sufficient, taking into account other liens imposed by public agencies, to
secure fully the Special Tax, the District has no recourse against the owner.
Land Values
The value of the property within the District is a critical factor in determining the investment
quality of the Bonds. If a property owner is delinquent in the payment of Special Taxes, the
District's only remedy is to commence foreclosure proceedings in an attempt to obtain funds to pay
the Special Taxes. Reductions in property values due to a downturn in the economy, the direct or
indirect consequences of military and/or terrorist actions in this country or abroad, physical events
such as earthquakes, fires or floods, stricter land use regulations, delays in development or other
events will adversely impact the security underlying the Special Taxes. See 'THE COMMUNITY
FACILITIES DISTRICT - Estimated Value-to-Lien Ratios" herein.
The assessed values set forth in this Official Statement do not represent market values arrived
at through an appraisal process and generally reflect only the sales price of a parcel when acquired by
its current owner, adjusted annually by an amount determined by the San Diego County Assessor, not
to exceed an increase of more than 2% per fiscal year. No assurance can be given that a parcel could
actually be sold for its assessed value.
The Appraiser has estimated, on the basis of certain definitions, assumptions and limiting
conditions contained in the Appraisal, that as of May 1,2003 the value of the land within the District
was $73,500,000. The Appraisal is based on the assumptions as stated in Appendix C -
"APPRAISAL REPORT." The Appraisal does not reflect any possible negative impact which could
occur by reason of future actions by the City under the GMOC or future slow or no growth voter
initiatives, any potential limitations on development occurring due to time delays, an inability of the
45
DOCSOC\932761 v9\22245.0 140
property owners within the District to obtain any needed development approval or permit, the
presence of hazardous substances within the District, the listing of endangered species or the
determination that habitat for endangered or threatened species exists within the District, or other
similar situations. The Appraiser has conditioned the Appraisal on four special conditions in addition
to the typical list of assumptions and limiting conditions, including that the value takes into
consideration the improvements to be financed with the proceeds ofthe Bonds, the costs provided by
the Developer are accurate and complete, the traffic enhancement projects contemplated by the
Monitoring Agreement are completed in a timely manner and there are no environmental or
moratorium issues which would slow or thwart development of the District to its highest and best
use. See "THE DEVELOPMENT AND PROPERTY OWNERSHIP - Potential Limitations on
Development" and Appendix C - "APPRAISAL REPORT."
Prospective purchasers of the Bonds should not assume that the land within the District could
be sold at a foreclosure sale for delinquent Special Taxes for the appraised amount in the Appraisal.
In arriving at the estimates of value, the Appraiser assumes that any sale wiU be unaffected by undue
stimulus and will occur following a reasonable marketing period, which is not always present in a
foreclosure sale. See Appendix C for a description of other assumptions made by the Appraiser and
for the definitions and limiting conditions used by the Appraiser.
No assurance can be given that any bid will be received for a parcel with delinquent Special
Taxes offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all
delinquent Special Taxes. See "SOURCES OF PAYMENT FOR THE BONDS - Special Tax-
Proceeds of Foreclosure Sales."
Terrorism
Neither the City nor the Developer can predict the economic effect of the ongoing threat of
terrorism and the response of the United States government to terrorist acts or threats, though impacts
could be significant. No assurance can be given that the direct and indirect consequences of military
and/or terrorist activities in this country or abroad wiU not have an effect on the District, the
Developer or the property owners in the District, which may include, among other effects, a
slowdown in home sales and a decrease in land values in the District.
FDIC/Federal Government Interests in Properties
The ability of the District to foreclose the lien of delinquent unpaid Special Tax installments
may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the
"FDIC") has an interest. In the event that any financial institution making any loan which is secured
by real property within the District is taken over by the FDIC, and prior thereto or thereatìer the loan
or loans go into default, then the ability of the District to coUect interest and penalties specified by
State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited.
The FDIC's policy statement regarding the payment of state and local real property taxes (the
"Policy Statement") provides that property owned by the FDIC is subject to state and local real
property taxes only if those taxes are assessed according to the property's value, and that the FDIC is
immune from real property taxes assessed on any basis other than property value. According to the
Policy Statement, the FDIC wiU pay its property tax obligations when they become due and payable
and wiU pay claims for delinquent property taxes as promptly as is consistent with sound business
practice and the orderly administration of the institution's affairs, unless abandonment ofthe FDIC's
46
DOCSOC\932 761 v9\22245.0 140
interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property
taxes owed at the rate provided under state law, to the extent the interest payment obligation is
secured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and
will not pay nor recognize liens for such amounts. If any property taxes (including interest) on
FDIC-owned property are secured by a valid lien (in effect before the property became owned by the
FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of
the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC's consent.
In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by
foreclosure without the FDIC's consent.
The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes,
including special assessments, on property in which it has a fee interest unless the amount of tax is
fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the
validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes
imposed under the Mello-Roos Act and a special tax formula which determines the special tax due
each year are specifically identified in the Policy Statement as being imposed each year and therefore
covered by the FDIC's federal immunity.
The District is unable to predict what effect the application of the Policy Statement would
have in the event of a delinquency in the payment of Special Taxes on a parcel within the District in
which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed
out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase
a parcel at a foreclosure sale. Such an outcome could cause a draw on the Reserve Account and
perhaps, ultimately, a default in payment on the Bonds.
Bankruptcy aud Foreclosure
Bankruptcy, insolvency and other laws generally affecting creditors rights could adversely
impact the interests of owners of the Bonds in at least two ways. First, the payment of property
owners' taxes and the ability of the District to foreclose the lien of a delinquent unpaid Special Tax
pursuant to its covenant to pursue judicial foreclosure proceedings may be limited by bankruptcy,
insolvency or other laws generally affecting creditors' rights or by the laws of the State relating to
judicial foreclosure. In addition, the prosecution of a foreclosure could be delayed due to many
reasons, including crowded local court calendars or lengthy procedural delays.
Second, the Bankruptcy Code might prevent moneys on deposit in the funds and accounts
created under the Indenture from being applied to pay interest on the Bonds and/or to redeem Bonds
if bankruptcy proceedings were brought by or against the Developer and if the court found that the
Developer had an interest in such moneys within the meaning of Section 541(a)(I) of the Bankruptcy
Code.
Although a bankruptcy proceeding would not cause the Special Taxes to become
extinguished, the amount of any Special Tax lien could be modified if the value of the property falls
below the value of the lien. If the value of the property is less than the lien, such excess amount
could be treated as an unsecured claim by the bankruptcy court. In addition, bankruptcy of a
property owner could result in a delay in prosecuting Superior Court foreclosure proceedings. Such
delay would increase the likelihood of a delay or default in payment of delinquent Special Tax
installments and the possibility of delinquent Special Tax installments not being paid in full.
47
DOCSOC\932761 v9\22245.0 140
On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued it.s opinion
in a bankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad
valorem property taxes levied by Snohomish County in the State of Washington after the date that
the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor
with a prior lien on the property. Although the court upheld the priority of unpaid taxes imposed
before the bankruptcy petition, unpaid taxes imposed after the filing of the bankruptcy petition were
declared to be "administrative expenses" of the bankruptcy estate, payable after all secured creditors.
As a result, the secured creditor was able to foreclose on the property and retain all the proceeds of
the sale except the amount of the pre-petition taxes.
The Bankruptcy Reform Act of 1994 (the "Bankruptcy Reform Act") included a provision
which excepts from the Bankruptcy Code's automatic stay provisions, "the creation of a statutory
lien for an ad valorem property tax imposed by . . . a political subdivision of a state if such tax comes
due after the filing of the petition [by a debtor in bankruptcy court]." This amendment effectively
makes the Glasply holding inoperative as it relates to ad valorem real property taxes. However, it is
possible that the original rationale of the Glasply ruling could still result in the treatment of post-
petition special taxes as "administrative expenses," rather than as tax liens secured by real property,
at least during the pendency of bankruptcy proceedings.
According to the court's ruling, as administrative expenses, post petition taxes would be paid,
assuming that the debtor had sufficient assets to do so. In certain circumstances, payment of such
administrative expenses may be allowed to be deferred. Once the property is transferred out of the
bankruptcy estate (through foreclosure or otherwise), it would at that time become subject to current
ad valorem taxes.
The Act provides that the Special Taxes are secured by a continuing lien which is subject to
the same lien priority in the case of delinquency as ad valorem taxes_ No case law exists with respect
to how a bankruptcy court would treat the lien for Special Taxes levied after the filing of a petition in
bankruptcy. Glasply is controlling precedent on bankruptcy courts in the State. If the Glasply
precedent was applied to the levy of the Special Taxes, the amount of Special Taxes received from
parcels whose owners declare bankruptcy could be reduced.
The various legal opinions to be delivered concurrently with the delivery of the Bonds
(including Bond Counsel's approving legal opinion) will be qualified, as to the enforceability of the
various legal instruments, by moratorium, bankruptcy, reorganization, insolvency or other similar
laws affecting the rights of creditors generally.
No Acceleration Provision
The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event
of a payment default or other default under the Bonds or the Indenture.
Loss of Tax Exemption
As discussed under the caption "TAX MATTERS," the interest on the Bonds could become
includable in gross income for federal income tax purposes retroactive to the date of issuance of the
Bonds as a result of a failure of the District to comply with certain provisions of the Internal Revenue
Code of 1986, as amended. Should such an event of taxability occur, the Bonds are not subject to
48
DOCSOC\932761 v9\22245.0 140
early redemption and will remain outstanding to maturity or until redeemed under the optional
redemption provisions of the Indenture.
Limitations on Remedies
Remedies available to the owners of the Bonds may be limited by a variety of factors and
may be inadequate to assure the timely payment of principal of and interest on the Bonds or to
preserve the tax-exempt status of the Bonds.
Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the
Indenture to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium, or other similar laws affecting generally the
enforcement of creditors' rights, by equitable principles and by the exercise of judicial discretion.
The lack of availability of certain remedies or the limitation of remedies may entail risks of delay,
limitation or modification of the rights of the owners ofthe Bonds.
Limited Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a
secondary market exists, that such Bonds can be sold for any particular price. Although the District
and the Developer have committed to provide certain financial and operating infonnation on an
annual basis, there can be no assurance that such information will be available to Bondowners on a
timely basis. See "CONTINUING DISCLOSURE." The failure to provide the required annual
financial information does not give rise to monetary damages but merely an action for specific
perfonnance. Occasionally, because of general market conditions"lack of current information, or
because of adverse history or economic prospects connected with a particular issue, secondary
marketing practices in connection with a particular issue are suspended or terminated. Additionally,
prices of issues for which a market is being made will depend upon then prevailing circumstances.
Such prices could be substantially different from the original purchase price.
Proposition 218
An initiative measure commonly referred to as the "Right to Vote on Taxes Act" (the
"Initiative") was approved by the voters of the State of California at the November 5, 1996 general
election. The Initiative added Article XIIlC and Article XlIID to the California· Constitution.
According to the 'Title and Summary" of the Initiative prepared by the California Attorney General,
the Initiative limits "the authority of local governments to impose taxes and property-related
assessments, fees and charges." The provisions of the Initiative have not yet been interpreted by the
courts, although several lawsuits have been filed requesting the courts to interpret various aspects of
the Initiative. The Initiative could potentially impact the Special Taxes available to the City to pay
the principal of and interest on the Bonds as described below.
Among other things, Section 3 of Article XlII states that". . . the initiative power shall not be
prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or
charge." The Act provides for a procedure which includes notice, hearing, protest and voting
requirements to alter the rate and method of apportionment of an existing special tax. However, the
Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or
terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless
such legislative body determines that the reduction Or termination of the special tax would not
49
DOCSOC\93276] v9\22245.0 ]40
interfere with the timely retirement of that debt. On July I, 1997, a bill was signed into law by the
Governor of the State enacting Government Code Section 5854, which states that:
"Section 3 of Article XllIC of the California Constitution, as adopted at the
November 5, 1996, general election, shall not be construed to mean that any owner or
beneficial owner of a municipal security, purchased before or after that date, assumes the risk
of, or in any way consents to, any action by initiative measure that constitutes an impairment
of contractual rights protected by Section 10 of Article I of the United States Constitution."
Accordingly, although the matter is not free from doubt, it is likely that the Initiative has not
conferred on the voters the power to repeal or reduce the Special Taxes if such reduction would
interfere with the timely retirement of the Bonds.
It may be possible, however, for voters or the City Council acting as the legislative body of
the District to reduce the Special Taxes in a manner which does not interfere with the timely
repayment of the Bonds, but which does reduce the maximum amount of Special Taxes that may be
levied in any year below the existing levels. Furthermore, no assurance can be given with respect to
the future levy of the Special Taxes in amounts greater than the amount necessary for the timely
retirement of the Bonds. Therefore, no assurance can be given with respect to the levy of Special
Taxes for Administrative Expenses. Nevertheless, to the maximum extent that the law permits it to
do so, the District has covenanted that it will not initiate proceedings under the Act to reduce the
maximum Special Tax rates on parcels within the District to less than an amount equal to 110% of
Maximum Annual Debt Service on the Outstanding Bonds and Parity Bonds. In connection with the
foregoing covenant, the District has made a legislative finding and determination that any elimination
or reduction of Special Taxes below the foregoing level would interfere with the timely retirement of
the Bonds. The District also has covenanted that, in the event an initiative is adopted which purports
to alter the Rate and Method of Apportionment of Special Tax, it will commence and pursue legal
action in order to preserve its ability to comply with the foregoing covenant. However, no assurance
can be given as to the enforceability of the foregoing covenants.
The interpretation and application of the Initiative will ultimately be determined by the courts
with respect to a number of the matters discussed above, and it is not possible at this time to predict
with certainty the outcome of such determination or the timeliness of any remedy afforded by the
courts. See "SPECIAL RISK FACTORS - Limitations on Remedies."
Ballot Initiatives
Article XIII A, Article XIII B and Proposition 218 were adopted pursuant to measures
qualified for the ballot pursuant to California's constitutional initiative process. On March 6, 1995 in
the case of Rossi v. Brown, the State Supreme Court held that an initiative can repeal a tax ordinance
and prohibit the imposition of further such taxes and that the exemption from the referendum
requirements does not apply to initiatives. From time to time, other initiative measures could be
adopted by California voters. The adoption of any such initiative might place limitations on the
ability of the State, the City or local districts to increase revenues or to increase appropriations or on
the ability of the landowners within the District to complete the remaining proposed development.
See "SPECIAL RISK FACTORS - Failure to Develop Properties" herein.
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DOCSOC\932761 v9\22245.0 140
CONTINUING DISCLOSURE
Pursuant to a Continuing Disclosure Agreement with the Fiscal Agent, as dissemination
agent (the "Disclosure Agreement"), the District, has agreed to provide, or cause to be provided, to
each nationally recognized municipal securities information repository and any public or private
repository or entity designated by the State as a state repository for purposes of Rule 15c2-l2(b)(5)
adopted by the Securities and Exchange Commission (each, a "Repository") certain annual financial
information and operating data concerning the District. The Annual Report to be filed by the District
is to be filed not later than February 1 of each year, beginning February I, 2004, and is to include
audited financial statements of the City. The requirement that the City file its audited financial
statements as a part of the Annual Report has been included in the Disclosure Agreement solely to
satisfy the provisions of Rule 15c2-12. The inclusion of this information does not mean that the
Bonds are secured by any resources or property of the City other than as described hereinabove. See
"SOURCES OF PAYMENT FOR THE BONDS" and "SPECIAL RISK FACTORS - Limited
Obligations." The City has never failed to comply in all material respects with any previous
undertakings with regard to Rule 15c2-12 to provide annual reports or notices of material events.
The full text of the Disclosure Agreement is set forth in Appendix G.
To assist the Underwriter in complying with Rule 15c2-12(b)(5), the Developer and the
McMillin Entities (defined for the purposes of the Continuing Disclosure Agreement as, collectively,
the "Developer") will enter into a certain Continuing Disclosure Agreement (the "Developer
Disclosure Agreement") covenanting to provide Semi-Annual Reports not later than February I and
August 1 of each year beginning February 1, 2004. The Semi-Annual Reports provided by the
Developer are to contain the unaudited financial statements of the Developer and, if available, the
audited financial statements, and the additional financial and operating data outlined in Section 4 of
the Developer Disclosure Agreement attached in Appendix G.
The Developer's obligations under the Developer Disclosure Agreement will terminate upon
the earliest to occur of: (a) the legal defeasance, prior redemption or payment in full of all the
Bonds; (b) the date on which the Developer and all atìiliates of the Developer are no longer
responsible for the payment of more than 20 percent of the annual Special Tax levy; or (c) the date
on which the Developer delivers to the City an opinion of nationally-recognized bond counsel to the
effect that the continuing disclosure is no longer required under the Rule. The Developer has also
agreed that if it sells or transfers an ownership interest in any property in the District which will
result in the transferee becoming responsible for the payment of 20 percent ofthe annual Special Tax
levy in the fiscal year following such transtèr, the Developer will cause any such transferee to enter
into a disclosure agreement described in Section 12 of the Developer Disclosure Agreement attached
hereto in Appendix G.
The Developer has not previously failed to comply in all material respects with any previous
undertakings with regard to Rule 15c2-12 to provide annual reports or notices of material events.
The Developer Disclosure Agreement will inure solely to the benefit of the District, any
Dissemination Agent, the Underwriter and owners or beneficial owners from time to time of the
Bonds.
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DOCSOC\932761 v9\22245.0] 40
TAX MATTERS
In the opinion of Best Best & Krieger LLP ("Bond Counsel"), based upon an analysis of
existing laws, regulations, rulings and court decisions, and assuming, among other matters,
compliance with certain covenants, interest on the Bonds is excluded from gross income for federal
income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code") and is
exempt from State of California personal income taxes. Bond Counsel is of the further opinion that
interest on the Bonds is not a specific preference item for purposes of the federal individual or
corporate alternative minimum taxes, although Bond Counsel observes that such interest is included
in adjusted current earnings when calculating federal corporate alternative minimum taxable income.
A complete copy of the proposed form of opinion of Bond Counsel is set forth in Appendix H hereto.
The Code imposes various restrictions, conditions and requirements relating to the exclusion
from gross income for federal income tax purposes of interest on obligations such as the Bonds. The
City has covenanted to comply with certain restrictions designed to insure that interest on the Bonds
will not be included in federal gross income. Failure to comply with these covenants may result in
interest on the Bonds being included in federal gross income, possibly from the date of original
issuance of the Bonds. The opinion of Bond Counsel assumes compliance with these covenants.
Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken
(or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may
adversely affect the value of, or the tax status of interest on, the Bonds. Further, no assurance can be
given that pending or future legislation or amendments to the Code, if enacted into law, or any
proposed legislation or amendments to the Code, will not adversely affect the value of, or the tax
status of interest on, the Bonds. Prospective Bondholders are urged to consult their own tax advisors
with respect to proposals to restructure the federal income tax.
Certain requirements and procedures contained or referred to in the Indenture, the Tax
Certificate, and other relevant documents may be changed and certain actions (including, without
limitation, defeasance of the Bonds) may be taken or omitted under the circumstances and subject to
the terms and conditions set forth in such documents. Bond Counsel expresses no opinion as to any
Bond or the interest thereon if any such change occurs or action is taken or omitted upon the advice
or approval of Bond Counsel other than itself.
Although Bond Counsel is of the opinion that interèst on the Bonds is excluded from gross
income for federal income tax purposes and is exempt from State of California personal income
taxes, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may
otherwise affect a bondholder's federal or state tax liability. The nature and extent of these other tax
consequences will depend upon the particular tax status of the Bondholder or the Bondholder's other
items of income or deduction, and Bond Counsel expresses no opinion regarding any such other tax
consequences.
LEGAL MATTERS
Certain legal matters incident to the issuance of the Bonds are subject to the approving legal
opinion of Best Best & Krieger LLP, San Diego, California CBond Counsel"). A copy of the
proposed form of opinion of Bond Counsel is set forth in Appendix H hereto. The opinion of Bond
Counsel will be qualified as to the enforceability of certain of the proceedings by limitations imposed
by bankruptcy, insolvency, moratoria and other similar laws affecting creditors' rights, heretotàre or
52
DOCSOC\932761 v9\22245.0 140
hereafter enacted, and by the exercise of judicial discretion in accordance with general principles of
equity.
Bond Counsel has reviewed the cover page of this Official Statement and the portions hereof
under the captions "INTRODUCTION," "THE BONDS," "SOURCES OF PAYMENT FOR THE
BONDS" 'TAX MATTERS" and in Appendices E and H, insofar as such portions purport to
summarize certain provisions of the Bonds, the Indenture, the legal procedures required for the
authorization of the Bonds, and the opinion of Bond Counsel concerning the exclusion of interest on
the Bonds from gross income, but Bond Counsel has not assisted in the preparation of or reviewed
the remainder of this Official Statement, and accordingly Bond Counsel expresses no opinion as to
the accuracy or sufficiency of any statements, material or financial information contained in the
remainder of this Official Statement.
Certain legal matters will be passed upon for the City and the District by the City Attorney
and for the Underwriter by its counsel, Stradling Y occa Carlson & Rauth, a Professional Corporation,
Newport Beach, California ("Stradling"). Although it serves as counsel to the Underwriter in
connection with the issuance and sale of the Bonds, Stradling represents the City in connection with
other financings.
LITIGATION
No litigation is pending or threatened concerning the validity of the Bonds or the pledge of
Special Taxes to repay the Bonds and a certificate of the District to that effect will be furnished to the
Underwriter at the time of the original delivery of the Bonds. The District is not aware of any
litigation pending or threatened which questions the existence of the District or contests the authority
of the District to levy and collect the Special Taxes or to issue and retire the Bonds.
NO RATING
The District has not made and does not contemplate making application to any rating agency
for the assignment of a rating of the Bonds.
UNDERWRITING
The Bonds are being purchased by Stone & Youngberg LLC (the "Underwriter"). The
Underwriter has agreed to purchase the Bonds at a price of $ (being $
aggregate principal amount thereof, less Underwriter's discount of $ ). The purchase
agreement relating to the Bonds provides that the Underwriter will purchase all of the Bonds if any
are purchased. The obligation to make such purchase is subject to certain terms and conditions set
forth in such purchase agreement, the approval of certain legal matters by counsel and certain other
conditions.
The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower
than the offering price stated on the cover page hereof. The offering price may be changed from time
to time by the Underwriter.
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DOCSOC\932761 v9\22245.0140
FINANCIAL INTERESTS
The fees being paid to the Underwriter, Underwriter's Counsel and Bond Counsel are
contingent upon the issuance and delivery of the Bonds. The fees being paid to the Financial
Advisor are partially contingent upon the issuance and delivery of the Bonds. From time to time,
Bond Counsel represents the Underwriter on matters unrelated to the Bonds and Underwriter's
Counsel represents the City on matters unrelated to the Bonds.
PENDING LEGISLATION
The District is not aware of any significant pending legislation which would have material
adverse consequences on the Bonds or the ability of the District to pay the principal of and interest
on the Bonds when due.
ADDITIONAL INFORMATION
The purpose of this Official Statement is to supply information to prospective buyers of the
Bonds. Quotations and summaries and explanations of the Bonds and documents contained in this
Official Statement do not purport to be complete, and reference is made· to such documents for full
and complete statements and their provisions.
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DOCSOC\93276 ¡ v9\22245.0 ¡ 40
The execution and delivery of this Official Statement by the Director of Finance of the City
has been duly authorized by the City Council acting in its capacity as the legislative body of the
District.
CITY OF CHULA VISTA COMMUNITY
FACILITIES DISTRICT NO. 2001-2
(McMillin - Otay Ranch - Village Six)
By:
Director of Finance '
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DOCSOC\932761 v9\22245.0 140
.
APPENDIX A
RATE AND METHOD OF APPORTIONMENT FOR
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 2001-2
(McMillin Otay Ranch Village Six)
A Special Tax as hereinafter defined shall be levied on each Assessor's Parcel of Taxable
Property within the City of Chula Vista Community Facilities ~istrict No. 2001-2 ("CFO No. 2001-
2") and collected each Fiscal Year commencing in Fiscal Year 2002-2003 in an amount determined
by the City Council through the application of the appropriate Special Tax for "Developed Property,"
and "Undeveloped Property as described below. All of the Taxable Property in CFO No. 2001-2,
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 meaning:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an
Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land
area shown on the applicable final map, parcel map, condominium plan, record of survey, or
other recorded document creating or describing the parcel. If the preceding maps for a land
area are not available, the Acreage of such land area shall be determined by the City
Engineer.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being
Chapter 2.5, ~ivision 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the actual or reasonably estimated costs directly
related to the administration of CFO No. 2001-2 including, but not limited to, the following:
the costs of computing the Special Taxes and preparing the annual Special Tax collection
schedules (whether by the City or designee thereof or both); the costs of collecting the
Special Taxes (whether by the County, the City, or otherwise); the costs of remitting the
Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the
discharge of the duties required of it under the Indenture; the costs to the City, CFO
No. 2001-2 or any designee thereof of complying with arbitrage rebate requirements; the
costs to the City, CFO No.2001-2 or any designee thereof of providing continuing
disclosure; the costs associated with preparing Special Tax disclosure statements and
responding to public inquiries regarding the Special Taxes; the costs of the City, CFO
No. 2001-2 or any designee thereof related to any appeal of the levy or application of the
Special Tax; and the costs associated with the release of funds from an escrow account, if
any. Administrative Expenses shall also include amounts estimated or advanced by the City
or CFO No. 2001-2 for any other administrative purposes of CFO No. 2001-2, including, but
not limited to attorney's fees and other costs related to commencing and pursuing to
completion any foreclosure of delinquent Special Taxes.
A-I
DOCSOC\932761 v9\22245.0 140
"Assessor's 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 County Assessor of the
County designating parcels by Assessor's Parcel number.
"Assigned Special Tax" means the Special Tax for each Land Use Category of
Developed Property as determined in accordance with the provision of Section C.I.a. below.
"Available Funds" means the balance in the reserve fund established pursuant to the
terms of the Indenture in excess of the reserve requirement as defined in such Indenture,
delinquent Special Tax payments not required to fund the Special Tax Requirement for any
preceding Fiscal Year, the Special Tax prepayments collected to pay interest on Bonds, and
other sources of funds available as a credit to the Special Tax Requirement as specified in
such Indenture.
"Backup Special Tax" means the Special Tax determined in accordance with the
provisions of Section C.I.b below.
"Bonds" means any bonds or other debt (as defined in the Act), whether in one or
more series, issued by CFD No. 2001-2 under the Act.
"Bond Year" means a one-year period beginning on September 2nd in each year and
ending on September 1st in the following year. Unless defined differently in the applicable
Indenture.
"CFD Administrator" means an official of the City, or designee thereof, responsible
for determining the Special Tax Requirement and providing for the levy and collection of the
Special Taxes.
"CFD No.2001-2" means City of Chula Vista, Community Facilities District
No. 2001-2 (McMillin Otay Ranch Village Six).
"City" means the City of Chula Vista.
"Community Purpose Facility Property" means all Assessor's Parcels which are
classified as community purpose facilities and meet the requirements of City of Chula Vista
Ordinance No. 2452.
"Council" means the City Council of the City, acting as the legislative body of CFD
No. 2001-2.
"County" means the County of San Diego.
"Developed Property" means, for each Fiscal Year, all Taxable Property for which a
building permit for new construction was issued prior to March I of the prior Fiscal Year.
"Final Subdivision Map" means a subdivision of property created by recordation of
a final map, parcel map, or lot line adjustment, approved by the City pursuant to the
Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of
A-2
DOCSOC\932761 v9\22245.0 140
a condominium plan pursuant to California Civil Code 1352 that creates individual lots for
which residential building permits may be issued without further subdivision of such
property.
"Fiscal Year" means the period starting July I and ending on the following June 30.
"Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution
or other instrument pursuant to which Bonds are issued, as modified, amended and/or
supplemented from time to time, and any instrument replacing or supplementing the same.
"Land Use Class" means any of the classes listed in Tables I and 2 of Section C.
"Lot(s)" means an individual legal lot created by a Final Subdivision Map for which
a building permit for residential construction has been or could be issued.
"Master Developer" means the owner of the predominant amount of Undeveloped
Property in CFD No. 2001-2.
"Maximum Annual Special Tax" means the maximum annual Special Tax,
determined in accordance with the provisions of Section C below, which may be levied in
any Fiscal Year on any Assessor's Parcel of Taxable Property.
"Non-Residential Property" means all Assessor's Parcels of Developed Property
for which a building permit has been issued tòr purposes of constructing one or more non-
residential structures, excluding Community Purpose Facility Property.
"Occupied Residential Property" means all Assessors' Parcels of Residential
Property for which title is owned by an end user (homeowner).
"Outstandiug Bonds" means all Bonds which remain outstanding as defined in the
Indenture.
"Property Owner Association Property" means any property within the boundaries
of CFD No. 2001-2 owned by or dedicated to a property owner association, including any
master or sub-association.
"Proportionately" means for Developed Property that the ratio of the actual Special
Tax levy to the Assigned Annual Special Tax or Backup Special Tax is equal for all
Assessor's Parcels of Developed Property within CFD No. 2001-2. For Undeveloped
Property "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the
Maximum Annual Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped
Property within CFD No. 2001-2.
"Public Property" means any property within the boundaries of CFD No. 2001-2
that is owned by or dedicated to the federal government, the State of California, the County,
the City or any other public agency.
"Residential Property" means all Assessor's Parcels of Developed Property for
which a building permit has been issued for purposes of constructing one or more residential
dwelling units.
A-3
DOCSOC\932761 v9\22245.0 140
"Residential Floor Area" means all of the square footage of living area within the
perimeter of a residential structure, not including any carport, walkway, garage, overhang,
patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be
made by the CFO Administrator by reference to appropriate records kept by the City's
Building Department. Residential Floor Area for a residential structure will be based on the
building permit(s) issued for such structure prior to it being classified as Occupied
Residential Property, and shall not change as a result of additions or moditications made to
such structure atìer such classification as Occupied Residential Property.
"Special Tax" means the annual special tax to be levied in each Fiscal Year on each
Assessor's Parcel of Taxable Property to fund the Special Tax Requirement.
"Special Tax Requirement" means that amount required in any Fiscal Year for CFD
No. 2001-2 to: (i) pay debt service on all Outstanding Bonds (as defined in Section A) due in
the Bond Year beginning in such Fiscal Year; (ii) pay other periodic costs on Outstanding
Bonds, including but not limited to, credit enhancement and rebate payments on Outstanding
Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or
replenish any reserve funds for all Outstanding Bonds in accordance with the Indenture;
(v) pay directly for acquisition and/or construction of public improvements which are
authorized to be financed by CFD No. 2001-2 provided that inclusion of such amount does
not cause an increase in the levy of Special Taxes on Undeveloped Property; and (vi) less a
credit for Available Funds.
"State" means the State of California.
"Taxable Property" means all of the Assessor's Parcels within the boundaries of
CFO No. 2001-2 which are not exempt from the Special Tax pursuant to law or Section E
below.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture.
"Undeveloped Property" means, for each Fiscal Year, all Taxable Property not
classified as Developed Property.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, all Assessor Parcels within CFD No. 2001-2 shall be classified as
Taxable Property or Exempt Property. All Taxable Property shall then be classified as
Developed Property or Undeveloped Property, and shall be subject to the levy of annual
Special Taxes determined pursuant to Sections C and D below. Furthermore, all Developed
Property shall then be classified as Residential Property or Non-Residential Property.
C. MAXIMUM ANNUAL SPECIAL TAX RATE
1. Developed Property
The Maximum Annual Special Tax for each Assessor's Parcel of Residential
Property or Non-Residential Property shall be the greater of (I) the Assigned Special
Tax described in Table I below or (2) the amount derived by application of the
Backup Special Tax.
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DOCSOC\932761 v9\22245.0 140
a. Assi2ned Special Tax
The Assigned Special Tax for each Assessor's Parcel classitied as Developed
Property shall be the amount shown in Table I below:
TABLE 1
Assigned Special Tax for Developed Property
Land Use
Class Description Maximum Annual Special Tax
1 Residential $440 per unit plus $.34 per square
Property foot of Residential Floor Area
2 Non-Residential $11,365 per Acre
Property
b. Backup Special Tax
When a Final Subdivision Map is recorded within CFD No. 2001-2, the
Backup Special Tax for Assessor's Parcels of Developed Property classified as
Residential Property or Non-Residential Property shall be determined as follows:
For each Assessor's Parcel of Developed Property classified as Residential
Property or for each Assessor's Parcel of Undeveloped Property to be classitied as
Residential Property within the Final Subdivision Map area, the Backup Special Tax
shall be the rate per Lot calculated according to the following formula:
$11,365 x A
B=
------------------------
L
The tenns above have the following meanings:
B = Backup Special Tax per Lot in each Fiscal Year.
A = Acreage classified or to be classified as Residential Property in such
Final Subdivision Map.
L = Lots in the Final Subdivision Map which are classified or to be
classified as Residential Property.
For each Assessor's Parcel of Developed Property classified as Non-
Residential Property or for each Assessor's Parcel of Undeveloped Property to be
classified as Non-Residential Property within the Final Subdivision Map area, the
Backup Special Tax shall be determined by multiplying $11,365 by the total Acreage
of both the Non-Residential Property and Undeveloped Property to be classified as
Non-Residential Property within the Final Subdivision Map area.
Notwithstanding the foregoing, if Assessor's Parcels of Residential Property,
Non-Residential Property or Undeveloped Property for which the Backup Special
Tax has been determined are subsequently changed or modified by recordation of a
new or amended Final Subdivision Map (by an applicable tinal map, parcel map,
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DOCSOC\932761 v9\222450 140
condominium plan, record of survey, or other recorded document creating the
parcels) then the Backup Special Tax applicable to such Assessor's Parcels shall be
reca1culated to equal the amount of Backup Special Tax that would have been
generated if such change or modification did not take place.
2. Undeveloped Property
The Maximum Annual Special Tax for each Assessor's Parcel classified, as
Undeveloped Property shall be the amount shown in Table 2 below:
TABLE 2
Land Use
Class Description Maximum Annual Special Tax
3 Undeveloped Property $11,365 per Acre
Maximum Annual Special Tax for Undeveloped Property
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2002-2003 and for each following Fiscal Year, the
Council shall determine the Special Tax Requirement and shall levy the Special Tax until the
amount of Special Taxes equals the Special Tax Requirement. The Special Tax shall be
levied each Fiscal Year as follows:
First: The Special Tax shall be levied Proportionately on each Assessor's Parcel of
Developed Property at a rate up to 100% of the applicable Assigned Special Tax to satisfy the
Special Tax Requirement.
Second: If additional monies are needed to satisfy the Special Tax Requirement after
the first step has been completed, the Special Tax shall be levied Proportionately on each
Assessor's Parcel of Undeveloped Property, excluding any Assessor's Parcels classified as
Undeveloped Property pursuant to paragraphs 2 and 3 in Section E, at up to 100% of the
Maximum Annual Special Tax for Undeveloped Property.
Third: If additional monies are needed to satisfy the Special Tax Requirement after
the first two steps have been completed, the Special Tax to be levied on each Assessor's
Parcel whose Maximum Annual Special Tax is derived by the application or'the Backup
Special Tax shall be increased Proportionately from the Assigned Special Tax up to the
Maximum Annual Special Tax for each such Assessor's Parcel.
Fourth: If additional monies are needed to satisfy the Special Tax Requirement after
the first three steps have been completed, then the Special Tax shall be levied Proportionately
on each Assessor's Parcel classified as Undeveloped Property pursuant to paragraphs 2 and 3
in Section E at up to 100% of the Maximum Annual Special Tax for Undeveloped Property.
Notwithstanding the above, under no circumstances will the Special Tax levied
against any Assessor's Parcel of Occupied Residential Property be increased by more than
ten percent per year as a consequence of delinquency or default in the payment of Special
Taxes by the owner of any other Taxable Property.
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E. EXEMPTIONS
1. The CFD Administrator shall classify up to 53 Acres within Assessor Parcel number
643-052-05 and any future subdivisions therein as property exempt from the Special
Taxes provided that all or a portion of the property is planned for or is being
developed or used for Community Purpose Facility Property and school land uses
approved by the City pursuant to the Tentative Map approved for McMillin Otay
Ranch, Village Six on February 26, 2002. It is possible that land use entitlements
(such as parcel map, final map or any other such division of land) may be approved
prior to January I st of any Fiscal Year for all or any portion of such area(s) which
would authorize the development or use of such area(s) for purposes not exempt from
the levy of the Special Tax pursuant to this Section E. The adjusted area(s) shall then
be classified as Taxable Property in the next Fiscal Year as Developed Property or
Undeveloped property in Step 2 of Section 0, as applicable.
2. The CFO Administrator shall also classify the following Assessor Parcel(s) as exempt
property: (i) Public Property, (ii) Property Owner Association Property, (iii) all
Assessor's Parcels defined as Community Purpose Facility Property which are in
addition to the property described in paragraph J. above, and (iv) Assessor's Parcels
with public or utility easements making impractical their utilization for other than the
purposes set forth in the easement; provided, however, that no such classification
shall reduce the sum of all Taxable Property to less than 75.48 Acres.
Notwithstanding the preceding sentence, the CFO Administrator shall not classify an
Assessor's Parcel described in this paragraph as exempt property if such
classification would reduce the sum of all Taxable Property to less than 75.48 Acres.
Assessor's Parcels which cannot be classified as exempt property because such
classification would reduce the Acreage of all Taxable Property to less than 75.48
Acres will be classified as Undeveloped Property and shall be taxed as such. Tax-
exempt status for purposes of this paragraph will be assigned by the CFO
Administrator in the chronological order in which property becomes exempt property.
3. The Maximum Annual Special Tax obligation for any property which would be
classified as Public Property upon its transfer or dedication to a public agency but
which cannot be classified as exempt property as described in paragraph 2 of
Section E shall be prepaid in full by the seller pursuant to Section H. J, prior to the
transfer/dedication of such property to such public agency. Until the Maximum
Annual Tax obligation for any such Public Property is prepaid, the property shall
continue to be subject to the levy of the Special Tax as Undeveloped Property.
F. REVIEW/APPEAL COMMITTEE
Any landowner or resident who pays the Special Tax and feels that the amount of the
Special Tax levied on their Assessor's Parcel is in error shall first consult with the CFO
Administrator regarding such error. If following such consultation, the CFO Administrator
determines that an error has occurred, the CFO 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 CFO Administrator, the landowner or resident believes such error still exits, such
person may file a written notice with the City Clerk of the City appealing the amount of the
Special Tax levied on such Assessor's Parcel. Upon the receipt of any such notice, the City
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DOCSOC\93276! v9\22245.0 140
Clerk shall forward a copy of such notice to the City Manager who shall establish as part of
the proceedings and administration of CFD No. 2001-2, 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.
G. MANNER OF COLLECTION
The annual Special Tax shall be collected in the same manner and at the same time as
ordinary ad valorem property taxes; provided, however, that CFD No. 2001-2 may directly
bill the Special Tax, may collect Special Taxes at a different time or in a different manner if
necessary to meet its financial obligations, and may covenant to foreclose and may actually
foreclose on Assessor's Parcels of Taxable Property that are delinquent in the payment of
Special Taxes.
Tenders of Bonds may be accepted for payment of Special Taxes upon the terms and
conditions established by the Council pursuant to the Act. However, the use of Bond tenders
shall only be allowed on a case-by-case basis as specifically approved by the Council.
H. PREPAYMENT OF SPECIAL TAX
The following definition applies to this Section H:
"Outstanding Bonds" means all previously issued Bonds which will remain
outstanding after the first interest and/or principaJ payment date following the current Bond
Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments
of Maximum AnnuaJ Special Taxes.
1. Prepayment in Full
The Maximum Annual Special Tax obligation may only be prepaid and permanently
satisfied by an Assessor's Parcel of Developed Property, Undeveloped Property for which a
building permit has been issued, or Public Property. The Maximum Annual Special Tax
obligation applicable to such Assessor's Parcel may be fully prepaid and the obligation of the
Assessor's Parcel to pay the Special Tax permanently satisfied as described herein; provided
that a prepayment may be made only if there are no delinquent Special Taxes with respect to
such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel
intending to prepay the Maximum Annual Special Tax obligation shall provide the CFD
Administrator with written notice of intent to prepay. Within 30 days of receipt of such
written notice, the CFD Administrator shall notify such owner of the prepayment amount of
such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing
this figure.
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DOCSOC\932761 v9\22245.0 140
The Prepayment Amount (defined below) shall be calculated as summarized below
(capitalized terms as defined below):
Bond Redemption Amount
plus
plus
plus
less
less
equals
Redemption Premium
Defeasance Amount
Administrative Fees and Expenses
Reserve Fund Credit
Capital ized Interest Credit
Prepayment Amount
Total:
As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be
calculated as follows:
Paragraph No.:
I. For Assessor's Parcels of Developed Property, compute the Maximum Annual Special Tax
for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property for
which a building permit has been issued to be prepaid, compute the Maximum Annual
Special Tax for that Assessor's Parcel as though it was already designated as Developed
Property, based upon the building permit which has already been issued for that Assessor's
Parcel. For Assessor's Parcels of Public Property to be prepaid, compute the Maximum
Annual Special Tax for that Assessor's Parcel using the Maximum Annual Special Tax for
Undeveloped Property.
2. Divide the Maximum Annual Special Tax computed pursuant to paragraph 1 by the sum of
the total expected Maximum Annual Special Tax revenue excluding any Assessor's Parcels
which have been prepaid.
3. Multiply the quotient computed pursuant to paragraph 2 by the Outstanding Bonds to
compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption
Amount").
4. Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the applicable
redemption premium on the next possible Bond call date, if any, on the Outstanding Bonds to
be redeemed (the "Redemption Premium").
5. Compute the amount needed to pay interest on the Bond Redemption Amount from the first
bond interest and/or principal payment date following the current Fiscal Year until the
earliest redemption date for the Outstanding Bonds.
6. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
7. Determine the Special Taxes levied on the Assessor's Parcel in the current Fiscal Year which
have not yet been paid.
8. Compute the amount the CFD Administrator reasonably expects to derive from the
reinvestment of the Prepayment Amount (less the Administrative Fees and Expenses) from
the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed
with the prepayment.
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DOCSOC\932761 v9\22245.0 140
9. Add the amounts computed pursuant to paragraphs 5 and 7 and subtract the amount
computed pursuant to paragraph 8 (the "Defeasance Amount").
10. Verify the administrative fees and expenses of CFO No. 2001-2, including the costs of
computation of the prepayment, the costs to invest the prepayment proceeds, the costs of
redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the
redemption (the "Administrative Fees and Expenses").
11. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the
expected reduction in the reserve requirement (as defined in the Indenture), if any, associated
with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount
derived by subtracting the new reserve requirement (as defined in the Indenture) in effect
after the redemption of Outstanding Bonds as a result of the prepayment from the balance in
the reserve fund on the prepayment date, but in no event shall such amount be less than zero.
12. If any capitalized interest for the Outstanding Bonds will not have been expended at the time
of the first interest and/or principal payment following the current Fiscal Year, a capitalized
interest credit shall be calculated by multiplying the quotient computed pursuant to
paragraph 2 by the expected balance in the capitalized interest fund after such first interest
and/or principal payment (the "Capitalized Interest Credit").
13. The Maximum Annual Special Tax prepayment is equal to the sum of the amounts computed
pursuant to paragraphs 3, 4, 9, and 10, less the amounts computed pursuant to paragraphs 11
and 12 (the "Prepayment Amount").
14. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 9, 11, and
12 shall be deposited into the appropriate fund as established under the Indenture and be used
to retire Outstanding Bonds or make debt service payments. The amount computed pursuant
to paragraph 10 shall be retained by CFO No. 200T -2.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of
Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the
appropriate fund established under the Indenture to be used with the next prepayment of bonds or to
make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax levy as determined under
paragraph 7 above, the CFO Administrator shall remove the current Fiscal Year's Special Tax levy
for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is
prepaid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to
indicate the prepayment of Special Taxes and the release of the Special Tax lien on such Assessor's
Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the
amount of Maximum Annual Special Taxes that may be levied on Taxable Property within CFO
No. 2001-2 both prior to and after the proposed prepayment is at least 1.1 times the maximum annual
debt service on all Outstanding Bonds.
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DOCSOC\93276I v9\22245.0 140
Tenders of Bonds in prepayment of Maximum Annual Special Taxes may be accepted upon
the terms and conditions established by the Council pursuant to the Act. However, the use of Bond
tenders shall only be allowed on a case-by-case basis as specifically approved by the Council.
2. Prepayment in Part
The Maximum Annual Special Tax on an Assessor's Parcel of Developed Property or an
Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be
partially prepaid. The amount of the prepayment shall be calculated as in Section H.I; except that a
partial prepayment shall be calculated according to the following formula:
PP = (PE x F) + A
These terms have the following meaning:
PP = the partial prepayment
PE = the Prepayment Amount calculated according to Section H.!, minus Administrative
Expenses and Fees pursuant to Step 10.
F = the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the
Maximum Annual Special Tax.
A = the Administrative Expenses and Fees pursuantto Step 10.
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Annual
Special Tax shall notify the CFD Administrator of (i) such owner's intent to partially prepay the
Maximum Annual Special Tax, (ii) the percentage by which the Maximum Annual Special Tax shall
be prepaid, and (iii) company or agency that will be acting as the escrow agent, if applicable. The
CFD Administrator shall provide the owner with a statement of the amount required for the partial
prepayment of the Maximum Annual Special Tax for an Assessor's Parcel within 30 days of the
request and may charge a reasonable fee for providing this service.
With respect to any Assessor's Parcel that is partially prepaid, the City shall (i) distribute the
funds remitted to it according to Paragraph 14 of Section H.I, and (ii) indicate in the records of CFD
No. 2001-2 that there has been a partial prepayment of the Maximum Annual Special Tax and that a
portion of the Maximum Annual Special Tax equal to the outstanding percentage (1.00 - F) of the
remaining Maximum Annual Special Tax shall continue to be authorized to be levied on such
Assessor's Parcel pursuant to Section D.
I. TERM OF MAXIMUM ANNUAL SPECIAL TAX
The Maximum Annual Special Tax shall be levied commencing in Fiscal Year 2003-
2004 to the extent necessary to fully satisfy the Special Tax Requirement and .shall be levied
for a period no longer than the 2037-2038 Fiscal Year.
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DOCSOC\932761 v9\22245.0 140
APPENDIX B
SUMMARY OF MARKET ABSORPTION STUDY
A. Regional Overview
Success in the development and sale of the residential units within CFD No. 2001-2 will be
correlated with the strength of national, regional and local economic conditions during the sales
period. Economic conditions in San Diego County still continue to support the development of all
types of residential housing in appropriate locations and the regional economy is expected to remain
positive in the near to medium term. All projects in CFD No. 2001-2 (Otay Ranch Village Six-
McMillin) should be sold-out in the next three years (2003-2005). Our review of key market
indicators indicates positive growth will continue in the foreseeable future.
Propelled by low interest rates, continued home price increases, high demand for housing and
improved consumer confidence following a swift resolution to the Iraq war, the San Diego County
housing market remains strong as the Second Quarter of2003 gets underway. San Diego County job
growth has slowed down considerably, but unemployment remains low and San Diego County has
managed to avoid recession and continue to expand moderately.
2002 was an excellent year for the housing market in San Diego, with just over 11,000 new
housing units sold countywide, the highest level since the late 1980s. There were 2,536 new homes
sold countywide in the First Quarter of 2003, about a 17% decline from First Quarter 2002 (sales are
about the same however as First Quarter 2001). This sales decline is due less to a dropoff in demand
than to a drop in the number of active housing projects and homes available for sale. There were 222
active new housing projects countywide in First Quarter 2002, compared to 241 a year ago.
Detached projects have declined the most, with 166 active projects countywide in First Quarter 2003,
down from 199 in the same quarter a year ago. By another data source, there were a combined 5,008
new and existing home closings in San Diego County in April 2003, the highest level ever.
Perhaps more remarkable than the continued robust sales of housing in San Diego in the face
of declining job gains are that they come about despite record levels of home price appreciation in
recent years. The First Quarter 2003 detached median price reached $493,750 in the county, up
21.6% from the First Quarter 2002 median price (the median price per square foot is also up 22% to
$191 in the past 12 months). Despite these price gains, demand for new housing is strong due to
home price appreciation (people are using equity to move up), low interest rates and the availability
of various mortgage instruments (adjtJstables, etc.). While housing is higher·priced in absolute terms
than it was a decade ago, the impact of lower interest rates alone can make monthly housing costs
similar or even lower than lower-priced housing a decade ago.
Finally, the region has maintained a fairly low level of housing supply. As mentioned, the
number of active projects has declined in the past year, particularly in the detached for-sale market.
At the end of First Quarter 2003, there were only 59 standing inventory units countywide and 657
released, but unsold housing units. At current detached sales rates of 574 units per month, this is a
one to two month supply. The level of attached for-sale inventory is also quite low.
San Diego's economic outlook is good. Employment gains have halted (this should be
monitored), but unemployment remains low. San Diego County had an unemployment rate of 4.2%
in April 2003, compared to 6.6% in California and 5.8% in the nation. Defense spending and
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DOCSOC\932761 v9\22245.0 140
CITY OF CHULA VISTA
CFD No. 2002-1 (McMillin Otay Ranch Village 6)
December 17,2002
Page 2
improved business investment will support the area's technology and defense-related industries.
Tourism, manufacturing and government sectors are healthy or stabilizing (the quick end to the war
in Iraq means that armed forces are returning home - a positive for the region). While 2003 is
expected to be a relatively flat to stable year for the economy, conditions are expected to improve
locally as the national economy (hopefully) moves forward in 2004+.
The South submarket of San Diego has become a more attractive area to reside in the last five
years with several well-designed master planned communities in development and relatively
affordable home prices. One of the main drivers of this region is affordability. Home prices have
increased in South County, but the submarket's 2003 (IQ) median new-detached median home price
of $456,130 is still below the countywide median of $493,750. This comparison is somewhat
misleading because new housing priced under $500,000 is largely unavailable in other areas of San
Diego County (median home prices exceed $500,000 in the Inland North and $620,000 in the Coastal
North area). The availability of new detached homes in the $400,000s in South County influences
the county median home downwards (the county median would be even higher without the large
numbers of more affordable South County home sales in the mix). In the North County, similar sized
homes are priced $75,000 to $100,000 or more higher than South County options.
Most of Otay Ranch Village Six-McMillin future product is in the under $500,000 price
categories and the product program also includes for-sale condominiums priced under $350,000.
Condominiums are selling well in South County as a relatively affordable alternative to increasingly
expensive detached housing.
While the South County area is historically more affordable, home prices are normalizing
somewhat, at least in the eastern Chula Vista area as this area attracts more buyers from outside the
area and as the area develops a larger executive housing market. In the past year, the move-up and
executive housing segment has been one of the strongest in South County with strong sales for
housing priced over $500,000 (this segment represented 172 sales in First Quarter 2003). Home
appreciation and interest rates are enabling households to trade up at a time that some larger lot,
executive housing projects are being developed in communities like Rolling Hills Ranch, Eastlake
(Woods, Vistas) and Otay Ranch. As the area matures, it is supporting a more diverse housing
product, from rentals to large custom homes in appropriate locations.
Residential growth in the southern portion of San Diego County, and specifically in the
eastern Chula Vista area, will continue. County new home sales will continue to shift to the South
County submarket because of its relative affordability and large supply of developable land.
Established areas like Sun bow, the first Otay Ranch component (Villages One and Five) and the first
phase of Lomas Verdes are now nearing build out and projects to the south of Olympic Parkway
(Villages Six and Eleven) and further east towards the mountains (San Miguel Ranch, Rolling Hills
Ranch, Eastlake) will continue to provide housing options.
B. Market Position in ¡ of the Otav Ranch Residential Products
The development plan for Otay Ranch Village Six-McMillin master planned community is
consistent with other housing being developed in the eastern Chula Vista area. Unlike Eastlake for
instance, which has an area of high-end homes on large lots in its current product array, the various
products in Village 6-McMillin are geared to the heart of the market, offering entry-level and 1110ve-
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DOCSOC\932761 v9\22245.0 140
CITY OF CHULA VISTA
CFD No. 2002- I (McMillin Otay Ranch Village 6)
December 17,2002
Page 3
up attached and detached housing products. McMillin is planning to build four of the five residential
products (all detached) and is very experienced in the market. Cornerstone, which built two attached
projects in the first phase of Lomas Verdes, will build the attached condo units in the second phase
area. Attached for-sale products are doing particularly well in the current South County housing
market as they offer a more affordable product alternative (detached housing is increasingly
$400,000+, with the exception of a few high-density (alley-loaded or courtyard cluster) detached
products in the upper $300,000s.
Positionin2
Following is a positioning analysis comparing competitive active projects with the planned
units in CFD No. 2001-2 (Otay Ranch Village Six-McMillin). McMillin provided us with pricing
estimates ranging from $270,000 to $500,000, with per product sales rates of 4.0 to 8.0 units per
month. Based on our evaluation of active of active projects, we provided updated pricing
conclusions as shown in Exhibit 1-5. These adjustments are appropriate given current market
conditions and price levels and in some cases are conservative (we did not review product plans,
feature levels and floorplans versus competitive options to better fine-tune pricing). Projects were
broken down into four categories.
Attached For-Sale Product
There is one parcel in Village Six-McMillin that will be developed with attached for-sale
homes. Cornerstone will develop 212 attached for-sale units ranging in size from 1, I 75 to 1,760
square feet (we assumed town home style units with garages). Our conclusion is for base prices
ranging from $275,000 to $325,000 and a project sales rate of 7.0 units per month. This pricing is
similar to current prices for attached for-sale products in Otay Ranch (Gold Rush) and Eastlake
(Summer Hill).
As summarized in Exhibit V-I, there are just four active attached for-sale projects in the
eastern Chula Vista (some others are being developed in the Otay Mesa area to the south). One
project, Tivoli Villas in Sunbow, is basically sold-out with just one unit left. The projects total 476
units, with 245 units sold to-date and 231 units remaining. The projects are selling well, with sales
rates of 6.81 to 7.46 sales per month. Gold Rush in Otay Ranch opened recently and sold the 24
units in the first phase upon release. The units in the active projects range from 1,032 to 1,686
square feet, with current pricing in the $260,000s to the $330,000s (Alicante and Tivoli Villas are
priced higher but are in view-oriented locations with distant ocean and city views).
Small Lot Detached For-Sale Products (under 4,000 Square Foot Lots)
McMillin will develop one parcel with 126 lots that have an average lot size of 4,000 square
feet (the project will be called Jasmine). The homes will have alley loaded garages and range in size
from 2,200 to 2,600 square feet. Our conclusion is for base pricing from $375,000 to $400,000 and a
sales rate of 8.0 units per month.
There are four detached for-sale projects with compact lot sizes under 4,000 square feet in the
eastern Chula Vista area, but with generally smaller lot sizes and unit sizes compared to the subject
units. Unit sizes range from 1,310 to 2,160 square feet and base prices currently range from the
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DOCSOC\93276! v9\22245.0 J 40
CITY OF CHULA VISTA
CFD No. 2002- I (McMillin Otay Ranch Village 6)
December 17, 2002
Page 4
$320,000s to the $380,000s. The projects include aIley-loaded products (Wi[d Iris) and courtyard
cluster style detached condos (Bella Sol, Sonora Ridge). As a category, this product segment is
selling particularly well, with per project sales rates of 7.65 to 11.37 units per month. Sales are also
strong for the next larger segment of products (4,000 to 4,999 square foot lots) at prices in the
$400,000s. There are three active projects averaging 6.74 sales per month. The proposed units will
have smaller lots and [ower base prices.
There is strong demand for affordable housing products in the market and detached solutions
are selling particularly well, albeit in higher density product types. The Jasmine units should sell
well.
Initial Move-up Products (5,000 Square Foot Lots)
There are two neighborhoods in McMillin - Village 6 with 5,000 square foot lots. Auburn
will offer 92 lots with units ranging from 2,600 to 3,000 square tèet and Sienna (which will be the
first project to open for sales) will have 163 lots with units ranging from 2,700 to 3,200 square feet.
The projects wiIl seIl concurrently, but wiIl offer some product differentiation. Our price conclusion
is for base prices of $430,000 to $475,000, with per project sales rates of 6.0 units per month. At the
recommended prices, the project is priced in-line with current prices for homes on similar lot sizes in
East1ake, Otay Ranch and San Miguel Ranch.
The 5,000 square foot lot category is one of the most active in the current market but many
projects are close to selling out (6 of the 8 are down to less than 20 units [etì). There are 8 active
projects, with 866 total units and 640 units sold to-date (226 remaining units). Among the active
projects, units range from 1,908 to 3,559 square feet, with prices from the $420,000s to the
$540,000s. The sales rates for the active projects range from 2.63 to 9.38 sales per month, with an
overaIl average sales rate of 6.16 sales per month.
Homes of this size are selling well in the current market given the home price appreciation
being realized by current homeowners and low interest rates. Growing families are taking the
opportunity to move up to new, larger homes in the same market area.
Move-up Products (6,000 Square Foot Lots)
The final·neighborhood in ViIlage Six-McMiIlin wiIl be on 6,000 square foot lots. Alca[a
will offer 101 lots with unit sizes ranging from 2,450 to 3,400 square feet. Our price conclusion is
for May 2003 base prices of $460,000 to $520,000, with a projected per project sales rates of 5.0
units per month. At the recommended pricing, Alcala is positioned in-line with projects in Otay
Ranch and San Miguel Ranch and is below projects in RoIling HiIls Ranch and Eastlake.
This lot category is also active, with numerous move-up projects selling. There are 7 active
detached projects, with 687 total units and 48 I units sold to-date (206 left). Unit sizes among the
active projects in this lot size category range from 2,238 to 3,837 square feet, with pricing from the
$470,000s to the [ow $600,000s. The sales rates of these projects range from 2.37 to 9.76 units per
month, with an overaIl average of7.23 units per month.
8-4
DOCSOC\932761 v9\22245.0 140
CITY OF CHULA VISTA
CFO No. 2002-] (McMillin Otay Ranch Village 6)
December 17, 2002
Page 5
Homes of this size are also selling well in the current market given the home price
appreciation being realized by current homeowners and low interest rates. Growing families are
taking the opportunity to move up to new, larger homes in the same market area.
C. Absorption Projection for the CFD No. 2001-2 Residential Products
A detailed buildout schedule was developed for the CFO No. 2001-2 development plan. The
detailed buildout schedule is shown in Exhibits I-I through ]-2.
Given the proposed product and pricing parameters, it is our conclusion that residential units
within CFO No. 2001-2 should be fully built-out in the 2003-2005 period. As projected, average
sales for all the units in Village Six-McMillin is +/-174 units per year. The following is a list of the
sales per year over the past five years for a few of the active South County master plans:
· Lomas Verdes (first phase) ~ ]45 to 46] sales per year
· Eastlake ~ 272 to 656 sales per year
· Sun bow ~ 173 to 309 sales per year
· San Miguel Ranch - 206 sales in the first year
· Rolling Hills Ranch - 200 to 300 sales per year
Peak sales of up to 363 sales per year are projected for Otay Ranch Village Six - McMillin in
the first full year of development (2004). We project that at peak the community will be selling
approximately five subdivisions at one time. In comparison, Otay Ranch as a whole has achieved
sales of 850 to 900 sales in the past two years with six to eight active detached projects. Eastlake has
achieved 503 sales in 2000 and 656 sales in 2001 and the Trails sold out. The tirst phase of the
Lomas Verdes master plan sold 145 homes in year one of development, 461 in year two and 337 in
year three. The three-year average was 3] 4 homes.
An annual average is somewhat misleading because the project will start selling in mid-year
and the last year (2005) is also a partial sales year. Our projection is for the 694 units in Village Six-
McMillin to sell out over a ten-quarter period, or two and a half years. The quarterly sales rate
averages 70 units per quarter. For comparison purposes, Eastlake sold 212 units in First Quarter
2003, Rolling Hills Ranch sold 52 units, San Miguel Ranch sold 92 units and Otay Ranch sold 85
units. Sun bow, with just two projects left, sold 68 units in First Quarter 2003.
Absorption Assumptions and Impact of Allocation System
The provision of needed infrastructure in step with new development is a critical policy for
the City of Chula Vista. The bonds for which this analysis was prepared will pay for needed
community infrastructure. The projected buildout of CFO No. 2001-2 will also necessitate other
infrastructure, including schools and parks.
B-5
DOCSOC\932761 v9\22245.0 140
CITY OF CHULA VISTA
CFD No. 2002-1 (McMillin Otay Ranch Village 6)
December 17,2002
Page 6
Concern about the pace of growth in the community led Chula Vista to impose a building
permit allocation system in April 2003 that will affect this project (among others). Builders in the
Village Six-McMillin area have agreed to a permit allocation (shown in Exhibit 1-2). For this
project, McMillin will be allocated 278 units between 4/1/2003 and March 31 st, 2004, 307 permits in
the second 12 months after that and 109 permits in the final 12 months.
Measuring the impact of the allocation system on sales or building schedules is tough at this
point. The allocation system allows a tonsiderable amount of development to take place and a
number of projects that are currently active are not impacted (most of these should build out in
2003). We projected likely permit issuance in Exhibit 1-2 assuming no allocation to compare it to the
allocation impacts. In either scenario, all of the permits are issued in the 2003-2005 period, but get
staggered out somewhat.
The most likely impact is that McMillin will release and sell phases as allowed and will only
"slow" rather than "stop" sales. Combined with a similar system impacting other competitive
projects, particularly in 2004 and beyond, the supply of homes in the next few years should basically
resemble that of the past few years. If housing supply is constrained or drawn out in the face of
strong demand, upward pressure on pricing will continue.
This buildout schedule assumes a smooth schedule of approvals processing, home
construction and infrastructure completion (no delays due to weather, construction worker shortages
or government delays in processing final maps, issuing permits per the allocation plan or reviewing
plans or approving any product changes).
8-6
DOCSOC\93276] v9\22245.0 140
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EXHIBIT 1-2
COMPARISON OF BUILDING PERMITS AND NEW HOME SALES
San Diego County, South County and Village 6 (McMillin-Lomas Verdes Spa II)
1980-2005
Year '" mg enmts ew ome aes eW.,aes
Ratio of Sales %of
SF MF TOTAL TOTAL to Permits TOTAL County'
1981 3,915 5,083 8,998
1982 3,735 3,767 7,502
1983 11,052 9,729 20.781
1984 12,3]8 20,862 33,180
1985 12,890 25,349 38,239
1986 16,585 27,545 44,]30
1987 15,466 15,143 30,609 14.253 47% 2.124 15%
1988 14,749 13.803 28,552 15,111 53% 1.388 9%
1989 10,856 7,854 18,710 10,425 56% 994 10%
1990 6,621 9,175 ]5,796 6,842 43% 762 1]%
1991 5,346 2,570 7,916 6.803 86% 677 10%
1992 3,762 2,297 6,059 5,816 96% 648 11%
1993 4,076 1,526 5,602 5,393 96% 621 12%
1994 5,247 ],688 6,935 6,013 87% 838 ]4%
1995 4,731 1,872 6,603 5,482 83% 822 15%
1996 5,8]6 1,052 6.868 6,063 88% 891 15%
1997 8,336 3,066 11,402 8,275 73% 1,103 13%
1998 9.561 2,984 12,545 8,413 67% 1,655 20%
1999 9,993 6,434 16,427 8,307 51'% 1,999 24%
2000 9,167 6,760 15,927 10,302 65% 2:698 26%
2001 9,326 6.324 15,650 9.212 59% 2,699 29%
2002 8.175 5,800 13,975 10,000 72% 2,800 28%
100mum , '. , "
.'\1aximum 16,585 27,545 44.130 15,111 96% 2,800 29%
Average 8,608 8,156 16,764 8.544 70% 1,420 16%
Median 8,336 6,324 13,975 8,291 69% !,049 14%
By Year, If Total New Home Sales Arc:
San Diego South Bay Lomas Verdes (SPA TI) Lomas Verdes SPA II CAPTURE
County Absorption ** (3) County South Bay
2002 10,000 3,000 Annual Sales
20()] 10,000 3,000 217 2.2% 7.2%
2(}()4 10,000 3,000 362 3.6% 12.1%
200S ]0,000 3,000 114 1.1% 3.80;;,
TOTAL b'-)J For Sale units only
362 3.6% 12.1%
231 2.3% 7.7%
SOURCE: (I) Construction Industry Research Board; (2) 1l1e Meyers Group; (3) Estimated for-sale absorption per Exhibit [_I
B-8
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105 units
50/ml1ll1
""""'I!J-R-4-6
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Con(jnental Homes
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(EasllakeVistas)
Fieldslone
5,000 sflots: New
.........OldCreek
(Rollingl-lillsRanch)
Continental Hornes
6,OOOsflo1S: 1421 sls/mo
___Loreto
(San Miguel Ranch)
Shea Homes
6,500 sf lots: 156] sls/mo
.........Marirosa
(OtayRanch)
Oakwood Development, [nc
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---.- Suiter Creek
(O(ayR,u1ch)
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(O!ayRal1ch)
Oakwood Developmenl
5,000 sf lots; New
Exhibit 1-8
COMPETITIVE NEW HOME MARKET POSITIONING (5,000+ SF LOTS)
South County Submarket Select Master Planned Communities
August 2002
ey:
GREEN"" Eastlake
TURQOISE "" Rolling Hills
Ranch
RED = San Miguel Ranch
BLUE", Olay Ranch
GRAY", Sunbow
2,200
2,400
2,600 2,800 3,000
Unit Size (SF)
3,200
3.400
3,600
DOCSOC\932761 v9\22245.0 140
B-]4
APPENDIX C
APPRAISAL REPORT
C-l
DOCSOC\932761 v9\22245.0 140
SUMMARY APPRAISAL REPORT - COMPLETE APPRAISAL UPDATE
COMMUNITY FACILITIES DISTRICT NO. 2001-2
Portions of Village Six of Otay Ranch
(Planning Areas R-l, R-3, R-4, R-6 and R-I0)
City of Chula Vista
San Diego County, California
(Appraiser's File No. 2003-73)
Prepared For
City ofChula Vista
276 Fourth A venue
Chula Vista, California
Prepared Bv
Bruce W. Hull & Associates, Inc.
1056 E. Meta Street, Suite 202
Ventura, California 93001
(805) 641-3275
(805) 641-3278 [fax]
115 E. Second Street, Suite 100
Tustin, California 92780
(714) 544-9978
(714) 544-9985 [Fax]
C-2
DOCSOC\932761 v9\22245.0 140
May 23, 2003
Mr. George Krempl
Deputy City Manager
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Reference:
Community Facilities District No. 2001-2 - Update Appraisal
Portions of Village Six of Otay Ranch
Planning Areas R-I, R-3, R-4, R-6 and R-10
City of Chula Vista
San Diego County, California
Dear Mr. Krempl:
At your request and authorization, we have prepared an appraisal of the property within
Community Facilities District No. 2001-2 ("CFD No. 2001-2"). CFO No. 2001-2 encompasses a
proposed 694-residential unit development within a portion of Village 6 located in the master
planned community of Otay Ranch in Chula Vista. The 694 residential lots are located within five
planning areas. One planning area has been sold to a merchant builder while the majority of the
remaining four planning areas have been sold to various entities that are all associated with the
master developer, McMillin Otay Ranch, LLC.
This appraisal report is an update to a previous report undertaken as a result of the approval
of a traffic monitoring agreement, which places a cap on building permits on both an annual and per
project basis over the next three years, beginning in April 2003. The Monitoring Agreement was
approved by the City of Chula Vista in April 2003. The subject property is included in this
Monitoring Agreement.
We have valued the fee simple estate for the property subject to the CFD No. 2001-2 special
tax bonds. The property has been graded with the majority of the utilities installed and some streets
paved. This appraisal report is based on the special assumption that the property is enhanced by the
improvements and/or benefits that are to be funded by the CFO No. 2001-2 special tax bonds.
We have estimated the values for the property as follows:
Cornerstone Ownership
Master Oeveloper Ownership
$11,775,000
$61,725,000
Aggregate Value
$73,500,000
These values are stated subject to the limiting conditions, special assumptions, and appraisers'
certification as of May 1,2003.
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DOCSOC\932761 v9\222450 140
Mr. George Krempl
City of Chula Vista
May 23, 2003
Page Two
This report is also subject to the following special assumptions:
I) That the reported value takes into consideration the improvements and/or benefits to be
financed by City of Chula Vista Community Facilities District No. 2001-2.
2) That no environmental or moratorium issues exist, which would slow or thwart
development of the site to its highest and best use.
3) That the cost estimates as provided by the master developer are accurate and complete.
4) That the three traffic enhancement projects that are a part of the City of Chula Vista
Monitoring Agreement ("Monitoring Agreement") are completed in a timely manner.
This report is defined as a Summary Appraisal Report - Complete Appraisal, and is intended to
comply with the reporting requirements set forth under Standards Rule 2-2(b) of the Uniform
Standards of Professional Appraisal Practice (USP AP) effective January 1, 2003 for a Summary
Appraisal Report. As such, it presents only summary discussions of the data, reasoning, and
analyses that were used in the appraisal process to develop the appraiser's opinion of value.
Supporting documentation concerning the data, reasoning, and analyses is retained in the
appraiser's file. The depth of discussion contained in this report is specific to the needs of the
client. The appraiser is not responsible for unauthorized uses of this report.
The following narrative Summary Appraisal Report sets' forth the data and analyses upon which
our opinion of value is, in part, predicated.
Respectfully submitted,
BRUCE W. HULL & ASSOCIATES, INC.
&~
/J!f:tð ßM
Kitty S. Siino, MAl
State Certified Genera]
Real Estate Appraiser (AG004793)
Bruce W. Hull, MAl
State Certified General
Real Estate Appraiser (AG004964)
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DOCSOC\932761 v9\22245.0 140
ASSUMPTIONS AND LIMITING CONDITIONS
1. This Summary Appraisal Report is intended to comply with the reporting requirements set
forth under Standard Rule 2-2(b) of the Uniform Standards of Professional Appraisal Practice
for a Summary Appraisal Report. As such, it might not include full discussions of the data,
reasoning, and analyses that were used in the appraisal process to develop the appraiser's
opinion of value. Supporting documentation concerning the data, reasoning, and analyses is
retained in the appraiser's file. The information contained in this report is specific to the
needs of the client and for the intended use stated in this report. The appraiser is not
responsible for unauthorized use of this report.
2. No responsibility is assumed for legal or title considerations. Title to the subject property is
assumed to be good and marketable unless otherwise stated in this report.
3. The property is appraised subject to the easements of record, the CFD No. 2001-2 special tax
lien, and as if free and clear of any other liens and/or encumbrances.
4. Responsible ownership and competent property management are assumed unless otherwise
stated in this report.
5. The information furnished by others is believed to be reliable. However, no warranty IS
given for its accuracy.
6. All engineering is assumed to be correct. Any plot plans and illustrative material in this
report are included only to assist the reader in visualizing the property.
7. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or
structures that render it more or less valuable. No responsibility is assumed for such
conditions or for arranging for engineering studies that may be required to discover them.
8. It is assumed that there is full compliance with all applicable federal, state, and local
environmental regulations and laws unless otherwise stated in this report.
9. It is assumed that the property is in compliance with all applicable zoning and use regulations
and restrictions, unless nonconformity has been stated, defined, and considered in this
appraisal report.
10. It is assumed that all required licenses, certificates of occupancy, and other legislative or
administrative authority from any local, state, or national governmental or private entity or
organization have been or can be obtained or renewed for any use on which the value
estimates contained in this report are based.
II. Any sketch contained in this report may show approximate dimensions and is included only
to assist the reader in visualizing the property. Maps and exhibits found in this report are
provided for reader reference purposes only. No guarantee as to accuracy is expressed or
implied unless otherwise stated in this report. No survey has been made for the purpose of
this report.
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DOCSOC\932761 v9\22245.0 140
12. It is assumed that the utilization of the land and improvements is within the boundaries or
property lines of the property described, and that no encroachment or trespass exists unless
otherwise stated in this report.
13. The appraiser is not qualified to detect hazardous waste and/or toxic materials. Any
comment by the appraiser that might suggest the possibility of the presence of such
substances should not be taken as confirmation of the presence of hazardous waste and/or
toxic materials. Such determination would require investigation by a qualified expert relating
to asbestos, urea-formaldehyde foam insulation, or other potentially hazardous materials that
may affect the value of the subject property. The appraiser's value estimate is predicated on
the assumption that there is no such material on or in the property that would cause a loss in
value unless otherwise stated in this report. No responsibility is assumed for any
environmental conditions, or for any expertise or engineering knowledge required to discover
such conditions. The appraiser's descriptions and resulting comments are the result of the
routine observations made during the appraisal process.
14. Unless otherwise stated in this report, the subject property is appraised without a specific
compliance survey having been conducted to determine whether the property is in
conformance with the requirements of the Americans with Disabilities Act. The presence of
architectural and communications barriers that are structural in nature and would restrict
access to the property by disabled individuals may adversely affect the property's value,
marketability, or utility.
15. Any proposed improvements are assumed to be completed in a good workmanlike manner in
accordance with the submitted plans and specifications.
16. The distribution, if any, of the total valuation in this report between land and improvements
applies only under the stated program of utilization. The separate allocations for land and
buildings must not be used in conjunction with any other appraisal, and such allocations are
invalid if so used.
17. This report may not be used for any purpose by any person other than the party to whom it is
addressed without the written consent of the appraiser, and, in any event, only with proper
written qualification and in its entirety. Permission is given for this appraisal to be published
as a part of the Official Statement or similar document for the bonds to be issued by
Community Facilities District No. 2001-2.
18. No portion of the contents of this report shall be conveyed to any person or entity, other than
the appraiser's or firm's client, through advertising, solicitation or public relations materials,
news, sales, or other media without the written consent and approval of the author,
particularly as to valuation conclusions, the identity of the appraiser or firm with which the
appraiser is connected, or any reference to the Appraisal Institute or MAl. Furthermore, the
appraiser and firm assume no obligation, liability, or accountability to any third party. If this
report is placed in the hands of anyone but the client, client shall make such party aware of
all the assumptions and limiting conditions of the assignment.
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DOCSOC\932761 v9\22245.0 140
SPECIAL ASSUMPTIONS
I. That the reported value takes ioto consideration the improvements financed and/or benefits
received to be financed by CFD No. 2001-2.
2. That no environmental or moratorium issues exist, which would slow or thwart development
of the site to its highest and best use.
3. That the costs provided by the master developer are accurate and complete.
4. That building permits are available to the projects within CFD No. 2001-2 in accordance with
the schedule currently in place under the City of Chula Vista Monitoring Agreement.
PURPOSE OF THE APPRAISAL
The purpose of this Summary Appraisal Report is to provide the appraiser's best estimate of
market value of the fee simple estate for the subject property, subject to the CFD No. 2001-2 special
tax lien, which encompasses the five residential planning areas of Village Six within the master
planned community of Otay Ranch, located in Chula Vista, California. The master developer is
McMillin Otay Ranch LLC ("McMillin"). The lands covered by CFD No. 2001-2 consist of
approximately 215 gross! acres and are proposed for 694 residential units. All of the property has
been graded with the major infrastructure complete. The majority of the utilities are installed and
some internal streets are paved. In the case at hand, the market value of the subject property is
determined taking into consideration the special tax lien ofCFD No. 2001-2.
THE SUBJECT PROPERTY
The subject property consists of approximately 215 gross acres divided into five residential
planning areas. ln addition there ·is a private high school site and a community purpose site,
however, these are not included within this appraisal report. The subject property is designated for
482 detached residential units and 212 attached dwelling units.
McMillin has sold the 212 unit attached site to a merchant builder and the remaining four
planning areas are either sold or under option to related entities of McMillin. The planning areas are
detailed on the following page.
Builder Minimum
Planning Area Units Lot Size Project Name/Building Entity
R-I 101 6,400 sf Mandalay/McMillin Mandalay 101, LLC, LLC
R-3 (p) 87 5,200 sf Sienna/McMillin Sienna II, LLC
R-3 (p) 76 5,200 sf McMillin Otay Ranch LLC (under option to
Sienna/McMillin Sienna II, LLC)
R-4 92 5,200 sf Auburn Lane/McMillin Auburn Lane II, LLC
R-6 126 4,000 sf Jasmine/McMillin Jasmine 126, LLC
R-IO 212 Attached N/A/Cornerstone Communities LLC
Total 694
] TM McMillin ütay Ranch Village Six includes lots designated for school, community purpose and all road areas.
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DOCSOC\932761 v9\22245.0 140
DEFINITIONS
Market Value
The term market value as used in this appraisal report is defined by Federal Register, Vol. 55,
No. 165, Friday, August 4, 1990, rules and regulations, 12 C.F.R. part 34.42(t) as:
"The most probable price in terms of money which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the buyer
and seller, each acting prudently, knowledgeable and assuming the price is not
affected by undue stimulus. Implicit in this definition is the consummation of a sale as
of a specified date and the passing of title from seller to buyer under conditions
whereby:
1) buyer and seller are typically motivated;
2) both parties are well i'!formed or sell advised, and acting in what they
consider their own best interest;
3) a reasonable time is allowed for exposure in the open market;
4) payment is made in terms of cash in Us. dollars or in terms of financial
arrangements comparable thereto; and
5) the price represents the normal consideration for the property sold unaffected
by special or creative financing or sales concessions granted by anyone
associated with the sale. "
Finished Lot
The term finished lot is defined as:
"A parcel which has legal entitlements created by a recorded subdivision map, whose
physical characteristics are a fine graded level pad with infrastructure contiguous to
each individual lot, asphalt paved road, and the necessary utilities. This term
assumes the payment of all applicable development fees with the exception of
building permit and plan checkfees. "
INTENDED USE OF THE REPORT
It is the appraiser's understanding that this Summary Appraisal Report is intended to assist
the client, the City of Chula Vista, in the issuance of special tax bonds by CFO No. 2001-2 secured
by all taxable property within CFO No. 2001-2. It is the appraiser's understanding that no other
intended users of this report exist.
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DOCSOC\932761 v9\22245.0 140
OWNER OF RECORD
The table below shows the ownership for the various planning areas within the subject
property.
Planning Land Number of
Area Use Units/Lots SPA Plan Ownership
R-I SFD 10] Single-family McMillin Mandalay 10 I, LLC, a Delaware
limited liability company
R-3 (p) SFD 87 Single-family McMillin Sienna II, LLC, a Delaware
limited liability company
R-3 (p) SFD 76 Single-family McMillin Otay Ranch, LLC, a Delaware
limited liability company
R-4 SFD 92 Single-family McMillin Auburn Lane II, LLC, a Delaware
limited liability company
R-6 SFD 126 Single-family McMillin Jasmine 126, LLC, a Delaware
limited liability company
R-IO SF A 212 Multi-Family Cornerstone Communities LLC
Total 694
THREE YEAR SALES HISTORY
We have reviewed the agreement of purchase and sale plus escrow instructions between
McMillin Project Services, Inc. (buyer) and West Coast Land Fund L.P. (seller) for the subject
property and additional lands. The agreement is dated December 23, 1996. The purchase pertained
to a total estimated 1,097 acres. The purchase price was $13,800,000 for the subject property and
additional lands.
There are have been five sales, one to a merchant builder and the remaining four planning
areas have been sold or are under option to related entities of McMillin. The sales for the subject
property are detailed as shown on the following page.
Planning Area R-l (101 detached lots with a minimum lot size of 6,400 square feet) sold to
McMillin Mandalay 10 I, LLC based on a finished lot price of $126,000. This transaction closed in
mid-November 2002. This finished price included $13,760 per lot of impact fees to be paid. The
contract was negotiated in November 200 I.
Planning Area R-3 (163 detached lots with a minimum lot size of 5,200 square feet) is being
sold to McMillin Sienna II, LLC in two phases, the first phase of 87 lots closed in November 2002.
The documents based the purchase price on a finished lot price of $]2] ,000. The finished price
included $13,760 per lot of impact fees to be paid. The contract was negotiated in November 2001.
The second phase of 76 lots is scheduled to close in November 2003 for the same finished lot price.
Planning Area R-4 (92 detached lots with a minimum lot size of 5,200 square feet) sold to
McMillin Auburn Lane II, LLC based on a finished lot price of $121 ,000. This transaction closed in
mid-November 2002. This finished price included $13,760 per lot of impact fees to be paid. The
contract was negotiated in November 2001.
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DOCSOC\932761 v9\22245.0 140
Planning Area R-6 (126 detached lots with a minimum lot size of 4,000 square feet) sold to
McMillin Jasmine 126, LLC based on a finished lot price of $105,000. This transaction closed in
mid-November 2002 per the seller. The finished price included $13,760 per lot of impact fees to be
paid. The contract was negotiated in November 200 I.
Planning Area R-IO (212 attached units) sold to Cornerstone Communities LLC for $66,000
per unit on October 30, 2002 per the seller. This price was for the property in a superpad condition.
This contract was negotiated in August 2002.
EFFECTIVE DATE OF VALUE
Opinions and matters expressed herein are stated as of May 1,2003.
DATE OF REPORT
The date of this report is May 23, 2003.
PROPERTY RIGHTS APPRAISED
The property rights appraised are the fee simple rights subject to easements of record and the
special tax lien ofCFD No. 2001-2.
APPRAISAL DEVELOPMENT AND REPORTING PROCESS
The purpose of this Summary Appraisal Report is to provide the appraiser's best estimate of
market value for the subject property, which is proposed for the development of 694 residential units.
The valuation for the subject property will take into consideration the special tax lien of CFD
No. 2001-2 and the improvements and/or credits and benefits to be funded by CFD No. 2001-2. In
addition, the valuation will take into account the Monitoring Agreement. It is a special assumption
of this report that building permits are available to the projects within CFD No. 2001-2 in accordance
with the schedule currently in place under the Monitoring Agreement (further discussion under City
of Chula Vista Monitoring Agreement Section later within this report).
In appraising the subject property, the value estimate will be based on the property's highest
and best use conclusion and will utilize both the Sales Comparison Approach to value and a
Discounted Cash Flow Analysis. The subject property is under construction. The master developer
has sold one of the planning areas to a merchant builder and the remaining four planning areas have
been sold or under contract to related entities of McMillin. In valuing the property, the most
appropriate unit of comparison for each property type will be determined. Next, due to McMillin
being the managing partner of four of the planning areas, a Discounted Cash Flow Analysis will be
applied for these ownerships. This will include the detennination of an absorption period and the
costs associated with selling off the remaining lots. As the subject property is currently vacant land,
the income and cost approaches do not apply.
The summary appraisal will be presented in the following format:
. Description of General and Immediate Areas
. Discussion of the San Diego County Housing Market
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DOCSOC\932761 v9\22245.0 140
· Description of the Subject Area's Sectional Planning Area Plan
· Discussion of Community Facilities District No. 2001-2
· Description of the Subject Property
· Highest and Best Use Analysis
· Valuation Analysis and Conclusions
· Appraisal Report Summary
As stated, in valuing the subject property, we will use the Sales Comparison Approach to
Value. This approach compares similar properties that have recently sold or are currently listed to the
subject property. The approach is defined as:
"...an appraisal procedure in which the market value estimate is predicated upon
prices paid in actual market transactions and current listings, the former fixing the
lower limit of value in a static or advancing market (price wise), and fixing the
higher limit in a declining market; and the laller fixing the higher limit in any market.
1t is a process of analyzing sales of similar, recently sold properties in order to derive
an indication of the most probable sales price of the property being appraised. "
For the single-family residential product, the market considers the appropriate unit of
comparison on a finished lot condition. As the majority of the property is not yet completed to a
finished lot condition, after a finished lot value is determined for the various products, the costs to
develop the properties to their finished lot condition need to be addressed. That is, if a single-family
detached planning area is partially finished and the most appropriate unit of comparison is on a
finished lot basis, the costs remaining to be spent on the property to bring the site to a finished
condition need to be considered. For the multi-family residential sites, the most appropriate unit of
comparison is on a per unit basis in a super-pad condition.
Due to the single ownership of four planning areas by McMillin related entities, a Discounted
Cash Flow Analysis needs to be considered to arrive at a bulk value for the property. The
Discounted Cash Flow Analysis is defined as:
"The procedure for valuing undeveloped acreage that involves discounting the cost
of development and the probable proceeds from the sale of developed sites,,2
First, the retail value of the finished lots will be determined, then the development costs will
be considered, followed by an estimated absorption period for the selling off of the lands. Next,
marketing and sales costs will be addressed, along with the costs associated with the carrying of the
property over the absorption period. Finally, a discount rate that accounts for the risk associated with
the development of the lots, the time value of money, and a profit due to the developer will be
considered.
1 The Dictionary of Real Estate Appraisal, AREA 1989
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DOCSOC\932761 v9\22245.0 140
The due diligence of this appraisal assignment included the following.
\) Compilation of certain demographic information, and then relating such data to the
subject property to determine a feasibility/demand analysis.
2) Interviews with the property owners to obtain available information on the subject
property. The interviews included reviewing cost estimates to determine their
validity.
3) A review of the Otay Ranch Village Section Planning Area Six Plan Land Use
Document.
4) A review of the Marketing Report and Absorption Study prepared by The Meyers
Group Consulting Services, dated May 2\, 2003 that covers the subject property.
This report indicates an estimated absorption period for selling the master developer-
owned lands to individual home buyers.
5) A review of a summary of the subject sales provided by the master developer for the
recently closed sales and current escrows of planning areas to merchant builders
(including related entities to the master developer).
7) A review of a preliminary title report prepared by First American Title Insurance
Company dated August 22, 2002.
8) A physical inspection of the subject property including the current status of
development and unique features.
9) Reviewed available information provided by the City in regards to the Monitoring
Agreement.
10) An extensive review of the total cost estimates for the project; the costs spent to date,
and the remaining costs to develop the property to saleable condition (i.e., for single-
family detached lots to a finished lot and for multi-family sites to a superpad
condition).
11) An extensive search of the area for relevant comparable transactions, both sales and
offerings. Interviews with appropriate parties were then conducted to ascertain
pertinent information relating to each transaction.
C-12
DOCSOC\932761 v9\22245.0 140
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C-13
DOCSOC\932761 v9\22245.0 140
DESCRIPTION OF GENERAL AND IMMEDIATE AREAS
General Surroundings
The subject property is located in the southern portion of San Diego County (the "County").
The County is located in the southwestern corner of the State of California, and borders Mexico to
the south, Imperial County to the east, and Riverside and Orange Counties to the north. The Pacific
Ocean is its western border. The County encompasses approximately 4,250 square miles and
includes terrain from ocean beaches to foothills to mountains and deserts. The San Diego region has
experienced faster growth rates than most of California during the past several decades. According
to the California Department of Finance, the July 1,2002 population for the County was 2,935,100.
The City of Chula Vista (the "City") incorporated in 1911 and encompasses an estimated
50.1 square miles. The City is located 7 miles southeast of downtown San Diego, with easy access to
the County seat. During 1997, the City annexed 9,100 acres, the largest annexation in County
history. This annexation included the subject area.
Population
The County has experienced an increasing growth pattern for several decades. Between
January 1990 and January 2002, the population grew from 2,480,072 to 2,911,300, or an annual
average of approximately 1.4 percent. However, between January 1998 and January 2000, the
population increased by 116,683 persons, or an annual average of approximately 2.1 percent. This
two-year increase is due in part to major growth in the South Bay area (in which the subject property
is located). Between July 1,2001 and July 1,2002 the population increased 1.85 percent, suggesting
a slight slowdown from the previous two years, however an increase over the average annual
increase over the past 12 years.
Based on census data, between January 1990 and January 2000, the City population grew
from 135,163 to 174,319, which equates to an average annual growth rate of2.6 percent. However,
between January 1998 and January 2002 the average annual increase was 4.29 percent based on the
January 2002 population of 190,900. This figure is significantly higher than the average over the
decade as a whole. The subject area has grown at a substantially higher rate than the overall County
during this period.
The population growth over the past decade in both the County and the City illustrates the
results of the economic recession that affected Southern California during 1990 to 1994. The growth
in area population since January 1998 depicts the economic growth in the region. The population in
the City reflects the recent annexations and new development. Current projections are for the
population growth rate to continue to exceed 2 percent per year, which is considered to be a healthy,
sustainable rate of growth.
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Economics
Per the State of California Employment Development Department, the unemployment rate
for the County as of March 2003 was 4.3 percent. Following is a chart showing unemployment rates
for other relevant areas.
Jurisdiction
Los Angeles County
Riverside/San Bernardino
County
Orange County
San Diego County
State of California
United States
As of
03/03
03/03
Unemployment Rate
6.3%
5.8%
03/03
03/03
03/03
03/03
3.8%
4.3%
6.8%
6.2%
Source: State of California E.D.D.
As shown, the County has a favorable unemployment rate compared to most surrounding
counties, the State of California, and the nation as a whole. Compared to January 2003,
unemployment rates in the subject and surrounding counties have decreased slightly from 4.4
percent. Typically Southern California follows the nation and overall state in both entering a
recession and coming out of a recession, although the area had been resilient in the last mild
downturn of 200 I.
As stated, the economic climate in the United States as a whole slowed in the latter part of
200 I. The tragic events of September 11, 200 I sent the national economy farther into a downward
turn. The Southern California economy has been strong, particularly in the housing market. At the
beginning of 2002 the indications were that the national economy was entering a recovery mode from
the mild recession of 2001. Throughout 2002 however, the recovery was slow to tepid recovery.
Thus far in 2003 the stock market has seen volatility with economic statistics providing a mixed
message for the economy.
Housing statistics appear to remain strong for certain areas within Southern California,
including San Diego and Orange Counties. The effects of the events of September 11 and other
terrorist activities on real estate values in these areas did not appear to have a lasting affect. We have
interviewed several builders in Southern California, including those with active projects in the San
Diego market. Although a slowdown occurred in the housing market during the months of
September and October 200 I, the lowering of interest rates appears to have buyers in the market with
strong sales once again in both 2002 and thus far in 2003.
Within the City, economic growth in the last part of the 1990s saw a significant increase. In
1998, Raytheon, a defense electronics firm, opened a 100,000 square foot íàcility that employs 250
workers. Solar Turbines leased 92,000 square feet, and B.F. Goodrich Aerospace announced plans to
move jobs from its Arkansas operation to Chula Vista. Attractions within the City include the ARCO
U.S. Olympic Training Center, the Coors Amphitheatre, Knott's Soak City U.S.A., the Chula Vista
Yacht Harbor, the National Wildlife Refuges and the Chula Vista Nature Center.
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Housing
The 1990-94 recession had an impact on construction starts. This downturn was represented
by lower housing starts and higher unemployment rates. The resulting factors of lower growth,
higher vacancies, and higher unemployment had major impacts on real estate development in most of
Southern California during that period. Following is a table depicting housing growth trends in the
County.
Years
Number of Hou.yes
Constructed
2000 - 2003
1995 - 1999
1990 - 1994
1985 - 1989
1980 - 1984
1970 - 1979
1950 - 1969
1949 or prior
59,170'
53,4 78
42,300
146,421
89,628
258,234
299,055
94,065
* Based on YTO annualized estimates.
This chart shows the slowdown from the early 1990s recession, along with the increase
toward the end of the 1990s. Between 1996 and 1997, there was a 28 percent increase in new homes;
between 1997 and 1998 there was a 7 percent increase; and between 1998 and 1999 there was a 35
percent increase. This growth pattern is indicative of the current positive growth in the County's
economy. In the City, there were 3,642 new residential building permits issued between the years
1990 and 1994 and 6,561 new residential building permits issued between the years 1995 and 1999.
In 2000 through 2003 (estimated based on YTD annualized amounts) there will be 11,306 new
residential building permits issued in the City of Chula Vista.
The City has recently approved a Monitoring Agreement that links the amount of building
permits within certain portions of the City to the construction of certain roadway infrastructure. This
Monitoring Agreement allows for a certain number of new residential units to be constructed within
several master planned communities located in the City over the next three years. This Monitoring
Agreement will be discussed in detail later within this report.
Transportation
Four major interstate freeways bisect the County: Interstate 5, Interstate 15, Interstate 8, and
Interstate 805. Interstate 5 is the major north/south arterial throughout the State of California. It
generally follows the coastal route throughout the County. Interstate 15 is also a north/south arterial;
however, it is located inland in the more mountainous regions of the County. Interstate 8 provides
east/west access through the County, while Interstate 805 generally parallels Interstate 5 beginning
near Del Mar, providing an inland route south to near the Mexican border.
Both Interstate 5 and Interstate 805 bisect the City. Access to the subject property is via
Interstate 805 to Olympic Parkway, then east approximately three miles to the northern border ofthe
subject property. There will be major on/ofT ramps on Interstate 805 at Olympic Parkway. Future
access will be via SR 125 to Olympic Parkway near the subject property. SR 125 will provide
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DOCSOC\932761 v9\22245.0 140
enhanced access to the subject property in the near future. Plans for SR 125 have begun, with
financing currently being obtained. Currently the design-build contractor estimated SR 125 would be
open by the end of 2005. There has previously been some litigation from environmental groups
attempting to stop construction of SR 125. It is the appraisers' understanding that an agreement has
been reached with the environmental groups and no further litigation is expected.
The County is well serviced by Amtrak and Metrolink. In addition, downtown San Diego
has a trolley which provides access around the downtown area and to the Mexican border. The San
Diego International Airport, located near downtown, also serves the County.
Conclusion
During the 1970s and 1980s, the County experienced substantial population growth, resulting
in significant residential, industrial, and commercial development. The recession of the early 1990s
had some dramatic impacts on the County as a whole; however, the long-term forecast is for
continued substantial growth for the County. As previously discussed, homebuilders have been
buying land and building homes at significant rates for the past six to seven years. It is our opinion
that current primary concerns (national economic uncertainty, rising unemployment and lower
consumer confidence) relate to economic cycles that are typical for the nation since the end of World
War II. Such growth and recession cycles have occurred at least six times in the last 55 years, with
both "boom" and "bust" portions of the cycle seeming longer in duration in recent years. There were
indications of an economic recovery for the nation as a whole at the beginning of 2002, however with
the volatility of the stock market and weakening dollar, the economic recovery slowed from what
was anticipated at the beginning of 2002. Thus far in 2003 there has been signs of recovery once
again; however, the impact of the recent war in Iraq and recent terrorist events does provide some
uncertainty. On a more micro level, most areas of the County, especially the housing market, have
not shown signs of slowing. In addition, the City has seen significant growth due to the recent
annexations, new commerce, new housing starts, and little slowdown in its economy. This has
prompted the City to approve the current Monitoring Agreement in an attempt to have growth
consistent with traffic infrastructure development.
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IMMEDIATE SURROUNDINGS
The subject property is located east of Interstate 805 approximately 2 y, miles and south of
Telegraph Canyon Road at the southeast corner of La Media Road and Olympic Parkway. Current
residential developments in the area include ütay Ranch, Lomas Verdes Rancho Del Rey, Sunbow,
Rolling Hills Ranch, San Miguel Ranch, and Eastlake. Lomas Verdes refers to the McMillin
developed portion of the Otay Ranch. The 1997 annexation of 9, I 00 acres of eastern Chula Vista
included the subject property. The subject property is bounded to the north by previously developed
villages of Lomas Verdes and by the Otay Ranch to the east and west. Undeveloped lands comprise
the area south of the subject property.
Within the newly developing area of eastern Chula Vista is the Coors Amphitheater, which
has attracted many popular entertainers. The Olympic Training Center along the shores of the Otay
Reservoir has also brought a measure of status to the South Bay region. The recent opening of
Olympic Parkway provides excellent access to both the Olympic Training Center and the subject
property.
The Otay Ranch lies within the approximate 37,S8S-acre Eastern Territories Planning Area of
the City of Chula Vista. The Eastern Territories Planning Area is bounded by Interstate 80S to the
west; San Miguel Mountain and State Route S4 to the north; the Otay Reservoirs and the Jamul
Foothills to the east; and the Otay River Valley to the south. The subject property, which is known
as portions of Village Six of the Otay Ranch is located in the center of the Eastern Territories
Planning Area. The subject property includes the McMillin owned portion of Village Six and is
adjacent to the McMillin Company's portion of Village 1 and Village S, which is almost built out.
The subject's surrounding area is made up of new and existing housing.
Existing shopping is available at retail centers in the master planned communities of Terra
Nova (located at Interstate 80S and East H Street - one exit north of Telegraph Canyon Road;
East/ake (east of the subject), and in Rancho del Rey, north of the subject.
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DOCSOC\932761 v9\22245.0 140
SAN DIEGO COUNTY HOUSING MARKET
In evaluating the San Diego County housing market, economic conditions such as job and
population growth need to be further addressed. Current economic conditions in San Diego County
support the development of all types of residential housing. Although the regional economy is
moderating from the heated pace of the past few years, the housing market has not seen a slowdown
at this time. Projections are for the housing market in the County to remain strong in the near- to
medium-term future. The nation's economy has been mixed. In early 200], the national economy
experienced slowing, but aggressive interest rate cuts by the Federal Reserve in the later part of 200 I
and the early part of 2002 attempted to "spark" the economy. The terrorist attacks of September I],
2001 provided further downward pressure for the economy. Thus far the economy for 2003 has been
steady although the tàllout from the recent Iraq contlict and recent terrorists events has yet to be
determined. Although the nation's economy experienced a short recession in 2001, the County's
economy has been strong (with the exception of the most recent month). Growth predictions for the
County are for 2 percent per year over the next few years.
Job growth in the County has slowed in recent months with April 2003 numbers at a negative
0.1 percent growth for the first time in 10 years. However the current negative growth remains at a
level above both the State's and the national average. Although the unemployment rate in the nation
is beginning to increase, the unemployment rate in the County is still near a record low. As of March
2003, unemployment in the San Diego region was 4.3 percent, compared to 6.8 percent in California
as a whole and 6.2 percent for the nation for the same period. The County's job rate exceeded
40,000 new jobs annually during the period from 1997 to 2000, with 48,000 new non-agriculture jobs
in 1997, over 51,000 new jobs in 1998,47,000 new jobs in 1999, and 43,000 new jobs in 2000. The
year 200 I ended with an increase of almost 24,600 new jobs in the County while 2002 ended with an
increase of 10, I 00 new jobs. Projections for 2003 are for a negative 650 new jobs in the region.
Long-term growth is estimated per SANDAG at an average increase of over 10,500 new jobs per
year between 2005 and 2010 and over 15,500 annual new jobs between 20 I 0 and 2020. Although
current year figures are lower than previous years, the long term job growth is a sign of a healthy
growing economy. According to the Center for the Continuing Study of the California Economy,
"San Diego is leading California's job growth into the next century and is one of the fastest growing
metropolitan areas in the nation."
The County is the second largest in the State of California, with a population of 2.91 million.
According to the California Department of Finance, the County population increased by 2.5 percent
in 1998, 2.1 percent in 1999, and 1.9 percent in 2000. This rate of growth is compared to a 1.6
percent population growth rate in California overall. The County population grew at an average of
46,350 new residents per year during the 1970s; 68,450 new residents per year during the 1980s; and
43,137 new residents per year in the 1990s. The year 200 I saw a population increase in the County
of 40,583 while 2002 saw an additional 36,760 new residents. Current estimates are for the County
to grow an average of 37,000+ new residents per year for the next five years.
The subject property is located in the South County submarket at the southernmost part of the
County and includes the incorporated communities of National City, Imperial Beach, and Chula
Vista, as· well as portions of the City of San Diego and unincorporated San Diego County. Per The
Meyers Group's San Diego County Market Analysis and Absorption Projection for CFD No. 2001-2,
the South County submarket is projected to add 6,508 of the 37,000+ new residents per year for the
County. Also, according to The Meyers Group, this submarket increased 10,500 persons per year in
the 1980s and 5,300 persons per year in the 1990s. The South County area also has the greatest
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DOCSOC\932761 v9\22245.0 140
amount of undeveloped land in the County, which suggests that the growth in population will
continue. Per the San Diego Association of Governments (SANDA G), nearly 40 percent of the land
in South County is vacant and zoned for residential or commercial development.
With strong employment in the County, building permits are striving to keep up with
demand. In 1994, employment gains began to outpace residential building permit issuance, reaching
a peak of 4.2 I jobs per residential permit in 1997 and 1998 (the highest level in the past 15 years).
Currently, the employment/permit ratio is 0.49 jobs per permit, indicating a balancing market with
supply not yet exceeding demand. Within the City, building permits have nearly doubled since 1998
due to the large number of new master-planned communities. There were 2,640 residential units
permitted in 2000. Of th,is total, 1,776 were for detached units and 864 were for attached units.
Through year-end 200 I, 3,525 building permits were issued for residential development in the City.
Of this total, 2, 184 were for detached and 1,341 were for attached. This equates to a 23 percent
increase in detached building permits and a 55 percent increase in attached unit building permits. In
2002,2,250 new building permits were issued for residential development with 1,749 for detached
units and 50 I for attached units. Using actual building permits through the first four months of 2003
on an annualized basis, the City is on track to issue 2,89 I building permits, which is less than 200 I,
however higher than 2002 when product was limited. It should be noted that these projections are on
an annualized basis from the first four months of 2003, which was prior to the current Monitoring
Agreement.
We have reviewed The Meyers Group San Diego County Market Analysis and Absorption
Projection for the subject CFD. New home sales in 200 I in the County overall were down II percent
while during the year 2000 new home sales were up 20 percent over 1999 totals. The year 200 I saw
8,962 new home sales in the County with the South Bay submarket capturing 30 percent of this total.
The year 2002 saw 11,059 new home sales in the County with the South Bay submarket capturing
25 percent. The first quarter of 2003 has seen 2,536 new home sales in the County with the South
Bay capturing 30.4 percent. The current capture rate of 30.4 percent is strong and partially due to the
South Bay market offering some of the lowest base price housing in the County.
Per The Meyers Group, the new, detached home average base price for the County from
January to March 2003 was $533,552; which is up 17.9 percent from the same period in 2002. These
same figures for the South Bay submarket were $450,844 between January to March 2003, up
34.3 percent from the previous year but still 15.5 percent lower than the County average. In 2001 the
South County detached average new home price exceeded $300,000 for the first time and has
continued to increase. For the first time during the first quarter of 2003 the South Bay sub-market is
not the lowest price sub-market in the County. The East County sub-market has an average new
home base price of $417,213, which is 7 percent lower than the South County average. However, the
East County residential market is much smaller than the South Bay sub-market with 36 new home
sales in the East County sub-market compared to 555 in the South Bay sub-market. These prices
indicate that the South Bay sub-market is a more affordable new home market than some other areas
of the County, however not the lowest priced area in the County.
Between January and March 2003, 16 percent of new detached home sales within the County
overall were in the over $700,000 price range; 34.3 percent were in the $500,000 - $699,999 range;
26.5 percent were in the $400,000 - $499,999 price range and 23.2 percent were in the under
$400,000 price range. South Bay sales figures have no sales in the over $700,000 price range;
3 I percent in the $500,000 - $699,999 range; 39.5 percent in the $400,000 - $499,999 range and
29.5 percent in the under $400,000 price range during the first quarter of 2003. There were no
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DOCSOC\932761 v9\22245.0 140
detached homes priced under $300,000 while attached townhomes and condominiums began
reappearing in the market. In the overall County during the first quarter 2003 there were 814
attached new home sales, which was up 63.8 percent from the previous year while there were 1,722
detached new home sales. Within the South Bay submarket, there were 217 attached new home sales
during the first quarter 2003 while there were 555 detached home sales during the same time period.
Given that detached homes priced under $300,000 have disappeared, the South County new home
market is shifting into the higher-priced homes.
Several apartment sites have been sold to apartment builders within the past few years. Only
a few apartments have been completed and opened. As of December 2001, the average rent level in
San Diego County was $1,082 per month, while the occupancy rate for the County overall was
95.8 percent. In the City of Chula Vista, the average rental rate is lower ($943 per month); however,
the occupancy rate is higher at 96.9 percent. The average rental rates at year-end 200 I are up
5.7 percent in overall San Diego County and 9.9 percent in Chula Vista over the past twelve months.
Vacancy rates are the lowest in the newer projects, which suggests that there has been a pent up
demand for new rental product in the County. This also suggests a need for rental units in the subject
area. Several new projects opened in the subject area in the past eighteen months. The projects have
been well received in the marketplace and lease-up of the projects is occurring. The absorption rates
are considered good, however the lease prices are slightly below what was proposed at time of
construction for these apartments.
The single-family detached residential market appears strong. The South County sub-market
has 45 current active projects. This translates to 35 active detached home projects and 10 attached
active projects. At the same time period in 2002 there were 37 active detached home projects and
2 attached active projects. At the end of 2001 there were 39 active detached projects and 3 attached
active projects. The current increase in attached product suggests the need for lower priced housing
in the subject's sub-market. The average sales rate for all currently active projects in the eastern
Chula Vista area is 5.59 units per month. In addition, development is underway on Villages Six of
Otay Ranch (McMillin ownership - subject property), Village Six of Otay Ranch (Otay ownership);
Eastlake Land Swap and Village Eleven ofOtay (Brookfield and Shea ownership). Currently, homes
are selling as they enter the market in each new project. The demand for new homes is high at all
price levels and prices continue to increase per The Meyers Group. All of the for-sale lots in the
near-term stage of development that have been released in Eastlake Woods and Vistas, Sunbow, San
Miguel Ranch, Rolling Hills Ranch, Village Six of Otay Ranch (both McMillin and Otay
ownerships) are either sold or committed to merchant builders. There are future master-planned
communities that will need to address environmental, infrastructure, and entitlement requirements
before land development can begin. As the subject property's development is nearing completion,
the timing appears to be good for entry into the strong residential market.
Interest rates have a significant effect on home sales. In an effort to stimulate the economy,
the Federal Reserve dropped interest rates several times during 2002, creating near-historic lows.
Current mortgage rates are less than 6.0%. This appears to be helping the residential market in the
subject area to remain strong. Lower interest rates create sales by making a higher mortgage
possible, enabling more people to purchase homes. Interest rates drastically affect the affordability
of new homes. The affordability index in the County as of late 2002 was 18 percent, compared to
32 percent in Southern California overall, and 56 percent in the nation. Thus far in 2003 the
affordability index is 12.8 percent for new homes with a fixed rate mortgage and 18.8 percent for an
adjustable rate mortgage. These County figures are below 2000, when the County had an
affordability index of 24 percent, Southern California was at 33 percent, and the nation was at
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DOCSOC\93276 ¡ v9\22245.0 140
53 percent. The similarity of the affordability indexes between 2000 and 2002 for the State and
Nation while prices over that same time period rose substantially appears to be a factor of the interest
rate reductions. These affordability rates compare to 1989 in the state and nation, when the County
had an 18 percent affordability index (same as 2002), Southern California had a 17 percent
affordability index (compared to 32%), and the nation had a 47 percent affordability index (compared
to 53%).
In trying to determine the affects of the terrorist attacks and recent conflict in Iraq on the San
Diego housing market, minimal conclusions can be reached. The market slowed during the last
quarter of 2001 but only slightly due to offsetting lower mortgage interest rates and the relatively
affordable home prices in the South County market. Fourth quarter sales rates are typically down 15
to 20 percent after the summer months. Thus, it is difficult to determine if the slowdown was
attributable to the September II th terrorist attacks or to a typical fourth quarter slowdown. The year
2002 did not indicate a detriment to the housing industry due to terrorist activities. The sales slow-
down was attributable to a limited supply. Thus far, 2003 has shown a varied residential market.
Sales are down 16.9 percent county wide, however, in the South Bay sales are up 0.5 percent over the
same period last year. Prices have increased 10.4 percent overall county wide and 21.9 percent from
same period sales in the South Bay sub-market. It has been suggested that the first quarter 2003
slow-down in sales is attributable to the recent war in Iraq, which created uncertainty for consumers.
With only weeks since the Iraq conflict being resolved, it is too soon to tell if the war in Iraq or other
terrorists events will have an effect on the County's residential market.
Within the subject property, there are 694 proposed units, including 212 attached units, which
have been sold to a merchant builder, and the remaining 482 lots which have been sold or are under
contract to McMillin related entities. Planning Area R-I is proposed for Mandalay (McMillin) with
an average home size of 3, I 00 square feet and projected price ranges from $450,000 to $500,000.
Planning Area R-3 is known as Sienna (a continuation of a previous McMillin product in the first
phase of Lomas Verdes) with an average home size of2,800 square feet and prices from $415,000 to
$475,000. Planning Area R-4 is also a continuation of a previous McMillin product known as
Auburn Lane with an average home size of 3,000 square feet with prices from $450,000 to $484,000.
Planning Area R-6 is known as Jasmine (McMillin) with an average home size of 2,500 square feet
and prices ranging from $379,000 to $436,000. Planning Area R-IO, which was purchased by
Cornerstone is proposed for an ·attached product with sizes ranging from 1,175 to 1,760 square feet
and proposed pricing from $250,000 to $325,000. The sales of the subject planning areas suggest a
current strong residential market.
The discussion above suggests that the subject real estate market is still extremely strong.
However, the City has implemented a Monitoring Agreement of building permits which will restrict
new building permits to an agreed upon amount within each master planned community until proper
infrastructure is in place to avoid traffic congestion. This Monitoring Agreement will limit the
supply of housing, however, only to a minimal extent. In the 12 months April 2003 through March
2004 there are 2,475 new residential units allowed within the master planned communities in Eastern
Chula Vista (more detailed discussion later within this report). Within the City of Chula Vista there
were 2,250 new building permits issues in 2002, which is under the allowed amount. However, in
4001 there were 3,525 new building permits issued in the City. Using the first four months of 2003
actual building permits issued, and annualizing them, there would be 2,891 new building permits
issued over the year.
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In summary, the population and economic growth in the County overall and more specifically
in the South County sub-market are anticipated to be good. Therefore, housing will need to meet
these future demands. With prices lower than the majority of the County, the South Bay submarket
is a positive factor for entry-level families. Rental units are strong in both the County overall and the
South County area. Attached home sales appear to have made a rebound in the County, as well as in
the South County market where there have recently been strong sales for this type of product. The
slowdown of the national economy and the terrorist attacks which began in 200 I slowed the San
Diego area economy; however, not at the same level as other areas of the state and nation. The new
Monitoring Agreement will restrict building permits over the next three years however demand still
remains strong. In summary, the outlook for the South San Diego County housing market is still
pointing toward positive levels.
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VILLAGE SIX SPA PLAN
The Otay Ranch General Development Plan ("GDP") was adopted in 1993 as a joint planning
effort of the City of Chula Vista and the County of San Diego. The purpose of the Otay Ranch GDP
is to implement the City of Chula Vista's General Plan and extend the comprehensive planning
concepts and high quality standards established in previous planning and development in the Otay
Ranch Community to the next major planning phase for the community. Approval of the GDP is the
initial step in the process of planning the property for development under P-C (Planned Community)
Zoning in the City of Chula Vista. The GDP provides a policy bridge between the Chula Vista
General Plan and the detailed project development planning provided in the Sectional Planning Area
("SPA") Plan. The Otay Ranch GDP states that Village Six is comprised of approximately 365
acres. Village Six encompasses the subject property and additional lands. The Land Use is planned
for a maximum of 990 single-family residential units and a maximum of 1,242 multi-family
residential units, along with a commercial core, public and community purpose facilities, a bus/rail
line stop, an elementary school, a town square and a neighborhood park.
The Village Six SPA - Otay Ranch GDP was adopted January 22, 2002 by Resolution
No. 2002-022. Village Six SPA Plan provides the entitlement linking the Chula Vista General Plan
and the Otay Ranch GDP policies with subsequent project-level approvals. The Village Six SPA
Plan is the controlling land use document for the subject property. This document addresses the
development boundaries, preliminary grading, existing and proposed land uses, circulation, parks,
recreation and open space, public facilities, development standards and guidelines, and development
phasing for Village Six of the Otay Ranch planned community. The Village Six SPA Plan was
prepared in accordance with the Otay Ranch GDP, the City of Chula Vista General Plan (as
amended), Title 19, Zoning of the Chula Vista Municipal Code, and other City of Chula Vista
development regulations and standards, such as the Parks Development Ordinance.
The Village Six SPA Plan includes a total of approximately 365 acres and includes the
subject property being developed by McMillin and the remainder of Village Six which is being
developed by the Otay Ranch Company. The Otay Ranch Company owned portion is not included in
this appraisal report. Following is a table showing the total Village Six SPA Plan as compared to the
McMillin developed portion of Village Six (subject property).
Land Use Total Village Six Subject Property
Acres Units Acres Units
Single-family Units 173.1 883 102.6 482
Multi-Family Units 64.1 1203 12.1 212
CPF 16.7 N/A N/ACI) N/A
Schools 42.5 N/A N/A(1) N/A
Park 7.6 N/A N/A N/A
Commercial 3.0 N/A N/A N/A
Open Space/Circulation 58.0 N/A N/A(I) N/A
Total 365.0 2,086 114.7 694
Park, Public, Circulation & Open Space Lands 229.5
Total 748.3 2,061
(1) A private high school site, one CPF site and some open space and circulation areas are located within the subject CFD,
however not included in the valuation.
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DOCSOC\932761 v9\22245.0 140
According to Tentative Map McMillin Otay Ranch Village Six, the subject property has
215.2 gross acres. The difference between SPA acreage and the tentative map acreage is reflective of
more precise planning and mapping along with the School, CPF site, Open Space and Circulation
areas.
The development of McMillin's portion of Village Six will be implemented through the use
of the SPA Plan and subsequent Tentative Subdivision Map(s). As individual tentative maps and
precise plans are processed, they will be reviewed for conformance with the SPA Plan land uses,
development regulations, and design standards.
C-25
DOCSOC\932761 v9\22245.0 140
CITY OF CHULA VISTA MONITORING AGREEMENT
On April 8, 2003 the City of Chula Vista City Council requested staff to bring forward a
report regarding options for addressing the need to provide traffic infrastructure in a timely manner
and to ensure that growth is being managed in accordance with the City's growth management
program. At the same time, staff had been working with several developers to implement provisions
of previously approved "traffic enhancement agreements" which address the need to provide
additional traffic capacity in eastern Chula Vista, and to consider adjustments to previously
established limitations of development prior to completion of SR-I25.
Traffic monitoring has been an ongoing activity since the City adopted the Threshold
Standards Policy in 1987. The monitoring is conducted twice annually and serves as input for the
Growth Management Oversight Commission. As eastern Chula Vista grew, studies were conducted
regarding traffic capacity for the new projects. The studies resulted in a limit of 9,429 housing units
prior to the construction of SR-I25 in master planned communities in Eastern Chula Vista including
Eastlake, Otay Ranch, Rolling Hills Ranch, San Miguel Ranch and Sunbow. Further studies resulted
in limited amounts of development within Rolling Hills Ranch and San Miguel Ranch until SR-125
was completed in this area. Notwithstanding the foregoing, the City may issue additional building
permits if the City decides in its sole discretion that the circulation system has additional capacity.
In early 2003 the 9,429 dwelling unit permit limit was reached. City staff commissioned a
traffic study to reevaluate the current capacity On the eastern Chula Vista street system and estimate
the capacity increases due to on-going and planned traffic enhancements. Using January 1, 2003 as
the base point, the study revealed additional existing capacity, and estimated future capacity
increases as shown on the following page.
Enhancement
Increase in Housing
Unit Capacity
6,150
1,350
600
940
8,990
Baseline with Olympic Parkway Completed
Improvements On Telegraph Canyon Road
Improvements On East H Street
Olympic Parkway Interchange
Total
Recognizing the completion of SR 125 has been delayed, and that it is important to stabilize
the rate of residential development during the period prior to the completion of that facility, City staff
and the developers have been negotiating a set of agreements which would set forth a three-year
schedule beginning On April I, 2003 for the issuance of residential permits. The analysis took into
consideration the study, along with the number of permits which have been issued in 2003 prior to
April 1, and the remaining permits needed in previously approved communities. The concluded
Option I is as follows:
Year
Units Permitted
4/1/03-3/31/04
4/1/04-3/31/05
4/1/05-3/31/06
Total
2,4 75
2,375
1,780
6,630
C-26
DOCSOC\932761 v9\22245.0 140
The dwelling units are then divided between the master planned communities as shown on
the following page.
Developer Project 4/03-3/04 4/04-3/05 4/05-3/06 Totals
EastLake Company EastLake III 620 834 507 1,961
Brookfield Shea Otay LLC Village 11 378 568 492 1.438
McMillin Otay Ranch LLC(I) Village 6 278 307 109 694
Otay Project LP Village 6 1008 299 35 1,342
McMillin Rolling Hills Ranch LLC Rolling Hills 120 153 330 603
Trimark- Trimark San Miguel San Miguel 71 154 227 452
Bella Lago Bella Lago 0 60 ----ªº -HQ
Totals 2,475 2,375 1,780 6,630
(I) Subject Property.
The above totals represent the total number of units providing all of the traffic enhancement
improvements are completed. Olympic Parkway was completed in late 2002. It is the appraisers'
understanding that the East H Street improvements are under construction and due to be completed
ahead of schedule. Telegraph Canyon Road improvements are in the design stage and financing for
the improvements has been obtained. There is a right-of-way issue that still needs to be resolved,
however, the City believes it will be resolved in the near future and not halt planning or development
of the improvements for Telegraph Canyon Road. Construction is estimated to begin in August
2003. The Olympic Parkway/Interstate 805 Interchange is still in the planning stages. There are a
variety of funding sources for this $21.8 million project with over $18 million identified at this time.
lt is a special assumption of this appraisal report that whether or not the traffic enhancement
projects are completed in a timely manner building permits will be available to projects within
CFD No. 2001-2 in accordance with the schedule set forth in the foregoing table.
C-27
DOCSOC\932761 v9122245.0 140
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C-28
DOCSOC\93276I v9\222450 140
COMMUNITY FACILITIES DISTRICT NO. 2001-2
CFD No.2001-2 was formed to fund the acquisition by the City of certain public
improvements that will benefit the subject property. The bond amount for CFD No. 2001-2 is
anticipated to be approximately $9,850,000 which will finance the acquisition of approximately
$8,425,000 in facilities.
CFD No. 200] -2 bond proceeds will be used to finance the acquisition of backbone streets
and associated improvements (i.e., grading, sewer, streets, landscaping, utilities, etc.). Specific
facilities include the following:
· Traffic Enhancement Improvements
· La Media South and La Media South Landscaping
· Olympic Parkway and Olympic Parkway Landscaping
· Birch Parkway and Birch Parkway Landscaping
· Magdalena Street Phases 1-3 and Magdalena Street Landscaping
· Pedestrian Bridge Development
· La Media Road Onsite Landscaping
· Santa Venetia Street Landscaping
· La Media Road Offsite Landscaping
· Birch Parkway Offsite
· Olympic Parkway Channel
The CFD No. 2001-2 bond proceeds to be available to finance the acqUIsItIon of these
improvements are currently estimated at $8,427,451 per the Sources and Uses of Funds Report
prepared by Stone & Youngberg LLC dated May 9, 2003 (copy located in Addenda). These amounts
are subject to change. The actual costs for the construction of the eligible improvements exceeds the
available CFD bond proceeds and are to be funded out of the developer's equity.
C-29
DOCSOC\932761 v9\2224;0 140
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C-30
DOCSOC\932761 v9\22245.0 140
SUBJECT PROPERTY DESCRIPTION
Below is a property description for the all of the subject property within CFD No. 2001-2.
As previously noted there are two property owners as one neighborhood has been sold to a merchant
builder while the remaining planning areas have been sold to related entities to McMillin. Under the
valuation section, each ownership will be valued separately.
Location:
The subject property is located at the southeast corner of La Media Road and
Olympic Parkway, in the City ofChula Vista, County of San Diego, and State
of California.
APN s/Property
Taxes:
Per the San Diego County Assessor's Office, the 2002-2003 property taxes
on the subject property and additional lands (open space and school site) are
as follows:
Assessor's Parcel Assessed 2002-2003
Number Value Tax Amount
643-052-01-00 $2,759,505 $36,703.82
643-052-02-00 $5,300,000 $58,580.32
643-052-05-00 $6,242,400 $68,004.74
APN 643-052-05-00 is currently owned by the Roman Catholic Bishop of
San Diego and is proposed for a private Catholic high school and a church
(known as Planning Areas S-2 and CPF-2). It is the appraiser's
understanding that this property is not to be included in the valuation for the
subject property.
The subject property is also within CFD No. 11 of the Sweetwater Union
High School District; CFD No. II of the Chula Vista Elementary School
District; CFD 97-2 Preserve Maintenance District, City of Chula Vista; and,
CFD 08-M Open Space Maintenance District, City of Chula Vista. It is the
appraiser's understanding that the property was formerly within CFD 97-1
and 98-2 but has now been released from these CFDs.
Legal Description:
The subject property is commonly identified as Tentative Map McMillin
Otay Ranch Village Six, City of Chula Vista, California. A lengthy metes
and bounds legal description is retained in our files.
Size and Shape:
The subject property is irregular in shape. Per the tentative map, the property
contains 215.2 gross acres.
Zoning:
The subject property was pre-zoned Planned Community (PC) as part of the
GDP planning process. The PC zone required a multi-phase planning process
beginning with a GDP, followed by the preparation of a SPA Plan.
C-31
DOCSOC\932761 v9\22245.0 140
The SPA Plan is to be used as a supplement to other existing City of Chula
Vista regulations, and supersedes those established in the City Zoning
Ordinance. Where conflict exists, the SPA Plan shall apply; where a topic is
not addressed by this SPA Plan, appropriate City of Chula Vista regulations
shall apply. Incorporated into the SPA Plan is the Site Utilization Plan,
which designates the zoning ·on the subject property. The Village Six SPA
Plan was adopted by the City of Chula Vista on January 22, 2002 by
Resolution No. 2002-022. Per the SPA Plan, the subject property is
designated for residential development and open space lands, a school site, a
community purpose facility site, and both major circulation and internal
streets.
Entitlements:
The subject property is covered by Tentative Map McMillin Otay Ranch
Village 6 allowing for 482 single-family detached residential lots and 212
multi-family units. In addition, the "A" Map was recorded August 30, 2002
per document no. 14432. The "A" Map refers to City Tract No. 02-03,
McMillin Otay Ranch Village Six and divides the property into eight
developable parcels. They are as follows:
Planning MinLot
Lot Number Land Use Area Units Acres Size (S.F.)
Lot No. 1 SFD R-I 101 31.339 6,400
Lot No.3 SFD R-3 163 38.886 5,200
Lot No.4 SFD R-4 92 20.456 5,200
Lot No.6 SFD R-6 126 20.179 4,000
Lot No.7 MF R-IO 212 11.726 N/A
Lot No.8 School S-2 N/A 37.634 N/A
Lot No.9 CPF CPF2 N/A 13.112 N/A
The "B" Maps for Planning Areas R-I (14492), R-3 (14493), R-4 (14494)
and R-6 (14495) all recorded on November 19, 2002. The "B" maps divide
the property in single-family detached lots where applicable. Planning Area
R-IO is an attached product and thus does not need a "B" map.
Topography:
.
The subject property has been graded. Streets have been cut in (both offsite
major streets and internal streets for each tract) and storm drains have been
instal)ed. All single-family lots have been graded and terraced. The multi-
family site has been graded to a superpad.
Soi·ls:
We have reviewed a geotechnical investigation on McMillin Otay Ranch
Village Six, prepared by Geotechnics Incorporated of San Diego, California.
The report is dated October 19, 2001. The report concludes that the subject
property is feasible for the proposed development provided that the
recommendations and appropriate construction practices stated in their report
are followed. No geotechnical conditions were encountered that would
preclude construction. This appraisal assumes that the soils are adequate to
support the highest and best use conclusion.
C-32
DOCSOC\932761 v9\22245.0 140
Seismic:
Environmental:
Easements/
Encumbrances:
DOCSOC\932761 v9\22245.0 140
According to the above referenced Geotechnics Incorporated report, the
closest known earthquake fault is the Rose Canyon Fault located otTshore
approximately 17 kilometers from the subject property. The second closest
known earthquake fault is the Coronado Bank located approximately 3 I
kilometers from the subject properties.
We have reviewed the Otay Ranch Village Six SPA Plan Final Second Tier
Environmental Impact Report 98-01, dated December 200 I and certified by
the City of Chula Vista on January 9, 2002. Two significant environmental
issues include the Threshold Capacity of Poggi Canyon Trunk Sewer Line
and the Guidelines for Traffic Impact Studies which creates possible limits on
development due to traffic issues. It is the appraiser's understanding that the
master developer is working with the City of Chula Vista on these projects
and that the Poggi Canyon Trunk Sewer Line has been resolved for the
subject property.
No additional environmental issues were noted upon our physical inspection.
However, we are not experts in the environmental field. If the client has
concerns relating to environmental issues on the subject property, it is our
recommendation that an expert in this field be consulted. It is an assumption
of this report that there are no environmental concerns, which would slow or
thwart development of the subject site.
We have reviewed First American Title Insurance Company Order
No. 1258332-6 dated August 22, 2002 on the subject property. The following
exceptions are noted from this report:
Item Nos. 1,2 and 3 pertain to property taxes that appear to be paid current.
Item No.4 refers to an agreement regarding indemnification, implementation
of mitigation measures and payment of certain fees in the connection with the
approval of a general plan amendment between the City of Chula Vista and
Otay Vista Associates. Item Nos. 5 and 8 state that the land lies within CFD
No.1 I (Lomas Verde) of the Sweetwater Union High School District. Item
No.6 states that the land lies within CFD 97-2 (Preserve Maintenance
District) of the City of Chula Vista. Item No.7 states that the land lies within
CFD 98-1 (Interim Open Space Maintenance District). Item No.9 states the
property is within CFD No. 98-2 (Interim Open Space Maintenance District).
Item No. 10 refers to the Parcel Map on the property. Item No. I I refers to a
proposed 30 foot private access easement as delineated and designated on
Parcel Map No. 18481. Item No. 12 refers to an easement on the property.
Item Nos. I3 and 14 refer to CC & R's on the property. Item No. 15 is in
regards to a memorandum of entitlement services agreement between the
McMillin Otay Ranch LLC and the Roman Catholic Bishop of San Diego.
Item No. 16 pertains to a right of first refusal and right to repurchase between
McMillin and the Catholic Church. Item No. 17 refers to a lien of special tax
for CFD 97-1 (Open Space Maintenance District). Item No. 18 refers to a
disiltation and maintenance agreement between McMillin Otay Ranch LLC
and the City of Chula Vista. Item Nos. 19 and 20 refer to deeds of trust on
the property. Item No. 21 states the property is within CFD 2001-2 (subject
C-33
Utilities:
Streets/Access:
DOCSOC\932761 v9\22245.0 140
CFD). Item No. 22 refers to an affordable housing agreement between
McMillin and the City ofChula Vista.
It is an assumption of this report that the subject property is free and clear of
any liens and or encumbrances with the exception of the stated special
districts including the subject CFD.
All normal utilities will be available to serve the subject site by the following
entities:
Electrical:
Natural Gas:
Sewer
Water:
Storm Drain:
. Fire:
Police:
Telephone:
CATV:
San Diego Gas & Electric
San Diego Gas & Electric
City of Chula Vista
Otay Municipal Water District
City of Chula Vista
City ofChula Vista
City ofChula Vista
Pacific Bell
Cox Cable
The subject property has access via Interstate 805 to Telegraph Canyon Road,
east approximately 5 miles to La Media Road, south to the subject property.
Additional access is via Interstate 805 to Olympic Parkway, east to the
subject property. Additional future access will be via SR 125, which will
provide access to the subject area in the future. It is anticipated to be
complete by year-end 2005.
Interstate 805 is a major north/south freeway paralleling Interstate 5 via an
inland route. Interstate 805 begins just south of Del Mar and rejoins
Interstate 5 north of the Mexican border.
Telegraph Canyon Road is a major east/west arterial through the City of
Chula Vista. Telegraph Canyon Road is known as E Street between
Interstates 5 and 805. East of Interstate 805 the road is known as Telegraph
Canyon Road for approximately 6 miles when the name changes to Otay
Lakes Road. Otay Lakes Road terminates east of the subject property at SR
94 in an undeveloped area of unincorporated San Diego County.
Olympic Parkway has on/off ramps at Interstates 805. The first section of
Olympic Parkway opened providing access to the Otay Ranch development.
The second section recently opened and now provides access to the subject
property.
SR 125 is a proposed north/south main arterial providing future access to the
project. SR 125 is in the planning stages with the estimated construction to
begin in 2003. The estimated completion for this arterial is by year-end
2006.
C-34
Current Use:
Costs of
Development:
CFD Funded
Improvements:
DOCSOC\932761 v9\22245.0 140
The subject property is currently under development. Mass grading is
complete, with lots terraced. The storm drain is complete. Water and sewer
are installed in all planning areas and electrical is complete in all except
Planning Area R-6. Planning Area R-I is paved with Planning Areas R-3 and
R-4 paving within the next few weeks. La Media, Santa Venitia and
Magdalena Avenue are all paved with underground complete and landscaping
underway. Planning Area R-IO was delivered in a superpad condition with
utilities to the site. R-IO has recently begun grading on their site.
We have reviewed the remaining costs of development on the subject
property as provided by the McMillin Company. In addition we have
reviewed the McMillin Company's site development estimates for the
project. The remaining cost estimates for the project are as follows:
Overall Soft Costs
Construction Soft Costs
Site Development Costs
Contingency
Subtotal
Less Remaining CFD Improvements
$ 612,000
1,594,511
13,999,453
810,298
$17,016,262
($1,124,454)
Total Remaining Costs
$15,891,808
The remaining costs have been allocated to each planning area. The
Cornerstone allocated costs to complete have been estimated at $3,168, I 07
while the McMillin costs to complete are estimated at $12,723,701. A
schedule showing the allocation is located in the Addenda for the readers'
revIew.
It is an assumption of this report that the improvements to be funded by the
subject CFD are in place. As previously discussed, the CFD construction
proceeds are estimated $8,427,451. A portion of these costs ($7,302,997) has
been spent to date, leaving remaining construction proceeds of $1,124,454.
C-35
HIGHEST AND BEST USE ANALYSIS
The highest and best use is a basic concept in real estate valuation due to the fact it represents
the underlying premise (i.e., land use) upon which the estimate of value is based. In this report the
highest and best use is defined as:
"the reasonably probable and legal use of vacant land or an improved property,
which is physically possible, appropriately supported, financially feasible, and that
results in the highest value. "
Proper application of this analysis requires that the subject property first be considered as if
vacant in order to identify the "ideal" improvements in terms of use, size, and timing of development.
Second, the existing improvements (if any) are compared to the "ideal" improvements to determine if
the use should be continued, altered, or demolished preparatory to redevelopment of the site with a
more productive or ideal use. In the case at hand, the subject property is not yet improved with
structures; thus, only the As Vacant analysis is relevant.
In the following analysis, we have considered the site's probable use, or those uses which are
physically possible; the legality of use, or those uses which are allowed by zoning or deed
restrictions; the financially feasible use, or those uses which generate a positive return on investment;
and the maximally productive use, or those probable permissible uses which combine to give the
owner of the land the highest net return on value in the foreseeable future.
Physically Possible Uses
The subject property is irregular in shape and contains approximately 215 gross acres. The
site is located within the City of Chula Vista, in the area known as the Eastern Territories. The site
has a generally sloping topography. Mass grading is complete on the property, with major roads
complete except for landscaping. Because the subject property is within a master-planned
community, an engineered drainage system has been constructed to alleviate any potential flooding
problems. We have reviewed a soils report concluding that the proposed development is feasible on
the subject property. It is an assumption of this report that the soils are adequate to support the
highest and best use conclusion. This assumption is evidenced by structures on surrounding lands in
the area. It is the appraiser's understanding that all environmental clearances have been obtained,
including 404, 40 I, 4( d), 160 I and 1603 permits. Although there are two possible development
concerns (i.e., traffic issues/Monitoring Agreement and Poggi Canyon sewer), it is the appraiser's
understanding that the master developer and the City of Chula Vista are working to settle these
possible issues. It is an assumption of this report that there are no environmental issues or
development issues that would slow or thwart development of the subject site.
All standard utilities are or will be available to serve the subject site. Proposed SR 125
bounds the property to the east beyond which is the master planned community of Eastlake. North of
the property is Otay Ranch owned portions of Village Six and the built out phases of Lomas Yerdes
Master Plan. West of the subject is future villages of Otay Ranch (currently undeveloped) while
south of the property is the Otay Ranch owned portions ofYillage Six along with undeveloped lands.
Main access to the subject is currently from Telegraph Canyon Road (becomes Otay Lakes Road
west of the subject) to the subject property or Olympic Parkway to the subject. Main access through
the project will be La Media, Santa Venetia Street and Magdalena A venue. These major roads are all
constructed with landscaping now underway.
C-36
DOCSOC\932761 v9\22245.0 140
This appraisal assumes that the improvements to be funded by CFD No. 2001-2 are
completed and installed to the subject property. The majority of these improvements are completed.
The size, access, and topography of the subject property make it physically suited for
numerous types of development; however, the grading that has occurred on the site suggests
residential use (i.e., lots being terraced). In addition, the surrounding uses of residential development
appear to make the subject property more suitable for residential use.
Based on the physical analysis (especially size and topography), the subject property appears
to be viable for numerous types of development; however, the current condition would suggest that
some of the planning areas are limited to a use of residential development due to their current
development state (graded residential lots).
Legality of Use
The subject property is located within the City of Chula Vista, which is the entity responsible
for regulating land use through the implementation of a general plan and zoning ordinance. Per the
City of Chula Vista General Plan, the property is zoned PC for planned community and is a portion
of the Otay Ranch. The Village Six SPA Plan is a detailed land use document specific to Village Six
of Otay Ranch. It was approved in accordance with the General Development Plan. The Village Six
SPA Plan was approved on January 22, 2002 and covers the subject property and additional lands.
Incorporated into the Village Six SPA Plan is the Site Utilization Plan, which designates the zoning
on the subject property ranging from Single-family to Multi Family Residential development in
addition to a School Site and a Community Purpose Facility Site. It is the appraiser's understanding
that the School Site and the Community Purpose Facility Site are not to be included in the valuation
for the subject property.
In addition, entitlements have been obtained for the subject property. As previously detailed
(see the section The Subject Property), there are 482 single-family detached units and 212 multi-
family attached units allowed within the subject planning areas. There has also been a recorded" A"
map on the property and recorded "B" maps for all of the single-family detached lots. The City has
recently approved a Monitoring Agreement for residential development in the eastern Chula Vista
area that affects the subject property. The Monitoring Agreement allows for the subject's 694 units
to be permitted over the next three years.
The current entitlements are consistent with the current zoning and general plan. Based on
the legality of use analysis, the type of development for which the subject property can be utilized is
narrowed to residential use. This is consistent with the findings of the physically possible uses.
Feasibility of Development
The third and fourth considerations in the highest and best use analysis are economic in
nature, i.e., the use that can be expected to be most profitable. After the recession of the early 1990s,
residential subdivisions re-emerged in the subject marketplace. The late I 980s were characterized by
rapidly escalating prices, good pre-sale activity, and a strong resale market providing move-up
buyers. The housing market began to deteriorate in mid 1990s, with home sale prices falling from
previous highs. In the mid 1990s the recession ended, and by the late 1990s, sales rates and prices
. had surpassed late 1980s highs. The year 2000 saw steady high-volume sales and significant price
increases. The year 200 I saw a slowdown in sales, however, not due to an economic slowdown, but
C-37
DOCSOC\932761 v9\22245. 0] 40
rather due to a limited supply of homes available for sale. The fourth quarter of 200 I saw a decline
due to the typical fourth quarter slowdown, the national economic slowdown, and the reaction to the
terrorist attacks. The year 2002 once again saw an increase in both sales and pricing in the subject
area. Thus far, 2003 is showing a strong residential market in the subject's neighborhood. As
described earlier within the "San Diego County Housing Market" section of this report, the housing
market activity in the South San Diego County area is considered to be strong.
Several master-planned communities are currently under construction in the immediate area
(i.e., Eastlake Woods and Vistas, San Miguel Ranch, Sunbow, Otay Ranch, Lomas Verdes (subject),
Rolling Hills Ranch, Rancho del Rey, and Ocean View Hills). The current phases of San Miguel
Ranch, Sunbow, Lomas Verdes, Rancho del Rey and Ocean View Hills have essentially sold out
their released phases of land to merchant builders. New phases are under development within some
of the projects.
The subject property is approved for 694 new homes comprised of 482 detached units and
212 attached units. Land sales to merchant residential builders have been strong in the area. Related
entities to the master developer (McMillin) have purchased four of the five planning areas. The
remaining planning area was sold to a merchant builder. There are proposed products on each of the
planning areas. Home sales have been strong in the surrounding master-planned communities.
Maximally Productive Use
In light of the current sales activity within the subject marketplace, coupled with the actual
activity on the subject property, it is our opinion that the subject property is feasible for the proposed
master-planned residential community with an adequate profit level to entice experienced builders.
Highest and Best Use Conclusion
The final determinant of highest and best use, as vacant, is the interaction of the previously
discussed factors (i.e., physical, legal, and financial feasibility along with maximum productivity
considerations). Based upon the foregoing analysis, it is our opinion that the highest and best use for
the subject property is for the proposed development of the Village Six.
C-38
DOCSOC\932761 v9\22245.0 140
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VALUATION PROCESS
The valuation of the subject property will be presented as follows: First, a discussion of each
of the market data types utilized in the valuation of the subject properties (i.e. detached residential
lots and multi-family sites) will be presented. Next, the valuation analysis for the subject property
will be presented. There are 2 owners, the master developer (or related entities to the master
developer) and a merchant builder. Each ownership will be valued separately. Each valuation will
utilize the Sales Comparison Approach to Value and a DCF will be utilized for the master developer
owned lands:
Although the single-family detached lots were sold on a "finished lot" basis, they are not yet
in a finished lot condition. Therefore, the remaining costs to develop each planning area into
finished lots (if applicable) will be addressed under each valuation. In addition, there is some
backbone infrastructure that needs to be completed by the master developer associated with each of
the planning areas. The remaining backbone infrastructure costs will also be addressed, along with
allocations to each ownership.
Next, the remaining lands owned by the master developer and its related entities will be
valued. In valuing these lands, the Discounted Cash Flow Analysis (also known as the development
procedure) will be utilized. A Discounted Cash Flow Analysis is needed due to the single ownership
of the remainder of the property. In the case at hand, the Discounted Cash Flow Analysis will take
into account the retail value or "saleable condition" of the subject property. The master developer
and its related entities-owned subject property is proposed for 482 remaining single-family detached
lots. The property is currently under construction, with planning areas in varying stages of
development. We have reviewed cost estimates prepared by the owner. In addition, we have
reviewed improvements installed with regard to the project in order to verify the spent-to-date
amounts. As the subject property is under development and remaining costs are available to
determine what remains to be spent to construct finished lots, it is our opinion that the most
appropriate unit of comparison is the condition it will be in or, in one instance, has been in when
sold. The most relevant unit of comparison is a finished lot value for the single-family detached
planning areas and a superpad value for the attached or apartment planning area. The majority of the
subject planning areas are not yet in a saleable condition, as there is still backbone infrastructure to
be installed that benefits each planning area. Therefore, it is our opinion that the most relevant
valuation process is to value the property based on the retail or "saleable" condition, and then deduct
the appropriate remaining costs to complete the property to this condition.
In determining this retail value, we will utilize the Sales Comparison Approach. In the Sales
Comparison Approach, market value is estimated by comparing properties similar to the subject
property that have recently been sold, are listed for sale, or are under contract (i.e., for which
purchase offers and a deposit have been recently submitted). After determining the retail value of the
subject property, the next step in the Discounted Cash Flow Analysis is to determine an absorption
period to determine the timing of the sale of the master developer-owned units (in this case, the
timing of sales refer to the sale of a planning area to a merchant builder). Taken into consideration in
the absorption period is the Monitoring Agreement for building permits. Next, the costs associated
with the subject development (to bring the property from its current condition to the "saleable" or
"retail" condition) need to be determined, along with a construction schedule. These costs then need
to be deducted, as well as the estimated marketing costs and a contingency factor associated with the
costs involved in the development of the project. Finally, the resulting cash flows need to be
discounted by an appropriate discount rate due to (I) the time value of money; (2) the risk associated
C-40
DOCSOC\93276I v9\22245.0] 40
with the project; and (3) a profit due to the developer. The analysis of the above revenues and costs
results in a present value for the subject property in its "as is" condition, assuming the improvements
as a result of the bonds of the subject CFD are installed.
Market Data Discussion - Detached Residential Lots
The search for land sales included consideration of the subject sales and current escrow.
Ahhough all of these sales were considered market transactions, they were negotiated in November
2001, prior to a substantial amount of appreciation in the subject marketplace. Therefore, we wi II
include sales within surrounding master planned communities including Eastlake, San Miguel Ranch,
Rolling Hills Ranch and Otay Ranch. Due to the number of recent sales within these surrounding
master-planned communities, we have limited the majority of the search to this area. The 15
appropriate residential lot sales and escrows are summarized on the facing and following facing
pages and are discussed below. All are within surrounding master-planned communities and are
either current escrows or have closed escrow within the past 12 months. The market data is
considered good and significant.
Data No. I pertains to the recent sale of some of the largest lots located in Eastlake Woods.
Colrich purchased the 57 lots in a finished condition. The lots have a minimum lot size of 13,800
square feet. They were purchased on the basis of a $295,000 finished lot. Colrich closed on the site
on May 2, 2003. The overall tax rates within Eastlake are considered to be comparable to the
subject's proposed overall tax rates. In comparison to the subject property, Data No.1 is considered
to be superior in lot size.
Data No.2 refers to the recent closing of a transaction that was negotiated in early 2002. The
property is located within the Vistas portion of the Master Planned Community of Eastlake. These
56 single-tàmily detached lots have a minimum lot size of 10,450 square feet with the majority
having views of the Otay Lake Reservoir. These are the premier lots within the Vistas neighborhood.
Colrich has purchased these lots and planned a high-end product for the location. The lots sold on
the basis of a $155,000 finished lot price. The overall tax rates within Eastlake are considered to be
comparable to the subject's proposed overall tax rates. In comparison to the subject property, Data
No.2 is considered to be superior in lot size and views, however, inferior due to the negotiated price
timing in early 2002, prior to a substantial amount of appreciation in the subject marketplace.
Data Nos. 3, 6, 8, 12, 14 and 15 pertain to sales within the master planned community of
Eastlake. Data No.3 is located within the Woods development. This property was sold to Colrich
on the basis of a $148,000 finished lot. Colrich is constructing homes, which range in size from
3,191 to 4,302 square feet. The lots have a minimum size of 10,450 square feet. The sale for 77 lots
closed in June 2002. Data No.6 refers to another June 2002 sale, within the Woods portion of
Eastlake. Continental purchased this site on the basis of a $141,000 per finished lot. The 72 lots
have a minimum lot size of7,350 square feet. Data No.8 refers to the purchase by Davidson, also in
June 2002, for 115 lots with a minimum size of 7,020 square feet. These lots sold on the basis of a
$133,435 finished lot. Data No. 12 sold in May 2002 on the basis of a $129,000 finished lot for 135
lots with a minimum lot size of 4,500 square feet. Cornerstone purchased the lots in a tinished
condition. Data No. 14 refers to the sale of 119 single-family detached lots with a minimum lot size
of 3,150 square feet. The lots sold in a finished condition on the basis of a $123,600 finished lot.
Cornerstone purchased the lots for their Sonoma project. Data No. 15 sold in June 2002 on the basis
of a $139,000 finished lot. Cornerstone purchased these lots for their Montecello project. All of the
market data were sold in a finished condition with approximately $17,000 per lot in fees included in
C-41
DOCSOC\932761 v9\22245.0 140
the finished lot price. All were purchased knowing the proposed lien from CFD 06-1 would
encumber the property, which creates similar overall tax rates to the subject property's proposed
overall rates. All of these transactions were negotiated in October 2001 and closed in May/June
2002.
Data Nos. 4, 5 and 13 refer to a new phase of land sales within Eastlake. Data No.4 pertains
to the current escrow for 7] single-family detached lots with a minimum lot size of 8,400 square feet.
K. Hovnanian is purchasing the lots on the basis of a $295,000 tinished lot. The transaction is
anticipated to close in June 2003. Data No.5 refers to the purchase by Cornerstone of 67 lots with a
minimum lot size of 7,350 square feet. These lots are in escrow based on a $275,000 finished lot.
This escrow is due to close in late May 2003. Data No. 13 refers to the current escrow of 135 single-
family detached lots with a minimum lot size of 4,200 square feet. These lots are in escrow to KB
Home on the basis of a $244,000 finished lot. This escrow is also due to close in June 2003. These
market data have proposed similar overall tax rates in comparison to the subject property. All of the
transactions were recently negotiated.
Data No.7 pertains to the recent sale of 70 single-family detached lots located in the master
planned community of Rolling Hills Ranch, north of the subject property. The lots are within a
guard-gated community. A majority of the lots have panoramic views. Standard Pacific purchased
the lots in April 2003. Rolling Hills Ranch is not within a Community Facilities District, thus the
overall tax rates are substantially lower than the subject properties proposed overall tax rates making
it superior in comparison to the subject property.
Data No.9 refers to another sale within the master planned community of Rolling Hills
Ranch, north of the subject property near the San Miguel Ranch. Continental purchased these lots
from McMillin, the master developer. The lots have a minimum size of 6,000 square feet and were
purchased on the basis of a $175,000 finished lot. The overall tax rates are considered to be superior
to the subject's proposed overall rates as there is no CFD in Rolling Hills Ranch. This transaction
was negotiated in mid-2002, prior to a significant amount of appreciation in the subject marketplace.
Data Nos. 10 and 11 refer to recent sales within the San Miguel Ranch. The San Miguel
Ranch is located north of the subject, northerly of Rolling Hills Ranch. Data No.1 0 pertains to the
Trimark purchase of 117 single-family detached lots with a minimum lot size of 5,000 square feet.
These lots sold on the basis of a $188,000 finished lot. Although the buyer is a related entity to the
seller, it is the appraiser's understanding that this was a market transaction. Data No. 11 refers to the
Buie Communities, Inc. purchase of 75 lots trom Trimark San Miguel on the basis of a $182,000
finished lot for 4,500 square foot lots. These lots will be developed as a continuation of an existing
project, which alleviates the need for a model complex. These two transactions were negotiated in
early to mid-2002, prior to a substantial amount of appreciation in the subject marketplace. The San
Miguel Ranch has similar proposed overall tax rates in comparison to the subject property.
C-42
DOCSOC\932761 v9\22245.0 ¡ 40
Market Data Analysis
Four of the subject properties sold in November 2002 to related entities of the McMillin
Companies. All are reportedly arms length transactions, however they were negotiated in November
200 L Between November 200] and May 2003 the subject marketplace experienced a significant
amount of appreciation. The subject transactions are summarized on the following page:
Planning Area
R-l
R-3
R-4
R-6
Minimum Lot Size
6,400
5,200
5,200
4,000
A verage Lot Size
8,000 sf
6,800 sf
6,600 sf
4,600 sf
Finished
Price/Lot
$126,000
$121,000
$]21,000
$105,000
It is the appraiser's opinion that the subject sales do not reflect current market value.
The market data utilized all refer to either current escrows or transactions that have closed.
within the past twelve months. Data Nos. 2, 3, 6, 8,12, ]4 and 15 refer to sales that were negotiated
in either late 2001 or early 2002 which was prior to a substantial amount of appreciation in the
marketplace. In order to compare these sales to a current market sale, a date of sale adjustment needs
to be considered. When pairing Data Nos. 5 and 6 (adjacent planning areas within Eastlake Woods)
an appreciation factor of95 percent is suggested between late 2001 and April 2003 or over 5 percent
per month. However, included in this 95 percent increase is the fact that the latest sales are closing in
on the last land parcels within Eastlake, a highly successfuJmaster planned community. Typically
the last phases of a build-out end up have a premium attached if the project has been successful. A
pairing of Data Nos. 7 and 9 (located in Rolling Hills Ranch) suggests an appreciation of 50 percent
between July 2002 and April 2003 or slightly more than 5 percent per month. It should be noted that
Data No.9 has a smaller lot size in comparison to Data No.7 which would decrease the appreciation
factor. A pairing of Data Nos. 12 and 13 suggests an appreciation factor of 89 percent between late
2001 and May 2003 or approximately 5 percent per month. Again, it should be noted that Data
No. 13 has a slightly smaller sized lot than Data No. 12 which would increase the appreciation factor;
however, these transactions are located in Eastlake and it is our opinion there is a premium in the
latest sales due to Eastlake nearing build-out. In addition to appreciation, it should be noted that the
new sales all have allotments within the new Monitoring Agreement within the City. That is, all of
the newer sales could have a premium attached as they all have allotments for the 2003/04 fiscal
year. This suggests that it may not be exclusively appreciation in the increased price of lots. Also, as
previously mentioned, Eastlake Woods and Vistas are the last developable neighborhoods within
Eastlake, a very successful master planned community developed ove¡ the past ten plus years.
Typically, the last remaining land buyers pay a premium if the project is as successful as Eastlake. In
determining a date of sale adjustment for the appreciation in the marketplace, we are considering the
above factors and concluding on a 3 percent monthly adjustment from time of negotiation for
appreciation. The adjusted market data is shown below.
C-43
DOCSOC\932761 v9\22245.0 140
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Adjusted
Data No. Master Plan Min. Lot Size Neg. Datell) Date Of Sale Price/Lot
1 Eastlake Woods 13,800 sf 2Q2003 5/03 $295,000
2 Eastlake Vistas 10,450 sf2) I Q2002 4/03 $224,750
3 Eastlake Woods 10,450 sf 4Q200 1 06/02 $227,920
4 Eastlake Woods 8,400 sf 2Q2003 Escrow $295,000
5 Eastlake Woods 7,350 sf 2Q2003 Escrow $275,000
6 Eastlake Woods 7,350 sf 4Q200 1 06/02 $217,140
7 Rolling Hills Ranch 7,200 sf 2Q2003 04/03 $262,000
8 Eastlake Vistas 7,020 sf 4Q200 1 06/02 $205,490
9 Rolling Hills Ranch 6,000 sf 2Q2002 09/02 $23 8 :000
10 San Miguel Ranch 5,000 sf 3Q2002 12/02 $238,760
11 San Miguel Ranch 4,500 sf 3Q2002 12/02 $231,140
12 Eastlake Woods 4,500 sf 4Q200 1 05/02 $198,660
13 Eastlake Vistas 4,200 sf 2Q2003 Escrow $244,000
14 East/ake Woods 3,150 sf 4Q200 1 05/02 $190,344
J 5 East/ake Vistas 3,150sf I Q2002 06/02 $201,550
(I) 4Q2002 refers to tourth quarter 2002.
(2) Lake Views.
All of the data are located within master planned communities within the City of Chula Vista. The
sales are considered good and plentiful. The number of lots within each sale appears to be typical for
merchant builder transactions. With the exception of Rolling Hills Ranch (Data Nos. 7 and 9) all of the
transactions have similar proposed overall tax rates. Rolling Hills Ranch has lower overall tax rates as they
are not located within a Community Facilities District, which is considered to be superior to the subject lands.
It is the appraiser's opinion that the market data utilized in the analysis is more relevant in determining the
current market value for the subject properties.
This appropriate market data will be utilìzed in the valuation of the subject planning areas.
Market Data Discussion - Superpad Sales
We searched the area and found the six land transactions summarized on the facing page to be most
relevant in the subject superpad valuation. Most are located within the surrounding San Miguel Ranch, Otay
Ranch (subject) and Eastlake master-planned communities. We have included one sale from San Elijo Hills, a
master planned community in north San Diego County. All of the sales are within the past 14 months. The
market data is discussed below.
Data No.1 refers to a current escrow for 600 units to be construction within the "land swap" portion of
EastLake. Cornerstone is in escrow to purchase all of the units on the basis of $131,666 per unit. The
property is in a superpad condition which is mass graded with utilities stubbed to the site and all surrounding
infrastructure in place. The proposed products include a planned unit development, a courtyard project, some
triplex units and a sixplex project. The property is due to close in two take-downs with the first closing in
June 2003. The overall density on the project is 14.5 dwelling units per acre.
Data No.2 refers to a portion of the subject property. Planning Area R-lO sold to Cornerstone in
October 2002 for $66,000 per unit in a superpad condition. Cornerstone is proposing 212 attached multi-
family units to be constructed on the site. This price was negotiated in August 2002. The overall density on
the site is ] 7.52 dwelling units per acre.
Data No.3 refers to a current escrow between Eastlake and Greystone for 300 units, which are
proposed for Eastlake in their Vistas neighborhood. Greystone is purchasing the site in a superpad condition
CA5
DOCSOC\93276 ¡ v9\22245.0 140
Professions Code Section] 1340( c). Such detennination was made in a manner consistent
with the Goals and Policies.
SECTION 3. Maximum Principal Amount of the Bonds. The Bonds in an aggregate
principal amount not to exceed $] 1,000,000 are hereby authorized to be issued subject to aU other
terms and conditions as set forth herein and in the Resolution of Issuance.
SECTION 2. Official Statement. The City Council hereby approves the form of the Revised
Preliminary Official Statement as presented to this City Council and on file with the City Clerk,
together with any changes therein or additions thereto deemed advisable by the Director of Finance
or, in the absence of the Director of Finance, another Authorized Officer (as such term is defined in
the Resolution oflssuance). Pursuant to Rule 15c2-]2 under the Securities Exchange Act of 1934
(the "Rule") the Director of Finance or, in the absence ofthe Director of Finance, another Authorized
Officer is authorized to detcrmine when the Revised Preliminary Official Statement is deemed final
(the "Deemed Final Preliminary Official Statement"), and the Director of Finance or such other
Authorized Official is hereby authorized and directed to provide written certification thereof. The
cxecution of a final official statement (the "Final Official Statement"), which shall include such
changes and additions to Deemed Final Preliminary Official Statement as are deemed advisable by
the Director of Finance or, in the absence of the Director of Finance, another Authorized Officer
pursuant to the Rule, shaU be conclusive evidence of the approval ofthe Final Official Statement by
the Community Facilities District. The City Council hereby authorizes the distribution of the final
form of the Deemed Final Preliminary Official Statement by Stone & Youngberg LLC (the
"Underwriter") to all prospective purchasers of the Bonds and directs that the Underwriter distribute
the Final Official Statement to all purchasers ofthe Bonds as required pursuant to the Ru]e.
SECTION 4. Conflict or Inconsistency with Resolution of Issuance. If terms of this
Resolution shall govern and prevail over any inconsistent or conflicting term or terms of the
Resolution of Issuance. All other terms ofthe Resolution of Issuance shall remain in full force and
effect.
SECTION 5. Effective Date. This resolution shall take effeet from and after its adoption.
Presented by
Approved as to form by
rÀ~
Ann Moore
City Attorney
Clifford Swanson
Director of Engineering
J:\Attorncy\Rcso\apprOVl!1g revised P~S 6.S.0J
3
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for $42,333 per unit. The proposed overall tax rates are similar in comparison to the subject property. The
overall density on the site is 24.4 dwelling units per acre.
Data No.4 pertains to the sale of two planning areas within Eastlake Vistas. William Lyon purchased
the 15+ acres for a proposed 170 units. The per unit price for the property in a superpad condition was
$70,053 plus an additional $14,332 per unit to be paid in fees. This sale was negotiated in October 200] and
closed in June 2002. The overall density on the site is 10.98 dwelling units per acre.
Data No.5 refers to the sale ofVR-IO within Eastlake Vistas. VR-10 totals 7.68 acres and is proposed
for]]] units. Western Pacific purchased the site on June 25,2002. The site was purchased for $53,000 per
unit with an additional $]4,332 per unit in fees to be paid. The overall density on the site is 14.45 dwelling
units per acre.
Data No.6 refers to the sale of a superpad for proposed attached units in the master planned
community of San Elijo Hills in San Marcos in north San Diego County. Colrich Coml1)unities purchased the
property from the master developers in April 2002. The sales price was $80,666 per unit, however the buyer
then gets credited for the CFD funded improvements. In comparison to the subject property this location is
slightly superior in addition to the CFD credit being superior. The density on this site is 17.0 dwelling units
per acre.
Market Data Analysis
Data Nos. I through 6 have densities ranging from 10.98 to 22.3 units per acre. The products range
from attached condominiums to a proposed triplex product. All were sold in a superpad condition. This data
has value ranges from $42,333 to $131,666 per unit. Data No. 1 is a current escrow and not yet a closed sale
with several projects with ranging densities within the sale of 600 lots. Data No.3 refers to the highest density
transaction which is considered to be inferior to the subject's lower density. Data No.6 is considered to be
superior to the subject. The market data is all located within Lomas Verdes, San Miguel or Eastlake master
planned communities with the exception of Data No.6. The remaining market data ranges from a low of
$53,000 to a high of $70,053. The subject property is Data No.2 which sold in October 2002 (negotiated in
August 2002) for $66,000 per lot. This market data will be utilized in the valuation of the applicable subject
planning areas.
C-46
DOCSOC\93276 ¡ v9\222450 140
VALUATION ANALYSES AND CONCLUSIONS
First, the Cornerstone ownership will be valued. Following this valuation, the remaining lands owned
by the master developer and related entities will be addressed. As previously stated, in valuing the remaining
master developer-owned parcels, a Discounted Cash Flow ("DCF") Analysis will be used due to the ownership
between related entities.
Cornerstone Ownership Planning Area R-W Valuation Analysis and Conclusion
Planning Area R-10 contains a 12.1-acre superpad lot proposed for 212 multi-family attached dwelling
units. Cornerstone purchased the lots in October 2002. The in-tract improvements began construction in late
April 2003. Between October 2002 and April 2003 Cornerstone processed plans and obtained approvals for
their product on the site. The sales price was $66,000 per unit for the property in a superpad condition. In
valuing this parcel, we have considered the following market data to be the most relevant:
Per Unit
Data No. Master Plan Density Date (If"Sale Price
1 Eastlake 14.50 Escrow $131,666
2 Otay Ranch 17.52 10/02 $ 66,000
3 Eastlake 24.40 Escrow $ 46,]81
4 Eastlake ]0.98 06/02 $ 70,053
5 Eastlake 14.45 06/02 $ 53,000
6 San Elijo 17.00 04/02 $ 80,666
Data No.2 refers to the subject purchase. Data NO.3 refers to the current escrow of a parcel with a
higher proposed density than the subject property. Data Nos. 4 and 5 pertain to two additional sales within
Eastlake, both with lower densities. In pairing these two data one can note the difference the density on a
superpad makes in the sales price. Unfortunately there is no clear pairing of price appreciation for attached
sales within the subject marketplace. Data No.6 is considered to be superior due to a refund from the future
CFD on the project. The existing attached products in the marketplace are being received well. The subject
project has obtained all approvals and is now beginning construction. We have concluded that Planning Area
R-10 with an overall density of 17.52 has a current market value of $75,000 in a superpad condition. In
addition, we have reviewed an agreement between McMillin (master developer) and Cornerstone (merchant
builder) in regards to the current Monitoring Agreement's effect on the subject property. Both parties have
signed an agreement allowing for the following schedule of building permits on planning area R-lO.
Year Permits
4/03 - 3/04 64
4/04 - 3/05 86
4/05 - 3/06 62
Total 212
C-47
DOCSOC\93276 Iv9\22245.0 140
As a limited amount of building permits can be obtained each year, it is our opinion that a discounting
would be considered if this property was exposed on the market today. The merchant builder has obtained all
approvals and begun site construction, thus there is little risk left for the construction of the project. It is our
opinion that a discount factor that takes into account the time value of money and the risk of the market should
be utilized in determining a current market value for the site. Based on current market rates and market
conditions, we are using a 10 percent discount factor for the limited building permits. Therefore, the final
value conclusion for the subject site is as follows:
$75,000 x 64 lots =
($75,000 x 0.95] 43) x 86 lots =
($75,000 x 0.86124) x 62 lots
Total (present val ue)
$ 4,800,000
$ 6,136,723
$ 4,004,766
$14,941,489
However, there are still some offsite improvements, which need to be completed prior to the property
being in a true superpad condition, which has all surrounding streets completed and utilities stubbed to the site.
The costs to complete these offsite improvements have been discussed under the property description section
earlier within this report. Development Planning and Financing Group of San Juan Capistrano, a consultant to
the developer, has conducted an allocation process. Per this allocation, Planning Area R-I 0 has remaining
offsite development costs of $3,168,107. Considering these costs, the current "as is" market value for
Planning Area R-l 0, owned by Cornerstone, is as follows:
Planning Area R-lO in Superpad Condition
Less: Remaining Offsite Development Costs
$ 14,941,489
(3,168,107)
$ 11,773,382
$ 11,775,000
(say)
Master Developer Owned Lands
Retail Value
Planning Area R-I contains 101 single-family lots with a minImum lot size of 6,400 square feet.
McMillin Mandalay 101, LLC, owns the lots. They were purchased on the basis of a $126,000 finished lot.
This transaction was negotiated in November 2001, prior to a substantial amount of appreciation in the
marketplace. In valuing this parcel, we have considered the following market data to be the most relevant.
Finished Adjusted
Data No. Master Plan Lot Size Date of Sale Lot Price F/L Price
5 East/ake 7,350 sf Escrow $275,000 $275,000
6 Eastlake 7,350 sf 06/02 $141,000 $217,140
7 Rolling Hills 7,200 sf 04/03 $262,000 $262,000
8 Eastlake 7,020 sf 06/02 $133,435 $205,490
9 Rolling Hills 6,000 sf 09/02 $175,000 $238,000
10 San Miguel 5,000 sf 12/02 $188,000 $238,760
11 San Miguel 4,500 sf 12/02 $]82,000 $231, I 40
13 Eastlake 4,200 sf Escrow $244,000 $244,000
Data Nos. 5 and 13 refer to current escrows within Eastlake. As previously discussed these are some
of the last available land sites within Eastlake and it is our opinion a premium is included within these prices.
Data Nos. 7 and 9 refer to sales within Rolling Hills Ranch, which has lower overall tax rates in comparison to
the subject property. The remainder of the market data has a range of $205,490 to $238,760. The subject
property was negotiated in November 2001. Adjusting the sales price to reflect appreciation results in an
C-48
DOCSOCI932761 v9122245.0] 40
adjusted sales price of $194,040. Planning Area R-I rears to both Olympic Parkway and La Media Road a
main arterial through Lomas Verdes. The lots have a minimum lot size of 6,400 square feet. We have
concluded that the subject lots have a retail, finished lot value of $200,000. The calculation is as follows.
$200,000 x 10] lots = $20,200,000
However, the property is not in a finished lot condition at this time. The costs to develop the property to
finished lots will be taken into account in the discounted cash flow analysis.
Planning Area R-3 contains ] 63 single-family lots with a minimum lot size of 5,200 square feet.
McMillin Sienna II, LLC owns 87 of the lots and McMillin Otay Ranch, LLC owns the remaining 76 lots.
McMillin Sienna ][ purchased the first phase of lots on the basis of a $121,000 finished lot. This escrow was
negotiated in November 200], prior to a substantial amount of appreciation in the marketplace. The remaining
lots are anticipated to close in November 2003 at the same price. In valuing this parcel, we have considered
the following market data to be the most relevant.
Finished Adjusted
Data No. Master Plan Lot Size Date of Sale Lot Price F/L Price
5 Eastlake 7,350 sf Escrow $275,000 $275,000
7 Rolling Hills 7,200 sf 04/03 $262,000 $262,000
9 Rolling Hills 6,000 sf 09/02 $175,000 $238,000
]0 San Miguel 5,000 sf 12/02 $] 88,000 $238,760
]2 Eastlake 4,500 sf 05/02 $129,000 $198,660
13 Eastlake 4,200 sf Escrow $244,000 $244,000
Data Nos. 5 and 13 refer to current escrows within East1ake which is nearing it's build-out and
obtaining a premium on their remaining lots. Data Nos. 7 and 9 refer to sales within Rolling Hills Ranch,
which has a lower overall tax rate in comparison to the subject property. Data No. 10 is located in San Miguel
with similar tax rates and similar sized lots. Data No. 12 refers to a previous sale within Eastlake. Adjusting
the subject sales price due to being negotiated in November 200] indicates an adjusted price of $186,340.
Planning Area R-3 rears to Olympic Parkway. The lots have a minimum size of 5,200 square feet. We have
concluded that the subject lots have a retail, finished lot value of $190,000. The calculation is as follows.
$190,000 x 87 lots = $16,530,000
$190,000 x 76 lots = $14,440,000
However, the property is not in a finished lot condition at this time. The costs to develop the property to
finished lots will be taken into account in the discounted cash flow analysis.
C-49
DOCSOC\93276 I v9\22245.0 140
Planning Area R-4 consists of 92 lots with a minimum lot size of 5,200 square feet. McMillin Auburn
Lane II, LLC owns the lots. They were purchased on the basis of a $121,000 finished lot. This escrow was
negotiated in November 2001, prior to a substantial amount of appreciation in the marketplace. In valuing this
parcel, we have considered the following market data to be the most relevant.
Finished Adjusted
Data No. Master Plan Lot Size Date of Sale Lot Price F /L Price
5 Eastlake 7,350 sf Escrow $275,000 $275,000
7 Rolling Hi11s 7,200 sf 04/03 $262,000 $262,000
9 Rolling Hi11s 6,000 sf 09/02 $175,000 $238,000
]0 San Miguel 5,000 sf 12/02 $188,000 $238,760
12 Eastlake 4,500 sf 05/02 $129,000 $] 98,660
13 Eastlake 4,200 sf Escrow $244,000 $244,000
Data Nos. 5 and 13 refer to current escrows within Eastlake which is nearing it's build-out and
obtaining a premium on their remaining lots. Data Nos. 7 and 9 refer to sales within Rolling Hills Ranch,
which has a lower overall tax rate in comparison to the subject property. Data No. 10 is located in San Miguel
with similar tax rates and similar sized lots. Data No. 12 refers to a previous sale within Eastlake. Adjusting
the sales price of the subject due to the date of negotiations results in an adjusted sales price of$186,340. We
have concluded that the subject lots have a retail, finished lot value of $190,000. The calculation is as follows.
$190,000 x 92 lots = $17,480,000
However, the property is not in a finished lot condition at this time. The costs to develop the property to
finished lots will be taken into account in the discounted cash flow analysis.
Planning Area R-6 consists of 126 lots with a minimum lot size of 4,000 square feet. McMillin
Jasmine 126, LLC owns the lots. They were purchased on the basis of a $105,000 finished lot. This escrow
was negotiated in November 2001, prior to a substantial amount of appreciation in the marketplace. In valuing
this parcel, we have considered the following market data to be the most relevant.
Finished Adjusted
Data No. Master Plan Lot Size Date of Sale Lot Price F/L Price
10 San Miguel 5,000 sf 12/02 $188,000 $238,760
11 San Miguel 4,500 sf 12/02 $182,000 $23],140
12 Eastlake 4,500 sf 05/02 $]29,000 $ I 98,660
13 Eastlake 4,200 sf Escrow $244,000 $244,000
14 Eastlake 3,150 sf 5/02 $123,600 $190,344
15 Eastlake 3,150 sf 6/02 $139,000 $201,550
Data Nos. 10 and 11 refer to land sales within San Miguel Ranch. These lots are slightly larger than.
the subject lots. Data No. 12 is located in Eastlake, again with slightly superior lot sizes. Data No. 13 refers
to a current escrow in Eastlake with similar sized lots. Data Nos. 14 and 15 pertain to prior sales within
Eastlake with slightly smaller sized lots than the subject lots. Adjusting the subject sales for appreciation since
the date of negotiation indicates a price of$161,700. We have concluded that the subject lots have a retail,
finished lot value of $170,000. The calculation is as follows.
$ I 70,000 x 126 lots = $21,420,000
However, the property is not in a finished lot condition at this time. The costs to develop the property to
finished lots will be taken into account in the discounted cash flow analysis.
C-50
DOCSOC\932761 v9\22245.0 140
Retail Value Summary
The master developer-owned property has the following retail value conclusions.
Planning
Area
No. of
Lots
R-I
R-3a
R-3b
R-4
R-6
Total
WI
87
76
92
126
Absorption Period
Min Lot Size
6,400 sf
5,200 sf
5,200 sf
5,200 sf
4,000 sf
Retail Value
Conclusion
$ 20,200,000
$ 16,530,000
$ ]4,440,000
$ 17,480,000
$ 21,420,000
$ 90,070,000
In determining an absorption period for the subject property, we have reviewed the Market Analysis
and Absorption Analysis prepared by the Meyers Group on the property. The Meyers Group analyzed the end
user (homeowner) buying the property whereas this analysis,is for the land being purchased by the merchant
builder. There is typically a 6 to 12 month lag between a builder buying the land and selling the first home. In
addition, we have taken into consideration the City of Chula Vista's Monitoring Agreement on building
permits. It is our belief that a builder would not purchase land until a time frame near when the allocations
will be available. This is evidenced by Eastlake taking some lots off the market rather than sell them without
allocations available. We have also reviewed and taken into consideration the master developer's projections
regarding their pro-forma on the sellout of the subject lots. Although the planning areas are under separate
ownerships, all are related entities to McMillin. We have concluded the absorption for the subject planning
areas as shown on the facing page. The periods consist of semi-annual time periods, which begin as of the
date of value.
The concluded absorption schedule is similar to the Meyers Group findings. We have taken into
account the Monitoring Agreement along with the current market conditions in determining an absorption
period. It should be noted that the Meyers Group refers to home buyers purchasing the completed home while
the appraisal absorption refers to lot being purchased by a merchant builder.
The Meyers Group projection and the absorption utilized in this report are shown below.
Meyers Group Projection
McMillin Absorption
Cornerstone Absorption
Total Absorption per Appraisal
Appreciation/Inflation Rates
1/03-12/03 1/04-12/04 1/05-12/05
188 363 143
4/03-3/04 4/04-3/05 4/05-3/06
214 221 47
64 86 62
278 307 109
Land appreciation in the past twelve to eighteen months has been extraordinarily impressive. We
estimate over the next several years appreciation will continue, but at a lower rate. We have concluded future
annual appreciation on the subject lots to be estimated at 4 percent per annum. This is based on the Meyers
Group report as well as other factors. It is estimated that costs will increase at 3 percent annually for this
analysis.
DOCSOC\932761 v9\22245.0140
C-51
Remainin2 Costs of Development
The remaining costs of development include the remaining backbone infrastructure, which is allocated
to the master developer-owned properties; the remaining phase specific costs, which have been allocated to the
master developer-owned properties; and the in-tract costs associated with finishing the lots for the detached lot
tracts. A portion of these costs has been allocated to the previous valuations. These costs are specific to the
master developer-owned property only. The costs have been discussed previously within this report (under
Property Description section). Remaining costs, taking into consideration the CFD funded improvements that
are allocated to the master developer are $]2,723,701.
In determining the spread of the remaining costs, we have reviewed the master developer's projections
along with our absorption estimates of the selling of the subject properties. These costs generally coincide
with the selling of the planning areas.
Taxes
Taxes have been estimated based on current market value at an overall tax rate of 1.2 percent for ad
valorem taxes and other minimal charges. In addition we have estimated the CFD obligation for the master
developer's property. It is assumed that the tax obligation to the master developer will be reduced as the
property sells off.
Indirect Costs
Indirect costs include administration and contingency, and sales and marketing costs for the portion of
the property owned by the developer. We have estimated administration and contingency costs to be ].5
percent of gross revenues, while sales and marketing costs are estimated at 3.0 percent. Taxes have been
considered separately. In determining these amounts, we have considered the developer's proposed costs
along with historical costs on similar sized projects.
Disconnt Rate
The discount rate inv<;Jlves several factors, including the time value of money, the variety and
magnitude of different risks associated with the project, and profit that any developer would expect in
developing the project. It should be noted that discount rates (particularly in the case of land development
projects) are not easily derived from real estate market data. Indeed, if one could abstract a discount rate from
a previous land development project, in all probability, it would not be relevant in today's marketplace. That
is, the historical perspective of a master-planned project that began 5 to 10 years ago and sold out last year
would, in all likelihood, not be relevant. Market conditions, as well as market expectations, change trequently,
and as a result, what the market anticipates today is more important than what has occurred in the past. The
appraiser needs to make subjective decisions on the future profit expectations during the anticipated time
frame for the income stream generated by such a large project.
C-52
DOCSOC\93276] v9\22245.0 I 40
Another perspective on discount rates appears in an article written for The Appraisal Journal (January
1989, Page 85) entitled Discount Rate Derivation. The author (Robert Mason) states that "over the past
decade improved real estate investments have had a discount rate between 1.25 and 2.5 times the safe rate,
while vacant or subdivision lands have had a discount rate between 3 and 5 times the safe rate." The safe rate
is the compensation paid to a lender or investor for the use of money. Assume for the moment that the lender
is the U.S. government and a benchmark 10-year treasury bond is utilized for analysis. As of April 2003, the
benchmark 10-year bill was quoted at less than 4.0 percent, which will be assumed as the "safe rate" for the
purpose of analysis. The major elements of a discount rate are risk rate and safe rate. Based on our scenario, a
discount rate would be "built-up" under the following variables:
¡) As previously discussed, a safe rate of 4.0%
2) Risks associated not only with this project, but a rate that reflects the burdens and benefits to
real estate investment
The capital markets for financing any type of land development are virtually non-existent and real
estate residential values are stable at best. We have observed in the marketplace that the typical merchant
builder buying fully entitled finished lots who is planning a housing development of 50 to 100 houses (the
total in a given tract) expects a minimum 10 to 12 percent profit based on the sales price of the house.
Utilizing this 12 percent factor, the following discount rate is "built-up."
Safe Rate
Risk/Profit
Total
4.0%
12.0%
16.0%
Note that 16 percent is only 4 times the safe rate. A factor of 5 would equate to a 20 percent discount rate.
Although this analysis is helpful in determining an appropriate discount rate, the market perspective is as
important as the theoretical build-up of the rate.
Economic Research Associates (ERA) was asked by the Metropolitan Water District of Southern
California for its opinion regarding the appropriate discount rates for discounting cash flows to a present value
for large landholdings planned for development. Its conclusions were drawn from its own experience in
feasibility analysis and valuation of planned community development projects over the past 15 years,
including several current assignments. ERA states "the appropriate discount rate must reflect the rate of return
that a typical buyer expects." Discount rates vary depending upon the cash flow methodology and market
expectation as to the following:
I) The availability and cost of capital
2) The degree of uncertainty in cost estimates
3) The degree of uncertainty in market forecasts
4) The degree of uncertainty in entitlements
5) The overall perceived risk in the development
6) The expected rate of appreciation in product prices, in relation to the inflation rates employed
in the cash flow forecast
An interesting article in the April 16, 1992 Wall Street Journal dealt with the concept of a discount
rate. The article, which focused on an artist's estate, discussed what an appropriate discount rate would be for
C-53
DOCSOC\932761 v9\22245.0 I 40
the artist's work. The sum of the individual values at the time of the artist's death was estimated at
$72.8 million. A dispute occurred between the IRS, who discounted the total between 10 and 37 percent, and
the expert for the estate who proposed a 75 percent discount. The judge stated that the opinion of the estate's
expert "defies common sense," yet the IRS opinion was also determined to be unjustified. "Frustrated... by
the lack of a reliable expert opinion," the judge valued the art at a 50 percent discount. Obviously, this is not
considered as a reliable discount rate in the subject case. However, we point it out for two reasons: (l) the
$72.8 million would take time to sell off and (2) the judge indicated that the rate must reflect what the history
and prospects of the sales are, the art market's general state, and the works themselves. In a way, this is
similar to what must be considered in determining a discount rate for this project. That is, we must consider
the future of the real estate market in San Diego County, the general real estate market as a whole, and the
product itself. It is worth noting that even the IRS proposed a 10 to 37 percent range discount rate.
In determining an appropriate discount rate, the appraiser has taken into consideration (1) the
entitlements which cover the subject property (i.e., including mapping with the "B" maps recorded); (2) the
existing sales to merchant builders including related entities to the master developer; (3) the proposed products
on each of the planning areas; (3) current market conditions involving the capital markets, and (4) the risks
associated with the remaining development of the subject property including the Monitoring Agreement which
is currently in place. It should be noted that this appraisal assumes that the Monitoring Agreement traffic
enhancements are completed in a timely manner that does not slow development of the project.
Taking all factors into consideration, we have concluded at a discount rate of 18% for the subject
property.
Discounted Cash Flow Analysis Conclusion
The above information has been input into a discounted cash flow analysis. The analysis (see facing
page for assumptions and conclusions) for the subject master developer-owned property results in a present
value of $61 ,725,000. The resulting cash flow data is located in the Addenda of this report.
C-54
DOCSOC\932761 v9\22245.0 I 40
ASSUMPTIONS MATRIX
McMillin Village Six
CFD 2001-2
--------- Parcel's Land-Use Designations ___~._m
PLANNING PRICE NET LOT SIZE
PRODUCT TYPE AREA PER LOT LOTS SQ. FT.
Residential
R-Ho) R-HD) 200,000 50 6400
R-11, R-Hn\ 200,000 51 6,400
R-3 R,3 190 000 63 5200
R-311 R-3 190 000 62 5200
R,31c R-3 190 000 38 5,200
R-4ID\ R-4In\ 190 000 58 5200
R-4(ol R-4r;;; 190,000 34 5200
R-6IDI R-6ID\ 170 000 43 4,000
R-6ID\ R-6ID) 170 000 74 4000
R-6Io) R-6(n\ 170,000 9 4000
Residential Totals 482
Grand Total 482
Gen Dev Costs (before finance costs) .... .....,. 12,723,701
------- Inflation Rates Annually ----...---
Appreciation of Property.. 4.00%1
Cost Increases..... ....... .......... .......... ............ ............. 3.00%
--------- Indirect Costs --------
Admin./Conting... .. ....................... 1.50%
Sales & Marketing Costs.... .......... ............ ............. . ....... 3.00%
Taxes (See schedule)
----- Other Assumptions -----
Canst Loan Interest Rate (includes pts) ........ "". ......... ... .......... 7.50%
Loan Repayment ( % of Revenues ).... . ........ ...... ..... 85.00%
Annual Discount Rate.. . ......... 18.00%
Each time period = Annual
CONCLUSIONS
Present Value of the Property (millions)... $61.725
Bruce W. Hull, MAl
C-55
DOCSOC\932761 v9\22245.0 140
MARKETING AND EXPOSURE TIME
It is our estimation that both the exposure time and the marketing time for the subject property (as sold
in bulk or total), if on the market today at our concluded value, is less than 12 months.
C,56
DOCSOC\932761 v9\22245.0 140
APPRAISAL REPORT SUMMARY
This appraisal assignment was to estimate the fair market value of the subject property, which consists
of a proposed 694 residential homes located in Village Six ofOtay Ranch and known as Lomas Verdes, being
developed by The McMillin Companies. The property is under construction, with mass grading complete and
infrastructure currently being installed. One of the planning areas has been sold to Cornerstone. We have
valued this planning area separately. The remainder of the property has recently been sold to related entities to
the master developer and thus was valued using a Discounted Cash Flow Analysis. The final value
conclusions are as follows:
Cornerstone Ownership - Planning Area R-I0:
Eleven Million Seven Hundred Seventy-Five Thousand Dollars
($11,775,000)
Remaining Master Developer-Owned Lands:
Sixty-One Million Seven Hundred Twenty-Five Thousand Dollars
($61,725,000)
Aggregate Value:
Seventy-Three Million Five Hundred Eighty Thonsand Dollars
($73,500,000)
The above values are stated subject to the Special Assumptions, Limiting Conditions, and Appraiser's
Certification as of the 1st day of May 2003.
.
C-57
DOCSOC\932761 v9\22245.0 140
ADDENDA
MARKET DATA SUMMARY CHARTS
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McMilLIN lOMAS VERDES
PRO FORMA ANALYSIS
Prepared by: Jon Bell
Prepared on: 05103103
REVENUE (Based on purchase or expense reimbursement contracts)
(All Neighborhoods closed escrow by 12/10102 except for 76 lots of RM3 to close on 11/29103)
Neighborhood R-1 (Contracted 11128101)
Neighborhood R-3 (Contracted 11/28/01)
Neighborhood R-4 (Contracted 11128/01)
Neighborhood R-6 (Contracted 11128/01)
Neighborhood R-10 (Contracted 08114/02)
Catholic Church Entitlement Reimbursement Contract
Total Revenue
Contracted
Finished Impact
# of Units Lot Price Fees
101 $126,000 ($13,760)
163 $121,000 ($13,760)
92 $121,000 ($13,760)
126 $105,000 ($13,760)
212 $66,000
EXPENSES & EXPENSE RELATED REIMBURSEMENTS
Overal1200s (Projected Remaining Costs after 04130103)
Construction 200s (Projected Remaining Costs after 04130103)
Construction 300s (Projected Remaining Costs after 04/30103)
200s & 300s Contingency @ 5%
CIP Reimbursment for Otay Water District
Sidewalk/Driveway Approaches - Reimbursed by merchant builders
CFO Proceeds
Property Taxes (12/02 and 04103 taxes paid)
Indirect Costs (Landscape Maint. & Dev. Supervision - $22k1mo. X 11 mos.)
Technical Service Fees ($100klmo. X 5 mos. + $50k/mo. X 6 mos.)
Loan Interest (A&D Loan paid off)
Loan Fees (A&O Loan paid off)
Management Fees @ 2% of Revenue
Marketíng/Misc.lG&A @ 0.5% of Revenue
Total Expenses & Expense Related Reimbursements
NET PROFIT
La Media South (Compleled)
La Media South Landscaping
Olympic Parkway (Completed)
Olympic Parkway Landscaping
PFOIF Prepayment (Not Paid)
TDIF Non-TOIF
$1,989,596
$0
$3,311,226
$0
$2,002,175
$5,300,822 $2,002,175
H:\data\finance~bell\Current ProjectslOtay RanchlMisc\CFO Infol[Village 6 Static Analysis 4.xls]Sheet1
Contracted
Net Finished
Lot Price
$112.240
$107.240
$107,240
$91,240
Total Contracted
. Revenue
$11,336,240
$17,480,120
$9,866,080
$11,496,240
$13,992,000
$1,500,000
$65,670,680
($612.000)
($1,594,511 )
($13,999,453)
($810,298)
$1,285,000
$664.000
$7.302,997
$0
($242,000)
($200,000)
$0
$0
($902,972)
($415.743)
($9,334,981)
$56,335,699 ~
SOURCES AND USES OF FUNDS
May 9, 2003 6:20 am Prepared by Stone & Youngberg LLC (SED)
(Finance 4.432 McMilIin:050903-2003BOND) Page 1
SOURCES AND USES OF FUNDS
CFD 2001-2 of the City ofChu!a Vista (McM;nin)
2003 Special Tax Bonds
************************.**.........*..*..**...*..*.....****....*
Non-Rated Interest Rates as of May 9, 2003
..........................*.*...................*............*.*.
Dated Date
Delivery Date
07/03/2003
07103/2003
Sources:
Bond Proceeds:
Par Amount
9,850,000.00
9,850,000.00
Uses:
Proj eet Fund Deposits:
Acquisition I Improvement Fund
8,427,451.28
Other Fund Deposits:
Debt Service Reserve Fund
Capitalized Interest Fund
711,487.50
88,685.22
800, 172.72
Delivery Date Expenses:
Cost of Issuance
Undetwriter's Discount
375,001.00
172.375.00
547,376.00
Other Uses of Funds:
First Year CFD Administration
75,000.00
9,850,000.00
APPRAISERS' QUALIFICATIONS
QUALIFICATIONS OF BRUCE W. HULL, MAI
Business Locations:
1056 E. Meta Street, Suite 202
Ventura, California 93001
(805) 641-3275' Facsimile (805) 641-3278
E-Mail Address-BhuIl86686@aol.com
Direct Correspondence to Ventura Location
115 E. Second Street, Suite 100
Tustin, California 92780
(949) 581-2194' Facsimile (949) 581-2198
Bruce W. Hull & Associates, Inc. is an appraisal firm that provides a wide variety of
appraisal assignments for public agencies, developers and financial institutions.
The principal, Bruce W. Hull, MAl, has been in the appraisal field since graduation in
1969 from Westmont College, Santa Barbara. After being employed by the Ventura
County Assessor's Office for five years, he established an appraisal company in Orange
County in 1974. In August of 1995 he established an office in Ventura while
maintaining an Orange County location. While most of the appraisal assignments are
in Southern California, assignments have been completed in areas from San
Francisco/Bay Area and Lake Tahoe to San Diego.
The appraisal assignments completed have been diverse in nature, including such
property types as large masterplanned developments, shopping centers, large retail
uses, and mitigation land. A brief summary of the more challenging assignments is
given on the following pages.
MASTERPLAN NED DEVELOPMENT
These are typically more than 1,000 acres in size and have a wide variety of residential
product, often ranging from condominiums to large estate type of properties. In
addition, there is often a commercial use within the development. I have been involved
in the following projects.
Lake Sherwood, Hidden Valley
Wood Ranch, Simi Valley
Rancho San Clemente, San Clemente
Towne Center, Rancho Santa Margarita
Rancho Trabuco North and South, Rancho Santa Margarita
Hunters Ridge, Fontana
The Corona Ranch, Corona
Mountain Cove, Temescal
Mountain Gate, South Corona
The Foothill Ranch, Corona
Orangecrest, City of Riverside
Aliso Viejo, County of Orange
Talega Valley, City of San Clemente/County of Orange
Otay Ranch, City of Chula Vista
RETAIL USE
Consultant to City of Long Beach regarding a 30 acre site (Long Beach Naval
Hospital) which the City was acquiring from the US Navy for inclusion in a 100
acre shopping center site.
Towne Center, Rancho Santa Margarita, is a masterplanned project which
contains two shopping centers (Towne Center, 160,000 SF plus a Target
Store, 122,000 SF; Plaza Antonio, 165,000 SF).
Mission Grove, City of Riverside, is a 395,362 SF center which included a K-
Mart Department Store among the major tenants.
Victoria Gardens Masterplan was a proposed mixed use project consisting of
3,065 acres of land which included a mixture of residential (2,150 acres);
commercial (335 acres of which 91.9 acres was a regional center site);
schools; parks; and open space for the remainder of the lands.
Menifee Village, Riverside County, is a 1977 acre masterplanned development
which had approvals for 5,256 units. The assignment included the valuation
of Planning Area 2-7 which was a commercial site that had been developed
with a Target Store, Ralph's Market, and in-line stores (190,000 SF with
eventually being a 257,000 SF center).
MITIGATION LANDS
These assignments involved valuing lands that are considered mitigation lands which
are often acquired by public agencies or nonprofit organizations.
Bolsa Chica, Huntington Beach, a 42-acre site which was part of a larger
wetlands conservation program. This particular acreage was unique since it
was subject to "tidal flushing" and had both fresh and saltwater impacting the
lands. This assignment was completed for Metropolitan Water District.
San Joaquin Marsh, City of Irvine, consisted of approximately 289 acres of
wetlands which were acquired for use as a "buffer" zone by the Irvine Ranch
Water District.
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Eagle Valley, a 1072-acre parcel near Lake Matthews in Riverside County,
was acquired by Metropolitan Water District for use as a water treatment plant
and buffer zone.
Poormans Reservoir, Moreno Valley, a 38-acre site acquired by the City of
Moreno Valley for preservation/open space use.
ASSESSMENT DISTRICTS/BOND ISSUES
Have been involved in the appraisals of the following Bond Issues regarding Community
Facilities Districts and/or Assessment Districts. (This represents a partial list of
assignments completed from 1990 thru Present.)
CFD No.9 (Orangecrest - Impr. Areas 1, 3 & 5); City of Riverside
CFD No. 2000-1 (Crosby Estate @ Rancho Santa Fe); Solana Beach
CFD No. 2001-01 (Murrieta Valley U.S.D.);Murrieta
CFD No. 90-1 (Lusk-Highlander); City of Riverside
Otay Ranch SPA I - CFD No. 99-2; City of Chula Vista
CFD No.7 (Victoria Grove); County of Riverside
CFD No.1 0 (Fairfield Ranch); City of Chino Hills
CFD No. 2000-1; Tejon Industrial Complex; Lebec
CFD No. 99-1; Santa Margarita Water District
CFD No. 97-3; City of Chula Vista
CFD No.2 (Riverside Unified School District); City of Riverside
CFD No. 89-1; City of Corona
Lake Sherwood AD. Refunding; County of Ventura
CFD No.9; City of Chino Hills
CFD NO. 88-12; City ofTemecula
CFD No. 90-1 (Refunding); City of Corona
AD. No. 97-1-R; City of Oxnard
AD. No. 96-1; Valley Center Municipal Water District; San Diego County
AD. No. 96-1; City of Oxnard
CFD No. 88-1 (Saddleback Valley Unified School Dist.); Rancho Santa Margarita
CFD No. 89-2 (Saddleback Valley Unified School Dis!.); Rancho Santa Margarita
CFD No. 89-3 (Saddle back Valley Unified School Dist); Rancho Santa Margarita
Centex AD. No. 95-1; City of Corona
Coyote Hills AD. No. 95-1; City of Fullerton
Sycamore Creek AD. No. 95-1; City of Orange
Prop. CFD NO.2 (Riverside Unified School District); City of Riverside
CFD No. 91-1; City of Rancho Cucamonga
Prop. CFD No.2; City of Chino
CFD No.9; County of San Bernardino
A.D. No. 89-1; City of Corona
CFD No. 87-1 (Series B); City of Moreno Valley
CFD No. 90-1; City of Corona
-3-
CFD No. 89-1; (Saddleback Valley Unified School District); Orange County
A.D. No. 96-1; City of Oxnard
A.D. Nos. 86-3, 87-1 and 89-1 (Refunding); City of Oxnard
CFD No. 90-1; City of Corona
CFD NO.1 (Refunding); City of Jurupa
CFD No. 88-12; City of Temecula
PARTIAL LIST OF CLIENTS
Have completed appraisal assignments for a wide variety of clients. A partial list of
these includes the following.
Anaheim City Unified School District
Bank of America NT & SA
Bank of Montreal
Bear, Stearns & Co., Inc.
Best Best & Krieger LLP (Law Firm)
Carpinteria Valley Unified School District
Chino Unified School District
Citicorp, N.A.
City of Brea
City of Chino
City of Chino Hills
City of Chula Vista
City of Colton
City of Corona
City of Fullerton
City of Huntington Beach
City of Jurupa
City of Mission Viejo
City of Moreno Valley
City of Orange
City of Oxnard
City of Rancho Cucamonga
City of Riverside
City of San Bernardino
City of San Marcos
'City of Temecula
Coast Federal Bank
Colton Joint Unified School District
County of Los Angeles
County of Orange
County of Riverside
County of San Bernardino
County of Ventura
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Downey Savings and Loan
Federal National Mortgage Association (FNMA)
Federal Deposit Insurance Corporation (FDIC)
Fieldman, Rolapp & Associates (Financial Consultants)
Irvine Ranch Water District
Irvine Unified School District
Jurupa Community Services District
Metrobank
Metropolitan Water District
Meserve, Mumper & Hughes (Law Firm)
Munger, Tolles & Olson LLP (Law Firm)
Murrieta Valley Unified School District
Rialto Unified School District
Riverside Unified School District
Saddleback Valley Unified School District
Santa Margarita Water District
Sidley & Austin (Law Firm)
Solana Beach Unified School District
Southern California Edison Company
Stone & Youngberg LLC (Bond Underwriters)
Talmantz Aviation
The Irvine Company
Wells Fargo Bank
Wells Fargo Mortgage Company
Weyerhaeuser Mortgage Company
COURT EXPERIENCE
Qualified Expert Witness in the following courts:
United States District Court/Central District of California, Los Angeles
Los Angeles County Superior Court
Orange County Superior Court
Riverside County Superior Court
Ventura County Superior Court
ORGANIZATIONS
Member - Appraisal Institute (No. 6894)
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LICENSES
Real Estate Broker - State of California
Certified General Real Estate Appraiser - State of California
(Certificate: AG004964)
GUEST SPEAKER (for)
UCLA Symposium on Mello Roos Districts - 1988
"Exploring the Rumors & Realities of Land Secured Debt in California" -
Conference sponsored by Stone & Youngberg, LLC, bond underwriters, held in
Los Angeles on January 15, 1992
"Appraisals for Land Secured Financing" presentation for Stone & Youngberg, LLC,
bond underwriters, held at San Francisco Headquarters on March 5, 1998
UCLA Symposium on Mello-Roos Districts - 2001
MISCELLANEOUS
Member Advisory Panel to California Debt Advisory Commission regarding Appraisal
Standards for Land Secured Financing (May, 1994)
.
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QUALIFICATIONS OF KITTY S. SIINO, MAl
Education
Bachelor of Arts in Business Administration, Financial Investments, California
State University, Long Beach, California (1980)
Post-Graduate Study, Real Estate Development, University of California,
Irvine, California
Appraisal Institute Classes: Uniform Standards of Professional Appraisal
Practice, A & B; Appraisal Principles; Appraisal Procedures; Basic Income
Capitalization; Advanced Income Capitalization; Narrative Report Writing;
Advanced Applications, Case Studies. Successfully completed all classes in
addition to successfully completing the writing of a Demonstration Report and
taking the Comprehensiye Exam. Became a Member of the Appraisal
Institute in December 1996.
Emvloyment
1988 - Present:
Self-Employed Real Estate Appraiser. Duties include the appraisal
of various types of properties such as commercial, retail, industrial
and vacant land. More complex assignments include easements,
right of ways and special assessment districts. From 1996 to present
specialized in special assessment districts and community facilities
districts appraisals for public entities.
1986-1988:
Project Manager of Development for Ferguson Partners, Irvine,
California. Duties included land acquisitions; review of fee
appraisals and valuations; analysis of proposed development;
planning and design; management of development, construction and
lease-up. The types of properties developed were commercial and
industrial. Duties ranged from raw, vacant site development through
property management of recently developed projects.
Employment (continued)
1981 - 1986
Manager of Finance, Construction for Community Development
Division, The Irvine Company, Irvine, California. Duties
included originating and managing a newly formed division of
finance to bridge between the accounting functions and project
management functions. Worked with analysis and budgets for
Community Development Division. Coordinated with cities in
forming new Assessment Districts and Community Facilities
Districts to finance major infrastructure improvements. Types of
properties were apartments and single-family residential lots on a for
sale basis to apartment and home-builders.
1980 - 1981
Inyestment Counselor, Newport Equity Funds, Newport Beach,
California. Duties included obtaining private financing for
residential properties and working with appraisals of properties and
analyzing the investments.
Licenses
Real Estate Sales Person, State of California, 1980
Certified General Appraiser, State of California (#AG004793)
Orl!anizations
MAl #11145 - The Appraisal Institute
APPRAISER'S CERTIFICATION
We certify, to the best of our knowledge and belief, that:
]. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are our personal, unbiased, professional
analyses, opinions, and conclusions.
3. We have no present or prospective interest in the property that is the subject of this
report, and we have no personal interest or bias with respect to the parties involved,
4. Our compensation is not contingent upon the reporting of a predetermined value or
direction in value that favors the cause of the client, the amount of the value estimate, the
attainment of a stipulated result, or the occurrence of a subsequent event.
5. This appraisal was not based on a requested minimum valuation, a specific valuation, or
the approval of any specified amount.
6. Our analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
7, We have made a personal inspection of the property that is the subject of this report.
8. No one provided significant professional assistance to the persons signing this report.
9. The reported analyses, opinions, and conclusions were developed, and this report has
been prepared, in conformity with the requirements of the Code of Professional Ethics
and the Standards of Professional Appraisal Practice of the Appraisal Institute.
10. The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
11. As of the date of this report, Bruce W. Hull and Kitty S. Siino have completed the
requirements of the continuing education program of the Appraisal Institute.
Kitt~~MÞJ~
State Certified General
Real Estate Appraiser (AG004793)
Bruce W. Hull, MAl
State Certified General
Real Estate Appraiser (AG004964)
C-58
DOCSOC\932761 v9\22245.0] 40
APPENDIX D
INFORMATION REGARDING THE CITY OF CHULA VISTA
GENERAL INFORMATION
This appendix sets forth general information about the City ofChula Vista ("Chula Vista') including
information with respect to its jìnances. The following information concerning Chula Vista, the County of San
Diego (the "County"), the State of California (the "State') and the United States o/America (the "United
States ') are included only/or general background purposes.
General Description
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 the area generally known as "South Bay." Chula Vista's city
limits cover approximately 50 square miles. Chula Vista was incorporated March 17, 1911 and became a
chartered city in 1949. Chula Vista operates under a Council-Manager form of government and provides the
following services: public safety, community services, engineering services, planning services, public works,
general administrative services and capital improvements. With a January 2003 estimated population of
199,700, Chula Vista is the second largest city in the County.
Population
The historic population of Chula Vista, the County and the State is shown below.
City of Chula Vista, County of San Diego and State of California
Population Estimates
Year City ofChula Vista County of San Diego State of California
1999 164,200 2,751,000 33,140,000
2000 171,700 2,805,900 33,753,000
2001 181,000 2,856,000 34,367,000
2002 190,300 2,908,500 35,000,000
2003 199,700 2,961,600 35,591,000
Source: California State Department of Finance, E-4 Revised Historical City, County and State Population Estimates. 1991-
2000, with 1990 and 2000 Census Counts and E-4 Population Estimates for cities, counties and the State, 2001-2003,
with 2000 DRU Benchmark.
0-1
DOCSOC\932761 v9\22245.0 140
Building Activity
Residential building activity for the past five calendar years for Chula Vista is shown in the
following tables.
City of Chula Vista
New Housing Units Building Permits
/998 /999 2000 200/ 2002
Single Family Units 1,180 1,796 1,776 2,184 1,749
Multifamily Units 166 750 864 1,341 501
Total Units 1,346 2,546 2,640 3,525 2,250
Source: Construction Industry Research Board.
City of Chula Vista
Building Permit Valuations
/998
/999
2000
200/
2002
Residential
New Single Family $214,986,428 $307,653,358 $319,085,986 $433,850,821 $413,647,842
New Multifamily 11,452,036 53,470,818 74,634,324 107,731,702 47,388,930
Res. AI!. & Adds 5,391,192 5,085,049 4,862,879 7,987,049 10,30 I ,30]
Total Residential 231,829,656 366,209,225 398,583,189 549,569,572 471,338,073
Nonresidential
New Commercial 17,432,322 17,213,869 17,916,085 22,139,245 20,926,638
New Industrial 5,581,655 7,909,587 17,418,207 2,139,313 737,651
New Other(l) 11,483,220 5,840,339 17,890, I 00 11,112,335 22,761,223
Alters. & Adds. 12,783,744 13,552,638 10,527,193 13,091 ,600 19,367,574
Total Non- Residential 47,280,852 38,516,433 63,751,585 48,482,493 63,793,086
Total All Building $279,110,508 $404,725,658 $462,334,774 $598,052,065 $535,131,159
(I)
Includes churches and religious buildings, hospitals and institutional buildings, schools and educational buildings.
residential garages, public works and utilities buildings and no-residential alterations and additions.
"Total All Building" is the sum of Residential and Nonresidential Building Permit Valuations. Totals may not add to
sums because of independent rounding.
Construction Industry Research Board.
Note:
Source:
0-2
DOCSOC\932761 v9\22245.0 140
Employment
The following table summarizes the labor force, employment and unemployment figures over
the period 1998 through 2002 for ChuJa Vista, the County, the State and the United States.
Chula Vista, San Diego County, State of California and United States
Labor Force, Employment and Unemployment Yearly Average
Civilian Civilian Civilian Civilian
Year and Area Labor Farce Employmenl/) Unemploymenl2) Unemployment Rate(3)
1998
Chula Vista 69,200 66,630 2,570 3.7%
San Diego County 1,321,000 1,274,600 46,400 3.5%
California 16,336,500 15,367,500 969,000 5.9%
United States(4) 137,673,000 131,463,000 6,210,000 4.5%
1999
Chula Vista 71,300 68,980 2,320 3.3%
San Diego County 1,361,600 1,3]9,600 42,000 3.1%
California 16,596,500 15,73],700 864,800 5.2%
United States(4) 139,368,000 133,488,000 5,580,000 4.2%
2000
Chuta Vista 72,970 70,660 2,310 3.2%
San Diego County 1,393,600 1,351,800 41,800 3.0%
California 16,884,200 16,048,900 835,300 4.9%
United States(4) 140,863,000 135,208,000 5,655,000 4.0%
2001
Chula Vista 74,830 72,270 2,560 3.4%
San Diego County 1,428,900 1,382,600 46,300 3.2%
California 17,182,900 ]6,260,100 922,800 5.4%
United States(4) 141,815,000 135,073,000 6,742,000 4.8%
2002
Chula Vista 76,980 73,490 3,490 4.5%
San Diego County 1,469,000 1,406,000 63,000 4.3%
California ] 7,404,600 16,241,800 1,162,800 6.7%
United States(4) 144,863,000 136,485,000 8,378,000 5.8%
Includes persons involved in labor-management trade disputes.
Includes all persons without jobs who are actively seeking work.
The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded
fìgures in this table.
(4) Not strictly comparable with data for prior years.
Source: California Employment Development Department, based on March 2002 benchmark and U.S. Department of Labor,
Bureau of Labor Statistics.
(I)
(2)
(3)
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DOCSOC\93276! v9\22245.0 140
San Diego Metropolitan Statistical Area ("MSA"), which includes Chula Vista, civilian labor
force and wage and salary employment figures for calendar years 1998 through 2002 are shown in
the following table. These figures are county-wide statistics and may not necessarily accurately
reflect employment trends in Chula Vista.
San Diego MSA
Civilian Labor Force, Employment and Unemployment
Annual Averages, March 2002 Benchmark
/998 /999 2000 200/ 2002
Civilian Labor Force 1,321,000 1,361,600 1,393,600 1,429,300 1,468,300
Civilian Employment 1,274,600 1,319,600 1,351,800 1,383,000 1,405,300
Civilian Unemployment 46,400 42,000 41,800 46,300 63,000
Civilian Unemployment Rate 3.5% 3.1% 3.0% 3.2% 4.3%
Total Farm 10,600 11,200 11,400 11 ,400 10,800
Total Nonfarm 1,105,500 1,152,900 1,193,800 1,218,400 1,228,500
Total Private 910,900 953,500 987,200 1,004,700 1,007,600
Goods Producing 184,500 190,200 192,600 194,400 188,600
Natural Resources and Mining 300 300 300 300 300
Construction 60,200 67,000 69,700 75,100 76,000
Manufacturing 124,000 122,900 122,600 119,000 112,200
Service Providing 921,000 962,700 1,001,200 1,024,000 1,039,900
Trade, Transportation and Utilities 187,900 194,200 202,600 209,000 209,400
Wholesale Trade 34,700 36,800 39,100 41,500 41,300
Retail Trade 124,700 128,200 133,800 135,600 137,500
Transportation, Warehousing and Utilities 28,600 29,200 29,800 32,000 30,700
Information 34,300 36,200 39,200 38,800 37,200
Financial Activities 66,000 70,400 71,200 72,000 73,800
Professional and Business Services 173,100 185,000 195,200 198,200 201,300
Educational and Health Services 107,100 112,200 115,300 116,000 118,700
Leisure and Hospitality 118,600 124,400 129,000 131,400 132,200
Other Services 39,500 40,900 42,200 44,900 46,300
Government 194,500 199,300 206,600 213,800 221 ,000
Total, All Industries L1l6,IOQ l~IJiÆ,oOO 1,2Qj,JOO 1,2:¡<i,§QO 1,239,100
Note: The "Total, All Industries" data is not directly comparable to the employment data found herein.
(I) Based on place of residence.
(2) Based on place of work.
Source: State of California, Employment Development Department, San Diego MSA Annual Average Labor Force and
Industry Employment, March 2002 Benchmark.
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DOCSOC\932761 v9\22245.0 140
The following listings set forth Chula Vista's Principal Employers for fiscal year ending
June 30, 2002:
Chula Vista's Principal Employers
Business Industrial/Office
Name
SF Goodrich Aerospace Aerostructures Group
Sharp Chula Vista Medical Center
Scripps Memorial Hospital
Ges Exposition Services, Inc.
United Parcel Service
Wal-Mart
Remedy Temporary Services, LLC
Costeo Wholesaler Corp #460
Raytheon Systems Company
Sears Roebuck & Co.
Costeo Wholesaler Corp #405
Bayview Behavioral Health Campus
Home Depot
American Fashion Inc.
Gee Industries Inc.
ATC Van cum of California
Target
MOl Interviewing Services, Inc.
Type of Business
No. of
Employees
2.418
1,110
818
705
466
375
352
292
281
262
237
236
235
229
222
214
204
200
Aerospace Manufacturer
Hospital
Hospital
Contractor
Parcel Delivery
General Merchandise
Employment Services
General Merchandise
Communications
Department Store
General Merchandise
Hospital
Building Supplies/Hardware
Apparel Manufacturing
Engineering
Transit Company
Retail
Marketing
Source: City ofChula Vista Finance Department (excluding City ofChula Vista Employees).
DOCSOC\93276J v9\22245.0] 40
0-5
Effective Buying Income
"Effective Buying Income" is defined as personal income less personal tax and nontax payments, a
number often referred to as "disposable" or "after-tax" income. Personal income is the aggregate of wages and
salaries, other than labor-related income (such as employer contributions to private pension funds), proprietor's
income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings),
dividends paid by corporations, interest income from all sources and transfer payments (such as pensions and
welfare assistance). Deducted from this total are personal taxes (federal, state and local, nontax payments,
fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government
definitions, the resultant figure is commonly known as "disposable personal income."
The following table summarizes the total effective buying income, the per capita effective buying
income, the median household effective buying income and percent of households over $50,000 for Chula
Vista, the County and the State between 1997 and 2001.
Chula Vista, San Diego County and California
Effective Buying Income(l)
Median
Effective Per Capita Household Percent of
Buying Effective Effective Households
Incoml1) Buying Income Buying Income over $50,000
1997
Chula Vista $ 2,217,170 $13,762 $33,267 28.9%
San Diego County 43,212,824 15,619 35,725 31.7
California 524,439,600 15,797 36,483 33.5
1998
Chula Vista $ 2,408,888 $14,187 $33,911 30.1%
San Diego County 46,056, t 43 16,101 36,296 32.8
California 551,999,317 t6,299 37,091 34.6
1999
Chula Vista $ 2,629,899 $15,776 $37,725 35.4%
San Diego County 49,907,828 17,270 39,213 37.4
California 590,376,663 17,245 39,492 38.3
2000
Chula Vista $ 2,959,674 $17,268 $42,550 41.6%
San Diego County 54,337,662 19,150 44,292 43.7
California 652,190,282 19,081 44,464 44.3
2001
Chula Vista $ 2,917,494 $16,128 $42,229 39.1%
San Diego County 55,210,119 19,092 44,146 42.0
California 650,521,407 18,652 43,532 41.9
(I) Not comparable with prior years. Effective Buying Income is now based on money income (which does not take into
account sale of property. taxes and social security paid, receipt of food stamps, etc.) versus personal income.
(2) Dollars in thousands.
Source: "Survey of Buying Power," Sales & Marketing Management Magazine, dated 1997, 1998, 1999,2000 and 2001.
0-6
DOCSOC\932761 v9\22245.0] 40
Sales Taxes
The following table shows taxable transactions in Chula Vista by type of business during
calendar years ] 997 through 200 I. As indicated below, total retail sales for Chula Vista in ] 997
increased by approximately 7.1 % over the] 996 level, in 1998 increased by approximately 8.8% over
the 1997 level, in 1999 increased approximately 10.3% over the 1998 level, in 2000 increased
approximately 11 % over the 1999 level and in 200 I increased approximately 4% over the 2000 level.
A summary of historic taxable transactions for Chula Vista is shown in the following table.
City of Chula Vista
Taxable Transactions
(Dollars in thousands)
/997 /998 /999 2000 2001
Apparel Stores Group $ 64,979 $ 63,414 $ 61.758 $ 66.598 $ 61,937
General Merchandise Stores 337,230 382,944 439,731 495,679 524,942
Food Stores Group 81,503 81,006 85,662 90,487 92,224
Eating and Drinking Group 126,357 131,661 142,329 155,583 164,417
Household Group/Home Furn. Appli. 47,004 55,856 61,923 66,365 67,827
Building Material Group 70,930 75,812 87.902 102,370 97,827
Automotive Group 89,986 107.808 126,304 145,923 151.812
Service Stations 103,994 88,570 95,546 121,244 119,050
Other Retail Stores 120,212 133,463 139.837 157,152 183,303
Retail Stores Total $ 1,042,195 $ 1,120,534 $ 1,240.992 $ 1,40 I ,40 1 $ 1,463,409
All Other Outlets 171.228 199,661 215,396 206,889 225.256
Total All Outlets $j,LU,42} LJ±:)20 195 LL~56,388 t~§08 290 $ 1 68ß 665
Note: Drugs stores are grouped with the General Merchandise Stores and package liquor stores are grouped with the Eating
and Drinking Group.
Source: State Board of Equa!ization.
Education
Public educational instruction from kindergarten through high school is provided by the Chula Vista
Elementary School District and Swee!water Union High School District. These districts administer twenty-six
elementary schools, nine junior high schools and eight senior high schools. Southwestern College, a two year
Community College, has an enrollment of more than 15,000. There are also four adult education schools and
twelve private schools. There are seven universities or colleges within 30 minutes commuting distance from
Chula Vista in the San Diego Metropolitan Area. Chula Vista has proposed a University of California campus
in Chula Vista, to be located on a 400 acre site adjoining the Olympic Training Center.
Community Facilities
There are two acute-care hospitals, two psychiatric hospitals and three convalescent hospitals, and
more than 400 medical doctors and allied professionals in Chula Vista.
There are two daily, one weekly and one semi-weekly newspapers published and circulated in Chula
Vista. Chula Vista has one main public library and two branch libraries.
Recreational facilities within or near Chula Vista include twenty-four parks, four community centers,
six "tot lots," two ball fields, twenty-eight tennis courts, three golf courses, four municipal swimming pools,
two gymnasiums and boat launching facilities. Chula Vista's bayfront area contains a marina which houses
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DOCSOC\932761 v9\222450 140
552 boats and miles of public beaches. Chula Vista also provides many trails for bicycling, hiking and
jogging.
Chula Vista is also the home of the United States Olympic Training Center. This is the third such
training center in the nation and the only year round training facility. The center is located on a ISO-acre site
donated by EastLake Development Company adjacent to the Otay Lake reservoir.
Chula Vista has more than sixty churches and nearly 100 service, fraternal and civic organizations.
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 boarder. Commuter rail service is provided by the San Diego
Trolley, a light rail system started in 1981 and eleven bus routes serve Chula Vista.
Daily bus connections serve Chula Vista, and Southern Pacific Railway and San Diego's Lindbergh
International Airport are fifteen minutes to the north ofChula Vista.
Utilities
Electric power and natural gas are provided by San Diego Gas and Electric. Pacific Bell provides
telephone service to the area. Otay Water District and Sweetwater Water District provide water service and
Chula Vista provides sewer service.
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APPENDIX E
SUMMARY OF INDENTURE
The following is a summary of certain provisions of the Bond Indenture not otherwise
summarized in the text of this Official Statement. This summary is not intended to be definitive, and
reference is made to the complete text of each of such documents for the complete terms thereof
DEFINITIONS
Except as otherwise defined in this summary, the terms previously defined in this Official
Statement have the respective meanings ascribed to such terms in the body of this Official Statement.
In addition to the preceding definitions, the following terms defined in the Bond Indenture
have, except where specijìed otherwise, the following meanings.
"Acquisition Account" means the account by that name within the Project Fund established
pursuant to the Indenture.
"Acquisition/Financing Agreement" means that certain Acquisition/Financing Agreement
made and entered into on November 17,2002 by and between the City, acting on behalf of itself and
the District, and McMillin ütay Ranch, LLC, a Delaware limited liability company, as such
agreement may be further amended from time to time.
"Act" means the "Mello-Roos Community Facilities Act of 1982," as amended, being
Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California.
"Administrative Expense Fund" means the fund by that name established pursuant to the
Indenture.
"Administrative Expenses" means the expenses directly related to the administration of the
District, including, but not limited to, the following: the costs of computing the Special Taxes and
preparing the annual Special Tax collection schedules (whether by the City or a designee thereof or
both); the costs of collecting the Special Taxes (whether by the County, the City or otherwise); the
costs of remitting the Special Taxes to the Fiscal Agent; the costs of the Fiscal Agent (including its
legal éounsel) in the discharge of the duties of the Fiscal Agent required under the Indenture; the
costs of the City, the District or any designee thereof of complying with the arbitrage rebate
requirements; the costs of the City, the District, or any designee thereof of complying with City,
District or obligated person disclosure requirements associated with applicable federal or state
securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements
and responding to public inquiries regarding the Special Taxes; the costs of the City, District or any
designee thereof related to an appeal of the Special Tax; and the costs of any credit enhancement
obtained by the City or the District (but excluding the costs of any credit enhancement required to be
provided by McMillin ütay Ranch, LLC or its successor). Administrative Expenses shall also
include Delinquency Collection Expenses.
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DOCSOC\932761 v9\222450 140
"Administrative Expense Requirement" means an annual amount equal to $75,000, or such
lesser amount as may be designated in written instructions from an Authorized Representative to the
Fiscal Agent, to be allocated as the first priority of Special Taxes received for the payment of
Administrative Expenses.
"Annual Debt Service" means, for each Bond Year, the sum of (a) the interest payable on
the Outstanding Bonds in such Bond Year, and (b) the principal amount of the Outstanding Bonds
scheduled to be paid in such Bond Year, including from111andatory sinking fund payments.
City.
"Assistant City Manager" means the Assistant City Manager/Director of Finance of the
"Assistant Director of Finance" means the Assistant Director of Finance of the City.
"Authorized Representative" of the District means the City Manager, the Director of
Finance or Assistant Director of Finance, a\òting on behalf of the District, or any other person
designated by the City Council and authorized to act on behalf of the District under or with respect to
the Indenture and all other agreements related thereto.
"Average Annual Debt Service" means the average annual debt service during the term of
the Bonds.
"Bond Counsel" means an attorney or firm of attorneys, selected by the District, of
nationally recognized standing in matters pertaining to the tax treatment of interest on bonds issued
by states and their political subdivisions, duly admitted to the practice of law before the highest court
of the State.
"Bondowner" or "Owner", or any similar term, means any person who shall be the
registered owner or his duly authorized attorney, trustee, representative or assign of any Outstanding
Bond which shall at the time be registered.
"Bonds" means the $ City of Chula Vista Community Facilities District 2001-2
(McMillin - Otay Ranch - Village Six) 2003 Special Tax Bonds issued pursuant to the Indenture.
"Bond Service Fund" means the fund created and established pursuant to the Indenture.
"Bond Year" means each twelve-month period extending from September 2 in one calendar
year to September I of the succeeding calendar year, except in the case of the initial Bond Year
which shall be the period from the Delivery Date to September 1,2003.
"Business Day" means a day which is not a Saturday or a Sunday or a day of the year on
which banks in New York, New York and Los Angeles, California, or where the Principal Corporate
Trust Office is located, are not required or authorized to remain open.
"Capitalized Interest Sub-Account" means the sub-account by that name within the Interest
Account of the Bond Service Fund established pursuant to the Indenture.
"City" means the City of Chula Vista, California.
"City Manager" means the City Manager of the City, acting for and on behalf of the District.
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DOCSOC\932761 v9\222450 140
"Code" means the Internal Revenue Code of 1986, as amended.
"Costs of Issuance" means, as to the Bonds, all of the costs of formation of the District and
the costs of issuing the Bonds, including but not limited to, all printing and document preparation
expenses in connection with this Indenture and any Supplemental Indenture, the Bonds, and any and
all other agreements, instruments, certificates or other documents issued in connection therewith; any
computer and other expenses incurred in connection with the Bonds; the initial fees and expenses of
the Fiscal Agent (including without limitation, acceptance fees and first annual fees payable in
advance); and other fees and expenses incurred in connection with the issuance of the Bonds, to the
extent such fees and expenses are approved by the District.
"Costs of Issuance Fund" means the fund by that name established pursuant to the
Indenture.
States.
"Comptroller of the Currency" shall mean the Comptroller of the Currency of the United
"Debt Service on Parity Refunding Obligations" means the gross debt service due in any
Bond Year on any refunding bonds or other refunding obligations which have, or purport to have, a
lien upon the Special Tax Revenues on a parity with the lien of the Bonds.
"Delinquency Collection Expenses" means those fees and expenses of the District incurred
by or on behalf of the District in or related to the collection of delinquent Special Taxes.
"Delinquency Proceeds" means the amounts collected from the redemption of delinquent
Special Taxes including the penalties and interest thereon and from the sale of property sold as a
result of the foreclosure of the lien of the Special Tax resulting from the delinquency in the payment
of Special Taxes due and payable on such property.
"Delivery Date" means the date on which the Bonds are issued and delivered to the initial
purchaser thereof.
"Depository" shall mean DTC and its successors and assigns or if (a) the then Depository
resigns from its functions as securities depository of the Bonds, or (b) the District discontinues use of
the Depository pursuant to this Indenture, any other securities depository which agrees to follow
procedures required to be followed by a securities depository in connection with the Bonds and
which is selected by the Treasurer.
"Director of Finance" means the Director of Finance of the City, acting for and on behalf of
the District.
"District" means Community Facilities District No. 2001-2 (McMillin - Otay Ranch -
Village Six) situated in and formed by the City ofChula Vista, California.
"DTC" shall mean The Depository Trust Company, New York, New York, and its successors
and assigns.
"Fiscal Agent" means U.S. Bank, N.A., and any successor thereto.
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DOCSOC\932761 v9\22245.0 140
"Fiscal Year" means the 12 month period beginning July I of each year and terminating on
June 30 of the following year, or any other annual accounting period thereinafter selected and
designated by the District as its fiscal year in accordance with applicable law.
"Government Obligations" means obligations described in Paragraph (a) of the definition of
Permitted Investments.
"Indenture" means the Bond Indenture, as amended or supplemented pursuant to the terms
hereof.
"Independent Accountant" means any certified public accountant or firm of such certified
public accountants appointed and paid by the District, and who, or each of whom -
I. is in fact independent and not under domination of the District or the City;
2. does not have any substantial interest, direct or indirect, in the District or the City;
and
3. is not an officer or employee of the District or the City, but who may be regularly
retained to make annual or other audits of the books of or reports to the City or the
District.
"Interest Payment Date" means March 1 and September I of each year, commencing
March I, 2004.
"Investment Agreement" means any investment satisfying the requirements of paragraph II
of the definition of Permitted Investments.
"Legislative Body" means the City Council of the City, acting as the legislative body of the
District.
"Maximum Annual Debt Service" means, as of the date of any calculation, the largest
Annual Debt Service during the current or any future Bond Year.
"Moody's" means Moody's Investors Service, its successors and assigns.
"Nominee" shall mean the nominee of the Depository which may be the Depository, as
determined from time to time by the Depository.
"Outstanding" means as to the Bonds, all of the Bonds, except:
1. Bonds theretofore canceled or surrendered for cancellation in accordance with the
provision of the Indenture;
2. Bonds for the payment or redemption of which monies shall have been theretofore
deposited in trust (whether upon or prior to the maturity or the redemption date of
such bonds), provided that, if such Bonds are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as provided in the Indenture
or any applicable Supplemental Indenture.
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DOCSOC\932761 v9\22245.0 140
"Participant" shall mean a member of or a participant in the Depository.
"Permitted Investments" means any of the following which at the time of investment are
legal investments under the laws of the State for the moneys proposed to be invested therein (the
Fiscal Agent shall be entitled to rely upon any written investment direction from an Authorized
Representative of the District as a certification to the Fiscal Agent that such investment constitutes a
Permitted Investment):
1.
A.
Direct obligations (other than an obligation subject to variation in principal
payment) of the United States of America ("United States Treasury
Obligations");
B. Obligations fully and unconditionally guaranteed as to timely payment of
principal and interest by the United States of America;
C. Obligations fully and unconditionally guaranteed as to timely payment of
principal and interest by any agency or instrumentality of the United States of
America when such obligations are backed by the full faith and credit of the
United States of America, or
D. Evidences of ownership of proportionate interests in future interest and
principal payments on obligations described above held by a bank or trust
company as custodian, under which the owner of the investment is the real
party in interest and has the right to proceed directly and individually against
the obligor and the underlying government obligations are not available to
any person claiming through the custodian or to whom the custodian may be
obligated.
2. Federal Housing Administration debentures.
3. The listed obligations of government-sponsored agencies which are not backed by the
full faith and credit of the United States of America:
A. Federal Home Loan Mortgage Corporation (FHLMC)
(I) Participation certificates (excluded are stripped mortgage securities
which are purchased at prices exceeding their principal amounts)
(2) Senior Debt obligations
B. Farm Credit Banks (formerly: Federal Land Banks, Federal Intermediate
Credit Banks and Banks for Cooperatives)
(I)
Consolidated system-wide bonds and notes
,
C. Federal Home Loan Banks (FHL Banks)
(I) Consolidated debt obligations
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DOCSOC\932761 v9\22245.0 140
D. Federal National Mortgage Association (FNMA)
(I) Senior debt obligations
(2)
Mortgage-backed secuntIes (excluded
securities which are purchased at prices
amounts)
are stripped mortgage
exceeding their principal
E. Student Loan Marketing Association (SLMA)
(I) Senior debt obligations (excluded are securities that do not have a
fixed par value and/or whose terms do not promise a fixed dollar
amount at maturity or call date)
F. Financing Corporation (FICO)
(I) Debt obligations
G. Resolution Funding Corporation (REFCORP)
(1) Debt obligations
4. Unsecured certificates of deposit, time deposits, and bankers' acceptances (having
maturities of not more than 30 days) of any bank the short-term obligations of which
are rated "A-I" or better by S&P.
5. Deposits the aggregate amount of which are fully insured by the Federal Deposit
Insurance Corporation (FDIC), in banks which have capital and surplus of at least
$5 million.
6. Commercial paper (having original maturities of not more than 270 days rated "A-I"
by S&P and "Prime-I" by Moody's.
7. Money market funds rated "AAm-l" or "AAm-G" by S&P, or better.
8. State Obligations, which means:
A. Direct general obligations of any state of the United States of America or any
subdivision or agency thereof to which is pledged the full faith and credit of a
state the unsecured general obligation debt of which is rated "A3" by
Moody's and "A" by S&P, or better, or any obligation tùlly and
unconditionally guaranteed by any state, subdivision or agency whose
unsecured general obligation debt is so rated.
B. Direct general short-term obligations of any state agency or subdivision or
agency thereof described in (A) above and rated "A-l +" by S&P and
"Prime-I" by Moody's.
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DOCSOC\932761 v9\22245.0 140
C. Special Revenue Bonds (as defined in the United States Bankruptcy Code) of
any state, state agency or subdivision described in (A) above and rated "AA"
or better by S&P and "AA" or better by Moody's.
9. PrNefunded municipal obligations rated "AAA" by S&P and "AAA" by Moody's
meeting the following requirements:
A. the municipal obligations are (I) not subject to redemption prior to maturity
or (2) the trustee for the municipal obligations has been given irrevocable
instructions concerning their call and redemption and the issuer of the
municipal obligations has covenanted not to redeem such municipal
obligations other than as set forth in such instructions;
B. the municipal obligations are secured by cash or United States Treasury
Obligations which may be applied only to payment of the principal of,
interest and premium on such municipal obligations;
C. the principal of and interest on the United States Treasury Obligations (plus
any cash in the escrow) has been verified by the report of independent
certified public accountants to be sufficient to pay in full all principal ot~
interest, and premium, if any, due and to bècome due on the municipal
obligations ("Verification");
D. the cash or United States Treasury Obligations serving as security for the
municipal obligations are held by an escrow agent or trustee in trust for
owners of the municipal obligations;
E. no substitution of a United States Treasury Obligation shall be permitted
except with another United States Treasury Obligation and upon delivery of a
new Verification; and
F. the cash or United States Treasury Obligations are not available to satisfy any
other claims, including those by or against the trustee or escrow agent.
10. Repurchase agreements:
With (I) any domestic bank, or domestic branch of a foreign bank, the long term debt
of which is rated at least "A" by S&P and Moody's; or (2) any broker-dealer with
"retail customers" or a related affiliate thereof which broker-dealer has, or the parent
company (which guarantees the provider) of which has, long-term debt rated at least
"A" by S&P and Moody's, which broker-dealer falls under the jurisdiction of the
Securities Investors Protection Corporation, or (3) any other entity rated "A" or better
by S&P and Moody's, provided that:
A. The market value of the collateral is maintained at levels and upon such
conditions as would be acceptable to S&P and Moody's to maintain an "A"
rating in an "A" rated structured financing (with a market value approach); .
B. The Fiscal Agent or a third party acting solely as agent therefor or for the
District (the "Holder of the Collateral") has possession of the collateral or the
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DOCSOC\93276 ¡ v9\22245.0 140
collateral has been transferred to the Holder of the Collateral in accordance
with applicable state and federal laws (other than by means of entries on the
transferor's books);
C. The repurchase agreement shall state and an OpInIOn of counsel shall be
rendered at the time such collateral is deliVered that the Holder of the
Collateral has a perfected first priority security interest in the collateral, any
substituted collateral and all proceeds thereof (in the case of bearer securities,
this means the Holder of the Collateral is in possession);
D. The repurchase agreement shall provide that if during its term the provider's
rating by either Moody's or S&P is withdrawn or suspended or falls below
"A-" by S&P or "A3" by Moody's, as appropriate, the provider must, at the
direction of the District or the Fiscal Agent, within I 0 days of receipt of such
direction, repurchase all collateral and terminate the agreement, with no
penalty or premium to the District or Fiscal Agent.
Notwithstanding the above, collateral levels need not be as specified in "A" above, so
long as such collateral levels are 103% or better and the provider is rated at least "A"
by S&P and Moody's, respectively.
11. Investment agreements with a domestic or foreign bank or corporation the long-term
debt or financial strength of which, it or its guarantor is rated at least "AA-" by S&P
and "Aa3" by Moody's; provided that, by the terms of the investment agreement:
A. the invested funds are available for withdrawal without penalty or premium,
upon not more than seven days' prior notice; the District and the Fiscal Agent
hereby agree to give or cause to be given notice in accordance with the tenns
of the investment agreement so as to receive funds thereunder with no penalty
or premium paid;
B. the investment agreement shall state that it is the unconditional and general
obligation of, and is not subordinated to any other obligation of, the provider
thereof; or, in the case of a bank, that the obligation of the bank to make
payments under the agreement ranks pari passu with the obligations of the
bank to its other depositors and its other unsecured and unsubordinated
creditors;
C. the District and the Fiscal Agent receives the opinion of domestic counsel that
such investment agreement is legal, valid, binding and enforceable upon the
provider in accordance with its terms and of foreign counsel (if applicable);
D. the investment agreement shall provide that if during its term
(I) the provider's rating by either S&P or Moody's falls below "AA-" or
"Aa3", respectively, the provider shall, at its option, within I 0 days of
receipt of publication of such downgrade, either (a) collateralize the
investment agreement by delivering or transferring in accordance with
applicable state and federal laws (other than by means of entries on
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DOCSOC\932761 v9\222450 140
the provider's books) to the District, the Fiscal Agent or a Holder of
the Collateral free and clear of any third-party liens or claims the
market value of which collateral is maintained at levels and upon such
conditions as would be acceptable to S&P and Moody's to maintain
an "A" rating in an "A" rated structured financing (with a market
value approach); or (b) transfer and assign the investment agreement
to a then qualifying counterparty with ratings specified above; and
(2) the provider's rating by either S&P or Moody's is withdrawn or
suspended or falls below "A-" or "A3", respectively, the provider
must, at the direction of the District or the Fiscal Agent, within
1 0 days of receipt of such direction, repay the principal of and
accrued but unpaid interest 'on the investment;
E. The investment agreement shall state and an opinion of counsel shall be
rendered, in the event collateral is required to be pledged by the provider
under the terms of the investment agreement, at the time such collateral is
delivered, that the Holder of the Collateral has a perfected first priority
security interest in the collateral, any substituted collateral and all proceeds
thereof (in the case of bearer securities, this means the Holder of the
Collateral is in possession);
F. the investment agreement must provide that if during its term
(I) the provider shall default in its payment obligations, the provider's
obligations under the investment agreement shall, at the direction of
the District or the Fiscal Agent, be accelerated and amounts invested
and accrued but unpaid interest thereon shall be repaid to the District
or Fiscal Agent, as appropriate, and
(2) the provider shall become insolvent, not pay its debts as they become
due, be declared or petition to be declared bankrupt, etc. ("Event of
Insolvency"), the provider's obligations shall automatically be
accelerated and amounts invested and accrued but unpaid interest
thereon shall be repaid to the District or Fiscal Agent, as appropriate.
12. The Local Agency Investment Fund (LAIF) administered by the treasurer of the State
to the extent such deposits remain in the name of and control of the Fiscal Agent.
"Principal Corporate Trust Office" means the office of the Fiscal Agent at 550 South Hope
Street, 5th Floor, Los Angeles, California 90071; provided, however for transfer, registration,
exchange, payment and surrender of Bonds means care of the corporate trust office of U.S. Bank,
N.A. in St. Paul, Minnesota or such other address specified by the Fiscal Agent to the District in
writing.
"Project" means the public improvements as set forth and described in Exhibit A to the
Acquisition/Financing Agreement.
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"Project Costs" means all expenses of and incidental to the construction, acquisition, or
both, of the Project.
"Project Fund" means the fund by that name established pursuant to the Indenture.
"Rebate Fund" means the fund by that name established pursuant to the provisions of the
Indenture.
"Rebate Instructions" means the Rebate Instructions attached to the Indenture.
"Record Date" shall mean the fifteenth (l5th) calendar day of the month immediately
preceding an Interest Payment Date.
"Redemption Fund" means the fund by that name established pursuant to the provisions of
the Indenture.
"Regulations" means the regulations promulgated under the Internal Revenue Code of 1986,
as amended.
"Reserve Fund" means the fund by that name established pursuant to the provisions of the
Indenture.
"Reserve Requirement" means an amount initially equal to the least of $
which amount shall, as of any date of calculation, be equal to the lesser of (i) Maximum Annual Debt
Service for the Bonds, (ii) one hundred twenty-five percent (125%) of Average Annual Debt Service
for the Bonds, and (iii) ten percent (10%) of the original principal amount of the Bonds less original
issue discount, if any, plus original issue premium, if any, applicable to the Bonds.
"Special Tax" means the Special Tax authorized to be levied in the District pursuant to the
Act and the Special Tax RMA.
"Special Tax Consultant" means any person or firm possessing demonstrated experience
and expertise in the preparation of. special tax formulas and/or the administration of special taxes
levied for community facilities districts. Any such person or firm shall be appointed and paid by the
District and who, or each of whom -
1. is in fact independent and not under domination of the District or the City;
2. does not have any substantial interest, direct or indirect, in the District or the City;
and
3. is not an officer or employee of the District or the City, but who may be regularly
retained by the City or other community facilities districts formed by the City to
administer the levy of special taxes within such community facilities districts.
"Special Tax Fund" means the fund by that name established pursuant to the provisions of
the Indenture.
"Special Tax Revenues" means (a) the proceeds of the Special Tax levied and received by
the District, and (b) the Delinquency Proceeds.
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"Special Tax RMA" means the rate and method of apportionment of the Special Tax
authorized to be levied on property within the District as approved at the special election held in
District on August 13, 2002, as it may be modified from time to time in accordance with the Act.
"Standard & Poor's" or "S&P" means Standard & Poor's Rating Services, its successors
and assigns.
"State" means the State of California.
"Supplemental Indenture" means any bond indenture then in full force and effect which has
been duly approved by resolution of the Legislative Body under and pursuant to the Act at a meeting
of the Legislative Body duly convened and held, at which a quorum was present and acted thereon,
amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental
Indenture is specifically authorized under the Indenture.
"Term Bonds" means the Bonds maturing on September 1, 20_and the Bonds maturing
on September 1,20_.
"Traffic Enhancement Improvement Account" means the account by that name within the
Project Fund established pursuant to the Indenture.
"Traffic Enhancement Improvement Costs" means the cost of the acquIsItIon or
construction of the Traffic Enhancement Improvements (as such term is defined in the
Acquisition/Financing Agreement) in an amount not to exceed the Fair Share (as such term is defined
in the Acquisition/Financing Agreement).
"Traffic Enhancement Improvements" shall have the meaning given such term in the
Acquisition/Financing Agreement and shall include the Telegraph Canyon Roadway Improvements
defined therein.
"Treasurer" means the Treasurer of the City acting for and on behalf of the District.
FUNDS AND ACCOUNTS; FLOW OF FUNDS
Special Tax Fund
(a) The District shall, no later than the tenth (10th) Business Day after which Special Tax
Revenues have been received by the District on behalf of the District and in any event
not later than February 15th and August 15th of each year, transfer such Special Tax
Revenues to the Fiscal Agent for deposit in the Special Tax Fund.
(b) The Special Tax Revenues deposited in the Special Tax Fund shall be held in trust
and deposited in the following accounts of the Special Tax Fund or transtèrred to the
following other funds and accounts on the dates and in the amounts set forth in the
following paragraphs and in the following order of priority:
(1) The Fiscal Agent shall each Fiscal Year transfer to the Administrative
Expense Fund from the first Special Tax Revenues received by the Fiscal
Agent during such Fiscal Year an amount equal to the Administrative
Expense Requirement, unless the Fiscal Agent shall have received written
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DOCSOC\932761 v9\22245.0 140
instructions from an Authorized Representative to transfer an amount less
than the Administrative Expense Fund.
(2) The Fiscal Agent shall transfer to the Interest Account of the Bond Service
Fund, on each Interest Payment Date and date for redemption of the Bonds,
an amount required to cause the aggregate amount on deposit in the Interest
Account to equal the amount of interest due or becoming due and payable on
such Interest Payment Date on all Outstanding Bonds or to be paid on the
Bonds being redeemed on such date.
(3) The Fiscal Agent shall transfer to the Principal Account of the Bond Service
Fund, on each Interest Payment Date and redemption date on which the
principal of the Bonds shall be payable, an amount required to cause the
aggregate amount on deposit in the Principal Account to equal the principal
amount of, and premium (if any) on, the Bonds coming due and payable on
such Interest Payment Date, or required to be redeemed on such date pursuant
to the Indenture.
(4) On or after March 2 and September 2 of each year after making the deposits
and transfers required under (I) through (3) above, the Fiscal Agent shall
transfer the amount, if any, necessary to replenish the amount then on deposit
in the Reserve Fund to an amount equal to the Reserve Requirement.
(5) On or after September 2 of each year after making the deposits and transfers
required under (I) through (4) above, upon receipt of written instructions
from an Authorized Representative, the Fiscal Agent shall transfer from the
Special Tax Fund to the Rebate Fund the amount specified in such request.
(6) On or after September 2 of each year after making the deposits and transfers
required under (I) through (5) above, upon receipt of a written request of an
Authorized Representative, the Fiscal Agent shall transfer from the Special
Tax Fund to the Administrative Expense Fund the amounts specified in such
request to pay those Administrative Expenses which the District reasonably
expects (a) will become due and payable during such Fiscal Year or the cost
of which Administrative Expenses have previously been incurred and paid by
the District from funds other than the Administrative Expense Fund and
(b) the cost of which Administrative Expenses will be in excess of the
Administrative Expense Requirement for such Fiscal Year.
(7) If, on or after September 2 of each year, after making the deposits and
transfers required under (I) through (6) above, monies remain in the Special
Tax Fund, such monies shall remain on deposit in the Special Tax Fund and
shall be subsequently deposited or transferred pursuant to the provisions of
(I) through (6) above.
(c) The Fiscal Agent shall, upon receipt of Special Tax Revenues representing
Prepayments, immediately transfer such amounts to the Redemption Fund and utilize
such funds to redeem Bonds and to pay interest on such Bonds to be redeemed as set
forth in written instructions to be delivered to the Fiscal Agent by an Authorized
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DOCSOC\932761 v9\22245.0 140
Representative; provided, however, that any portion of a Prepayment constituting
Administrative Fees and Expenses (as defined in the Special Tax RMA) shall be
deposited into the Administrative Expense Fund as set forth in such written
instructions. The Fiscal Agent may conclusively rely upon such instructions.
(d) When there are no longer any Bonds Outstanding, any amounts then remaining on
deposit in the Special Tax Fund shall be transtèrred to the District and' used for any
lawful purpose under the Act.
Costs ofIssuance Fund.
The Fiscal Agent shall, upon the written requIsition executed by an Authorized
Representative, disburse mone'y from the Costs of Issuance Fund, if any, on such dates and in such
amounts as specified in such requisition to pay the Costs of Issuance related to the Bonds. Any
amounts remaining on deposit in the Costs ofIssuance Fund on the earlier of the date on which all
Costs of Issuance have been paid as stated in writing by an Authorized Representative delivered to
the Fiscal Agent or six months after the Delivery Date of the Bonds shall be transferred to the Project
Fund.
Bond Service Fund.
(a) Interest Account. All moneys in the Interest Account shall be used and withdrawn by
the Fiscal Agent solely for the purpose of paying interest on the Bonds as it shall become due and
payable (including accrued interest on any Bonds redeemed prior to maturity). All funds in the
Capitalized Interest Sub-Account shall be used and withdrawn to pay interest on the Bonds prior to
using any other funds on deposit in the Interest Account for such purpose.
(b) Principal Account. All moneys in the Principal Account shall be used and withdrawn
by the Fiscal Agent solely for the purpose of (i) paying the principal of the Bonds at the maturity
thereof, (ii) paying the principal of the Bonds, including the Term Bonds, upon the mandatory
sinking fund redemption thereof pursuant to the Indenture, or (iii) paying the principal of and
premium (if any) on any Bonds upon the optional or extraordinary mandatory redemption thereof
pursuant to the Indenture.
Proiect Fund
(a) Acquisition Account. The Fiscal Agent shall, from time to time, disburse monies
from the Acquisition Account to pay the Project Costs. Upon receipt of a payment request duly
executed by an Authorized Representative (which payment request shall not exceed the
corresponding payment request provided to the City under the Acquisition/Financing Agreement),
the Fiscal Agent shall pay the Project Costs from amounts in the Acquisition Account directly to the
contractor(s) or such other persbn(s), corporation(s) or entity(ies) specified in the payment request
(including reimbursements, if any, to the District). The Fiscal Agent may rely on an executed
payment request as complete authorization for said payments.
After the final payment or reimbursement of all Project Costs, as certified by delivery of a
written notice from an Authorized Representative to the Fiscal Agent, the Fiscal Agent shall transfer
excess monies, if any, on deposit in, or subsequently deposited in, the Acquisition Account to the
Special Tax Fund or the Redemption Fund as an Authorized Representative may direct in writing and
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DOCSOC\932761 v9\22245.0! 40
the Fiscal Agent shall apply the amount so transferred as directed by the Authorized Representative.
Upon such transfer the Acquisition Account shall be closed.
On or after December 15, 2005, the District may deliver to the Fiscal Agent a written
certificate executed by an Authorized Representative certifying that the District, in its sole and
absolute discretion, has determined that it will not be necessary for the District to utilize the proceeds
of the Bonds, together with any investment earnings on such proceeds, then remaining on deposit in
the Acquisition Account to fund Project Costs and directing the Fiscal Agent to transfer all such
moneys to the Redemption Fund for the purpose of redeeming Bonds prior to maturity: Upon receipt
of such certificate, the Fiscal Agent shall transfer such moneys to the Redemption Fund as so
directed. Upon such transfer the Acquisition Account shall be closed.
Notwithstanding anything herein to the contrary, if on the date which is three (3) years from
the Delivery Date of any series of the Bonds, any funds derived from the Bonds remain on deposit in
the Acquisition Account, the Fiscal Agent shall immediately restrict the Yield on such amounts so
that the Yield earned on the investment of such amounts is not in excess of the Yield on the Bonds,
unless in the written opinion of Bond Counsel delivered to the Fiscal Agent such restriction is not
necessary to prevent an impairment of the exclusion of interest on the Bonds from gross income for
federal income tax purposes.
(b) Traffic Enhancement Improvement Account. The Fiscal Agent shall, from time to
time, disburse monies from the Traffic Enhancement Improvement Account to pay the Traffic
Enhancement Improvement Costs. Upon receipt of a payment request duly executed by an
Authorized Representative, the Fiscal Agent shall pay the Traffic Enhancement Improvement Costs
from amounts in the Traffic Enhancement Improvement Account directly to the contractor(s) or such
other person(s), corporation(s) or entity(ies) specified in the payment request (including
reimbursements, if any, to the District). The Fiscal Agent may rely on an executed payment request
as complete authorization for said payments. Funds on deposit in the Traffic Enhancement
Improvement Account may not be utilized to pay Project Costs.
After the final payment or reimbursement of all Traffic Enhancement Improvement Costs, as
certified by delivery of a written notice from an Authorized Representative to the Fiscal Agent, the
Fiscal Agent shall transfer excess monies, if any, on deposit in, or subsequently deposited in, the
Traffic Enhancement Improvement Account to the Project Account, if such account is still open, or
to the Special Tax Fund or the Redemption Fund as an Authorized Representative may direct in
writing if the Project Account is closed and the Fiscal Agent shall apply the amount so transferred as
directed by the Authorized Representative.
On or after December 15, 2005, the District may deliver to the Fiscal Agent a written
certificate executed by an Authorized Representative certifying that the District, in its sole and
absolute discretion, has determined that it will not be necessary for the District to utilize the proceeds
of the Bonds, together with any investment earnings on such proceeds, then remaining on deposit in
the Traffic Enhancement Improvement Account to fùnd the Traffic Enhancement Improvement Costs
and directing the Fiscal Agent to transfer all such moneys to the Redemption Fund for the purpose of
redeeming Bonds prior to maturity. Upon receipt of such certificate, the Fiscal Agent shall transfer
such moneys to the Redemption Fund as so directed.
Notwithstanding anything herein to the contrary, if on the date which is three (3) years from
the Delivery Date of the Bonds, any funds derived from the Bonds remain on deposit in the Traffic
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DOCSOC\932761 v9\22245.0 140
Enhancement Improvement Account, the Fiscal Agent shall immediately restrict the Yield on such
amounts so that the Yield earned on the investment of such amounts is not in excess of the Yield on
such series of the Bonds, unless in the written opinion of Bond Counsel delivered to the Fiscal Agent
such restriction is not necessary to prevent an impairment of the exclusion of interest on the Bonds
from gross income for federal income tax purposes.
(c) Other Transfers Between the Accounts in the Proiect Fund. In addition to transfers
made pursuant to (a) and (b) above, the Fiscal Agent shall, from time to time and as directed by the
District by written instruction from an Authorized Representative given pursuant to the
Acquisition/Financing Agreement, transfer such funds as are specified in such written instruction
between the Traffic Enhancement Improvement Account and the Acquisition Account and between
the Acquisition Account and the Traffic Enhancement Improvement Account.
Reserve Fund,
Moneys on deposit in the Reserve Fund shall be used solely for the purpose of paying the
principal of and interest on the Bonds as such amounts shall become due and payable in the event
that the moneys in the Special Tax Fund and the Bond Service Fund for such purpose are insufticient
therefor or redeeming Bonds as described below. The Fiscal Agent shall, when and to the extent
necessary, withdraw money from the Reserve Fund and transfer such money to the Bond Service
Fund or the Redemption Fund for such purpose.
All Permitted Investments in the Reserve Fund shall be valued at their fair market value at
least semi-annually. On any date after the transfers to the Administrative Expense Fund and the
Bond Service Fund described above have been made for any Bond Year, if the amount on deposit in
the Reserve Fund is less than the Reserve Requirement, the Fiscal Agent shall transfer to the Reserve
Fund from the first available monies in the Special Tax Fund an amount necessary to increase the
balance therein to the Reserve Requirement.
If on September I, or the first Business Day thereafter if September I is not a Business Day,
of each year, the amount on deposit in the Reserve Fund is in excess of the Reserve Requirement, the
Fiscal Agent shall, as directed in writing by an Authorized Representative, (i) prior to the final
payment or reimbursement of all Project Costs or a determination by the City Manager, or the
designee thereof, that the amounts on deposit in the Project Fund are sufficient to pay all remaining
Project Costs for which a payment request has been or is expected to be submitted, as evidenced by a
written certificate of an Authorized Representative, transfer such excess to the Project Fund, and
(ii) after receipt of such written certificate, transfer such excess (less the hold back of funds sufticient
to pay all remaining Project Costs for which a payment request has been or is expected to be
received, as applicable) to the Bond Service Fund. In connection with any optional or extraordinary
mandatory redemption of Bonds, amounts in the Reserve Fund in excess of the Reserve Requirement
following such redemption shall be transferred to the Principal Account or the Interest Account ofthe
Bond Service Fund, as applicable, pursuant to written instructions of the District executed by an
Authorized Representative and applied to redeem Bonds.
Upon receipt of written instructions from an Authorized Representative instructing the Fiscal
Agent to transfer certain moneys representing a Reserve Fund credit for the prepayment of a Special
Tax obligation, the Fiscal Agent shall transfer the amount specified in such instructions from the
Reserve Fund to the Redemption Fund for the purpose of redeeming Bonds pursuant to such
instructions.
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DOCSOC\932761 v9\22245.0 140
Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the
Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if
any, due upon redemption, the Fiscal Agent shall transfer the amount in the Reserve Fund to the
Redemption Fund to be applied, on the next succeeding interest payment date, to the payment and
redemption, in accordance with the provisions of the Indenture of all of the Outstanding Bonds. In
the event that the amount so transferred from the Reserve Fund to the Redemption Fund exceeds the
amount required to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be
transferred to the District to be used for any lawful purpose of the District as set forth in the Act.
Rebate Fund.
The District shall calculate Excess Investment Earnings as defined in, and in accordance
with, the Rebate Instructions, and shall, in writing, direct the Fiscal Agent to transfer funds to the
Rebate Fund from funds furnished by the District as provided for in the Indenture and the Rebate
Instructions.
Notwithstanding the foregoing, the Rebate Instructions, including the method of computing
Excess Earnings (as defined in the Rebate Instructions) may be modified, in whole or in part, without
the consent of the Owners of the Bonds, upon receipt by the District of an opinion of Bond Counsel
to the effect that such modification shall not adversely affect the exclusion from gross income for
federal income tax purposes of interest on the Bonds then Outstanding.
The Fiscal Agent shall not be responsible for calculating rebate amounts or for the adequacy
or correctness of any rebate report or rebate calculations The Fiscal Agent shall be deemed
conclusively to have complied with the provisions of the Indenture regarding calculation and
payment of rebate if it follows the directions of the District and it shall have no independent duty to
review such calculations or enforce the compliance by the District with such rebate requirements.
Redemption Fund.
Monies may be deposited by the District into the Redemption Fund and shall be set aside and
used solely for the purpose of redeeming Bonds from unexpended proceeds transferred from the
Project Fund in accordance with the provisions of the Indenture. Following the redemption of any
Bonds, if any surplus remains in the Redemption Fund, such surplus shall be transferred to the
Special Tax Fund.
Administrative Expense Fund.
The moneys in the Administrative Expense Fund shall be used to pay Administrative
Expenses from time to time upon receipt by the Fiscal Agent of a written request executed by an
Authorized Representative specifying the name and address of the payee and the amount of the
Administrative Expense and a description thereof and further stating that such request has not formed
the basis of any prior request for payment.
Investment of Funds.
Unless otherwise specified in the Indenture, monies in the Special Tax Fund, Bond Service
Fund, the Reserve Fund and the Project Fund, the Costs of Issuance Fund and the Administrative
Expense Fund shall, at the written direction of an Authorized Representative given at least two (2)
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DOCSOC\932761 v9\222450 140
days prior, be invested and reinvested in Permitted Investments (including investments with the
Fiscal Agent or an affiliate of the Fiscal Agent or investments for which the Fiscal Agent or an
affiliate of the Fiscal Agent acts as investment advisor or provides other services so long as the
investments are Permitted Investments). Monies in the Redemption Fund and the Rebate Fund shall,
at the written direction of an Authorized Representative, be invested in Government Obligations.
Notwithstanding anything in the Indenture to the contrary, in the absence of written investment
instructions, the Fiscal Agent shall invest solely in investments identified in paragraph 7 of the
definition of Permitted Investments.
Obligations purchased as investments of monies in any fund or account shall be deemed at all
times to be a part of such fund or account. Except as otherwise provided in the Indenture, any
income realized on or losses resulting from investments in any fund or account shall be credited or
charged to such fund or account. Subject to the restrictions set forth in the Indenture and/or any
written investment instructions received by Fiscal Agent pursuant to the Indenture, monies in said
funds and accounts may be from time to time invested by the Fiscal Agent or the District, as
applicable, in any manner so long as:
(I) Monies in the Project Fund, Costs of Issuance Fund, Administrative Expense Fund
and Rebate Fund shall be invested in obligations which will by their terms mature as
close as practicable to the date the District estimates the monies represented by the
particular investment will be needed for withdrawal from such Fund; and
(2) Monies in the Special Tax Fund, the Bond Service Fund, the Redemption Fund or the
Reserve Fund shall be invested only in obligations which will by their terms mature
on such dates so as to ensure the payment of principal and interest on the Bonds as
the same become due; provided, however, investments of monies on deposit in the
Reserve Fund shall have an average aggregate weighted tenn not greater than five (5)
years.
The Fiscal Agent or District, as applicable, shall sell or present for redemption any
obligations so purchased whenever it may be necessary to do so in order to provide monies to meet
any payment or transfer for such funds and accounts or from such funds and accounts. The Fiscal
Agent shall not be liable for any loss from any investments made or sold by it in accordance with the
provisions of the Indenture.
TRANSFER OR EXCHANGE OF BONDS
Exchan2e of Bonds,
Bonds may be exchanged at the Principal Corporate Trust Office, for a like aggregate
principal amount of Bonds of authorized denominations, interest rate and maturity, subject to the
terms and conditions of the Indenture, including the payment of certain charges, if any, upon
surrender and cancellation of a Bond. Upon such transfer and exchange, a new registered Bond or
Bonds of any authorized denomination or denominations of the same maturity and for the same
aggregate principal amount will be issued to the transferee in exchange therefor.
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DOCSOC\932761 v9\22245.0 140
Transfer of Bonds.
The transtèr of any Bond may be registered only upon such books of registration upon
surrender thereof to the Fiscal Agent, together with an assignment duly executed by the Owner or his
attorney or legal representative, in satisfactory form. Upon any such registration of transfer, a new
Bond or Bonds shall be authenticated and delivered in exchange for such Bond, in the name of the
transferee, of any denomination or denominations authorized by the Indenture, and in an aggregate
principal amount equal to the principal amount of such Bond or Bonds so surrendered. In all cases in
which Bonds shall be exchanged or transferred, the Fiscal Agent shall authenticate the Bonds in
accordance with the provisions of the Indenture. The Fiscal Agent may make a charge for every such
exchange or registration of transfer of Bonds sufficient to reimburse it for any tax or other
governmental charge required to be paid with respect to such exchange or registration or transfer.
Mutilated, Destroyed, Stolen or Lost Bonds,
In case any Bond shall become mutilated or be destroyed, stolen or lost, the District shall
cause to be executed and authenticated a new Bond of like date and tenor and principal or maturity
amount in exchange and substitution for and upon the cancellation of such mutilated Bond or in lieu
of and in substitution for such Bond mutilated, destroyed, stolen or lost, upon the Owner's paying the
reasonable expenses and charges in connection therewith, and, in the case of a Bond destroyed,
stolen or lost, his filing with the Fiscal Agent and District of evidence satisfactory to them that such
Bond was destroyed, stolen or lost, and of his ownership thereof, and furnishing the Fiscal Agent and
District with indemnity satisfactory to them.
COVENANTS
As long as the Bonds are Outstanding and unpaid, the District shall (through its proper
members, officers, agents or employees) faithfully perform and abide by all of the covenants and
agreements set forth in the Indenture; provided, however, that, except for (c) below, such covenants
do not require the District to expend any funds other than the Special Tax Revenues.
(a) Preservation of Security for Bonds and Covenant to Foreclose. The District shall
preserve and protect the security of the Bonds and the rights of the Bondowners and defend their
rights against all claims and demands of all persons. Until such time as an amount has been set aside
sufficient to pay Outstanding Bonds at maturity or to the date of redemption if redeemed prior to
maturity, plus unpaid interest thereon and premium, if any, to maturity or to the date of redemption if
redeemed prior to maturity, the District will faithfully perform and abide by all of the covenants,
undertakings and provisions contained in the Indenture or in any Bond issued under the Indenture.
The District will review the public records of the County of San Diego, California, in
connection with the collection of the Special Taxes to determine the amount of the Special Tax
collected and will commence and diligently pursue to completion, judicial foreclosure proceedings
against (i) properties under common ownership with delinquent Special Taxes in the aggregate of
$5,000 or more by October 1 following the close of the Fiscal Year in which the Special Taxes were
due, and (ii) against all properties with delinquent Special Taxes in the aggregate of $2,500 or more
by October I following the close of any fiscal year if the amount in the Reserve Fund is less than the
Reserve Requirement.
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DOCSOC\932761 v9\22245.0 140
(b) Limitation on Bonds Secured by Superior Liens. The District will not issue any other
obligations payable, principal or interest, from the Special Taxes which have, or purport to have, any
I ien upon the Special Taxes superior to or, except as permitted in the following sentence, on a parity
with the lien of the Bonds authorized pursuant to the Indenture. Nothing in the Indenture shall
prevent the District from issuing and selling, pursuant to law, refunding bonds or other refunding
obligations payable from and having a first lien upon the Special Taxes on a parity with the
Outstanding Bonds so long as the issuance of such refunding bonds or other refunding obligations
results in a reduction in each Bond Year on the Annual Debt Service on the Bonds when combined
with the Debt Service on Parity Refunding Obligations following the issuance of such refunding
bonds or other refunding obligations.
(c) Punctual Payment. The District will duly and punctually payor cause to be paid the
principal of and interest on each of the Bonds issued under the Indenture on the date, at the place and
in the manner provided in said Bonds, solely from the Special Taxes and other funds as may be
therein provided.
(d) Special Tax Covenants. The District shall comply with all requirements of the Act so
as to assure the timely collection of the Special Taxes in an amount sufficient to pay the Annual Debt
Service on the Bonds when due and any Administrative Expenses when due. Prior to July I of each
year, the District shall ascertain the parcels on which the Special Taxes are to be levied in ·the
following Fiscal Year, taking into account any subdivisions of parcels during the current Fiscal Year.
The District shall effect the levy of the Special Tax in accordance with the Special Tax RMA and the
Act each Fiscal Year so that the computation of such levy is complete and transmitted to the Auditor
of the County of San Diego before the final date on which the Auditor of the County of San Diego
will accept the transmission of the Special Tax for the parcels within the District for inclusion on the
next real property tax roll. Upon completion of the computation of the amount of the Special Tax
levy, the District shall prepare or cause to be prepared, and shall transmit or cause to be transmitted
to the Auditor of the County of San Diego, such data as such Auditor requires to include the levy of
the Special Tax on the next real property tax roll.
The District finds and determines that, historically, delinquencies in the payment of special
taxes authorized pursuant to the Act in community facilities districts in Southern California have
from time to time been at levels requiring the levy of special taxes at the maximum authorized rates
in order to make timely payment of principal of and interest on the outstanding indebtedness of such
community facilities districts. For this reason, the District has determined that, absent the
certification described below, a reduction in the Maximum Annual Special Tax (as such term is
defined in the Special Tax RMA) authorized to be levied below the levels provided would interfere
with the timely retirement of the Bonds. The District has determined it to be necessary in order to
preserve the security for the Bonds to covenant, and, to the maximum extent that the law permits it to
do so, the District does covenant, that it'shall not initiate proceedings to reduce the Maximum Annual
Special Tax, unless, in connection therewith, (i) the District receives a certificate from one or more
Special Tax Consultants which, when taken together, certify that, on the basis of the parcels of land
and improvements existing in the District as of the July 1 preceding the reduction, the Maximum
Ann~al Special Tax which may be levied on all Assessor's Parcels (as such term is defined in the
Special Tax RMA) of taxable property on which a completed structure is located in each Fiscal Year
will equal at least 110% of the largest sum of the Annual Debt Service on the Bonds to remain
Outstanding and the Debt Service on Parity Refunding Obligations outstanding after the reduction is
approved (the "Maximum Debt Service") and will not reduce the Maximum Annual Special Tax
payable from parcels on which a completed structure is located to less than 110% of the Maximum
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DOCSOC\93276 ¡ v9\22245.0 140
Debt Service, and (ii) the City Council, acting as the legislative body of the District, finds pursuant to
the Indenture that any reduction made under such conditions will not adversely affect the interests of
the Owners of the Bonds. Any reduction in the Maximum Annual Special Tax approved pursuant to
the preceding sentence may be approved without the consent of the Owners of the Bonds.
The District covenants that, in the event that any initiative is adopted by the qualified electors
which purports to reduce the Maximum Annual'Special Tax below the levels authorized pursuant to
the Special Tax RMA or to limit the power or authority of the District to levy Special Taxes pursuant
to the Special Tax RMA, the District shall, from funds available under the Indenture, commence and
pursue legal action in order to preserve the authority and power of the District to levy Special Taxes
pursuant to the Special Tax RMA.
(e) Books and Accounts. The District will at all times keep, or cause to be kept, proper
and current books and accounts (separate from all other records and accounts) in which complete and
accurate entries shall be made of all transactions relating to the Special Tax Revenues and other
funds provided for in the Indenture.
(t) Use of Proceeds. The District will not directly or indirectly use or permit the use of
any proceeds of the Bonds or any other funds of the District or take or omit to take any action that
would cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the Code,
or obligations which are "federally guaranteed" within the meaning of Section l49(b) of the Code.
The District will not allow five percent (5%) or more of the proceeds of the Bonds to be used in the
trade or business of any non-governmental units and will not loan five percent (5%) or more of the
proceeds of the Bonds to any non-governmental units.
(g) Preservation of Tax Exemption. The District covenants that it wi II not take any
action, or fail to take any action, if any such action or failure to take action would adversely affect the
exclusion from gross income of the interest on the Bonds under Section 103 of the Code. The
District will not directly or indirectly use or permit the use of any proceeds of the Bonds or any other
funds of the District, or take or omit to take any action, that would cause the Bonds to be "arbitrage
bonds" within the meaning of Section l48(a) of the Code. To that end, the District will comply with
all requirements of Section 148 of the Code to the extent applicable to the Bonds. In the event that at
any time the District is of the opinion that for purposes of this Section it is necessary to restrict or
limit the yield on the investment of any monies held under the Indenture or otherwise the District
shall so instruct the Treasurer in writing, and the Treasurer shall take such action as may be
necessary in accordance with such instructions.
Without limiting the generality of the foregoing, the District agrees that there shall be paid
from time to time all amounts required to be rebated to the United States of America pursuant to
Section l48(t) of the Code and any temporary, proposed or final Treasury Regulations as may be
applicable to the Bonds from time to time. This covenant shall survive payment in full or defeasance
of the Bonds.
Notwithstanding any provision of this covenant, if the District shall obtain an opinion of
Bond Counsel to the effect that any action required under this covenant is no longer required, or to
the effect that some further action is required, to maintain the exclusion from gross income of the
interest on the Bonds pursuant to Section 103 of the Code, the Treasurer may rely conclusively on
such opinion in complying with the provisions hereof, and the covenant under the Indenture shall be
deemed to be modified to that extent.
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(h) Extension of Maturity. The District shall not directly or indirectly extend the
maturity dates of the Bonds or the time of payment of interest with respect thereto.
(i) Limitation on Right to Tender Bonds. The District covenants that it will not adopt
any policy pursuant to Section 53341.1 of the Act permitting the tender of Bonds in full payment or
partial payment of any Special Taxes unless it first receives a certificate of an independent financial
consultant that accepting such tender will not result in the District having insufficient Special Tax
Revenues to pay the principal of and interest on the Bonds when due.
MODIFICATIONS AND AMENDMENTS OF THE INDENTURE
The Legislative Body may, by adoption of a resolution from time to time, and at any time but
without notice to or consent of any of the Bondholders, approve a Supplemental Indenture to the
Indenture for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any provision in the Indenture which
may be inconsistent with any other provision therein, or to make any other provision
with respect to matters or questions arising under the Indenture or in any
Supplemental Indenture, provided that such action shall not be materially adverse to
the interests of the Bondowners;
(b) to add to the covenants and agreements of and the limitations and the restrictions
upon the District contained in the Indenture, other covenants, agreements, limitations
and restrictions to be observed by the District which are not contrary to or
inconsistent with the Indenture as theretofore in effect;
(c) to modify, alter, amend or supplement the Indenture in any other respect which is not
materially adverse to the interests of the Bondowners; and
(d) to amend any provision of the Indenture relating to the Code as may be necessary or
appropriate to assure compliance with the Code and the exclusion from gross income
of interest on the Bonds.
Exclusive of the Supplemental Indentures provided for in the first paragraph above, the
Owners of not less than 60% in aggregate principal amount of the Bonds then Outstanding shall have
the right to consent to and approve the adoption by the District of such Supplemental Indentures as
shall be deemed necessary or desirable by the District for the purpose of waiving, modifying,
altering, amending, adding to or rescinding, in any particular, any of the terms or provisions
contained in the Indenture; provided, however, that nothing therein shall permit, or be construed as
permitting, (a) an extension of the maturity date of the principal of, or the payment date of interest
on, any Bond, or (b) a reduction in the principal amount of, or redemption premium on, any Bond or
the rate of interest thereon without the consent of the affected Bondowner(s), or permit, or be
construed as permitting, (x) a preference or priority of any Bond or Bonds over any other Bond or
Bonds, (y) a reduction in the aggregate principal amount of the Bonds the Owners of which are
required to consent to such Supplemental Indenture, or (z) creating of a pledge of or lien or charge
upon the Special Tax Revenues superior to the pledge provided for in the Indenture, without the
consent of the Owners of all Bonds then Outstanding.
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If at any time the District shall desire to approve a Supplemental Indenture, which shall
require the consent of the Bondowners, the District shall so notify the Fiscal Agent and shall deliver
to the Fiscal Agent a copy of the proposed Supplemental Indenture. The District shall, at the expense
of the District, cause notice ofthe proposed Supplemental Indenture to be mailed, postage prepaid, to
all Bondowners at their addresses as they appear in the bond register. Such notice shall briefly set
forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof is on file
at the principal office of the District for inspection by all Bondowners. The failure of any
Bondowner to receive such notice shall not affect the validity of such Supplemental Indenture when
consented to and approved. Whenever at any time within one year after the date of the first mailing
of such notice, the District shall receive an instrument or instruments purporting to be executed by
the Owners of not less than 60% in aggregate principal amount of the Bonds then Outstanding, which
instrument or instruments shall refer to the proposed Supplemental Indenture described in such
notice, and shall specifically consent to the approval thereof by the Legislative Body substantially in
the fonn of the copy thereof referred to in such Notice as on file with the District, such proposed
Supplemental Indenture, when duly approved by the Legislative Body, shall thereafter become a part
of the proceedings for the issuance of the Bonds. In determining whether the Owners of 60% of the
aggregate principal amount of the Bonds have consented to the approval of any Supplemental
Indenture, Bonds which are owned by the District or by any person directly or indirectly controlling
or controlled by or under the direct or indirect common control with the District, shall be disregarded
and shall be treated as though they were not outstanding for the purpose of any such determination.
Upon the approval of any Supplemental Indenture and the receipt of consent to any such
Supplemental Indenture from the Owners of the appropriate aggregate principal amount of Bonds in
instances where such consent is required, the Indenture shall be, and shall be deemed to be, modified
and amended in accordance therewith, and the respective rights, duties and obligations under the
Indenture of the District and ail Owners of Bonds then Outstanding shall thereafter be determined,
exercised and enforced under the Indenture, subject in all respects to such modifications and
amendments. Notwithstanding anything therein to the contrary, no Supplemental Indenture shall be
entered into which would modify the duties of the Fiscal Agent under the Indenture, without the prior
written consent of the Fiscal Agent.
PROVISIONS CONSTITUTE CONTRACT
The provIsIons of the Indenture shall constitute a contract between the District and the
Bondowners and the provisions thereof shall be enforceable by any Bondowner for the equal benefit
and protection of all Bondowners similarly situated by mandamus, accounting, mandatory injunction
or any other suit, action or proceeding at law or in equity that is now or may hereafter be authorized
under the laws of the State in any court of competent jurisdiction. Such contract is made under and is
to be construed in accordance with the laws of the State.
No remedy conferred hereby upon any Bondowner is intended to be exclusive of any other
remedy, but each such remedy is cumulative and in addition to every other remedy and may be
exercised without exhausting and without regard to any other remedy conferred by the Act or any
other law of the State. No waiver of any default or breach of duty or contract by any Bondowner
shall affect any subsequent default or breach of duty or contract or shall impair any rights or
remedies on said subsequent default or breach. No delay or omission of any Bondowner to exercise
any right or power accruing upon any default shall impair any such right or power or shall be
construed as a waiver of any such default or acquiescence therein. Every substantive right and every
remedy conferred upon the Bondowners may be enforced and exercised as often as may be deemed
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DOCSOC\93276Iv9\22245.0] 40
expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be
brought or taken and the Bondowner shall prevail, said Bondowner shall be entitled to receive from
the Special Tax Fund reimbursement for reasonable costs, expenses, outlays and attorney's fees, and
should said suit, action or proceeding be abandoned or be determined adversely to the Bondowners
then, and in every such case, the District and the Bondowners shall be restored to their former
positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.
After the issuance and delivery of the Bonds, the Indenture shall be irrevocable, but shall be
subject to modification to the extent and in the manner provided therein, but to no greater extent and
in no other manner.
EVENTS OF DEFAULT
Events of Default Defiued,
The following events shall be Events of Default under the Indenture.
(a) Default in the due and punctual payment of the principal of any Bond when and as
the same shall become due and payable, whether at maturity as therein expressed, by
proceedings for redemption, by declaration or otherwise.
(b) Default in the due and punctual payment of interest on any Bond when and as such
interest shall become due and payable.
(c) Default by the District in the observance of any of the other covenants, agreements or
conditions on its part in the Indenture or in the Bonds contained, if such default shall
have continued for a period of thirty (30) days after written notice thereof, specifying
such default and requiring the Same to be remedied, shall have been given to the
District by the Fiscal Agent or to the District and the Fiscal Agent by the Owners of
not less than twenty-five percent (25%) in aggregate principal amount of the Bonds
at the time Outstanding; provided that such default (other than a default arising from
nonpayment of the Fiscal Agent's fees and expenses, which must be cured within
such 30-day period unless waived by the Fiscal Agent) shall not constitute an Event
of Default under the Indenture if the District shall COmmence to cure such deíàult
within said thirty (30) day period and thereafter diligently and in good faith shall cure
such default within a reasonable period of time; or
(d) The filing by the District of a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the
United States of America, or if a court of competent jurisdiction shall approve a
petition, filed with or without the consent of the District, seeking reorganization
under the federal bankruptcy laws or any other applicable law of the United States of
America, or if, under the provisions of any other law for the relief or aid of debtors,
any court of COmpetent jurisdiction shall assume custody or control of the District or
of the whole or any substantial part of its property.
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DOCSOC\932761 v9\22245.0 140
Application of Revenues and Other Funds after Default.
If a default in the payment of the Bonds or any Additional Bonds shall occur and be
continuing, all revenues and any other funds then held or thereafter received under any of the
provisions of the Indenture shaIl be applied as folIows and in the folIowing order:
A. To the payment of any expenses necessary in the opinion of the District to protect the
interest of the owners of the Bonds and payment of reasonable charges and expenses
of the Fiscal Agent (including reasonable fees and disbursements of its counsel)
incurred in and about the performance of its powers and duties under the Indenture;
B. To the payment of the principal of and interest then due with respect to the Bonds
(upon presentation of the Bonds to be paid, and stamping thereon of the payment if
only partially paid, or surrender thereof if fuIly paid) subject to the provisions of the
Indenture, as foIlows:
First: To the payment to the persons entitled thereto of all installments of interest
then due in the order of the maturity of such instaIlments, and, if the amount available
shall not be sufficient to pay in full any installment or installments maturing on the
same date, then to the payment thereof ratably, according to the amounts due thereon,
to the persons entitled thereto, without any discrimination or preference; and
Second: To the payment to the persons entitled thereto of the unpaid principal of any
Bonds which shall have become due, whether at maturity or by call for redemption,
with interest on the overdue principal at the rate borne by the respective Bonds on the
date of maturity of redemption, and if the amount available shall not be sufficient to
pay in full all the Bonds, together with such interest, then to the payment thereof
ratably, according to the amounts of principal due on such date to the persons entitled
thereto, without discrimination or preference.
DEFEASANCE
If the District shall payor cause to be paid, or there shall otherwise be paid, to the Owner of
an Outstanding Bond the interest due thereon and the principal thereof, at the times and in the
manner stipulated in the Indenture, then the Owner of such Bond shall cease to be entitled to the
pledge of the Special Tax Revenues, and, other than as set forth below, all covenants, agreements and
other obligations of the District to the Owner of such Bond under the Indenture shall thereupon
cease, terminate and become void and discharged and satisfied. In the event of the defeasance of all
Outstanding Bonds, the Fiscal Agent shall pay over or deliver to the District all money or securities
held by it pursuant to the Indenture which are not required for the payment of the principal at:
premium, if any, and interest due on such Bonds.
Any Outstanding Bond shall be deemed to have been paid within the meaning expressed in
the preceding paragraph if such Bond is paid in anyone or more of the following ways;
(a) by paying or causing to be paid the principal of, premium, if any, and interest on such
Bond, as and when the same shall become due and payable;
DOCSOC\932761 v9\222450 140
E-24
(b) by depositing with the Fiscal Agent, in trust, at or before maturity, money which,
together with the amounts then on deposit in the funds established pursuant to the
Indenture (exclusive of the Rebate Fund) and available for such purpose, is fully
sufficient to pay the principal of, premium, if any, and interest on such Bond, as and
when the same shall become due and payable; or
(c) by depositing with an escrow bank appointed by the District, in trust, noncallable
Government Obligations, in such amount as an Independent Accountant shall
determine (as set forth in a verification report from such Independent Accountant)
will be sufficient, together with the interest to accrue thereon and moneys then on
deposit in the funds established under the Indenture (exclusive of the Rebate Fund)
and available for such purpose, together with the interest to accrue thereon, to pay
and discharge the principal of, premium, if any, and interest on such Bond, as and
when the same shall become due and payable;
then, at the election of the District, and notwithstanding that any Outstanding Bonds shall not have
been surrendered for payment, all obligations of the District under the Indenture with respect to such
Bond shall cease and tenninate, except for the obligation of the Fiscal Agent to payor cause to be
paid to the Owners of any such Bond not so surrendered and paid, all sums due thereon and except
for the covenants of the District to preserve the exclusion of the interest on the Bonds from gross
income for federal income tax purposes. Notice of such election shall be filed with the Fiscal Agent
not less than ten (10) days prior to the proposed defeasance date, or such shorter period of time as
may be acceptable to the Fiscal Agent. In connection with a defeasance under (b) or (c) above, there
shall be provided to the Fiscal Agent a certificate of a Independent Accountant stating its opinion as
to the sufficiency of the moneys or securities deposited with the Fiscal Agent or the escrow bank,
together with the interest to accrue thereon and moneys then on deposit in the funds established
under the Indenture (exclusive of the Rebate Fund) and available for such purpose, together with the
interest to accrue thereon to pay and discharge the principal of, premium, if any, and interest on all
such Bonds to be defeased in accordance with the Indenture as and when the same shall become due
and payable, and an opinion of Bond Counsel (which may rely upon the opinion of the Independent
Accountant) to the effect that the Bonds being defeased have been legally defeased in accordance
with the Indenture.
To accomplish such defeasance, the District shall cause to be delivered (i) a report of the
Independent Accountant verifying the determination made pursuant to paragraph (c) above (the
"Verification Report") and (ii) an opinion of Bond Counsel to the effect that the Bonds are no longer
Outstanding. The Verification Report and opinion of Bond Counsel shall be acceptable in form and
substance, and addressed to the District and the Fiscal Agent.
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DOCSOC\932761 v9\22245.0 140
APPENDIX F
CONTINUING DISCLOSURE AGREEMENT OF THE DISTRICT
This Continuing Disclosure Agreement dated as of , 2003 (the "Disclosure
Agreement") is executed and delivered by the City of Chula Vista Community Facilities District
No. 2001-2 (McMillin - Otay Ranch - Village Six) (the "Issuer") and MuniFinancial as dissemination
agent (the "Dissemination Agent"), in connection with the issuance and delivery by the Issuer of its
$ 2003 Special Tax Bonds (the "Bonds"). The Bonds are being issued pursuant to an
Indenture, dated as of July 1,2003 (the "Indenture"), by and between the Issuer and the Fiscal Agent.
The Issuer, the Fiscal Agent and the Dissemination Agent covenant as follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the Issuer, the Fiscal Agent and the Dissemination Agent, for the benefit
of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating
Underwriter in complying with the Rule.
SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which
apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as
described in, Sections 3 and 4 of this Disclosure Agreement.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to
vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding
Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any
Bonds for federal income purposes.
"Disclosure Representative" shall mean the Director of Finance of the City ofChula Vista or
his or her designee, or such other officer or employee as the Issuer shall designate in writing to the
Dissemination Agent from timé to time.
"Dissemination Agent" shall mean, initially, MuniFinancial, acting in its capacity as
Dissemination Agent hereunder, or any successor Dissemination Agent designed in writing by the
Issuer and which has been filed with the then current Dissemination Agent a written acceptance of
such designation.
"Listed Events" shall mean any of the events listed In Section 5(a) of this Disclosure
Agreement.
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purpose of the Rule.
"Official Statement" shall mean the Official Statement, dated
to the Bonds.
, 2003 relating
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DOCSUC\932761 v9\22245.0 140
"Participating Underwriter" shall mean Stone & Youngberg LLC, whose address for
purposes of this Agreement is 50 California Street, Suite 3500, San Francisco, California 94111,
Attention: Research Department.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule l5c2-l2(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
"State Repository" shall mean any public or private repository or entity designated by the
State of California as a state repository for the purpose of the Rule and recognized as such by the
Securities and Exchange Commission. As of the date of this Disclosure Agreement, there is no State
Repository.
'Tax-exempt" shall mean that interest on the Bonds is excluded from gross income for
federal income tax purposes, whether or not such interest is includable as an item of tax preferences
or otherwise includable directly or indirectly for purposes of calculating any other tax liability,
including any alternative minimum tax or environmental tax.
SECTION 3. Provision of Annual Reports.
(a) The Issuer shall, or shall cause the Dissemination Agent by written direction to such
Dissemination Agent to, not later than February I after the end of the Issuer's fiscal year (which
currently ends on June 30), commencing with the report due by February I, 2004, provide to each
Repository and the Participating Underwriter an Annual Report which is consistent with the
requirements of Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a
single document or as separate documents comprising a package, and may include by reference other
information. as provided in Section 4 of this Disclosure Agreement; provided that the audited
financial statements of the Issuer may be submitted separately from and later than the balance of the
Annual Report if they are not available by the date required above for the filing of the Annual
Report.
An Annual Report shall be provided at least annually notwithstanding any fiscal year
longer than 12 calendar months. The Issuer's fiscal year is currently effective from July I to the
immediately succeeding June 30 of the following year. The Issuer will promptly notify each
Repository or the Municipal Securities Rulemaking Board and, in either case, the Fiscal Agent and
the Dissemination Agent of a change in the fiscal year dates.
(b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a)
for providing the Annual Report to Repositories, the Issuer shall provide the Annual Report to the
Dissemination Agent and the Fiscal Agent (if the Fiscal Agent is not the Dissemination Agent). If by
fifteen (15) Business Days prior to such date the Fiscal Agent has not received a copy of the Annual
Report, the Fiscal Agent shall contact the Issuer and the Dissemination Agent to determine if the
Issuer is in compliance with subsection (a). The Issuer shall provide a written certification with each
Annual Report furnished to the Dissemination Agent and the Fiscal Agent to the effect that such
Annual Report constitutes the Annual Report required to be furnished by it hereunder. The
Dissemination Agent and Fiscal Agent may conclusively rely upon such certification of the Issuer
and shall have no duty or obligation to review such Annual Report.
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DOCSOC\932761 v9\222450 140
(c) If the Dissemination Agent is unable to verify that an Annual Report has been
provided to Repositories by the date required in subsection (a), the Dissemination Agent shall send a
notice to each Repository, in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the
name and address of each National Repository and each State Repository, if any; and
(ii) promptly after receipt of the Annual Report, tile a report with the Issuer and
(if the Dissemination Agent is not the Fiscal Agent) the Fiscal Agent certifying that the
Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it
was provided and listing all the Repositories to which it was provided.
SECTION 4. Content of Annual Reports. The initial Annual Report due by February 1,
2003 shall include only a copy of the Official Statement and the audited financial statements of the
Issuer described in Section 4(a) below. Thereafter, the Issuer's Annual Report shall contain or
include by reference:
(a) Financial Statements. The audited financial statements of the Issuer for the most
recent fiscal year of the Issuer then ended. If the Issuer prepares audited financial statement and if
the audited financial statements are not available by the time the Annual Report is required to be
filed, the Annual Report shall contain any unaudited financial statements of the Issuer in a format
similar to the financial statements, and the audited financial statements shall be filed in the same
manner as the Annual Report when they become available. Audited financial statements of the
Issuer shall be audited by such auditor as shall then be required or permitted by State law or the
Indenture. Audited financial statements, if prepared by the Issuer, shall be prepared in accordance
with generally accepted accounting principles as prescribed for governmental units by the
Governmental Accounting Standards Board; provided, however, that the Issuer may from time to
time, if required by federal or state legal requirements, modify the basis upon which its financial
statements are prepared. In the event that the Issuer shall modify the basis upon which its financial
statements are prepared, the Issuer shall provide a notice of such modification to each Repository,
including a reference to the specific federal or state law or regulation specifically describing the legal
requirements for the change in accounting basis.
(b) Financial and Operating Data. The Annual Report shall contain or incorporate by
reference the following information:
(i) the principal amount of Bonds outstanding as of the September 2 preceding
the filing of the Annual Report;
(ii) the balance in each fund under the Indenture and the Reserve Requirement as
of the September 2 preceding the filing of the Annual Report;
(iii) an update on the status of construction of the public improvements to be
constructed with the proceeds of the Bonds, which shall include an update of Table I in the
Official Statement;
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DOCSOC\932761 v9\22245.0 140
(iv) any changes to the Rate and Method of Apportionment of the Special Taxes
approved or submitted to the qualified electors for approval prior to the filing of the Annual
Report and a description of any parcels for which the Special Taxes have been prepaid in the
Fiscal Year for which the Annual Report is being prepared;
(v) an update of the estimated assessed value-to-lien ratios within the District
substantially in the form of Table 6 in the Official Statement based upon the most recent
Special Tax levy preceding the date of the Annual Report and on the assessed values of
property for the current fiscal year; provided, however, that all parcels which constitute
Developed Property may be grouped as a single category;
(vi) an update of Table 2 in the Official Statement, including a list of all taxpayers
within the District which own property in the District upon which 5% or more of the total
Special Taxes for the current fiscal year have been levied, and a statement as to whether any
of such taxpayers is delinquent in the payment of Special Taxes;
(vii) any event known to the Issuer which reduces or slows the number of
residential units permitted to be constructed within the District or which results in a
moratorium on future building within the District;
(viii) the status of any foreclosure actions being pursued by the Issuer with respect
to delinquent Special Taxes;
(ix) the total Special Taxes levied and the total Special Taxes collected for the
prior fiscal year and the total Special Taxes that remain unpaid for each prior fiscal year in
which Special Taxes were levied; and
(x) any information not already included under (i) through (ix) above that the
Issuer is required to file in its annual report to the California Debt and Investment Advisory
Commission pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982,
as amended.
(c) Any or all of the items listed in (a) or (b) above may be included by specific reference
to other documents, including official statements of debt issues of the Issuer or related public entities,
which have been submitted to each of the Repositories or the Securities and Exchange Commission.
If the document included by reference is a final official statement, it must be available from the
Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other document
so included by reference.
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given,
notice of the occurrence of any of the following events with respect to the Bonds, if material:
(I) principal and interest payment delinquencies.
(2) an event of default under the Indenture other than as described in (I)
above.
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DOCSOC\93276] v9\22245.0] 40
(3) unscheduled draws on the Reserve Fund reflecting financial
difficulties.
(4) unscheduled draws on any credit enhancements securing the Bonds
reflecting financial difficulties.
(5) any change in the provider of any letter of credit or any municipal
bond insurance policy securing the Bonds or any failure by the providers of
such letters of credit or municipal bond insurance policies to perform on the
letter of credit or municipal bond insurance policy.
(6) adverse tax opinions or events adversely affecting the tax-exempt
status of the Bonds.
(7) modifications to the rights of Bond Owners.
(8) unscheduled redemption of any Bond.
(9) defeasances.
(10) any release, substitution, or sale of property securing repayment of the
Bonds.
(II) rating changes.
(b) The Fiscal Agent shall, promptly upon the obtaining actual knowledge of the
occurrence of any of the Listed Events, contact the Issuer pursuant to the Indenture, inform such
person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing
whether or not to report the event pursuant to subsection (t). For purposes of this Disclosure
Agreement, "actual knowledge" of the occurrence of such Listed Events shall mean actual
knowledge by the officer at the corporate trust office of the Fiscal Agent with regular responsibility
for the administration of matters related to the Indenture.
(c) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, whether
because of a notice from the Fiscal Agent pursuant to subsection (b) or otherwise, the Issuer shall as
soon as possible determine if such event would be material under applicable federal securities laws.
(d) If the Issuer has determined that knowledge of the occurrence of a Listed Event
would be material under applicable federal securities laws, the Issuer shall promptly notify the
Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the
occurrence pursuant to subsection (t).
(e) If in response to a request under subsection (b), the Issuer determines that the Listed
Event would not be material under applicable federal securities laws, the Issuer shall so notify the
Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence
pursuant to subsection (t).
(t) If the Dissemination Agent has been instructed by the Issuer to report the occurrence
of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with (i) the
Municipal Securities Rulemaking Board or (ii) each National Repository, and in either case, to each
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DOCSOC\93276 ¡ v9\22245.0 140
State Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections
(a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the
underlying event is given to Owners of affected Bonds pursuant to the Indenture. In each case of the
Listed Event, the Dissemination Agent shall not be obligated to file a notice as required in this
subsection (f) prior to the occurrence of such Listed Event.
(g) The Issuer hereby agrees that the undertaking set forth in this Disclosure Agreement
is the responsibility of the Issuer and that the Fiscal Agent or the Dissemination Agent shall not be
responsible for determining whether the Issuer's instructions to the Dissemination Agent under this
Section 5 comply with the requirements of the Rule.
SECTION 6. Termination of Reporting Obligation. The obligation of the Issuer, the Fiscal
Agent and the Dissemination Agent under this Disclosure Agreement shall terminate upon the legal
defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior
to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner
as for a Listed Event under Section 5.
SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under the Disclosure Agreement, and
may discharge any such Dissemination Agent, with or without appointing a successor Dissemination
Agent. If at any time there is not any other designated Dissemination Agent, the Fiscal Agent shall
be the Dissemination Agent. The initial Dissemination Agent shall be MuniFinancial. The
Dissemination Agent may resign by providing (i) thirty days written notice to the Issuer and the
Fiscal Agent and (ii) upon appointment of a new Dissemination Agent hereunder.
SECTION 8. Amendment. (a) This Disclosure Amendment may be amended, by written
agreement of the parties, without the consent of the Owners, if all of the following conditions are
satisfied: . (I) such amendment is made in connection with a change in circumstances that arises from
a change in legal (including regulatory) requirements, a change in law (including rules or regulations)
or in interpretations thereof, or a change in the identity, nature or status of the Issuer or the type of
business conducted thereby, (2) this Disclosure Agreement as so amended would have complied with
the requirements of the Rule as of the date of this Disclosure Agreement, after taking into account
any amendments or interpretations of the Rule, as well as any change in circumstances, (3) the Issuer
shall have delivered to the Fiscal Agent an opinion of a nationally recognized bond counselor
counsel expert in federal securities laws, addressed to the Issuer and the Fiscal Agent, to the same
effect as set forth in clause (2) above, (4) the Issuer shall have delivered to the Dissemination Agent
an opinion of nationally recognized bond counselor counsel expert in federal securities laws,
addressed to the Issuer, to the effect that the amendment does not materially impair the interests of
the Owners or Beneficial Owners, and (5) the Issuer shall have delivered copies of such opinion and
amendment to each Repository.
(b) This Disclosure Agreement may be amended, by written agreement of the parties,
upon obtaining consent of Owners in the same manner as provided in the Indenture for amendments
to the Indenture with the consent of the Owners of the Bonds, provided that the conditions set forth in
Section 8(a)( 1), (2) and (3) have been satisfied.
(c) To the extent any amendment to this Disclosure Agreement results in a change in the
type of financial information or operating data provided pursuant to this Disclosure Agreement, the
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DOCSOC\932761 v9\22245.0 140
first Annual Report provided thereafter shall include a narrative explanation of the reasons for the
amendment and the impact of the change.
(d) If an amendment is made to the basis on which financial statements are prepared, the
Annual Report for the year in which the change is made shall present a comparison between the
financial statements or information prepared on the basis of the new accounting principles and those
prepared on the basis of the former accounting principles. Such comparison shall include a
quantitative and, to the extent r~asonably feasible, qualitative discussion of the differences in the
accounting principles and the impact of the change in the accounting principles on the presentation of
the financial information.
SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the Issuer from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or
including any other information in any.Annual Report or notice of occurrence of a Listed Event, in
addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any
information in any Annual Report or notice of occurrence of a Listed Event in addition to that which
is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this
Agreement to update such information or include it in any future Annual Report or notice if
occurrence of a Listed Event.
The Issuer acknowledges and understands that other state and federal laws, including but not
limited to the Securities Act of 1933 and Rule IOb-5 promulgated under the Securities Exchange Act
of 1934, may apply to the Issuer, and that under some circumstances compliance with this Disclosure
Agreement, without additional disclosures or other action, may not fully discharge all duties and
obligations of the Issuer under such laws.
SECTION 10. Default. In the event of a failure of the Issuer or the Dissemination Agent to
comply with any provision of this Disclosure Agreement, the Participating Underwriter or any
Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate,
including seeking mandate or specific performance by court order, to cause the Issuer to comply with
its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not
be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure
Agreement in the event of any failure of the Issuer or the Fiscal Agent to comply with this Disclosure
Agreement shall be an action to compel performance.
SECTION II. Duties, Immunities and Liabilities of Fiscal Agent and Dissemination Agent.
Article VII of the Indenture is hereby made applicable to this Disclosure Agreement as if this
Disclosure Agreement were (solely for this purpose) contained in the Indenture and the
Dissemination Agent and the Fiscal Agent shall be entitled to the same protections, limitations from
liability and indemnification hereunder as are afforded the Fiscal Agent thereunder. The
Dissemination Agent and the Fiscal Agent shall have only such duties as are specifically set forth in
this Disclosure Agreement, and the Issuer agrees to indemnify and save the Dissemination Agent and
the Fiscal Agent and their respective officers, directors, employees and agents, harmless against any
loss, expense and liabilities which, they may incur arising out of or in the exercise or performance of
their powers and duties hereunder, including the costs and expenses (including attorneys fees) of
defending against any claim of liability, but excluding,liabilities due to the Dissemination Agent's or
the Fiscal Agent's respective negligence or willful misconduct. The Dissemination Agent shall be
paid compensation by the Issuer for its services provided hereunder in accordance with its schedule
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DOCSOC\932761 v9\22245.0 140
of fees as amended from time to time and all expenses, legal fees and advances made or incurred by
the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent and
the Fiscal Agent shall have no duty or obligation to review any information provided to them
hereunder. The obligations of the Issuer under this Section shall survive resignation or removal of
the Dissemination Agent and Fiscal Agent and payment of the Bonds. No person shall have any
right to commence any action against the Fiscal Agent or the Dissemination Agent seeking any
remedy other than to compel specific performance of this Disclosure Agreement. The Dissemination
Agent and the Fiscal Agent shall not be liable under any circumstances for monetary damages to any
person for any breach under this Disclosure Agreement.
SECTION 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of
the Issuer, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and Owners and
Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or
entity.
SECTION 13. Notices. Notices should be sent in writing to the following addresses. The
following information may be conclusively relied upon until changed in writing.
Disclosure Representative:
Director of Finance
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Dissemination Agent:
MuniFinancial
28765 Single Oak Drive, Suite 200
Temecula, California 92590
Attention: Corporate Trust Department
SECTION 14. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
CITY OF CHULA VISTA COMMUNITY
FACILITIES DISTRICT NO. 2001-2 (McMillin-
Otay Ranch - Village Six)
By:
Director of Finance
MUNIFINANClAL, as Dissemination Agent
By:
Authorized Officer
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DOCSOC\932761 v9\22245.0 140
EXHIBIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Chula Vista Community Facilities District No. 2001-2 (McMillin _
Otay Ranch - Village Six)
Name of Bond Issue: City of Chula Vista Community Facilities District No. 2001-2 (McMillin _
Otay Ranch - Village Six) $ 2003 Special Tax Bonds
Date of Issuance: , 2003
NOTICE IS HEREBY GIVEN that the City of Chula Vista Community Facilities District
No. 2001-2 (McMillin - Otay Ranch - Village Six) located in the City ofChula Vista, California (the
"District") has not provided an Annual Report with respect to the above-named Bonds as required by
Section 3 of the Continuing Disclosure Agreement, dated as of , 2003, by and between
the District and MuniFinancial, as dissemination agent. [The District anticipates that the Annual
Report will be filed by .J
Dated:
MuniFinancial, as Dissemination Agent
cc: City of Chula Vista
Stone & Youngberg LLC
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DOCSOC\93276! v9\22245. 0 140
APPENDIX G
CONTINUING DISCLOSURE AGREEMENT OF THE DEVELOPER
This Continuing Disclosure Agreement (the "Disclosure Agreement") dated as of
, 2003 is executed and delivered by McMillin Otay Ranch, LLC, McMillin Mandalay
10 I, LLC, McMillin Jasmine 126, LLC, McMillin Sienna II, LLC and McMillin Auburn Lane II,
LLC (collectively the "Developer"), and U.S. Bank National Association, as fiscal agent (the "Fiscal
Agent") and as dissemination agent (the "Dissemination Agent"), in connection with the execution
and delivery by City of Chula Vista Community Facilities District No. 2001-2 (McMillin _ Otay
Ranch - Village Six) (the "District") $ aggregate principal amount of its City of Chula
Vista Community Facilities District No. 2001-2 (McMillin - Otay Ranch - Village Six) 2003 Special
Tax Bonds (the "Bonds"). The Bonds are being executed and delivered pursuant to an Indenture
dated as of July 1,2003 by and between the District and U.S. Bank National Association, as Fiscal
Agent (the "Agreement"). The Developer covenants and agrees as follows:
SECTION I. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the Developer for the benefit of the Bondowners and Beneficial Owners
and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-l2(b)(5).
This Disclosure Agreement does not address additional undertakings, if any, by or with respect to
persons other than the Developer who may be considered obligated persons or purposes of the Rule,
which additional undertakings, if any, may be required for the Participating Underwriter to comply
with the Rule.
SECTION 2. Definitions. In addition to the definitions set forth in the Agreement, which
apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
"Affiliate" shall mean, with respect to any Person, (a) each Person that, directly or indirectly,
owns or controls, whether beneficially or as an agent, guardian or other fiduciary, twenty-five percent
(25%) or more of any class of Equity Securities of such Person, (b) each Person that controls, is
controlled by or is under common control with such Person, or (c) each of such Person's executive
officers, directors, joint venturers and general partners; provided, however, that in no case shall the
District be deemed to be an Affiliate of the Developer for purposes of this Agreement. For the
purpose of this definition, "control" of a Person shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise.
"Beneficial Owner" shall mean any person which has or shares the power, directly or
indirectly, to make investment decisions concerning ownership of the Bonds (including persons
holding Bonds through nominees, depositories or other intermediaries).
"Dissemination Agent" shall mean U.S. Bank National Association, acting in its capacity as
Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the
Developer and which has filed with the Developer and the City a written acceptance of such
designation.
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DOCSOC\932761 v9\22245.0 ¡ 40
"District" shall mean City of Chula Vista Community Facilities District No. 2001-2
(McMillin - Otay Ranch - Village Six).
"Equity Securities" of any Person shall mean (a) all common stock, preferred stock,
participations, shares, general partnership interests or other equity interests in and of such person
(regardless of how designated and whether or not voting or non-voting) and (b) all warrants, options
and other rights to acquire any of the foregoing.
"Fiscal Year" shall mean the period beginning on July 1 of each year and ending on the next
succeeding June 30.
"Government Authority" shall mean any national, state or local government, any political
subdivision thereof, any department, agency, authority or bureau of any of the foregoing, or any other
Person exercising executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Listed Event" shall mean any of the events listed In Section 5(a) of this Disclosure
Agreement.
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule.
"Official Statement" shall mean the Official Statement, dated
to the Bonds.
, 2003, relating
"Participating Underwriter" shall mean Stone & Youngberg LLC, the original underwriter of
the Bonds, whose address for purposes of this Agreement is 50 California Street, Suite 3500, San
Francisco, California 9411], Attention: Research Department, and any other underwriting firm that
provides written notice to the Developer that it is required to comply with the Rule in connection
with the offering of the Bonds.
"Person" shall mean any natural person, corporation, limited liability company, partnership,
firm, association, Government Authority or any other Person whether acting in an individual
fiduciary, or other capacity.
"Repository" shall mean each National Repository and the State Repository.
"Rule" shall mean Rule 15c2-l2(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
"Semi-Annual Report" shall mean any Semi-Annual Report provided by the Developer
pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.
"State" shall mean the State of California.
"State Repository" shall mean any public or private repository or entity designed by the State
as a state repository for the purpose of the Rule and recognized as such by the Securities and
Exchange Commission. As of the date of this Disclosure Agreement, there is no State Repository.
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il
SECTION 3. Provision of Annual Reports.
(a) The Developer shall, or shall cause the Dissemination Agent to, not later than
February I and August I of each year, commencing February 1, 2004, provide to each Repository,
the District and to Stone & Youngberg LLC a Semi-Annual Report which is consistent with the
requirements of Section 4 of this Disclosure Agreement. The Semi-Annual Report may be submitted
as a single document or as separate documents comprising a package, and may include by reference
other information as provided in Section 4 of this Disclosure Agreement provided that the audited
financial statements, if any, of the Developer may be submitted separately from the balance of the
Semi-Annual Report and later than the date required for the filing of the Semi-Annual Report if they
are not available by that date.
(b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a)
for providing the Semi-Annual Report to Repositories, the Developer shall provide the Semi-Annual
Report to the Dissemination Agent or shall provide notification to the Dissemination Agent that the
Developer is preparing, or causing to be prepared, the Semi-Annual Report and the date which the
Semi-Annual Report is expected to be available. If by such date, the Dissemination Agent has not
received a copy of the Semi-Annual Report or notification as described in the preceding sentence, the
Dissemination Agent shall contact the Developer to determine if the Developer is in compliance with
the first sentence of this subsection (b).
(c) If the Dissemination Agent is unable to, provide a Semi-Annual Report to
Repositories by the date required in subsection (a) or to verify that a Semi-Annual Report has been
provided to Repositories by the date required in subsection (a), the Dissemination Agent shall send a
notice to each Repository in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) detennine each year prior to the date for providing the Semi-Annual Report
the name and address of each National Repository and the State Repository, if any; and
(i i) file a report with the Developer and the District certifying that the Semi-
Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it
was provided and listing all the Repositories to which it was provided.
.
SECTION 4. Content of Semi-Annual Report. The Developer's Semi-Annual Re'port shall
contain or include by reference the information which is available as of January I and July I of each
year, as applicable, relating to the following:
a. An update to the section in the Official Statement entitled "THE DEVELOPMENT
AND PROPERTY OWNERSHIP" (excluding the subsections entitled "Appraisal"
and "Market Absorption Study") including an update of the tables therein and a
discussion of the sources of funds to finance development relating to its property
within, and whether any material defaults exist under any loan arrangement related to
such financing.
b. A summary of development activity within , including the number of parcels for
which building permits have been issued, the number of parcels for which certificates
of occupancy have been issued, the number of parcels for which sales have closed,
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DOCSOC\932761 v9\22245.0 140
and land or lot sales including the amount of land or lots sold and the name of the
purchaser of lots to be developed.
c. Status of any material governmentally-imposed preconditions for commencement or
continuation of development of the undeveloped parcels within the District known to
the Developer.
d. Status of any material legislative, administrative and judicial challenges known to the
Developer to or affecting the construction of the development or the time for
construction of any public or private improvements to be made by the Developer or
any of its Affiliates within the District, other than the public improvements described
in (e) below (the "Developer Improvements").
e. Status of completion of the public improvements financed by the Bonds and any
material legislative, administrative and judicial challenges known to the Developer to
or affecting the construction of such public improvements (the "District
Improvements").
f. Any material amendments to land use entitlements or Special Tax exemption status
with respect to parcels within the District that are known to the Developer, including
(i) an update of the total acres subject to the levy of Special Taxes if the amendment
affects the total number of acres subject to the levy of the Special Taxes, and
(Ii) listings of any acreage that has become exempt from the levy of Special Taxes.
g. Until such time as the Developer and its Affiliates no longer own land within the
District which is responsible for 20% or more of the annual Special Tax levy,
unaudited financial statements of the Developer and its Affiliates owning land within
the District and, if prepared, audited financial statements of each of such entities for
its most recently completed fiscal year (which currently ends on each December 31),
prepared in accordance with generally accepted accounting principles as promulgated
to apply to private entities from time to time by the Financial Accounting Standards
Board. If the Developer has audited financial statements prepared and the audited
fin,ancial statements are not available by the time the Semi-Annual Report is required
to be filed pursuant to Section 3(a), the Semi-Annual Report shall contain unaudited
financial statements in a format similar to the financial statements for the preceding
year, and the audited financial statements shall be filed in the same manner as the
Semi-Annual Report when they become available. The Developer need only provide
audited or unaudited data once per year.
h. The filing of any lawsuit against the Developer or otherwise known to the Developer
which will materially adversely affect the completion of the District Improvements,
the Developer Improvements or the development of undeveloped parcels within, or
litigation which would materially adversely affect the financial condition of the
Developer or its Affiliates that own property within.
1. Material payment default by the Developer on any loan of the Developer (whether or
not such loan is secured by property within the District) which is beyond any
applicable cure period in such loan.
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Any and all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues which have been submitted to each of the
Repositories or the Securities and Exchange Commission. If the document included by reference is a
final official statement, it must be available from the Municipal Securities Rulemaking Board. The
Developer shall clearly identify each such other document so included by reference.
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Developer shall give, or cause to be
given, notice of the occurrence of any of the following events with respect to the Bonds, if material
under clauses (b) and (c):
I. Failure to pay any real property taxes, special taxes or assessments (including
any assessment installment) levied within the District on a parcel owned by the Developer or
any of its Affiliates;
2. Material payment default by the Developer or any Affiliate on any loan
secured by property within the District owned by the Developer or any of its Affiliates which
is beyond any applicable cure period in such loan;
3. The filing of any proceedings with respect to the Developer or any of its
Affiliates, in which the Developer or any of its Affiliates that own property within the
District may be adjudicated as bankrupt or discharged from any or all of their respective
debts or obligations or granted an extension of time to pay debts or a reorganization or
readjustment of debts; and
(b) Whenever the Developer obtains knowledge of the occurrence of a Listed Event, the
Developer shall as soon as possible determine if such event would be material under applicable
federal securities laws.
(c) If the Developer determines that knowledge of the occurrence of a Listed Event
would be material under applicable federal securities laws, the Developer shall promptly file a notice
of such occurrence with the Dissemination Agent which shall then distribute such notice to the
Municipal Securities Rulemaking Board and each State Repository, with a copy to the District and
the Participating Underwriter.
SECTION 6. Termination of Reporting Obligation. The Developer's obligations under this
Disclosure Agreement shall terminate upon any of the following events:
(a) the legal defeasance, prior redemption or payment in full of all of the Bonds,
(b) if as of the date for filing the Semi-Annual Report the Developer and its Atììliates
own property within the District which is responsible for less than twenty percent (20%) of the
Special Taxes levied in the Fiscal Year for which the Semi-Annual Report is being prepared, and the
District Improvements to be constructed by the Developer have been completed, or
(c) upon the delivery by the Developer to the District and the Participating Underwriter
of an opinion of nationally recognized bond counsel to the effect that the information required by this
Disclosure Agreement is no longer required. Such opinion shall be based on information publicly
provided by the Securities and Exchange Commission or a private letter ruling obtained by the
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DOCSOC\932761 v9\222450 140
Developer or a private letter ruling obtained by a similar entity to the Developer. If such termination
occurs prior to the final maturity of the Bonds, the Developer shall give notice of such termination in
the same manner as for a Semi-Annual Report hereunder.
SECTION 7. Dissemination Agent. The Developer may from time to time, appoint or
engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure
Agreement, and may discharge any such Dissemination Agent, with or without appointing a
successor Dissemination Agent. If the Dissemination Agent is not the Developer, the Dissemination
Agent shall not be responsible in any manner for the content of any notice or report prepared by the
Developer pursuant to this Disclosure Agreement. The Developer has initially appointed U.S. Bank
National Association as the Dissemination Agent hereunder.
SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Agreement, the Developer may amend this Disclosure Agreement, and any provision of this
Disclosure Agreement may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5, it may
only be made in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature or status of an obligated person with
respect to the Bonds, or the type of business conducted;
(b) This Disclosure Agreement, as amended or taking into account such waiver, would,
in the opinion of nationally recognized bond counsel addressed to the District, the Fiscal Agent and
the Participating Underwriter, have complied with the requirements of the Rule at the time of the
original issuance of the Bonds, after taking into account any amendments or interpretations of the
Rule, as well as any change in circumstances;
(c) The amendment or waiver either (i) is approved by the Bondowners in the same
manner as provided in the Agreement for amendments to the Agreement with the consent of
Bondowners, or (ii) does not, in the opinion of nationally recognized bond counsel addressed to the
City and the Fiscal Agent, materially impair the interests of the Bondowners or Beneficial Owners of
the Bonds; and
(d) The Developer, or the Dissemination Agent, shall have delivered copies of the
amendment and any opinions delivered under (b) and (c) above.
In the event of any amendment or waiver of a provision of this Disclosure Agreement, the
Developer shall describe such amendment in the next Semi-Annual Report, and shall include, as
applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the
type (or, in the case of a change of accounting principles, on the presentation) of financial
information or operating data being presented by the Developer. In addition, if the amendment
relates to the accounting principles to be followed in preparing financial statements, (i) notice of such
change shall be given to the Municipal Securities Rulemaking Board, the State Repository, if any,
and the Repositories, and (ii) the Semi-Annual Report for the year in which the change is made
should present a comparison (in narrative form and also, if feasible, in quantitative form) between the
financial statements as prepared on the basis of the new accounting principles and those prepared on
the basis of the former accounting principles. The comparison of financial data described in
clause (ii) of the preceding sentence shall be provided at the time financial statements, if any, are
filed under Section 4(g) hereof.
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SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the Developer from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or
including any other information in any Semi-Annual Report or notice of occurrence of a Listed
Event, in addition to that which is required by this Disclosure Agreement. If the Developer chooses
to include any information in any Semi-Annual Report or notice of occurrence of a Listed Event in
addition to that which is specifically required by this Disclosure Agreement, the Developer shall have
no obligation under this Disclosure Agreement to update such information or include it in any future
Semi-Annual Report or notice of occurrence of a Listed Event.
SECTION 10. Default. In the event of a failure of the Developer to comply with any
provision of this Disclosure Agreement, any Participating Underwriter or any Bondowner or
Beneficial Owner of the Bonds may, take such actions as may be necessary and appropriate,
including seeking mandate or specific performance by court order, to cause the Developer or the
Dissemination Agent to comply with its obligations under this Disclosure Agreement. A default
under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and
the sole remedy under this Disclosure Agreement in the event of any failure of the Developer to
comply with this Disclosure Agreement shall be an action to compel specific performance.
SECTION II. Duties, Immunities and Liabilities of Dissemination Agent. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Agreement and the Developer agrees to indemnify and save the Dissemination Agent, its officers,
directors, employees and agents, harmless against any loss, expense and liabilities which they may
incur arising out of or in the exercise or performance of theirs powers and duties hereunder, including
the costs and expenses (including attorneys fees) of defending against any claim of liability, but
excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The
Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the Developer,
the Participating Underwriter, Bondowners or Beneficial Owners or any other party. The
Dissemination Agent may rely and shall be protected in acting or refraining from acting upon a
direction from the Developer or an opinion of nationally recognized bond counsel. The obligations
of the Developer under this Section shall survive resignation or removal of the Dissemination Agent
and payment of the Bonds. No person shall have any right to commence any action against the
Dissemination Agent seeking any remedy other than to compel specific performance of this
Disclosure Agreement.
The Dissemination Agent will not, without the Developer's prior written consent, settle,
compromise or consent to the entry of any judgment in any pending or threatened claim, action or
proceeding in respect of which indemnification may be sought hereunder unless such settlement,
compromise or consent includes an unconditional release of the Developer and its controlling persons
from all liability arising out of such claim, action or proceedings. If a claim, action or proceeding is
settled with the consent of the Developer or ifthere is a final judgment (other than a stipulated final
judgment without the approval of the Developer) for the plaintiff in any such claim, action or
proceeding, with or without the consent of the Developer, the Developer agrees to indemnify and
hold han11less the Dissemination Agent to the extent described herein.
SECTION 12. Reporting Obligation of Developer's Transferees. The Developer shall, in
connection with any sale or transfer of ownership of land within the District which will result in the
transferee (which term shall include any successors and assigns of the Developer) becoming
responsible (i) for the payment of more than 20 percent of the Special Taxes levied on property
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I,
within the District in the Fiscal Year following such transfer and (ii) for the construction and/or
installation of some or all of the improvements needed to bring such sold or transferred land to
finished lot condition, cause such transferee and any Affiliate of the transferee to enter into a
disclosure agreement with terms substantially similar to the terms of this Disclosure Agreement,
whereby such transferee agrees to be bound by the obligations of the Developer under this Disclosure
Agreement as an additional obligated party. Additionally, the Developer shall, in connection with
any sale or transfer of ownership of land within the District which will result in the transtèree and
any Affiliate of the transferee becoming responsible for the payment of more than 20 percent of the
Special Taxes levied on property within the District in the Fiscal Year following such transfer, which
sale or transfer occurs before such sold or transferred land is in finished lot condition, and the
transferee is not responsible for the construction or installation of some or all of the infrastructure
needed to bring such land to finished lot condition, cause such transferee to enter into a disclosure
agreement with terms substantially similar to the terms of this Disclosure Agreement, whereby such
transferee agrees to provide the information of the type described in Section 4(b), (c), (d) and (f) of
this Disclosure Agreement with respect to its property; provided that such transferee's obligations
under such disclosure agreement shall terminate upon the transferee and any Affiliate of the
transferee becoming responsible for the payment of less than 20 percent of the annual Special Taxes.
A memorandum regarding the Developer's obligations under this Disclosure Agreement shall be
recorded in the Official Records in the Office of the County Recorder of the County of San Diego.
SECTION 13. Developer as Independent Contractor. In performing under this Disclosure
Agreement, it is understood that the Developer is an independent contractor and not an agent of the
City of Chula Vista or the District.
SECTION 14. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of
the Developer, the City, the Dissemination Agent, the Participating Underwriter and Bondowners and
Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or
entity.
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"
SECTION 15. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute one and the same
instrument.
McMillin Otay Ranch, LLC, a Delaware limited
liability company
By: McMillin Companies, LLC
a Delaware limited liability company
Its: Manager
By:
Its:
By:
Its:
McMillin Mandaly 101, LLC
a Delaware limited liability company
By: McMillin Management Services, L.P.,
a California limited partnership
Its: Manager
By: Corky McMillin Construction Services,
Inc.
a California corporation
Its: General Partner
By:
Its:
By:
Its:
McMillin Sienna II, LLC
a Delaware limited liability company
By: McMillin Managemeht Services, L.P.,
a California limited partnership
Its: Manager
By: Corky McMillin Construction Services,
Inc.
a California corporation
Its: General Partner
By:
Its:
By:
Its:
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I
McMillin Auburn Lane II, LLC
a Delaware limited liability company
By: McMillin Management Services, L.P.,
a California limited partnership
Its: Manager
By: Corky McMillin Construction Services,
Inc.
a California corporation
Its: General Partner
By:
Its:
By:
Its:
McMillin Jasmine 126, LLC
a Delaware limited liability company
By: McMillin Management Services, L.P.,
a California limited partnership
Its: Manager
By: Corky McMillin Construction Services,
Inc.
a California corporation
Its: General Partner
By:
Its:
By:
Its:
U.S. Bank National Association
By:
Its:
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DOCSOC\932761 v9\22245.0 140
EXHIBIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE SEMI-ANNUAL REPORT
Name of the Issuer:
City of Chula Vista Community Facilities District No. 2001-2
(McMillin - Otay Ranch - Village Six) City ofChula Vista, California
Name of Bond Issue:
City of Chula Vista
Community Facilities District No. 2001-2
(McMillin - Otay Ranch - Village Six) 2003 Special Tax Bonds
Date of Issuance:
,2003
NOTICE IS HEREBY GIVEN that has not provided a Semi-
Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure
Agreement. [The Developer anticipates that such Semi-Annual Report will be filed not later than
, .J
Dated:
U.S. BANK NATIONAL ASSOCIATION
By:
cc: City ofChula Vista, California
Stone & Youngberg LLC
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DOCSOC\932761 v9\22245.0 140
APPENDIX H
FORM OF OPINION OF BOND COUNSEL
Mayor and City Council
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA
BOND OPINION
$
CITY OF CHULA VISTA
COMMUNITY FACILITIES DISTRICT NO. 2001-2
(MCMILLIN - OTA Y PROJECT - VILLAGE SIX)
2003 SPECIAL TAX BONDS
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance by Community Facilities
District No. 2001-2 (McMillin - Otay Project - Village Six) situated in and formed by the City of
Chula Vista, County of San Diego, State of California (the "District"), of $ aggregate
principal amount of the City of Chula Vista Community Facilities District No. 2001-2 (McMillin -
Otay Project - Village Six) 2003 Special Tax Bonds (the "Bonds"). The Bonds are issued pursuant to
the provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part I of Division 2 of Title 5 of the Government Code of the
State of California (the "Act"), a resolution adopted by the City Council on February 4, 2003 (the
"Resolution"), and a Bond Indenture, dated as of June 1, 2002 (the "Bond Indenture"), between the
District and U.S. Bank, National Association, as fiscal agent (the "Fiscal Agent").
We have examined the Act, the Resolution, the Bond Indenture and certified copies of the
proceedings taken for the issuance and sale of the Bonds. As to questions of fact which are material
to our opinion, we have relied upon the representations of the District and the City of Chula Vista
without having undertaken to verify the accuracy of any such representations by independent
investigation.
Based upon such examination, we are of the OpInIOn, as of the date hereof, that the
proceedings referred to above have been taken in accordance with the laws and the Constitution of
the State of California, and that the Bonds, having been issued in duly authorized form and executed
by the proper officials and delivered to and paid for by the purchaser thereof, and the Bond Indenture
having been duly authorized and executed by the proper ofÌÌcial, constitute the legally valid and
binding obligations of the District enforceable in accordance with their terms subject to the
qualifications specified below. Except where funds are otherwise available, as may be pennitted by
law, the Bonds are payable, as to both principal and interest, solely from certain special taxes to be
levied and collected within the District and other funds available therefor held under the Bond
Indenture.
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DOCSOC\93276 ¡ v9\22245.0 ¡ 40
I;
The Internal Revenue Code of 1986, as amended (the "Code"), sets forth certain investment,
rebate and related requirements which must be met subsequent to the issuance and delivery of the
Bonds for the interest on the Bonds to be and remain exempt from federal income taxation.
Noncompliance with such requirements could cause the interest on the Bonds to be subject to federal
income taxation retroactive to the date of issuance of the Bonds. Pursuant to the Bond Indenture, the
District has covenanted to comply with the requirements of the Code and applicable regulations
promulgated thereunder.
Weare of the opinion that, under existing statutes, regulations, rulings and court decisions,
and assuming compliance by the District with the aforementioned covenants, the interest on the
Bonds is excluded from gross income for purposes of federal income taxation and is exempt from
personal income taxation imposed by the State of California.
Weare further of the opinion that interest on the Bonds is not a specific preference item for
purposes of the alternative minimum tax provisions of the Code. However, interest on the Bonds
received by corporations will be included in corporate adjusted current earnings, a portion of which
may increase the alternative minimum taxable income of such corporations.
Although interest on the Bonds is excluded tram gross income for purposes of federal income
taxation, the accrual or receipt of interest on the Bonds may otherwise affect the federal income tax
liability of the recipient. The extent of these tax consequences will depend on the recipient's
particular tax status or other items of income or deduction. We express no opinion regarding any
such consequences.
The opinions expressed herein may be affected by actions which may be taken (or not taken)
or events which may occur (or not occur) after the date hereof. We have not undertaken to determine,
or to inform any person, whether any such actions or events are taken or occur or are not taken or do
not occur.
The rights of the owners of the Bonds and the enforceability of the Bonds and the Bond
Indenture 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.
Respectfully submitted,
Best Best & Krieger, LLP
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,
APPENDIX I
DTC AND THE BOOK ENTRY SYSTEM
The Depository Trust Company ("DTC"), New York, NY, will act as securities depository
for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of
Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized
representative of DTC. One fully-registered bond wi II be issued for each maturity of the Bonds, each
in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, the world's largest 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 Unifonn Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17 A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for
over 2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and
money market instruments from over 85 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, in turn, is owned by a number of Direct Participants of DTC and Members of the National
Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing
Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC,
also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock
Exchange LLC, and the National Association of Securities Dealers, Inc. 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 Standard & Poor's
highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and
Exchange Commission.
Purchases of Bonds under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual
purchaser of each 2003 Special Tax Bond ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase. Beneficial Owners are, however, expected to receive written
confinnations providing details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on
the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive bonds representing their ownership interests in Bonds, except in the event
that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be
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requested by an authorized representative of DTC. The deposit of Bonds with DTC and their
registration in the name of Cede & Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's
records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited,
which mayor 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.
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 Beneíicial
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 Bonds may wish to take
certain steps to augment the transmission to them of notices of significant events with respect to the
Bonds, such as redemptions, tenders, defaults, and proposed amendments to the 2003 Special Tax
Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee
holding the Bonds 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.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are
being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct
Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect
to Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its
usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.' s consenting or voting rights to those Direct
Participants to whose accounts Bonds are credited on the record date (identified in a listing attached
to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds will be made to
Cede & Co., or such other nominee as may be requested by an authorized representative of DTC.
DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and
corresponding detail information from the District or the Fiscal Agent, on payment date in
accordance with their respective holdings shown on DTC's records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of DTC nor its nominee, the Fiscal Agent, or the
District, subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds, distributions, and dividend paY'11ents to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the responsibility of the
Fiscal 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.
A Beneficial Owner shall give notice to elect to have its Bonds purchased or tendered,
through its Participant, to the Fiscal Agent, and shall effect delivery of such Bonds by causing the
Direct Participant to transfer the Participant's interest in the Bonds, on DTC's records, to the Fiscal
Agent. The requirement for physical delivery of Bonds in connection with an optional tender or a
mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred
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by Direct Participants on DTC's records and followed by a book-entry credit of tendered Bonds to
the Fiscal Agent's DTC account.
DTC may discontinue providing its services as depository with respect to the Bonds at any
time by giving reasonable notice to the District or the Fiscal Agent. Under such circumstances, in the
event that a successor depository is not obtained, physical Bonds are required to be printed and
delivered.
The District may decide to discontinue use of the system of book-entry transfers through
DTC (or a successor securities depository). In that event, physical Bonds will be printed and
delivered.
The information in this section concerning DTC and DTC's book-entry system has been
obtained from sources that the District believes to be reliable, but the District takes no responsibility
for the accuracy thereof.
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