HomeMy WebLinkAboutRDA Agenda Packet 2006/02/14
I declare under penalty of perjury that I am
employed by the City of Chula Vista in the ~ ~ ~
e of the City Clerk and that I posted ~
ent on the bulletm board accordm
ct requirements. . ~ -:;. ::: ~
, <1'\.1/0-", CITY OF
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Stephen C. Padilla, Mayor/Chair
/i vu!a Patricia E. Chavez, Council/Agency Member David D. Rowlands, Jr., City Manager/Executive Director
Y / John McCann, Council/Agency Member Ann Moore, City Attorney/Agency Counsel
~ Jerry R. Rindone, Council/Agency Member Susan Bigelow, City Clerk
Steve Castaneda, Council/Agency Member
SPECIAL JOINT MEETING OF THE CITY COUNCIL, REDEVELOPMENT
AGENCY, AND PUBLIC FINANCING AUTHORITY OF THE CITY OF
CHULA VISTA
February 14,2006
6:00 P.M.
(Immediately following the City Council Meeting)
Council Chambers
City Hall
276 Fourth Avenue
CALL TO ORDER
ROLL CALL: Council! Agency Members Castaneda, Chavez, McCann, Rindone, and
Mayor/Chair Padilla
CONSENT CALENDAR
(Item I)
The Council/Agency will enact the Consent Calendar staff recommendation,
without discussion, unless a Council/Agency Member, a member of the public, or
City staff requests that an item be removed for discussion. If you wish to speak on
this item, please fill out a "Request to Speak" form (available in the lobby) and
submit it to the City Clerk prior to the meeting.
I. CONSIDERATION OF ACCEPTANCE BY THE CITY COUNCIL,
REDEVELOPMENT AGENCY AND PUBLIC FINANCING AUTHORITY OF
AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2005
Pursuant to the City Charter Section 1017, an annual audit is performed of the City's
financial records. Presented for acceptance are the Audited Financial Statements for the
fiscal year ended June 30, 2005, as prepared by the independent audit firm of Caporicci
& Larson. Both the City's and the Agency's Annual Financial Reports received
unqualified opinions from the independent audit firm. (Finance Director)
Staff recommendation: Council! Agency/Authority accept the audited financial
statements for fiscal year ended June 30, 2005.
ITEMS REMOVED FROM THE CONSENT CALENDAR
PUBLIC COMMENTS
Persons speaking during Public Comments may address the Council/Agency on
any subject matter within the Council/Agency's jurisdiction that is not listed as an
item on the agenda. State law generally prohibits the Council/Agency from taking
action on any issue not included on the agenda, but, if appropriate, the
Council/Agency may schedule the topic for future discussion or refer the matter to
staff Comments are limited to three minutes.
PUBLIC HEARING OF THE CITY COUNCILIPUBLIC FINANCING AUTHORITY
The following item has been advertised as a public hearing as required by law. If
you wish to speak on this item, please fill out a "Request to Speak" form
(available in the lobby) and submit it to the City Clerk prior to the meeting
2. CONSIDERATION BY THE CITY COUNCIL OF THE CITY OF CHULA VISTA
AND THE CHULA VISTA PUBLIC FINANCING AUTHORITY OF THE
EXECUTION, SALE AND DELIVERY OF CERTIFICATES OF PARTICIPATION IN
ORDER TO FINANCE CERTAIN PUBLIC CAPITAL IMPROVEMENTS (Continued
from February 7, 2006)
Adoption of the resolutions approves funding for the second component of the Civic
Center Complex renovation (Public Services Building) and interior exhibit improvements
in the Nature Center. (Finance Director)
Staff recommendation: Council! Authority conduct the public hearing and adopt the
following resolutions:
A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
MAKING REQUIRED FINDINGS AUTHORIZING THE EXECUTION AND
DELIVERY OF DOCUMENTS RELATING TO THE SALE AND DELIVERY
OF NOT TO EXCEED $20,000,000 2006 CERTIFICATES OF
PARTICIPATION, (CIVIC CENTER COMPLEX PROJECT - PHASE 2),
APPROPRIATING THE NET PROCEEDS THEREOF TO THE CIVIC
CENTER COMPLEX PROJECT (GG-200), AND AUTHORIZING
REIMBURSEMENT OF UP TO $4,296,950 TO THE PFDIF FUND FROM
PROCEEDS OF THE SALE OF THE CERTIFICATES OF PARTICIPATION,
AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN
CONNECTION THEREWITH (4/5THS VOTE REQUIRED)
B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
MAKING REQUIRED FINDINGS AUTHORIZING THE EXECUTION AND
DELIVERY OF DOCUMENTS RELATING TO THE SALE AND DELIVERY
OF NOT TO EXCEED $2,500,000 2006 CERTIFICATES OF PARTICIPATION
(NATURE CENTER PROJECT), APPROPRIATING THE NET PROCEEDS
THEREOF TO THE NATURE CENTER PROJECT (00-175) AND
AUTHORIZING REIMBURSEMENT OF UP TO $1,536,949 TO THE
GENERAL FUND FOR MONIES PREVIOUSLY SPENT ON THE PROJECT
FROM THE SALE OF THE CERTIFICATES OF PARTICIPATION, AND
AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION
THEREWITH (4/5THS VOTE REQUIRED)
Page 2 - Jt. Council/Redevelopment Agency/Public Financing Authority Agenda
http://www . chula vistaca. gOY
February 14,2006
C. RESOLUTION OF THE CHULA VISTA PUBLIC FINANCING AUTHORITY
APPROVING THE EXECUTION AND DELIVERY OF DOCUMENTS IN
CONNECTION WITH THE SALE AND DELIVERY OF THE 2006
CERTIFICATES OF PARTICIPATION (CIVIC CENTER PROJECT - PHASE
2) IN A PRINCIPAL AMOUNT NOT TO EXCEED $20,000,000, AND
AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION
THEREWITH
D. RESOLUTION OF THE CHULA VISTA PUBLIC FINANCING AUTHORITY
APPROVING THE EXECUTION AND DELIVERY OF DOCUMENTS IN
CONNECTION WITH THE SALE AND DELIVERY OF THE 2006
CERTIFICATES OF PARTICIPATION (NATURE CENTER PROJECT) IN A
PRINCIPAL AMOUNT NOT TO EXCEED $2,500,000 AND AUTHORIZING
AND DIRECTING CERTAIN ACTIONS IN CONNECTION THEREWITH
OTHER BUSINESS
3. CITY MANAGERlDIRECTOR'S REPORTS
4. MAYOR/CHAIR'S REPORTS
5. COUNCIL/AGENCY MEMBER'S COMMENTS
CLOSED SESSION
Announcements of actions taken in Closed Session shall be made available by noon on
Wednesday following the Agency Meeting at the City Attorney's office in accordance with
the Ralph M Brown Act (Government Code 54957. 7).
ADJOURNMENT to the Regular Meeting of February 21, 2006 at 6:00 p.m. in the Council
Chambers.
In compliance with the
AMERlCA.c'lS WITH DISABILITIES ACT
The City of Chu/a Vista requests individuals who require special accommodations to access, attend, and/or participate in a City
meeting, activity, or service request such accommodation at least forty-eight hours in advance for meetings and five days for
scheduled services and activities. Please contact the City Clerk for specific information at (619) 691-5041 or
Telecommunications Devices for the Deaf (TDD) at (619) 585-5655. California Relay Service is also available for the hearing
impaired.
Page 3 - Jt. Council/Redevelopment Agency/Public Financing Authority Agenda
http://www . chula vistaca. gov
February 14, 2006
Page 1, Item I
Meeting Date ?/14/Of,
JOINT COUNCIL/REDEVELOPMENT AGENCY/PUBLIC FINANCING
AUTHORITY
AGENDA STATEMENT
REVIEWED BY:
Audited Financial Statements for Fiscal Year ended June 30, 2005
Director of FinanCefTreasur~
City Manager fiJ
(4/5ths Vote: Yes_No..2l)
ITEM TITLE:
SUBMITTED BY:
Presented for Council/Agency information and acceptance are the Audited Financial
Statements for the fiscal year ended June 30, 2005, as prepared by the independent
audit firm of Caporicci & Larson. Both the City's and the Agency's Annual Financial
Reports received unqualified (clean) opinions from the independent audit firm.
RECOMMENDATION: That Council and the Agency accept the fiscal year 2004-05
Financial Statements.
BOARDS/COMMISSIONS RECOMMENDATION:
Not Applicable.
DISCUSSION:
Pursuant to the City Charter Section 1017, an annual audit is performed of the City's
financial records by an independent accounting firm. The firm of Caporicci & Larson has
examined the general purpose financial statements of the City of Chula Vista and the
Redevelopment Agency, and issued their opinion that those statements "present fairly, in
all material respects, the financial position of the City as of June 30, 2005 and the results
of its operations and cash flows for the year then ended in conformity with generally
accepted accounting principles." In addition, a separate report has been prepared for the
Public Financing Authority and a report covering State and Federal Grant compliance,
termed a "Single Audit Report".
The audit did not result in any material adjustments to previously reported year-end
figures for the General Fund. The General Fund available fund balance was verified to
be $15.2 million as of June 30, 2005, a decrease of approximately $4.9 million from the
prior year ending balance of $20.1 million. This reserve level represents 9.8 percent of
the operating budget as compared to the Council policy minimum target level of 8
percent.
In order to form a basis for their opinion, Caporicci & Larson evaluated the internal control
procedures of the City and found no reportable conditions.
1-/
Page 2, Item I
Meeting Date 2/14106
The audit firm was again very professional and efficient in their work, and provided a
great deal of much-needed assistance in the conversion to the new mandated reporting
formats. A representative from Caporicci & Larson is available to answer any questions
you may have.
FISCAL IMPACT: There is no fiscal impact to the City or Agency from this action. The
contract for audit services totaled $55,782 for the year reported.
ATTACHMENTS:
. FY 2005 Comprehensive Annual Financial Report
. FY 2005 Single Audit Report
. FY 2005 Redevelopment Agency, Basic Financial Statements and Auditor's Report
. FY 2005 Public Financing Authority, Basic Financial Statements and Auditor's Report
/- ..-/
,,-.
ITEM TITLE:
JOINT CITY COUNCIUPUBLlC FINANCING AUTHORITY
AGENDA STATEMENT
.--;- d-
Item /"
Meeting Date 2/V!'606
/' ~iLf/o~
Public Hearing of the City Council of the City of Chula Vista and the
Chula Vista Public Financing Authority to consider the execution, sale
and delivery of certificates of participation in order to finance certain
public capital improvements.
Resolution of the City of Chula Vista making required
findings authorizing the execution and delivery of documents relating
to the sale and delivery of not to exceed $20,000,000 2006
Certificates of Participation, (Civic Center Complex Project - Phase
2), appropriating the net proceeds thereof to the Civic Center
Complex project (GG-200), and authorizing reimbursement of up to
$4,296,950 to the PFDIF Fund from proceeds of the sale of the
Certificates of Participation, and authorizing and directing certain
actions in connection therewith.
Resolution of the City of Chula Vista making required
findings authorizing the execution and delivery of documents relating
to the sale and delivery of not to exceed $2,500,000 2006 Certificates
of Participation, (Nature Center Project), appropriating the net
proceeds thereof to the Nature Center Project (GG-175) and
authorizing reimbursement of up to $1,536,949 to the General Fund
for monies previously spent on the project from the sale of the
Certificates of Participation, and authorizing and directing certain
actions in connection therewith.
Resolution of the Chula Vista Public Financing Authority
approving the execution and delivery of documents in connection
with the sale and delivery of the 2006 Certificates of Participation,
(Civic Center Project - Phase 2) in a principal amount not to exceed
$20,000,000 and authorizing and directing certain actions in
connection therewith
Resolution of the Chula Vista Public Financing Authority
approving the execution and delivery of documents in connection
with the sale and delivery of the 2006 Certificates of Participation,
(Nature Center Project) in a principal amount not to exceed
2-1
.
Item :2.
Page 2, Date 2/7/2006
$2,500,000 and authorizing and directing certain actions in
connection therewith.
SUBMITTED BY: Director of FinancefTreasurer ~ f't-HJL
REVIEWED BY: City Manager 11 ~h.. pi<. (4/5ths Vote:
Yes LNo_)
SUMMARY:
.
The City of Chula Vista has experienced significant growth in population over the past
several years and is projected to reach a build out population of over 326,000.
Recognizing that the existing Civic Center Complex no longer accommodated the staff
required to service the current population nor that of the future and that modernization
and retrofitting of all of the Civic Center Complex buildings were going to be required in
order to meet current code requirements and to accommodate current and emerging
technology, on 7/10/2001, the City Council approved the Civic Center Master Plan for
the expansion of the existing Civic Center Complex and directed staff to return with
recommended long-term-financing.
On August 3, 2004, the City Council approved the financing for the first phase of the
Civic Center Complex project, which included the reconstruction of the City Hall
building. The first phase was substantially completed in November 2005.
The renovation of the second phase of the Civic Center Complex is underway which
involves the renovation of the Public Services Building. This report discusses the
second phase of the Civic Center Complex financing plan and includes funding for the
second component of the Civic Center Complex renovation (Renovation of the Public
Services Building) and interior exhibit improvements in the Nature Center. The
improvements within the Nature Center, which are unrelated to the City Hall expansion,
are included in this financing plan in order to save on issuance costs.
Staff is recommending approval of a long-term borrowing by issuing Certificates of
Participation in a combined amount not to exceed $22,500,000. The funding for the
final phase of the Civic Center Complex project will be brought back for Council
consideration as Phase 3 of the financing plan in order to coincide with the construction
timeline.
RECOMMENDATION:
Council:
Conduct public hearing required by Government Code 6586.5.
Adopt Resolution of the City of Chula Vista making
required findings authorizing the execution and delivery of documents
relating to the sale and delivery of not to exceed $20,000,000 2006
Certificates of Participation, (Civic Center Complex Project - Phase
2.-2
Item Z
Page 3, Date 2nt2006
2), appropriating the net proceeds thereof to the Civic Center
Complex project (GG-200), and authorizing reimbursement of up to
$4,296,950 to the PFDIF Fund from proceeds of the sale of the
Certificates of Participation, and authorizing and directing certain
actions in connection therewith.
Adopt Resolution of the City of Chula Vista making required
findings authorizing the execution and delivery of documents relating
to the sale and delivery of not to exceed $2,500,0002006 Certificates
of Participation, (Nature Center Project), appropriating the net
proceeds thereof to the Nature Center Project (GG-175) and
authorizing reimbursement of up to $1,536,949 to the General Fund
for monies previously spent on the project from the sale of the
Certificates of Participation, and authorizing and directing certain
actions in connection therewith.
Financing
Authority:
Adopt Resolution of the Chula Vista Public Financing
Authority approving the execution and delivery of documents in
connection with the sale and delivery of the 2006 Certificates of
Participation, (Civic Center Project - Phase 2) in a principal amount
not to exceed $20,000,000 and authorizing and directing certain
actions in connection therewith
Adopt Resolution of the Chula Vista Public Financing
Authority approving the execution and delivery of documents in
connection with the sale and delivery of the 2006 Certificates of
Participation, (Nature Center Project) in a principal amount not to
exceed $2,500,000 and authorizing and directing certain actions in
connection therewith.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable
DISCUSSION:
The Civic Center project has three construction phases, which includes the demolition
and reconstruction of the City Hall building, the renovation of the Public Services
building and finally the renovation of the former Police Facility. The Guaranteed
Maximum Price set by the City Council on August 3, 2004 was $50,148,000. The City
has previously entered into a contract with Highland Partnership, Inc. for design/build
services for the entire project.
The first phase of the Civic Center Project was substantially completed in November
2005. This phase included the demolition of the former 18,300 square foot City Hall
2~3
Item Z
Page 4, Date 2!712006
Building and construction of the new facility. The new City Hall building is
approximately 42,230 square feet and is occupied by the Mayor and Council, Council
Chambers, City Manager, City Attorney, City Clerk, Finance Department, Office of
Budget and Analysis and Office of Communications.
Now that the City Hall phase is completed, the temporary remodel of the former Police
Facility has begun in preparation to house staff during the second phase of the Civic
Center project, which involves the renovation of the Public Services Building. The
Planning & Building Department and Engineering Department are scheduled to move
into the former Police Facility on February 13, 2006.
The Public Services Building is currently 29,700 square feet in size and houses the
former Council Chambers, Planning & Building Department, Engineering Department
and the Finance Department until their recent move into the new City Hall. The
renovated building will total 30,562 square feet, which is a small increase of 862 square
feet due to the demolition of the Council Chambers and the "squaring off' of that corner
of the building to make it more conducive for reuse as an office area. The Public
Services building remodel should be substantially completed by December 13, 2006
and ready for move-in at that time. The renovated Public Services Building will be
occupied by the Planning & Building Department and the Engineering DepartmeAt.
.
The former Police Facility, which will be the final phase of the Civic Center Project, will
be renovated but the square footage will not be altered (52,160 sq. ft.). The work is
scheduled to begin on February 19, 2007 and should be completed by May 7, 2008.
The building is currently occupied by the Management and Information Systems
Department and Human Resources Department. Upon completion of the renovations,
the building will be occupied by the Management and Information Systems Department,
Human Resources Department, Community Development Department, Recreation
Department, portions of the Planning and Building Department and the Chula Vista
Credit Union
.
When this final renovation is complete, two other buildings, the Community
Development Building and the Legislative Building will be demolished and parking will
be added in that space. Also, throughout all of the components, various site work will
be occurring as parking areas are constructed and relocated and a central landscaped
plaza in what is now Memorial Way will be developed.
The financing plan discussed in this report includes funding for the renovation of the
Public Services Building (second phase of the Civic Center Complex project) and the
Nature Center Interior Exhibits project. The attached Council informational memo was
presented to Council on November 17, 2005 and discusses the additional
appropriations being requested for reimbursements to the General Fund and PDIF fund.
Staff will develop and return to Council with the third phase of financing for the final
construction component (renovating the former Police Facility) in order to coincide with
the construction timeframe.
2-'-1
Item 2
Page 5, Date 2f712006
The approved Civic Center Master Plan also contemplated the future relocation of
existing Fire Station NO.1 to the site of the current Ken Lee Building. Staff is currently
developing preliminary feasibility options for Fire Station NO.1. Staff will return to
Council at a future date when it appears that both funding and operational functionality
require that the relocation of Fire Station No. 1 be considered for implementation and
the Civic Center Master Plan to be amended.
PFDIF Update
The majority of the Civic Center Complex Project (estimated at 81.7%-with all three
phases combined) will be funded by the Civic Center component of the Public Facilities
Development Impact Fee (PFDIF). The PFDIF - Civic Center Component fee was
approved by the City Council in August 1989. The purpose of the fee was to mitiqate
the impacts of qrowth on the Civic Center Complex bv providinq a fundinq source for the
construction and expansion of the Complex. In accordance with the Municipal Code
3.50.080, these funds are restricted for use on the construction of the Civic Center
Complex Proiect and administrative costs associated with the administration of the fee.
During the mpst recent update of the Public Facility Development Impact Fee
(November 2002), the cost of the renovation of the Civic Center (excluding Fire Station
1 and financing cost) was $34,798,333. As discussed in the staff report provided to
Council on 8/3/2004, the total estimated project cost for the Civic Center Complex
project (all Components excludinq Fire Station 1 and financing cost) is $50,148,000.
The increase in cost is attributed to insurance costs which were not included in the initial
estimate ($3.4 million), increased construction costs ($13.2 million) related to the
increased cost of steel, updated design costs and the relocation of the Council
Chambers which has been included in the City Hall building itself and a net reduction in
costs for permits, staff services and contingencies (-$1.3 million).
With the recent approval of the General Plan Update, it is staff's intention to present to
Council an update of the PFDIF, not exclusively limited to the Civic Center component.
The next PFDIF update, will take into account the increased costs, which are
considered extraordinary because the cost increases could not have been reasonably
forseen at the time the current fee was established.
Beginning in fiscal year 2007, the total debt obligations being paid by the PFDIF fund
will be approximately $5.0 million per year (excluding the Phase 2 financing). With the
second and third phases yet to be financed, the anticipated debt obligations are
projected to increase to $6.4 million per year not including the financing of the Rancho
Del Rey Library.
Civic Center Complex Renovation - Phase 2 - Public Services BuildinQ
2-5
Item 2-
Page 6, Date 2/7/2006
Phase 2 of the project involves the reconstruction of the Public Services Building. The
total cost of the second phase, excluding financing, is anticipated to be approximately
$12.4 million, broken down as follows:
Design of PSB Renovations
Design of Temporary Renovations to Current PO
Development Staff Costs
Design/Builders Fee (Design)
Design/Builders Fee (Construction)
Design Builders Reimbursables
Construction Allowance Budgets
General Conditions
Renovations of PSB
On-Site Improvements
Construction Contingency
Total Design Builder Costs
City Budgeted Allowances (Permits, Staff Time
Furniture and Equipment, Project Management
Services, Contingencies, Other Equipment
Project Insurance
Total Phase 2 - Public Services Building
Nature Center - Interior Exhibits
$ 690,000
$ 10,000
$ 75,000
$ 151,000
$ 352,000
$ 131,000
$ 700,000
$ 668,000
$ 5,150,000
$ 1,298,000
$ 357.000
$ 9,582,000
$ 1,964,000
$ 811,000
$12,357,000
The City Council previously approved the Design Build agreement with Rudolph and
Sletten, Inc. for the provision of services necessary to design and construct upgrades
and replacements to the Nature Center Interior Exhibits. The Guaranteed Maximum
. Price for the project was set at $3,174,736.
Included in this financing plan is $1,824,736 in project costs, which will be dedicated to
the Nature Center Project. General Fund revenues will be used to fund the debt service
commitment. This project is independent of the Civic Center Project but included in this
financing plan both for convenience and savings on cost of issuance.
Nature Center Interior Exhibits
General Fund - to be financed
Grant - State Coastal Conservancy
Donations and other Grant Funds
Total Funding Sources
2~~
$1,824,736
$350,000
$1,200,000
$3,374,736
Item L
Page 7, Date 2f7/2006
LonQ Term FinancinQ
The total project cost included in Phase 2, excludinq financinq costs, is anticipated to be
approximately $15,359,228. This financing includes costs associated with Phase III
such as insurance costs which were initially budgeted over all three phases, but due to
the volatility of the insurance market, it was to the benefit of the City to lock in a
guaranteed rate and pay the costs in full during Phase I. In addition, in order to obtain
the best value and price for ceramic and stone tiles, doors and frames, which will be
utilized over the remaining two phases, these materials were prepaid during Phase 1 of
the construction project.
Design and Construction
City Budgeted Allowances
Insurance
Total GMP Phase II
Phase II
Financing
$ 9,582,000
$ 1,964,000
$ 811,000
$ 12,357,000
Phase III Insurance Costs
Phase III Design and Materials
Phase III pre-financing construction costs
$ 898,726
$ 1,582,569
$ 520,933
Total Civic Center Complex Phase II Financing $ 15,359,228
The portion of the borrowing attributable to the development funding commitment is
75.9% or $11.7 million, with the remainder 24.1% or $3.7 million attributable to the City
funding commitment.
The project costs for the Nature Center Interior Exhibits to be financed within this plan is
$1,824,736, excludinq financinq costs. Debt service commitments will be funded 100%
from the General Fund.
Staff is recommending that long-term financing be obtained to provide approximately
$17,183,964 for project costs, which is derived as follows:
Funding Ratios
Proiect Description
Civic Center Renovation - Phase 2
Nature Center - Exhibits
Total Project Cost $
Proiect Cost Fundinq
15,359,228 PFDIF 75.9%/General Fund 24.1 %
1,824,736 General Fund 100%
17,183,964
2-7
.
Item 2-
Page 8, Date 2/7/2006
In December, 2000, the Council approved an agreement with Harrell & Co. Advisors,
LLC to provide financial advisory services for determining the most appropriate
borrowing structure and for executing long-term financing transactions to provide
funding for both the Police Headquarters and Civic Center Remodeling projects. Harrell
& Co. is recommending that the required funds for the Civic Center project be obtained
through a standard competitively bid certificate of participation issue, which is a vehicle
that the City/Agency has used in the past for financing such projects as the police
facility, corporation yard, shopping center remodel, the downtown parking structure, etc.
The typical structure is such that certain assets are leased to a separate legal entity, in
this case the City's Financing Authority, which then leases the assets back to the City.
The Financing Authority then borrows money through the municipal market by causing
the trustee bank to sell certificates of participation, which entitle the holder to a
proportionate share of the City's lease payments (i.e. principal & interest). The lease
payments from the City are established at a level sufficient to pay the debt service
payments due to the certificate holders.
In order to generate the $17,183,964 required to complete the funding of these projects,
it is estimated under current market conditions (assumed interest rate of 4.7%) that a
borrowing of approximately $22.5 million will be necessary. It is estimated that for a
Certificate issue of this size, with a 30-year final maturity for the Civic Center portion
and 20 years for the Nature Center Project, the total debt service will amount to
approximately $35.3 million, which includes net financing cost of $14.4 million. This
figure includes an estimated net interest cost of $13.8 million, an underwriter's discount
of $200,000, an insurance premium of $188,000, miscellaneous costs of issuance
including financial advisory services, legal services, etc. of approximately $250,000.
The semi-annual debt service (lease) payments that will begin in March 2008, will vary
slightly year to year, but the average annual amount due is estimated at approximately
$1.3 million ($1.15 million Civic Center Project - Phase 2 and $169,320 Nature Center
Interior Exhibits Project).
Est. Average Annual Debt Service
Assumed Interest Rate of 4.7%
Civic Center Proiect - Phase II:
PFDIF Fund (75.9%)
General Fund (24.1 %)
Subtotal
875,181
277,890
$1,153,071
Nature Center Interior Exhibits
General Fund (100%) $ 169,320
Total Avg. Annual Debt Svc.
$ 1,322,391
2-8
.
Item 2
Page 9, Date 2/7/2006
It is felt that these figures are somewhat conservative and that the actual costs should
be less if market conditions remain fairly stable until the date of sale for the Certificates.
As indicated previously, this amount is a shared commitment, funded by development
fees and the General Fund. However, it must be noted that if at any time over the next
30 years, there are insufficient development fee revenues on hand to meet the debt
service obligation related to the Civic Center Project the unmet obligation would fall to
the General Fund.
Outstandina Debt
In fiscal year 2007-08, the first year of lease payments for this issue, the General Fund's
actual debt service payments total $7.0 million. This $7.0 million represents
approximately 4% of the projected General Fund operating budget, which would be
considered an average debt burden for a local governmental entity. It should also be
noted that the single largest annual debt service commitment of the General Fund is the
$2.3 million payment on the Pension Obligation Bonds, which could easily be viewed as
an operational expense categorized as personnel retirement, rather than debt service,
thereby further reducing the "real" debt burden on the General Fund for comparison
purposes to 2.7%. The final debt service payment for the Pension Obligation Bonds are
scheduled to end in fiscal year 2012.
Annual Debt Service Payments of the General Fund
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$-
FY04 FY06
FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22
. Pension Obligation Bonds
o Shopping Mall COP2003 (Ref COP)
.2000 COP Corporation Yard
. Calease #2800 MHZ 2003 (Ref COP)
. Police Facility- 2002 COP
o Civic Center Expansion-Phase ii (estimated)
. Nature Center (estimated)
"Final payment of the Pension Obligations Bonds occurs in fiscal year 2012
. Shopping Maii Parking CVCtr. 2003 (Ref. COP)
o Palomar Troiiey Commercial-Notes Payable
111800 Mhz- County Buy-in
o Calease #2 Fiscal System 2003 (Ref COP)
. Civic Center Expansion- 2004 COP Phase I
o Civic Center Phase iil (estimated)
2-1
Item 2,
Page 10, Date 2/7/2006
The annual lease payments for this borrowing will increase the total annual debt service
commitment of the City's General Fund by almost 10% when the first full year payment
is due in fiscal year 2007-08. At that time, it is projected that the General Fund annual
debt service commitment will total approximately $13.8 million, or approximately 8% of
the projected General Fund operating budget. Viewed in isolation, this percentage
would be considered moderately high for a local governmental entity. However, it must
be noted that although this amount is truly a General Fund commitment, only $7.0
million is to be actually paid from General Fund resources. The remaining $6.8 million
of debt is scheduled to be paid from development fees, residential construction taxes
etc.
The financing-related resolutions approve the competitive sale of Certificates of
Participation in a total amount not to exceed $22,500,000, and also, approve the
amendments to the Site Lease, the Lease/Purchase Agreement, the trust agreement
and the assignment agreement along with the Preliminary Official Statement and other
necessary documents on file with the City Clerk, and authorize them to be executed and
distributed in connection with the sale of the Certificates. In addition, the resolutions
authorize the Director of Finance to solicit and obtain insurance on the transaction if it is
. found to be economically advantageous. Finally, the resolutions authorize staff to take
all actions as may be necessary to close the transaction, including execution of all
required closing documents.
FISCAL IMPACT:
Adoption of these resolutions will amend the Civic Center CIP budget by the net bond
proceeds and the reimbursement of up to $4,296,950 to the Public Facilities
Development Impact Fund and $1,536,949 to the General Fund for monies previously
spent on the projects, and recognize net long-term financing costs over a thirty year
period of approximately $14.4 million.
.
The ongoing fiscal impact based on debt service obligations will on average be
approximately, $477,210 ($277,890 Civic Center and $169,320 Nature Center Exhibits)
to the General Fund and $875,181 to the PFDIF fund. As previously mentioned, the
General Fund guarantees that the debt service will be paid. If at any time insufficient
funds are available in the PFDIF funds, the General Fund would be committed to fund
the debt service obligation which will be approximately $1.3 million annually.
As previously stated, beginning in fiscal year 2007, the total debt obligations being paid
by the PFDIF fund will be approximately $5.0 million per year (excluding the Phase 2
COPs). With the second and third phases yet to be financed, the anticipated debt
obligations are projected to increase to $6.4 million per year by 2010. Currently, there
are an estimated $6.2 million in available reserves within the PFDIF fund.
Financinq Summarv
.
2- ~tO
Item 1-
Page 11, Date 2/7/2006
The funding sources for Phase 2 - PSB renovation, the Nature Center Interior Exhibits
and the related financing costs are estimated as follows:
Financing Summary
Civic Center" Phase 2 Nature Center Total
PFDIF 15.9% General Fund 24.1% Total Civic Ctr. 100% GF All Projects
Gross Interest 11,866,412 3,767,860 15,634,272 1,853,728 17,488,000
Cost of Issuance 422,734 134,228 556,962 66,038 623,000
Project Fund 11,660,110 3,702,354 15,362,464 1,821,500 17,183,964
Total Financing Costs 23,949,257 7,604,441 31,553,698 $ 3,741,266 $ 35,294,964
Net Financing Costs $ 9,771,062 3,102,538 $ 12,873,600 $ 1,526,400 $ 14,400,000
Net Debt Service $ 14,178,194 4,501,904 $ 18,680,098 $ 2,214,866 $ 20,894,964
Total Cost $ 23,949,257 $ 7,604,441 $ 31,553,698 $ 3,741,266 $ 35,294,964
ATTACHMENTS:
1. Council Information Item Dated November 17, 2005 with attached Draft Staff
Report
2. Amended and Restated Trust Agreement for CV 2006 Civic Center COPS
3. Agency Agreement for CV 2006 Civic Center COPS
4. Continuing Disclosure Agreement for CV 2006 Civic Center COPS
5. First Amendment to Lease/Purchase Agreement
6. First Amendment to Assignment Agreement
7. First Amendment to Site Lease
8. Preliminary Official Statement
9. Official Notice of Sale
2-11
ATTACHMENT 1
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General Services Department
Memorandum
CnvOF
CHUIA VISfA
DATE:
November 17, 2005
TO:
The Honorable Mayor and City Council
VIA:
David D. Rowlands, Jr., City Manager
FROM:
Jack Griffin, Director of General Services
SUBJECT:
Civic Center Interim Appropriation
Attached is a draft staff report that describes the need for the Council to authorize an interim
appropriation to the Civic Center Renovation capital improvement project (GG 139). As the draft
report indicates, the project is proceeding within the budget that the Council approved in August
of2004 when it approved the Guaranteed Maximum Price of the project.
The interim appropriation is necessary due to certain expenditures that were made during the first
phase of the project for work associated with later phases. In particular, the design of all three
phases occurred in the first phase and the project insurance costs were paid almost in full during
the fust phase. These payments leave the proj ect budget "short" from a cash perspective.
The draft staff report indicates that the funds to be approproriated would be reimbursed when the
second phase of the project, the renovations the Public Services Building, is financed in early
2006.
This interim appropriation, like all other appropriations requires the approval offour-fifths of the
Council. In the case of the Civic Center, Councilmember Rindone, whose residence is within
500 feet of the Civic Center Complex, would have to abstain from voting. This creates a
problem with the uncertainty regarding when Councilmember Davis will be able to return to
Council meetings. Given the uniqueness of this situation, the City Attorney is attempting to
obtain an opinion from the California Fair Political Practices Commission (FPPC) as to whether
Councilmember Rindone could vote on the matter. In the meantime, the City is contractually
obligated to remit payment to Highland Partnership, Office Pavilion, Corporate Express, Allegis
Development Company and other vendors who have or are currently providing
services/materials for the project.
In order to meet these contractual obligations, the City will continue to makes its required
payments. Pending the answer the City Attorney receives from the FPPC or the return to
2. - i2-
C\Oocuments and Settings\phillipd\Local Settings\Temporary Internet FiIes\OLK10\civic center interim appropriation info iteml.doc
ATTACHMENT 1
Council meetings of Councilmember Davis, we will promptly bring the draft staff report forward
for your consideration.
We would like to reiterate that the project costs are well within the project budget that the
Council has previously approved and only the combination of a three-phased project with three
distinct financing series, the conflict of interest issues and Councilmember Davis' illness have
created this somewhat unwieldy situation.
Cc: Ann Moore, City Attorney
Maria Kachadoorian, Finance Director
-2-/9
C\Documents and Settings\philIipd\Local Settings\Temporary Internet Files\OLK.20\civic center interim appropriation info iteml.doc
ATTACHMENT 1
COUNCIL AGENDA STATEMENT
Item:
Meeting Date: IU22/0S
ITEM TITLE: Resolution authorizing the appropriation of $~,721,194 from the
available balance of the Public Facilities Develqpment Impact (PFDIF)
fund to complete the first phase activities reg!irding the Civic Center
Complex project (GG139). '
SUBMITTED BY: Director of General Services
REVIEWED BY: City Manager
(4/Sths Vote: Yes X No
.,-,,".
The City Council previously approved CIP projectGG-139 which,'involved the renovation of the
Civic Center Complex. On August 3, 2004 City COliIlcil approi~q by Resolution 2004-266 a
financing plan for Component A of the project appropriating ,$1,.5,9.55,550 from bond proceeds
and $3,000,000 from the Public Facility Development Impact Fund (PFDIF). In addition to
existing funds when the first phase of the project began, thetb~ available f.i.mds amounted to
$23,461,166,'}"'"
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Phase I, City Hall is nearing r';" l~oi1ipletiqn, however, due to expe~4ifuIes incurred in the first
phase of construction rather;thari,in the'budg~t~d future phases;:sfaff is recommending an
additional appropriation to comp'let~ all cOmp?~eDt~..or the.,first phase whereby the funds
appropriated by the approval of toru@1's resolu,#oIl wiIYD'eF~iinbursed when the bond proceeds
or sale of the certificates of participation fo;- the-second phaS'e'occurs.
RECOMMENLlAJ:1QN: That the CitYQouncil authori:e the appropriation of$3,721,194 from
/',,~,,'L~'" ,,<;,..:.-., -',
the avail!\!JJ~balance of<Jke Public Faciliti'esDevelopment Impact (PFDIF) fund to complete first
phase activities regarding the Civic Center COJ:nplex project (GG 139).
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BOARJ)S/COMMISSIONSRECOMMENDA TION: N/ A
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.c.... 'TIieSqnstructionire'~()vation of the Civic Center Complex is progressing well. Staff has moved
in~o lli.~"P\~w City HaJl\\m?:,~!;,is ope~ational. Only the n~w Coun~il Chamb~rs is n?t yet complete.
It IS expect~d that the C~Fbers will be ready to host ItS first City Council meeting on Tuesday,
December',6" 2005. i:temporary Occupancy Permit has been issued for City Hall. Also, as
required by the contract, a Substantial Completion Certificate has also been issued. The interim
modificatioiJg, to the former Police Department and current move coordination activities from
Public Services Building (PSB) to the former Police Department in an effort to prepare for the
renovation 'of the PSB are proceeding.
The :financing for the proj ect is broken down into the three phases consistent with the three
phaSes of the Civic Center Complex renovation/construction and budgeted accordingly. The
existing appropriation to the Civic Center Complex project was intended to cover budgeted costs
of the first phase of the project. However, due to future phase expenditures incurred in the first
phase, it has become necessary to appropriate additional funds to complete all components of the
first phase. These additional funds will be reimbursed to the PFDIF with the financing of the
second phase.
z -/'-/
ATTACHMENT 1
Page 2, Item:
Meeting Date: 11/22/05
Given the complexity of the project in that three separate and distinct existing bUildings will be
reconstructed and/or renovated, along with their related site improveme1)-ts' such as parking,
landscaping, etc., expenditures have occurred relating to budgeted items iii.!futufe phases of the
project during the first phase, It should be noted that although thert!'.';;re overla.pping phase
expenditures, the project as a whole is within budget. .,' ,
.
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.
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The first occurrence is the payment of design services for all}W~e.compo~~rits; City Hall,~~I3
and former Police Department including interim temporarji);tenov4!ions to the former Police"
Department to accommodate staff during construction,,ii)itiaJly budgeted over three phases but"-
incurred in the first phase. The total amount for the~<istS incurred in excess of budgeted Phase: f'
design services is $ I ,970,000 (see Table I). The C;i~r~alized si~ficant savings in design c'b~ts
by undertaking the full design of the project PB()i"'t~;,the constrJt?l!?n of the first phase. By
completing the design of all phases up front, the' Desig'i!~uildf:!5,was'also able to set prices for
materials and labor in phases 2 and 3 by having biddable ddE~ents on those buildings.
"~f.:~~;h,
The second occurrence is the payment of the entire insurance{~~9wam, initially budgeted over
three phases. Due to the volatility of the insurance market it was{tpJhe'Benefit of the City to
lock in a guaranteed price for thl;Civic<:;enter insurance program ata:c6sf of $3,027,326 for all
three phases (less $I50,00Q.iIi broker's 'fe@~'t9_.1Jl;paid at a rate o:fj.$'j'S,OOO at the construction
onset of each phase) and S455,400'for Builde~;gtW*Jor a total e~penditure of $3,332,726 in
insurance costs. The budgeted ambUnt for iD,SliHill2&:iit:}:!b,aSe I was $1,623,000. Thus, an
unanticipated expense of$I,709,726W~ incurfbCl in the fir;'~phase (see Table I).
'~~"~':t"'1i~~;i/~);')' (>~3;:~1x
The third and fm.al:occurrence is the paYment of materials such as ceramic and stone tiles, doors
,d"~~':.:~': ,':':'.:-rt:t,,,,,,:,.,. . ""\!:~
and frame~putCnased'aiJ.d expense incurred in the first phase in an effort to obtain the best value
,"" ':' :>J,',.:} ,n.,C. ("
and pri<;e.for the City, !i.p.'!-Vever, they are not:~c4eduled for installation nor budgeted for until the
secoI'l~:I).and/or third pl:!~es. An amount \~P:$297,468 accounts for those overlapping phase
activit)i\"costs (see Tablg'J). '. (Xi'
i;~ ~ :"~""<\r',;;" . ,..~,; j:,,':W;I;.;S!L':-;%:~i8:{~:::i~,',".!,:::,) ::., " . ~."t7:'
The total fUD.9!>reqUlred to completeaJrPhase I activities is $3,292,028 and is outlined in Table I
below: 'n;!!;"
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, .. Table'l.
>
"t~,,1;~':':~h
Component A
Budgeted Obligation
Amt Incurred in
Phase 1 for
Com anent 2
Amt Incurred in
Phase 1 for
Com onent 3
Total Excess Amt
Incurred in Phase 1
Com onents 2 + 3
. \!~.:. Description
;\~~,~~~
""i",";
Design Builder\',gpsts:
i;,\fi
esign of Build[ri~
esign ofTernli~enov - old PD
evelopme9-~,S~Costs
IE Fixed!,ee (Design)
IE F~i(i:;()nstruction)
~;'rReimburseables
Cc;>nstruction Allowance Budgets
General Conditions
emolition and Construction*
n~Site Improvements
Construction Contingency
Design Builder Costs Sub-Total
$1,299,00
$65,00
$120,00
$240,00
$680,00
$199,00
$855.00
$1,075,00
$10,838,00
$2,117,00
$691,00
$18,179,000
$785,00
$10,00
$83,00
$166,00
$142,26
$155,201
$1,068,26
$1,199,201
$2,267,46
2-/5
ATTACHMENT 1
Page 3, Item:
Meeting Date: 11/22/05
Insurance:
$1,623,00
Amt Incurred in
Phase I for
Com onent 2
$811,00
Total Excess Amt
.mcurred in Phase I
-. ';'Com onents 2 + 3)
$1,709,72
Description
Component A
Budgeted Obligation
City Budgeted Allowance:
$2,974,00
$2,097,927
Total
ess Adjusted Avail Balance**
ppropriation Req - Ph I
$22,776,00
aterials - Component 2IB - PSB
aterials - Component 3/C - Old
PD
*Total Materials Purchased
$142,26
$155,201
$297,46
aunt Avail at onset of Phase 1
ount Budget
UAdj Avail
$23,461,16
$22,776,00
$685,16
,: -'
With the expenditure of Cql"liP6~~rit2 and 3 costs III Phase 1, ,tJ:le total amount of those
Components will be reduced,as sho'lyn on Table2:,
Table 2.
Description
CompOD,ellt 2
Original Bu:~g~t,:;;
Component ~: '::
Adjusted Bti~et
Component 3
Original Budget
Component 3
Adjusted Budget
esign Bu~14er Costs
City Budgeted Allowauces
roje~t~':I,rance
otaI COntpO,Dent Costs
$8,513,733
$1,964,00
$
$10,477,73
$9,857,79
$3,012,00
$47,27
$12,917,073
,- ".Fihallcing
, '~~j' ",." ',-"
It is antiCipated that thesare of certificates of participation will occur in February of 2006. In
advance o(1:hat, staff Will return to Council in December of 2005 recommending approval of a
reimbursem'ti4t resolution that will enable the City to have these DIF funds reimbursed with the
Phase 2 financing. Also included in the recommended appropriation are funds that will enable
the proj ect to' continue to move forward. These funds will be utilized to complete the interim
, improvern~rits to the fo=er Police Department as well as anticipated construction progress
. payments for the PSB in the amount of$429,166. Move coordination efforts for the Engineering
Departinent and Planning and Building Department continue with their expected move into the
fo=er Police Department in late January/early February of 2006. Renovations to the PSB will
start immediately upon those moves and it is anticipated that the renovations will take eleven to
twelve months to complete.
After analysis of current and anticipated obligations/expenditures, staff is recommending a total
appropriation in the amount of$3,721,194 (see Table 3).
2-lb
ATTACHMENT 1
Page 4, Item:
Meeting Date: 11/22/05
Table 3.
ppropnation Req - Phase 1
nticipated Phase 2 Expenditure
Total Appropriation Requested
FISCAL IMPACT:
~,<',:,'. :',,- ' . ,"
At this time staff is recommending that Council approve tM'~ppi8J1Jiation of $3,721,194 froiil...
,,.... "i' .,.-" ,"'.
the available balance of the Public Facilities DevelopmentITIipact (PFDIF) fund as necessary to
complete Phase 1 activities and in anticipation of Phase2 expenditures prior to receipt of bopd..
proceeds. Of the $3,721,194 appropriated by apprgY\l1 of tonight'~ resolution, the entire amount
will be reimbursed from the bond proceeds or S;;i[e bf the certific<\tes of participation when the
financing plan for the second phase occurs, thus there iSIl? impactt() the General Fund.
<"'-'"
As indicated in earlier staff reports, the project costs are split between the PFDIF (approximately
84%) and the General Fund (approximately 16%). While trus:ac!ion does not have any direct
impact on the General Fund the issuance of bonds or the sale ofcei1ificate~of participation will
require debt service payments fromj:he General Fund. Those costs wi).[ be detailed when staff
brings forth recommendatioI)$on the fIiiaricing of Phase 2. As previ9lJ.Sly stated, it is anticipated
that the sale of certificatesofpartitipation will OCc~ i,n February of2006.
,,-. "'-',:' '~.
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M:\GcneraI Services\GS Administration\Council Agenda\Civic G,~iet\2005 Civic Cel!t-erAddtl Appropriation.doc
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2-/7
ATTACHMENT 2
Stradling Yocca Car/son &: Rauth
Draft of 1/16/06
AMENDED AND RESTATED TRUST AGREEMENT
Dated as of March 1,2006
by and among
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as successor trustee to
BNY WESTERN TRUST COMPANY,
as Trustee
and the
CHULA VISTA PUBLIC FINANCING AUTHORITY
and the
CITY OF CHULA VISTA
relating to the
$37,240,000
CITY OF CHULA VISTA
2004 CERTIFICATES OF PARTICIPATION
(Civic Center Project - Phase 1)
and
$
CITY OF CHULA VISTA
2006 CERTIFICATES OF PARTICIPATION
(Civic Center Project - Phase 2)
DOCSOC/1148399v3/024036-0033
Z -IF
.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions and Rules of Construction .............................................................2
Section 1.02. Authorization... ................ ......... .......... .................. ................ .......................... II
Section 1.03. Equal Security.................................................................................................II
ARTICLE II
TERMS OF THE CERTIFICATES AND ADDITIONAL CERTIFICATES
Section 2.01. Authorization..................................................................................................11
Section 2.02. Description of Certificates. .............................................................................11
Section 2.03. Form of Certificates................................................................................... .....14
Section 2.04. Execution .............. ....................... ................. .,................................................14
Section 2.05. Application of Proceeds and Other Amounts. ................................................14
Section 2.06. Transfer and Exchange. ..................................................................................15
Section 2.07. Certificates Mutilated, Lost, Destroyed or Stolen ..........................................15
Section 2.08. Execution of Documents and Proof of Ownership .........................................16
Section 2.09. Certificate Register .........................................................................................16
Section 2.10. Book-Entry System......................................................................................... 17
Section 2.11. Destruction of Cancelled Certificates .............................................................19
Section 2.12. Additional Certificates .................. ..................................... ................... .......... 20
.
ARTICLE III
PROJECT FUND
Section 3.0 I. Establishment of Project Fund........................................................................ 22
Section 3.02. Purpose........................................................................................................... 22
Section 3.03. Deposit of Moneys; Payment of Project Costs and Delivery Costs. ..............22
Section 3.04. Transfers of Unexpended Proceeds ................................................................22
ARTICLE IV
PREPAYMENT FUND
Section 4.01. Establishment of Prepayment Fund ................................................................23
Section 4.02. Extraordinary Prepayment ............. ..... ................. ................ ........ ................... 23
Section 4.03. Prepayment ... .................... ........ .............. .............. ................ .................. ........ 23
Section 4.04. Selection of Certificates for Prepayment........................................................27
Section 4.05. Notice of Prepayment. ....................................................................................27
Section 4.06. Partial Prepayment of Certificates ..................................................................28
DOCSOC/1148399v3/024036-0033
2-/1
TABLE OF CONTENTS
(continued)
Page
Section 4.07. Effect of Notice of Prepayment....................................................... ...............28
Section 4.08. Surplus ........................... ......... ...... ............ ........ .... ............... ................ ........... 29
ARTICLE V
LEASE PAYMENTS; LEASE PAYMENT FUND
Section 5.0 I. Security Provisions. .... ............ .............. ..... ............... ............ ... ..... ............... ... 29
Section 5.02. Establishment of Lease Payment Fund..................................................:........30
Section 5.03. Deposits .............. ............. ............ .......... ............... .................................. ........30
Section 5.04. Application of Moneys ...................................................................................30
Section 5.05. Surplus ... ........ ......................... ................................. ............... ..... ............... .... 31
ARTICLE VI
RESERVE FUND
Section 6.01. Establishment of Reserve Fund ......................................................................31
Section 6.02. Funding. .............. ......................... ..................... .................................... .......... 31
Section 6.03. Transfers of Excess. ............ ........... ... ....... ............................. ..........................32
Section 6.04. Application of Reserve Fund in Event of Deficiency in Lease Payment Fund32
Section 6.05. Transfer to Make All Lease Payments............................................................ 33
ARTICLE VII
NET PROCEEDS FUND
Section 7.01. Establishment of Net Proceeds Fund: Deposits..............................................33
Section 7.02. Cooperation........... ......................................................................................... 34
ARTICLE VIII
MONEYS IN FUNDS; INVESTMENT
Section 8.01. Held in Trust...................................................................................................34
Section 8.02. Investments Authorized. .. ....... ..... ......... .......................................................... 34
Section 8.03. Disposition of Investments .... ...... ......................... .......................................... 3 5
Section 8.04. Accounting...................................................................................................... 3 5
Section 8.05. Valuation and Disposition ofInvestments......................................................35
Section 8.06. Commingling of Moneys in Funds .................................................................36
Section 8.07. Tax Covenants. ... ........................ .... ........ ....... ................................................. 36
Section 8.08. Rebate Fund. ....... ......... .............. ........... ................................................... ....... 37
2-20
ii
DOCSOCIl148399v3/024036-0033
TABLE OF CONTENTS
(continued)
Page
ARTICLE IX
THE TRUSTEE
.
Section 9.01. Appointment of Trustee.. ...... .................... ..... ............ .......... ........................... 39
Section 9.02. Merger or Consolidation. ............. ..... ......... ....... .......... .................................... 40
Section 9.03. Protection of the Trustee......... ..... ....... .... ... ...... ........... .............. ...................... 40
Section 9.04. Rights of the Trustee.......................................................................................41
Section 9.05. Standard of Care .............................................................................................41
Section 9.06. Compensation of the Trustee ..........................................................................41
Section 9.07. Indemnification of Trustee .............................................................................41
Section 9.08. Trustee's Disclaimer of Warranties ................................................................43
.
ARTICLE X
MODIFICATION OR AMENDMENT OF AGREEMENTS
Section 10.01. Amendments Permitted. .................................................................................43
Section 10.02. Procedure for Amendment with Written Consent of the Owners...................44
Section 10.03. Disqualified Certificates ........................... ........................................ .............. 45
Section 10.04. Effect of Supplemental Agreement ................................................................45
Section 10.05. Endorsement or Replacement of Certificates Delivered After Amendments.45
Section 10.06. Amendatory Endorsement of Certificates ......................................................46
Section 10.07. Copies of Amendments Delivered to Rating Agencies ..................................46
ARTICLE XI
COVENANTS; NOTICES
.
Section 11.01. Compliance With and Enforcement of the Lease ...........................................46
Section 11.02. Payment of Taxes ...........................................................................................46
Section 11.03. Observance of Laws and Regu1ations.............................................................46
Section 11.04. Prosecution and Defense of Suits ...................................................................46
Section 11.05. City Budgets ...................................................................................................47
Section 11.06. Further Assurances .........................................................................................47
Section 11.07. Continuing Disclosure ....................................................................................47
ARTICLE XII
LIMITATION OF LIABILITY
Section 12.01. Limited Liability of the City...........................................................................47
Section 12.02. No Liability of the City or Authority for Trustee Performance......................47
Section 12.03. Limitation of Rights to Parties and Certificate Owners..................................48
iii
DOCSOC/l148399v3/024036-0033
2 -2-1
TABLE OF CONTENTS
(continued)
Page
Section 12.04. No Liability of Authority to the Owners ........................................................48
ARTICLE XIII
EVENTS OF DEFAULT AND REMEDIES OF CERTIFICATE OWNERS
Section 13.01. Assignment of Rights .....................................................................................48
Section 13.02. Events of Default. ...........................................................................................48
Section 13.03. Application of Funds ......................................................................................49
Section 13.04. Institution of Legal Proceedings.....................................................................49
Section 13.05. Non-Waiver ....................................................................................................50
Section 13.06. Remedies Not ExcIusive................................................................................. 50
Section 13.07. Power of Trustee to Control Proceedings.......................................................50
Section 13.08. Limitation on Certificate Owners' Right to Sue.............................................50
Section 13.09. Agreement to Pay Attorneys' Fees and Expenses ..........................................51
Section 13.10. Insurers' Rights...............................................................................................51
ARTICLE XIV
MISCELLANEOUS
Section 14.0 I. Defeasance. ............................... .............................. ............... ......................... 51
Section 14.02. Non-Presentment of Certificates........ ............ ........................... ............... ....... 53
Section 14.03. Acquisition of Certificates by City .................................................................53
Section 14.04. Records ...... .................................... .... ..................... .............. ................... ....... 53
Section 14.05. Notices .................. ...................................... .......... ................ .......... ......... ....... 53
Section 14.06. Governing Law ...............................................................................................54
Section 14.07. Binding Effect: Successors .............................................................................54
Section 14.08. Execution in Counterparts ..............................................................................54
Section 14.09. Headings......................................................................................................... 54
Section 14.10. Waiver of Notice ............................................................................................54
Section 14.11. Separability ofInvalid Provisions ..................................................................54
Section 14.12. Insurers to be Deemed Owners; Rights of the Insurers ..................................55
Section 14.13. Claims Under 2004 Insurance Policy: Payments by and to 2004 Insurer ......55
Section 14.14. Information to be Provided to the 2004 Insurer.............................................. 57
EXHIBIT A
EXHIBIT B-1
EXHIBIT B-2
FORM OF CERTIFICATE ................................................................................A-I
FORM OF WRITTEN DELIVERY COST REQUlSITION...........................B-I-1
FORM OF WRITTEN PROJECT COST REQUISITION ..............................B-2-1
2- -22-
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DOCSOCI1148399v3/024036-0033
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of March 1,2006
(the "Trust Agreement"), by and among THE BANK OF NEW YORK TRUST COMPANY, N.A., a
national banking association, as successor-in-interest to BNY Western Trust Company, a state
banking corporation organized under the laws of the State of California, as trustee (the "Trustee"),
the CHULA VISTA PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority duly
organized and existing under the laws of the State of California, as lessor under the Lease hereinafter
referred to (the "Authority"), and the CITY OF CHULA VISTA, a municipal corporation and a
charter city duly organized and existing under the Constitution and laws of the State of California, as
lessee under the Lease (the "City"), amends and restates in its entirety that certain Trust Agreement
dated as of September I, 2004 by and among the City, the Authority and the Trustee, and constitutes
a supplemental agreement executed pursuant to Section 2.12 thereof for the purpose of facilitating
the execution and delivery of the 2006 Certificates (as defined below);
W II N ];.s..s. in H:
WHEREAS, the City and the Authority have entered into a LeaselPurchase Agreement, dated
as of September I, 2004, as amended by that First Amendment to Lease Agreement dated as of
March I, 2006 (collectively, the "Lease"), whereby the City, as agent of the Authority, has agreed to
cause the modernization, reconstruction and equipping of improvements for the City's Civic Center
and other City facilities, as described therein (collectively, the "Project"), and the City has leased the
Leased Premises (defined below) trom the Authority; and
WHEREAS, in order to finance the Project, the City and the Authority have authorized the
sale of the $37,240,000 City ofChula Vista 2004 Certificates of Participation (Civic Center Project-
Phase I) (the "2004 Certificates") and the $ City of Chula Vista 2006 Certificates of
Participation (Civic Center Project - Phase 2) (the "2006 Certificates"), each evidencing tractional
interests in the Lease Payments and Prepayments made by the City under the Lease; and
WHEREAS, as security for the 2004 Certificates, the 2006 Certificates and any Additional
Certificates executed and delivered in accordance with this Trust Agreement, the Authority has
assigned the rights to receive all Lease Payments described in the Lease, and the Authority and the
City have granted a security interest in all moneys held by the Trustee hereunder (other than the
Rebate Fund as described herein) to the Trustee for the benefit of the Owners of the 2004
Certificates, the 2006 Certificates and any Additional Certificates executed and delivered hereunder;
and
WHEREAS, Section 5420 et seq. of the California Government Code (the "Government
Code") provides statutory authority for pledging collateral for the payment of principal or
prepayment price of, and interest on, any agreement, including certificates of participation, and the
Government Code creates a continuing perfected security interest which shall attach immediately to
such collateral irrespective of whether the parties to the pledge document have notice of the pledge
and without the need for any physical delivery, recordation, filing or further act, and, therefore, the
City and the Authority hereby warrant and represent that pursuant to the Lease, this Trust Agreement
and the Government Code, the Trustee has a first priority perfected security interest in the Lease
Payments described in the Lease pursuant to the Government Code.
DOCSOCII148399v3/024036-0033
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WHEREAS, the Trustee has agreed to apply the proceeds of the 2004 Certificates, the 2006
Certificates and any Additional Certificates deposited in the Project Fund to pay certain Project Costs
and Delivery Costs (as such terms are defined herein).
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained
herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
.
Section !.O!. Definitions and Rules of Construction. Unless the context otherwise requires,
the terms defined in this Section shall, for all purposes of this Trust Agreement, have the meanings
herein specified. Unless the context otherwise indicates, words importing the singular number shall
include the plural number and vice versa. The terms "hereby," "hereof," "hereto," "herein,"
"hereunder" and any similar terms, as used in this Trust Agreement, refer to this Trust Agreement as
a whole.
"Additional Certificates" means certificates of participation authorized by a supplemental
Trust Agreement that are executed and delivered by the Trustee under and pursuant to Section 2.12.
"Additional Payments" means all amounts payable by the City as Additional Payments as
defined in Section 4.11 of the Lease.
"Assignment Agreement" means the Assignment Agreement, dated as of September I, 2004,
as amended by that certain First Amendment to Assignment Agreement dated as of March I, 2006,
by and between the Trustee and the Authority, and any duly authorized and executed amendments
thereto.
"Authority" means the Chula Vista Public Financing Authority, a joint exercise of powers
authority organized under the laws of the State, its successors and assigns.
"Authority Rel'resentative" means the President, Vice President, Secretary, Treasurer,
Executive Director, Assistant Executive Director or Assistant Treasurer of the Authority, or any other
person authorized to act on behalf of the Authority under or with respect to the Lease.
"Beneficial Owner" means any person which (a) has the power, directly or indirectly, to vote
or consent with respect to, or to dispose of ownership of, any Certificates (including persons holding
Certificates through nominees, depositories or other intermediaries), or (b) is treated as the owner of
any Certificates for federal income tax purposes.
"Business Dav" means any day other than (i) a Saturday or Sunday, or (ii) a day on which
banking institutions in the State of New York or the State of California are authorized or required by
law or executive order to remain closed.
"Certificates" means the 2004 Certific"ates, the 2006 Certificates and each series of
Additional Certificates executed and delivered pursuant to Section 2.12.
.
DOCSOCIl 148399v3/024036-0033
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2 ~ ZLf
"Certificate of Completion" means a certificate of the City Representative delivered pursuant
to Section 3.4 of the Lease stating that all components of the Project being financed by a series of
Certificates have been completed or concluded in conformity with the requirements of the Lease.
"Certificate Year" means the period extending from September 2 each year to September I of
the subsequent calendar year, provided that the first Certificate Year for each series of Certificates
shall commence on the Delivery Date and end on the following September I.
"Citv" means the City of Chula Vista, a municipal corporation and a charter city organized
and existing under the laws and Constitution of the State, and its successors and assigns.
"Citv Representative" means the City Manager and Director of Finance of the City or any
other person authorized by the City Manager of the City to act on behalf of the City with respect to
the Lease or this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, and the regulations issued thereunder, as
the same may be amended from time to time, and any successor provisions of law. Reference to a
particular section of the Code shall be deemed to be a reference to any successor to any such section.
"Continuing Disclosure Agreement" means (i) that certain Continuing Disclosure Agreement
dated as of September I, 2004, by and between the City and The Bank of New York Trust Company,
N.A., as successor-In-interest to BNY Western Trust Company, as Dissemination Agent, as it may be
amended from time to time in accordance with the terms thereof; (ii) that certain Continuing
Disclosure 'Agreement dated as of March I, 2006 by and between The Bank of New York Trust
Company, N.A., as Dissemination Agent, as it may be amended from time to time in accordance with
the terms thereof; and (iii) any agreement entered into by the City and a dissemination agent with
respect to any Additional Certificates relating to compliance with Rule l5c2-12 adopted under the
Securities Exchange Act of 1934.
"Deliverv Cost Requisition" means a written requisition substantially in the form attached
hereto as Exhibit B-1.
"Deliverv Costs" means and includes all items of expense directly or indirectly payable by or
reimbursable to the City or the Authority relating to the financing of the Project from the proceeds of
the Certificates, including but not limited to costs provided in the contract of purchase with the
Original Purchaser, the premium for the 2004 Insurance Policy, the 2006 Insurance Policy or any
insurance policies purchased to insure any Additional Certificates or to satisfy the Reserve
Requirement, filing and recording costs, settlement costs, printing costs, word processing costs,
reproduction and binding costs, initial fees and charges of the Trustee, including its first annual
administration fee and the fees of its counsel, legal fees and charges, financing and other professional
consultant fees, fees of auctioning any Certificates, costs of rating agencies and costs of providing
information to such rating agencies, any computer and other expenses incurred in connection with the
Certificates, fees for execution, transportation and safekeeping of the Certificates and charges and
fees in connection with the foregoing.
"Deliverv Date" means the date on which a series of Certificates, duly executed by the
Trustee, is delivered to the Original Purchaser thereof.
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DOCSOCIl148399v3/024036-0033
"Depository" means the securities depository acting as depository pursuant to Section 2.10
hereof.
"DTC" means The Depository Trust Company, New York, New York, a limited purpose trust
company organized under the laws of the State of New York in its capacity as securities depository
for the Certificates.
"Event of Default" means an event of default under the Lease, as defined in Section 9.1
thereof.
"Fiscal Year" means the fiscal year of the City commencing July 1 and ending June 30 of the
next year.
"Government Obligations" means Permitted Investments of the type described in paragraph
(A) of the definition thereof.
"Independent Counsel" means an attorney duly admitted to the practice of law before the
highest court of the state in which such attorney maintain.s an office and who is not an employee of
the Authority, the Trustee or the City.
"Insurance Business Dav" means any day other than (i) a Saturday or Sunday, or (ii) a day on
which the 2004 Insurance Trustee or lending institutions in the State of New York are authorized or
required by law or executive order to remain closed.
"Insurance Policies" means the municipal bond insurance policies issued by the Insurers
insuring the payment when due of the principal and interest with respect to one or more series of the
Certificates as provided therein.
"Insurers" means, collectively, the municipal bond insurance companies insuring any of the
Outstanding Certificates.
"Interest Pavrnent Date" means March 1 and September 1 of each year commencing
March 1, 2005 for the 2004 Certificates, September 1,2006 for the 2006 Certificates and for each
series of Additional Certificates the March 1 or September 1 specified in the supplemental agreement
executed in accordance with Section 2.12 hereof with respect to such Additional Certificates.
"Lease" means the Lease/Purchase Agreement related to the Certificates, dated as of
September 1, 2004, as amended by that certain First Amendment to Lease/Purchase Agreement dated
as of March 1, 2006, by and between the City and the Authority, and any additional duly authorized
and executed amendments thereto.
"Lease Pavrnent" means any payment required to be paid by the City to the Authority
pursuant to Section 4.4 of the Lease.
.
"Lease Pavment Date" means the Lease Payment Date defined in Section 4.4(a) of the Lease,
which shall be each February 15 and August 15 commencing February 15, 2005.
"Lease Pavment Fund" means the fund by that name established and held by the Trustee
pursuant to Article V hereof.
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DOCSOCIl148399v3/024036-0033
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"Leased Premises" has the meaning set forth in the Lease.
"Letter of Representations" means the letter of the City delivered to and accepted by the
Depository on or prior to delivery of the Certificates as book-entry certificates making reference to
the DTC Operational Arrangements memorandum, as it may be amended from time to time, setting
forth the basis on which the Depository serves as depository for such book-entry certificates, as such
letters were originally executed or as they may be supplemented or revised or replaced by letters
from the City and the Trustee delivered to and accepted by the Depository.
"Moodv's" means Moody's Investors Service or any successors or assigns thereto.
"Net Proceeds" means any proceeds of any insurance, performance bonds or taking by
eminent domain or condemnation paid with respect to the Leased Premises remaining after payment
therefrom of any expenses (including attorneys' fees) incurred in the collection thereof.
"Net Proceeds Fund" means the fund by that name established and held by the Trustee
pursuant to Article VII hereof.
"Nominee" means the nominee of the Depository, which may be the Depository, as
determined from time to time pursuant to Section 2.10 hereof.
"Original Purchaser" means the original purchaser of a series of the Certificates on the
Delivery Date for such series.
"Outstanding" when used as of any particular time with respect to Certificates, means
(subject to the provisions of Section 10.03 hereof) all Certificates theretofore executed and delivered
by the Trustee under this Trust Agreement except:
(I) Certificates theretofore cancelled by the Trustee or surrendered to the Trustee for
cancellation;
(2) Certificates for the payment or prepayment of which funds or Government
Obligations, together with interest earned thereon, in the necessary amount shall have
theretofore been deposited with the Trustee (whether upon or prior to the maturity or
prepayment date of such Certificates), provided that, if such Certificates are to be
prepaid prior to maturity, notice of such prepayment shall have been given as
provided in Section 4.05 hereof or provision satisfactory to the Trustee shall have
been made for the giving of such notice; and
(3) Certificates in lieu of or in exchange for which other Certificates shall have been
executed and delivered by the Trustee pursuant to Sections 2.06 and 2.07 hereof.
Notwithstanding anything herein to the contrary, in the event that the principal and/or interest
with respect to a Certificate shall be paid by an Insurer, pursuant to an Insurance Policy, such
Certificate shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not
be considered paid by the City.
"Owner" or "Certificate Owner" or "Owner of a Certificate", or any similar term, when used
with respect to a Certificate means the person in whose name such Certificate is registered on the
registration books maintained by the Trustee.
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DOCSOC/1148399v3/024036-0033
.
"ParticilJants" means those broker-dealers, banks and other financial institutions ITom time to
time for which the Depository holds book-entry certificates as securities depository.
"Permitted Investments" means, if and to the extent permitted by law and by any policy
guidelines promulgated by the City:
.
A. Direct obligations of the United States of America (including obligations
issued or held in book-entry form on the books of the Department of the Treasury) or
obligations the principal of and interest on which are unconditionally guaranteed by the
United States of America.
B. Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such obligations are
backed by the full faith and credit of the United States of America (stripped securities are
only permitted if they have been stripped by the agency itself):
I. Farmers Home Administration (FmHA)
Certificates of beneficial ownership
2. Federal Housing Administration Debentures (FHA)
3. General Services Administration
Participation certificates
Mae")
4. Government National Mortgage Association (GNMA or "Ginnie
GNMA-guaranteed mortgage-backed bonds
GNMA-guaranteed pass-through obligations
5. U.S. Maritime Administration
Act ofl972)
Guaranteed Title XI financing (qualified under the Ship Financing
6. U.S. Department of Housing and Urban Development (HUD)
Project Notes
Local Authority Bonds
C. Bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit U.S. government agencies
(stripped securities are only permitted ifthey have been stripped by the agency itself):
6
DOCSOC/l148399v3/024036-0033
z-zs
1. Federal Home Loan Bank Svstem
Senior debt obligations
2. Federal Home Loan Mortgage Comoration (FHLMC or "Freddie
Mac")
Participation certificates
Senior debt obligations
3. Federal National Mortgage Association (FNMA or "Fannie Mae")
Mortgage-backed securities and senior debt obligations (excluding
stripped mortgage securities which are valued greater than par on the portion of
unpaid principal)
4. Student Loan Marketing Association (SLMA or "Sallie Mae")
Senior debt obligations
5. Resolution Funding Com (REFCORP)
The interest only component of REFCORP strips which have been
stripped by request to the Federal Reserve Bank of New York
6. Farm Credit Svstem Com. - Consolidated system-wide bonds and
notes
D. Money market funds registered under the Investment Company Act of 1940,
whose shares are registered under the Securities Act of 1933, and having a rating by Standard
& Poor's of AAArn-G, AAArn, or AAm and by Moody's of Aaa, including funds for which
the Trustee, its parent holding company, if any, or any affiliates or subsidiaries of the Trustee
provide investment advisory or other management services.
E. Certificates of deposit secured at all times by collateral described in (A)
and/or (B) above and having a maturity of one year or less. Such certificates must be issued
by commercial banks, savings and loan associations or mutual savings banks whose short-
term obligations are rated "A-l+" by Standard & Poor's, which may include the Trustee and
its affiliates. The collateral must be held by a third party and the Bondholders must have a
perfected first security interest in the collateral.
F. Certificates of deposit, savings accounts, deposit accounts or money market
deposits which are fully insured by FDIC (including those of the Trustee and its affiliates).
G. Commercial paper rated at the time of investment "Prime - I" by Moody's
and "A-l +" or better by Standard & Poor's.
H. Investment agreements, including guaranteed investment agreements,
acceptable to the Insurers.
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DOCSOCIl148399v3/024036-0033
I. Bonds or notes issued by any state or municipality which are rated by
Moody's and Standard & Poor's in one of the two highest rating categories assigned by such
agencies.
J. Federal funds or bankers acceptances with a maximum term of one year of
any bank which has an unsecured, uninsured or unguaranteed obligation rating of "Prime _ I"
or "A3" or better by Moody's and "A-I +" or better by Standard & Poor's, including those of
the Trustee and its affiliates.
K. Repurchase agreements satisfying criteria acceptable to the Insurers that
provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to
the Trustee (buyer/lender), and the transfer of cash from the Trustee to the dealer bank or
securities firm with an agreement that the dealer bank or securities firm will repay the cash
plus a yield to the Trustee, in exchange for the securities at a specified date or dates.
.
1. Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by
Standard & Poor's. If, however, the issue is only rated by Standard & Poor's (i.e., there is no
Moody's rating), then the pre-refunded bonds must have been pre-refunded with cash, direct
U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded municipals to satisfy this
condition.
M. The Local Agency Investment Fund of the State, provided that the Trustee
may deposit and withdraw monies in its own name.
N. Any other investment which the City is permitted by law to make (including
investment agreements and forward delivery or forward purchase agreements), but only with
prior written consent of the Insurers.
"Value" of the above investments shall be determined as of the end of each month, and the
value of any investments shall be calculated as follows:
(a) as to investments the bid and asked prices of which are published on a regular
basis in The Wall Street Journal (or, if not there, then in The New York Times): the average
of the bid and asked prices for such investments so published on or most recently prior to
such time of determination;
(b) as to investments the bid and asked prices of which are not published on a
regular basis in The Wall Street Journal or The New York Times: the average bid price at
such time of determination for such investments by any two nationally recognized
government securities dealers (selected by the Trustee in its absolute discretion) at the time
making a market in such investments or the bid price published by a nationally recognized
pricing service;
(c) as to certificates of deposit and bankers acceptances: the face amount thereof,
plus accrued interest;
(d) as to any investment not specified above: the value thereof established by a
methodology selected by the City and specified in writing to the Trustee; and
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DOCSOCII148399v3/024036-0033
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(e) alternatively, the value of the above investments shall be determined as of the
end of each month by the manner currently employed by the Trustee or any other manner
consistent with industry standard.
"Prepayment" means any payment made by the City pursuant to Article X of the Lease as a
prepayment of Lease Payments.
"Prepavment Fund" means the fund by that name established and held by the Trustee
pursuant to Article IV hereof.
"Principal Office or CO!J1orate Trust Office" means the corporate trust office of the Trustee at
700 South Flower Street, Suite 500, Los Angeles, California 90017, Attention: Corporate Trust
Services, or such other or additional offices as may be designated by the Trustee; provided, however,
that for the purposes of payment, transfer or exchange of Certificates such term means the office or
agency of the Trustee at which, at any particular time its corporate trust agency business shall be
conducted.
"Proiect" has the meaning set forth in the Lease.
"Proiect Cost Requisition" means a written requisition substantially in the form attached
hereto as Exhibit B-2.
"Proiect Costs" means, with respect to any item or portion of the Project, the contract price
paid or to be paid therefor upon acquisition, construction, procurement or improvement thereof, in
accordance with a purchase order or contract therefor. Project Costs include, but are not limited to,
the administrative, engineering, legal, financial and other costs incurred by the City and the Authority
in connection with the acquisition, construction, procurement, remodeling or improvement of the
Project, all applicable sales taxes and other charges resulting from such construction, procurement,
remodeling or improvement of the Project and the costs associated with making rebate calculations
required by the Code. Project Costs shall not include any costs of the City or the Authority to
enforce remedies hereunder or under the Lease.
"Proiect Fund" means the fund by that name established and held by the Trustee pursuant to
Article III hereof.
"Property" has the meaning set forth in the Lease.
"Record Date" means the close of business on the fifteenth day of the month preceding each
Interest Payment Date, whether or not such fifteenth day is a Business Day.
"Reserve Fund" means the fund by that name established and held by the Trustee pursuant to
Article VI hereof.
"Reserve Requirement" means, as of any calculation date, the least of (I) the maximum
aggregate annual Lease Payments (in any Certificate Year) then payable under the Lease (exclusive
of Lease Payments attributable to Certificates that have been defeased), (2) 125% of the average
annual aggregate Lease Payments (in any Certificate Year) then payable under the Lease (exclusive
of Lease Payments attributable to Certificates that have been defeased), or (3) 10% of the face
amount of the Certificates (less original issue discount if in excess of two percent of the stated
prepayment amount at maturity).
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DOCSOCIl148399v3!024036-0033
"S&P" or "Standard & Poor's" means Standard & Poor's Ratings Services or any successors
or assigns thereto.
"Site Lease" means the Site Lease, dated as of September I, 2004, as amended by that certain
First Amendment to Site Lease dated as of March I, 2006, by and between the Authority and the
City, and any additional duly authorized and executed amendments thereto.
"Special Counsel" means Stradling Y occa Carlson & Rauth, a Professional Corporation, or
any other attorney or firm of attorneys of nationally recognized standing in matters pertaining to the
tax-exempt status of interest on obligations issued by states and their political subdivisions and
acceptable to the City.
"State" means the State of California.
"Tax Certificate" means the Tax Certificate, dated as of the Delivery Date for a series of
Certificates, concerning matters pertaining to the use and investment of proceeds of such Certificates
executed and delivered to the City on the date of execution and delivery of such Certificates,
including any and all exhibits attached thereto.
Lease.
"Term" means the time during which the Lease is in effect, as provided in Section 4.2 of the
"Trustee" means The Bank of New York Trust Company, N.A., a national banking
association, as successor-in-interest to BNY Western Trust Company, a banking corporation duly
organized and existing under the laws of the State of California, and any successor trustee.
"Trust Agreement" or "Agreement" means this Amended and Restated Trust Agreement,
together with any amendments hereof or supplements hereto permitted to be made hereunder.
"2004 Certificates" means the $37,240,000 aggregate principal amount of City of Chula
Vista 2004 Certificates of Participation (Civic Center Project - Phase I) executed and delivered by
the Trustee pursuant to this Trust Agreement.
"2004 Insurance Policv" means the municipal bond insurance policy issued by the 2004
Insurer insuring the payment when due of the principal and interest with respect to the 2004
Certificates as provided therein.
"2004 Insurance Trustee" means U.S. Bank Trust National Association, or its successors.
"2004 Insurer" means MBIA Insurance Corporation, a stock insurance company domiciled in
the State of New York, or any successor thereto or assignee thereof.
"2006 Certificates" means the $ aggregate principal amount of City of Chula
Vista 2006 Certificates of Participation (Civic Center Project - Phase 2) executed and delivered by
the Trustee pursuant to this Trust Agreement.
"2006 Insurance Policv" means [TO COME]
"2006 Insurer" means [TO COME]
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Section 1.02. Authorization. Each of the parties hereby represents and warrants that it has
full legal authority and is duly empowered to enter into this Trust Agreement, and has taken all
actions necessary to authorize the execution of this Trust Agreement by the officers and persons
signing it.
Section 1.03. Equal Security. In consideration of the acceptance of the Certificates by the
Owners, this Trust Agreement shall be deemed to be and shall constitute a contract between the
Trustee and the Owners to secure the full and final payment of the interest, if any, and principal
represented by the Certificates which may be executed and delivered hereunder, subject to each of
the agreements, conditions, covenants and terms contained herein; and all agreements, conditions,
covenants and terms contained herein required to be observed or performed by or on behalf of the
Trustee shall be for the equal and proportionate benefit, protection and security of all Owners without
distinction, preference or priority as to security or otherwise of any Certificates over any other
Certificates by reason of the number or date thereof or the time of execution or delivery thereof or for
any cause whatsoever, except as expressly provided herein or therein. All of the Certificates are
equally secured as provided in this Section 1.3, except as may be otherwise expressly provided in this
Trust Agreement.
ARTICLE II
TERMS OF THE CERTIFICATES AND ADDITIONAL CERTIFICATES
Section 2.01. Authorization. Upon written request of the City Representative, the Trustee
will execute and deliver to the Original Purchaser of each series of Certificates an aggregate principal
amount of Certificates of the applicable series purchased by such Original Purchaser representing
proportionate ownership interests in the Lease Payments and the Prepayments.
Section 2.02. Description of Certificates.
(a) Each Certificate of a series shall be dated the Delivery Date for such series
and shall mature on March I in each year, and shall bear interest (calculated on the basis of a 360-
day year of twelve 30-day months) payable on each Interest Payment Date for such series.
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DOCSOC/1148399v3/024036-0033
The 2004 Certificates shall mature on March 1 in each year of the years specified below and
shall bear interest at the rates specified below:
Maturity Principal Interest
(March 1) Amount Rate
2007 $ 775,000 2.00%
2008 790,000 2.375
2009 810,000 2.75
2010 830,000 3.00
2011 855,000 3.375
2012 885,000 3.50
2013 915,000 3.75
2014 950,000 3.75
2015 985,000 3.75
2016 1,025,000 4.00
2017 1,065,000 4.00
2018 1,110,000 4.125
2019 1,155,000 4.20
2020 1,200,000 4.25
2021 1,255,000 4.375
2022 1,305,000 4.40
2023 1,365,000 4.50
2024 1,425,000 4.50
2026 3,050,000 4.625
2029 5,130,000 4.75
2034 10,360,000 5.00
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DOCSOCIl148399v3/024036-0033
.
-----
The 2006 Certificates shall mature on March 1 in each year of the years specified below and
shall bear interest at the rates specified below:
Maturity
(March 1)
Principal
Amount
Interest
Rate
The Certificates of a series shall be delivered in fully registered form, numbered from one
upwards in consecutive numerical order (with such alphabetical prefix as the Trustee shall
determine). The Certificates shall be executed ane;! delivered in the denominations of $5,000 and any
integral multiple thereof.
Each Certificate shall bear interest from the Interest Payment Date next preceding the date of
execution thereof, unless (i) it is executed during the period from the day after the Record Date for an
Interest Payment Date to and including such Interest Payment Date, in which event it shall bear
interest from such Interest Payment Date, or (ii) it is executed on or prior to the Record Date for the
first Interest Payment Date, in which event interest shall be payable from the Delivery Date;
provided, however, that if, at the time of execution of any Certificate interest with respect to such
Certificate is in default, such Certificate shall bear interest from the Interest Payment Date to which
interest has been paid or made available for payment with respect to such Certificate.
(b) Pavment Provisions. Interest with respect to any Certificate shall be payable
in lawful money of the United States of America by check or draft of the Trustee, mailed no later
than the Interest Payment Date to the Owner at his address as it appears, on the Record Date, on the
registration books maintained by the Trustee or at such other address as has been furnished to the
Trustee in writing by the Owner on or prior to such Record Date; provided, however, that at the
written request of the Owner of at least $1,000,000 in aggregate principal amount of Outstanding
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.
Certificates filed with the Trustee prior to any Record Date, interest with respect to such Certificates
shall be paid to such Owner on each succeeding Interest Payment Date (unless such request has been
revoked in writing) by wire transfer of immediately available funds to an account in the continental
United States designated in such written request. Payments of defaulted interest with respect to the
Certificates shall be paid by check or draft to the registered Owners of the Certificates as of a special
record date to be fixed by the Trustee, notice of which special record date shall be given to the
registered Owners of the Certificates no less than ten days prior thereto. The principal of and
premium, if any, on the Certificates is payable when due upon surrender thereof at the Principal
Office in lawful money of the United States of America.
.
Section 2.03. Form of Certificates. The 2004 Certificates and the 2006 Certificates and the
assignment to appear thereon shall be substantially in the forms set forth in Exhibit A attached hereto
and by this reference incorporated herein with such appropriate additions, modifications, and
insertions as are permitted or required by this Trust Agreement or the 2004 Insurer in the case of the
2004 Certificates and the 2006 Insurer in the case of the 2006 Certificates. Each series of Additional
Certificates shall be in the form set forth in the supplemental agreement executed with respect to
such Additional Certificates in accordance with Section 2.12 hereof. Pending the preparation of
definitive Certificates the Certificates may be executed and delivered in temporary form
exchangeable for definitive Certificates when ready for delivery. If the Trustee delivers temporary
Certificates for a series, it shall execute and deliver definitive Certificates of such series in an equal
aggregate principal amount of authorized denominations, when available, without additional charge,
and thereupon the temporary Certificates shall be surrendered to the Trustee at its Principal Office.
Until so exchanged, the temporary Certificates shall be entitled to the same benefits under this Trust
Agreement as definitive Certificates.
Section 2.04. Execution. The Certificates shall be executed by and in the name of the
Trustee by the manual signature of any authorized signatory of the Trustee. The Trustee shall insert
the date of execution of each Certificate in the place provided thereon.
Section 2.05. Application of Proceeds and Other Amounts.
(a) 2004 Certificates. The proceeds from the sale of the 2004 Certificates in the
amount of $36,570,71 1.36 (representing the par amount of the 2004 Certificates of $37,240,000, less
the 2004 Insurance Policy premium of $332,000.00, plus the net original issue premium of
$35,253.70, less Original Purchaser's discount of $372,542.34) shall be deposited with the Trustee as
follows: $31,997,962.42 to the 2004 Certificates Account of the Project Fund (of which $221,962.42
shall be deposited to the Delivery Costs Account therein) for the payment of Project Costs and
Delivery Costs, $2,176,837.68 to the Interest Account of the Lease Payment Fund and $2,395,911.26
to the 2004 Certificates Account of the Reserve Fund, which amount equals the initial Reserve
Requirement.
(b) 2006 Certificates. The proceeds from the sale of the 2006 Certificates in the
amount of$ (representing the par amount of the 2006 Certificates of$ , less
the 2006 Insurance Policy premium of $ , plus the net original issue premium of
$ , less Original Purchaser's discount of$ ) shall be deposited with the Trustee
as follows: $ to the 2006 Certificates Account of the Project Fund (of which
$ shall be deposited to the Delivery Costs Account therein) for the payment of Project
Costs and Delivery Costs, $ to the Interest Account of the Lease Payment Fund and
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$ to the 2006 Certificates Account of the Reserve Fund, which amount equals the initial
Reserve Requirement.
The Trustee may, in its discretion, establish a temporary fund or account in its books or
records to facilitate such deposits and transfers.
Section 2.06. Transfer and Exchange.
(a) Transfer of Certificates. Any Certificate may, in accordance with its terms,
be transferred upon the books required to be kept pursuant to the provisions of Section 2.09 by the
person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of
such Certificate for cancellation at the Principal Office accompanied by delivery of a written
instrument of transfer in a form acceptable to the Trustee, duly executed. Whenever any Certificate
or Certificates shall be surrendered for transfer, the Trustee shall execute and deliver a new
Certificate or Certificates of the same series, tenor and maturity, for like aggregate principal amount
in authorized denominations. The cost of printing Certificates and any services rendered or expenses
incurred by the Trustee in connection with any transfer shall be paid by the City. The Trustee shall
require the payment by the Owner requesting such transfer of any tax or other governmental charge
required to be paid with respect to such transfer, and there shall be no other charge to any Owner for
any such transfer.
(b) Exchange of Certificates. Certificates may be exchanged at the Principal
Office for a like aggregate principal amount of Certificates of other authorized denominations of the
same series, tenor and maturity. The Trustee may require the payment by the Certificate Owner
requesting such exchange of any tax or other governmental charge required to be paid with respect to
such exchange. The cost of printing Certificates and any services rendered or expenses incurred by
the Trustee in connection with any exchange shall be paid by the City. All Certificates surrendered
pursuant to the provisions of this Section shall be cancelled and destroyed by the Trustee and shall
not be redelivered.
(c) Time for Transfer or Exchange. The Trustee shall not be obligated to transfer
or exchange any Certificate after a Record Date and before the following Interest Payment Date, or
during the period in which it is selecting Certificates for prepayment, or after notice of prepayment
has been given as provided in Section 4.05.
Section 2.07. Certificates Mutilated, Lost. Destroved or Stolen. If any Certificate shall
become mutilated, the Trustee, at the expense of the Owner of said Certificate, shall execute and
deliver a new Certificate of like series, tenor, maturity and principal amount in exchange and
substitution for the Certificate so mutilated, but only upon surrender to the Trustee of the Certificate
so mutilated. Every mutilated Certificate so surrendered to the Trustee shall be cancelled by it. If
any Certificate shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be
submitted to the Trustee, and, if such evidence is satisfactory to the Trustee and, if an indemnity,
satisfactory to the Trustee indemnifying the Trustee, the Authority and the City, shall be given, the
Trustee, at the expense of the Certificate Owner, shall execute and deliver a new Certificate of like
series, tenor, maturity and principal amount and numbered as the Trustee shall determine in lieu of
and in substitution for the Certificate so lost, destroyed or stolen. The Trustee may require payment
of an appropriate fee for each new Certificate delivered under this Section and of the expenses which
may be incurred by the Trustee in carrying out the duties under this Section. Any Certificate
executed under the provisions of this Section in lieu of any Certificate alleged to be lost, destroyed or
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.
stolen shall be equally and proportionately entitled to the benefits of this Trust Agreement with all
other Certificates secured by this Trust Agreement. The Trustee shall not be required to treat both
the original Certificate and any replacement Certificate as being Outstanding for the purpose of
determining the principal amount of Certificates which may be executed and delivered hereunder or
for the purpose of determining any percentage of Certificates Outstanding hereunder, but both the
original and replacement Certificate shall be treated as one and the same. Notwithstanding any other
provision of this Section, in lieu of delivering a new Certificate in place of one which has been
mutilated, lost, destroyed or stolen, and which has matured, or has been called for prepayment, the
Trustee may make payment with respect to such Certificate upon receipt of the above-mentioned
indemnity.
.
Section 2.08. Execution of Documents and Proof of Ownership. Any request, direction,
consent, revocation of consent, or other instrument in writing required or permitted by this Trust
Agreement to be signed or executed by Certificate Owners may be in any number of concurrent
instruments of similar tenor, and may be signed or executed by such Owners in person or by their
attorneys or agents appointed by an instrument in writing for that purpose, or by any bank, trust
company or other depository for such Certificates. Proof of the execution of any such instrument, or
of any instrument appointing any such attorney or agent, and of the ownership of Certificates shall be
sufficient for any purpose of this Trust Agreement (except as otherwise herein provided), if made in
the following manner:
(a) The fact and date of the execution by any Owner or his attorney or agent of
any such instrument and of any instrument appointing any such attorney or agent, may be proved by
a certificate, which need not be acknowledged or verified, of an officer of any bank or trust company
located within the United States of America, or of any notary public, or other officer authorized to
take acknowledgments of deeds to be recorded in such jurisdictions, that the persons signing such
instruments acknowledged before him the execution thereof. Where any such instrument is executed
by an officer of a corporation or association or a member of a partnership on behalf of such
corporation, association or partnership, such certificate shall also constitute sufficient proof of his
authority.
(b) The fact of the ownership of Certificates by any person, the amount and
numbers of such Certificates and the date of execution shall be proved by the registration books
maintained pursuant to Section 2.09 hereof.
Nothing contained in this Article II shall be construed as limiting the Trustee to such proof, it
being intended that the Trustee may accept any other evidence of the matters herein stated which the
Trustee may deem sufficient. Any request or consent of the Owner of any Certificate shall bind
every future Owner of the same Certificate in respect of anything done or to be done by the Trustee
in pursuance of such request or consent.
Section 2.09. Certificate Register. The Trustee will keep or cause to be kept at its Principal
Office sufficient books for the registration and transfer of the Certificates which shall, during normal
working hours and upon reasonable notice, be open to inspection by the City and the Authority; and,
upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may
prescribe, register or transfer or cause to be registered or transferred, on said books, Certificates as
hereinbefore provided. The City, the Authority and the Trustee shall be entitled to treat the
registered owner of a Certificate as the absolute owner thereof for all purposes, whether or not a
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Certificate shall be overdue and the City, the Authority and the Trustee shall not be affected by any
notice to the contrary.
Section 2.10. Book-Entry Svstem.
(a) Election of Book-Entry Svstem. Prior to the execution and delivery of a
series of the Certificates, the City may provide that such series of Certificates shall be initially
executed and delivered as book-entry Certificates. If the City shall elect to deliver any series of
Certificates in book-entry, then the City shall cause the delivery of a separate single fully registered
Certificate for such series (which may be typewritten) for each maturity date of such Certificates in
an authorized denomination corresponding to that total principal amount of the Certificates
designated to mature on such date. Upon initial execution and delivery, the ownership of each such
Certificate shall be registered in the Certificate register in the name of the Nominee, as nominee of
the Depository, and ownership of the Certificates, or any portion thereof, may not thereafter be
transferred except as provided in Section 2.1 Oed).
With respect to book-entry Certificates, the City and the Trustee shall have no responsibility
or obligation to any Participant or to any person on behalf of which such a Participant holds an
interest in such book-entry Certificates. Without limiting the immediately preceding sentence, the
City and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the
records of the Depository, the Nominee, or any Participant with respect to any ownership interest in
book-entry Certificates, (ii) the delivery to any Participant or any other person, other than an Owner
as shown in the Certificate register, of any notice with respect to book-entry Certificates, including
any notice of prepayment, (iii) the selection by the Depository and its Participants of the beneficial
interests in book-entry Certificates to be prepaid in the event the City prepays the Certificates in part,
or (iv) the payment by the Depository or any Participant or any other person, of any amount with
respect to principal, premium, if any, or interest evidenced and represented by book-entry
Certificates. The City and the Trustee may treat and consider the person in whose name each book-
entry Certificate is registered in the Certificate register as the absolute Owner of such book-entry
Certificate for the purpose of payment of principal, premium and interest with respect to such
Certificate, for the purpose of giving notices of prepayment and other matters with respect to such
Certificate, for the purpose of registering transfers with respect to such Certificate, and for all other
purposes whatsoever. The Trustee shall pay all principal, premium, if any, and interest evidenced
and represented by the Certificates only to or upon the order of the respective Owner, as shown in the
Certificate register, or his respective attorney duly authorized in writing, and all such payments shall
be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of
principal, premium, if any, and interest evidenced and represented by the Certificates to the extent of
the sum or sums so paid. No person other than an Owner, as shown in the Certificate register, shall
receive a Certificate evidencing the obligation to make payments of principal, premium, if any, and
interest evidenced and represented by the Certificates. Upon delivery by the Depository to the
Owner and the Trustee, of written notice to the effect that the Depository has determined to substitute
a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record
Dates, the word "Nominee" in this Trust Agreement shall refer to such nominee of the Depository.
(b) Delivery of Letter of Representations. In order to qualify the book-entry
Certificates for the Depository's book-entry system, the City shall execute and deliver to the
Depository a Letter of Representations. The execution and delivery of a Letter of Representations
shall not in any way impose upon the City any obligation whatsoever with respect to persons having
interests in such book-entry Certificates other than the Owners, as shown on the Certificate register.
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In addition to the execution and delivery of a Letter of Representations, the City shall take such other
actions, not inconsistent with this Trust Agreement, as are reasonably necessary to qualify book-entry
Certificates for the Depository's book-entry program.
(c) Selection of Depositorv. In the event (i) the Depository'determines not to
continue to act as securities depository for book-entry Certificates, or (ii) the City determines that
continuation of the book-entry system is not in the best interest of the beneficial owners of the
Certificates or the City, then the City will discontinue the book-entry system with the Depository. If
the City determines to replace the Depository with another qualified securities depository, the City
shall prepare or direct the preparation "f a new single, separate, fully registered Certificate for each
of the maturity dates of such book-entry Certificates, registered in the name of such successor or
substitute qualified securities depository or its Nominee as provided in subsection (d) hereof. If the
City fails to identify another qualified securities depository to replace the Depository, then the
Certificates shall no longer be restricted to being registered in such Certificate register in the name of
the Nominee, but shall be registered in whatever name or names the Owners transferring or
exchanging such Certificates shall designate, in accordance with the provisions of Section 2.06
hereof.
(d) Pavments to Depositorv. Notwithstanding any other provision of this Trust
Agreement to the contrary, so long as all Outstanding Certificates of a series are held in book-entry
and registered in the name of the Nominee, all payments with respect to principal, prepayment
premium, if any, and interest evidenced and represented by such Certificate and all notices with
respect to such Certificate shall be made and given, respectively to the Nominees, as provided in the
Letter of Representations or as otherwise instructed by the Depository and agreed to by the Trustee
notwithstanding any inconsistent provisions herein.
(i) All book-entry Certificates shall be initially executed and
delivered as provided in Section 2.0 I hereof. If such Certificates are initially
registered in the name of the Nominee, then registered ownership of such
Certificates, or any portions thereof, may not thereafter be transferred except:
(A) to any successor of DTC or its nominee, or of any substitute
depository designated pursuant to clause (B) of subsection (i) of this
Section 2.10(d) ("Substitute Depository"); provided that any
successor of DTC or Substitute Depository shall be qualified under
any applicable laws to provide the service proposed to be provided by
it;
(B) to any Substitute Depository, upon (I) the resignation ofDTC
or its successor (or any Substitute Depository or its successor) from
its functions as depository, or (2) a determination by the City that
DTC (or its successor) is no longer able to carry out its functions as
depository; provided that any such Substitute Depository shall be
qualified under any applicable laws to provide the services proposed
to be provided by it; or
.
(C) to any person as provided below, upon (I) the resignation of
DTC or its successor (or any Substitute Depository or its successor)
from its functions as depository, or (2) a determination by the City
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that DTC or its successor (or Substitute Depository or its successor) is
no longer able to carry out its functions as depository.
(ii) In the case of any transfer pursuant to clause (A) or clause (B)
of subsection (i) of this Section 2.IO(d), upon receipt of all Outstanding
Certificates of a series by the Trustee, together with a written request of the
City to the Trustee designating the Substitute Depository, a single new
Certificate, which the City shall prepare or cause to be prepared, shall be
executed and delivered for each maturity of Certificates of such series then
Outstanding, registered in the name of such successor or such Substitute
Depository or their Nominees, as the case may be, all as specified in such
written request of the City. In the case of any transfer pursuant to clause (C)
of subsection (i) of this Section 2.IO(d), upon receipt of all Outstanding
Certificates of a series by the Trustee, together with a written request of the
City to the Trustee, new Certificates of the applicable series, which the City
shall prepare or cause to be prepared, shall be executed and delivered in such
denominations and registered in the names of such persons as are requested in
such written request of the City, subject to the limitations of Section 2.01
hereof, provided that the Trustee shall not be required to deliver such new
Certificates within a period of less than sixty (60) days from the date of
receipt of such written request from the City.
(iii) In the case of a partial prepayment or an advance refunding of
any Certificates evidencing a portion of the principal maturing in a particular
year, DTC or its successor (or any Substitute Depository or its successor)
shall make an appropriate notation on such Certificates indicating the date
and amounts of such reduction in principal, in form acceptable to the Trustee,
all in accordance with the Letter of Representations. The Trustee shall not be
liable for such Depository's failure to make such notations or errors in
making such notations.
(iv) The City and the Trustee shall be entitled to treat the person in
whose name any Certificate is registered as the Owner thereof for all
purposes of this Trust Agreement and any applicable laws, notwithstanding
any notice to the contrary received by the Trustee or the City; and the City
and the Trustee shall not have responsibility for transmitting payments to,
communicating with, notifYing, or otherwise dealing with any beneficial
owners of the Certificates. Neither the City nor the Trustee shall have any
responsibility or obligation, legal or otherwise, to any such beneficial owners
or to any other party, including DTC or its successor (or Substitute
Depository or its successor), except to the Owner of any Certificates, and the
Trustee may rely conclusively on its records as to the identity of the Owners
of the Certificates.
Section 2. I I. Destruction of Cancelled Certificates. Whenever in this Trust Agreement
provision is made for the surrender or cancellation by the Trustee and the delivery to the City of any
Certificates, the Trustee will cancel and destroy such Certificates and deliver a certificate of such
destruction to the City upon its request.
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.
Section 2.12. Additional Certificates. Subsequent to the execution and delivery by the
Trustee of the 2004 Certificates, the Trustee shall, upon written request or requests of the City
Representative and of the Authority Representative, execute and deliver from time to time one or
more series of Additional Certificates in such aggregate principal amount as may be set forth in such
written request or requests, provided that there shall have been compliance with all of the following
conditions, which are hereby made conditions precedent to the preparation, execution and delivery of
such Additional Certificates:
(a) The parties to this Trust Agreement shall have executed a supplemental
agreement which (i) sets forth the terms and provisions of such Additional Certificates, including the
establishment of such funds and accounts, which may be separate and apart from the funds and
accounts established hereunder for the 2004 Certificates and the 2006 Certificates, as shall be
necessary or appropriate, and (ii) requires that prior to the delivery of such Additional Certificates the
Reserve Requirement with respect to such Additional Certificates shall be on deposit in the Reserve
Fund established hereunder or in a reserve fund established under such supplemental agreement;
(b) The scheduled principal and interest payable with respect to such Additional
Certificates shall be payable only on Interest Payment Dates;
(c) The Lease shall have been amended, if necessary, to (i) increase or adjust the
Lease Payments due and payable on each Lease Payment Date to an amount sufficient to pay the
principal, premium (if any) and interest payable with respect to all Outstanding Certificates,
including the Additional Certificates to be executed and delivered as and when the same mature or
become due and payable (except to the extent such principal, premium and interest may be payable
out of moneys then in the Reserve Fund or otherwise on deposit with the Trustee in accordance with
this Trust Agreement), (ii) if appropriate, amend the definition of "Leased Premises" to include as
part of the Leased Premises all or any portion of additions, betterments, extensions, improvements or
replacements, or such other real or personal property (whether or not located upon the Leased
Premises as such Leased Premises is constituted as of the Delivery Date for the 2004 Certificates), to
be financed, acquired or constructed by the preparation, execution and delivery of such Additional
Certificates, and (iii) make such other revisions to the Lease as are necessitated by the execution and
delivery of such Additional Certificates (provided, however, that such other revisions shall not
prejudice the rights of the Owners of Outstanding Certificates as granted them under the terms of this
Trust Agreement);
(d) There shall have been delivered to the Trustee a counterpart of the
amendments required by subsection 2.l2( c) hereof;
(e) The Trustee shall have received a certificate of the Authority Representative
that there exists on the part of the Authority no Event of Default (or any event which, once all notice
or grace periods have passed, would constitute an Event of Default);
(f) The Trustee shall have received a certificate of the City Representative that
(i) there exists on the part of the City no Event of Default (or any event which, once all notice or
grace periods have passed, would constitute an Event of Default) and (ii) the Lease Payments as
increased or adjusted do not exceed in any year the fair rental value of the Leased Premises (as such
term is defined in the amended Lease);
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(g) The Trustee shall have received an opinion of Special Counsel substantially
to the effect that (i) said supplemental agreement and said amendments to the Lease comply in all
respects with the requirements of this Section 2.12, (ii) said supplemental agreement and said
amendments to the Lease have been duly authorized, executed and delivered by each of the
respective parties thereto (provided that said opinion of Special Counsel, in rendering the opinions
set forth in this clause (ii), shall be entitled to rely upon one or more other opinions of counsel,
including counsel to any of the respective parties to said supplemental agreement or said
amendments to the Lease), (iii) assuming that no Event of Default has occurred and is continuing,
this Trust Agreement, as amended by said supplemental agreement, and the Lease, as amended by
the respective amendments thereto, constitute the legal, valid and binding obligations of the
respective parties thereto, enforceable against said parties in accordance with their respective terms
(except to the extent that enforcement thereof may be limited by bankruptcy, insolvency,
moratorium, debt adjustment or other laws affecting creditors' rights generally, and except to the
extent that enforcement thereof may be limited by general principles of equity, regardless of whether
enforcement is sought in a legal or equitable proceeding) and (iv) the execution of such supplemental
agreement and said amendments to the Lease, and performance by the parties thereunder, will not
result in the inclusion of the interest portion of any Lease Payments payable with respect to any
Certificates theretofore prepared, executed and delivered, in the gross income of the Owners of the
Certificates or the owners of any Additional Certificates for purposes of federal income taxation;
(h) The City shall have provided the Insurers written notice of the proposed
execution and delivery of such Additional Certificates and shall have received prior written consent
of the Insurers with respect to such Additional Certificates; provided that any Additional Certificates
being delivered to refund any Outstanding Certificates shall not require the prior written consent of
the Insurers if the aggregate maximum annual debt service with respect to the Certificates and the
Additional Certificates during any remaining year that the Certificates will be Outstanding does not
exceed maximum annual debt service with respect to the Certificates prior to such refunding, as
evidenced by a Certificate of the City Representative.
(i) There shall have been delivered to the Trustee an endorsement to or
reissuance of the title insurance policy delivered under Section 5.5 of the Lease providing that the
insured amount is at least equal to the aggregate principal amount of all of the Certificates including
the Additional Certificates outstanding upon the execution and delivery of such Additional
Certificates;
U) Upon the execution and delivery of such Additional Certificates, the amount
on deposit in the Reserve Fund or in a reserve fund established under the supplemental agreement
pursuant to which such Additional Certificates are executed and delivered shall be equal to the
Reserve Requirement, taking into account the execution of the Additional Certificates; and
(k) Such other conditions shall have been satisfied, and such other instruments
shall have been duly executed and delivered to the Trustee (with a copy to the Insurers), as the City
or the Authority shall have reasonably requested.
Upon delivery to the Trustee of the foregoing instruments, the Trustee shall cause to be
executed and delivered Additional Certificates representing the aggregate principal amount specified
in such supplemental agreement, and such Additional Certificates shall be equally and ratably
secured with all Outstanding Certificates theretofore prepared, executed and delivered, all without
preference, priority or distinction (other than with respect to maturity, payment, prepayment or
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.
sinking fund payment (if any)) of anyone Certificate, including Additional Certificates, over any
other; provided, however, that no provision of this Trust Agreement shall require the City to consent
to or otherwise permit the preparation, execution and delivery of Additional Certificates, it being
understood and agreed that any such consent or other action of the City to permit the preparation,
execution and delivery of Additional Certificates, or lack thereof, shall be in the sole discretion of the
City.
ARTICLE III
PROJECT FUND
Section 3.01. Establishment of Proiect Fund. The Trustee shall establish a special fund
designated as the "City of Chula Vista (Civic Center Project) Project Fund," referred to herein as the
"Project Fund" and shall establish a 2004 Certificates Account, a 2006 Certificates Account and
Delivery Costs Account therein; shall keep the Project Fund separate and apart from all other funds
and moneys held by it; and shall administer such fund as herein provided. The Project Fund shall be
held and applied by the Trustee in accordance herewith.
Section 3.02. Purpose. Moneys in the Project Fund shall be expended for Project Costs and
Delivery Costs.
Section 3.03. Deposit ofMonevs: Payment ofProiect Costs and Delivery Costs.
(a) Deposits. There shall be credited to the Project Fund and each applicable
Account therein the following amounts: (I) the proceeds of sale of the Certificates required to be
deposited therein pursuant to Section 2.05 hereof; (2) all investment earnings on moneys held in each
Account of the Project Fund, which shall be credited to each Account and remain in the Project Fund
until expended for Project Costs or Delivery Costs or applied to the prepayment of Certificates, as
described in Section 3.04 below; and (3) any other funds trom time to time deposited with the
Trustee to pay Project Costs.
.
(b) Disbursements. The Trustee shall disburse moneys in the Project Fund trom
time to time to pay Project Costs directly or to reimburse the City for payment of Project Costs, upon
receipt by the Trustee of a Project Cost Requisition signed by the City Representative. The Trustee
shall have no duty or liability to monitor the application of any moneys disbursed hereunder. The
Trustee shall disburse moneys trom the Delivery Costs Account to pay Delivery Costs or to
reimburse the City for payment of such Delivery Costs upon receipt by the Trustee of a Delivery
Cost Requisition signed by the City Representative. The Trustee shall be absolutely protected in
making any disbursement from the Project Fund in reliance upon a Project Cost Requisition or
Delivery Cost Requisition signed by the City Representative. Each such Project Cost Requisition
and Delivery Cost Requisition shall be sufficient evidence to the Trustee of the facts stated therein
and the Trustee shall have no duty to confirm the accuracy of such facts. Any remaining balance in
the Delivery Costs Account shall be transferred by the Trustee to the Project Fund as directed in
writing by City Representative.
Section 3.04. Transfers of Unexpended Proceeds. Upon the filing with the Trustee of the
Certificate of Completion with respect to a series of Certificates pursuant to Section 3.4 of the Lease,
the Trustee shall withdraw all remaining moneys in the Account of the Project Fund related to such
series (other than any moneys retained therein to pay Project Costs not then due and payable and
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certified by the City Representative) and shall transfer such moneys to the Lease Payment Fund to be
applied to the payment of principal and interest with respect to the Certificates of such series as
prescribed in Section 5.04 hereof or, at the written election of the City Representative delivered to
the Trustee, together with an opinion of Special Counsel that such transfer wi11 not cause interest due
with respect to the Certificates to be included in gross income for federal income tax purposes, shall
transfer such moneys to the City for the purpose of capital expenditures of the City, and following
such transfer, such Account of the Project Fund shall be closed.
ARTICLE IV
PREPAYMENT FUND
Section 4.0 I. Establishment of Prepavment Fund. The Trustee shall establish a special
fund designated as the "City of Chula Vista (Civic Center Project - Phase I) Prepayment Fund,"
referred to herein as the "Prepayment Fund"; shall keep such fund separate and apart from all other
funds and moneys held by it; and shall administer such fund as herein provided. Moneys to be used
for prepayment of the Certificates shall be deposited into the Prepayment Fund and used solely for
the purpose of prepaying the Certificates in advance of their maturity on the date designated for
prepayment and upon presentation and surrender of such Certificates to the Trustee.
Section 4.02. Extraordinary Prepavment. The Certificates are subject to prepayment prior
to their respective maturity dates on any date, in whole or in part, from Net Proceeds which the
Trustee shall deposit in the Prepayment Fund as provided in Section 6.I(c) of the Lease at least 45
days prior to the date fixed for prepayment and credited towards the prepayment made by the City
pursuant to Section 1O.2(a) of the Lease, at a prepayment price equal to the principal amount thereof
together with accrued interest to the date fixed for prepayment, without premium.
Section 4.03. Prepavrnent
(a) Optional Prepavment of 2004 Certificates. The 2004 Certificates maturing on
or after March 1,2015 are subject to prepayment prior to maturity in whole or in part on any date on
or after March I, 2014, at the option of the City, in the event the City exercises its option under
Section 10.3 of the Lease to prepay all or a portion of the principal component of the Lease Payments
(in integral multiples of $5,000 but not in a principal amount of less than $20,000), at the following
prepayment prices expressed as a percentage of the principal component to be prepaid), plus accrued
interest to the date fixed for prepayment:
PreIJayment Date
Prepavment Price
March 1,2014 through February 28,2015
March I, 2015 through February 28, 2016
March I, 20 I 6 and thereafter
101.0%
100.5
100.0
In the evertt the City gives notice to the Trustee of its intention to exercise such option, but fails to
deposit with the Trustee on or prior to the prepayment date an amount equal to the prepayment price,
the City wi11 continue to pay the Lease Payments as if no such notice had been given.
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DOCSOCI1148399v3/024036-0033
(b) Mandatory Sinking Account Payment of 2004 Certificates.
(i) The 2004 Certificates maturing March 1, 2026 (the "2026
Term Certificates") are subject to prepayment in part by lot, on March 1 in
each of the following years from sinking account payments as set forth below
at a prepayment price equal to the principal amount thereof to be prepaid,
without premium; provided, however, that if some but not all of the 2026
Term Certificates have been prepaid pursuant to an optional or extraordinary
prepayment, the total amount of all future sinking account payments will be
reduced pro rata by the aggregate principal amount of the 2026 Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 2026
Term Certificates may be purchased by the City and tendered to the Trustee
pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March 1)
Sinking Account
Pavment
2025
2026*
$
1,490,000
1,560,000
* Final Maturity
(ii) The 2004 Certificates maturing March 1, 2029 (the "2029
Term Certificates") are subject to prepayment in part by lot, on March 1 in
each ofthe following years from sinking account payments as set forth below
at a prepayment price equal to the principal amount thereof to be prepaid,
without premium; provided, however, that if some but not all of the 2029
Term Certificates have been prepaid pursuant to an optional or extraordinary
prepayment, the total amount of all future sinking account payments will be
reduced pro rata by the aggregate principal amount of the 2029 Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 2029
Term Certificates may be purchased by the City and tendered to the Trustee
pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March 1)
Sinking Account
Pavment
.
2027
2028
2029*
$
1,630,000
1,710,000
1,790,000
* Final Maturity
(iii) The 2004 Certificates maturing March 1, 2034 (the "2034
Term Certificates") are subject to prepayment in part by lot, on March 1 in
each of the following years from sinKing account payments as set forth below
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DOCSOCIl148399v3/024036-0033
at a prepayment price equal to the principal amount thereof to be prepaid,
without premium; provided, however, that if some but not all of the 2034
Term Certificates have been prepaid pursuant to an optional or extraordinary
prepayment, the total amount of all future sinking account payments will be
reduced pro rata by the aggregate principal amount of the 2034 Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 2034
Term Certificates may be purchased by the City and tendered to the Trustee
pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March 1)
Sinking Account
Pavrnent
2030
2031
2032
2033
2034*
$
1,875,000
1,970,000
2,065,000
2,170,000
2,280,000
* Final Maturity
If prior to one of the mandatory prepayment dates specified above the City purchases
any 2026 Term Certificates, 2029 Term Certificates or 2034 Term Certificates, then at least 45 days
prior to the prepayment date the City shall notify the Trustee as to the principal amount purchased,
and the amount of 2004 Certificates so purchased shall be credited at the time of purchase, to the
extent of the full principal amount thereof, to reduce the upcoming sinking account payment for the
applicable maturity of the 2004 Certificates so purchased. All 2004 Certificates purchased pursuant
to this subsection shall be cancelled pursuant to Section 14.03 hereof.
(c) Optional Prepavrnent of 2006 Certificates. The 2006 Certificates maturing on
or after March I, 20_ are subject to prepayment prior to maturity in whole or in part on any date on
or after March I, 20_, at the option of the City, in the event the City exercises its option under
Section 10.3 of the Lease to prepay all or a portion of the principal component of the Lease Payments
(in integral multiples of $5,000 but not in a principal amount of less than $20,000), at the following
prepayment prices expressed as a percentage of the principal component to be prepaid), plus accrued
interest to the date fixed for prepayment:
Prepayment Date
Prepavrnent Price
March 1,20_ through February 28,20_
March 1,20_ through February 28, 20_
March I, 20_ and thereafter
In the event the City gives notice to the Trustee of its intention to exercise such option, but fails to
deposit with the Trustee on or prior to the prepayment date an amount equal to the prepayment price,
any notice of prepayment mailed in accordance with Section 4.05 hereof shall be of no force and
effect and the City will continue to pay the Lease Payments as if no such notice had been given.
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DOCSOC1l148399v3!024036-0033
(d) Mandatory Sinking Account Payment of2006 Certificates.
(i) The 2006 Certificates maturing March I, 20 (the
"20_ Term Certificates") are subject to prepayment in part by lot, on March I
in each of the following years from sinking account payments as set forth
below at a prepayment price equal to the principal amount thereof to be
prepaid, without premium; provided, however, that if some but not all of the
20_ Term Certificates have been prepaid pursuant to an optional or
extraordinary prepayment, the total amount of all future sinking account
payments will be reduced pro rata by the aggregate principal amount of the
20_ Term Certificates so prepaid. In addition, in lieu of prepayment thereof,
the 20_ Term Certificates may be purchased by the City and tendered to the
Trustee pursuant to the provisions hereof.
.
Mandatory Prepayment
Date
(March I)
Sinking Account
Pavment
20_
20 *
$
* Final Maturity
(ii) The 2006 Certificates maturing March I, 20_ (the "20_
Term Certificates") are subject to prepayment in part by lot, on March I in
each of the following years ITom sinking account payments as set forth below
at a prepayment price equal to the principal amount thereof to be prepaid,
without premium; provided, however, that if some but not all of the 20_
Term Certificates have been prepaid pursuant to an optional or extraordinary
prepayment, the total amount of all future sinking account payments will be
reduced pro rata by the aggregate principal amount of the 20_ Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 20_
Term Certificates may be purchased by the City and tendered to the Trustee
pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March I)
Sinking Account
Pavment
20_
20_
20_*
$
* Final Maturity
.
(iii) The 2006 Certificates maturing March I, 20_ (the "20_
Term Certificates") are subject to prepayment in part by lot, on March I in
each of the following years ITom sinking account payments as set forth below
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DOCSOC/1148399v3/024036-0033
at a prepayment price equal to the principal amount thereof to be prepaid,
without premium; provided, however, that if some but not all of the 20_
Term Certificates have been prepaid pursuant to an optional or extraordinary
prepayment, the total amount of all future sinking account payments will be
reduced pro rata by the aggregate principal amount of the 20_ Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 20_
Term Certificates may be purchased by the City and tendered to the Trustee
pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March I)
Sinking Account
Pavment
20
20
20
20
20 *
$
* Final Maturity
If prior to one of the mandatory prepayment dates specified above the City purchases
any 20_ Term Certificates, 20_ Term Certificates or 20_ Term Certificates, then at least 45 days
prior to the prepayment date the City shall notify the Trustee as to the principal amount purchased,
and the amount of 2006 Certificates so purchased shall be credited at the time of purchase, to the
extent of the full principal amount thereof, to reduce the upcoming sinking account payment for the
applicable maturity of the 2006 Certificates so purchased. All 2006 Certificates purchased pursuant
to this subsection shall be cancelled pursuant to Section 14.03 hereof.
Section 4.04. Selection of Certificates for Prepavrnent. Whenever provision is made in this
Trust Agreement for the optional prepayment of a series of Certificates and less than all Outstanding
Certificates of such series are called for optional prepayment, the Trustee shall select Certificates for
optional prepayment ITom among maturities selected by the City and by lot within any maturity. For
extraordinary prepayment of Certificates pursuant to Section 4.02 hereof, the Trustee shall select
Certificates for prepayment as nearly as practicable on a pro rata basis among series and among
maturities within a series and by lot within any maturity. The Trustee shall promptly notify the City
and the Authority in writing of the Certificates so selected for prepayment by mailing to the City and
the Authority copies ofthe notice of prepayment provided for in Section 4.05. The City shall provide
the Trustee with a revised sinking fund schedule for the applicable series of Certificates upon any
prepayments.
Section 4.05. Notice ofPrepavrnent.
(a) Content. When prepayment is authorized or required pursuant to this Article
IV, the Trustee shall give notice of the prepayment of the Certificates. Such notice shall specify: (a)
the prepayment date, (b) the prepayment price, (c) if less than all ofthe Outstanding Certificates of a
maturity are to be prepaid, the Certificate numbers (and in the case of partial prepayment, the
respective principal amounts), (d) the series and CUSIP numbers of the Certificates to be prepaid, (e)
the place or places where the prepayment will be made, (I) the original date of execution and delivery
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DOCSOC/1148399v3/024036-0033
of the Certificates, and (g) any other descriptive information regarding the Certificates needed to
identify accurately the Certificates being prepaid. Such notice shall further state that on the specified
date there shall become due and payable upon each Certificate to be prepaid, the portion of the
principal amount of such Certificate to be prepaid, together with interest accrued to said date, and
that from and after such date, provided that moneys therefor have been deposited with the Trustee,
interest with respect thereto shall cease to accrue and be payable.
.
(b) Recipients: Timing. Notice of such prepayment shall be sent by first class
mail or delivery service postage prepaid, or by telecopy, to the municipal Securities Depository (as
defined below) on the date of mailing of notice to the Owners by first class mail and to the
Information Services (as defined below) that disseminate securities redemption notices, on the date
notice is mailed to the Owners and by first class mail, postage prepaid, to the Authority and the
respective Owners of any Certificates designated for prepayment at their addresses appearing on the
Certificate registration books, at least thirty (30) days, but not more than sixty (60) days, prior to the
prepayment date; provided that neither failure to receive such notice nor any defect in any notice so
mailed shall affect the sufficiency of the proceedings for the prepayment of such Certificates. Under
no circumstances shall the Trustee have any liability to any party for any inaccurate CUSIP number.
The Securities Depository is The Depository Trust Company, 55 Water Street, New York,
New York 10041, Fax (212) 855-7320; or, in accordance with the then current guidelines of the
Securities and Exchange Commission to such other addresses and/or such other securities
depositories or to no such depositories as the City may designate in writing to the Trustee.
In addition, notice of such prepayment shall also be sent by certified mail, overnight delivery
service, facsimile transmission or other secure means, postage prepaid, to all municipal registered
securities depositories and to at least two of the national information services that disseminate
securities prepayment notices, when possible, at least two (2) days prior to the mailing of notices
required by the first paragraph above, and in any event no later than simultaneously with the mailing
of notices required by the first paragraph above; provided, that neither failure to receive such notice
nor any defect in any notice so mailed shall affect the sufficiency of the proceedings for the
prepayment of such Certificates.
Section 4.06. Partial Prepavment of Certificates. Upon surrender by the Owner of a
Certificate for partial prepayment at the Principal Office, payment of such partial prepayment of the
principal amount of a Certificate will be paid to such Owner. Upon surrender of any Certificate
prepaid in part only, the Trustee shall execute and deliver to the registered Owner thereof, at the
expense of the City, a new Certificate or Certificates which shall be of authorized denominations
equal in principal amount to the unprepaid portion of the Certificate surrendered and of the same
series, tenor and maturity. Such partial prepayment shall be valid upon payment of the amount
thereby required to be paid to such Owner, and the City, the Authority and the Trustee shall be
released and discharged from all liability to the extent of such payment.
Section 4.07. Effect of Notice of Prepayment. Notice having been given to the Owners of
the Certificates as set forth in Section 4.05 hereof, and the moneys for the prepayment (including, the
interest to the applicable date of prepayment), having, been set aside in the Prepayment Fund, the
Certificates for which notice was sent shall become due. and payable on said date of prepayment, and,
upon presentation and surrender thereof at the Principal Office, said Certificates shall be paid at the
prepayment price with respect thereto, plus interest accrued and unpaid to said date of prepayment.
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DOCSOC/1148399v3/024036-0033
If, on the date of a prepayment, moneys for the prepayment of all the Certificates to be
prepaid, together with interest to said date of prepayment, shall be held by the Trustee so as to be
available therefor on such date of prepayment, and, if notice of prepayment thereof shall have been
given as set forth in Section 4.05 hereof, then, from and after said date of prepayment, interest with
respect to the Certificates to be prepaid shall cease to accrue and become payable. All moneys held
by or on behalf of the Trustee for the prepayment of Certificates shall be held in trust for the account
of the Owners of the Certificates so to be prepaid, without liability for interest thereon.
All Certificates paid at maturity or prepaid prior to maturity pursuant to the provisions of this
Article shall be cancelled upon surrender thereof and destroyed.
Section 4.08. Surplus. Any funds remaining in the Prepayment Fund after prepayment and
payment of all Certificates Outstanding, including accrued interest and payment of any applicable
fees and expenses to the Trustee pursuant to Sections 9.06 and 9.07 hereof and any other Additional
Payments payable under the Lease or provision made therefor satisfactory to the Trustee, and
provision for any amounts required to be transferred to the Rebate Fund pursuant to Sections 8.07
and 8.08 hereof, shall be withdrawn by the Trustee and remitted to the City.
ARTICLE V
LEASE PAYMENTS; LEASE PAYMENT FUND
Section 5.01. Security Provisions.
(a) Assignment of Rights in Lease. The Authority has, pursuant to the
Assignment Agreement, absolutely assigned and set over to the Trustee certain of its rights in the
Lease, including but not limited to all of the Authority's rights to receive and collect all ofthe Lease
Payments, the Prepayments and all other amounts required to be deposited in the Lease Payment
Fund pursuant to the Lease or pursuant hereto. All Lease Payments, Prepayments and such other
amounts to which the Authority may at any time be entitled (other than amounts due to the Authority
under Section 4.11 of the Lease) shall be paid directly to the Trustee, and all of the Lease Payments
and Prepayments collected or received by the Authority shall be deemed to be held and to have been
collected or received by the Authority as the agent of the Trustee and ifreceived by the Authority at
any time shall be deposited by the Authority with the Trustee within five (5) Business Days after the
receipt thereof, and all such Lease Payments shall be forthwith deposited by the Trustee upon the
receipt thereof in the Lease Payment Fund, all such Prepayments shall be forthwith deposited by the
Trustee upon the receipt thereof in the Prepayment Fund. If the City shall fail to deposit with the
Trustee a Lease Payment on the applicable Lease Payment Date, the Trustee shall, within three
Insurance Business Days after such Lease Payment Date, notify the 2004 Insurer of such failure. The
2004 Insurance Policy and the 2006 Insurance Policy shall be held by the Trustee and, shall be
deemed to be held in the Lease Payment Fund.
(b) .Security Interest in Monevs and Funds. The Authority and the City, as their
interests may appear, hereby grant to the Trustee for the benefit of the Owners a lien on and a
security interest in all moneys in the funds held by the Trustee under this Trust Agreement (excepting
only the Rebate Fund and any moneys to be deposited into the Rebate Fund), including without
limitation, the Lease Payment Fund, the Reserve Fund, the Prepayment Fund, the Project Fund and
the Net Proceeds Fund, and all such moneys shall be held by the Trustee in trust and applied to the
respective purposes specified herein and in the Lease.
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DOCSOCIl148399v3/024036-0033
(c) Pledge of Lease Payments and Proceeds. The Lease Payments and any
proceeds trom the re-Ietting or any other disposition of the Leased Premises pursuant to Article IX of
the Lease (the "Lease Proceeds") are hereby irrevocably pledged to and shall be used for the punctual
payment of the interest and principal represented by the Certificates and, except as permitted under
Section 2.12 hereof with respect to Additional Certificates, the Lease Payments and Lease Proceeds
shall not be used for any other purpose while any of the Certificates remain Outstanding. This
pledge shall constitute a first lien on the Lease Payments and Lease Proceeds in accordance with the
terms hereof, subject to Section 13.03 hereof and subject to Section 2.12 hereof, which provides that
all Certificates and Additional Certificates shall be equally and ratably secured.
.
Section 5.02. Establishment of Lease Payment Fund. The Trustee shall establish a specral
fund designated as the "City of Chula Vista (Civic Center Project) Lease Payment Fund and shall
establish an Interest Account therein. All moneys at any time deposited by the Trustee in the Lease
Payment Fund shall be held by the Trustee in trust for the benefit of the Owners of the Certificates.
So long as any Certificates are Outstanding, neither the City nor the Authority shall have any
beneficial right or interest in the Lease Payment Fund or the moneys deposited therein, except only
as provided in this Trust Agreement, and such moneys shall be used and applied by the Trustee as
hereinafter set forth.
Section 5.03. Deposits. There shall be deposited in the Interest Account of the Lease
Payment Fund the amount specified in Section 2.05 from proceeds of the 2004 Certificates which
shall be applied as a credit on the Lease Payments due on February 15,2005, August 15,2005 and
February 15,2006 and shall pay a portion of the interest due with respect to the 2004 Certificates on
the Interest Payment Dates to and including March I, 2006. There shall be deposited in the Interest
Account of the Lease Payment Fund the amount specified in Section 2.05 trom proceeds ofthe 2006
Certificates which shall be applied as a credit on the Lease Payments due on August 15, 2006,
February 15,2007 and August IS, 2007 and shall pay a portion of the interest due with respect to the
2006 Certificates on the Interest Payment Dates to and including September 1,2007. There shall be
deposited in the Lease Payment Fund all Lease Payments and in the Prepayment Fund all
Prepayments received by the Trustee, including any moneys received by the Trustee for deposit
therein pursuant to Section 2.05 hereof and Section 4.4 of the Lease, and any other moneys required
to be deposited therein pursuant to the Lease, including without limitation Section 5.4( c) of the Lease
(regarding proceeds of rental interruption insurance) or pursuant to this Trust Agreement, which
moneys shall be applied as a credit towards any Lease Payment then due.
Section 5.04. Application of Monevs. Except as provided in this Section 5.04, in all
amounts in the Lease Payment Fund shall be used and withdrawn by the Trustee solely for the
purpose of paying the principal and interest with respect to the Certificates as the same shall become
due and payable, in accordance with the provisions of Article II and Article IV hereof, subject to the
requirement that certain investment earnings may be transferred to the Rebate Fund, as provided in
Section 8.08 hereof.
On or before each Interest Payment Date, the Trustee shall set aside an amount sufficient to
pay the interest becoming due and payable on such Interest Payment Date on all Outstanding
Certificates. Moneys so set aside shall be used and withdrawn by the Trustee solely for the purpose
of paying the interest with respect to the Certificates as it shall become due and payable (including,
accrued interest with respect to any Certificates prepaid prior to maturity).
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DOCSOC/1148399v3/024036-0033
On or before each Interest Payment Date on which the principal of the Certificates shall be
payable, the Trustee shall set aside an amount equal to (i) the principal amount of the Certificates
coming due and payable on such Interest Payment Date pursuant to Section 2.02, and (ii) the
prepayment price of the Certificates (consisting of the principal amount thereof and any applicable
premiums) required to be prepaid on such Interest Payment Date pursuant to any of the provisions of
Article IV hereof. Moneys so set aside shall be used and withdrawn by the Trustee solely for the
purpose of (i) paying the principal of the Certificates at the maturity thereof, or (ii) paying the
principal of and premium (if any) on any Certificates upon the prepayment thereof pursuant to
Section 4.03 hereof.
Section 5.0). Surplus. Any funds remaining in the Lease Payment Fund after payment of
all Certificates Outstanding, including accrued interest and payment of any applicable fees to the
Trustee pursuant to Sections 9.06 and 9.07 hereof and any other Additional Payments due under the
Lease, or provision made therefor satisfactory to the Trustee, and provision for any amounts required
to be transferred to the Rebate Fund pursuant to Section 8.08 hereof, shall be withdrawn by the
Trustee and remitted to the City.
ARTICLE VI
RESERVE FUND
Section 6.01. Establishment of Reserve Fund. The Trustee shall establish a special fund
designated as the "City of Chula Vista (Civic Center Project) Reserve Fund," referred to herein as the
"Reserve Fund" and shall establish a 2004 Certificates Account and a 2006 Certificates Account
therein. All moneys at any time on deposit in the Reserve Fund shall be held by the Trustee in trust
for the benefit of the Owners of the Certificates, as a reserve for the payment when due of all the
Lease Payments to be paid pursuant to the Lease and of all payments on the Certificates and applied
solely as provided herein.
Section 6.02. Funding.
(a) Reserve Requirement. On the Delivery Date for the 2006 Certificates, there
shall be transferred to the 2004 Certificates Account of the Reserve Fund $2,395,911.26, which
equals the initial Reserve Requirement that was funded upon the execution and delivery of the 2004 .
Certificates. On the Delivery Date for the 2006 Certificates, there shall be transferred to the 2006
Certificates Account of the Reserve Fund $ , which shall cause the balance in the
Reserve Fund to be increased to the Reserve Requirement as of such date.
The Reserve Requirement, or any portion thereof, may be satisfied by the City by crediting to
the Reserve Fund moneys or, with the prior written consent of the Insurers and with notice to S&P, a
letter of credit, a bond insurance policy, or any other comparable credit facility or any combination
thereof which, in the aggregate, make funds available in the Reserve Fund in an amount equal to the
Reserve Requirement; however, the long-term unsecured debt or claim-paying ability, as the case
may be, of the provider of any such letter of credit, bond insurance policy or any other comparable
credit facility, must have a rating of at least no less than the current rating on the Certificates and a
maturity date equal to the final maturity date of the Certificates or provide for a drawing, in full, in
the event of a nonrenewal of any such instrument with a shorter maturity date.
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DOCSOCfl148399v3!024036-0033
.
(b) Delinquent Lease Payments. The City hereby agrees that if at any time the
balance in the Reserve Fund shall be reduced below the Reserve Requirement, the first payments of
Lease Payments thereafter payable by the City and not needed to pay interest and principal
components of Lease Payments payable to the Certificate Owners on the next Interest Payment Date
.shall be deposited into the Reserve Fund and credited to the Accounts therein such that each Account
contains its proportionate share of the Reserve Requirement or, if the available amounts are
insufficient to replenish the Reserve Fund in full, then to each Account so that each Account contains
the same percentage of its proportionate share of the Reserve Requirement. Amounts in the Reserve
Fund shall be used to first, reimburse the provider of a surety bond, or any insurance policy or letter
of credit for any repayment obligation owing thereto for any draw on a surety bond, insurance policy
or letter of credit credited to the Reserve Fund and second, to increase the balance in the Reserve
Fund to the Reserve Requirement.
(c) Certain Net Proceeds. Net Proceeds of rental interruption insurance described
in Section 5.4 of the Lease shall be deposited first to the Reserve Fund to make up any deficiencies
therein and second to the Lease Payment Fund to be credited to the payment of the Lease Payments
in the order in which they become due.
Section 6.03. Transfers of Excess.
The Trustee shall, on or before February 15 and August 15 of each year, provide written
notice to the City of any moneys which will be on hand in each Account of the Reserve Fund
(including investment earnings) in excess of the Reserve Requirement on the next succeeding March
I or September I, as the case may be, and one Business Day immediately preceding any Lease
Payment Date, the Trustee shall transfer such excess moneys, to the Lease Payment Fund to be
applied to the Lease Payment then due from the City. In the event of the partial Prepayment of Lease
Payments, the City may instruct the Trustee to reduce the amounts on deposit in one or more
Accounts of the Reserve Fund to the Reserve Requirement as of such date and may direct the Trustee
to transfer excess amounts from one or more Accounts of the Reserve Fund for any lawful purpose.
The transfers described above are in each case subject to the requirement that if the
Certificate proceeds shall have become subject to the arbitrage rebate provisions of Section 148(t) of
the Code as described in Section 8.08 hereof then certain investment earnings are to be transferred to
the Rebate Fund at the direction of the City as provided in Section 8.08 hereof.
Section 6.04. Ap1Jlication of Reserve Fund in Event of Deficiencv in Lease Payment Fund.
Whether or not Lease Payments are then in abatement, if one (I) day immediately preceding any
Interest Payment Date, the moneys available in the Lease Payment Fund do not equal the amount of
the principal and interest with respect to the Certificates then coming due and payable, the Trustee
first shall apply the moneys available in the Reserve Fund to make the payments due with respect to
the Certificates on such Interest Payment Date by transferring the amount necessary for such purpose
to the Lease Payment Fund. In the event of a deficiency in the Lease Payment Fund, the Trustee
shall allocate the available funds to the payment of the principal and interest due on each series of
Certificates on a proportionate basis such that an equal percentage of the principal and interest due on
a series is paid from the moneys available in the Lease Payment Fund and shall then transfer from the
Account of the Reserve Fund for each series the amount required to pay the balance of the principal
and interest payments then due on such series. The Trustee shall take whatever action is necessary to
liquidate or draw upon investments of funds held in the Reserve Fund or draw upon any surety bond,
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DOCSOC/1148399v3/024036-0033
insurance policy or letter of credit securing the Reserve Fund to make such funds available for
application as provided hereunder on the Interest Payment Date.
Section 6.05. Transfer to Make All Lease Pavments. If on any Interest Payment Date the
moneys on deposit in an Account of the Reserve Fund and the monies in the Lease Payment Fund
allocable to the series of Certificates related to such Account (excluding amounts required for
payment of principal or interest with respect to Certificates not presented for payment) are sufficient
to pay all Outstanding Certificates of such series, including all principal, interest and prepayment
premiums (if any), the Trustee shall, upon the written direction of the City Representative, transfer
all amounts in the applicable Account of the Reserve Fund to the Lease Payment Fund to be applied
to the payment of the Lease Payments or to the Prepayment Fund to make Prepayments on behalf of
the City and such moneys shall be distributed to the Owners of the applicable series of Certificates in
accordance with Article II and Article IV of this Trust Agreement. Any amounts remaining in the
Reserve Fund upon payment in full of all Outstanding Certificates and the Trustee's fees and
expenses pursuant to Sections 9.06 and 9.07 hereof and any other Additional Payments due under the
Lease, or upon provision for such payments as provided in Section 14.01 hereof and provisions for
any amounts required to be transferred to the Rebate Fund pursuant to Section 8.08 hereof, shall at
the written direction of the City Representative be withdrawn by the Trustee and paid to the City.
ARTICLE VII
NET PROCEEDS FUND
Section 7.0 I. Establishment of Net Proceeds Fund: DelJosits. The Trustee shall establish
when required a special fund designated as the "City of Chula Vista (Civic Center Project) Net
Proceeds Fund," referred to herein as the "Net Proceeds Fund," to be maintained and held in trust for
the benefit of the Owners, subject to disbursement therefrom as provided herein. The Trustee shall
deposit Net Proceeds in the Net Proceeds Fund as provided in Section 6.1 (a) of the Lease.
(a) Casualtv Insurance. The Trustee shall disburse Net Proceeds for replacement
or repair of the Leased Premises as provided in Section 6.1 (b) of the Lease, or transfer such proceeds
to the Prepayment Fund to be applied to the prepayment of Certificates in the manner provided in
Section 4.02 hereof, upon notification of the City Representative as provided in Section 6.1 (c) of the
Lease. Pending such application, such Net Proceeds may be invested by the Trustee as directed by
the City Representative in Permitted Investments that mature not later than such times moneys are
expected to be needed to pay such costs of repair or replacement. After all of the Certificates have
been paid and the entire amount of principal and interest with respect to the Certificates has been
paid in full, or provision made for payment satisfactory to the Trustee, including provision for all
amounts required to be transferred to the Rebate Fund pursuant to Section 8.08 hereof, the Trustee
shall pay any remaining moneys in the Net Proceeds Fund to the City after payment of any amounts
due to the Trustee pursuant to Sections 9.06 and 9.07 hereof and any other Additional Payments due
under the Lease.
(b) Title Insurance. Proceeds of any policy of title insurance received by the
Trustee with respect to the Leased Premises shall be applied and disbursed by the Trustee upon the
Written Request of the City as follows:
(i) If the City determines that the title defect giving rise to such
proceeds has not substantially interfered with its use and occupancy of the
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Leased Premises and wi1I not result in an abatement of Lease Payments and
Additional Payments payable by the City under the Lease (such determination
to be certified by the City in writing), such proceeds shall, with the written
approval of the Insurers, be remitted to the City and used for any lawful
purpose thereof; or
(ii) If the City determines that the title defect giving rise to such
proceeds has substantially interfered with its use and occupancy of the Leased
Premises and will result in an abatement of Lease Payments and Additional
Payments payable by the City under the Lease; then the Trustee shall, with
the written approval of the Insurers, immediately deposit such proceeds in the
Prepayment Fund and such proceeds shall be applied to the prepayment of
Certificates in the manner provided in Section 4.02 hereof.
.
Section 7.02. Cooperation. The Authority and the Trustee shall cooperate fully with the
City at the expense of the City in filing any proof of loss with respect to any 2004 Insurance Policy
maintained pursuant to Article V of the Lease and in the prosecution or defense of any prospective or
pending condemnation proceeding with respect to the Leased Premises or any item or portion
thereof; provided, however, the Trustee shall not be obligated to take any action hereunder if it is not
indemnified to its satisfaction from and against any liability or expense arising therefrom.
ARTICLE VIII
MONEYS IN FUNDS; INVESTMENT
.
Section 8.0 I. Held in Trust. The moneys and investments held by the Trustee under this
Trust Agreement, other than in the Rebate Fund, are irrevocably held in trust for the benefit of the
Owners and, in the case of the Rebate Fund, for payment as required to the United States Treasury,
and for the purposes herein specified, and such moneys, and any income or interest earned thereon,
shall be expended only as provided in this Trust Agreement, and shall not be subject to levy or
attachment or lien by or for the benefit of any creditor of the Authority, the Trustee or the City, or
any of them.
Section 8.02. Investments Authorized.
(a) Bv Trustee. Subject to the further provisions of this Article VIII, moneys
held by the Trustee hereunder shall be invested and reinvested on maturity thereof by the Trustee
pursuant to Section 8.02(b). The Trustee wi1I report any such investments to the City on a monthly
basis in its regular statements.
(b) Upon Direction of the City. The City Representative shall direct by
facsimile, to the designated trust officer responsible for the administration of this Trust Agreement,
followed by oral notification and distribution by U.S. Mail or overnight courier service of such
notice, such investment in specific Permitted Investments not less than two Business Days prior to
the date that such Permitted Investment is to take effect. Such investments and reinvestments shall
be made giving full consideration for the time at which funds are required to be available based
among other things, scheduled completion of the various components of the Project. In the event that
the City Representative does not so direct the Trustee, the Trustee shall invest in the Permitted
Investments described in paragraph (D) of the definition thereof contained in Section 1.01.
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Investments purchased with funds on deposit in the Lease Payment Fund and Prepayment
Fund shall mature not later than the Interest Payment Date or prepayment date, as appropriate,
immediately succeeding the investment. Investments purchased with funds on deposit in the Project
Fund shall mature not later than the dates upon which such funds shall be needed to be expended for
the payment of Project Costs. Notwithstanding anything to the contrary contained herein,
investments purchased with funds on deposit in the Reserve Fund shall have an average aggregate
weighted term to maturity of not greater than five years; provided that such amounts in an Account of
the Reserve Fund may be invested in an investment agreement described in paragraph H of the
definition of Permitted Investments to the date of the final maturity of the series of Certificates for
which such Account was established so long as such amounts may be withdrawn at any time, without
penalty, for application in accordance with Article VI hereof.
(c) Registration. Such investments, if registrable, shall be registered in the name
of the Trustee for the benefit of the Owners and held by the Trustee or its nominee.
(d) Trustee as Purchaser OF Agent. The Trustee may purchase or sell to itself or
any affiliate, as principal or agent, investments authorized by this Section. The Trustee may act as
purchaser or agent in the making or disposing of any investment. The Trustee or any of its affiliates
may act as a sponsor of, or as an advisor to any provider of, Permitted Investments hereunder. The
City acknowledges that to the extent regulations of the Comptroller of the Currency or other
applicable regulatory entity grant the City the right to receive brokerage confirmations of security
transactions as they occur, the City specifically waives receipt of such confirmations to the extent
permitted by law. The Trustee will furnish the City periodic cash transaction statements which
include detail for all investment transactions made by the Trustee hereunder.
(e) Trustee Standard of Care. Except as otherwise provided in Section 9.05, the
Trustee shall not be responsible or liable for any loss suffered in connection with any investment of
funds or sale of such investment made by it in accordance with this Section or disposition made by it
in accordance with Section 8.05(b).
Section 8.03. Disposition of Investments. Any income, profit or loss on the investment of
moneys held by the Trustee hereunder shall be credited to the respective fund for which it is held,
except as otherwise provided herein.
Section 8.04. Accounting. The Trustee shall furnish to the City, not less than monthly, an
accounting (which may be in the form of its regular statements) of all investments made by the
Trustee and all funds and amounts held by the Trustee; provided, that the Trustee shall not be
obligated to deliver an accounting for any fund or account that (i) has a balance of zero and (ii) has
not had any activity since the last reporting date. The Trustee shall keep accurate records of all funds
administered by it and of all Certificates paid and discharged.
Section 8.05. Valuation and Disposition of Investments.
(a) Valuation. Subject to the provisions of Section 8.08 hereof, for the purpose
of determining the amount in any fund, all Permitted Investments (except investment agreements)
credited to such fund shall be valued at the lower of the cost or the market price, exclusive of accrued
interest. With respect to all funds and accounts, investments shall be valued by the Trustee (i) as
frequently as deemed necessary by the Insurers but not less often than annually nor more often than
monthly, and (ii) upon any draw upon the Reserve Fund. In making any such valuations, the Trustee
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may utilize, and conclusively rely upon such valuation services as may be available to the Trustee,
including those within its regular accounting system.
(b) Disposition. Subject to the provisions of Section 8.08 hereof, the Trustee
shall sell, or present for prepayment, any Permitted Investment so purchased by the Trustee
whenever it shall be necessary in order to provide moneys to meet any required payment, transfer,
withdrawal or disbursement trom the fund to which such Permitted Investment is credited.
Section 8.06. Commingling of Monevs in Funds. The Trustee may, and upon the written
request of the City Representative shall, commingle any of the funds held by it pursuant to this Trust
Agreement into a separate fund or funds for investment purposes only; provided, however, that all
funds or accounts held by the Trustee hereunder shall be accounted for separately notwithstanding
such commingling by the Trustee. The City shall ensure that any such commingling complies with
Section 1.148-4 of the Treasury Regulations, and shall provide direction to the Trustee accordingly.
Section 8.07. Tax Covenants.
(a) General. The City and the Authority hereby covenant with the holders of the
Certificates that, notwithstanding any other provisions of this Trust Agreement, they shall 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 interest with respect to the Certificates under Section 103
of the Code. The Authority hereby covenants with the holders of the of the Certificates that,
notwithstanding any other provision of this Trust Agreement, to the extent that the Authority may
have control over the Project or the proceeds of the Certificates, it shall not take any action that
would adversely affect the exclusion trom gross income of interest with respect to the Certificates
under Section 103 of the Code. The City and the Authority (to the extent that the Authority may
have control over the Project or the proceeds of the Certificates) shall not, directly or indirectly, use
or permit the use of proceeds of the Certificates or the Project, or any portion thereof, by any person
other than a governmental unit (as such term is used in Section 141 of the Code), in such manner or
to such extent as would result in the loss of exclusion from gross income for federal income tax
purposes of interest due with respect to the Certificates.
(b) Use of Proceeds. The City and the Authority (to the extent that the Authority
may have control over the Project or the proceeds of the Certificates) shall not take any action, or fail
to take any action, if any such action or failure to take action would cause the Certificates to be
"private activity bonds" within the meaning of Section 141 of the Code, and in furtherance thereof,
shall not make any use of the proceeds of the Certificates or the Project, or any portion thereof, or
any other funds of the City, that would cause the Certificates to be "private activity bonds" within the
meaning of Section 141 of the Code. To that end, so long as any Certificates are outstanding, the
City and the Authority, with respect to such proceeds and the Project and such other funds, will
comply with applicable requirements of the Code and all regulations of the United States Department
of the Treasury issued thereunder and under Section 103 of the Code, to the extent such requirements
are, at the time, applicable and in effect. The City shall establish reasonable procedures necessary to
ensure continued compliance with Section 141 of the Code and the continued qualification of the
Certificates as "governmental bonds."
(c) Arbitrage. The City and the Authority (to the extent that the Authority may
have control over the Project or the proceeds of the Certificates) shall not, directly or indirectly, use
or permit the use of any proceeds of any Certificates, or of the Project, or other funds of the City, or
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take or omit to take any action, that would cause the Certificates to be "arbitrage bonds" within the
meaning of Section 148 of the Code. To that end, the City and the Authority shall comply with all
requirements of Section 148 of the Code and all regulations of the United States Department of the
Treasury issued thereunder to the extent such requirements are, at the time, in effect and applicable to
the Certificates.
(d) Federal Guarantee. The City and the Authority (to the extent that the
Authority may have control over the proceeds of the Certificates) shall not make any use of the
proceeds of the Certificates or any other funds of the City, or take or omit to take any other action,
that would cause the Certificates to be "federally guaranteed" within the meaning of Section 149(b)
of the Code.
(e) Compliance with Tax Certificates. In furtherance of the foregoing tax
covenants of this Section, the City covenants that it will comply with the provisions of each Tax
Certificate, which is incorporated herein as if fully set forth herein. These covenants shall survive
payment in full or defeasance of the Certificates.
Section 8.08. Rebate Fund.
(a) General. The Trustee shall establish a special fund designated the "City of
Chula Vista (Civic Center Project) Rebate Fund" (the "Rebate Fund") and shall establish a separate
account therein for each series of Certificates. All amounts at any time on deposit in the Rebate Fund
shall be held by the Trustee in trust, to the extent required to satisfy the requirement to make rebate
payments to the United States (the "Rebate Requirement") pursuant to Section 148 of the Code and
the Treasury Regulations promulgated thereunder (the "Treasury Regulations"). Such amounts shall
be free and clear of any lien under this Trust Agreement and shall be governed by this Section and
Section 8.07 of this Trust Agreement and by the Tax Certificate executed by the City. The Trustee
shall be deemed conclusively to have complied with the Rebate Requirement if it follows the
directions of the City, and shall have no independent responsibility to, or liability resulting from its
failure to, enforce compliance by the City with the Rebate Requirement.
(i) Within 45 days of the end of the fifth Certificate Year for a
series of Certificates and each fifth Certificate Year thereafter, (I) the City
shall calculate or cause to be calculated with respect to the Certificates of
such series the amount that would be considered the "rebate amount" within
the meaning of Section 1.148-3 of the Treasury Regulations, and (2) the City
shall make an Additional Payment under Section 4.11 of the Lease and
transfer to the Trustee for deposit in the Account of the Rebate Fund
established for such series, if and to the extent required, amounts sufficient to
cause the balance in the Rebate Fund to be equal to the "rebate amount" so
calculated. The City may direct the Trustee to transfer excess amounts on
deposit in the Reserve Fund, as set forth in Section 6.03 hereof, to pay all or a
portion of any "rebate amount" due hereunder.
(ii) The City shall not be required to deposit any amount to the
Rebate Fund in accordance with preceding sentence if the amount on deposit
in the Rebate Fund prior to the deposit required to be made under this
subsection (a) equals or exceeds the "rebate amount" calculated in accordance
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with the preceding sentence. Such excess may be withdrawn from the Rebate
Fund to the extent permitted under subsection (f) of this Section.
(iii) The City shall not be required to calculate the "rebate
amount," and shall not be required to deposit any amount to the Rebate Fund
in accordance with this subsection (a), with respect to all or a portion of the
proceeds of a series of the Certificates (including amounts treated as proceeds
of the Certificates) (1) to the extent such proceeds satisfy the expenditure
requirements of Section 148(f)(4)(B) or Section 148(f)(4)(C) of the Code or
Section 1.148-7(d) of the Treasury Regulations, whichever is applicable, and
otherwise qualify for the exception to the Rebate Requirement pursuant to
whichever of said sections is applicable, (2) to the extent such proceeds are
subject to an election by the City under Section 148(f)(4)(C)(vii) of the Code
to pay a 1-112% penalty in lieu of arbitrage rebate in the event any of the
percentage expenditure requirements of Section 148(f)(4)(C) are not satisfied,
or (3) to the extent such proceeds qualify for the exception to arbitrage rebate
under Section I 48(f)( 4)(A)(ii) of the Code for amounts in a "bona fide debt
service fund."
(b) Withdrawal Following Pavrnent of Certificates. Any funds remaining in an
Account of the Rebate Fund for a series of Certificates after prepayment of all the Certificates and
any amounts described in paragraph (ii) of subsection (c) of this Section, or provision made therefor
satisfactory to the Trustee, including accrued interest and payment of any applicable fees to the
Trustee, shall be withdrawn by the Trustee and remitted to the City.
(c) Withdrawal for Pavrnent of Rebate. Upon the City's written direction, but
subject to the exceptions contained in subsection (a) of this Section to the requirement to calculate
the "rebate amount" and make deposits to the Rebate Fund, the Trustee shall pay to the United States
with respect to the applicable series of Certificates, from amounts on deposit in the Rebate Fund,
(i) not later than 60 days after the end of (I) the fifth Certificate
Year, and (2) each fifth Certificate Year thereafter for such series, an amount
that, together with all previous rebate payments, is equal to at least 90% of
the "rebate amount" for such series calculated as of the end of such
Certificate Year in accordance with Section 1.148-3 of the Treasury
Regulations; and
(ii) not later than 60 days after the payment of all Certificates, an
amount equal to 100% of the "rebate amount" calculated as of the date of
such payment (and any income attributable to the "rebate amount"
determined to be due and payable) in accordance with Section 1.148-3 of the
Treasury Regulations.
(d) Rebate Pavrnents. Each payment required to be made pursuant to subsection
(c) of this Section shall be made to the Internal Revenue Service Center, Ogden, Utah 8420 I on or
before the date on which such payment is due, and shall be accompanied by Internal Revenue Service
Form 8038-T, which shall be completed by the arbitrage rebate consultant for execution by the City
and provided to the Trustee.
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(e) Deficiencies in the Rebate Fund. In the event that, prior to the time any
payment is required to be made ITom the Rebate Fund, the amount in the Rebate Fund is not
sufficient to make such payment when such payment is due, the City shall calculate the amount of
such deficiency and direct the Trustee to deposit an amount received ITom the City equal to such
deficiency into the applicable Account of the Rebate Fund prior to the time such payment is due.
(f) Withdrawals of Excess Amounts. In the event that immediately following the
calculation required by subsection (a) of this Section, but prior to any deposit made under said
subsection, the amount on deposit in the applicable Account of the Rebate Fund exceeds the "rebate
amount" calculated in accordance with said subsection, upon written instructions from the City, the
Trustee shall withdraw the excess from the Rebate Fund and credit such excess to the Lease Payment
Fund.
(g) Record Keeping. The City shall retain records of all determinations made
hereunder until six years after the complete retirement of the Certificates.
(h) Survival of Defeasance. Notwithstanding anything in this Trust Agreement to
the contrary, the Rebate Requirement for a series of the Certificates shall survive the payment in full
or defeasance of the Certificates of such series.
ARTICLE IX
THE TRUSTEE
Section 9.01. Appointment of Trustee.
(a) Appointment. The Bank of New York Trust Company, N.A., a national
banking association organized under the laws of the United States of America, is hereby appointed
Trustee by the Authority and the City.
(h) Oualifications. The Authority and the City agree that they will maintain a
Trustee having a corporate trust office in New York, New York, San Francisco, California, Seattle,
Washington, or Los Angeles, California capable of exercising trust powers in the State of California,
with a combined capital (exclusive of borrowed capital) and a surplus of at least Fifty Million Dollars
($50,000,000), or be a member of a bank holding company system, which shall have a combined
capital and surplus of at least Fifty Million Dollars ($50,000,000), and subject to supervision or
examination by federal or state authority, so long as any Certificates are Outstanding. If such bank,
corporation or trust company publishes a report of condition at least annually pursuant to law or to
the requirements of any supervising or examining authority above referred to then for the purpose of
this Section the combined capital and surplus of such bank, corporation or trust company shall be
deemed to be its combined capital and surplus as set forth in its most recent report of condition so
published.
(c) Removal. Each Insurer and, so long as there is no Event of Default, the City,
may remove the Trustee initially appointed, and any successor thereto, and may appoint a successor
or successors thereto.
(d) Resilffiation. The Trustee may, upon prior written notice to the City, the
Insurers and the Authority, resign; provided that such resignation shall not take effect until the
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successor Trustee is appointed as provided in this Section 9.01. Upon receiving such notice of
resignation, the City shall promptly appoint a successor Trustee subject to written approval of the
Insurers. In the event the City does not name a successor Trustee within thirty (30) days of receipt of
notice of the Trustee's resignation, then the Trustee may petition a federal or state court to seek the
immediate appointment of a successor Trustee.
(e) Successor. Any successor Trustee shall be a bank, corporation, national
association or trust company meeting the qualifications as set forth in Subsection (b) above. Any
resignation or removal of the Trustee and appointment of a successor Trustee shall become effective
upon acceptance of appointment by the successor Trustee and upon receipt of written approval of the
Insurers. Upon such acceptance, the successor Trustee shall mail notice thereof to the Owners at
their respective addresses set forth on the Certificate registration books maintained pursuant to
Section 2.12.
Section 9.02. Merger or Consolidation. Any company or banking association into which
the Trustee may be merged or converted or with which it may be consolidated or any company
resulting from any merger, conversion or consolidation to which it shall be a party or any company to
which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided
that such company shall be eligible under Section 9.01, shall be the successor to the Trustee without
the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.
Section 9.03. Protection ofthe Trustee.
(a) Reliance Upon Papers or Documents. The Trustee shall be protected and
shall incur no liability in acting or proceeding in good faith upon any resolution, notice, telegram,
facsimile, request, consent, direction, waiver, certificate, statement, affidavit, voucher, bond,
requisition or other paper or document which it shall in good faith believe to be genuine and to have
been passed or signed by the proper board or person or to have been prepared and furnished pursuant
to any ofthe provisions of this Trust Agreement, and the Trustee shall be under no duty to make any
investigation or inquiry as to any statements contained or matters referred to in any such instrument,
but may, in the absence of bad faith on its part, accept and rely upon the same as conclusive evidence
of the truth and accuracy of such statements. In the event the Trustee shall make any investigation
into the content of any such certifications, the Trustee shall not thereby be deemed to have expanded
the scope of its duties.
(b) Reliance Upon OJ?inions of Counsel. The Trustee may consult with its
counselor counsel to the City, with regard to legal questions and the opinion of such counsel shall be
full and complete authorization and protection in respect of any action taken or suffered by it
hereunder in good faith in accordance therewith. Before being required to take any action, the
Trustee may require an opinion of Independent Counsel acceptable to the Trustee which opinion
shall be made available to the other parties hereto upon request, which counsel may be counsel to any
of the parties hereto, or a verified certificate of any party hereto, or both, concerning the proposed
action and the opinion of such counsel shall be full and complete authorization and protection in
respect of any action taken by the Trustee in reliance thereon.
(c) Reliance Upon Requested Certificates. Whenever in the administration of its
duties under this Trust Agreement, the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed), in the absence of bad faith on its part,
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shall be deemed to be conclusively proved and established by the certificate of the City
Representative or the Authority Representative and such certificate shall be full warranty to the
Trustee for any action taken or suffered under the provisions of this Trust Agreement in reliance
thereon, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or
may require such additional evidence as to it may seem reasonable, provided however that the duties
and obligations of the Trustee shall not be deemed expanded thereby.
Section 9.04. Rights of the Trustee.
(a) Ownership of Certificates. The Trustee may become an Owner with the same
rights it would have if it were not Trustee; may acquire and dispose of other bonds or evidence of
indebtedness of the City with the same rights it would have if it were not the Trustee; and may act as
a depository for and permit any of its officers or directors to act as a member of, or in any other
capacity with respect to, any committee formed to protect the rights of Owners, whether or not such
committee shall represent the Owners of the majority in principal amount of the Certificates then
Outstanding.
(b) Attornevs. Agents. Receivers. The Trustee may execute any of the trusts or
powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or
receivers, shall not be responsible for the actions or omissions of such attorneys, agents or receivers
if appointed by it with reasonable care, and shall be entitled to advice of counsel concerning all
matters of trust and its duty hereunder.
(c) Funds and Accounts. In addition to the funds and accounts established or
required to be established pursuant to this Trust Agreement, the Trustee may establish such
additional funds and accounts as it deems necessary or appropriate to perform its duties hereunder,
and shall have the right to close such accounts in its discretion.
Section 9.05. Standard of Care. The Trustee shall not be liable in connection with the
performance of its duties hereunder, except for its own negligence or willful misconduct. The
Trustee shall only perfoi-m those duties specifically set forth herein and no implied duties, covenants
or obligations whatsoever shall be read into this Trust Agreement. In the event of and during the
continuance of an Event of Default, the Trustee shall exercise such care in performing its duties
hereunder as a prudent man would exercise in such event.
Section 9.06. Compensation of the Trustee. As an Additional Payment under Section 4.11
of the Lease, the City 'Bhall, from time to time, pay such amounts as are specified in any written
agreement with the City and, on demand, pay to the Trustee to the extent not covered by such
agreement reasonable compensation for its services and the services of any accountants, consultants,
attorneys and other experts as may be engaged by the Trustee to provide services under this Trust
Agreement pursuant to a written agreement between the City and the Trustee. The City's obligation
hereunder shall remain valid and binding notwithstanding maturity and payment of the Certificates or
resignation and removal of the Trustee.
Section 9.07. Indemnification of Trustee. The City shall, to the extent permitted by law,
indemnify and save the Trustee and its officers, directors, agents, and employees harmless from and
against (whether or not litigated) all claims, losses, costs, expenses, liability and damages, including
legal fees and expenses, arising out of (i) the use, maintenance, condition or management of, or from
any work or thing done on, the Leased Premises by the City, (ii) any breach or default on the part of
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2 --103
the City in the performance of any of its obligations under this Trust Agreement and any other
agreement made and entered into for purposes of the Leased Premises, (iii) any act of negligence of
the City or of any of its agents, contractors, servants, employees or licensees with respect to the
Leased Premises, (iv) any act of negligence of any assignee of, or purchaser from, the City or of any
of its or their agents, contractors, servants, employees or licensees with respect to the Leased
Premises, (v) the construction or acquisition of the Project or the expenditure of Project Costs, or (vi)
the exercise and performance by the Trustee of its powers and duties hereunder or any related
document, (vii) the sale of the Certificates and the carrying out of any of the transactions
contemplated by the Certificates or this Trust Agreement, or (viii) any untrue statement or alleged
untrue statement of any material fact or omission or alleged omission to state a material fact
necessary to make the statements made in light of the circumstances in which they were made, not
misleading in any official statement or other disclosure document utilized in connection with the sale
of the Certificates. The indemnification set forth in this Section 9.07 shall extend to the Trustee's
officers, agents, employees, successors and assigns. No indemnification will be made under this
Section or elsewhere in this Trust Agreement or other agreements for willful misconduct or
negligence by the Trustee, its officers, agents, employees, successors or assigns. The City's
obligations hereunder shall remain valid and binding notwithstanding maturity and payment of the
Certificates, or the resignation or removal of the Trustee.
In accepting the trust hereby created, the Trustee acts solely as Trustee. for the Owners and
not in its individual capacity, and all persons, including, without limitation, the Owners, Authority
and the City, having any claim against the Trustee arising from the Trust Agreement shall look only
to the funds and accounts held by the Trustee hereunder for payment, except as otherwise provided
herein or where the Trustee has breached its standard of care as described in Section 9.05 hereof.
Under no circumstances shall the Trustee be liable in its individual capacity for the obligations
evidenced by the Certificates.
No provision of this Trust Agreement shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of its duties hereunder or in the
exercise of any of its rights or powers.
The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Owners of not less than a majority in aggregate
principal amount of the Certificates at the time Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee or in the exercise of any right
hereunder.
The Trustee is authorized and directed to execute, in its capacity as Trustee, the Assignment
Agreement.
.
Every provision of this Trust Agreement, the Lease, the Site Lease and the Assignment
Agreement relating to the conduct or liability of the Trustee shall be subject to the provisions of this
Trust Agreement, including without limitation, this Article IX.
The Trustee shall have no responsibility with respect to any information, statement or recital
in any official statement, offering memorandum or any other disclosure material prepared or
distributed with respect to the Certificates.
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The Trustee shall not to be deemed to have knowledge of any Event of Default hereunder or
under the Lease unless it has actual knowledge thereof at its Principal Office.
Before taking any action under Article XIII or this Article at the request of the Owners or
Insurer, the Trustee may require that a satisfactory indemnity bond be furnished by the Owners or
such Insurer for the reimbursement of all expenses to which it may be put and to protect it against all
liability, except liability which is adjudicated to have resulted from its negligence or willful
misconduct in connection with any action so taken.
Section 9.08. Trustee's Disclaimer of Warranties. THE TRUSTEE MAKES NO
WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE,
DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY THE CITY OF THE LEASED
PREMISES, OR ANY PORTION THEREOF. THE CITY ACKNOWLEDGES THAT THE CITY
IS LEASING THE LEASED PREMISES AS IS. In no event shall the Trustee be liable for
incidental, indirect, special or consequential damages, in connection with or arising out of the Lease,
the Site Lease, the Assignment Agreement or this Trust Agreement for the existence, furnishing,
functioning or the City's use and possession of the Leased Premises.
ARTICLE X
MODIFICATION OR AMENDMENT OF AGREEMENTS
Section 10.01. Amendments Permitted.
(a) With Consent. This Trust Agreement and the rights and obligations of the
Owners, and the Lease and the rights and obligations of the parties thereto, may be modified or
amended at any time, with notice to any rating agency then rating the Certificates by a supplemental
agreement or amendment thereto which shall become effective when the written consents of each
Insurer (exclusive of any Insurer which is in default in its payment obligations under its Insurance
Policy) and Owners of a majority in aggregate principal amount of the Certificates then Outstanding,
exclusive of Certificates disqualified as provided in Section 10.03 hereof, shall have been filed with
the Trustee. No such modification or amendment shall:
(i) extend or have the effect of extending the fixed maturity of any
Certificate or reducing the interest rate with respect thereto or extending the time of
payment of interest, or reducing the amount of principal thereof or reducing any
premium payable upon the prepayment thereof, or diminish the security afforded by
an Insurance Policy without the express consent of the Owner of such Certificate and
the Insurer issuing such Insurance Policy (exclusive of any Insurer which is in default
in its payment obligations under its Insurance Policy), or
(ii) reduce or have the effect of reducing the percentage of Certificates
required for the affirmative vote or written consent to an amendment or modification
of the Lease, or
(iii) modify any of the rights or obligations of the Trustee without its
written assent thereto, or
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(iv) amend this Section 10.01 without the prior written consent of the
Owners of all Certificates then outstanding and each Insurer (exclusive of any Insurer
which is in default in its payment obligations under its Insurance Policy).
.
The Trustee shall have the right to require such opinions of counsel as it deems necessary concerning
(i) the lack of material adverse effect of the amendment on Owners and (ii) the fact that the
amendment will not affect the tax status of interest with respect to the Certificates. Any such
supplemental agreement or amendments thereto shall become effective as provided in Section 10.02
hereof.
(b) Without Consent. This Trust Agreement and the rights and obligations of the
Owners, and the Lease and the rights and obligations of the parties thereto, may be modified or
amended at any time by a supplemental agreement or amendments thereto, with the prior written
consent of each Insurer (exclusive of any Insurer which is in default in its payment obligations under
its Insurance Policy) without the consent of any such Owners, but only to the extent permitted by law
and only:
(i) to add to the covenants and agreements of the City hereunder,
.
(ii) to cure, correct or supplement any ambiguous or defective provision
contained herein or therein,
(iii) in regard to matters arising hereunder or thereunder, as the parties
hereto or thereto may deem necessary or desirable (which may be based upon
opinions as provided in Section 9.03(b)), shall not adversely affect the interest of the
Owners or the Insurers,
(iv) to substitute the Leased Premises, or a portion thereof, in accordance
with Sections 3.5 and 7.12 of the Lease,
.
(v) to make such additions, deletions or modifications as may be
necessary or appropriate to assure the exclusion from gross income for federal
income tax purposes of the interest component of Lease Payments and the interest
payable with respect to the Certificates,
(vi) to add to the rights of the Trustee,
(vii) to provide for the execution and delivery of Additional Certificates in
accordance with the provisions of Section 2.12 hereof.
No such modification or amendment, however, shall modify any of the rights or obligations of the
Trustee without its written assent thereto. Any such supplemental agreement shall become effective
upon execution and delivery by the parties hereto or thereto as the case may be.
Section 10.02. Procedure for Amendment with Written Consent of the Owners. This Trust
Agreement or the Lease may be amended by supplemental agreement as provided in this Section
10.02 in the event the consent of the Owners is required pursuant to Section 1O.0l(a) hereof. A copy
of such supplemental agreement, together with a request to the Owners for their consent thereto, shall
be mailed by the Trustee to each Owner of a Certificate at his address as set forth in the Certificate
registration books maintained pursuant to Section 2.09 hereof, but failure to receive copies of such
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supplemental agreement and request so mailed shall not affect the validity of the supplemental
agreement when assented to as in this Section provided.
Such supplemental agreement shall not become effective unless there shall be filed with the
Trustee the written consent of the Owners of at least a majority in aggregate principal amount of the
Certificates then Outstanding (exclusive of Certificates disqualified as provided in Section 10.03
hereof) and notices shall have been mailed as hereinafter in this Section provided. Any such consent
shall be binding upon the Owner of the Certificate giving such consent and on any subsequent Owner
(whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing
by the Owner giving such consent or a subsequent Owner by filing such revocation with the Trustee
prior to the date when the notice hereinafter in this Section provided for has been mailed.
After the Owners of the required percentage of Certificates shall have filed their consent to
such supplemental agreement, the Trustee shall mail a notice to the Owners of the Certificates in the
manner hereinbefore provided in this Section for the mailing of such supplemental agreement, stating
in substance that such supplemental agreement has been consented to by the Owners of the required
percentage of Certificates and will be effective as provided in this Section (but failure to mail copies
of said notice shall not affect the validity of such supplemental agreement or consents thereto). A
record, consisting of the papers required by this Section to be filed with the Trustee, shall be proof of
the matters therein stated until the contrary is proved. The Trustee may obtain and conclusively rely
on an opinion of counsel with regard to such matters.
Section 10.03. Disqualified Certificates. Certificates owned or held by or for the account of
the City or the Authority or by any person directly or indirectly controlled or controlled by, or under
direct or indirect common control with the City or the Authority (except any Certificates held in any
pension or retirement fund) shall not be deemed Outstanding for the purpose of any vote, consent,
waiver or other action or any calculation of Outstanding Certificates provided for in this Trust
Agreement, and shall not be entitled to vote upon, consent to, or take any other action provided for in
this Trust Agreement.
The City or the Trustee may adopt appropriate regulations to require each Owner, before his
consent provided for in this Article X shall be deemed effective, to reveal if the Certificates as to
which such consent is given are disqualified as provided in this Section 10.03 hereof. Upon request
of the Trustee, the City and Authority shall specify to the Trustee those Certificates disqualified
pursuant to this Section and the Trustee may conclusively rely on such certificate.
Section 10.04. Effect of Supplemental Agreement. From and after the time any
supplemental agreement becomes effective pursuant to this Article X, this Trust Agreement or the
Lease, as the case may be, shall be deemed to be modified and amended in accordance therewith, the
respective rights, duties and obligations of the parties hereto or thereto and all Owners of Certificates
Outstanding, as the case may be, shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modification and amendment, and all the terms and conditions of any
supplemental agreement shall be deemed to be part of the terms and conditions of this Trust
Agreement or the Lease, as the case may be, for any and all purposes.
Section 10.05. Endorsement or Replacement of Certificates Delivered After Amendments.
The Trustee may determine that Certificates delivered after the effective date of any action taken as
provided in this Article X shall bear a notation, by endorsement, in form approved by the Trustee, as
to such action. In that case, upon demand of the Owner of any Outstanding Certificate at such
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effective date and presentation of his Certificate for such purpose at the Principal Office, a suitable
notation shall be made on such Certificate. The Trustee may determine that new Certificates, so
modified as in the opinion of the Trustee is necessary to conform to such Owner's action, shall be
prepared, executed and delivered. In that case, upon demand of the Owner of any Certificate then
Outstanding, such new Certificate shall be exchanged in the Principal Office without cost to such
Owner, for a Certificate of the same character then Outstanding, upon surrender of such Certificate.
.
Section 10.06. Amendatorv Endorsement of Certificates. Subject to Section 10.0 I hereof,
the provisions of this Article X shall not prevent an Owner from accepting any amendment as to the
particular Certificates held by him, provided that due notification thereof is made on such
Certificates.
Section 10.07. Copies of Amendments Delivered to Rating Agencies. Copies of any
modifications or amendments to this Agreement, the Lease, the Site Lease or the Assignment
Agreement shall be delivered by the City to any rating agency then rating the Certificates at least 10
days prior to the effective date thereof.
.
ARTICLE XI
COVENANTS; NOTICES
Section 11.0 I. Compliance With and Enforcement of the Lease. The City covenants and
agrees with the Owners to perform all obligations and duties imposed on it under the Lease. The
Authority covenants and agrees with the Owners to perform all obligations and duties imposed on it
under the Lease.
.
The City will not do or permit anything to be done, or omit or refrain from doing anything, in
any case where any such act done or permitted to be done, or any such omission of or refraining from
action, would or might be a ground for cancellation or termination of the Lease by the Authority
thereunder. The Authority and the City, immediately upon receiving or giving any notice,
communication or other document in any way relating to or affecting their respective estates, or
either of them, in the Leased Premises, which mayor can in any manner affect such estate of the
City, will deliver the same, or a copy thereof, to the Trustee.
Section 11.02. Pavment of Taxes. The City shall pay all taxes as provided in Section 7.7(b)
of the Lease.
Section 11.03. Observance of Laws and Regulations. The City will well and truly keep,
observe and perform all valid and lawful obligations or regulations now or hereafter imposed on it by
contract, or prescribed by any law of the United States, or of the State, or by any officer, board or
commission having jurisdiction or control, as a condition of the continued enjoyment of any and
every right, privilege or franchise now owned or hereafter acquired by the City, including its right to
exist and carry on business as a municipal corporation, to the end that such rights, privileges and
franchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any
manner impaired.
Section 11.04. Prosecution and Defense of Suits. The City shall promptly, and also upon
request of the Trustee, an Insurer or any Owner, from time to time take such action as may be
necessary or proper to remedy or cure any defect in or cloud upon the title to the Leased Premises,
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whether now existing or hereafter developing and shall prosecute all such suits, actions and other
proceedings as may be appropriate for such purpose.
Section 11.05. City Budgets. In accordance with Section 4.7 of the Lease, the City
Representative shall certify to the Trustee on or before August 1 of each year that the City has
included all Lease Payments (other than Lease Payments of advance rental), Additional Payments
due under the Lease in the Fiscal Year covered by its annual budget and the amount so included. If
the City fails to certify that it has included all such Lease Payments and Additional Payments in such
annual budget, the Trustee shall promptly provide the City written notice specifying that the City has
failed to observe and perform its covenant and agreement in such Section 4.7 and requesting that
such failure be remedied within 30 days, or such failure shall constitute an Event of Default under
Section 9.1 (b) of the Lease. The Trustee shall forward a copy of such notice to the Authority and to
the Insurers. Upon receipt of such notice, the City shall notify the Trustee of the proceedings
proposed to be taken by the City, and shall keep the Trustee advised of all proceedings thereafter
taken by the City.
Section 11.06. Further Assurances. The Authority and the City will make, execute and
deliver any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance ofthis Agreement, and
for the better assuring and confirming unto the Owners the rights and benefits provided herein.
Section 11.07. Continuing Disclosure. The City hereby covenants and agrees that it will
comply with and carry out all of the provisions of the Continuing Disclosure Agreement.
Notwithstanding any other provision of this Trust Agreement, failure of the City to comply with the
Continuing Disclosure Agreement shall not be considered an Event of Default hereunder; however,
any Owner or Beneficial Owner may take such actions as may be necessary and appropriate,
including seeking mandate or specific performance by court order, to cause the City to comply with
its obligations under this Section and the Continuing Disclosure Agreement.
ARTICLE XII
LIMITATION OF LIABILITY
Section 12.01. Limited Liabilitv of the City. Except for the payment of Lease Payments,
Additional Payments and Prepayments when due in accordance with the Lease and the performance
of the other covenants and agreements of the City contained herein and in the Lease, the City shall
have no obligation or liability to any ofthe other parties hereto or to the Owners with respect to this
Trust Agreement or the terms, execution, delivery or transfer of the Certificates, or the distribution of
Lease Payments to the Owners by the Trustee.
Section 12.02. No Liability of the Citv or Authority for Trustee Performance. Except as
expressly provided herein, neither the City nor the Authority shall have any obligation or liability to
any other parties hereto or to the Owners with respect to the performance by the Trustee of any duty
imposed upon it under this Trust Agreement.
(a) No Investment Advice. The Trustee shall have no obligation or responsibility
for providing information to the Owners concerning the investment character of the Certificates.
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(b) Sufficiency of this Trust Agreement or Lease Payments. The Trustee makes
no representations as to the validity or sufficiency of the Certificates, shall incur no responsibility in
respect thereof, other than in connection with the duties or obligations herein or in the Certificates
assigned to or imposed upon it. The Trustee shall not be responsible or liable for the sufficiency or
enforceability of the Lease, the Site Lease or the Assignment Agreement. The Trustee shall not be
liable for the sufficiency or collection of any Lease Payments or other moneys required to be paid to
it under the Lease (except as provided in this Trust Agreement), its right to receive moneys pursuant
to said Lease, or the value of or title to the Leased Premises.
(c) Actions of Authority and City. The Trustee shall have no obligation or
liability to any of the other parties or the Owners with respect to this Trust Agreement or failure or
refusal of any other party to perform any covenant or agreement made by any of them under this
Trust Agreement or the Lease, but shall be responsible solely for the perfonnance of the duties and
obligations expressly imposed upon it hereunder as provided in Section 9.05.
(d) Recitals and Agreements of Authority and City. The recitals of facts,
covenants and agreements herein and in the Certificates contained shall be taken as statements,
covenants and agreements of the City or the Authority (as the case may be), and the Trustee assumes
no responsibility for the correctness ofthe same.
Section 12.03. Limitation of Rights to Parties and Certificate Owners. Nothing in this Trust
Agreement or in the Certificates expressed or implied is intended or shall be construed to give any
person other than the City, the Authority, the Trustee, the Insurers and the Owners, any legal or
equitable right, remedy or claim under or in respect of this Trust Agreement or any covenant,
condition or provision hereof; and all such covenants, conditions and provisions are and shall be for
the sole and exclusive benefit of the City, the Authority, the Trustee, the Insurers and the Owners.
Section 12.04. No Liability of Authority to the Owners. Except as expressly provided
herein, the Authority shall not have any obligation or liability to the Owners with respect to the
payment when due of the Lease Payments by the City or with respect to the observance or
performance by the City of the other agreements, conditions, and covenant imposed upon the City by
the Lease or by this Trust Agreement.
ARTICLE XIII
EVENTS OF DEFAULT AND REMEDIES OF CERTIFICATE OWNERS
.
Section 13.01. Assignment of Rights. The parties hereto acknowledge that pursuant to the
Assignment Agreement the Authority has transferred, assigned and set over to the Trustee for the
benefit of the Owners, certain of the Authority's rights under the Lease.
Section 13.02. Events of Default.
(a) Remedies. If an Event of Default shall happen, then, and in each and every
such case during the continuance of such Event of Default, subject to the provisions of Section 13.04
hereof, the Trustee may exercise any and all remedies available pursuant to law or granted pursuant
to the Lease; provided, however, that notwithstanding anything herein or in the Lease to the contrary,
THERE SHALL BE NO RIGHT UNDER ANY CIRCUMSTANCES TO ACCELERATE THE
MATURITIES OF THE CERTIFICATES OR OTHERWISE TO DECLARE ANY LEASE
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PAYMENTS NOT THEN IN DEFAULT TO BE IMMEDIATELY DUE AND PAYABLE. Section
9.2 of the Lease is hereby incorporated by reference.
(b) Actual Knowledge. The Trustee shall not be deemed to have knowledge of
any Event of Default unless and until the trust officer responsible for the administration of this Trust
Agreement shall have actual knowledge thereof, or shall have received written notice thereof at the
Principal Office.
Section 13.03. Application of Funds. All moneys received by the Trustee pursuant to any
right given or action taken under the provisions of this Article XIII or of Article IX of the Lease,
shall be deposited into the Lease Payment Fund and be applied by the Trustee after payment of all
amounts due and payable under Sections 9.06 and 9.07 hereof and Section 4.11 of the Lease in the
following order upon presentation of the Certificates, and the stamping thereon of the payment if
only partially paid, or upon the surrender thereof if fully paid -
First, Costs and Expenses: to the payment of the costs, fees and expenses of the
Trustee in declaring such Event of Default and in performing its duties hereunder, including
reasonable compensation to its agents, attorneys and counsel and then to any such amounts incurred
by the Owners;
Second, Interest: to the payment to the persons entitled thereto of all installments of
interest then due in the order of the maturity of such installment, 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;
Third, Principal: to the payment to the persons entitled thereto ofthe unpaid principal
with respect to any Certificates which shall have become due, whether at maturity or by call for
prepayment, in the order of their due dates, with interest on the overdue principal and interest at a
rate equal to the rate paid with respect to the Certificates and, if the amount available shall not be
sufficient to pay in full all the amounts due with respect to the Certificates on any date, 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 any discrimination or preference; and
Fourth, Insurers: to the extent not included in clauses First, Second or Third above, to
the payment of all amounts then due to the Insurers, as certified in writing to the Trustee, and, to the
extent that the amount available is not sufficient to pay in full all the amounts due to the Insurers,
then to the payment thereof to each Insurer ratably.
Section 13.04. Institution of Legal Proceedings. If one or more Events of Default shall
happen and be continuing, with the prior written consent of the Insurers not then in default under
their Insurance Policies, the Trustee may, and upon the written request of the Owners of a majority in
principal amount of the Certificates then Outstanding, and upon being indemnified to its satisfaction
therefor, shall, proceed to protect or enforce its rights or the rights of the Owners by a suit in equity
or action at law, either for the specific performance of any covenant or agreement contained herein or
in the Lease, or in aid of the execution of any power herein granted, or by mandamus or other
appropriate proceeding for the enforcement of any other legal or equitable remedy as the Trustee
shall deem most effectual in support of any of its rights or duties hereunder; provided that such
written request shall not be otherwise than in accordance with provisions of law and this Trust
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Agreement and that the Trustee shall have the right to decline to follow any such written request if
the Trustee shall be advised by counsel that the action or proceeding so requested may not be taken
lawfully or if the Trustee in good faith shall determine that the action or proceeding so requested
would be unjustly prejudicial to the Certificate Owners not a party to such written request or expose
the Trustee to liability. In no event shall counsel to the Trustee be deemed counsel to the Owners,
and any communications between the Trustee and its counsel shall be deemed confidential and
privileged.
Section 13.05. Non-Waiver. Nothing in this Article XIII or in any other provision of this
Trust Agreement or in the Certificates shall affect or impair the obligation of the City to payor
prepay the Lease Payments as provided in the Lease. So long as an Insurer is not in default in its
payment obligations under its 2004 Insurance Policy, the Trustee shall not waive any default or
breach of duty or contract hereunder without the prior written consent of such Insurer. No delay or
omission of the Trustee or of any Owner of any of the Certificates to exercise any right or power
arising upon the happening of any Event of Default shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence therein, and every power
and remedy given by this Article XIII to the Trustee or to the Owners may be exercised from time to
time and as often as shall be deemed expedient by the Trustee or the Owners.
Section 13.06. Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Trustee or to the Owners is intended to be exclusive of any other remedy, and every such remedy
shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing, at law or in equity or by statute or otherwise.
Section 13.07. Power of Trustee to Control Proceedings. In the event that the Trustee, upon
the happening of an Event of Default, shall have taken any action, by judicial proceedings or
otherwise, pursuant to its duties hereunder, whether upon its own discretion, upon the request of an
Insurer, or upon the request of the Owners of a majority in principal amount of the Certificates then
Outstanding, it shall have full power, in the exercise of its discretion for the best interest of the
Owners of the Certificates, with respect to the continuance, discontinuance, withdrawal, compromise,
settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there
no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise
dispose of any litigation pending at law or in equity, if at the time there has been filed with it a
written request signed by the Owners of at least a majority in principal amount of the Outstanding
Certificates hereunder opposing such discontinuance, withdrawal, compromise, settlement or other
disposal of such litigation.
.
Section 13.08. Limitation on Certificate Owners' Right to Sue. No Owner of any Certificate
executed hereunder shall have the right to institute any suit, action or proceeding at law or in equity,
for any remedy under or upon this Trust Agreement, unless (a) such Owner shall have previously
given to the Trustee written notice of the occurrence of an Event of Default under the Lease; (b) so
long as the Insurer of such Certificate is not in default in its payment obligations under its Insurance
Policy, such Owner shall have obtained such Insurer's consent to such institution; (c) the Owners of a
majority in aggregate principal amount of all the Certificates then Outstanding shall have made
written request upon the Trustee to exercise the powers hereinbefore granted or to institute such
action, suit or proceeding in its own name; (d) said Owners shall have tendered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with
such request; (e) the Trustee shall have refused or omitted to comply with such request for a period
of 60 days after such written request shall have been received by, and said tender of indemnity shall
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have been made to, the Trustee; and (f) there shall have been a default in the payment of such
Owner's proportionate interest in the Lease Payments as the same become due.
Such notification, request, tender of indemnity, refusal or omission, and default are hereby
declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy
hereunder; it being understood and intended that no one or more Owners shall have any right in any
manner whatever by his or their action to enforce any right under this Trust Agreement, except in the
manner herein provided and for the equal benefit of all Owners of the Outstanding Certificates.
The right of any Owner of any Certificate to receive payment of said Owner's proportionate
interest in the Lease Payments as the same become due, or to institute suit for the enforcement of
such payment, shall not be impaired or affected without the consent of such Owner, notwithstanding
the foregoing provisions of this Section or any other provision of this Trust Agreement.
Section 13.09. Agreement to Pav Attornevs' Fees and Expenses. In the event any party to
this Trust Agreement should default under any of the provisions hereof and the nondefaulting party
should employ attorneys or incur other expenses for the collection of moneys or the enforcement or
observance of any obligation or agreement on the part of the defaulting party contained herein, the
defaulting party agrees that it will on demand therefor pay to the nondefaulting party the reasonable
fees of such attorneys and such other expenses so incurred by the nondefaulting party.
Section 13.10. Insurers' Rights. Anything in this Trust Agreement to the contrary
notwithstanding, upon the occurrence and continuance of an Event of Default, each Insurer may
exercise its rights as the deemed Owner of the Certificates insured by it as set forth in Section 14.12
hereof for purposes of directing the Trustee in the exercise of all rights and remedies granted to the
Owners or to the Trustee for the benefit of the Owners under this Trust Agreement.
ARTICLE XIV
MISCELLANEOUS
Section 14.01. Defeasance.
(a) Methods. If and when any Outstanding Certificates shall be paid and
discharged in anyone or more of the following ways:
(i) Payment or Prepayment: by well and truly paying or causing
to be paid the principal, interest and prepayment premiums (if any) with
respect to such Certificates Outstanding, as and when the same become due
and payable;
(ii) Cash: if prior to maturity and having given at least thirty (30)
days prior written notice of prepayment by depositing with the Trustee, in
trust, concurrent with the giving of such notice, an amount of cash which
(together with cash then on deposit in the Lease Payment Fund and the
Reserve Fund together with the interest to accrue thereon, in the event of
payment or provision for payment of all Outstanding Certificates) is sufficient
to pay such Certificates Outstanding, including all principal and interest and
premium, if any; or
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(iii) Government Obligations: by irrevocably depositing with the
Trustee, in trust, Government Obligations together with cash, if required, in
such amount as will, in the opinion of an independent certified public
accountant, together with interest to accrue thereon (and, in the event of
payment or provision for payment of all Outstanding Certificates, moneys
then on deposit in the Lease Payment Fund and the Reserve Fund together
with the interest to accrue thereon), be fully sufficient to pay and discharge
such Certificates (including all principal and interest represented thereby and
prepayment premiums if any) at or before their maturity or prepayment date;
.
and all other amounts due hereunder have been paid in full, then, notwithstanding that any
Certificates shall not have been surrendered for payment, all obligations of the Authority, the Trustee
and the City with respect to such Certificates shall cease and terminate, except only the obligation of
the City and the Authority to comply with the provisions of Sections 8.07 and 8.08 hereof and the
obligation of the Trustee to payor cause to be paid, from Lease Payments paid by or on behalf of the
City from funds deposited pursuant to paragraphs (ii) and (iii) of this Section, to the Owners of the
Certificates not so surrendered and paid all sums due with respect thereto, and in the event of
deposits pursuant to paragraphs (ii) and (iii) of this Section, the Certificates shall continue to
represent direct and proportionate interests of the Owners thereof in Lease Payments under the Lease.
Notwithstanding anything herein to the contrary, in the event that the principal and/or interest
with respect to any Certificates shall be paid by an Insurer pursuant to an Insurance Policy, the
Certificates shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not
be considered paid by the City, and the assignment and pledge of the Lease Payments and all
covenants, agreements and other obligations of the City to the Owners shall continue to exist and
shall run to the benefit of such Insurer, and such Insurer shall be subrogated to the rights of such
Owners.
(b) Surplus Monevs. Any funds held by the Trustee, at the time of payment or
provision for payment of all Outstanding Certificates pursuant to the one of the procedures described
in paragraphs (a)(i) through (a)(iii) of this Section, which are not required for the payment to be
made to the Owners, shall be paid over to the City, after the payment of any amounts due to the
Trustee pursuant to Sections 9.06 and 9.07 hereof, any amounts due and owing to the Insurers, and
any other Additional Payments due under the Lease.
(c) Surviving Provisions. Notwithstanding the satisfaction and discharge hereof,
the Trustee shall retain such rights, powers and privileges hereunder as may be necessary or
convenient for the payment of the principal, interest and prepayment premium, if any, on the
Certificates and for the registration, transfer and exchange of the Certificates.
(d) Opinions and Reports. Prior to any defeasance becoming effective under this
Section, the City shall cause to be delivered (i) an executed copy of a report, addressed to the
Trustee, the City and the Insurer of the Certificates being defeased, in form and substance acceptable
to the City and such Insurer of a nationally recognized firm of certified public accountants, verifying
that the Government Obligations and cash, if any, satisfy the requirements of Section 14.01(a) above,
(ii) a copy of the escrow deposit agreement entered into in connection with such defeasance, which
escrow deposit agreement shall be in form and substance acceptable to such Insurer, and (iii) a copy
of an opinion of Special Counsel, dated the date of such defeasance and addressed to the Trustee, the
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City and such Insurer, in form and substance acceptable to the City and such Insurer, to the effect
that such Certificates are no longer Outstanding under the Trust Agreement.
Section 14.02. Non-Presentment of Certificates. In the event any Certificate shall not be
presented for payment when the principal with respect thereto becomes due, either at maturity, or at
the date fixed for prepayment thereof, if moneys sufficient to pay such Certificate shall have been
deposited in the Prepayment Fund or Lease Payment Fund, as applicable, all liability of the City and
the Trustee to the Owner thereof for payment of such Certificate shall forthwith cease, terminate and
be completely discharged, and thereupon it shall be the duty of the Trustee to hold such moneys,
without liability for interest thereon, for the benefit of the Owner of such Certificate who shall
thereafter be restricted exclusively to such moneys, for any claim of whatever nature on his or her
part under this Trust Agreement or on, or with respect to, said Certificate.
Any moneys so deposited with and held by the Trustee not so applied to the payment of
Certificates within two (2) years after the date on which the same shall have become due shall be
paid by the Trustee to the City, free from the trusts created by this Trust Agreement. Prior to
forwarding any such moneys to the City, the Trustee may publish notice of its intention to transfer
such funds in The Bond Buyer or another financial newspaper of general circulation in New York,
New York. In addition, Trustee shall be indemnified trom and against any and all liabilities to third
parties resulting trom its actions under this Section. Thereafter, Owners shall be entitled to look only
to the City for payment, and then only to the extent of the amount so repaid by the Trustee. The City
shall not be liable for any interest on the sums paid to it pursuant to this section and shall not be
regarded as a trustee or trustees of such money.
Section 14.03. Acquisition of Certificates bv Citv. All Certificates acquired by the City,
whether by purchase, gift or otherwise, shall be surrendered by the City to the Trustee for
cancellation.
Section 14.04. Records. The Trustee shall keep complete and accurate records of all moneys
received and disbursed by it under this Trust Agreement, which shall be available for inspection by
the City, the Authority and any Owner, or the agent of any of them, at any time during regular
business hours upon reasonable prior notice.
Section 14.05. Notices. Except as specifically provided otherwise in this Trust Agreement,
all written notices to be given under this Trust Agreement shall be given by mail or personal delivery
to the party entitled thereto at its address set forth below, or at such address as the party may provide
to the other party in writing trom time to time. Notice shall be deemed to have been received upon
the earlier of actual receipt or five Business Days after deposit in the United States mail, in certified
form, postage prepaid or, in the case of personal delivery, upon delivery to the address set forth
below:
If to the City:
City ofChula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Director of Finance
If to the Authority:
Chula Vista Public Financing Authority
276 Fourth Avenue
Chula Vista, California 91910
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DOCSOCIl148399v3!024036-0033
Attention: Executive Director
If to the Trustee:
The Bank of New York Trust Company, N.A.
700 South Flower Street, Suite 500
Los Angeles, California 90017
Attention: Corporate Trust Services
If to S&P:
Standard & Poor's Ratings Services
55 Water Street
New York, New York 10004
Attention: Public Finance Department
.
Ifto the 2004 Insurer:
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Surveillance
If to the 2004 Insurer:
[TO COME]
Section 14.06. Governing Law. This Trust Agreement shall be construed and governed in
accordance with the laws of the State.
Section 14.07. Binding Effect: Successors. This Trust Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns. Whenever in this Trust
Agreement either the Authority, the City or the Trustee is named or referred to, such reference shall
be deemed to include the successors or assigns thereof and all the covenants and agreements in this
Trust Agreement contained by or on behalf of the Authority, the City or the Trustee shall bind and
inure to the benefit of the respective successors and assigns thereof whether so expressed or not.
Section 14.08. Execution in Counteroarts. This Trust 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
agreement.
.
Section 14.09. Headings. The headings or titles of the several Articles and Sections hereof,
and any table of contents appended to copies hereof, shall be solely for convenience of reference and
shall not affect the meaning, construction or effect of this Trust Agreement. All references herein to
"Articles", "Sections" and other subdivisions are to the corresponding Articles, Sections or
subdivisions of this Trust Agreement; and the words "herein," "hereof," "hereunder" and other words
of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section
or subdivision hereof.
Section 14.10. Waiver of Notice. Whenever in this Trust Agreement the giving of notice by
mail or otherwise is required, the giving of such notice may be waived in writing by the person
entitled to receive such notice and in any case the giving or receipt of such notice shall not be a
condition precedent to the validity of any action taken in reliance upon such waiver.
Section 14.11. Separability of Invalid Provisions. In case anyone or more of the provisions
contained in this Trust Agreement or in the Certificates shall for any reason be held to be invalid,
illegal or unenforceable in any respect, then such invalidity, illegality or unenforceability shall not
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affect any other provision of this Trust Agreement, and this Trust Agreement shall be construed as if
such invalid or illegal or unenforceable provision had never been contained herein. The parties
hereto hereby declare that they would have entered into this Trust Agreement and each and every
other section, paragraph, sentence, clause or phrase hereof and authorized the delivery of the
Certificates pursuant thereto irrespective of the fact that anyone or more sections, paragraphs,
sentences, clauses or phrases of this Trust Agreement may be held illegal, invalid or unenforceable.
Section 14.12. Insurers to be Deemed Owners: Rights of the Insurers. Each Insurer shall be
recognized as the Owner of each Certificate insured by it for the purposes of exercising all rights and
privileges available to Certificate Owners. An Insurer shall have the right to institute any suit, action
or proceeding at law or in equity under the same terms as the Owners of the Certificates insured by it
in accordance with applicable provisions hereof. The rights granted to an Insurer shall be deemed
terminated and shall not be exercisable during any period during which such Insurer shall be in
default under the its Insurance Policy.
Section 14.13. Claims Under 2004 Insurance Policv: Payments bv and to 2004 Insurer. As
long as the 2004 Insurance Policy shall be in full force and effect, the City and the Trustee agree to
comply with the following provisions:
(a) In the event that, on the second Business Day, and again on the Business Day,
prior to any payment date on the 2004 Certificates, the Trustee has not received sufficient moneys to
pay all principal of and interest on the 2004 Certificates due on the second following or following, as
the case may be, Business Day, the Trustee shall immediately notifY the 2004 Insurer or its designee
on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified
mail, of the amount of the deficiency.
(b) If the deficiency is made up in whole or in part prior to or on the payment
date, the Trustee shall so notifY the 2004 Insurer or its designee on the same Business Day by
telephone or telegraph, confirmed in writing by registered or certified mail.
(c) In addition, if a responsible officer of the Trustee has written notice that any
Owner has been required to disgorge payments of principal or interest on a 2004 Certificate to a
trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent
jurisdiction that such payment constitutes avoidable preference to such Owner within the meaning of
any applicable bankruptcy laws, then the Trustee shall notify the 2004 Insurer or its designee of such
fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail.
(d) The Trustee is hereby irrevocably designated, appointed, directed and
authorized to act as attorney-in-fact for Owners of the 2004 Certificates as follows:
(i) If and to the extent there is a deficiency in amounts required
to pay interest due with respect to the 2004 Certificates, the Trustee shall (a)
execute and deliver to 2004 Insurance Trustee, or its successors under the
2004 Insurance Policy, in form satisfactory to the 2004 Insurance Trustee, an
instrument appointing the 2004 Insurer as agent for such Owners in any legal
proceeding related to the payment of such interest and an assignment to the
2004 Insurer of the claims for interest to which such deficiency relates and
which are paid by the 2004 Insurer, (b) receive as designee of the respective
Owners of the 2004 Certificates (and not as Trustee) in accordance with the
55
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DOCSOC/1148399v3/024036-0033
terms of the 2004 Insurance Policy payment ITom the 2004 Insurance Trustee
with respect to the claims for interest so assigned, and (c) disburse the same
to such respective Owners; and
(ii) If and to the extent of a deficiency in amounts required to pay
principal of the 2004 Certificates the Trustee shall (a) execute and deliver to
the 2004 Insurance Trustee in form satisfactory to the 2004 Insurance Trustee
an instrument appointing the 2004 Insurer as agent for such Owner in any
legal proceeding relating to the payment of such principal and an assignment
to the 2004 Insurer of any of the 2004 Certificates surrendered to the 2004
Insurance Trustee of so much of the principal amount thereof as has not
previously been paid or for which moneys are not held by the Trustee and
available for such payment (but such assignment shall be delivered only if
payment ITom the 2004 Insurance Trustee is received), (b) receive as designee
of the respective Owners of the 2004 Certificates (and not as Trustee) in
accordance with the tenor of the 2004 Insurance Policy payment therefor
ITom the 2004 Insurance Trustee, and ( c) disburse the same to such Owners.
(e) Payments with respect to claims for interest and principal due with respect to
the 2004 Certificates disbursed by the Trustee ITom proceeds of the 2004 Insurance Policy shall not
be considered to discharge the obligation of the City to make the Lease Payments evidenced by such
2004 Certificates, and the 2004 Insurer shall become the owner of such unpaid 2004 Certificates and
claims for the interest in accordance with the tenor of the assignment made to it under the provisions
of this subsection or otherwise.
(f) Irrespective of whether any such assignment is executed and delivered, the
City and the Trustee hereby agree for the benefit of the 2004 Insurer that:
(i) They recognize that to the extent the 2004 Insurer makes
payments, directly or indirectly (as by paying through the Trustee), on
account of principal of or interest due with respect to the 2004 Certificates,
the 2004 Insurer will be subrogated to the rights of such Owners to receive
the amount of such principal and interest, with interest thereon as provided
and solely from the sources stated in this Trust Agreement and the 2004
Certificates; and
(ii) They will accordingly pay to the 2004 Insurer the amount of
such principal and interest (including principal and interest recovered under
subparagraph (ii) of the first paragraph of the 2004 Insurance Policy, which
principal and interest shall be deemed past due and not to have been paid),
with interest thereon as provided in this Trust Agreement and the 2004
Certificates, but only from the sources and in the manner provided herein for
the payment of principal of and interest due with respect to the 2004
Certificates to Owners, and will otherwise treat the 2004 Insurer as the owner
of such rights to the amount of such principal and interest.
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Section 14.14. Infonnation to be Provided to the 2004 Insurer.
(a) The City shall deliver copies of any amendments made to the documents
executed in connection with the execution and delivery of the 2004 Certificates which are consented
to by the 2004 Insurer to S&P.
(b) The City shall deliver to the 2004 Insurer notice of the resignation or removal
of the Trustee and the appointment ofa successor thereto.
(c) The Trustee shall deliver to the 2004 Insurer copies of all notices required to
be delivered to 2004 Certificate Owners from the Trustee and, on an annual basis, the City shall
deliver to the 2004 Insurer copies of the City's audited financial statements and annual budget.
(d) Any notice that is required to be given to an Owner of a 2004 Certificate by
the Trustee or to the Trustee by the City pursuant to this Trust Agreement shall also be provided to
the 2004 Insurer.
(e) In connection with the issuance of Additional Certificates, the City shall
deliver to the 2004 Insurer a copy of the disclosure document circulated with respect to such
Additional Certificates.
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DOCSOC/I 148399v3/024036-0033
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year
first above written.
THE BANK OF NEW YORK TRUST COMPANY,
N.A., as Trustee
.
By:
Its:
Authorized Officer
CHULA VISTA PUBLIC FINANCING
AUTHORITY
By:
Its: Executive Director
ATTEST:
Secretary
CITY OF CHULA VISTA
.
By:
Its: Director of Finance
ATTEST:
City Clerk
Sol
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DOCSOC/l148399v3/024036-0033
EXillBIT A
FORM OF 2004 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY (AS DEFINED IN THE TRUST
AGREEMENT) TO THE REGISTRAR FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
CITY OF CHULA VISTA
2004 CERTIFICATE OF PARTICIPATION
(Civic Center Project - Phase 1)
Evidencing the Fractional Interest of the Owner Hereof
In Lease Payments to be Made by
CITY OF CHULA VISTA
As Rental for Certain Project
Pursuant to a LeaseIPurchase Agreement With
CHULA VISTA PUBLIC FINANCING AUTHORITY
INTEREST RATE
%
MATURITY DATE
March 1, 20_
DELIVERY DATE
September 16, 2004
CUSIP
REGISTERED OWNER:
CEDE & CO.
PRINCIPAL AMOUNT:
AND NOll 00 DOLLARS
TillS IS TO CERTIFY THAT the registered owner named above, or registered assigns, as
the Registered Owner of this Certificate of Participation (the "Certificate") is the owner of a
tractional and undivided interest in the right to receive certain Lease Payments and Prepayments
thereof under and as defined in that certain Lease/Purchase Agreement, dated as of September I,
2004, as amended (the "Lease"), by and between the Chula Vista Public Financing Authority, a joint
exercise of powers authority duly organized and existing under the laws of the State of California
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DOCSOCIl148399v3/024036-0033
(the "Authority') and the City of Chula Vista, a municipal corporation and a chartered city organized
and existing under and by virtue of the laws and Constitution of the State of California (the "City"),
which Lease Payments and Prepayments and certain other rights and interests under the Lease have
been assigned to The Bank of New York Trust Company, N.A., as trustee (the "Trustee").
.
The Registered Owner of this Certificate is entitled to receive, subject to the terms of the
Lease, on the maturity date specified above, the principal amount specified above, representing a
portion of the Lease Payments designated as principal coming due during the preceding twelve
months, and to receive on March I, 2005, and semiannually thereafter on March I and September I
of each year (the "Payment Dates") until payment in full of said portion of principal, the Registered
Owner's portion of the Lease Payments designated as interest coming due during the six months
immediately preceding each of the Payment Dates provided that interest with respect hereto shall be
payable from the Payment Date next preceding the date of execution of this Certificate unless (i) this
Certificate is executed during the period from the day after the fifteenth day of the month proceeding
a Payment Date (the "Record Date") to and including such Payment Date, in which event interest
shall be payable from such Payment Date, or (ii) unless this Certificate is executed on or prior to
February 15,2005, in which event interest shall be payable from the Dated Date hereof. The portion
of the Lease Payments designated as interest is computed on the basis of a 360-day year of twelve
30-day months and is the result ofthe multiplication of the aforesaid portion of the Lease Payments
designated as principal by the rate per annum identified above. Said amounts are payable in lawful
money of the United States of America. The amount representing principal payable at maturity or
upon prepayment in whole or in part is payable to the Registered Owner upon presentation and
surrender of this Certificate at the Principal Office. The amounts representing interest are payable by
check mailed by the Trustee by first class mail to the Registered Owner hereof as of the Record Date
preceding the Payment Date at his address as it appears on the registration books of the Trustee.
Interest with respect to any Certificates may, at the option of any Owner of Certificates in an
aggregate principal amount of $1,000,000 or more evidenced by the written request of such Owner to
the Trustee, be paid to such Owner by wire transfer to the bank and account number on file with the
Trustee as of the Record Date.
This Certificate is one of the $37,240,000 aggregate principal amount of2004 Certificates of
Participation (Civic Center Project - Phase I) (the "Certificates") which were initially executed and
delivered by the Trustee pursuant to the terms of a Trust Agreement, dated as of September I, 2004,
as amended and restated by that Amended and Restated Trust Agreement dated as of March I, 2006
(the "Trust Agreement"), by and among the Trustee, the Authority and the City. The City is
authorized to enter into the Lease and the Trust Agreement under the Constitution and laws of the
State of California. Reference is hereby made to the Lease and the Trust Agreement (copies of
which are on file at the Principal Office) for a description of the terms on which the Certificates are
delivered, the rights thereunder of the Registered Owners of the Certificates, the rights, duties and
immunities of the Trustee and the rights and obligations of the City under the Lease, to all of the
provisions of which Lease and Trust Agreement the Registered Owner of this Certificate, by
acceptance hereof, assents and agrees.
The City is obligated to pay Lease Payments from any source of legally available funds, and
the City has covenanted in the Lease to make the necessary annual appropriations therefor. The
obligation of the City to pay the Lease Payments does not constitute an obligation of the City for
which the City is obligated to levy or pledge any form of taxation or for which the City has levied or
pledged any form of taxation. The obligation of the City to pay Lease Payments does not constitute a
debt of the City, the State of California or any of its political subdivisions within the meaning of any
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Constitutional or statutory debt limitation or restriction. The City's obligation to pay Lease
Payments may be completely or partially abated during any period in which, by reason of
noncompletion of the Project by the date specified in the Lease or material damage, destruction, title
defect, or taking by eminent domain or condemnation there is substantial interference with the use
and right of possession by the City of the Leased Premises. Failure of the City to pay Lease
Payments during any such period shall not constitute a default under the Lease, the Trust Agreement
or this Certificate.
To the extent and in the manner permitted by the terms of the Trust Agreement, the
provisions of the Trust Agreement may be amended by the parties thereto with the written consent of
the 2004 Insurer so long as the 2004 Insurer is not in default in its payment obligations under that
2004 Insurance Policy and the Registered Owners of at least a majority in aggregate principal amount
of the Certificates and Additional Certificates then Outstanding, and may be amended, with the
consent of the 2004 Insurer and without such consent of the Registered Owners under certain
circumstances, but in no event such that the interests of the Registered Owners of the Certificates are
adversely affected. No such modification or amendment shall (i) extend or have the effect of
extending the fixed maturity of any Certificate or reducing the interest rate with respect thereto or
extending the time of payment of interest, or reducing the amount of principal thereof or reducing
any premium payable upon the prepayment thereof, without the express consent of the Registered
Owner of such Certificate, or (ii) reduce or have the effect of reducing the percentage of Certificates
required for the affirmative vote or written consent to an amendment or modification of the Lease,
(iii) modify any of the rights or obligations of the Trustee without its written assent thereto or (iv)
amend the section of the Trust Agreement dealing with permitted amendments thereof without the
prior written consent of the owners of all Certificates and the 2004 Insurer so long as the 2004
Insurer is not in default in its payment obligations under that 2004 Insurance Policy.
This Certificate is transferable by the Registered Owner hereof, in person or by his duly
authorized attorney, at the Principal Office, but only in the manner, subject to the limitations and
upon payment of the charges provided in the Trust Agreement and upon surrender and cancellation
of this Certificate. Upon such transfer a new Certificate or Certificates, of an authorized
denomination or denominations, for the same aggregate principal amount, maturity and interest rate,
will be delivered to the transferee. This Certificate also may be exchanged for a like aggregate
principal amount of Certificates of other authorized denominations as prescribed in the Trust
Agreement. The City, the Authority, and the Trustee may treat the Registered Owner hereof as the
absolute owner hereof for all purposes whether or not this Certificate shall be overdue, and the City,
the Authority and the Trustee shall not be affected by any notice to the contrary.
The Trustee shall not be required to transfer any Certificate selected for prepayment or be
required to transfer any Certificate during the period in which the Trustee is selecting Certificates for
prepayment.
The Certificates are subject to prepayment, on any date, in whole or in part, from Net
Proceeds deposited by the Trustee in the Prepayment Fund established under the Trust Agreement at
least forty-five (45) days prior to the date fixed for prepayment, at a prepayment price equal to the
principal amount thereof together with accrued interest to the dated fixed for prepayment, without
premium.
The Certificates maturing on or after March I, 20 IS are subject to prepayment prior to
maturity in whole or in part on any date on or after March I, 2014, at the option of the City, in the
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DOCSOCIl148399v3/024036-0033
event the City exercises its option under the Lease to prepay all or a portion of the principal
component of the Lease Payments (in integral multiples of $5,000 but not in a principal amount of
less than $20,000), at the following prepayment prices, expressed as a percentage of the principal
component to be prepaid), plus accrued interest to the date fixed for prepayment:
Prepayment Date
Prepayment Price
March 1,2014 through February 28, 2015
March 1,2015 through February 28, 2016
March 1, 2016 and thereafter
101.0%
100.5
100.0
The Certificates maturing March 1, 2026 (the "2026 Term Certificates") are subject to
prepayment in part by lot, on March 1 in each of the following years from sinking account payments
as set forth below at a prepayment price equal to the principal amount thereof to be prepaid, without
premium; provided, however, that if some but not all of the 2026 Term Certificates have been
prepaid pursuant to an optional or extraordinary prepayment, the total amount of all future sinking
account payments will be reduced pro rata by the aggregate principal amount of the 2026 Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 2026 Term Certificates may be
purchased by the City and tendered to the Trustee pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March 1)
Sinking Account
Pavment
2025
2026*
$
1,490,000
1,560,000
* Final Maturity
.
The Certificates maturing March 1, 2029 (the "2029 Term Certificates") are subject to
prepayment in part by lot, on March 1 in each ofthe following years from sinking account payments
as set forth below at a prepayment price equal to the principal amount thereof to be prepaid, without
premium; provided, however, that if some but not all of the 2029 Term Certificates have been
prepaid pursuant to an optional or extraordinary prepayment, the total amount of all future sinking
account payments will be reduced pro rata by the aggregate principal amount of the 2029 Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 2029 Term Certificates may be
purchased by the City and tendered to the Trustee pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March 1)
Sinking Account
Pavment
2027
2028
2029*
$
1,630,000
1,710,000
1,790,000
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DOCSOC/l148399v3/024036-0033
* Final Maturity
The Certificates maturing March I, 2034 (the "2034 Term Certificates") are subject to
prepayment in part by lot, on March I in each ofthe following years ITom sinking account payments
as set forth below at a prepayment price equal to the principal amount thereof to be prepaid, without
premium; provided, however, that if some but not all of the 2034 Term Certificates have been
prepaid pursuant to an optional or extraordinary prepayment, the total amount of all future sinking
account payments will be reduced pro rata by the aggregate principal amount of the 2034 Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 2034 Term Certificates may be
purchased by the City and tendered to the Trustee pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March 1)
Sinking Account
Pavment
2030
2031
2032
2033
2034*
$
1,875,000
1,970,000
2,065,000
2,170,000
2,280,000
* Final Maturity
As provided in the Trust Agreement, notice of prepayment shall be mailed, not less than 30
nor more than 60 days before the prepayment date, to the Registered Owner of this Certificate, but
neither failure to receive such notice nor any defect in the notice so mailed shall affect the sufficiency
of the proceedings for prepayment. If this Certificate is called for prepayment and payment is duly
provided therefor as specified in the Trust Agreement, interest shall cease to accrue with respect
hereto ITom and after the date fixed for prepayment.
The City has certified that all acts, conditions and things required by the statutes of the State
of California and the Trust Agreement to exist, to have happened and to have been performed
precedent to and in connection with the execution and delivery of this Certificate do exist, have
happened and have been performed in regular and due time, form and manner as required by law, and
that the Trustee is duly authorized to execute and deliver this Certificate, and that the amount of this
Certificate, together with all other Certificates executed and delivered under the Trust Agreement, is
not in excess of the amount of Certificates authorized to be executed and delivered thereunder.
Terms used herein which are not otherwise defined shall have the respective meanings
assigned thereto in the Trust Agreement.
The Trustee has no obligation or liability to the Registered Owners to make payments of
principal or interest with respect to this Certificate except ITom Lease Payments paid to the Trustee
and from the various funds and accounts established under the Trust Agreement. The Trust
Agreement provides that the recitals of facts, covenants and agreements in this Certificate shall be
taken as statements, covenants and agreements of the City, and the Trustee assumes no responsibility
for the correctness of the same. The Trustee has executed this Certificate solely in its capacity as
Trustee under the Trust Agreement and not in its individual or personal capacity.
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DOCSOCIl148399v3/024036-0033
IN WITNESS WHEREOF, this Certificate has been executed and delivered by The Bank of
New York Trust Company, N.A., as Trustee, acting pursuant to the Trust Agreement.
Date of Execution: September 16, 2004
THE BANK OF NEW YORK TRUST COMPANY,
N .A., as Trustee
By:
Its: Authorized Officer
.
.
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DOCSOC/1148399v3/024036-D033
FORM OF STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "2004 Insurer") has issued a policy containing the
following provisions, such policy being on file at The Bank of New York Trust Company, N.A.., Los
Angeles, California.
The 2004 Insurer, in consideration of the payment of the premium and subject to the terms of
this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined,
of the following described obligations, the full and complete payment required to be made by or on
behalf of the City to The Bank of New York Trust Company, N.A., or its successor (the "Trustee") of
an amount equal to (i) the principal of (either at the stated maturity or by any advancement of
maturity pursuant to a mandatory sinking fund payment) and interest on, the Obligations (as that term
is defined below) as such payments shall become due but shall not be so paid (except that in the
event of any acceleration of the due date of such principal by reason of mandatory or optional
redemption or acceleration resulting from default or otherwise, other than any advancement of
maturity pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be
made in such amounts and at such times as such payments of principal would have been due had
there not been any such acceleration); and (ii) the reimbursement of any such payment which is
subsequently recovered from any owner pursuant to a final judgment by a court of competent
jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning
of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the preceding
sentence shall be referred to herein collectively as the "Insured Amounts." "Obligations" shall mean:
$37,240,000
CITY OF CHULA VISTA
2004 CERTIFICATES OF PARTICIPATION
(CIVIC CENTER PROJECT - PHASE I)
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
writing by registered or certified mail, or upon receipt of written notice by registered or certified
mail, by the 2004 Insurer from the Trustee or any owner of an Obligation the payment of an Insured
Amount for which is then due, that such required payment has not been made, the 2004 Insurer on
the due date of such payment or within one business day after receipt of notice of such nonpayment,
whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust
Company, N.A., in New York, New York, or its successor, sufficient for the payment of any such
Insured Amounts which are then due. Upon presentment and surrender of such Obligations or
presentment of such other proof of ownership of the Obligations, together with any appropriate
instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations
as are paid by the 2004 Insurer, and appropriate instruments to effect the appointment of the 2004
Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of
Insured Amounts on the Obligations, such instruments being in a form satisfactory to State Street
Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such
owners or the Trustee payment of the Insured Amounts due on such Obligations, less any amount
held by the Trustee for the payment of such Insured Amounts and legally available therefor. This
policy does not insure against loss of any prepayment premium which may at any time be payable
with respect to any Obligation.
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As used herein, the term "owner" shall mean the registered owner of any Obligation as
indicated in the books maintained by the Trustee, the Issuer, or any designee of the Issuer for such
purpose. The term owner shall not include the Issuer or any party whose agreement with the Issuer
constitutes the underlying security for the Obligations.
Any service of process on the 2004 Insurer may be made to the 2004 Insurer at its offices
located at 113 King Street, Armonk, New York 10504, and such service of process shall be valid and
binding.
This policy is non-cancelable for any reason. The premium on this policy is not refundable
for any reason including the payment prior to maturity of the Obligations.
In the event the 2004 Insurer were to become insolvent, any claims arising under a policy of
financial guaranty insurance are excluded trom coverage by the California Insurance Guaranty
Association, established pursuant to Article 14.2 (commencing with Section 1063) of Chapter I of
Part 2 of Division I of the California Insurance Code.
MBIA INSURANCE CORPORATION
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(print or typewrite name, address, including postal zip code, and social
security or other identifying number of Transferee)
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
to transfer the within Certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:
Signature Guaranteed
NOTICE: Signature(s) guarantee should be made
by a guarantor institution participating in the
Securities Transfer agents Medallion Program or
such other guarantee program acceptable to the
Trustee.
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in .every particular,
without alteration or enlargement or any change
whatever.
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FORM OF 2006 CERTIFICATE
.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATNE OF THE DEPOSITORY (AS DEFINED IN THE TRUST
AGREEMENT) TO THE REGISTRAR FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY (AND ANY PA YMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
CITY OF CHULA VISTA
2006 CERTIFICATE OF PARTICIPATION
(Civic Center Project - Phase 2)
Evidencing the Fractional Interest ofthe Owner Hereof
In Lease Payments to be Made by
CITY OF CHULA VISTA
As Rental for Certain Project
Pursuant to a Lease/Purchase Agreement With
CHULA VISTA PUBLIC FINANCING AUTHORITY
INTEREST RATE
%
MATURITY DATE
March 1,20_
DELIVERY DATE
,2006
CUSIP
REGISTERED OWNER:
CEDE & CO.
PRINCIPAL AMOUNT:
AND NOll 00 DOLLARS
.
THIS IS TO CERTIFY THAT the registered owner named above, or registered assigns, as
the Registered Owner of this Certificate of Participation (the "Certificate") is the owner of a
tractional and undivided interest in the right to receive certain Lease Payments and Prepayments
thereof under and as defined in that certain Lease/Purchase Agreement, dated as of September I,
2004, as amended (the "Lease"), by and between the Chula Vista Public Financing Authority, a joint
exercise of powers authority duly organized and existing under the laws of the State of California
(the "Authority') and the City of Chula Vista, a municipal corporation and a chartered city organized
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and existing under and by virtue of the laws and Constitution of the State of California (the "City"),
which Lease Payments and Prepayments and certain other rights and interests under the Lease have
been assigned to The Bank of New York Trust Company, N.A, as trustee (the "Trustee").
The Registered Owner of this Certificate is entitled to receive, subject to the terms of the
Lease, on the maturity date specified above, the principal amount specified above, representing a
portion of the Lease Payments designated as principal coming due during the preceding twelve
months, and to receive on September 1, 2006, and semiannually thereafter on March 1 and
September 1 of each year (the "Payment Dates") until payment in full of said portion of principal, the
Registered Owner's portion of the Lease Payments designated as interest coming due during the six
months immediately preceding each of the Payment Dates provided that interest with respect hereto
shall be payable from the Payment Date next preceding the date of execution of this Certificate
unless (i) this Certificate is executed during the period from the day after the fifteenth day of the
month proceeding a Payment Date (the "Record Date") to and including such Payment Date, in
which event interest shall be payable from such Payment Date, or (ii) unless this Certificate is
executed on or prior to August 15, 2006, in which event interest shall be payable from the Dated
Date hereof. The portion of the Lease Payments designated as interest is computed on the basis of a
360-day year of twelve 30-day months and is the result of the multiplication of the aforesaid portion
of the Lease Payments designated as principal by the rate per annum identified above. Said amounts
are payable in lawful money of the United States of America. The amount representing principal
payable at maturity or upon prepayment in whole or in part is payable to the Registered Owner upon
presentation and surrender of this Certificate at the Principal Office. The amounts representing
interest are payable by check mailed by the Trustee by first class mail to the Registered Owner hereof
as of the Record Date preceding the Payment Date at his address as it appears on the registration
books of the Trustee. Interest with respect to any Certificates may, at the option of any Owner of
Certificates in an aggregate principal amount of$I,OOO,OOO or more evidenced by the written request
of such Owner to the Trustee, be paid to such Owner by wire transfer to the bank and account
number on file with the Trustee as of the Record Date.
This Certificate is one of the $ aggregate principal amount of 2006 Certificates
of Participation (Civic Center Project - Phase 2) (the "Certificates") which have been executed and
delivered by the Trustee pursuant to the terms of an Amended and Restated Trust Agreement, dated
as of March 1,2006 (the "Trust Agreement"), by and among the Trustee, the Authority and the City.
The City is authorized to enter into the Lease and the Trust Agreement under the Constitution and
laws of the State of California. Reference is hereby made to the Lease and the Trust Agreement
(copies of which are on file at the Principal Office) for a description of the terms on which the
Certificates are delivered, the rights thereunder of the Registered Owners of the Certificates, the
rights, duties and immunities of the Trustee and the rights and obligations of the City under the
Lease, to all of the provisions of which Lease and Trust Agreement the Registered Owner of this
Certificate, by acceptance hereof, assents and agrees.
The City is obligated to pay Lease Payments from any source of legally available funds, and
the City has covenanted in the Lease to make the necessary annual appropriations therefor. The
obligation of the City to pay the Lease Payments does not constitute an obligation of the City for
which the City is obligated to levy or pledge any form of taxation or for which the City has levied or
pledged any form of taxation. The obligation of the City to pay Lease Payments does not constitute a
debt of the City, the State of California or any of its political subdivisions within the meaning of any
Constitutional or statutory debt limitation or restriction. The City's obligation to pay Lease
Payments may be completely or partially abated during any period in which, by reason of
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noncompletion of the Project by the date specified in the Lease or material damage, destruction, title
defect, or taking by eminent domain or condemnation there is substantial interference with the use
and right of possession by the City of the Leased Premises. Failure of the City to pay Lease
Payments during any such period shall not constitute a default under the Lease, the Trust Agreement
or this Certificate.
To the extent and in the manner permitted by the terms of the Trust Agreement, the
provisions of the Trust Agreement may be amended by the parties thereto with the written consent of
the 2006 Insurer so long as the 2006 Insurer is not in default in its payment obligations under the
2006 Insurance Policy and the Registered Owners of at least a majority in aggregate principal amount
of the Certificates, 2004 Certificates and Additional Certificates then Outstanding, and may be
amended, with the consent of the 2006 Insurer and without such consent of the Registered Owners
under certain circumstances, but in no event such that the interests of the Registered Owners of the
Certificates are adversely affected. No such modification or amendment shall (i) extend or have the
effect of extending the fixed maturity of any Certificate or reducing the interest rate with respect
thereto or extending the time of payment of interest, or reducing the amount of principal thereof or
reducing any premium payable upon the prepayment thereof, without the express consent of the
Registered Owner of such Certificate, or (ii) reduce or have the effect of reducing the percentage of
Certificates required for the affirmative vote or written consent to an amendment or modification of
the Lease, (iii) modify any of the rights or obligations of the Trustee without its written assent thereto
or (iv) amend the section of the Trust Agreement dealing with permitted amendments thereof without
the prior written consent of the owners of all Certificates and the 2006 Insurer so long as the 2006
Insurer is not in default in its payment obligations under the 2006 Insurance Policy.
.
This Certificate is transferable by the Registered Owner hereof, in person or by his duly
authorized attorney, at the Principal Office, but only in the manner, subject to the limitations and
upon payment of the charges provided in the Trust Agreement and upon surrender and cancellation
of this Certificate. Upon such transfer a new Certificate or Certificates, of an authorized
denomination or denominations, for the same aggregate principal amount, maturity and interest rate,
will be delivered to the transferee. This Certificate also may be exchanged for a like aggregate
principal amount of Certificates of other authorized denominations as prescribed in the Trust
Agreement. The City, the Authority, and the Trustee may treat the Registered Owner hereof as the
absolute owner hereof for all purposes whether or not this Certificate shall be overdue, and the City,
the Authority and the Trustee shall not be affected by any notice to the contrary.
The Trustee shall not be required to transfer any Certificate selected for prepayment or be
required to transfer any Certificate during the period in which the Trustee is selecting Certificates for
prepayment.
The Certificates are subject to prepayment, on any date, in whole or in part, from Net
Proceeds deposited by the Trustee in the Prepayment Fund established under the Trust Agreement at
least forty-five (45) days prior to the date fixed for prepayment, at a prepayment price equal to the
principal amount thereof together with accrued interest to the dated fixed for prepayment, without
premium.
The Certificates maturing on or after March I, 20_ are subject to prepayment prior to
maturity in whole or in part on any date on or after March I, 20_, at the option of the City, in the
event the City exercises its option under the Lease to prepay all or a portion of the principal
component of the Lease Payments (in integral multiples of $5,000 but not in a principal amount of
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less than $20,000), at the following prepayment prices, expressed as a percentage of the principal
component to be prepaid), plus accrued interest to the date fixed for prepayment:
Prepayment Date
Prepayment Price
The Certificates maturing March 1, 20_ (the "20_ Term Certificates") are subject to
prepayment in part by lot, on March 1 in each ofthe following years from sinking account payments
as set forth below at a prepayment price equal to the principal amount thereof to be prepaid, without
premium; provided, however, that if some but not all of the 20_ Term Certificates have been
prepaid pursuant to an optional or extraordinary prepayment, the total amount of all future sinking
account payments will be reduced pro rata by the aggregate principal amount of the 20 Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 20_ Term Certificates may be
purchased by the City and tendered to the Trustee pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March 1)
Sinking Account
Pavrnent
* Final Maturity
The Certificates maturing March 1, 20_ (the "20_ Term Certificates") are subject to
prepayment in part by lot, on March 1 in each of the following years from sinking account payments
as set forth below at a prepayment price equal to the principal amount thereof to be prepaid, without
premium; provided, however, that if some but not all of the 20_ Term Certificates have been
prepaid pursuant to an optional or extraordinary prepayment, the total amount of all future sinking
account payments will be reduced pro rata by the aggregate principal amount of the 20_ Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 20_ Term Certificates may be
purchased by the City and tendered to the Trustee pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March I)
Sinking Account
Pavrnent
* Final Maturity
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The Certificates maturing March I, 20_ (the "'20_ Tenn Certificates") are subject to
prepayment in part by lot, on March I in each of the fonowing years rrom sinking account payments
as set forth below at a prepayment price equal to the principal amount thereof to be prepaid, without
premium; provided, however, that if some but not an of the 20_ Tenn Certificates have been
prepaid pursuant to an optional or extraordinary prepayment, the total amount of an future sinking
account payments wi11 be reduced pro rata by the aggregate principal amount of the 20_ Tenn
Certificates so prepaid. In addition, in lieu of prepayment thereof, the 20_ Tenn Certificates may be
purchased by the City and tendered to the Trustee pursuant to the provisions hereof.
Mandatory Prepayment
Date
(March I)
Sinking Account
Pavment
* Final Maturity
.
As provided in the Trust Agreement, notice of prepayment shan be mailed, not less than 30
nor more than 60 days before the prepayment date, to the Registered Owner. of this Certificate, but
neither failure to receive such notice nor any defect in the notice so mailed shan affect the sufficiency
of the proceedings for prepayment. If this Certificate is caned for prepayment and payment is duly
provided therefor as specified in the Trust Agreement, interest shan cease to accrue with respect
hereto rrom and after the date fixed for prepayment.
The City has certified that an acts, conditions and things required by the statutes of the State
of California and the Trust Agreement to exist, to have happened and to have been perfonned
precedent to and in connection with the execution and delivery of this Certificate do exist, have
happened and have been perfonned in regular and due time, fonn and manner as required by law, and
that the Trustee is duly authorized to execute and deliver this Certificate, and that the amount of this
Certificate, together with an other Certificates executed and delivered under the Trust Agreement, is
not in excess of the amount of Certificates authorized to be executed and delivered thereunder.
Tenns used herein which are not otherwise defined shan have the respective meanings
assigned thereto in the Trust Agreement.
.
The Trustee has no obligation or liability to the Registered Owners to make payments of
principal or interest with respect to this Certificate except rrom Lease Payments paid to the Trustee
and rrom the various funds and accounts established under the Trust Agreement. The Trust
Agreement provides that the recitals of facts, covenants and agreements in this Certificate shan be
taken as statements, covenants and agreements of the City, and the Trustee assumes no responsibility
for the correctness of the same. The Trustee has executed this Certificate solely in its capacity as
Trustee under the Trust Agreement and not in its individual or personal capacity.
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DOCSOC/1148399v31024036-0033
IN WITNESS WHEREOF, this Certificate has been executed and delivered by The Bank of
New York Trust Company, N.A., as Trustee, acting pursuant to the Trust Agreement.
Date of Execution:
,2006
THE BANK OF NEW YORK TRUST COMPANY,
N.A., as Trustee
By:
Its: Authorized Officer
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FORM OF STATEMENT OF INSURANCE
[TO COME]
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(print or typewrite name, address, including postal zip code, and social
security or other identifying number of Transferee)
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
to transfer the within Certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:
Signature Guaranteed
NOTICE: Signature(s) guarantee should be made
by a guarantor institution participating in the
Securities Transfer agents Medallion Program or
such other guarantee program acceptable to the
Trustee.
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face ofthe within Certificate in every particular,
without alteration or enlargement or any change
whatever.
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EXHIBIT B-1
FORM OF WRITTEN DELIVERY COST REOUISITION
The Bank of New York Trust Company, N.A., as Trustee
RE: Disbursement from the Project Fund pursuant to Section 3.03 of the Amended and Restated
Trust Agreement related to the City of Chula Vista 2006 Certificates of Participation (Civic
Center Project - Phase 2), dated as of March I, 2006 (the "Agreement"), by and among you
as trustee, the Chula Vista Public Financing Authority and the City of Chula Vista (the
"City")
REQUISITION NO. _
You are hereby instructed to pay to the City, or to at
$ as a Delivery Cost from the Project Fund as provided in
Section 3.03 of the Agreement. This Delivery Cost has been properly incurred, is a proper charge
against the Project Fund and has not been the basis of any previous disbursements.
The amount remaining in the Project Fund, together with interest earnings on the Project
Fund plus investment earnings on other funds that will be transferred into the Project Fund, will, after
payment of the amount set forth in this requisition, be sufficient to pay all remaining Delivery Costs
and Project Costs as presently estimated.
Very truly yours,
City Representative
.
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DOCSOC/1148399v3/024036-0033
EXHIBIT B-2
FORM OF WRITTEN PROJECT COST REQUISITION
The Bank of New York Trust Company, N.A., as Trustee
RE: Disbursement from the Project Fund pursuant to Section 3.03 of the Amended and Restated
Trust Agreement related to the City of Chula Vista 2004 Certificates of Participation (Civic
Center Project - Phase I), and the City of Chula Vista 2006 Certificates of Participation
(Civic Center Project - Phase 2), dated as of March ], 2006 (the "Agreement"), by and
among you as trustee, the Chula Vista Public Financing Authority and the City of Chula
Vista (the "City")
REQUISITION NO._
You are hereby instructed to pay to the City, or to at
$ as a Project Cost from the Account of the Project Fund as provided in
Section 3.03 of the Agreement. This Project Cost has been properly incurred, is a proper charge
against the Account of the Project Fund and has not been the basis of any previous
disbursements.
The amount remaining in the Project Fund, together with other moneys available to the City
and together with interest earnings on the Project Fund plus investment earnings on other funds that
will be transferred into the Project Fund, will, after payment of the amount set forth in this
requisition, be sufficient to pay all remaining Delivery Costs and Project Costs as presently
estimated.
Very truly yours,
City Representative
B-2-]
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DOCSOC/1148399v3/024036-0033
ATTACHMENT 3
Stradling Yocca Carlson & Rauth
Draft 1/11/06
AGENCY AGREEMENT
by and between
CHULA VISTA PUBLIC FINANCING AUTHORITY
and
CITY OF CHULA VISTA
Relating to
$
City of Chula Vista
2006 Certificates of Participation
(Civic Center Project - Phase 2)
Dated as of March 1,2006
DOCSOC/1147593v4/024036-0033
Z -10 (j
AGENCY AGREEMENT
THIS AGENCY AGREEMENT (the "Agency Agreement"), dated as of MarchI, 2006, is
entered into by and between CHULA VISTA PUBLIC FINANCING AUTHORlTY, a joint powers
authority duly organized and existing under and by virtue of the Constitution and laws of the State of
California (the "Authority"), and the CITY OF CHULA VISTA, a municipal corporation and a
charter city duly organized and existing under and by virtue of the Constitution and laws of the State
of California (the "City");
WITNESSETH:
WHEREAS, the Authority and the City have entered into a Lease/Purchase Agreement, dated
as of September 1,2004, and as amended by a First Amendment to Lease/Purchase Agreement, dated
as of March I, 2006 (as amended, the "Lease"), whereby the Authority has leased to the City certain
real property and the existing improvements thereon (the "Property"), together with the
improvements to be constructed on the Property (such improvements, together with the Property, the
"Leased Premises"), with a portion of the proceeds of the $ City of Chula Vista 2006
Certificates of Participation (Civic Center Project - Phase 2) (the "2006 Certificates"); and
WHEREAS, the Authority desires to appoint the City as its agent for the purposes of the
acquisition, construction, delivery and installation of the improvements to be constructed with the
proceeds of the 2006 Certificates (collectively, the "2006 Project"); and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to
have been performed precedent to and in connection with the execution and entering into of this
Agency Agreement do exist, have happened and have been performed in regular and due time, form
and manner as required by law, and the parties hereto are now duly authorized to execute and enter
into this Agency Agreement;
NOW, THEREFORE, IN CONSIDERA nON OF THE MUTUAL AGREEMENTS AND
COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE
PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:
Section 1. City to Act as Agent for the Authority and the City. The Authority hereby
appoints the City as its agent in connection' with the acquisition, construction, delivery and
installation of the 2006 Project. The City, as the agent of the Authority for the foregoing purpose,
shall cause the acquisition, construction, delivery and installation of the 2006 Project to be completed
on or before the dates set forth in Section 3 of this Agency Agreement and otherwise in accordance
with the Lease and all other laws applicable to the 2006 Project.
The appointment by the Authority of the City as its agent as provided in this Section and the
acceptance by the City of such appointment results in the assumption by the City of duties,
responsibilities and liabilities which are separate and apart trom its duties, responsibilities and
liabilities under the Lease, and such assignment does not include or transfer to the City any of the
rights or obligations of the Authority under the Lease which have been assigned by the Authority to
the Trustee pursuant to the Assignment Agreement. It is recognized by the parties that the Authority
I
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DOCSOCIl147593v4/024036-0033
.
has appointed the City for the purposes specified in this Agency Agreement, rather than appoint
another firm or entity for said purposes, based upon the Authority's and the City's determination that
the City is suitable to perform the duties, responsibilities and liabilities delegated to and assumed by
it pursuant to this Agreement due to the expertise, knowledge and ability of the City's personnel with
respect to similar undertakings.
Section 2. Acceptance. The City, for one dollar ($1.00) and other good and valuable
. consideration in hand received, does hereby accept the foregoing appointment as agent of the
Authority for the purposes set forth in Section I hereof.
Section 3. Time of Completion and Liquidatcl Damages. The construction and
equipping of the 2006 Project shall be completed on or prior to August I, 2007. It is agreed that, if
the City does not cause the completion of the acquisition, construction, equipping and installation of
the portion of the 2006 Project being constructed on the Property by its completion date specified
above by construction contractors or a construction manager, whichever the City deems appropriate,
liquidated damages will be assessed against the construction contractor for each day completion is
delayed in the amount specified in such construction contractor's contract. The City shall cause to be
paid to the Trustee all amounts received as liquidated damages for application toward the Lease
Payments.
Each construction contractor hired by the City shall be required to provide payment and
performance bonds in amounts equal to the maximum price under its contract.
Section 4. Construction and Acquisition of the 2006 Proiect. The City agrees to oversee
the construction, acquisition, delivery and installation of the 2006 Project in accordance with the
following terms:
(a) Construction and Completion. The City agrees to proceed with all due diligence to
complete the construction, acquisition, delivery and installation of the 2006 Project, all in accordance
with the plans and specifications for the 2006 Project (the "Plans and Specifications") approved
pursuant to the Design/Build Agreement and the other contracts to be entered into by the City with
respect to the 2006 Project. The City shall comply with all statutes and laws applicable to the
performance of its obligations hereunder, including all public laws applicable thereto and all laws
regarding the approval, acquisition and construction of public projects by chartered cities in the State
of California. The City shall make certain that each contract relating to the 2006 Project is awarded
in accordance with applicable law and contains a scheduled completion date which requires
completion on or before the scheduled completion date referred to in Section 3 above;
(b) Change Orders. Subject to any other restrictions imposed upon the City, the City
may approve any changes to the Plans and Specifications so long as any change does not, and all
such changes as a whole do not, (i) substantially alter the nature of the 2006 Project, (ii) delay the
completion of the 2006 Project beyond its scheduled completion date, (iii) reduce the fair rental value
of the portion ofthe 2006 Project being constructed on the Property, or (iv) increase the total Costs of
the 2006 Project to an amount in excess of the amount in the 2006 Project Fund unless there has been
deposited with the City an amount equal to such excess or unless there has been deposited with the
City a certificate of an Authorized Representative of the City, together with a revised construction
budget demonstrating that the total amount on deposit to pay for the 2006 Project is adequate to
allow the completion of the 2006 Project as planned;
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DOCSOCfl147593v4/024036-0033
.
(c) Pavment of Costs of the 2006 Proiect. Payment of the portion of the Costs of the
2006 Project being financed by the City shall be made from moneys deposited in the 2006 Project
Fund, and shall be disbursed for such purpose in accordance and upon compliance with the Trust
Agreement. Neither the Authority nor the City shall be liable for the payment of Costs of the 2006
Project other than from amounts on deposit in the 2006 Project Fund; and
.
(d) Unexpended Monies. The City agrees that unexpended moneys remaining in the
2006 Project Fund shall, upon payment in full of all Costs of the 2006 Project, be applied solely in
accordance with the provisions of the Trust Agreement.
(e) Partial Invalidity. If anyone or more of the terms, provIsIons, covenants or
conditions of this Agency Agreement shall to any extent be declared invalid, unenforceable, void or
voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or
decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of
this Agency Agreement shall be affected thereby, and each provision of this Agency Agreement shall
be valid and enforceable to the fullest extent permitted by law.
Section 3. Applicable Law. This Agency Agreement shall be governed by and
construed in accordance with the laws of the State.
Section 4. Representatives. Whenever under the provisions of this Agency Agreement
the approval of the Authority or the City is required, or the Authority or the City is required to take
some action at the request of the other, such approval or such request shall be given for the Authority
by an Authorized Representative of the Authority and for the City by an Authorized Representative
of the City and any party hereto shall be authorized to rely upon any such approval or request.
Section 5. Notices. All notices or other communications hereunder shall be sufficiently
given and shall be deemed to have been received five days after deposit in the United States mail in
registered or certified form, postage prepaid:
Ifto the City:
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: City Manager
If to the Authority:
Chula Vista Public Financing Authority
c/o City ofChula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Executive Director
.
rfto the Trustee:
The Bank of New York Trust Company, N.A.
700 South Flower Street, Suite 500
Los Angeles, California 90071
Attention: Corporate Trust Services
The Authority, the City and the Trustee, by notice given hereunder, may designate different
addresses to which subsequent notices or other communications will be sent.
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Section 6. Captions. The captions or headings in this Agency Agreement are for
convenience only and in no way define, limit or describe the scope or intent of any provision or
section of this Agency Agreement.
Section 7. Execution in Countemarts. This Agency Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original but all together shall
constitute but one and the same instrument.
Section 8. Amendment. The terms of this Agency Agreement shall not be waived,
altered, modified, supplemented or amended in any manner whatsoever, except by written instrument
signed by the Authority and the City, with the prior written consent of the Trustee and the Insurer for
the 2006 Certificates. The City hereby irrevocably appoints the Authorized Representative of the
City to act as its attorney-in-fact for purposes of providing the foregoing consent.
4
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DOCSOC/1147593v4/024036-0033
IN WITNESS WHEREOF, the parties hereto have executed this Agency Agreement as of the
day and year first written above.
CITY OF CHULA VISTA
By:
Director of Finance
ATTEST:
By:
City Clerk
CHULA VISTA PUBLIC FINANCING
AUTHORITY
By:
Executive Director
ATTEST:
.
By:
Secretary
.
.
S-1
DOCSOCIl ]47593v4/024036-0033
2 ---/05
Stradling Yocca Carlson & Rauth
Draft 1/6/06
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement, dated as of March I, 2006 (the "Disclosure
Agreement") is executed and delivered by the City of Chula Vista (the "City") and The Bank of New
York Trust Company, N.A. (the "Dissemination Agent") in connection with the execution and
delivery of $ City of Chula Vista 2006 Certificates of Participation (Civic Center Project
- Phase 2) (the "Certificates"). The Certificates are being executed pursuant to an Amended and
Restated Trust Agreement, dated as of March I, 2006, by and among the City, The Bank of New
York Trust Company, N.A., as trustee (the "Trustee") and the Chula Vista Public Financing
Authority (the "Authority"). The City covenants as follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the City for the benefit of the Holders and Beneficial Owners of the
Certificates 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 Trust 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:
"Annual Report" shall mean any Comprehensive Annual Financial Report provided by the
City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to
vote or consent with respect to, or to dispose of ownership of, any Certificates (including persons
holding Certificates through nominees, depositories or other intermediaries), or (b) is treated as the
owner of any Certificates for federal income tax purposes.
"Central Post Office" means the DisclosureUSA website maintained by the Municipal
Advisory Council of Texas or any successor thereto, or any other organization or method approved
by the staff or members of the Securities and Exchange Commission as an intermediary through
whiCh issuers may, in compliance with the Rule, make filings required by this Disclosure Agreement.
"Disclosure Representative" shall mean the City Manager of the City, the Director of Finance
of the City or their designee, or such other officer or employee as the City shall designate in writing
ITom time to time.
"Dissemination Agent" shall mean The Bank of New York Trust Company, N.A., or any
successor Dissemination Agent designated in writing by the City and which has filed with the City a
written acceptance of such designation.
"Listed Events" shall mean any of the events listed In Section Sea) 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 relating to the Certificates, dated
__,2006.
DOCSOC/l147761 v3/024036-0033
2-/010
"Participating Underwriter" shall mean the original purchaser of the Certificates required to
comply with the Rule in connection with the offering of the Certificates.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
"State" shall mean the State of California.
"State Repository" shall mean any public or private repository or entity designated 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 Agreement, there is no State Repository.
SECTION 3. Provision of Annual Reports.
(a) The City shall, or, upon delivery of the Annual Report to the Dissemination Agent,
shall cause the Dissemination Agent to, not later than each March I of each year commencing
March I, 2007, provide to each Repository 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 cross-reference other
information as provided in Section 4 of this Disclosure Agreement; provided that the audited
financial statements of the City may be submitted separately from the balance of the Annual Report
and later than the date required above for the filing of the Annual Report if they are not available by
that date. If the City's fiscal year changes, it shall give notice of such change in the same manner as
for a Listed Event under Section 5(c).
(b) Not later than fifteen (15) business days prior to said date, the City shall provide the
Annual Report to the Dissemination Agent (if other than the City). If the City is unable to provide to
the Repositories an Annual Report by the date required in subsection (a), the City shall send a notice
to each Repository in substantially the form attached as Exhibit A.
(c) The Dissemination Agent shall:
.
(i) determine each year prior to the date for providing the Annual Report
the name and address of each National Repository and the State Repository, if any; and
(ii) (if the Dissemination Agent is other than the City), file a report with
the City certifying that the Annual Report has been provided pursuant to this Disclosure
Agreement, stating the date it was provided and listing all the Repositories to which it was
provided.
(e) Notwithstanding any other provIsion of this Disclosure Agreement, any of the
required filings hereunder may be made through a Central Post Office.
.
SECTION 4. Content of Annual Reports. The City's Annual Report shall contain or include
by reference the following:
(a) The City's audited financial statements, prepared in accordance with generally
accepted auditing standards for municipalities in the State of California. If the City's audited
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DOCSOCI114776Iv3/024036-0033
financial statements are not available by the time the Annual Report is required to be filed pursuant
to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to
the financial statements contained in the final Official Statement, and the audited financial statements
shall be filed in the same manner as the Annual Report when they become available.
(b) To the extent not contained in the audited financial statements filed pursuant to the
preceding subsection (a) by the date required by Section 3 hereof, updates of Tables _, _, _ and
set forth in the Official Statement.
Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the City or related public entities, which
have been submitted to each of the Repositories or the Securities and Exchange Commission. If the
document included by reference is a final official statement, it must be available from the Municipal
Securities Rulemaking Board. The City shall clearly identitY each such other document so included
by reference.
SECTION 5. ReDorting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given,
notice of the occurrence of any of the following events with respect to the Certificates, if material:
(i) Principal and interest payment delinquencies.
(ii) Non-payment related defaults.
(iii) Modifications to rights of Certificate holders.
(iv) Optional, contingent or unscheduled Certificate calls.
(v) Defeasances.
(vi) Rating changes.
(vii) Adverse tax opinions or events affecting the tax-exempt status of the
Certificates.
(viii) Unscheduled draws on the debt service reserves reflecting financial
difficulties.
(ix) Unscheduled draws on the credit enhancements reflecting financial
difficulties.
(x) Substitution of the credit or liquidity providers or their failure to perform.
(xi) Release, substitution or sale of property securing repayment of the
Certificates.
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City
shall as soon as possible determine if such event would be material under applicable federal
securities laws.
3
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DOCSOC/l147761 v3/024036-0033
( c) If the City determines that knowledge of the occurrence of a Listed Event would be
material under applicable federal securities laws, the City shaU promptly file a notice of such
occurrence with the Repositories. Notwithstanding the foregoing, notice of Listed Events described
in subsections (a)(iv) and (v) need not be given under this subsection any earlier than the notice (if
any) of the underlying event is given to Holders of affected Certificates pursuant to the Trust
Agreement.
SECTION 6. Termination of Reporting Obligation. The City's obligations under this
Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full
of aU of the Certificates. If such termination occurs prior to the final maturity of the Certificates, the
City shall give notice of such termination in the same manner as for a Listed Event under
Section 5(c).
.
SECTION 7. Dissemination Agent. The City may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and
may discharge any such Dissemination Agent, with or without appointing a successor Dissemination
Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice
or report prepared by the City pursuant to this Disclosure Agreement. The Dissemination Agent may
resign by providing thirty days written notice to the City and the Trustee. The Dissemination Agent
shall not be responsible for the content of any report or notice prepared by the City and shall have no
duty to review any information provided to it by the City. The Dissemination Agent shall have no
duty to prepare any information report nor shall the Dissemination Agent be responsible for filing
any report not provided to it by the City in a timely manner and in a form suitable for filing.
SECTION 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure
Agreement, the City may amend this Disclosure Agreement, and any provision of this Disclosure
Agreement may be waived, provided that, in the opinion of nationally recognized bond counsel, such
amendment or waiver is permitted by the Rule; provided, the Dissemination Agent shall have first
consented to any amendment that modifies or increases its duties or obligations hereunder. In the
event of any amendment or waiver of a provision of this Disclosure Agreement, the City shall
describe such amendment in the next Annual Report, and shall include, as applicable, a narrative
explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a
change of accounting principles, on the presentation) of financial information or operating data being
presented by the City. In addition, if the amendment relates to the accounting principles to be
foUowed in preparing financial statements, (i) notice of such change shall be given in the same
manner as for a Listed Event under Section 5(c), and (ii) the Annual Report for the year in which the
change is made shall 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.
SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the City trom disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event, in
addition to that which is required by this Disclosure Agreement. If the City chooses to include any
information in any Annual Report or notice of occurrence of a Listed Event in addition to that which
is specifically required by this Disclosure Agreement, the City shall have no obligation under this
Certificate to update such information or include it in any future Annual Report or notice of
occurrence of a Listed Event.
4
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DOCSOC/1147761 v3/024036-0033
SECTION 10. Default. In the event of a failure of the City to comply with any provision of
this Disclosure Agreement, any Holder or Beneficial Owner of the Certificates may take such actions
as may be necessary and appropriate, including seeking mandate or specific performance by court
order, to cause the City to comply with its obligations under this Disclosure Agreement. A default
under this Disclosure Agreement shall not be deemed an Event of Default under the Trust
Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the
City to comply with this Disclosure Agreement shall be an action to compel performance.
No Certificate holder or Beneficial Owner may institute such action, suit or proceeding to
compel performance unless they shall have first delivered to the City satisfactory written evidence of
their status as such, and a written notice of and request to cure such failure, and the City shall have
refused to comply therewith within a reasonable time.
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 City agrees, to the extent permitted by law, to indemnify and save the
Dissemination Agent, its officers, directors, employees and agents, harmless agaip.st any loss,
expense and liabilities which it may incur arising out of or in the exercise or performance of its
powers and duties hereunder, including the costs and expenses (including attorney's fees) of
defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's
negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the City
for its services provided hereunder in accordance with its schedule of fees as amended from time to
time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the
performance of its duties hereunder. In performing its duties hereunder, the Dissemination Agent
shall not be deemed to be acting in any fiduciary capacity for the City, the Certificate Holders, or any
other party. The obligations of the City under this Section shall survive resignation or removal of the
Dissemination Agent and payment of the Certificates.
SECTION 12. Notices. Any notices or communications to or among any of the parties to
this Disclosure Agreement may be given as follows:
To the City: City ofChula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Director of Finance
To the Dissemination Agent: The Bank of New York Trust Company, N.A.
700 South Flower Street, Suite 500
Los Angeles, California 90017
SECTION 13. Beneficiaries. This Disclosure Agreement solely to the benefit of the City,
the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from
time to time ofthe Certificates, and shall create no rights in any other person or entity.
5
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DOCSOCIl147761v3/024036-0033
SECTION 14. Signature. This Disclosure Agreement has been executed by the undersigned
on the date hereof, and such signature binds the City to !be undertaking herein provided.
CITY OF CHULA VISTA
By:
Its: Director of Finance
THE BANK OF NEW YORK TRUST
COMPANY, N.A., as Dissemination Agent
By:
Its: Authorized Officer
.
6
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DOCSOC/1147761v3/024036-0033
nO',
EXHmIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer:
City ofChula Vista
Name of Certificate Issue:
$ City ofChula Vista
2006 Certificates of Participation (Civic Center Project -
Phase 2)
Date ofIssuance:
,2006
NOTICE IS HEREBY GIVEN that the City has not provided an Annual Report with respect
to the above-named Certificates as required by the Continuing Disclosure Agreement executed by the
City on the date of issuance of the Certificates. The City anticipates that the Annual Report will be
filed by
Dated:
THE BANK OF NEW YORK TRUST
COMPANY, N.A., as Dissemination Agent
By:
A-I
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DOC50C/1147761 v3/024036-0033
ATTACHMENT 4
Stradling Yocca Carlson & Rauth
Draft 1/6/06
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement, dated as of March 1, 2006 (the "Disclosure
Agreement") is executed and delivered by the City of Chula Vista (the "City") and The Bank of New
York Trust Company, N.A. (the "Dissemination Agent") in connection with the execution and
delivery of $ City of Chula Vista 2006 Certificates of Participation (Civic Center Project
- Phase 2) (the "Certificates"). The Certificates are being executed pursuant to an Amended and
Restated Trust Agreement, dated as of March I, 2006, by and among the City, The Bank of New
York Trust Company, N.A., as trustee (the "Trustee") and the Chula Vista Public Financing
Authority (the "Authority"). The City covenants as follows:
SECTION I. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the City for the benefit of the Holders and Beneficial Owners of the
Certificates and in order to assist the Participating Underwriter in complying with the Ruk
SECTION 2. Definitions. In addition to the definitions set forth in the Trust 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:
"Annual Report" shall mean any Comprehensive Annual Financial Report provided by the
City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to
vote or consent with respect to, or to dispose of ownership of, any Certificates (including persons
holding Certificates through nominees, depositories or other intermediaries), or (b) is treated as the
owner of any Certificates for federal income tax purposes.
"Central Post Office" means the Disclosure USA website maintained by the Municipal
Advisory Council of Texas or any successor thereto, or any other organization or method approved
by the staff or members of the Securities and Exchange Commission as an intermediary through
which issuers may, in compliance with the Rule, make filings required by this Disclosure Agreement.
"Disclosure Representative" shall mean the City Manager of the City, the Director of Finance
of the City or their designee, or such other officer or employee as the City shall designate in writing
from time to time.
"Dissemination Agent" shall mean The Bank of New York Trust Company, N.A., or any
successor Dissemination Agent designated in writing by the City and which has filed with the City 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 purposes of the Rule.
"Official Statement" shall mean the Official Statement relating to the Certificates, dated
__,2006.
DOCSOC/1147761v3/024036-0033
2- -I /3
"Participating Underwriter" shall mean the original purchaser of the Certificates required to
comply with the Rule in connection with the offering of the Certificates.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
.
"State" shall mean the State of California.
"State Repository" shall mean any public or private repository or entity designated 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 Agreement, there is no State Repository.
SECTION 3. Provision of Annual Reports.
(a) The City shall, or, upon delivery of the Annual Report to the Dissemination Agent,
shall cause the Dissemination Agent to, not later than each March I of each year commencing
March I, 2007, provide to each Repository 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 cross-reference other
information as provided in Section 4 of this Disclosure Agreement; provided that the audited
financial statements of the City may be submitted separately from the balance of the Annual Report
and later than the date required above for the filing of the Annual Report if they are not available by
that date. If the City's fiscal year changes, it shall give notice of such change in the same manner as
for a Listed Event under Section 5( c).
.
(b) Not later than fifteen (15) business days prior to said date, the City shall provide the
Annual Report to the Dissemination Agent (if other than the City). If the City is unable to provide to
the Repositories an Annual Report by the date required in subsection (a), the City shall send a notice
to each Repository in substantially the form attached as Exhibit A.
(c) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report
the name and address of each National Repository and the State Repository, if any; and
(ii) (if the Dissemination Agent is other than the City), file a report with
the City certifying that the Annual Report has been provided pursuant to this Disclosure
Agreement, stating the date it was provided and listing all the Repositories to which it was
provided.
(e) Notwithstanding any other proyision of this Disclosure Agreement, any of the
required filings hereunder may be made through a Central Post Office.
SECTION 4. Content of Annual Reports. The City's Annual Report shall contain or include
by reference the following:
(a) The City's audited financial statements, prepared in accordance with generally
accepted auditing standards for municipalities in the State of California. If the City's audited
2
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DOCSOC/114 7761 v3/024036-0033
financial statements are not available by the time the Annual Report is required to be filed pursuant
to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to
the financial statements contained in the final Official Statement, and the audited financial statements
shall be filed in the same manner as the Annual Report when they become available.
(b) To the extent not contained in the audited financial statements filed pursuant to the
preceding subsection (a) by the date required by Section 3 hereof, updates of Tables _, _, _ and
set forth in the Official Statement.
Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the City or related public entities, which
have been submitted to each of the Repositories or the Securities and Exchange Commission. If the
document included by reference is a final official statement, it must be available from the Municipal
Securities Rulemaking Board. The City shall clearly identify each such other document so included
by reference.
SECTION 5. Regorting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given,
notice of the occurrence of any of the following events with respect to the Certificates, if material:
(i) Principal and interest payment delinquencies.
(ii) Non-payment related defaults.
(iii) Modifications to rights of Certificate holders.
(iv) Optional, contingent or unscheduled Certificate calls.
(v) Defeasances.
(vi) Rating changes.
(vii) Adverse tax opinions or events affecting the tax-exempt status of the
Certificates.
(viii) Unscheduled draws on the debt service reserves reflecting financial
difficulties.
(ix) Unscheduled draws on the credit enhancements reflecting financial
difficulties.
(x) Substitution of the credit or liquidity providers or their failure to perform.
(xi) Release, substitution or sale of property securing repayment of the
Certificates.
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City
shall as soon as possible determine if such event would be material under applicable federal
securities laws.
3
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DOCSOCIl14 7761 v 3/024036-0033
.
(c) If the City detennines that knowledge of the occurrence of a Listed Event would be
material under applicable federal securities laws, the City shall promptly file a notice of such
occurrence with the Repositories. Notwithstanding the foregoing, notice of Listed Events described
in subsections (a)(iv) and (v) need not be given under this subsection any earlier than the notice (if
any) of the underlying event is given to Holders of affected Certificates pursuant to the Trust
Agreement.
SECTION 6. Tennination of Reporting Obligation. The City's obligations under this
Disclosure Agreement shall tenninate upon the legal defeasance, prior redemption or payment in full
of all of the Certificates. If such tennination occurs prior to the final maturity of the Certificates, the
City shall give notice of such tennination in the same manner as for a Listed Event under
Section 5(c).
SECTION 7. Dissemination Agent. The City may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and
may discharge any such Dissemination Agent, with or without appointing a successor Dissemination
Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice
or report prepared by the City pursuant to this Disclosure Agreement. The Dissemination Agent may
resign by providing thirty days written notice to the City and the Trustee. The Dissemination Agent
shall not be responsible for the content of any report or notice prepared by the City and shall have no
duty to review any infonnation provided to it by the City. The Dissemination Agent shall have no
duty to prepare any infonnation report nor shall the Dissemination Agent be responsible for filing
any report not provided to it by the City in a timely manner and in a form suitable for filing.
.
SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Agreement, the City may amend this Disclosure Agreement, and any provision of this Disclosure
Agreement may be waived, provided that, in the opinion of nationally recognized bond counsel, such
amendment or waiver is pennitted by the Rule; provided, the Dissemination Agent shall have first
consented to any amendment that modifies or increases its duties or obligations hereunder. In the
event of any amendment or waiver of a provision of this Disclosure Agreement, the City shall
describe such amendment in the next Annual Report, and shall include, as applicable, a narrative
explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a
change of accounting principles, on the presentation) of financial information or operating data being
presented by the City. In addition, if the amendment relates to the accounting principles to be
followed in preparing financial statements, (i) notice of such change shall be given in the same
manner as for a Listed Event under Section 5( c), and (ii) the Annual Report for the year in which the
change is made shall present a comparison (in narrative fonn and also, if feasible, in quantitative
fonn) between the financial statements as prepared on the basis of the new accounting principles and
those prepared on the basis of the fonner accounting principles.
SECTION 9. Additional Infonnation. Nothing in this Disclosure Agreement shall be
deemed to prevent the City from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or
including any other infonnation in any Annual Report or notice of occurrence of a Listed Event, in
addition" to that which is required by this Disclosure Agreement. If the City chooses to include any
infonnation in any Annual Report or notice of occurrence of a Listed Event in addition to that which
is specifically required by this Disclosure Agreement, the City shall have no obligation under this
Certificate to update such infonnation or include it in any future Annual Report or notice of
occurrence of a Listed Event.
.
4
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DOCSOC/1147761 v3/024036-0033
SECTION 10. Default. In the event of a failure of the City to comply with any provision of
this Disclosure Agreement, any Holder or Beneficial Owner of the Certificates may take such actions
as may be necessary and appropriate, including seeking mandate or specific performance by court
order, to cause the City to comply with its obligations under this Disclosure Agreement. A default
under this Disclosure Agreement shall not be deemed an Event of Default under the Trust
Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the
City to comply with this Disclosure Agreement shall be an action to compel performance.
No Certificate holder or Beneficial Owner may institute such action, suit or proceeding to
compel performance unless they shall have first delivered to the City satisfactory written evidence of
their status as such, and a written notice of and request to cure such failure, and the City shall have
refused to comply therewith within a reasonable time.
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 City agrees, to the extent permitted by law, to indemnify and save the
Dissemination Agent, its officers, directors, employees and agents, harmless against any loss,
expense and liabilities which it may incur arising out of or in the exercise or performance of its
powers and duties hereunder, including the costs and expenses (including attorney's fees) of
defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's
negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the City
for its services provided hereunder in accordance with its schedule of fees as amended from time to
time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the
performance of its duties hereunder. In performing its duties hereunder, the Dissemination Agent
shall not be deemed to be acting in any fiduciary capacity for the City, the Certificate Holders, or any
other party. The obligations of the City under this Section shall survive resignation or removal of the
Dissemination Agent and payment of the Certificates.
SECTION 12. Notices. Any notices or communications to or among any of the parties to
this Disclosure Agreement may be given as follows:
To the City: City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Attention: Director of Finance
To the Dissemination Agent: The Bank of New York Trust Company, N.A.
700 South Flower Street, Suite 500
Los Angeles, California 90017
SECTION 13. Beneficiaries. This Disclosure Agreement solely to the benefit of the City,
the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from
time to time ofthe Certificates, and shall create no rights in any other person or entity.
5
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DOCSOC/1147761 v31024036-0033
SECTION 14. Signature. This Disclosure Agreement has been executed by the undersigned
on the date hereof, and such signature binds the City to the undertaking herein provided.
CITY OF CHULA VISTA
By:
Its: Director of Finance
THE BANK OF NEW YORK TRUST
COMPANY, N.A., as Dissemination Agent
By:
Its: Authorized Officer
.
6
2--/(9'
DOCSOC/1147761v3/024036-0033
EXHlliIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT
Name ofIssuer:
City of Chula Vista
Name of Certificate Issue:
$ City of Chula Vista
2006 Certificates of Participation (Civic Center Project-
Phase 2)
Date ofIssuance:
,2006
NOTICE IS HEREBY GIVEN that the City has not provided an Annual Report with respect
to the above-named Certificates as required by the Continuing Disclosure Agreement executed by the
City on the date of issuance of the Certificates. The City anticipates that the Annual Report will be
filed by
THE BANK OF NEW YORK TRUST
COMPANY, N.A., as Dissemination Agent
Dated:
By:
A-I
2- -1/0
DOCSOC/l147761 v3/024036-0033
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
STRADLING, YOCCA, CARLSON & RAUTH
660 Newport Center Drive
Suite 1600
Newport Beach, California 92660
Artn: Robert J. Whalen, Esq.
ATTACHMENT 5
Stradling Yocca Carlson & Rauth
Draft 1/23/06
)
)
)
)
)
)
)
)
)
[Space above for recorder.]
This document is recorded for the benefit of the
City of Chula Vista, and the recording is
fee-exempt under Section 27383 of the
Government Code.
FIRST AMENDMENT TO
LEASE/PURCHASE AGREEMENT
between
CITY OF CHULA VISTA,
as Lessee
and
CHULA VISTA PUBLIC FINANCING AUTHORITY,
as Lessor
Dated as of March I, 2006
Relating to the
$
City ofChula Vista
Certificates of Participation
(Civic Center Project-Phase 2)
DOCSOC/l147282v6/024036-0033
2-JW
FIRST AMENDMENT TO LEASE/PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO LEASEIPURCHASE AGREEMENT, dated as of March I,
2006 ("First Amendment to Lease"), is entered into by and between the CITY OF CHULA VISTA
PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under
the laws of the State of California, as lessor (the "Authority"), and the CITY OF CHULA VISTA, a
municipal corporation and a charter city duly organized and existing under and by virtue of the
Constitution and laws of the State of California, as lessee (the "City"), and amends, in part, that
certain LeaseIPurchase Agreement between the City, as lessee, and the Authority, as lessor, dated as
of September I, 2004, and recorded in the official records of the County of San Diego (the "County")
on September 15, 2004 as Document No. 2004-0877212 (the "Lease");
WITNESSETH:
WHEREAS, pursuant to the Government Code of the State of California, the City may enter
into leases and agreements relating to real property to be used by the City; and
WHEREAS, the Authority 'is authorized pursuant to the laws of the State of California to
provide financial assistance to the City by acquiring, constructing and financing various public
facilities, land and equipment and the leasing offacilities, land and equipment for the use, benefit and
enjoyment of the public; and
WHEREAS, the Authority entered into the Lease with the City for the purpose of leasing the
real property (including all existing and future improvements thereon) described in Exhibit B thereto
to the City, as lessee thereunder; and
WHEREAS, the City and the Authority desire to enter into this First Amendment to
LeaseIPurchase Agreement in order to facilitate the execution and delivery of those certain $
City of Chula Vista 2006 Certificates of Participation (Civic Center Project-Phase 2) (the "2006
Certificates"), which shall be treated as Additional Certificates under the terms of the Lease, to
facilitate the construction, modernization and equipping of Phase 2 of the Civic Center and the
renovation of the Nature Center owned by the City; and
WHEREAS, the 2006 Certificates are being executed and delivered as Additional Certificates
under that certain Amended and Restated Trust Agreement, dated as of March I, 2006 (the "Trust
Agreement"), by and among the City, the Authority and The Bank of New York Trust Company,
N.A., as Trustee, which amends and restates in its entirety the Trust Agreement, dated as of
September I, 2004, by and among the City, the Authority and the Trustee, pursuant to which the
Trustee executed $37,240,000 City of Chula Vista 2004 Certificates of Participation (Civic Center
Project - Phase I) (the "Certificates"); and
WHEREAS, pursuant to Section 8.3 of the Lease, the City and the Authority reserved the
right to amend the Lease from time to time, including in connection with the execution and delivery
of Additional Certificates; and
WHEREAS, to facilitate the execution and delivery of the 2006 Certificates, the City and the
Authority desire to amend the Lease to add certain real property and improvements consisting of
I
2-IZJ
DOCSOCIl147282v6/024036-0033
Montevalle Park and Salt Creek Park (the "Additional Property") described in Exhibit I hereto to the
real property and improvements currently leased by the City from the Authority and to make the
further amendments to the Lease described herein; and
WHEREAS, the parties have determined that the amendments contained herein do not
adversely affect the interests of the Owners of the Certificates, the 2006 Certificates or any
Additional Certificates; and
WHEREAS, pursuant to Section 8.3 of the Lease, the Trustee is required to consent to any
amendment to the Lease; and
WHEREAS, the Trustee has consented to this First Amendment to Lease;
NOW, THEREFORE, in consideration of the above premises and of the mutual covenants
hereinafter contained and for other good and valuable consideration, the parties hereto agree as
follows:
SECTION 1. Definitions. Unless the context otherwise requires, the capitalized
terms used herein shall have the meanings specified in the Lease and the Trust Agreement.
The term "Agency Agreement" means the Agency Agreement dated as of
September I, 2004 by and between the City and the Authority, the Agency Agreement dated as of
March I, 2006 by and between the City and the Authority and any similar agreement entered into
between the City and the Authority with respect to any Additional Certificates.
The term "Insurer" means MBIA Insurance Corporation, a stock insurance company
domiciled in the State of New York, or any successor thereto or assignee thereof.
The tenn "Supplemental Agreement" or "Supplemental Trust Agreement" shall refer
to any amendment to the Trust Agreement.
SECTION 2. Lease of Additional Prooertv. The Authority hereby leases to the
City and the City hereby leases from the Authority the Additional Property on the terms and
conditions set forth in the Lease, as amended by this First Amendment to Lease, Exhibit B to the
Lease is hereby deleted in its entirety and replaced by Exhibit I hereto. From and after the date
hereof, the Property (as defined in the Lease) consists of the real property described in Exhibit I
hereto and the improvements located thereon other than the Project, and the Leased Premises consists
of the real property described in Exhibit I hereto, together with all existing and future improvements
located thereon, including, but not limited to, the portions of the Project located thereon.
Notwithstanding the provisions of Section 7.12 of the Lease, upon the completion of the Phase 3
improvements to the City's Civic Center Complex, the Additional Property shall automatically be
released upon the City's filing of a Completion Certificate for such improvements and its
presentation to the Trustee of a supplement to the Lease substantially in the form attached as
Exhibit D. The Trustee shall deliver a copy of the Completion Certificate and the supplement to the
Lease to the Insurer and the insurer of any Additional Certificates.
SECTION 3. Amendment of Section 3.4. Section of 3.4 of the Lease is hereby
deleted in its entirety and amended to read as follows:
DOCSOCIl147282v6/024036-0033
2 2~ /2-2.
"Section 3.4. Completion Certification. The portion of the Project financed
with the proceeds of the Certificates is substantially complete. The City and the
Authority expect that portion of the Project being constructed with the proceeds of
the 2006 Certificates will be substantially completed in accordance with plans and
specifications described in the Agency Agreement related to the 2006 Certificates on
or prior to August 1,2007.
"Upon the completion of acquisition, construction, delivery and installation of
the portion of the Project to be financed with the proceeds of the Certificates and,
upon the completion of the improvements to be financed with each series of
Additional Certificates, the City shall deliver to the Trustee, the Insurer and any
insurer of Additional Certificates a Completion Certificate with respect thereto. A
separate Completion Certificate will be filed with respect to the portion of the Project
to be financed from the Certificates and the portion to be financed with each series of
Additional Certificates. On the date of filing a Completion Certificate, all excess
moneys remaining in the Project Fund for the Certificates or the series of Additional
Certificates for which such Completion Certificate is delivered shall be applied in
accordance with the provisions of Section 3.04 of the Trust Agreement.
"If the Authority, for any reason whatsoever, cannot deliver possession of the
portion of the Leased Premises being financed with the proceeds of the 2006
Certificates by August I, 2007, and as a result of which non-delivery the City is
deprived of the use and occupancy of a substantial portion of the Leased Premises,
this Lease shall not be void or voidable, nor shall the Authority be liable to the City
for any loss or damage resulting therefrom. In such event, however, Lease Payments
and Additional Payments, with respect to the period between August I, 2007 and the
time when the portion of the Leased Premises comprising the Project is substantially
completed, shall be payable solely to the extent and from the sources of payment
identified in Section 4.l0(a) hereof."
SECTION 4. Amendment of Section 4.10(a). Section 4.2 of the Lease IS
amended, in part, by adding the following sentence at the end of Section 4.1 O(a) hereof:
"Notwithstanding the foregoing, there shall be no abatement hereunder as a
result of the noncompletion of the portion of the Project being financed with proceeds
of the 2006 Certificates. The City hereby finds and determines that the fair rental
value of the Leased Premises existing as of the date of the execution and delivery of
the 2006 Certificates is not less than the Lease Payments and Additional Payments
due hereunder.
SECTION 5. Amendment of Section 5.6(d). Section 5.6(d) of the Lease is hereby
deleted in its entirety and amended to read as follows:
"(d) Evidence of Insurance. The City shall cause to be delivered to the
Trustee and the Insurer and any insurer of Additional Certificates annually on or
before August I a certificate stating that the insurance policies required by this Lease
are in full force and effect."
3 "2 -12-3
DOCSOCIl147282v6/024036-0033
.
SECTION 6. Option to Purchase. Any appraiser selected pursuant to Section 7.3
shall also be acceptable to any insurer of Additional Certificates, and each insurer of Additional
Certificates shall have provided its written consent pursuant to any reversion or transfer pursuant to
such Section 7.3.
SECTION 7. Notice of Replacements. Redevelopment and Renovation. Any
notice provided by the City pursuant to Section 7.8(c)(ii) shall also be provided to any insurer of
Additional Certificates and any rating agency then providing a rating on any Additional Certificates.
SECTION 8. Schedule of Lease Pavments. Exhibit A to the Lease is hereby
deleted in its entirety and replaced by Exhibit 2 hereto.
SECTION 9. Description of Project. Exhibit C to the Lease is hereby deleted in
its entirety and replaced by Exhibit 3 hereto.
SECTION 10. No Other Amendments. Except as expressly set forth in Sections 2
through 8 above, all other provisions of the Lease remain in full force and effect.
SECTION 11. Counterparts. This First Amendment to Lease/Purchase 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.
4
'2 ~/2-1f
DOCSOC/1147282v6/024036-0033
IN WITNESS WHEREOF, the Authority has caused this First Amendment to
LeaselPurchase Agreement to be executed in its name by its duly authorized officers, and the City
has caused this First Amendment to LeaselPurchase Agreement to be executed in its name by its duly
authorized officers, as of the date first above written.
CHULA VISTA PUBLIC FINANCING
AUTHORlTY, as Lessor
By:
Chair
ATTEST:
Secretary
CITY OF CHULA VISTA, as Lessee
By:
City Manager
ATTEST:
City Clerk
5 2 ~ I Z-t?
DOCSOCIl147282v6/024036-0033
.
CONSENTED TO BY:
THE BANK OF NEW YORK TRUST COMPANY, N.A. as
successor-in-interest to BNY Western Trust Company,
as Trustee and Assignee
By:
Authorized Officer
.
6
2 ~{ 20
DOCSOCIl147282v6/024036-0033
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed under the foregoing to the City of
Chula Vista, a municipal corporation and a charter city, is hereby accepted by the undersigned officer
or agent on behalf of the City Council of the City of Chula Vista (the "City Council"), pursuant to
authority conferred by resolution of the said City Council adopted on February 7, 2006, and the
grantee consents to recordation thereof by its duly authorized officer.
Dated: March _,2006
CITY OF CHULA VISTA
By:
Its: City Manager
DOCSOCIl147282v6/024036-0033
2 -127
.
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On March _, 2006 before me, the undersigned, personally appeared David D. Rowlands, Jr.,
personally known to me to be the person whose names is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity upon behalf of which the person acted, executed the
instrument.
[SEAL]
WITNESS my hand and official seal
Donna Norris, Assistant City Clerk of the City of
Chula Vista
2 - / 2...'t
DOCSOCIl147282v6/024036-0033
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On March _, 2006 before me, the undersigned, personally appeared Maria Kachadoorian,
personally known to me to be the person whose names is subscribed to the within instrument and
acknowledged to me that she executed the same in her authorized capacity, and that by her signature
on the instrument the person, or the entity upon behalf of which the person acted, executed the
instrument.
[SEAL]
WITNESS my hand and official seal
Donna Norris, Assistant City Clerk of the City of
Chula Vista
2 ~IZC?
DOCSOC/1147282v6/024036-0033
EXHffilT 1
DESCRIPTION OF THE LEASED PREMISES
THAT REAL PROPERTY IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
CIVIC CENTER
PARCEL A:
ALL THAT PORTION OF THE WESTERLY HALF OF LOT 13, IN QUARTER SECTION 149,
CHULA VISTA, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888, DESCRIBED AS
FOLLOWS:
COMMENCING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT WHICH IS NORTH
71 DEGREES EAST 467 Yz FEET FROM THE SOUTHWESTERLY CORNER OF SAID LOT;
THENCE NORTH 71 DEGREES EAST ALONG THE SOUTHERLY LINE OF SAID LOT 78 y,
FEET; THENCE NORTH 19 DEGREES WEST 290 FEET TO THE NORTHERLY LINE OF SAID
LOT 13; THENCE SOUTH 71 DEGREES WEST ALONG SAID NORTHERLY LINE OF SAID
LOT, 78 Yz FEET; THENCE SOUTH 19 DEGREES EAST, 290 FEET, TO POINT OF
COMMENCEMENT.
eAPN: 568-110-17-00)
PARCELB:
ALL THAT PORTION OF THE WESTERLY HALF OF LOT 13, IN QUARTER SECTION 149,
CHULA VISTA, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888, DESCRIBED AS
FOLLOWS;
COMMENCING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT WHICH IS NORTH
71 DEGREES 00'00" EAST, 546.00 FEET FROM THE SOUTHWESTERLY CORNER OF SAID
LOT, SAID POINT BEING ALSO THE SOUTHEASTERLY CORNER OF THE LANDS
CONVEYED BY ELLA J. WHARTON AND REVERDY J. WHARTON TO ROBERT H. KING,
BY DEED DATED MARCH 2, 1914 AND RECORDER IN BOOK 643, PAGE 325 OF DEEDS,
RECORDS OF SAN DIEGO COUNTY; THENCE NORTH 71 DEGREES 00'00" EAST ALONG
SAID SOUTHERLY LINE OF SAID LOT 74.00 FEET TO THE SOUTHEASTERLY CORNER
OF THE WESTERLY HALF OF SAID LOT; THENCE NORTH 19 DEGREES 00'00" WEST
ALONG THE EASTERLY LINE OF SAID WESTERLY HALF OF SAID LOT, 290.00 FEET TO
THE NORTHERLY LINE THEREOF; THENCE SOUTH 71 DEGREES 00'00" WEST ALONG
THE NORTHERLY LINE THEREOF 74.00 FEET, MORE OR LESS, TO THE
NORTHEASTERLY CORNER OF THE LAND SO CONVEYED TO KING; THENCE SOUTH 19
Exhibit 1-1
DOCSOCIl147282v6/024036-0033
2 -1;:3D
DEGREES 00'00" EAST ALONG THE EASTERLY LINE OF SAID KING'S LAND, 290.00 FEET
TO THE POINT OF COMMENCEMENT.
(APN: 568-110-16-00)
PARCEL C:
THE EAST HALF OF TEN-ACRE LOT FOURTEEN AND THE EAST HALF OF TEN-ACRE
LOT THIRTEEN IN QUARTER SECTION ONE HUNDRED FORTY-NINE OF CHULA VISTA,
IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA,
BEING IN RANCHO DE LA NACION, ACCORDING TO MAP THEREOF NO. 505, FILED IN
THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY MARCH 13, 1888.
EXCEPTING THOSE PORTIONS LYING WITHIN PARCELS 1 AND 2.
PARCEL 1:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG AVENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH
18 DEGREES 40'22" EAST 100.00 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135.00
FEET; THENCE NORTH 18 DEGREES 40'22" WEST, 77.13 FEET TO THE BEGINNING OF A
TANGENT CURVE TO THE LEFT HALF HAVING A RADIUS OF 23.00 FEET AND A
CENTRAL ANGLE OF 89 DEGREES 40'37"; THENCE ALONG SAID CURVE A DISTANCE
OF 36.00 FEET; THENCE SOUTH 71 DEGREES 00'15" WEST, A DISTANCE OF 112.13 FEET
TO THE TRUE POINT OF BEGINNING.
PARCEL 2:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDINGTO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG AVENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
Exhibit 1-2
DOCSOCIl147282v6/024036-0033
2 -} 31
~-
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH 18
DEGREES 40'22" EAST 100 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135.00 FEET;
THENCE SOUTH 18 DEGREES 40'22" EAST, 40 FEET; THENCE SOUTH 71 DEGREES 00'15"
WEST TO AN INTERSECTION WITH THE EASTERLY LINE OF THE WESTERLY 60 FEET
OF THE EAST HALF OF SAID LOT 14; THENCE NORTHERLY ALONG SAID EASTERLY
LINE TO AN INTERSECTION WITH A LINE WHICH BEARS SOUTH 71 DEGREES 00'15"
WEST FROM THE TRUE POINT OF BEGINNING; THENCE ALONG SAID LINE NORTH 71
DEGREES 00'15" EAST TO THE TRUE POINT OF BEGINNING.
(APN: 568-110-33-00)
PARCEL D:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACroN, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG AVENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH
18 DEGREES 40'22" EAST 100.00 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135.00
FEET; THENCE NORTH 18 DEGREES 40'22" WEST, 77.13 FEET TO THE BEGINNING OF A
TANGENT CURVE TO THE LEFT HALF HAVING A RADIUS OF 23.00 FEET AND A
CENTRAL ANGLE OF 89 DEGREES 40'37"; THENCE ALONG SAID CURVE A DISTANCE
OF 36.00 FEET; THENCE SOUTH 71 DEGREES 00'15" WEST, A DISTANCE OF 112.13 FEET
TO THE TRUE POINT OF BEGINNING.
PARCEL E:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG AVENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
Exhibit 1-3
DOCSOCIl147282v6/024036-0033
2-1-32-
EAST, 30 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH 18
DEGREES 40'22" EAST 100 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135 FEET;
THENCE SOUTH 18 DEGREES 40'22" EAST, 40 FEET; THENCE SOUTH 71 DEGREES 00'15"
WEST TO AN INTERSECTION WITH THE EASTERLY LINE OF THE WESTERLY 60 FEET
OF THE EAST HALF OF SAID LOT 14; THENCE NORTHERLY ALONG SAID EASTERLY
LINE TO AN INTERSECTION WITH A LINE WHICH BEARS SOUTH 71 DEGREES 00'15"
WEST FROM THE TRUE POINT OF BEGINNING; THENCE ALONG SAID LINE NORTH 71
DEGREES 00'15" EAST TO THE TRUE POINT OF BEGINNING.
(APN: 568-110-32-00)
FIRE STATION NO.7
PARCEL F:
THAT PORTION OF PARCEL 4 OF PARCEL MAP NO. 18789, IN THE CITY OF CHULA
VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY ON SEPTEMBER 7, 2001, BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT AN ANGLE POINT ON THE EASTERLY BOUNDARY OF SAID PARCEL
4 BEING THE WESTERLY TERMINUS OF THAT COURSE ON THE BOUNDARY OF
PARCEL 1 OF SAID PARCEL MAP NO. 18789 DEPICTED ON SHEET 3 OF SAID PARCEL
MAP NO. 18789 AS NORTH 71 DEGREES 57'24" EAST, 1091.24', SAID POINT BEING THE
NORTHERLY TERMINUS OF THE WESTERLY RIGHT OF WAY OF LA MEDIA ROAD AS
DEDICATED ON CHULA VISTA TRACT NO. 02-055 OTAY RANCH VILLAGE 6 UNIT 2 "A"
MAP NO.1 ACCORDING TO MAP THEREOF NO. 14447 FILED IN THE SAID OFFICE OF
THE COUNTY RECORDER ON SEPTEMBER 18, 2002, SAID POINT ALSO BEING A POINT
ON A 4336.00 FOOT RADIUS CURVE, CONCAVE WESTERLY, A RADIAL LINE OF SAID
CURVE BEARS NORTH 77 DEGREES 19'04" EAST (RECORD NORTH 77 DEGREES 18'51"
EAST PER SAID PARCEL MAP NO. 18789) TO SAID POINT; THENCE ALONG SAID
WESTERLY RIGHT OF WAY SOUTHERLY ALONG THE ARC OF SAID 4336.00 FOOT
RADIUS CURVE THROUGH A CENTRAL ANGLE OF 00 DEGREES 39'06", 49.32 FEET TO
THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID WESTERLY
RIGHT OF WAY SOUTHERLY ALONG THE ARC OF SAID 4336.00 FOOT RADIUS CURVE
THROUGH A CENTRAL ANGLE OF 03 DEGREES 24'43", 258.21 FEET; THENCE LEAVING
SAID WESTERLY RIGHT OF WAY NON-TANGENT TO SAID CURVE SOUTH 76 DEGREES
40'26" WEST, 266.27 FEET; THENCE NORTH 12 DEGREES 45'05" WEST, 271.84 FEET TO A
POINT ON THE PROPOSED SOUTHERLY RIGHT OF WAY ("STREET A" WITHIN OTAY
RANCH VILLAGE 2; THENCE ALONG SAID PROPOSED SOUTHERLY RIGHT OF WAY
NORTH 77 DEGREES 14'55" EAST, 259.19 FEET; THENCE CONTINUING ALONG SAID
PROPOSED SOUTHERLY RIGHT OF WAY SOUTH 70 DEGREES 47'53" EAST, 20.21 FEET
TO THE TRUE POINT OF BEGINNING.
(APN: 644-030-22-00)
Exhibit 1-4
2-/33
DOCSOC/l147282v6/024036-0033
MONTEV ALLE PARK
[TO COME]
SALT CREEK PARK
[TO COME]
Exhibit 1-5
DOCSOCI1147282v6/024036-0033
2 -/3L{
Date
.
2004 Principal
Component
DOCSOCll14 7282v6/024036-003 3
EXHIBIT 2
SCHEDULE OF LEASE PAYMENTS
2004 Interest 2006 Principal
Component Component
2006 Interest
Component
Exhibit 2-1
2-/35
Total Lease
Payments
EXHIBIT 3
DESCRIPTION OF THE PROJECT
1. The portion of the Project to be constructed on the Property consists of the
reconstruction, modernization and equipping of the City's Civic Center Complex in three phases,
including the construction of a new 42,455 square foot City Hall building in phase 1, the renovation
of the existing Public Services building in phase 2 and the renovation of the former Police
Department building in phase 3, along with related site improvements in each phase.
2. The portion of the Project not located on the Property financed with proceeds of the
2004 Certificates consists of infrastructure improvements made in the western portion of the City,
including street, drainage and park improvements.
3. The portion of the Project not located on the Property financed with proceeds of the
2006 Certificates consists of improvements to be made to the City's Nature Center.
Exhibit 3-1
2-13(,
DOCSOC/1147282v6/024036-0033
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
STRADLING YOCCA CARLSON & RAUTH
660 Newport Center Drive
Suite 1600
Newport Beach, California 92660
Attn: Robert J. Whalen, Esq.
ATTACHMENT 6
Stradling Yocca Carlson & Rauth
Draft 1/23/06
)
)
)
)
)
)
)
)
)
[Space above for recorder.]
This document is recorded for the benefit of
the City of Chula Vista, and the recording is
fee-exempt under Section 27383 of the
Government Code.
FIRST AMENDMENT TO ASSIGNMENT AGREEMENT
between
CHULA VISTA PUBLIC FINANCING AUTHORITY
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as successor trustee to
BNY WESTERN TRUST COMPANY,
as Trustee
Dated as of March 1, 2005
Relating to the
$
_ City of Chula Vista
2006 Certificates of Participation
(Civic Center Project-Phase 2)
DOCSOC/l147304v6/024036-0033
2-~/37
FIRST AMENDMENT TO ASSIGNMENT AGREEMENT
This First Amendment to Assignment Agreement, dated as of March 1, 2006 (the
"First Amendment to Assignment Agreement"), is made and entered into by and between the Chula
Vista Public Financing Authority, a joint powers authority duly organized and existing under the
laws of the State of California (the "Authority"), as assignor, and The Bank of New York Trust
Company, a national banking association organized and existing under the laws of the United States,
as successor-in-interest to BNY Western Trust Company, as trustee (the "Trustee"), as assignee, and
amends that certain Assignment Agreement between the Authority and the Trustee, dated as of
September 1, 2004 and recorded in the official records ofthe County of San Diego (the "County") on
September 15, 2004 as Document No. 2004-0877213 (the "Assignment Agreement");
WIINg~~jnH:
WHEREAS, the Authority and the City of Chula Vista (the "City") have entered into
a certain Site Lease, dated as of September 1, 2004, recorded on September 15, 2004 in the official
records of the County as Document No. 2004-0877211, as amended by that certain First Amendment
to Site Lease dated as of March 1, 2006, as recorded concurrently herewith (collectively, the "Site
Lease"), whereby the City has leased to the Authority certain real property, including the
improvements thereon, described in Exhibit A to First Amendment to Site Lease and in Exhibit A
hereto (the "Property"); and
WHEREAS, the Authority and the City have entered into a certain LeaselPurchase
Agreement, dated as of September 1, 2004, recorded on September 15, 2004 in the official records of
the County as Document No. 2004-0877212, as amended by that certain First Amendment to
LeaselPurchase Agreement dated as of March 1, 2006 and recorded concurrently herewith
(collectively, the "Lease"), whereby the Authority has leased to the City, and the City has leased
from the Authority, the Leased Premises (as defined therein); and
WHEREAS, the Authority has assigned absolutely, without recourse, all of its rights
to receive the Lease Payments scheduled to be paid by the City under and pursuant to the Lease to
the Trustee and certain of its other rights, title and interest under the Lease, pursuant to the
Assignment Agreement; and
WHEREAS, the Authority has assigned absolutely, without recourse, all of its rights
to, under and pursuant to the Site Lease to the Trustee, pursuant to the Assignment Agreement; and
WHEREAS, the Authority and the Trustee desire to enter into this First Amendment
to Assignment Agreement in order to facilitate the execution and delivery of those certain $
City of Chula Vista 2006 Certificates of Participation (Civic Center Project-Phase 2) (the "2006
Certificates"); and
WHEREAS, the 2006 Certificates are being executed and delivered as Additional
Certificates under that certain Amended and Restated Trust Agreement, dated as of March 1, 2006
(the "Trust Agreement"), by and among the City, the Authority and the Trustee; and
DOCSOCI1147304v6/024036-0033
2- - f-3g
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
for other valuable consideration, it is hereby mutually agreed as follows:
SECTION 1. Definitions. Unless the context otherwise requires, the capitalized
terms used herein shall have the meanings specified in the Lease and the Trust Agreement.
SECTION 2. Execution and Delivery of 2006 Certificates. From and after the
date of the execution and delivery of the 2006 Certificates, the 2006 Certificates shall constitute
Additional Certificates subject to the provisions of the Assignment Agreement, and all references in
the Assignment Agreement to the "Trust Agreement" shall refer to the Amended and Restated Trust
Agreement as further amended trom time to time.
SECTION 3. Revised Lel!al Description. Exhibit A to the Assignment Agreement
is hereby deleted in its entirety and replaced by Exhibit A hereto. Upon the release of any portion of
the Leased Premises in accordance with the terms of the Lease, without the need for any further
consents or approvals, the parties hereto shall execute an amendment to revise Exhibit A hereto to
reflect the removal of property trom the Leased Premises.
SECTION 4. No Other Amendments. Except as expressly set forth in Section 2
above, all other provisions of the Assignment Agreement remain in full force and effect.
SECTION 5. Counterparts. This First Amendment to Assignment 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.
.
2
DOCSOC/1147304v61024036-0033
2-134 .
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Assignment Agreement by their officers thereunto duly authorized as of the day and year first written
above.
CHULA VISTA PUBLIC FINANCING
AUTHORITY
By:
Chief Financial Officer
ATTEST:
Secretary
THE BANK OF NEW YORK TRUST COMPANY;
N.A., as successor-in-interest to BNY WESTERN
TRUST COMPANY, as Trustee
By:
Authorized Officer
3
DOCSOCIl147304v6/024036-0033
2 ~lljO
ATTEST:
CONSENT
The City of Chula Vista hereby consents to the foregoing.
CITY OF CHULA VISTA, as Lessee
By:
City Manager
City Clerk
DOCSOC/I147304v6/024036-0033
?-~/L( I
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On March _, 2006 before me, the undersigned, personally appeared Maria Kachadoorian,
personally known to me to be the person whose names is subscribed to the within instrument and
acknowledged to me that she executed the same in her authorized capacity, and that by her signature
on the instrument the person, or the entity upon behalf of which the person acted, executed the
instrument.
[SEAL]
WITNESS my hand and official seal
Donna Norris, Assistant City Clerk of the City of
Chula Vista
DOCSOCI1147304v6/024036-0033
2-/<-12
STATE OF CALIFORNIA
.
COUNTY OF LOS ANGELES
On March _, 2006 before me, the undersigned, personally appeared ,
personally known to me to be the person whose names is subscribed to the within instrument and
acknowledged to me that she executed the same in her authorized capacity, and that by her signature
on the instrument the person, or the entity upon behalf of which the person acted, executed the
instrument.
[SEAL]
WITNESS my hand and official seal
Notary Public
DOCSOCI1147304v6/024036-0033
2 ~/V3
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
THAT REAL PROPERTY IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
CIVIC CENTER
PARCEL A:
ALL THAT PORTION OF THE WESTERLY HALF OF LOT 13, IN QUARTER SECTION 149,
CHULA VISTA, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888, DESCRIBED AS
FOLLOWS:
COMMENCING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT WHICH IS NORTH
71 DEGREES EAST 467 Yz FEET FROM THE SOUTHWESTERLY CORNER OF SAID LOT;
THENCE NORTH 71 DEGREES EAST ALONG THE SOUTHERLY LINE OF SAID LOT 78 y,
FEET; THENCE NORTH 19 DEGREES WEST 290 FEET TO THE NORTHERLY LINE OF SAID
LOT 13; THENCE SOUTH 71 DEGREES WEST ALONG SAID NORTHERLY LINE OF SAID
LOT, 78 y, FEET; THENCE SOUTH 19 DEGREES EAST, 290 FEET, TO POINT OF
COMMENCEMENT.
(APN: 568-110-17-00)
PARCEL B:
ALL THAT PORTION OF THE WESTERLY HALF OF LOT 13, IN QUARTER SECTION 149,
CHULA VISTA, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888, DESCRIBED AS
FOLLOWS:
COMMENCING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT WHICH IS NORTH
71 DEGREES 00'00" EAST, 546.00 FEET FROM THE SOUTHWESTERLY CORNER OF SAID
LOT, SAID POINT BEING ALSO THE SOUTHEASTERLY CORNER OF THE LANDS
CONVEYED BY ELLA J. WHARTON AND REVERDY J. WHARTON TO ROBERT H. KING,
BY DEED DATED MARCH 2,1914 AND RECORDER IN BOOK 643, PAGE 325 OF DEEDS,
RECORDS OF SAN DIEGO COUNTY; THENCE NORTH 71 DEGREES 00'00" EAST ALONG
SAID SOUTHERLY LINE OF SAID LOT 74.00 FEET TO THE SOUTHEASTERLY CORNER
OF THE WESTERLY HALF OF SAID LOT; THENCE NORTH 19 DEGREES 00'00" WEST
ALONG THE EASTERLY LINE OF SAID WESTERLY HALF OF SAID LOT, 290.00 FEET TO
THE NORTHERLY LINE THEREOF; THENCE SOUTH 71 DEGREES 00'00" WEST ALONG
THE NORTHERLY LINE THEREOF 74.00 FEET, MORE OR LESS, TO THE
NORTHEASTERLY CORNER OF THE LAND SO CONVEYED TO KING; THENCE SOUTH 19
DEGREES 00'00" EAST ALONG THE EASTERLY LINE OF SAID KING'S LAND, 290.00 FEET
A-I
DOCSOCIl147304v6!024036-0033
2-11./L(
TO THE POINT OF COMMENCEMENT.
(AJPN: 568-110-16-00)
PARCEL C:
THE EAST HALF OF TEN-ACRE LOT FOURTEEN AND THE EAST HALF OF TEN-ACRE
LOT THIRTEEN IN QUARTER SECTION ONE HUNDRED FORTY-NINE OF CHULA VISTA,
IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA,
BEING IN RANCHO DE LA NACION, ACCORDING TO MAP THEREOF NO. 505, FILED IN
THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY MARCH 13, 1888.
EXCEPTING THOSE PORTIONS LYING WITHIN PARCELS 1 AND 2.
PARCEL 1:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG AVENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH
18 DEGREES 40'22" EAST 100.00 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135.00
FEET; THENCE NORTH 18 DEGREES 40'22" WEST, 77.13 FEET TO THE BEGINNING OF A
TANGENT CURVE TO THE LEFT HALF HAVING A RADIUS OF 23.00 FEET AND A
CENTRAL ANGLE OF 89 DEGREES 40'37"; THENCE ALONG SAID CURVE A DISTANCE
OF 36.00 FEET; THENCE SOUTH 71 DEGREES 00'15" WEST, A DISTANCE OF 112.13 FEET
TO THE TRUE POINT OF BEGINNING.
PARCEL 2:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG AVENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
A-2
2-146
DOCSOC/1147304v6/024036-0033
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH 18
DEGREES 40'22" EAST 100 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135.00 FEET;
THENCE SOUTH 18 DEGREES 40'22" EAST, 40 FEET; THENCE SOUTH 71 DEGREES 00'15"
WEST TO AN INTERSECTION WITH THE EASTERLY LINE OF THE WESTERLY 60 FEET
OF THE EAST HALF OF SAID LOT 14; THENCE NORTHERLY ALONG SAID EASTERLY
LINE TO AN INTERSECTION WITH A LINE WHICH BEARS SOUTH 71 DEGREES 00'15"
WEST FROM THE TRUE POINT OF BEGINNING; THENCE ALONG SAID LINE NORTH 71
DEGREES 00'15" EAST TO THE TRUE POINT OF BEGINNING.
(APN: 568-110-33-00)
PARCEL D:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG AVENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH
18 DEGREES 40'22" EAST 100.00 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135.00
FEET; THENCE NORTH 18 DEGREES 40'22" WEST, 77.13 FEET TO THE BEGINNING OF A
TANGENT CURVE TO THE LEFT HALF HAVING A RADIUS OF 23.00 FEET AND A
CENTRAL ANGLE OF 89 DEGREES 40'37"; THENCE ALONG SAID CURVE A DISTANCE
OF 36.00 FEET; THENCE SOUTH 71 DEGREES 00'15" WEST, A DISTANCE OF 112.13 FEET
TO THE TRUE POINT OF BEGINNING.
PARCEL E:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG A VENUE WITH THE
CENTERLlNE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH 18
A-3
DOCSOC/1147304v6/024036-0033
2-Nb
DEGREES 40'22" EAST 100 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135 FEET;
THENCE SOUTH 18 DEGREES 40'22" EAST, 40 FEET; THENCE SOUTH 71 DEGREES 00'15"
WEST TO AN INTERSECTION WITH THE EASTERLY LINE OF THE WESTERLY 60 FEET
OF THE EAST HALF OF SAID LOT 14; THENCE NORTHERLY ALONG SAID EASTERLY
LINE TO AN INTERSECTION WITH A LINE WHICH BEARS SOUTH 71 DEGREES 00'15"
WEST FROM THE TRUE POINT OF BEGINNING; THENCE ALONG SAID LINE NORTH 71
DEGREES 00'15" EAST TO THE TRUE POINT OF BEGINNING.
(APN: 568-110-32-00)
FIRE STATION NO.7
PARCEL F:
.
THAT PORTION OF PARCEL 4 OF PARCEL MAP NO. 18789, IN THE CITY OF CHULA
VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY ON SEPTEMBER 7, 2001, BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
.
COMMENCING AT AN ANGLE POINT ON THE EASTERLY BOUNDARY OF SAID PARCEL
4 BEING THE WESTERLY TERMINUS OF THAT COURSE ON THE BOUNDARY OF
PARCEL 1 OF SAID PARCEL MAP NO. 18789 DEPICTED ON SHEET 3 OF SAID PARCEL
MAP NO. 18789 AS NORTH 71 DEGREES 57'24" EAST, 1091.24', SAID POINT BEING THE
NORTHERLY TERMINUS OF THE WESTERLY RIGHT OF WAY OF LA MEDIA ROAD AS
DEDICATED ON CHULA VISTA TRACT NO. 02-055 OTAY RANCH VILLAGE 6 UNIT 2 "A"
MAP NO.1 ACCORDING TO MAP THEREOF NO. 14447 FILED IN THE SAID OFFICE OF
THE COUNTY RECORDER ON SEPTEMBER 18, 2002, SAID POINT ALSO BEING A POINT
ON A 4336.00 FOOT RADIUS CURVE, CONCAVE WESTERLY, A RADIAL LINE OF SAID
CURVE BEARS NORTH 77 DEGREES 19'04" EAST (RECORD NORTH 77 DEGREES 18'51"
EAST PER SAID PARCEL MAP NO. 18789) TO SAID POINT; THENCE ALONG SAID
WESTERLY RIGHT OF WAY SOUTHERLY ALONG THE ARC OF SAID 4336.00 FOOT
RADIUS CURVE THROUGH A CENTRAL ANGLE OF 00 DEGREES 39'06",49.32 FEET TO
THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID WESTERLY
RIGHT OF WAY SOUTHERLY ALONG THE ARC OF SAID 4336.00 FOOT RADIUS CURVE
THROUGH A CENTRAL ANGLE OF 03 DEGREES 24'43", 258.21 FEET; THENCE LEAVING
SAID WESTERLY RIGHT OF WAY NON- TANGENT TO SAID CURVE SOUTH 76 DEGREES
40'26" WEST, 266.27 FEET; THENCE NORTH 12 DEGREES 45'05" WEST, 271.84 FEET TO A
POINT ON THE PROPOSED SOUTHERLY RIGHT OF WAY ("STREET A" WITHIN OTAY
RANCH VILLAGE 2; THENCE ALONG SAID PROPOSED SOUTHERLY RIGHT OF WAY
NORTH 77 DEGREES 14'55" EAST, 259.19 FEET; THENCE CONTINUING ALONG SAID
PROPOSED SOUTHERLY RIGHT OF WAY SOUTH 70 DEGREES 47'53" EAST, 20.21 FEET
TO THE TRUE POINT OF BEGINNING.
(APN: 644-030-22-00)
A-4
2-1 Lf 7
DOCSOCIl147304v6/024036-0033
MONTEV ALLE PARK
[TO COME]
SALT CREEK PARK
[TO COME]
A-5
DOCSOCIl147304v6/024036-0033
'2- ~ I '-I'?
ATTACHMENT 7
Stradling Yocca Carlson & Rauth
Draft 1/23/06
Recording Requested By and
When Recorded Mail To:
)
)
)
Stradling Y occa Carlson & Rauth )
660 Newport Center Drive, Suite 1600)
Newport Beach, California 92660 )
Attention: Robert J. Whalen, Esq. )
)
[Space above for recorder.]
This document is recorded for the benefit ofthe
City of Chula Vista, and the recording is
fee-exempt under Section 27383 of the
Government Code.
FIRST AMENDMENT TO SITE LEASE
between
CITY OF CHULA VISTA
and
CHULA VISTA PUBLIC FINANCING AUTHORITY
Dated as of March I, 2006
Relating to the
$
City of Chula Vista
Certificates of Participation
(Civic Center Project-Phase 2)
2-IL/q
DOCSOCI1147272v6/024036-0033
FIRST AMENDMENT TO SITE LEASE
This First Amendment to Site Lease (the "First Amendment to Site Lease") is made
and entered into as of March 1, 2006, by and between the CITY OF CHULA VISTA, a municipal
corporation and a charter city duly organized and existing under and by virtue of the laws of the
State, as lessor (the "City"), and the CHULA VISTA PUBLIC FINANCING AUTHORITY, a joint
powers authority duly organized and existing under the laws of the State, as lessee (the "Authority"),
and amends, in part, that certain Site Lease between the City, as lessor, and the Authority, as Jessee,
dated as of September I, 2004 and recorded in the official records of the County of San Diego (the
"County") on September 15, 2004 as Document No. 2004-0877211 (the "Site Lease").
W IIN f:.s..s.f:IH:
WHEREAS, the City has entered into the Site Lease with the Authority for the
purpose of leasing to the Authority, as lessee thereunder, the real property (including all existing
improvements thereon) described in Exhibit A thereto; and
WHEREAS, the City and the Authority desire to enter into this First Amendment to
Site Lease in order to facilitate the execution and delivery of those certain $ City of Chula
Vista 2006 Certificates of Participation (Civic Center Project-Phase 2) (the "2006 Certificates");
and
WHEREAS, the 2006 Certificates are being executed and delivered as Additional
Certificates under that certain Amended and Restated Trust Agreement, dated as of March 1, 2006
(the "Trust Agreement"), by and among the City, the Authority and The Bank of New York Trust
Company, N.A., as Trustee (the "Trustee"), which amends and restates in its entirety the Trust
Agreement, dated as of September 1, 2004, by and among the City, the Authority and the Trustee,
pursuant to which the Trustee executed and delivered the $37,240,000 City of Chula Vista 2004
Certificates of Participation (Civic Center Project - Phase 1) (the "2004 Certificates"); and
WHEREAS, pursuant to Section 18 of the Site Lease the City and the Authority
reserved the right to amend the Site Lease; and
WHEREAS, pursuant to Section 18 of the Site Lease and Section 8.3 of the
Lease/Purchase Agreement, dated as of September 1,2004 (the "Lease"), by and between the City, as
lessee, and the Authority, as lessor, and recorded in the official records of the County on
September 15,2004 as Document No. 2004-0877212, the City and the Authority reserved the right to
amend the Site Lease and the Lease in connection with the execution and delivery of Additional
Certificates; and
WHEREAS, to facilitate the execution and delivery of the 2006 Certificates, the City
has determined to add certain real property and improvements consisting of Montevalle Park and Salt
Creek Park (the "Additional Property") described in Exhibit A hereto to the property being leased to
the Authority under the Site Lease; and
WHEREAS, the parties hereto have agreed to amend the Site Lease as described
herein, which amendments do not adversely affect the interests of the Owners of the 2004
Certificates, the 2006 Certificates or any Additional Certificates;
2
2- - ISO
DOCSOC/1147272v6/024036-0033
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
for other valuable consideration, it is hereby mutually agreed as follows:
SECTION 1. Definitions. Unless the context otherwise requires, the capitalized
terms herein which are not defined herein shall have the meanings referenced in the Site Lease.
SECTION 2. Amendment of Section 3. The first sentence of Section 3 of the Site
Lease is amended by deleting the words "March I, 2034" and inserting in their place the words
"March 1,20_"
SECTION 3. Lease of Additional Property. The City hereby leases to the
Authority and the Authority hereby leases from the City the Additional Property, on the terms and
conditions set forth in the Site Lease. Exhibit A to the Site Lease is hereby deleted in its entirety and
replaced by Exhibit A hereto, and, from and after the date hereof, the Property (as defined in the Site
Lease) consists of the real property described in Exhibit A hereto and the existing improvements
thereon. Upon the release of the Additional Property under the Lease, without the need for any
further consents or approvals, the parties hereto shall execute an amendment to revise Exhibit A
hereto to reflect the removal ofthe Additional Property from the Site.
SECTION 4. Additional Rental. Section 4 of the Site Lease is amended, in part,
by adding a sentence thereto stating as follows: "Tbe Authority, and any assignee or successor in
interest of the Authority under this Site Lease, shall pay to the City as an additional rental payment
hereunder an amount equal to the net proceeds of the 2006 Certificates and any Additional
Certificates deposited with the Trustee.
SECTION 5. References to Trust A!!reement. From and after the date of the
execution and delivery of the 2006 Certificates, all references in the Site Lease to "Trust Agreement"
shall refer to the Amended and Restated Trust Agreement as further amended from time to time.
SECTION 6. No Other Amendments. Except as expressly set forth in Section 2
and 3 above, all other provisions of the Site Lease remain in full force and effect.
SECTION 7. Counteroarts. This First Amendment to Site Lease 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.
3
2-/5/
DOCSOCIl147272v6/024036-0033
IN WITNESS WHEREOF, the parties have caused this First Amendment to Site
Lease to be executed by their duly authorized officers on the date and year first above written.
CITY OF CHULA VISTA, as Lessor
By:
City Manager
ATTEST:
City Clerk
CHULA VISTA PUBLIC FINANCING AUTHORITY,
as Lessee
By:
Chief Financial Officer
ATTEST:
Secretary
4
'2 ~/62
DOCSOC/1147272v6/024036-0033
CONSENTED TO BY:
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as successor-in-interest to BNY Western Trust Company,
as Trustee and Assignee
By:
Authorized Officer
5
DOCSOC/l147272v6/024036-0033
2 -1r!J3
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed under the foregoing to the Chula
Vista Public Financing Authority (the "Authority"), a body corporate and politic, is hereby accepted
by the undersigned officer or agent on behalf of the Board of the Authority (the "Board"), pursuant to
authority conferred by resolution of the said Board adopted on February 7, 2006, and the grantee
consents to recordation thereof by its duly authorized officer.
Dated: March _, 2006
CHULA VISTA PUBLIC FINANCING
AUTHOR:lTY
By:
Its: Chief Financial Officer
6 '2--~ /6!.{
DOCSOC/1147272v6/024036-0033
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On March _, 2006 before me, the undersigned, personally appeared David D. Rowlands, Jr.,
personally known to me to be the person whose names is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity upon behalf of which the person acted, executed the
instrument.
[SEAL]
WITNESS my hand and official seal
Donna Norris, Assistant City Clerk ofthe City of
Chula Vista
DOCSOC/1147272v6/024036-0033
2.-- it75
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On March _, 2006 before me, the undersigned, personally appeared Maria Kachadoorian,
personally known to me to be the person whose names is subscribed to the within instrument and
acknowledged to me that she executed the same in her authorized capacity, and that by her signature
on the instrument the person, or the entity upon behalf of which the person acted, executed the
instrument.
[SEAL]
WITNESS my hand and official seal
Donna Norris, Assistant City Clerk of the City of
Chula Vista
DOC50CI1147272v6/024036-0033
2~/6b
EXHIBIT A
DESCRIPTION OF THE LEASED PREMISES
THAT REAL PROPERTY IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
CIVIC CENTER
PARCEL A:
ALL THAT PORTION OF THE WESTERLY HALF OF LOT 13, IN QUARTER SECTION 149,
CHULA VISTA, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888, DESCRIBED AS
FOLLOWS:
COMMENCING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT WHICH IS NORTH
71 DEGREES EAST 467 Yo FEET FROM THE SOUTHWESTERLY CORNER OF SAID LOT;
THENCE NORTH 71 DEGREES EAST ALONG THE SOUTHERLY LINE OF SAID LOT 78 Yo
FEET; THENCE NORTH 19 DEGREES WEST 290 FEET TO THE NORTHERLY LINE OF SAID
LOT 13; THENCE SOUTH 71 DEGREES WEST ALONG SAID NORTHERLY LINE OF SAID
LOT, 78 Yo FEET; THENCE SOUTH 19 DEGREES EAST, 290 FEET, TO POINT OF
COMMENCEMENT.
(ArN: 568-110-17-00)
PARCEL B:
ALL THAT PORTION OF THE WESTERLY HALF OF LOT 13, IN QUARTER SECTION 149,
CHULA VISTA, IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888, DESCRIBED AS
FOLLOWS:
COMMENCING AT A POINT IN THE SOUTHERLY LINE OF SAID LOT WHICH IS NORTH
71 DEGREES 00'00" EAST, 546.00 FEET FROM THE SOUTHWESTERLY CORNER OF SAID
LOT, SAID POINT BEING ALSO THE SOUTHEASTERLY CORNER OF THE LANDS
CONVEYED BY ELLA J. WHARTON AND REVERDY J. WHARTON TO ROBERT H. KING,
BY DEED DATED MARCH 2,1914 AND RECORDER IN BOOK 643, PAGE 325 OF DEEDS,
RECORDS OF SAN DIEGO COUNTY; THENCE NORTH 71 DEGREES 00'00" EAST ALONG
SAID SOUTHERLY LINE OF SAID LOT 74.00 FEET TO THE SOUTHEASTERLY CORNER
OF THE WESTERLY HALF OF SAID LOT; THENCE NORTH 19 DEGREES 00'00" WEST
ALONG THE EASTERLY LINE OF SAID WESTERLY HALF OF SAID LOT, 290.00 FEET TO
THE NORTHERLY LINE THEREOF; THENCE SOUTH 71 DEGREES 00'00" WEST ALONG
THE NORTHERLY LINE THEREOF 74.00 FEET, MORE OR LESS, TO THE
A-I
DOCSOC/l147272v6/024036-0033
2--167
NORTHEASTERLY CORNER OF THE LAND SO CONVEYED TO KlNG; THENCE SOUTH 19
DEGREES 00'00" EAST ALONG THE EASTERLY LINE OF SAID KING'S LAND, 290.00 FEET
TO THE POINT OF COMMENCEMENT.
(APN: 568-110-16-00)
PARCEL C:
THE EAST HALF OF TEN-ACRE LOT FOURTEEN AND THE EAST HALF OF TEN-ACRE
LOT THIRTEEN IN QUARTER SECTION ONE HUNDRED FORTY-NINE OF CHULA VISTA,
IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA,
BEING IN RANCHO DE LA NACION, ACCORDING TO MAP THEREOF NO. 505, FILED IN
THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY MARCH 13, 1888.
EXCEPTING THOSE PORTIONS LYING WITHIN PARCELS 1 AND 2.
PARCEL 1:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG A VENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH
18 DEGREES 40'22" EAST 100.00 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135.00
FEET; THENCE NORTH 18 DEGREES 40'22" WEST, 77.13 FEET TO THE BEGINNING OF A
TANGENT CURVE TO THE LEFT HALF HAVING A RADIUS OF 23.00 FEET AND A
CENTRAL ANGLE OF 89 DEGREES 40'37"; THENCE ALONG SAID CURVE A DISTANCE
OF 36.00 FEET; THENCE SOUTH 71 DEGREES 00'15" WEST, A DISTANCE OF 112.13 FEET
TO THE TRUE POINT OF BEGINNING.
PARCEL 2:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
A-2
2-/5'6
DOCSOC/l147272v6/024036-0033
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG AVENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH 18
DEGREES 40'22" EAST 100 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135.00 FEET;
THENCE SOUTH 18 DEGREES 40'22" EAST, 40 FEET; THENCE SOUTH 71 DEGREES 00'15"
WEST TO AN INTERSECTION WITH THE EASTERLY LINE OF THE WESTERLY 60 FEET
OF THE EAST HALF OF SAID LOT 14; THENCE NORTHERLY ALONG SAID EASTERLY
LINE TO AN INTERSECTION WITH A LINE WHICH BEARS SOUTH 71 DEGREES 00'15"
WEST FROM THE TRUE POINT OF BEGINNING; THENCE ALONG SAID LINE NORTH 71
DEGREES 00'15" EAST TO THE TRUE POINT OF BEGINNING.
(APN: 568-110-33-00)
PARCEL D:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG AVENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF UtE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH
18 DEGREES 40'22" EAST 100.00 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135.00
FEET; THENCE NORTH 18 DEGREES 40'22" WEST, 77.13 FEET TO THE BEGINNING OF A
TANGENT CURVE TO THE LEFT HALF HAVING A RADIUS OF 23.00 FEET AND A
CENTRAL ANGLE OF 89 DEGREES 40'37"; THENCE ALONG SAID CURVE A DISTANCE
OF 36.00 FEET; THENCE SOUTH 71 DEGREES 00'15" WEST, A DISTANCE OF 112.13 FEET
TO THE TRUE POINT OF BEGINNING.
PARCEL E:
ALL THAT PORTION OF LOT 14 OF THE NORTHEAST QUARTER OF QUARTER SECTION
149 OF RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 505, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 13, 1888,
DESCRIBED AS FOLLOWS:
A-3
'2 - 10'1
DOCSOC/1147272v6/024036-0033
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF FIG AVENUE WITH THE
CENTERLINE OF DAVIDSON STREET, ACCORDING TO MAP NO. 2109, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SAN DIEGO, CALIFORNIA,
BEING THE NORTHWEST CORNER OF THE EAST-HALF OF SAID LOT 14; THENCE
NORTH 71 DEGREES 00'15" EAST, 135.39 FEET; THENCE SOUTH 18 DEGREES 40'22"
EAST, 30 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH 18
DEGREES 40'22" EAST 100 FEET; THENCE NORTH 71 DEGREES 00'15" EAST, 135 FEET;
THENCE SOUTH 18 DEGREES 40'22" EAST, 40 FEET; THENCE SOUTH 71 DEGREES 00'15"
WEST TO AN INTERSECTION WITH THE EASTERLY LINE OF THE WESTERLY 60 FEET
OF THE EAST HALF OF SAID LOT 14; THENCE NORTHERLY ALONG SAID EASTERLY
LINE TO AN INTERSECTION WITH A LINE WHICH BEARS SOUTH 71 DEGREES 00'15"
WEST FROM THE TRUE POINT OF BEGINNING; THENCE ALONG SAID LINE NORTH 71
DEGREES 00'15" EAST TO THE TRUE POINT OF BEGINNING.
(APN: 568-110-32-00)
FIRE STATION NO.7
PARCEL F:
THAT PORTION OF PARCEL 4 OF PARCEL MAP NO. 18789, IN THE CITY OF CHULA
VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY ON SEPTEMBER 7, 2001, BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT AN ANGLE POINT ON THE EASTERLY BOUNDARY OF SAID PARCEL
4 BEING THE WESTERLY TERMINUS OF THAT COURSE ON THE BOUNDARY OF
PARCEL 1 OF SAID PARCEL MAP NO. 18789 DEPICTED ON SHEET 3 OF SAID PARCEL
MAP NO. 18789 AS NORTH 71 DEGREES 57'24" EAST, 1091.24', SAID POINT BEING THE
NORTHERLY TERMINUS OF THE WESTERLY RIGHT OF WAY OF LA MEDIA ROAD AS
DEDICATED ON CHULA VISTA TRACT NO. 02-055 OTA Y RANCH VILLAGE 6 UNIT 2 "A"
MAP NO.1 ACCORDING TO MAP THEREOF NO. 14447 FILED IN THE SAID OFFICE OF
THE COUNTY RECORDER ON SEPTEMBER 18, 2002, SAID POINT ALSO BEING A POINT
ON A 4336.00 FOOT RADIUS CURVE, CONCAVE WESTERLY, A RADIAL LINE OF SAID
CURVE BEARS NORTH 77 DEGREES 19'04" EAST (RECORD NORTH 77 DEGREES 18'51"
EAST PER SAID PARCEL MAP NO. 18789) TO SAID POINT; THENCE ALONG SAID
WESTERLY RIGHT OF WAY SOUTHERLY ALONG THE ARC OF SAID 4336.00 FOOT
RADIUS CURVE THROUGH A CENTRAL ANGLE OF 00 DEGREES 39'06", 49.32 FEET TO
THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID WESTERLY
RIGHT OF WAY SOUTHERLY ALONG THE ARC OF SAID 4336.00 FOOT RADIUS CURVE
THROUGH A CENTRAL ANGLE OF 03 DEGREES 24'43", 258.21 FEET; THENCE LEAVING
SAID WESTERLY RIGHT OF WAY NON-TANGENT TO SAID CURVE SOUTH 76 DEGREES
40'26" WEST, 266.27 FEET; THENCE NORTH 12 DEGREES 45'05" WEST, 271.84 FEET TO A
POINT ON THE PROPOSED SOUTHERLY RIGHT OF WAY ("STREET A" WITHIN OTAY
RANCH VILLAGE 2; THENCE ALONG SAID PROPOSED SOUTHERLY RIGHT OF WAY
NORTH 77 DEGREES 14'55" EAST, 259.19 FEET; THENCE CONTINUING ALONG SAID
A-4
2-lbO
DOCSOCIl147272v6/024036-0033
PROPOSED SOUTHERLY RIGHT OF WAY SOUTH 70 DEGREES 47'53" EAST, 20.21 FEET
TO THE TRUE POINT OF BEGINNING.
(APN: 644-030-22-00)
MONTEV ALLE PARK
[TO COME]
SALT CREEK PARK
[TO COME]
A-5
(2 -1101
DOCSOC/l147272v6/024036-0033
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ATTACHMENT 8
DRUT AS OF J.~'mARY 30,2006
RATINGS
Moody's: _
S&P:
(See "CONCLUDING INFORMATION ~ Ratings on the Certificates" herein).
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Special Counsel, under
existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance
with certain covenants and requirements described herein, interest with respect to the Certificates is excludedfrom gross income for
federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax
imposed in individuals and corporations. In the further opinion of Special Counsel, the interest due with respect to the Certificates is
exempt from State of California personal income tax. See "LEGAL M4ITERS - Tax Exemption" herein.
NEW ISSUE
BOOK-ENTRY ONLY
SAN DIEGO COUNTY
STATE OF CALIFORNIA
$20,100,000*
CITY OF CHULA VISTA
2006 Certificates of Participation
(Civic Center Project - Phase 2)
Evidencing Undivided Proportionate Interests in Lease Payments to be Made by the
CITY OF CHULA VISTA, CALIFORNIA
Pursuant to a Lease with the
CHULA VISTA PUBLIC FINANCING AUTHORITY
Dated: Date of Delivery
Due: March 1, as Shown on the Inside Front Cover.
The cover page contains certain information for quick reference only. It is not a summary of the issue. Potential investors
must read the entire Official Statement to obtain information essential to the making of an informed investment decision. See
"CERTIFICATE OWNERS' RISKS" herein for a discussion of special risk factors that should be considered in evaluating the
investment quality of the Certificates.
The City of Chula Vista 2006 Certificates of participation (Civic Center Project - Phase 2) (the .'Certificates'") are being executed and
delivered to (i) provide funds for the construction and equipping of certain improvements to the Civic Center complex of the City of
Chula Vista (the .'City") and other existing City facilities as described herein (the "ProjecC), (ii) fund capitalized interest during
construction, (iii) finance a reserve fund for the Certificates and (iv) pay the costs incurred in connection with the execution and
delivery of the Certificates. The Certificates evidence direct, undivided proportionate interests in lease payments ("Lease Payments")
to be made by the City to the Chula Vista Public Financing Authority (the "Authority") as rental for certain real property and the
improvements thereon (referred to herein as the '.Leased Premises") consisting of the City's Civic Center complex, the City's Fire
Station No.7 and two City parks pursuant to a LeaselPurchase Agreement, dated September 1, 2004 as amended by a First
Amendment to Lease/Purchase Agreement dated as of March 1, 2006, by and between the City and the Authority (as amended, the
"Lease'.), as described herein. See '.THE LEASED PREMISES" herein. The City is required under the Lease to make Lease Payments
in each fiscal year in consideration of the use and possession of the Leased Premises from any source of available funds, including
certain funds held under a trust agreement, as described herein, and insurance or condemnation awards, in an amount sufficient to pay
the annual principal and interest due with respect to the Certificates, subject to abatement, as described herein (see '"SOURCES OF
PAYMENT FOR mE CERTIFICATES" and "CERTIFICATE OWNERS' RISKS" herein).
Interest represented by the Certificates is payable on September 1, 2006, and semiannually thereafter on March 1 and September 1 of
each year until maturity or earlier prepayment (see "THE CERTIFICATES - General Provisions" and "THE CERTIFICATES -
Prepayment" herein).
Payment of the principal at the stated maturity of and interest with respect to the Certificates will be guaranteed by a fmancial
guaranty insurance policy to be issued by simultaneously with the execution and delivery of the Certi1icates. See
'"SOURCES OF PAYMENT FOR THE CERTIFICATES - Certificate Insurance" herein.
[LOGO]
The Certificates are offered, when, as and if executed and delivered, subject to the approval as to their legality by Stradling Yocca
Carlson & Rauth, a Professional Corporation, Newport Beach, California, Special Counsel. Certain legal matters will be passed on
for the City by the City Attorney, and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California,
as Disclosure Counsel. It is anticipated that the Certificates, in book-entry fonn, will be available for delivery on or about March 15,
2006 through the facilities of The Depository Trust Company (see "APPENDIX F - BOOK~ENTRY ONLY SYSTEM" herein).
The date of the Official Statement is~, 2006.
* Preliminary, subject to change.
Z-fb2
$20,100,000'
CITY OF CHULA VISTA
2006 Certificates of Participation
(Civic Center Project - Pbase 2)
Evidencing Undivided Proportionate Interests in Lease Payments to be Made by the
CITY OF CHULA VISTA, CALIFORNIA
Pursuant to a Lease witb tbe
CHULA VISTA PUBLIC FINANCING AUTHORITY
MATURITY SCHEDULE
(Base CUSIP@t )
Maturity Date
Marcb 1
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
2034
2035
2036
Principal
Amount
Interesf
Rate
~eoffering
YietdlPrice
~@t
* Preliminary, subject to change.
t CUSIP@ A registered trademark of tbe American Bankers Association. Copyright Ii:> 1999-2006 Standard &
Poor's, a Division of The McGraw-Hill Companies, Inc. CUSIP@ data herein is provided by Standard & Poor's
CUSIP@ Service Bureau. This data in not intended to create a database and does not serve in any way as a
substitute for the CUSIP@ Service Bureau. CUSIP@ numbers are provided for convenience of reference only.
Neither the City nor the Underwriter takes any responsibility for the accuracy of such numbers.
2-11o:J
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement This Official Statement is submitted in connection with the offer and sale of
the Certificates referred to herein and may not be reproduced or used, in whole or in part, for any other
purpose. This Official Statement is not to be construed as a contract with the purchasers of the
Certificates.
Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the
Authority or the City in any press release and in any oral statement made with the approval of an
authorized officer of the City or any other entity described or referenced herein, the words or phrases
"will likely result," "are expected to," "will continue," "'is anticipated," "estimate," "project," "forecast,"
"expect," "'intend" and similar expressions identify "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements are subjecf to risks and
uncertainties that could cause actual results to differ materially from those contemplated in such forward-
looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to
develop the forecasts will not be realized and unanticipated events and circumstances may occur.
Therefore, there are likely to be differences between forecasts and actual results, and those differences
may be material.
Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the Authority or
the City to give any information or to make any representations in connection with the offer or sale of the
Certificates other than those contained herein and if given or made, such other information or
representation must not be relied upon as having been authorized by the Authority, the City, the Financial
Advisor or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the Certificates by a person in any jurisdiction in which it
is unlawful for such person to make such an offer, solicitation or sale.
Involvement of Underwriter. The Underwriter has submitted the following sentence for inclusion in this
Official Statement: The Underwriter has reviewed the information in this Official Statement in
accordance with, and as a 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.
Information Subject to Change. The information and expressions of opinions herein are subject to
change without notice and neither delivery of this Official Statement nor any sale made hereunder shall,
under any circumstances, create any implication that there has been no change in the affairs of the
Authority or the City or any other entity described or referenced herein since the date hereof. All
summaries of the documents referred to in this Official Statement 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.
Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect
transactions which stabilize or maintain the market price of the Certificates at a level above that which
might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any
time. The Underwriter may offer and sell the Certificates to certain dealers and others at prices lower
than the public offering prices set forth on the inside front cover page hereof and said public offering
prices may be changed from time to time by the Underwriter.
THE CERTIFICATES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON AN EXCEPTION FROM THE REGISTRATION
REQUIREMENTS CONTAINED IN SUCH ACT. THE CERTIFICATES HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
2-lb'l
CITY OF CHULA VISTA, CALIFORNIA
CITY COUNCIL
Stephen C. Padilla, Mayor
John McCann, Mayor Pro Tem
Steve Castaneda, Councilmember
Patricia E. Chavez, Councilmember
Jerry Rindone, Councilmember
CITY STAFF
David D. Rowlands, Jr., City Manager
Jim Thomson, Assistant City Manager
Maria Kachadoorian, Director of Finance/Treasurer
Ann Moore, City Attorney
Susan Bigelow, City Clerk
PROFESSIONAL SERVICES
Special Counsel and Disclosure Counsel
Stradling Yocca Carlson & Rauth,
a Professional Corporation
Newport Beach, California
Financial Advisor
Harrell & Company Advisors, LLC
Orange, California
Trustee
The Bank of New York Trust Company, N.A.
Los Angeles, California
2- -j &5
TABLE OF CONTENTS
INTRODUCTION ......................................................1
The City .....................................................................1
Security and Sources of Repayment ..........................1
Additional Certificates........................... ......... ...........3
Tax Exemption... ........... ................................... ..........3
Professional Services.. ......" ...." ... ........., ........ ...... ......3
Offering of the Certificates ........................................4
Information Concerning this Official Staternent........4
.
THE CERTIFICATES ...............................................5
General Provisions. ..... ....... ....... .......... ........... ............ 5
Prepayment............ .......................... ................... .......6
Scheduled Lease Payments........................................8
THE FINANCING PLAN ..........................................9
Estimated Sources and Uses of Funds .......................9
The Project...................... .............................. ............. 9
The Civic Center Complex ........................................9
DesignlBuild Agreement.......................................... 1 0
Nature Center Improvements................................... 1 1
Project Costs ............................................................11
THE LEASED PREMISES .....................................12
Description of the Leased Premises......................... 12
SOURCES OF PAYMENT FOR THE
CERTIFICATES.................................................... 13
General..... ............. ...................... ................... ...... ....13
Lease Payments; Abatement ....................................13
Reserve Fund ...........................................................14
Capitalized Interest ..................................................14
Certificate Insurance ................................................15
Insurance Relating to the Leased Premises..............15
Reentering and Reletting .........................................15
THE AUTHORITY ..................................................16
CITY OF CHULA VISTA........................................ 16
General Information.............................................. ...16
General Organization ...............................................16
Governmental Services ............................................17
Community Facilities and Services .........................17
Transportation... .... .... ...... ......... ..' ....... ....... ,_,.. ... .......18
Population... .......... ..... ...................... ................. ...... .19
Personal Income... .. .... ........... ......... ...... ........ ..... ..... ..19
Employment and Industry........................................20
Commercial Activity..... ........ ...... ... ...... ........ ..... ..... ..21
Building Activity .....................................................23
FINANCIAL INFORMATION ...............................24
Budgetary Process and Administration ....................24
Appropriations Limit ...............................................24
.
Revenues and Expenditures .....................................24
Local Taxes .... ...... .......... ..... .......... ............ ......... ..... .26
Motor Vehicle License Fees .....................................29
Other Revenue Sources............................................30
Public Facilities Development Impact Fees.............30
Personnel............................. ...... ..... ..........................31
Employee Relations and Collective Bargaining.......31
Retirement Programs ...............................................32
Insurance Program ........... ......... ............ ........ ....... ....32
Outstanding Indebtedness of the City ......................33
Direct and Overlapping Debt...................................35
Financial Statements............... ...... ................... ........36
City Investment Policy.............................................39
CERTIFICATE OWNERS' RISKS ........................42
The Lease Payments ................................................42
Limited Recourse on Default ...................................47
Release or Substitution of Property .........................48
Loss of Tax Exemption ............................................48
Secondary Market ..... ...... ....................... .......... ........48
LEGAL MATTERS ..................................................49
Enforceability of Remedies .... ........ .......... .............. ..49
Approval of Legal Proceedings................................49
Tax Exemption ....... ......................... ...... ............ ... ....49
Absence of Litigation ............. ...... ....... ............ ....... ..51
CONCLUDING INFORMATION ..........................51
Ratings on the Certificates .......................................51
Underwriting .......... .... ........... ..... ... .... ............. ....... ...51
The Financial Advisor ..............................................51
Continuing Disclosure .............................................51
Additional Information ............................................52
References .... .... ...... ............ .................. ...... ............ ..52
Execution.... .......... ........ ....... ..... ..... ...... ................. ...52
APPENDIX A - SUMMARY OF PRINCIPAL
LEGAL DOCUMENTS
APPENDIX B - CITY AUDITED FINANCIAL
STATEMENTS
APPENDIX C - FORM OF CONTINUING
DISCLOSURE AGREEMENT
APPENDIX D - FORM OF SPECIAL COUNSEL
OPINION
APPENDIX E - SPECIMEN MUNICIPAL BOND
INSURANCE POLICY
APPENDIX F - BOOK-ENTRY ONLY SYSTEM
2-lbb
OFFICIAL STATEMENT
$20,100,000*
CiTY OF CHULA ViSTA
2006 Certificates of Participation
(Civic Center Project - Phase 2)
Evidencing Undivided Proportionate Interests in Lease Payments to be Made by the
CiTY OF CHULA VISTA, CALIFORNIA
Pursuant to a Lease with the
CHULA VISTA PUBLIC FINANCING AUTHORiTY
This Official Statement which includes the cover page and appendices (the "Official Statement"), is
provided to furnish certain information concerniog the sale, execution and delivery of 2006 Certificates of
participation (the "Certificates"), in the aggregate principal amount of $20,100,000', evidencing
undivided proportionate interests in Lease Payments (defined below) to be made by the City of Chula
Vista, California (the "City"), pursuant to a Lease as more fully described hereio (the "Lease") with the
Chula Vista Public Financing Authority (the "Authority").
INTRODUCTION
This Introduction contains only a brief description of this issue and does not purport to be complete. The
Introduction is subject in all respects to more complete information in the entire Official Statement and
the offering of the Certificates to potential investors is made only by means of the entire Official Statement
and the documents summarized herein. Potential investors must read the entire Official Statemerzt to
obtain information essential to the making of an informed investment decision (see "CERTIFICATE
OWNERS 'RISKS " herein).
The City
The City of Chula Vista (the "City") is located on San Diego Bay in Southern California, 8 miles south of
San Diego and 7 miles north of the Mexico border in an area generally known as "South Bay." The City
encompasses approximately 50 square miles. Based on population, Chula Vista is the second largest city
in San Diego County (see "CITY OF CHULA VISTA" herein).
Security and Sources of Repayment
In 2004, the City delivered $37,240,000 2004 Certificates of participation (Civic Center Project - Phase
I) (the "2004 Certificates') for the purpose of financing the first phase of renovation of the City's Civic
Center complex and other City public improvements. The 2004 Certificates are payable from lease
payments (the "2004 Lease Payments") made pursuant to a Lease/Purchase Agreement dated as of
September 1, 2004 (the "2004 Lease") between the City, as lessee, and the Authority, as lessor, entered
into for the lease of certain real property and improvements comprising the City's Civic Center complex
and Fire Station No.7. The City leased such real property and improvements to the Authority under a
Site Lease dated as of September I, 2004 (the "2004 Site Lease").
*Preliminary, subject to change.
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In order to provide for additional lease payments under the 2004 Lease (the "2006 Lease Payments," and
together with the 2004 Lease Payments, the "Lease Payments"), the City and the Authority will enter into
a First Amendment to Lease/Purchase Agreement (the "First Amendment") dated as of March I, 2006,
which amends the 2004 Lease (as amended, the "Lease"). The City and the Authority will also enter into
a First Amendment to Site Lease, dated as of March I, 2006, to amend the 2004 Site Lease (as amended,
the "Site Lease"). Under the First Amendment, the City and the Authority agree to add certain real
property and improvements to the Lease comprising the City's Montevalle Park and Community Center
and Salt Creek Park and Community Center (together with the Civic Center and Fire Station No.7, the
"Leased Premises").
The Certificates are being executed and delivered pursuant to an Amended and Restated Trust Agreement
dated as of March 1, 2006 (the "Trust Agreement"), by and among the City, the Authority and The Bank
of New York Trust Company, N.A., as trustee (the "Trustee"). The Certificates represent direct, undivided
proportionate interests in the 2006 Lease Payments. The City will use a portion of the proceeds of the
Certificates to provide funds for the construction and equipping of additional improvements to the Civic
Center complex and for renovation of the City's Nature Center (the "Project"). See "THE FINANCING
PLAN - The Project" herein.
Pursuant to an Assignment Agreement, dated as of September I, 2004, as amended by a First Amendment
to Assignment Agreement, dated as of March I, 2006 (as amended, the "Assignment Agreement"), by and
between the Authority and the Trustee, the Authority assigns to the Trustee, for the benefit of the owners
of the Certificates and the 2004 Certificates, substantially all of its rights under the Lease, including its
right to receive and collect Lease Payments and prepayments from the City under the Lease and rights as
may be necessary to enforce payment of Lease Payments and prepayments. All rights assigned by the
Authority pursuant to the Assignment Agreement will be administered by the Trustee in accordance with
the provisions of the Trust Agreement for the equal and proportionate benefit of all owners of the
Certificates and the 2004 Certificates.
For a swnmary of the Trust Agreement, the Lease, the Site Lease and the Assignment Agreement, see
"APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS" herein. Certain capitalized terms used
in this Official Statement and not otherwise defined have the meanings given them in "APPENDIX A."
In general, the City is required under the Lease to pay to the Trustee specified amounts for use and
possession of the Leased Premises which amounts are calculated to be sufficient in both time and amount
to pay, when due, the principal and interest payable with respect to the Certificates and the 2004
Certificates. The City is also required to pay any taxes and assessments levied on the Leased Premises
and all costs of maintenance and repair of the Leased Premises. The City has covenanted in the Lease to
take such actions as may be necessary to include all Lease Payments in its annual budgets and to make the
necessary annual appropriations for all such Lease Payments subject to complete or partial abatement of
such Lease Payments resulting from a taking of the Leased Premises (either in whole or in part) under the
powers of eminent domain or resulting from damage or loss of all or any portion of the Leased Premises.
Except for the Authority's right, title and interest in and to the Lease which have been assigned to the
Trustee, no funds or properties of the Authority or the City are pledged to or otherwise liable for the
obligations of the Authority (see "CERTIFICATE OWNERS' RISKS" herein).
The Lease is, in the opinion of Special Counsel, a valid and binding obligation of the City enforceable
against the City in accordance with its terms, except to the extent enforceabiiity thereof may be limited by
bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights heretofore or
hereinafter enacted and may be subject to the exercise of judicial discretion in accordance with general
principles of equity or otherwise in appropriate cases (see "CERTIFICATE OWNERS' RISKS - The Lease
Payments - Limited Recourse on Default" herein). The form of Special Counsel's opinion is attached
hereto as "APPENDIX D."
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The obligation of the City to pay Lease Payments does not constitute an obligation for wbich the
City is obligated to levy or pledge any form of taxation or for which the City bas pledged any form
of taxation. The obligation of the City to pay Lease Payments does not constitute a debt or liability
of the State of California or of any political subdivision thereof within the meaning of any
constitutional or statutory debt limitation or restriction.
Additional Certificates
The Certificates are being executed and delivered as "Additional Certificates" under the Trust Agreement
and are secured by Lease Payments on a parity with the 2004 Certificates. Further, the City expects to
cause approximately $18,000,000 of Additional Certificates to be executed and delivered in 2007
pursuant to the Trust Agreement to finance the third and final phase of the renovation to the Civic Center
complex. In connection with the execution and delivery of such Additional Certificates, the Lease
Payments due under the Lease would be increased. The Certificates, the 2004 Certificates and the
Additional Certificates will be secured on a parity under the Trust Agreement by Lease Payments and
other amounts held in the funds established thereunder other than the Project Fund and the Rebate Fund.
See "APPENDIX A _ SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - THE CERTIFICATES - Additional
Certificates."
Tax Exemption
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California ("Special Counsel"), under existing statutes, regulations, rulings and judicial decisions, and
assuming certain representations and compliance with certain covenants and requirements described
herein, the interest (and original issue discount) due with respect to the Certificates is excluded from gross
income for federal income tax purposes and is not an item of tax preference for purposes of calculating
the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of
Special Counsel, the interest (and original issue discount) due with respect to the Certificates is exempt
from State of California personal income tax. See "LEGAL MATTERS - Tax Exemption" herein.
Professional Services
All legal proceedings in connection with the execution and delivery of the Certificates are subject to the
approving opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California, Special Counsel. Certain legal matters will be passed on for the City by Ann Moore, City
Attorney and by Stradling Yocca Carlson & Rauth, a Professional Corporation, as Disclosure Counsel.
The Bank of New York Trust Company, N.A., serves as Trustee under the Trust Agreement. The Trustee
will act on behalf of the Certificate Owners for the purpose of receiving all moneys required to be paid to
the Trustee, to allocate, use and apply the same, to hold, receive and disburse the Lease Payments and
other funds held under the Trust Agreement, and otherwise to hold all the offices and perform all the
functions and duties provided in the Trust Agreement to be held and performed by the Trustee.
Harrell & Company Advisors, LLC (the "Financial Advisor") advised the City as to the financial structure
and certain other financial matters relating to the Certificates.
The City's audited general purpose financial statements for the fiscal year ended June 30, 2005, attached
hereto as "APPENDIX B" have been audited by Caporicci & Larson, Certified Public Accountants, Costa
Mesa, California. The City's audited financial statements are public documents and are included within
this Official Statement without the prior approval of the auditor. Accordingly, the auditor has not
performed any post-audit of the financial condition of the City.
3
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Offering of the Certificates
Authority for Execution and Delivery. The Certificates are to be executed and delivered pursuant to the
Trust Agreement, and have been authorized by a resolution adopted by the City Council of the City on
February 7, 2006. The Site Lease and the Lease will be entered into in accordance with the laws of the
State of California (the "State"), and particularly Section 37350 of the Government Code ofthe State.
Offering and Delivery of the Certificates. The Certificates were sold to at
competitive sale. The Certificates are offered, when, as and if executed and delivered, subject to the
approval as to their legality by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport
Beach, California, Special Counsel. It is anticipated that the Certificates, in book-entry form, will be
available for delivery in New York, New York on March 15, 2006 through the facilities of The Depository
Trust Company. See "APPENDIX F - BOOK-ENJRY ONLY SYSTEM."
Information Concerning this Official Statement
This Official Statement speaks only as of its date. The information set forth herein has been obtained by
the City with the assistance of the Financial Advisor from sources which are believed to be reliable and
such information is believed to be accurate and complete, but such information is not guaranteed as to
accuracy or completeness, nor has it been independently verified and is not to be construed as a
representation by the Financial Advisor or the Disclosure Counsel. Statements contained in this Official
Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described
herein, are intended as such and are not to be construed as representations of fact.
Preliminary Official Statement Deemed Final. The information set forth herein is in a form deemed
final, as of its date, by the City for the purpose of Rule 15c2-12 under the Securities Exchange Act of
1934, as amended (except for the omission of certain information permitted to be omitted under the Rule).
The information herein is subject to revision, amendment and completion in a Final Official Statement.
The infonnation and expressions of opinion herein are subject to change without notice and the delivery
of this Official Statement shall not, under any circumstances, create any implication that therenas been no
change in the information or opinions set forth herein or in the affairs of the City since the date hereof.
The information and expressions of opinion herein are subject to change without notice and the delivery
of this Official Statement shaH not, under any circumstances, create any implication that there has been no
change in the information or opinions set forth herein or in the affairs of the City since the date hereof.
Availability of Legal Documents. The summaries and references contained herein with respect to the
Trust Agreement, the Lease, the Site Lease, the Assignment Agreement, the Certificates and other statutes
or documents do not purport to be comprehensive or definitive and are qualified by reference to each such
document or statute, and references to the Certificates are qualified in their entirety by reference to the
form thereof included in the Trust Agreement. Copies of the documents described herein are available for
inspection during the period of initial offering of the Certificates at the offices of the Financial Advisor.
Copies of these documents may be obtained after delivery of the Certificates at the trust office of the
Trustee, The Bank of New York Trust Company, N.A., Los Angeles, California or from the City at 276
Fourth Avenue, Chula Vista, California 91910.
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THE CERTIFICATES
General Provisions
Payment of the Certificates. The Certificates will be executed and delivered in the form of fully
registered Certificates in the principal amount of $5,000 each or any integral multiple thereof. Interest
represented by the Certificates is payable at the rates per annum set forth on the inside front cover page
hereof, on September I, 2006 and each March I and September I thereafter (each, an "Interest Payment
Date") until maturity. Said interest will represent the portion of Lease Payments designated as interest
and coming due on each Interest Payment Date. The share of the portion of Lease Payments designated
as interest with respect to any Certificate will be computed by multiplying the portion of Lease Payments
designated as principal with respect to such Certificates by the rate of interest represented by such
Certificates. Interest represented by the Certificates and the Lease Payments will be computed on the
basis of a year consisting of 360 days and twelve 30-day months. Principal with respect to the
Certificates is payable from the principal component of Lease Payments allocable to the Certificates on
March I in each of the years and in the amounts set forth on the inside front cover page hereof.
Each Certificate will be dated as of the date of original delivery of the Certificates, and interest with
respect to the Certificates will be payable from the Interest Payment Date next preceding the date of
execution thereof, unless (a) it is executed following the 15th day of the month preceding an Interest
Payment Date (a "Record Date") and on or before such Interest Payment Date, in which event interest
with respect thereto will be payable from such Interest Payment Date; or (b) it is executed on or before
the first Record Date, in which event interest represented thereby will be payable from the Date of
Delivery. Notwithstanding the foregoing, if, as of the date of any Certificate, interest represented by such
Certificate is in default, interest represented by such Certificate will be payable from the Interest Payment
Date to which interest has previously been paid or made available for payment with respect to such
Certificate.
Book-Entry Only System. The Depository Trust Company ("DTC"), New York, New York, will act as
securitieS depository for the Certificates. The Certificates will be issued as fully registered securities
registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be
requested by an authorized representative of DTC. Interest on and principal of the Certificates will be
payable when due by wire of the Trustee to DTC which will in turn remit such interest and principal to
DTC Participants (as defined herein), which will in turn remit such interest and principal to Beneficial
Owners (as defined herein) of the Certificates (see "APPENDIX F - BOOK-ENTRY ONLY SYSTEM"
herein). As long as DTC is the registered owner of the Certificates and DTC's book-entry method is used
for the Certificates, the Trustee will send any notices to certificate owners only to DTC.
Discontinuance of Book-Entry System. DTC may discontinue providing its services as securities
depository with respect to the Certificates at any time by giving reasonable notice to the City or the
Trustee. Under such circumstances, in the event that a successor securities depository is not obtained,
Certificates are required to be printed and delivered as described in the Trust Agreement. The City may
decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities
depository). In that event, the Certificates will be printed and delivered as described in the Trust
Agreement. In addition, the following provisions shall apply: interest represented by each Certificate will
be paid on each Interest Payment Date by check of the Trustee mailed on such Interest Payment Date by
first class mail, to the person appearing on the registration books of the Trustee as the Owner thereof as of
the close of business on the preceding Record Date, at such Owner's address as it appears on the
registration books of the Trustee; provided however, that at the written request of the Owner of
Certificates in an aggregate principal amount of at least $1,000,000, which request is on file with the
Trustee as of any Record Date, interest with respect to such Certificates shall be paid on each succeeding
Interest Payment Date by wire transfer in immediately available funds to such account within the United
States of America as shall be specified in such request. The principal and prepayment price represented
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.
by any Certificate at maturity or upon prepayment will be payable upon presentation and surrender of
such Certificate at the Office of the Trustee in Los Angeles, California, or at such place as may be
designated by the Trustee.
Prepayment
.
Optional Prepayment. The Certificates maturing on or before March I, 2016 are not subject to
prepayment prior to maturity. The Certificates maturing on or after March I, 2017 are subject to
prepayment prior to maturity at the option of the City, on any date on or after March I, 2016, as a whole
or in part among maturities designated by the City and by lot within a maturity, from any source of
available funds at a prepayment price equal to 100% of the principal amount thereof to be prepaid,
without a premium, together with accrued interest thereon to the date fixed for prepayment.
Prepayment From Net Proceeds of Insurance or Condemnation. The Certificates and the 2004
Certificates are subject to mandatory prepayment, without premium as a whole, on any date, or in part on
any Interest Payment Date, from net hazard or title insurance proceeds not used to repair or replace any
portion of the Leased Premises damaged or destroyed, or from condemnation proceeds received with
respect to any portion of the Leased Premises and elected by the City to be used for such purpose
(collectively, "Net Proceeds"), pro-rata among maturities, at a prepayment price equal to the principal
amount of the Certificates and the 2004 Certificates to be prepaid, plus accrued interest thereon to the date
fixed for prepayment, without premium. There can be no assurance that such proceeds will be adequate
to prepay all of the Certificates and the 2004 Certificates (see "SOURCES OF PAYMENT FOR TIffi
CERTIFICATES - Certificate Insurance" and "CERTIFICATE OWNERS' RISKS - The Lease Payments _
Insurance" herein). In the event that Net Proceeds are to be applied to the prepayment of Certificates or
2004 Certificates when Additional Certificates, in any, are outstanding, the Net Proceeds will be applied
to prepay a proportionate amount of Certificates, 2004 Certificates and Additional Certificates based on
the Outstanding principal amount.
Mandatory Sinking Acconnt Prepayment. The Certificates maturing March I, _ (the "_ Term
Certificates") will be subject to prepayment in part by lot, on March I in each of the following years from
sinking account payments as set forth below at a prepayment price equal to the principal amount thereof
to be prepaid, without premium, provided, however, that if some but not all of the _ Term Certificates
have been prepaid pursuant to an optional or extraordinary prepayment, the total amount of all future
sinking account payments will be reduced pro rata by the aggregate principal amount of the _ Term
Certificates so prepaid. In addition, in lieu of prepayment thereof, the _ Term Certificates may be
purchased by the City and tendered to the Trustee pursuant to the provisions of the Trust Agreement.
Mandatory
Prepayment Date
(March 1)
Sinking Account
Prepayment
.
Notice of Prepayment. When prepayment is authorized or required, the Trustee is required to give
written notice to the respective Certificate Owners of any Certificates designated for prepayment at their
addresses appearing on the Certificate registration books, to the Securities Depositories and to one or
more of the Information Services, all as provided in the Trust Agreement, by first class mail, postage
prepaid, no less than 30, nor more than 60, days prior to the date fixed for prepayment. Neither failure to
receive such notice nor any defect in the notice so mailed will affect the validity of the proceedings for
prepayment of such Certificates or the cessation of accrual of interest from and after the prepayment date.
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So long as DTC is the registered Owner of the Certificates, all such notices will be provided to DTC as
the Owner, without respect to the beneficial ownership of the Certificates. See "APPENDIX F - BOOK-
ENTRY ONLY SYSTEM."
Rescission of Notice. The City has the right to rescind any notice of the optional prepayment of
Certificates by written notice to the Trustee on or prior to the dated fixed for prepayment. Any notice of
optional prepayment will be cancelled and annulled iffor any reason funds will not be or are not available
on the date fixed for prepayment for the payment in full of the Certificates then called for prepayment,
and such cancellation will not constitute an Event of Default. The City and the Trustee have no liability
to the Owners or any other party related to or arising from such rescission of prepayment. The Trustee
shall mail notice of such rescission of prepayment in the same manner as the original notice of
prepayment was sent.
Effect of Prepayment. Interest represented by the Certificates (or portions thereof) called for
prepayment will cease to accrue on the date fixed for prepayment and such Certificates (or portions
thereof) will cease to be entitled to any benefit or security under the Trust Agreement and the Owners of
such Certificates will have no rights in respect thereof except to receive payment of the prepayment price
thereof.
Partial Prepayment. In the event only a portion of any Certificate is called for prepayment, then upon
surrender of such Certificate the Trustee will execute and deliver to the Certificate Owner thereof, at the
expense of the City, a new Certificate or Certificates of authorized denominations equal in aggregate
principal amount equal to the unprepaid portion of the Certificate surrendered and of the same tenor and
the maturity.
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Scheduled Lease Payments
The following is a schedule of Lease Payments, and therefore the scheduled payments of principal and
interest represented by the Certificates and the 2004 Certificates.
.
Certificate
Year Ending
Ma rch 1
2007
2008
2009
20]0
2011
2012
2013
2014
20]5
20]6
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
Total
.
.
2006
2004
Lease
Payments
Princioal
Lease
Payments
Interest
Annual Total
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THE FINANCING PLAN
Estimated Sources and Uses of Funds
Under the provisions of the Trust Agreement, the Trustee will receive the proceeds from the sale of the
Certificates, together with other available funds, and will apply them as follows:
Sources of Funds
Par Amount of Certificates
Net Original Issue PremiumlDiscount
Available Funds
Uses of Funds
Project Fund
Reserve Fund
Interest Account (1)
Underwriters' Discount
Costs oflssuance Fund (2)
Total Uses
0) Represents capitalized interest on the Certificates through September 1, 2007.
(2) Expenses include fees and expenses of Special Counsel, the Financial Advisor, Disclosure Counsel and Trustee,
rating fees, bond insurance premium, costs of printing the Official Statement, and other costs of delivery of the
Certificates.
The Project
The proceeds of the Certificates deposited in the Project Fund will finance (i) the renovation,
reconstruction and equipping of the Public Service Building located in the City's Civic Center complex
(the "PSB Improvements") and (ii) the renovation and replacement of exhibits at the City's Nature Center
(the "Nature Center Improvements," and together with the PSB Improvements, the "Project").
Approximately $15.4 million of Certificate proceeds are expected to be spent on the Civic Center
renovations and $1.8 million of Certificate proceeds are expected to be spent on the Nature Center
Improvements.
The City expects to finance a final phase of its Civic Center complex renovation through the execution
and delivery of approximately $18,000,000 of Additional Certificates which will also be secured under
the Trust Agreement on a parity with the 2004 Certificates and the Certificates. Based on current plans,
the City expects the Additional Certificates to be executed and delivered in 2007. See "INTRODUCTION
- Additional Certificates."
The Civic Center Complex
The Civic Center complex consists of approximately 7.9 acres located in the City's downtown and
currently includes City Hall, the Public Services Building, a former Police Department facility, the
Community Development Building and the Legislative Building. The Civic Center Complex is being
renovated in phases. Phase I consisted of the construction of a new City Hall, whereby the former City
Hall was demolished and a new City Hall was constructed at the same location using a portion of the
proceeds of the City's 2004 Certificates. The newly constructed 42,000 square foot City Hall building,
includes City Council chambers with fixed seating for 156 people, an overflow conference room, a press
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room and audio visual equipment area. The new City Hall also contains the offices for the City Council
and Mayor, the City Manager, the City Attorney, the Finance Department, the Office of Budget and
Analysis, the Office of Public Information and the City Clerk.
In phase 2 of the Civic Center complex project, the Public Services Building will be renovated. The City
will utilize the former Police Department facility as temporary offices while the Public Services Building
is being renovated (the former Police Department facility also served as temporary offices for employees
to be displaced while the new City Hall was being constructed). When completed, the Public Services
Building will house the Engineering, Planning and Community Development departments. The PSB
Improvements are expected to cost $12.4 million as shown below. The City is also pre funding $3 million
in Phase 3 costs for materials and insurance.
Design of Public Services Building Improvements
Design of Temporary Renovations to police facility
Development Staff Costs
DesignlBuilders Fee (Design)
DesignlBuilders Fee (Construction)
DesignlBuilders Reimbursables
Construction Allowance Budgets
General Conditions
Renovations of Public Services Building
On-Site Improvements
Construction Contingency
Total DesignlBuild Costs
City Budgeted Allowances
Project Insurance
Total PSB Improvements
$690,000
10,000
75,000
151,000
~352,000
131,000
700,000
668,000
5,150,000
1,298,000
357.000
9,582,000
1,964,000
811.000
$12,357,000
The total approximate cost ofthe Civic Center renovation and reconstruction is $49.6 million (a reduction
of $500,000 trom the original budget due to savings in Phase I), of which $22.8 was financed in the first
phase and $15.4 million is being financed in the second phase. The first phase of construction was
substantially complete in September 2005. The second phase of construction is expected to be complete
in February 2007. The renovation and reconstruction of the former Police Department facility will be
completed in a third and final phase of construction. When complete, it will house the Human Resources,
Parks and Recreation and Building and Planning departments, as well as a conference center and a new
gymnasium and training facility. The third and final phase is expected to cost $15 million and be
complete in August 2008.
Design/Build Agreement
The Civic Center Complex is being renovated pursuant to the terms of a DesignlBuild Agreement dated as
of February 18, 2003, as amended on August 3, 2004 (the "DesignlBuild Agreement"), by and between
the City and Highland Partnership, Inc. ("Highland"). Highland specializes in providing turnkey
development, project management and construction services for new and retrofit building projects for the
public sector, corporate, medical and technology based industries. From its corporate office in Chula
Vista, Highland has directed and implemented projects across the nation, concentrating the majority of its
efforts in Southern California. In early 2004, Highland completed the construction of a new 140,000
square foot police facility for the City at a cost of approximately $66 million. The facility was completed
within budget and on-time. Highland completed phase I of the Civic Center complex renovation also on
time and within budget.
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Under the terms of the DesignlBuild Agreement, Highland has contracted to complete the PSB
Improvements for a guaranteed maximum price of $12,357,000 ("GMP"). Under the terms of the
DesignlBuild Agreement, Highland is required to commence construction on the PSB Improvements
immediately after it receives written notice to proceed from the City. The City expects to issue this notice
in February 2006, as soon as temporary renovations to the former Police Department facility are complete
and can be used as temporary offices.
The Design/Build Agreement obligates Highland to provide a performance bond in favor of the City in a
principal amount equal to 100% of the GMP and a payment bond equal to 100% of hard construction
costs of the PSB Improvements. The amounts payable under the performance and payment bonds are not
pledged to secure the payment of the Certificates.
The PSB Improvements are scheduled to be substantially completed and occupied by February 2007. If
Highland fails to complete the PSB Improvements within 30 days after the substantial completion date in
the DesignlBuild Agreement (currently estimated to be February 2007 based on receiving notice to
commence in February 2006), Highland and the City have agreed upon liquidated damages in the amount
of $580 per day for the first 30 days, $1,740 for each calendar day in excess of 30 days and less than 60
days and $2,900 per day for each calendar day in excess of 60 days up to a maximum of $870,000. The
liquidated damages amount is sufficient to cover interest due with respect to the Certificates for
approximately one year; however, capitalized interest will be funded through September I, 2007 with
Certificate proceeds and interest earnings on amounts in the Interest Account of the Lease Payment Fund
and the Reserve Fund. The PSB Improvements, when complete, wi11 constitute a portion of the Leased
Premises. See "TIffi LEASED PREMISES."
Nature Center Improvements
The portion ofthe Project constituting Nature Center Improvements includes certain improvements to the
City's Nature Center building, a new orientation area and four new exhibits - a Green Sea Turtle exhibit,
a Marsh exhibit, a Bay exhibit and an Upland exhibit. These four new exhibits wi11 replace all of the
existing displays at the facility, and wi11 represent the geographic diversity of the City, from its coastal
area to its mountain area.
The Nature Center Improvements do not constitute a part of the Leased Premises.
Project Costs
There can be no assurance that the Project wi11 be completed for the costs and within the time described in
this Official Statement. A delay in the completion or damage to the Project during construction could
have an adverse effect on the costs of the Project. Contractor and subcontractor performance and
integrity, availability and cost of labor, equipment and materials, and weather conditions, among other
unexpected factors, could cause such a failure of timely on-budget construction.
11
2- I 77
THE LEASED PREMISES
Description of the Leased Premises
Pursuant to the tenns of the Site Lease, the City leases the 7.9 acre Civic Center complex, Fire Station
No.7, Montevalle Park and Salt Creek Park and the existing improvements thereon (collectively the
"Property") to the Authority. Pursuant to the tenns of the Lease, the Authority leases the Property, the
PSB Improvements and any other improvements constructed on the Property, which together comprise the
Leased Premises, back to the City. The Leased Premises includes the improvements constructed on the
Property in the first phase of the Civic Center complex renovation and will include the PSB
Improvements when complete as well as any additional improvements constructed on the Property which
are financed with the proceeds of any Additional Certificates. See "INTRODUCTION - Additional
Certificates. "
The Civic Center complex consists of approximately 7.9 acres located in the City's downtown and
currently includes City Hall, the Public Services Building, a fonner Police Department facility, the
Community Development Building and the Legislative Building. The newly constructed 42,000 square
foot City Hall building includes the City Council chambers with fixed seating for 156 people, an overflow
conference room, a press room and audio visual equipment area. The new City Hall also contains offices
for the City Council and Mayor, the City Manager, the City Attorney, the Finance Department, the Office
of Budget and Analysis, the office of Public Infonnation and the City Clerk. The Public Services
Building is 31,494 square feet and the fonner Police Department facility is 50,976 square feet.
The City Fire Station No.7 was constructed in 2003 at a total land and construction cost of $5.5 million.
Montevalle Park is a 29-acre park located within the Rolling Hills Ranch community. A 21,000 square
foot community center is under construction and expected to be complete in April 2006. The community
center will contain a gymnasium, annex/multi-purpose room, game room, dance room, craft room and
court, offices, lobby and restrooms. Park amenities include three lighted multi-purpose fields, one lighted
softball field, lighted tennis courts and basketball courts, skate area, off-leash dog area, tot lots and picnic
shelters.
.
Salt Creek Park is a 24-acre park located within the EastLake Trails subdivision. A 20,000 square foot
community center is under construction and expected to be complete in April 2006. The community
center will contain a gymnasium, annex, weight room and offices. Other park amenities include two
lighted multi-purpose fields, a lighted arena soccer facility, lighted tennis courts and basketball courts,
skate area, tot lots and picnic shelters.
Pursuant to the Lease, the City and the Authority have agreed and detennined that the Lease Payments
required to be made under the Lease represent fair rental value of the Leased Premises. Under the tenns
of the Lease, upon completion of the Phase 3 Civic Center improvements (renovation of the fonner police
department facility), Montevalle Park and Salt Creek Park will be released from the Leased Premises
provided that certain conditions set forth in the Lease are met. Further, under the terms of the Lease, the
City may substitute other property for the Leased Premises, or any portion thereof, and may release other
portions of the Leased Premises provided that certain conditions set forth in the Lease are met. See
"APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - Covenants with Respect to the
Property - Substitution or Release of the Leased Premises" and "CERTIFICATE OWNERS' RISKS _
Release or Substitution of Property" herein.
12
2~/7;
SOURCES OF PAYMENT FOR THE CERTIFICATES
General
Each Certificate and each 2004 Certificate represents an undivided proportionate interest in the Lease
Payments to be made by the City (except certain right to indemnification) to the Authority under the
Lease. Under the Assignment Agreement, the Authority has assigned all of its rights under the Lease,
including its rights to receive Lease Payments from the City and its remedies under the Lease to the
Trustee for the benefit of the Owners of the Certificates and the 2004 Certificates. The Lease Payments
are calculated to be sufficient to pay, when due, the annual principal of and interest due with respect to the
Certificates and the 2004 Certificates.
Principal and interest with respect to the Certificates will be paid from the 2006 Lease Payments payable
by the City for the use and possession of the Leased Premises, insurance or condemnation Net Proceeds
received in respect to the Leased Premises to the extent that such Net Proceeds are not used for repair or
replacement, interest or other income derived from the investment of the funds held by the Trustee under
the Trust Agreement, or, in certain instances, from the Reserve Fund established by the Trust Agreement.
Lease Payments; Abatement
The City is required to pay to the Authority specified amounts for use of the Leased Premises, which are
equal to the principal of and interest due with respect to the Certificates and the 2004 Certificates. The
2006 Lease Payments payable under the Lease are in addition to the 2004 Lease Payments which the City
has agreed to pay under the 2004 Lease for the use and possession of the Leased Premises. The Lease
requires the City to make Lease Payments to the Authority fifteen days preceding each Interest Payment
Date. Under the Assignment Agreement, the Authority has assigned its rights to receive Lease Payments
to the Trustee for the benefit of the owners of the Certificates and the 2004 Certificates, as a result of
which all Lease Payments will be made by the City directly to the Trustee. The Trust Agreement requires
that the Lease Payments as are necessary to pay the principal and interest with respect to the Certificates
and the 2004 Certificates then coming due and payable will be deposited in the Lease Payment Fund
maintained by the Trustee under the Trust Agreement.
The City covenants in the Lease to take such action as may be necessary to include all Lease Payments in
its armual budgets and to make armual appropriations for all such Lease Payments. The Lease provides
that the several actions required by such covenants are deemed to be and shall be construed to be duties
imposed by law and that it is the duty of each and every public official of the City to take such action and
do such things as are required by law in the performance of the official duty of such official to enable the
City to carry out and perform the covenants in the Lease agreed to be carried out and performed by the
City.
The Lease provides that Lease Payments for any portion of the Leased Premises will be abated during any
period in which there is substantial interference with the City's use of such portions of the Leased
Premises because of damage, destruction or condemnation of such portions. The amount of such
abatement will be an amount such that the resulting Lease Payments represent fair consideration for the
use and occupancy of the portions of the Leased Premises not taken, damaged or destroyed. Such
abatement will continue for the period commencing with such taking, damage or destruction and ending
with the substantial completion of the work of replacement, repair or reconstruction. In the event of any
such damage or destruction, the Lease will continue in full force and effect and the City waives any right
to terminate the Lease by virtue of such damages, destruction and taking. Notwithstanding the foregoing,
there shall be no abatement of Lease Payments under the Lease to the extent that the proceeds of rental
interruption insurance or amounts in the Lease Payment Fund or the Reserve Fund are available to pay
Lease Payments which would otherwise be abated under the Lease.
13
2 -/71
.
.
During any period of abatement of Lease Payments, the Trustee may pay principal and interest with
respect to the Certificates and the 2004 Certificates (and Additional Certificates, if any) allocable to such
portions of the Leased Premises from moneys on deposit in the Reserve Fund, and, if available, proceeds
of insurance or condemnation award. The City's reduced rental payments will constitute the total Lease
Payments. The reduced Lease Payments may not be sufficient to pay principal and interest with respect
to the Certificates and the 2004 Certificates (and Additional Certificates, if any) in the amounts and at the
rates set forth therein. In the event and to the extent the Lease Payments are subject to abatement, there
could be insufficient amounts to pay principal of and interest on the 2004 Certificates and the Certificates
(and Additional Certificates, if any) in full, and such insufficiency would not constitute a default by the
City under the Trust Agreement, the Lease or otherwise.
The obligation of the City to make Lease Payments does not constitute an indebtedness of the City
for which the City is obligated to levy or pledge any form of taxation or for which the City has
levied or pledged any form of taxation. Neither the Certificates nor the obligation of the City to
make Lease Payments constitutes an indebtedness of the City, the State of California, or any of its
political subdivisions within the meaning of any constitutional or statutory debt limitation or
restriction.
Reserve Fund
.
A Reserve Fund is established by the Trust Agreement which is to be maintained in an amount equal to
the least of (i) maximum aggregate annual Lease Payments payable under the Lease in any Certificate
Year (exclusive of Lease Payments attributable to Certificates and Additional Certificates that have been
defeased), (ii) 125% of the average annual aggregate Lease Payments (in any Certificate Year) then
payable under the Lease (exclusive of Lease Payments attributable to Certificates and Additional
Certificates, if any, that have been defeased), or (Iii) 10% of the face amount of the Certificates and any
Additional Certificates, if any, (less original issue discount if in excess of two percent of the stated
payment amount at maturity) (the "Reserve Requirement"). The full amount available in the Reserve
Fund may be used by the Trustee to make payments due with respect to the Certificates, the 2004
Certificates and Additional Certificates, if any, in the event of abatement or a failure by the City to make
Lease Payments when due.
.
Currently, there is $ on deposit in the Reserve Fund from proceeds of the 2004 Certificates. The
City will deposit an additional $ in the Reserve Fund trom proceeds of the Certificates.
Interest or income received by the Trustee on investment of moneys in the Reserve Fund will be retained
in the Reserve Fund so long as amounts on deposit in the Reserve Fund are less than the Reserve
Requirement. In the event that amounts on deposit in the Reserve Fund exceed the Reserve Requirement,
subject to the requirement of transfers to the Rebate Fund, such excess shall be transferred to the Lease
Payment Fund on or before February 15 and August IS of each year.
The Reserve Requirement, or any portion thereof, may also be satisfied by the City by crediting to the
Reserve Fund a letter of credit, a surety bond insurance policy, or any other comparable credit facility or
any combination thereof which in the aggregate make funds available in the Reserve Fund in an amount
equal to the Reserve Requirement. See "APPENDIX A - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
- Definitions."
Capitalized Interest
There will an initial deposit by the Trustee to the Interest Account of the Lease Payment Fund from
proceeds of the Certificates. The amount deposited has been calculated, together with earnings thereon
and on the Reserve Fund, to be sufficient to make interest payments on the Certificates through and
including September I, 2007. Such amounts represent advance Lease Payments.
14
2-1 YD
.
Certificate Insurance
[to be completed]
Insurance Relating to the Leased Premises
pursuant to the Lease, the City is required to obtain an ALTA leasehold title insurance policy (with
Western Regional Exceptions) on the Leased Premises in an amount equal to the aggregate principal
component of unpaid Lease Payments. The Lease also requires that the City maintain casualty insurance
on the Leased Premises in amount equal to replacement value and rental interruption insurance to insure
against loss of Lease Payments caused by loss or damage to the Leased Premises covered under the City's
casualty insurance. The rental interruption insurance is to be in an amount not less than the maximum
remaining scheduled Lease Payments in any future two-year period. The City also is obligated under the
Lease to obtain a standard comprehensive general public liability and property damage insurance policy
or policies and workers' compensation insurance. See "FINANCIAL INFORMATION - Insurance
Program" and "APPENDIX A _ SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - INSURANCE" herein.
The proceeds of any rental interruption insurance will be deposited to (i) the Reserve Fund to make up
any deficiency therein and (ii) in the Lease Payment Fund to be credited towards the payment of the
Lease Payments in the order in which such Lease Payments become due and payable. The Lease requires
the City to apply the Net Proceeds of any insurance award either to replace or repair the Leased Premises
or to prepay Certificates, the 2004 Certificates and Additional Certificates, if any, if certain certifications
with respect to the adequacy of the Net Proceeds to make repairs, and the timing thereof, cannot be made.
See "APPENDIX A _ SUMMARY OF PRINCIPAL LEGAL DOCUMENTS - DAMAGE, DESTRUCTION AND
EMINENT DOMAIN; USE OF NET PROCEEDS," and "TIIE CERTIFICATES - Prepayment - Prepayment
from Net Proceeds of Insurance or Condemnation." The amount of Lease Payments will be abated and
Lease Payments due under the Lease may be reduced during any period in which by reason of damage,
destruction, title defect or taking by eminent domain or condemnation there is substantial interference
with the City's use and possession of all or part of the Leased Premises. See "CERTIFICATE OWNERS'
RISKS _ The Lease Payments - Abatement" herein.
If there are not sufficient insurance proceeds to complete repair of the Leased Premises, the Lease
Payment schedule will be proportionally reduced in accordance with the Lease. Such reduced
Lease Payments may not be sufficient to pay principal and interest with respect to the 2004
Certificates and the Certificates. Such reduction would not constitute a default under either the
Trust Agreement or the Lease.
Reentering and Reletting
If the City defaults in performance of its obligations under the Lease, the Trustee, as assignee of the
Authority, may re-enter and relet the Leased Premises and may enforce the Lease and hold the City liable
for all Lease Payments on an annual basis while re-entering and reletting the Leased Premises. Such re-
entry and reletting shall not effect a surrender of the Lease. The City, in the event of default, waives all
rights to any rentals received by the Trustee through reletting of the Leased Premises. The City agrees to
pay all costs, loss or damage howsoever occurring.
15
2-/21
THE AUTHORITY
.
The Chula Vista Public Financing Authority was established pursuant to a Joint Exercise of Powers
Agreement, dated as of April 4, 1995, by and between the City and the Redevelopment Agency of the
City of Chula Vista. The City Council of the City is appointed as the Governing Board of the Authority.
The Authority has acted as a conduit issuer for the City for a variety of financings.
The Authority is governed by a five-member Board which consists of all members of the City Council.
The Mayor serves as the Chairman of the Authority. The City Manager acts as the Executive Director, the
City Clerk acts as the Secretary and the Finance Director acts as the Treasurer of the Authority.
CITY OF CHULA VISTA
General Information
Chula Vista is located on San Diego Bay in Southern California, 8 miles south of the City of San Diego
and 7 miles north of the Mexico border, in an area generally know as "South Bay." Chula Vista's city
limits cover approximately 50 square miles. Neighboring communities include the City of San Diego and
National City to the north and the City of Imperial Beach and the communities of San Ysidro and Otay
Mesa to the south. With a January 2005 estimated population of 217,543, Chula Vista is the second
largest city in the County.
General Organization
The City ofChula Vista was incorporated as a general law city on March 17, 1911, and operates under the
council/manager form of government. It became a charter city in 1949. The City is governed by a five-
member council consisting of four members and a Mayor, each elected at large for four-year alternating
term. Positions of City Manager and City Attorney are filled by appointments of the Council. The City
of Chula Vista currently employs approximately 1,547 staff members including sworn officers and fire
personnel. The members of the City Council, the expiration dates of their terms and key administrative
personnel are set forth in the charts below.
CITY COUNCIL
Council Member
Stephen C. Padilla, Mayor
John McCann
Steve Castaneda
Patricia E. Chavez
Jerry Rindone
Term Expires
December 2006
December 2006
December 2008
December 2006
December 2008
.
CHIEF ADMINISTRATIVE PERSONNEL
David D. Rowlands, Jr., City Manager
Laurie A Madigan, Assistant City Manager Special Projects
David Palmer, Assistant City Manager Community Services
Dana Smith, Assistant City Manager Development Services
Jim Thomson, Assistant City Manager Administrative Services
Maria Kachadoorian, Director of Finance/Treasurer
Ann Moore, City Attorney
Susan Bigelow, City Clerk
16
2-I;'Z
Governmental Services
Public Safety and Welfare
The City of Chula Vista Police Department consists of 340 sworn officers and non-sworn personnel
providing patrol, traffic, animal control and investigations. There are eight fire stations located in and
operated by the City, staffed by 141 fire personnel.
Community Services
Services provided by the City include building permit and inspection, planning and zoning, landscape and
public infrastructure maintenance, street cleaning, traffic signal maintenance and municipal code
compliance.
Public Services
Water is supplied to Chula Vista by the Otay Water District and the Sweetwater Water District. Sewer
service is provided by the City. Electric power and natural gas are provided by San Diego Gas and
Electric.
Parks and Recreation
The Chula Vista Public Library is comprised of three individual libraries with over 432,000 volumes
available and connected by a wide-area network. The Library delivers books in English and Spanish,
videos and CDs, and community programming to the City's residents nearly every day of the year. The
Library contains an Office of Cultural Arts dedicated to advancing the arts and culture in a manner
designed to preserve the diverse cultures of the area.
In addition, Chula Vista provides a variety of cultural and educational facilities such as the Chula Vista
Heritage Museum, Onstage Playhouse, and the San Diego Junior Theater.
The Chula Vista Recreation department provides citizens with a variety of park and recreational services
on a year round basis. Facilities include nine community and recreation centers, including a youth
community center and a senior center. The City also has two community pools open year round, 46
community and neighborhood parks, and a Memorial Bowl with seating for 700 at which the City's
Summer Concert Series is hosted. The City also has after-school programs throughout the community.
The City will open three new parks and community centers this year.
Community Facilities and Services
Public educational instruction for kindergarten through high school is provided by the Chula Vista
Elementary School District and Sweetwater Union High School District. These districts administer 42
elementary schools, one junior high school, ten middle schools, II senior high schools, one continuation
high school, one alternative program school and one charter school. Southwestern College, a two year
Community College, has enrollment of approximately 19,000. There are also four adult education
schools and 16 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 property adjoining the Olympic Training
Center.
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.
17
Z-/~3
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.
Chula Vista has more than 60 churches and nearly 100 service, ftaternal and civic organizations.
The City's Mediterranean climate lends itself to many outdoor recreational activities. Chula Vista is
home to the 20,000 seat Coors Amphitheatre, the Chula Vista Nature Center, Knotts Soak City USA, four
golf courses, numerous parks and open spaces, and a harbor which includes two marinas, an RV park, and
several restaurants.
In addition, Chula Vista is the location 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 150-
acre property donated by EastLake Development Company adjacent to the Otay Lake reservoir.
Transportation
U.S. Highways 5 (along the coast) and 805 (inland) provide full fteeway access from Chula Vista north to
San Diego and south to the Mexican border. Commuter rail service is provided by the San Diego Trolley,
a light rail system started in 1981 and II bus routes serve Chula Vista.
The City has recently introduced Chu]a Vista Express, a three-part pilot commuting program to promote
public transportation, carpooling, vanpooling, biking and walking to work as alternatives to driving alone.
If offers ftee bus service ftom eastern Chula Vista to downtown San Diego, a free shuttle from eastern
Chula Vista to the H Street Trolley Station to a cash incentive for riding or joining a vanpool or carpool.
San Diego's Lindbergh International Airport is ] 5 minutes to the north of Chula Vista.
Air cargo and passenger flight services are provided at San Diego's Lindbergh International Airport, 12
miles west, which is served by all major airlines. Cargo shipping is available at the Unified Port of San
Diego, which serves as a transshipment facility for the region, which includes San Diego, Orange,
Riverside, San Bernardino and Imperial counties, plus northern Baja California, Arizona and points east.
]8
2~/gL(
Population
The following table provides a comparison of population growth for Chula Vista, surrounding cities and
San Diego County between 2001 and 2005.
TABLE NO. I
CHANGE IN POPULATION
CHULA VISTA, SURROUNDING CITIES AND SA."I DIEGO COUNTY
2001- 2005
CHULA VISTA SURROUNDING CITIES SAN DIEGO COUNTY
Percentage Percentage Percentage
Year Population Change Population Change Population Change
2001 181,453 176,052 2,863,657
2002 191,033 5.3% 180,662 2.6% 2,920,010 2.0%
2003 200,378 4.9% 183,379 1.5% 2,971,805 1.8%
2004 208,510 4.1% 183,791 0.2% 3,013,014 1.4%
2005 217,543 4.3% 188,449 2.5% 3,051,280 1.3%
% Increase Between
2001 - 2005 19.9% 7.0% 6.6%
Surrounding cities include El Cajon, Coronado and National City.
Source: State of California Department of Finance, Population Research Unit, "Population Estimates for California
Cities and Counties. "
Personal Income
Personal income information for the City of Chula Vista, San Diego County, the State of California and
the United States are summarized in the following table.
TABLE NO.2
EFFECTIVE BUYING INCOME
CITY OF CHULA VISTA, SAN DIEGO COUNTY, CALIFORNIA AND UNITED STATES
2000 - 2004
Year Chula Vista San Diego Connty State of California United States
2000 $42,550 $44,292 $44,464 $39,129
2001 42,229 44,146 43,532 38,365
2002 40,578 42,315 42,484 38,035
2003 42,389 43,346 42,924 38,201
2004 45,145 44,506 43,915 39,324
Source: Sales and Marketing Management, "Survey of Buying Power."
19
2. If5
Employment and Industry
The City is located in the San Diego-Carlsbad-San Marcos MSA labor market. Six major job categories
constitute 76.6% of the work force. They are government (16.8%), professional and business services
(15.9%), service producing (14.7%), leisure and hospitality (11.6%), educational and health services
(9.7%) and manufacturing (7.9%). The November 2005 unemployment rate in the San Diego-Carlsbad-
San Marcos area was 4.2%. The State of California November 2005 unemployment rate (unadjusted) was
5.1%.
.
TABLE NO.3
SAN DIEGO-CARLSBAD-SAN MARCOS MSA
WAGE AND SALARY WORKERS BY INDUSTRY (1)
(in Thousands)
Industry 2001 2002 2003 2004 2005
Government 221.1 222.8 216.7 218.8 218.9
Other Services 44.8 45.9 46.4 48.1 49.9
Leisure and Hospitality 128.6 135.8 142.1 144.0 150.2
Educational and Health Services 119.1 121.1 123.1 121.4 125.5
Professional and Business Services 200.3 204.0 203.0 207.2 207.1
Financial Activities 72.9 77.3 80.6 81.6 82.9
Infonnation 38.3 38.3 36.6 36.5 36.8
Transportation, Warehousing and Utilities 31.9 27.4 28.0 28.4 28.6
Service Producing
Retail Trade 139.7 143.6 147.2 149.6 149.4
Wholesale Trade 41.5 41.6 41.9 42.1 42.1
Manufacturing
Nondurable Goods 28.9 27.0 26.2 25.9 25.3
Durable Goods 87.3 82.6 78.0 77.8 77.9
Goods Producing
Construction 76.3 77.8 82.3 89.5 94.6
Natural Resources and Mining ~ ~ ----M ----M ----M
Total Nonfann 1,231.0 1,245.5 1,252.5 1,271.3 1,289.6
Fann ---1.Q.1 ----1U ---.lll ~ ---..l.M
Total (all industries) UiU ~ UW UW ~
.
(I) Annually, as of November.
Source: State of California Employment Development Department, "Labor Market information. "
20
2 - I g~
The major employers operating within the City and their respective number of employees as of June 30,
2005 are as fol1ows:
Name of Company
Rohr DBA Goodrich Aerospace
Sharp Chula Vista Medical Center
Scripps Memorial Hospital
United Parcel Service
Walmart 2291
Sears Roebuck & Co.
Costco Wholesale Corp. #781
ATC Vancom Inc.
Costco Wholesale Corp. #460
Walmart Store #3516
Employment
1,903
1,410
890
637
400
340
285
284
275
250
Source: City ofChula Vista.
Commercial Activity
Type of BusinesslProduct
Aerospace Manufacturing
Hospital
Hospital
Parcel Delivery Service
General Merchandise
General Merchandise
General Merchandise
General Merchandise
General Merchandise
General Merchandise
The fol1owing table summarizes the volume of retail sales and taxable transactions for the City of Chula
Vista for 1999 through 2003. The City's reported sales tax has-increased 20% since 2003. This increase
is primarily due to continued growth in the eastern section of the City, which lead to the opening of
significant new developments.
TABLE NO.4
CITY OF CHULA VISTA
TOTAL TAXABLE TRANSACTIONS
(in Thousands)
1999 - 2003
Total Taxable
Retail Sales Retail Sale. Transactions Issued Sales
Year ($OOO's) 0/0 Change Permits ($OOO's) 0/0 Change Permits
1999 $1,240,992 1,738 $1,456,388 3,619
2000 1,401,401 12.9% 1,780 1,608,290 10.4% 3,609
2001 1,463,409 4.4% 1,823 1,688,665 5.0% 3,690
2002 1,513,809 3.4% 1,883 1,729,158 2.4% 3,737
2003 1,642,889 8.5% 2,092 1,857,233 7.4% 3,921
Source: State Board of Equalization, "Tcrxable Sales in California. "
21
2-/97
The following table compares taxable transactions for the City of Chula Vista and surrounding cities.
TABLE NO.5
CHANGE IN TOTAL TAXABLE TRANSACTIONS
CHULA VISTA AND SURROUNDING CITIES
(in Thousands)
1999 - 2003
.
Chula Vista
El Cajon
Coronado
National City
% Change
-
1999 2000 2001 2002 2003 1999 - 2003
$1,456,388 $1,608,290 $1,688,865 $1,729,158 $1,857,233 27.5%
1,474,055 1,597,168 1,725,00 I 1,817,568 1,939,482 31.6%
163,488 172,631 168,147 175,648 179,418 9.7%
1,082,113 1,179,111 1,231,562 1,301,407 1,389,042 28.4%
City
Source: State Board of Equalization, "Taxable Sales in California. "
Taxable transactions by type of business for the City of Chula Vista for 1999 through 2003 are
summarized in Table No.6.
TABLE NO.6
CITY OF CHULA VISTA
TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
(in Thousands)
1999 - 2003
1999 2000 2001 2002 2003
Retail Stores
Apparel Stores $ 61,758 $ 66,598 $ 61,937 $ 67,035 $ 67,114
General Merchandise Stores 439,731 495,679 524,942 525,423 553,979
Food Stores 85,662 90,487 92,224 99,897 103,155
EatingIDrinking Places 142,329 155,583 164,417 169,892 188,675
Home Furnishings and
Appliances 61,923 66,365 67,827 74,255 78,561
Building Materials and
Farm Implements 87,902 102,370 97,897 91,235 100,504
Auto Dealers/Suppliers 126,304 145,923 151,812 156,872 178,733
Service Stations 95,546 121,244 119,050 123,636 148,318
Other Retail Stores 139.837 157.152 183.303 205.564 223.850
Total Retail Stores 1,240,992 1,401,401 1,463,409 1,513,809 1,642,889
All Other Outlets 215.396 206.889 225.256 215.349 214.344
Total All Outlets $1 456388 $1.608290 S 1.688 665 $1.729158 $1.857.233
Source: State Board of Equalization, "Taxable Sales in California. "
22 2 -leg-
Building Activity
The following table summarizes building activity valuations for the City of Chula Vista for the five-year
period from 200 I through 2005.
TABLE NO.7
CITY OF CHULA VISTA
BUILDING ACTIVITY AND VALUATION
(in Thousands)
2001 - 2005
2001 2002 2003 2004 2005
Residential $482,131,012 $467,349,014 $569,435,026 $703,847,604 $440,321,520
Non-Residential 91 667 827 81.298.075 92.855.876 123.793 323 111.908.460
Total Valuation ~"73 79R R39 $"4R 647 OR9 $662 290 902 $R27 640 927 $,"22299RO
Total Permits " 671 <;267 ~ &ID ~
Source: City of Chula Vista.
23
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FINANCIAL INFORMATION
Budgetary Process and Administration
In accordance with the provisions of Chapter I, Division 3, Title 3, of the Government Code of the State
of California, the City prepares and adopts a budget for each fiscal year. Prior to July I, the City Manager
is required to submit to the City Council a proposed budget for the fiscal year commencing the following
July I. The budget includes proposed expenditures and the means of financing them. On or before June
30, public hearings are conducted to obtain public comments. On or before June 30, the budget is
required to be enacted through the passage of a resolution by the City Council.
From the effective date of the budget, the amounts stated as proposed expenditures become appropriated
to the several departments, offices and agencies for the objects and purposes named, provided that the
City Manager may transfer appropriations of a fund from one object or purpose to another within the
same department in any amount up to $15,000. All other transfers or amendments require City Council
approval. All appropriations lapse at the end of the Fiscal Year to the extent that they have not been
expended or lawfully encumbered. At a public meeting after the adoption of the budget the City Council
may amend or supplement the budget by motion adopted by four votes of the City Council.
Appropriations Limit
Section 7910 of the Government Code of the State of California requires the City to adopt a formal
appropriations limit for each fiscal year. The City's appropriations limit for fiscal year 2005/06 is
$406,875,338. The City's appropriations subject to the limit for 2005/06 are $67,463,884. Based on this,
the appropriations limit is not expected to have any impact on the ability of the City to budget and
appropriate the Lease Payments as required by the Lease.
Revenues and Expenditures
The General City Budget includes programs which are provided on a largely city-wide basis. The
programs and services are financed primarily by the City's share of property taxes, sales taxes, utility
taxes, transient occupancy taxes, revenues from the State and/or federal government, and charges for
services provided. See "CERTIFICATE OWNERS' RISKS - The Lease Payments - State Budget" herein.
Table No.8 compares the adopted General Fund 2005/06 Budget with actual revenue and expenditures
for 2004/05. Sales and use taxes and property taxes provide the major source of revenues to the General
Fund, comprising approximately 17% and 13% respectively, of the City's 2005/06 General Fund Budget.
Other significant 2005/06 General Fund budgeted revenue sources are motor vehicle fees, 12%, franchise
fees, 6% and the utility users tax, 5%.
Public safety represents the major use of General Fund moneys, accounting for approximately 40% of
total expenditures ofthe 2005/06 General Fund Budget.
24
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TABLE NO.8
CITY OF CHULA VISTA
GENERAL FUND REVENUES AND EXPENDITURES
Item
2004/05 2005/06
Actual Budget
$ 18,393,361 $ 14,607,968
64,045,568 70,555,056
19,560,288 24,903,834
3,649,710 4,282,338
14,482,914 18,942,595
824,90 I 1,265,393
2,055,387 2,285,146
21,440,097 16,384,602
15.706.199 17 362.017
$141,765,064 $155,980,981
Beginning Undesignated Fund Balance
Revenues
Taxes
Intergovernmental Revenues
Licenses and Permits
Charges for Services
Fines and Forfeitures
Use of Money and Property
Other Revenues
Transfers In
Total Revenues
Expenditures
General Government
Public Safety
Public Works
Parks and Recreation
Library
Capital Outlay
Transfers Out
Total Expenditures
Ending Undesignated Fund Balance (1)
34,048,658
60,470,397
31,864,754
5,303,741
8,929,751
1,249,582
3.683 574
$145,550,457
40,831,003
61,973,167
30,705,676
5,830,725
9,646,674
659,389
6.334347
$155,980,981
$ 14607968
$ 14607968
<" The City also maintains a fund balance reserve for contingencies of$2,982,950.
Source: City of Chula Vista.
25
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Local Taxes
The City receives the following local taxes:
TABLE NO.9
CITY OF CHULA VISTA
TAX REVENUES BY SOURCE
(in Thousands)
Budget
2002/03 2003/04 2004/05 2005/06
Sales and Use Taxes $19,612,779 $21,421,090 $23,600,000 $26,788,000
Property Taxes 14,649,804 16,356,953 18,134,869 20,033,563
Franchise Fees 4,301,710 7,820,569 9,837,800 10,249,651
Utility Users Taxes 4,770,817 5,622,545 6,579,578 7,435,816
Business License Tax ],085,986 ],063,847 ],]85,187 1,229,948
Transient Occupancy Tax 2,024,366 2,]59,478 2,268,944 2,410,30]
Real Property Transfer Tax 1.359.756 1.989.898 2.439.190 2.407.777
Total Tax Revenues $47 80~ 218 $~6 434 380 $64 04~ ~68 $70 ~" 0~6
Source: City of Chula Vista.
.
Sales and Use Taxes. Sales tax is collected and distributed by the State Board of Equalization. Each
local jurisdiction received an amount equal to one percent of taxable sales within their jurisdiction. In
addition, the City receives a portion of a Y, cent sales tax increase approved by voters in 1993. Sales tax
generated by this increase is used to offset certain expenses for public safety.
On March 2, 2004, voters approved a bond initiative formally known as the "California Economic
Recovery Act." This act authorized the issuance of $15 billion in bonds to finance the 2002/03 and
2003/04 State budget deficits, which would be payable from a fund to be established by the redirection of
tax revenues through the Triple Flip.
Under the "Triple Flip," one-quarter oflocal governments' one percent share of the sales tax imposed on
taxable transactions within their jurisdiction are redirected to the State. In an effort to eliminate the
adverse impact of the sales tax revenue redirection on local government, the legislation provides for
property taxes in the ERAF to be redirected to local government. Because the ERAF moneys were
previously earmarked for schools, the legislation provides for schools to receive other state general fund
revenues. It is expected that the swap of sales taxes for property taxes would terminate once the deficit
financing bonds were repaid, which is currently expected to occur in approximately 9 to 13 years. See
"CERTIF]CATE OWNERS' RISKS - The Lease Payments - 2005/06 State Budget - Triple Flip" herein.
.
Ad Valorem Property Taxes. Taxes are levied for each fiscal year on taxable real and personal property
which is situated in the City as of the preceding January 1. For assessment and collection purposes,
property is classified either as "secured" or "unsecured," and is listed accordingly on separate parts of the
assessment roll. The "secured roll" is that part of the assessment roll containing State assessed property
and real property having a tax lien which is sufficient, in the opinion of the assessor, to secure payment of
the taxes. Other property is assessed on the "unsecured roll."
26
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Property taxes on the secured roll are due in two installments, on November 1 and February 1 of the fiscal
year. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a 10%
penalty attaches to any delinquent payment. In addition, property on the secured roll with respect to
which taxes are delinquent is sold to the State on or about June 30 of the fiscal year. Such property may
thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a redemption
penalty of I wy, per month to the time of redemption. If taxes are unpaid for a period of five years or
more, the property is subject to sale by the County Tax Collector.
Property taxes on the unsecured roll become delinquent, if unpaid on August 3 \. A 10% penalty attaches
to delinquent taxes on property on the unsecured roll, and an additional penalty of W,% per month begins
to accrue on November 1 of the fiscal year. The City has four ways of collecting delinquent unsecured
personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the
County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the
taxpayer; (3) filing a certificate of delinquency for record in the County Recorder's Office, in order to
obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property,
improvements or possessory interests belonging or assessed to the assessee.
Taxable PropertY and Assessed Valuation
Set forth in Table Nos. 10 and 11 below are assessed valuation for secured and unsecured property within
the City of Chula Vista and tax levies and collections.
TABLE NO. 10
CITY OF CHULA VISTA
GROSS ASSESSED VALUE OF ALL TAXABLE PROPERTY
Fiscal Year
Secured
Unsecured
Total
2001/02
2002/03
2003/04
2004/05
2005/06
$ 9,732,749,187
11,204,758,144
12,877,493,259
15,010,238,271
18,254,397,000
$396,147,701
340,623,666
346,627,990
356,016,779
403,067,000
$10,128,896,888
11,545,381,810
13,224,121,249
15,366,255,050
18,657,464,000
Source: City of Chula Vista.
TABLE NO. 11
CITY OF CHULA VISTA
GENERAL FUND PROPERTY TAX LEVIES AND COLLECTIONS
Delinquent
Fiscal Total Tax Current Tax Percent Tax Total Tax
Year Levy Collections Collected Collections Collections
2000/0 I $11 ,254,079 $11,073,584 98.40% $165,738 $11,239,322
2001/02 12,806,109 12,602,185 98.41 160,066 12,762,25 I
2002/03 14,293,880 14,066,050 98.41 169,521 14,235,571
2003/04 16,200,005 15,959,738 98.52 185,237 16,144,975
2004/05 18,652,193 18,324,641 98.24 187,292 18,511,933
Source: City of Chula Vista.
27
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Largest Taxpavers
The principal taxpayers in the City as of June 30, 2005 are as shown in Table No. 12.
TABLE NO. 12
CITY OF CHULA VISTA
LARGEST TAXPAYERS
Property Owner
1. Rom Inc.
2. Camden USA Inc.
3. Bre Properties
4. KB Home Coastal Inc.
5. Brookfield Shea Otay
6. CV Center Inc.
7. Eagle Lomas Verdes
8. SSR Realty Advisors Calstrs
9. Duke Energy South Bay LLP
10. Cornerstone Summit at Eastlake
11. Shea Homes LP
12. Missions at Sunbow
13. Horton DR San Diego Holding Co.
14. Eastlake Company LLC
15. Otay MF1 LLC
16. Otay Ranch R7B LLC
17. Lyon Otay Ranch LLC
18. Gateway Chula Vista LLC
19. San Miguel Village
20. Cornerstone GDCI Chula Vista
Total Tax
Assessed Valuation
$ 1,766,594
1,403,863
1,238,213
1,102,045
1,019,342
1,012,423
979,219
876,740
766,265
732,178
668,607
645,075
600,018
517,904
461,853
443,119
440,753
378,441
367,100
354.674
$15,734,427
$ 165,712,468
110,037,078
75,912,505
73,450,098
24,571,819
95,000,000
53,889,142
69,039,237
71,934,269
57,058,104
22,309,729
51,713,205
14,881,178
5,616,765
20,468,507
6,660,522
18,500,902
26,258,961
39,505,810
24.750.000
$1,027,270,299
(1) Percentage of assessed valuation to total assessed valuation.
Source: City of Chula Vista.
Redevelopment Agencies
Total (I)
1.25%
0.83
0.57
0.56
0.19
0.72
OAI
0.52
0.54
OA3
0.17
0.39
0.11
0.04
0.15
0.05
0.14
0.20
0.30
0.19
7.77%
The California Redevelopment Law authorizes the redevelopment agency of any city or county to receive
an allocation of tax revenues resulting from increases in assessed values of properties within designated
redevelopment project areas (the "incremental value") occurring after the year the project area is formed.
In effect, local taxing authorities, such as the City, realize tax revenues only on the assessed value of such
property at the time the redevelopment project is created for the duration of such redevelopment project.
There have been six redevelopment projects formed in the City. The following table sets forth total
assessed valuations and redevelopment agency incremental values.
28
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TABLE NO. 13
CITY OF CHULA VISTA
TOTAL AND NET PROPERTY TAX VALUATIONS
Fiscal
Year
Total Redevelopment
Assessed Agency Net
Valuation Incremental Value Value
$10,128,896,888 $589,344,184 $ 9,539,552,704
11,545,381,810 674,814,888 10,870,566,922
13,224,121,249 637,124,442 12,586,996,807
15,366,255,050 688,121,299 14,678,133,751
18,657,464,000 821,078,172 17,836,385,828
2001/02
2002/03
2003/04
2004/05
2005/06
Source: County of San Diego Auditor-Controller.
State Le2:islative Shift of Propertv Tax Allocation
Beginning in 1992/93, the State has required that local agencies remit a portion of property taxes received
to augment school funding. The General Fund's share of this property tax reduction was approximately
$1,835,000 for 2004/05. This reduction is expected to continue in future fiscal years. However, certain
provisions in the State budget have resulted in a realignment of property tax reVenues in future years. See
"CERTIFICATE OWNERS' RlSKS - The Lease Payments - State Budget" herein and "Local Taxes - Sales
and Use Taxes" above.
Franchise Taxes. The City levies a franchise tax on its cable television, trash collection and utility
franchises.
Utility Users Taxes. A utility uSers tax is levied on gas and electric based on usage and telephone
services based on gross receipts. The utility tax was first levied in 1970 and the last increase in tax rates
was in 1979. See "CERTIFICATE OWNERS' RlSKS - The Lease Payments - Proposition 62 and
Proposition 218" herein.
Business License Taxes. The City levies a business license tax based on number of employees.
Transient Occupancy Taxes. The City levies a 10% transient occupancy tax on hotel and motels bills.
Property Transfer Taxes. A documentary stamp tax is assessed for recordation of real property
transfers.
Motor Vehicle License Fees
A significant revenue source of the City is State of California payments in-lieu of taxes. The City
receives a portion of Department of Motor Vehicles license fees ("VLF") collected statewide. Payments
of VLF to the City were budgeted to be $18,424,278 or 12% of the total General Fund Budget for
2005/06. Payment of State assistance depends on the adoption by the State of its budget, including the
appropriations therein providing for local assistance. These revenues are shown in the accompanying
financial statements as "intergovernmental revenues from other agencies."
29
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Several years ago, the state-wide VLF was reduced by approximately two-thirds. However, the State
continued to remit to cities and counties the same amount that those local agencies would have received if
the VLF had not been reduced, known as the "VLF backfill." On June 19, 2003, the State triggered an
increase in VLF to be effective beginning October 1, 2003. However, the State Legislature adopted AB
1768 which would defer payment to local agencies of the amount of the VLF backfill that relates to the
period from June 20, 2003 to September 30, 2003 when the higher VLF went into effect, until August
2006. This VLF "gap" or "loan" is approximately $825 million statewide. The City's share of the "loan"
was $3,500,000.
The Governor signed and executive order on November 17, 2003 to reduce the VLF, revising the
triggered increase. On December 17, 2003 the Governor issued another executive order, this time
appropriating $2.625 billion to provide backfill funding for the city and county VLF funding in 2003/04
which covered the backfill except for the VLF loan.
The City's budgeted VLF amount of$18.4 million for Fiscal Year 2005/06 is based on projected amounts
at the reduced VLF rates and no assumed State VLF backfill, however, it does include repayment of the
VLF loan of approximately $3,500,000. The State's 2005/06 Budget realigns certain property tax
revenues so that cities and counties are kept whole with respect to the amount of the VLF backfill in
future years. See "CERTIFICATE OWNERS' RISKS - The Lease Payments - State Budget" herein.
Other Revenue Sources
Licenses and Permits. These revenues consist primarily of building construction and engineering
permits.
Fines, Forfeitures and Penalties. These revenues include parking citations and traffic fines.
Use of Money and Property. These revenues consist primarily of investment earnings and rental income
received for the City's community buildings.
Charges for Services. The City charges fees for zoning, plan check and inspection, as well as for various
City-sponsored recreational programs and other services.
Public Facilities Development Impact Fees
The City assesses certain fees on new development. One such fee is the Public Facilities Development
Impact Fee, or "PFDlF." These revenues are recorded in a Development Impact Fund. See "APPENDIX
B _ CITY AUDITED FINANCIAL STATEMENTS." The City utilizes the PFDlF to offset the cost of
constructing or financing certain public facilities, such as the renovation of the Civic Center complex.
The City expects to utilize PFDIF revenues to pay approximately 75.9 of Lease Payments allocable to the
PSB Improvements and 88% of Lease Payments allocable to the recently completed City Hall
improvement. The other major improvements funded with the PFDIF revenues are the City's public
works center financing and the City's police headquarters financing. In addition, the City expects to
utilize PFDlF to fund a portion of the cost of fmancing the final phase of the Civic Center complex
renovation.
The receipt of the PFDIF is dependent upon building activity in the City. While the City has projected
future development based on available information and expects that the PFDIF revenues will be available
in sufficient amounts to pay a portion of Lease Payments as well as other obligations described above,
there can be no guarantee that building activity wil1 occur as anticipated, and as a result, the City General
Fund may be required to pay a greater share of Lease Payments than currently anticipated by the City.
30
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The following table summarizes historical and projected PFDIF Revenues:
TABLE NO. 14
CITY OF CHULA VISTA
HISTORICAL AND PROJECTED PFDIF REVENUES
[to be completed]
Personnel
Employee salaries and benefits account for over 78% of the City's General Fund expenditures. Table No.
15 sets forth historical employee information for the City as of June 30.
TABLE NO. IS
CITY OF CHULA VISTA
CITY PERSONNEL
Year
Number of
EmDlovees
Percent of
Increase (Decrease)
Over Previous Year
Number of
Employees per
Thousands
PODulation
.
2000
2001
2002
2003
2004
2005
1,211
1,279
1,398
1,403
1,475
1,547
11.8%
5.6%
9.3%
0.4%
5.1%
4.9%
6.95
6.98
7.32
7.02
6.78
7.11
Source: City of Chula Vista.
Employee Relations and Collective Bargaining
City employees are represented by four labor unions and associations - the Chula Vista Employees'
Association (CYEA), the Chula Vista Police Officers' Association, the International Association of Fire
Fighters and the Western Council of Engineers. CYEA is the largest association, representing
approximately 40% of all City employees. Currently 64% of all City employees covered by negotiated
agreements. Current negotiated agreements expire June 30, 2010.
31
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Retirement Programs
California Public Employee's Retirement System. The City contributes to the California Public
Employee's Retirement System (PERS), an agent multiple-employer public employee retirement system
that acts as a common investment and, administrative agent for participating public entities within the
State of California.
All full-time employees are eligible to participate in the PERS. City employee's contribution rates are 8%
(9% for safety employees) of their annual covered salary. The City makes the contributions required of
City employees on their behalf and for their account, which amounted to $6,412,264 for the year ended
June 30, 2005. The City is required to contribute at an actuarial determined rate of 15.975% for the
period from July 1,2004 through October 14, 2004 and 16.003% for the period from October 15,2004 to
June 30, 2005 of annual covered payroll for miscellaneous employees and 22.054% of annual covered
payroll for safety employees from July I, 2004 to October 14, 2004 and 22.048% for the period from
October 15,2004 to June 30, 2005. City contribution rates in 2006 are approximately 40.3% for safety
employees and 28.7% for miscellaneous employees. The City's share of PERS payments for 2002/03
through 2004/05 are shown in the table below.
Fiscal Year End
Annual Pension Cost
6/30103
6/30104
6/30105
$ 6,947,159
8,340,066
13,614,272
PERS unfunded actuarial accrued liability (or surplus) for both miscellaneous and safety employees are
being amortized as a level percentage of projected payrolls over a closed 20-year period for prior and
current service unfunded liability. The current unfunded actuarial accrued liability is approximately $52.8
million.
Defined Contribution Pension Plan. The City provides pension plan benefits for all of its part-time
employees through a defined contribution pension plan. All part-time employees are eligible to
participate from the date of employment. Federal legislation requires contributions of at least 7.5% to a
retirement plan, and City Council resolved to match the employees' contributions of 3.75%. The City's
contributions for each employee (and interest earned by the accounts) are fully vested immediately.
For the year ended June 30, 2004, the City'.> total payroll and covered payroll was $3,104,019. The City
made employer contributions of $116,40 I (3.75% of current covered payroll), and employees contributed
$116,401 (3.75% of current covered payroll).
Insurance Program
The City is self-insured for the first $250,000 per occurrence for its general liability losses including
personal injury, property damage, errors and omissions, automobile liability and employment practices
liability. For those losses between $250,000 and $2,000,000 per occurrence the City pools its liabilities
through its membership in the San Diego pooled Insurance Program Authority (SANDPIPA). Insurance
for losses in excess of the $2,000,000 up to $34,000,000 is purchased on a group basis by the member
cities.
SANDPIPA is a joint powers authority comprised of twelve San Diego County cities. The Board of
Directors consists of one staff representative (and an alternate) from each of the member cities as
designated by the city's governing body. Each member city has equal representation on the Board of
Directors. The Board of Directors is liable for all actions ofSANDPIPA.
32
2 -;er 9
.
Annual pool premiums and assessments are approved by the Board of Directors and are adjusted annually
based on the member city's incurred losses; the member's share of such losses and other expenses as a
proportion of all member's losses; historical contributions to reserves (including reserves for IBNR
losses); the cost to purchase excess liability insurance and other coverage and a proportionate share of
administrative expenses.
The City is self-insured for the first $500,000 per occurrence for workers' compensation liabilities.
Excess workers' compensation coverage is obtained through participation in the CSAC Excess Insurance
Authority's Excess Workers' Compensation Program. As of June 30, 2005, there are 147 member entities
participating in the program that offers per occurrence coverage up to $5,000,000 through pooled
resources and from $5,000,000 to $ 150,000,000 via a group purchased excess insurance policy.
Only the probable amounts of loss as estimated by the City's Risk Manager and Attorney, including an
estimate of incurred-but-not-reported losses, have been recorded as liabilities in the City's financial
statements. As of June 30, 2005, there were no reductions in insurance from the prior year and there were
no insurance settlements that exceeded coverage in each ofthe past three years. The aggregate balance of
claims payable as of June 30, 2004 and June 30, 2005 were $8,164,554 and $8,948,014, respectively.
Outstanding Indebtedness of the City
The City had the following outstanding indebtedness as of June 30, 2005, exclusive of obligations to be
paid ITom specifically pledged revenues, such as revenue bonds, tax allocation bonds and assessment
district or special tax bonds. The City has never defaulted in the payment of any of its obligations.
Original Amount Final
Category of Indebtedness Obligation Outstanding Maturity
(I) Pension Obligation Bonds, Series 1994 $16,786,532 $12,991,962 2012
(2) 2000 Certificates of Participation, Series A 25,255,000 21,280,000 2021
(3) 2002 Certificates of Participation Police Facility 60,145,000 60,145,000 2033
(4) 2003 Refunding Certificates of Participation 11,320,000 8,900,000 2014
(5) 2004 Certificates of Participation, Civic Center I 37,240,000 37,240,000 2034
(6) Notes Payable 406,385 291,460 2014
(7) Capital Leases 2,809,405 2,042,487 2014
(8) Compensated Absences 5,094,534 N/A
(I) The Pension Obligation Bonds, Series 1994 were issued by the City to pay the obligations from
the City to the California Public Employees Retirement System for the City's unfunded pension
liability. The bonds are not limited as to payment to any special source of funds of the City. The
total issue is comprised of current interest bonds and capital appreciation bonds. Annual debt
service is approximately $2.2 million.
(2) In October 2000, the Authority issued its 2000 Certificates of Participation, Series A to provide
funds to improve the City's 800 Megahertz emergency communications system and improve the
City's Corporation Yard. The Certificates are to be repaid ITom lease payments to be made by the
City to the Authority. Annual lease payments are approximately $2. I million. Currently, 6 I % of
these lease payments are funded ITom PFDIF.
33 2 -fCfC}
(3) In June 2002, the Authority issued its 2002 Certificates of participation to provide funds to
construct the City's police Headquarters. The Certificates are to be repaid from lease payments to
be made by the City to the Authority. Annual lease payments are approximately $3.9 million.
Currently, 48.2% of these lease payments are funded from PFDlF.
(4) In May 2003, the City issued its 2003 Refunding Certificates of participation to defease its
outstanding 1993 Certificates of participation and reimburse the City for amounts it advanced to
prepay an equipment lease. The Certificates are to be repaid from lease payments made by the
City to the Authority. Annual lease payments are approximately $1.6 million.
(5) In September 2004, the City issued its 2004 Certificates of participation to provide funding for
the first phase of the reconstruction, renovation, and equipping of the City's Civic Center
Complex as well as approximately $9 million in infrastructure improvements throughout the City.
The Certificates are to be repaid from lease payments to be made by the City to the Authority.
Annual lease payments are approximately $2.4 million and advance lease payments (capitalized
interest) has been funded through March I, 2006. When due, approximately $1,540,000 will be
funded from PFDIF and an additional $680,000 will be funded from residential construction
taxes.
(6) In January 1994, the City entered into a note payable with a private party in order to purchase
certain land and improvements for the ultimate purpose of constructing a three-level parking
structure.
(7) The City has capitalized a certain lease for its share of the San Diego County Regional
Communications System.
(8) Represents that portion of compensated absences not expected to be paid during the current year.
The City expects to execute and deliver $15,000,000 of Additional Certificates in addition to the 2004
Certificates and the Certificates to complete the renovation of the Civic Center. As with the financing for
the first two phases of the project, the City expects to use PFDlF funds to pay approximately 88% of lease
payments attributable to the project.
34
2 - Z60
Direct and Overlapping Debt
Set forth below is a direct and overlapping debt report (the "Debt Report") prepared by Muni Financial as
of June 30, 2005. The Debt Report is included for general information purposes only. The City has not
independently verified this information and makes no representations as to its accuracy or completeness.
The Debt Report generally includes long-term obligations sold in the public credit markets by public
agencies whose boundaries overlap the boundaries of the City in whole or in part. Such long-term
obligations are not payable from City's General Fund nor are they necessarily obligations secured by
property within the City. In many cases, long-term obligations issued by a public agency are payable only
from the general fund or other revenues of such public agency.
TABLE NO. 16
CITY OF CHULA VISTA
DIRECT AND OVERLAPPING DEBT
2004105 Assessed Valuation:
Redevelopment Incremental Valuation:
Adjusted Assessed Valuation:
$15,366,255,050
699.939.207
$14,666,315,843
OVERLAPPING TAX AND ASSESSMENT DEBT:
Percentage Outstanding
ADolicable Debt 6/30/05
1.104% $ 4,616,818
99.997% 9,954,701
53.83 1 % 48,409,666
63.722% 53,551,969
85.353% 76,711,009
100.000% 178,410,000
3.978-100% 121,571,181
100.000% 7,945,000
100.000% 49455.000
$550,625,344
5.808% $ 26,941,954
5.808% 72,730,269
5.808% 744,731
53.831% 1,442,671
63.722% 1l,642,009
85.353% 95,608,163
100.000% 127,565,000
100.000% 12,275,036
61.279% 15730 319
$364,680,152
15730319
$348,949,833
Metropolitan Water District
Otay Municipal Water District, I.D. No. 27
Southwestern Community College District
Sweetwater Union High School District
Chula Vista City School District
City of Chula Vista Community Facilities Districts
Sweetwater Union High School District Community Facilities Districts
Chula Vista City School District Community Facilities Districts
City ofChula Vista 1915 Act Bonds
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT
DIRECT AND OVERLAPPING GENERAl. FUND OBLIGATION DEBT:
San Diego County General Fund Obligations
San Diego County Pension Obligations
San Diego County Superintendent of Schools Obligations
Southwestern Community College District Certificates of Participation
Sweetwater Union High School District Certificates of Participation
Chula Vista City School District Certificates of Participation
City of Chula Vista Certificates of Participation
City ofChula Vista Pension Obligations
Dtay Municipal Water District Certificates,ofParticipation
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT
Less: Otay Municipal Water District Certificates of Participation
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT
(Continued on next Da~e.)
35
2-2-tJ/
(Continued from previous page.)
GROSS COMBINED TOTAL DEBT
NET COMBINED TOTAL DEBT
$915.305.496 (1)
$899.575.177
(I) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded
capital lease obligations.
Ratios to 2004/05 Assessed Valuation:
Total Overlapping Tax and Assessment Debt.....................................................................3.58%
Ratio~ to Adiusted Assessed Valuation:
Combined Direct Debt ($139,840,036) .............................................................................0.95%
Gross Combined Total Debt ..............................................................................................6.240/0
Net Combined Total Debt ......... ................. ............ ................. .... .........-.......... .......... ......... 6.130/0
Source: Muni Financial
Financial Statements
The City's accounting policies conform to generally accepted accounting principles and reporting
standards set forth by the State Controller. The audited financial statements also conform to the principles
8.I}d standards for public financial reporting established by the National Council of Government
Accounting and the Governmental Accounting Standards Board.
GASB No. 34. The Governmental Accounting Standards Board (GASB) published its Statement No. 34
"Basic Financial Statements _ and Management's Discussion and Analysis - for State and Local
Governments" on June 30, 1999. Statement No. 34 provides guidelines to auditors, comptrollers, and
financial officers on requirements for financial reporting for all governmental agencies in the United
States. Retroactive reporting is required four years after the effective date on the basic provisions for all
major general infrastructure assets that were acquired or significantly reconstructed, or that received
significant improvements, in fiscal years ending after June 30, 1980. The City was required to implement
the provision of GASB 34 for the fiscal year ending June 30, 2002.
Basis of Accounting and Financial Statement Presentation. The government-wide financial statements
are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are levied. Grants and similar items are recognized as
revenue as sopn as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are r"l'orted using the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues are considered to
be available when they are collectible within the current period or soon enough thereafter to pay liabilities
of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures are recorded only when payment is due.
The City retained the firm of Caporicci & Larson, Certified Public Accountants, Costa Mesa, California,
to examine the general purpose financial statements of the City as of and for the year ended June 30,
2005. The following tables summarize the Balance Sheet and Statement of Revenues, Expenditures and
Changes in Fund Balance of the City's General Fund for the last four fiscal years.
36
2- -2n2-
TABLE NO. 17
CITY OF CHULA VISTA
GENERAL FUND
BALANCE SHEET
As of June 30
2002 2003 2004 2005
ASSETS
Cash and investments $27,341,472 $27,866,446 $19,125,509 $11,357,783
Receivables:
Accounts 5,959,672 725,281 1,000,307 200,620
Taxes 4,746,955 5,713,547 7,356,217 10,161,465
Interest 480,647 315,828 146,936 107,022
Loans 506,250 293,750 181,250 168,750
Due from other funds 1,400,461 1,676,641 3,035,728 1,736,486
Due from other governments 1,977,046 2,303,240 3,492,030 3,072,073
Advances to component unit 3,9Il,561
Advances to other funds 20,105,078 22,457,868 23,871,280 26,070,864
Inventories and prepaid items 164.324 17.080 17126 32 642
Total assets $66,593,466 $61,369,681 $58,226,383 $52,907,705
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities $ 4,481,923 $ 6,035,288 $ 6,740,614 $ 4,900,211
Refundable deposits 14,710 14,710
Unearned revenue 5.777.281 5.266.457 6.198.198 6.505.316
Total liabilities $10,273,914 $Il,316,455 $12,938,812 $Il,405,527
Fund Balances:
Reserved:
Encumbrances $ 3,068,795 $ 3,856,092 $ 2,224,781 $ 2,448,025
Long~term receivables and advances 18,745,607 17,485,160 17,854,331 19,734,298
Prepaid items 164 324 17 080 17126 32 642
Total reserved $21,978,726 $21,358,332 $20,096,238 $22,214,965
Unreserved:
Designated for:
Contingency 2,982,950 2,982,950
Capital projects 2,843,983 1,696,295
Designated 4,523,190 5,196,422
Undesignated: 29817 636 23498.472 19.364.400 14.607.968
T otaI unreserved 34,340,826 28,694,894 25,191,333 19,287,213
Total fund balances $56 319.552 $50.053 226 $45.287571 $41502178
T otalliabilities, fund balances $66 ;91 466 $61 %9681 $58 226 383 $;2 907 70;
Source: City of Chula Vista Comprehensive Annua! Financial Report.
37 2-2CJ.3
.
TABLE NO. 18
ClTY OF CHULA VISTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
For the year ended June 30
2002 2003 2004 2005
REVENUES:
Taxes $ 51,457,719 $ 47,805,218 $ 56,434,380 $ 64,045,568 (I}
Intergovernmental 15,882,300 16,556,260 15,603,934 19,560,288
Licenses and pennits 3,458,645 4,569,294 5,067,768 3,649,710
Charges for services 11,471,285 13,403,746 14,395,804 14,482,914
Fines and forfeitures 920531 922937 968,513 824,901
Use of money and property 3,595,682 2,741,528 837,064 2,055,387
Other 13.359.798 16.023619 19 070.433 21 440.097 (I}
Total revenues $100,145,960 $102,022,602 $112,377,896 $126,058,865
EXPENDITURES:
Current:
General government $ 24,451,019 $ 27,530,693 $ 30,764,992 $ 34,048,658
Public safety 39,409,867 44,369,505 51,459,649 60,470,397
Public works 19,379,018 25,645,152 29,968,968 31,864,754
Parks and recreation 7,978,726 4,712,527 4,759,282 5,303,741
Library 6,900,253 7,630,160 7,513,643 8,929,751
Capital outlay 5,520,797 4,633,345 3,474,411 1,249,582
Debt service:
Interest and fiscal charges 69.645
Total expenditures $103.709,325 $114,521,382 $127,940,945 $141,866,883
REVENUES OVER (UNDER) ($ 3,563,365) ($ 12,498,780) ($ 15,563,049) ($ 15,808,018)
OTHER FINANCING SOURCES (USES):
Transfers in $ 15,010,230 $ 13,496,337 $ 13,732,582 $ 15,706,199
Transfers out (1.880.274) (4937736) (2935.1881 (3683.574)
Total other financing sources $ 13,129,956 $ 8,558,601 $ 10,797,394 $ 12,022,625
EXTRAORDINARY ITEM:
Forgiveness of debt (24861411
Total extraordinary item (2,486,141)
NET CHANGE IN FUND BALANCES $ 9,566,591 ($ 6,426,320) ($ 4,765,655) ($ 3,785,393)
FUND BALANCE
Beginning of Year $ 46,422,947 $ 56,319,552 $ 50,053,226 $ 45,287,571
Prior year adjustment 330014 159.994
End afyear $ %119552 $ 50051226 $ 45187571 $ 41 507 178
(1) As restated.
Source: City of Chula Vista Comprehensive Annual Financial Report.
38 2- 20({
City Investment Policy
.
General. Pursuant to the City's Investment Policy (the "Investment Policy") the City's Finance Director
is responsible for investing the cash balances in all City Funds in accordance with the California
Government Code, Sections 53600 et seq. and 53635 et seq. The Investment Policy does not include long
tenn debt reserve funds and deferred compensation funds, which are exceptions covered by other more
specific Government Code sections and the legal documents unique to each debt transaction. The
Investment Policy provides that investment practices shall confonn to California's prudent man rule
which states, in essence, that "in investing... property for the benefit of another, a trustee shall exercise the
judgment and care, under the circumstances then prevailing, which men of prudence, discretion and
intelligence exercise in the management of their own affairs..."
Under the Investment Policy, the Finance Director and other individuals assigned to manage the
investment portfolio, acting within the intent and scope of the investment policy and other written
procedures, and exercising due diligence, shall be relieved of personal responsibility and liability for an
individual investment's credit risk or market price changes, provided material deviations from
expectations are reported in a timely manner and appropriate action is taken to control any adverse
developments.
The Investment Policy states that it is the City's full intent, at the time of purchase, to hold all investments
until maturity in order to ensure the return of all invested principal. However, it is anticipated that market
prices of securities purchased as investments will vary depending on economic conditions, interest rate
fluctuations, or individual security credit factors. In a diversified investment portfolio, such temporary
variations in market value will inevitably resuIt in measurable losses at any specific point in time. From
time to time, changes in economic or market conditions may dictate that it is in the City's best interest to
sell a security prior to maturity.
The three principal factors of safety, liquidity and yield are to be taken into consideration, in that order,
when making investment decisions.
Authorized Investment Instruments. The City may invest in the following instruments under the
guidelines as provided in the Investment Policy:
Certificates of DeDosit. Time Certificates of Deposit will be made only in FDIC or FSLIC insured
accounts. For deposits in excess of the insured maximum of $100,000, approved collateral shall be
required in accordance with California Government Code section(s) 53652 and/or 53651(m)(I). No more
than 25% of the investment portfolio may be invested in this investment type.
.
Securities of the U.S. Government or its Agencies. This category includes obligations issued by Federal
Home Loan Banks, Government National Mortgage Association, the Fann Credit System, the Federal
Home Loan Bank, the Federal Home Loan Mortgage Association, the Federal National Mortgage
Association, the Student Loan Marketing Association, or obligations or other instruments of or issued by
a federal agency or a United States Government sponsored enterprise.
Treasurv Bills and Notes. U.S. Treasury Bills, Notes, Bonds or Certificates of Indebtedness, or those for
which the full faith and credit of the United States are pledged for the payment of principal and interest.
Local Agencv Investment Fund (LAIF). Investment of funds in the California LAIF which allows the
State Treasurer to invest through the Pooled Money Investment Account. Maximum investment is subject
to state regulation.
County of San Diego Treasurv Pool. Ihvestment of funds in the County of San Diego Treasury which
allows the County Treasurer-Tax Collector to invest local funds through a pooled concept.
39
2~205
Bankers Acceptance. Bills of Exchange or time Drafts drawn on and accepted by a commercial bank,
otherwise known as Bankers Acceptances, both foreign and domestic, which are eligible for purchase by
the Federal Reserve System. purchases of Bankers Acceptances may not exceed 270 days maturity or
total more then 40% of the cost value of the City's investment portfolio.
Commercial Paper. Paper of the highest rating as provided by Moody's Investors Service, Inc. (Pl), or
Standard and Poor's Ratings Service (A1+). Eligible commercial paper is further limited to issuing
corporations that are organized and operating within the United States and having total assets in excess of
$500,000,000. Purchases of eligible commercial paper may not exceed 180 days maturity, represent more
than 10% of the outstanding paper of the issuer, or total more than 15% of the cost value of the City's
investment portfolio.
Negotiable Certificates of Deposit. Issued by a nationally or state-chartered bank of a state or federal
savings and Joan association or by a state-licensed branch of a foreign bank. purchases of Negotiable
Certificates of Deposit may not total more than 30% of the cost value of the City's investment portfolio.
Repurchase Agreements. A purchase of securities by the City pursuant to a Master Repurchase
Agreement by which the seller will repurchase such securities on or before a specified date, or on demand
of either party, and for a specified amount. Investments in repurchase agreements will be used solely as
short term investments not to exceed 90 days and be collateralized by securities having a market value of
at least 102% of the vaJue of the repurchase agreement at all times during the term of the investment.
Medium Term COrPorate Notes. Corporate obligations rated A or better by Moody's and or Standard and
Poor's rating agencies. Purchases of corporate medium term notes shall not total more than 30% of the
cost value of the City's investment portfolio, nor for anyone corporation, when combined with any
commercial paper issued by the same corporation, total more than 15% of the cost value of the City's
investment portfolio.
Dailv Cash Funds. Various daily cash funds administered for or by Trustees, Paying Agents, or Custodian
Banks contracted by the City may be purchased as allowed under California Government Code. Only
those funds holding U.S. Treasury or Government Agency obligations shall be purchased.
Diversification. Investments shall be diversified among institutions, types of securities and maturities to
maximize safety and yield with changing market conditions. Local financial institutions will be given
preferential consideration for investment of City funds consistent with the City's objective of attaining
market rates of return, and consistent with constraints imposed by its safety objectives, cash flow
considerations and State laws.
40 2- 2 (J b
The par value, market value, adjusted cost basis and percent oftotal investments for each category of the
City's investments, as of December 31,2005, are set forth in Table No. 19 below.
TABLE NO. 19
CITY OF CHULA VISTA
SCHEDULE OF INVESTMENTS
(As of December 31, 2005)
Investment Tvpe
Cash/Time Deposits
Pooled Investment
Federal Securities
Local Authority Investment Fund
Corporate Bonds
Par Value (I)
Adjusted Cost
Market Value (2) , Basis (3)
% ofrotal
Investments
SubtotaJ
Cash/Investments with Fiscal Agent
U.S. Government
Investment Agreements
Mutual Funds
Cash with FiscaJ Agents
Restricted Cash
Subtotal
TotaJs
(I) Par value is the principal amount of the investment at maturity.
(2)
All market values contained herein are received from sources the City believes are reliable; however, the City
does not guarantee their accuracy.
(3) Adjusted Cost Basis is the par value of the security plus or minus any premium or discount and accrued interest
that was included in the purchase price.
Source: City of Chula Vista
.
41 2-Zo7
The purchase of the Certificates involves investment risk. If a risk factor materializes to a sufficient
degree, it could delay or prevent payment of principal and/or interest represented by the Certificates.
Such risk factors include, but are not limited to, the following matters and should be considered, along
with other information in this Official Statement, by potential investors.
CERTIFICATE OWNERS' RISKS
The Lease Payments
City's Lease Payments and Other Payments. The City's Lease Payments and other payments due
under the Lease (inc1uding the costs of improvement, repair and maintenance of the Leased Premises and
taxes, other governmental charges and assessments levied against the Leased Premises) are not secured by
any pledge of taxes or other revenues of the City but are payable from yearly appropriations of any funds
lawfully available to the City. If the City's revenue sources are less than its total obligations, the City
could choose to fund other services before making Lease Payments and other payments due under the
Lease. The same result could occur if, because of State Constitutional limits on expenditures, the City is
not permitted to appropriate and spend all of its available revenues (see "Constitutional Limitation on
Taxes and Expenditures" herein). To the extent these types of events or other events adversely affecting
the funds available to the City occur in any year, the funds available to make Lease Payments may be
decreased.
The City has the capacity to enter into other obligations which may constitute additional charges against
its revenues. To the extent that additional obligations are incurred by the City, the funds available to the
City to make Lease Payments may be decreased.
Abatement. The amount of Lease Payments due under the Lease will be adjusted or abated during any
period in which by reason of damage or destruction to the Leased Premises or eminent domain
proceedings there is substantial interference with the use and possession of the Leased Premises.
Notwithstanding the provisions of the Lease and the Trust Agreement specifying the extent of abatement
in the event of the City's failure to have use and possession of the Leased Premises, such provisions may
be superseded by operation of law, and, in such event, the resulting Lease Payments of the City may not
be sufficient to pay all of that portion of the remaining principal and interest represented by the
Certificates.
Insurance. The Lease obligates the City to obtain and keep in force various forms of insurance, to assure
repair or replacement of the Leased Premises in the event of damage or destruction to the Leased
Premises (see "APPENDIX A _ sUMMARY OF PRINCIPAL LEGAL DOCUMENTS - LEASE AGREEMENT -
Insurance" herein). The City makes no representation as to the ability of any insurer to fulfill its
obligations under any insurance policy provided for in the Lease. In addition, certain risks, such as
damage from earthquakes, may not be covered by such property insurance (see "SOURCES OF PAYMENT
FOR THE CERTIFICATES - Insurance Relating to the Leased Premises" herein).
If the Leased Premises is partially or completely damaged or destroyed due to any uninsured or
underinsured event, it is likely that Lease Payments will be partially or completely abated. Apart from the
Net Proceeds of insurance, the City and the Authority will have no obligation to expend any funds to
repair or replace such damaged or destroyed property. If any Leased Premises so damaged or destroyed is
not repaired or replaced within the period during which the proceeds of rental interruption insurance or
amounts in the Reserve Fund are available, any such abatement could prevent the City from making
timely Lease Payments.
42
2-ZJ!)2
.
Discovery of a Hazardous Substance That Would Limit the Beneficial Use of the Leased Premises.
in general, the owners and lessees of a parcel may be required by law to remedy conditions of the
property relating to the releases or threatened releases of hazardous substances. The. federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980 sometimes referred to
as CERCLA or the Superfund Act, is the most well known and widely applicable of these laws but
California laws with regard to hazardous substances are also stringent and similar. Under many of these
laws, the owner (or lessee) is obligated to remedy a hazardous substance condition of property whether or
not the owner (or lessee) had any involvement in creating or handling the hazardous substance. The
effect, therefore, should the Leased Premises be affected by a hazardous substance, might be to limit the
beneficial use of the Leased Premises upon discovery and during remediation.
State Budget
The following information concerning the State s budgets for the current and most recent preceding years
has been compiled from publicly-available information provided by the State. Neither the City nor the
Financial Advisor is responsible for the information relating to the State s budgets provided in this
section. Further information is available from the Public Finance Division of the State Treasurer S Office.
The Budget Process. The State's fiscal year begins on July I and ends on June 30. The annual budget is
proposed by the Governor by January 10 of each year for the next fiscal year (the "Governor's Budget").
Under State law, the annual proposed Governor's Budget cannot provide for projected expenditures in
excess of projected revenues and balances available from prior fiscal years. Following the submission of
the Governor's Budget, the Legislature takes up the proposal.
Under the State Constitution, money may be drawn from the Treasury only through an appropriation
made by law. The primary source of the annual expenditure authorizations is the Budget Act as approved
by the Legislature and signed by the Governor. The Budget Act must be approved by a two-thirds
majority vote of each House of the Legislature. The Governor may reduce or eliminate specific line items
in the Budget Act or any other appropriations bill without vetoing the entire bill. Such individual line-
item vetoes are subject to override by a two-thirds majority vote of each House ofthe Legislature.
Appropriations also may be included in legislation other than the Budget Act. Bills containing
appropriations (except for K-14 education) must be approved by a two-thirds majority vote in each House
of the Legislature and be signed by the Governor. Bills containing K-14 education appropriations only
require a simple majority vote. Continuing appropriations, available without regard to fiscal year, may
also be provided by statute or the State Constitution.
Funds necessary to meet an appropriation need not be in the State Treasury at the time such appropriation
is enacted; revenues may be appropriated in anticipation of their receipt.
Recent State Budgets. Certain information about the State budgeting process and the State Budget is
available through several State of California sources. A convenient source of information is the State's
website, where recent official statements for State bonds are posted. The references to internet websites
shown below are shown for reference and convenience only; the information contained within the
websites has not been reviewed by the City and is not incorporated herein by reference.
The California State Treasurer's Internet home page at www.treasurer.ca.gov. under the heading "Bond
Information," posts various State of California Official Statements, many of which contain a summary of
the current State Budget, past State Budgets, and the impact of those budgets on school districts in the
State.
43 2-- 2n1
The California State Treasurer's Internet home page at www.treasurer.ca.gov. under the heading
"Financial Information," posts the State's audited financial statements. In addition, the "Financial
Information" section includes the State's Rule 15c2-12 filings for State bond issues. The "Financial
Information" section also includes the "Overview of the State Economy and Government, State Finances,
State Indebtedness, Litigation" rrom the State's most current Official Statement, which discusses the State
budget and its impact on school districts.
The California Department of Finance's Internet home page at www.dof.ca.gov. under the heading
"California Budget," includes the text of proposed and adopted State Budgets.
The State Legislative Analyst's Office prepares analyses of the proposed and adopted State budgets. The
analyses are accessible on the Legislative Analyst's Internet home page at www.lao.ca.gov under the
heading "Products."
2005/06 State Budget
Among the measures in the 2005/06 State budget affecting local governments are the following:
Vehicle License Fee Backfill. The State has enacted Vehicle License Fee reductions for the current and
prior fiscal years, but under the law authorizing these reductions, the State is required to "backfill" local
governments for their revenue losses resulting from the lowered rates, and the Vehicle License Fee rate
must be increased whenever there are insufficient moneys in the State general fund to pay for the backfill.
The 2004/05 and 2005/06 State budgets deleted the requirement for backfill payments and, instead,
provided that the amount of the backfill requirement will be met by an increase in the property tax
allocation to cities and counties. See "FINANCIAL INFORMATION - Local Taxes."
Praperty Tax Shift ta the ERAF. The budget included a $1.3 billion shift of local government property
taxes to the ERAF. The budget apportioned the $1.3 billion among cities ($350 miHion), counties ($350
million), special districts ($350 million) and redevelopment agencies ($250 miHion) and limited the $1.3
biHion ERAF transfer to the two fiscal years 2004/05 and 2005/06. The City's share of this additional
shift of property taxes is estimated to be $1,835,000 in each of the two years.
Deferral of Mandate Reimbursement. The budget defers reimbursement to counties, cities and special
districts for State mandates (i.e., State-mandated requirements that local agencies must carry out without
regard to the timing of State reimbursement of the costs ofthose mandates).
Other Measures. In addition to the ERAF shift, the budget contained numerous other changes that reduce
local government funds or increase local costs, including the elimination of booking fee subventions.
Triple Flip. The City anticipates that property tax revenue could be an increasingly significant portion of
City revenues, and that sales tax revenues could be an increasingly smaller portion of City revenues, at
least over the next few fiscal years, because of legislation, commonly referred to as the "Triple Flip,"
which was submitted to the voters on March 2, 2004, as part of a bond initiative formally known as the
"California Economic Recovery Act." This act authorized the issuance of $15 billion in bonds to finance
the 2002/03 and 2003/04 State budget deficits, which are payable from a fund established by the
redirection of tax revenues through the Triple Flip. Currently, $11.3 biHion of the $15 biHion
authorization has been sold, with the remaining authorization being held in reserve to assist in derraying
any future State budget deficits.
Under the "Triple Flip" one-quarter of local governments' one percent share of the sales tax imposed on
taxable transactions within their jurisdiction is redirected to the State. In an effort to eliminate the adverse
impact of the sales tax revenue redirection on local government, the legislation provides for property
taxes in the ERAF to be redirected to local government. Because the ERAF moneys were previously
earmarked for schools, the legislation provides for schools to receive other state general fund revenues. It
44 -Z - 2-/0
is expected that the swap of sales taxes for property taxes would terminate once the deficit financing
bonds were repaid. The "Triple Flip" legislation was approved by voters at the election on March 2, 2004
and the bonds were sold in May 2004.
The City cannot predict what actions will be taken in future years by the State Legislature and the
Governor to address the State's current or future budget deficits. Future State budgets will be affected by
national and state economic conditions and other factors over which the City has no control. To the extent
that the State budget process results in reduced revenues to the City, the City will be required to make
adjustments to its budget. Decrease in such revenues may have an adverse impact on the City's ability to
pay Lease Payments.
Constitutional Limitation on Taxes and Expenditures
State Initiative Measures Generally. Under the California Constitution, the power of initiative is
reserved to the voters for the purpose of enacting statutes and constitutional amendments. Over the past
18 years, the voters have exercised this power through the adoption of Proposition 13 ("Article XIIIA")
and similar measures, the most recent of which was approved as Proposition 218 in the general election
held on November 5, 1996.
Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies
such as the City. Subject to overriding federal constitutional principles, such collection may be materially
and adversely affected by voter-approved initiatives, possibly to the extent of creating cash-flow problems
in the payment of outstanding obligations such as the Lease Agreement.
.
Article XIIIA. Article XIIIA of the California Constitution limits the taxing powers of California public
agencies. Article XIIIA provides that the maximum ad valorem tax on real property cannot exceed one
percent of the "full cash value" of the property, and effectively prohibits the levying of any other ad
valorem property tax except for taxes above that level required to pay debt service on voter-approved
general obligation bonds. "Full cash value" is defined as "the County assessor's valuation of real
property as shown on the 1975/76 tax bill under 'full cash value' or, thereafter, the appraised value of real
property when purchased, newly constructed, or a change in ownership has occurred after the 1975
assessment." The "full cash value" is subject to annual adjustment to reflect inflation at a rate not to
exceed two percent or a reduction in the consuq)<:r price index or comparable local data. Article XIIIA
has subsequently been amended to permit reduction of the 'full cash value' base in the event of declining
property values caused by substantial damage, destruction or other factors, and to provide that there
would be no increase in the 'full cash value' base in the event of reconstruction of property damaged or
destroyed in a disaster and in other special circumstaflces.
The foregoing limitation does not apply to ad valorem taxes or special assessments to pay the interest and
redemption charges on any indebtedness approved by the voters before July I, 1978 or any bonded
indebtedness for the acquisition or improvement of real property approved by two-thirds of votes cast by
the voters voting on the proposition.
In the general election held November 4, 1986, voters of the State of California approved two measures,
Propositions 58 and 60, which further amend the terms "purchase" and "change of ownership", for
purposes of determining full cash value of property under Article XIIIA, to not include the purchase or
transfer of (I) real property between spouses and (2) the principal residence and the first $1,000,000 of
other property between parents and children. Proposition 60 amends Article XIIIA to permit the
Legislature to allow persons over age 55 who sell their residence and buy or build another of equal or
lesser value within two years in the same city, to transfer the old residence's assessed value to the new
residence. In the March 26, 1996 general election, voters approved Proposition 193, which extends the
parents-children exception to the reappraisal of assessed value. Proposition 193 amended Article XIIIA
so that grandparents may transfer to their grandchildren whose parents are deceased, their principal
residences, and the first $1,000,000 of other property without a re-appraisal of assessed value.
45
2 -2-/ I
.
Article XIIIB. On October 6, 1979, California voters approved Proposition 4, or the Gann Initiative,
which added Article xurn to the California Constitution. The principal thrust of Article XIIIB is to limit
the annual appropriations of the State and any city, county, city and county, school district, authority or
other political subdivision of the State. The "base year" for establishing such appropriations limit is the
1978/79 fiscal year, and the limit is to be adjusted annually to reflect changes in population, consumer
prices and certain increases in the cost of services provided by public agencies.
Proposition 62 and Proposition 218. Under the California Constitution, the power of initiative is
reserved to the voters for the purpose of enacting statutes and constitutional amendments. Over the past
18 years, the voters have exercised this power through the adoption of proposition 13 ("Article XIIIA")
and similar measures, the most recent of which was approved as proposition 218 in the general election
held on November 5, 1996. Proposition 62, also discussed below, was adopted in the November 1986
general election.
Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies
such as the City. Subject to overriding federal constitutional principles, such collection may be materially
and adversely affected by voter-approved initiatives, possibly to the extent of creating cash flow problems
in the payment of outstanding obligations such as the Lease Payments.
proposition 62 was a statutory initiative adding Sections 53720 to 53730, inclusive, to the California
Government Code. It confirmed the distinction between a general tax and special tax, established by the
State Supreme Court in 1982 in City and County of San Francisco v. Farrell, by defining a general tax as
one imposed for general governmental purposes and a special tax as one imposed for specific purposes.
Proposition 62 further provided that no local government or district may impose (i) a general tax without
prior approval of the electorate by majority vote or (Ii) a special tax without such prior approval by two-
thirds vote. 11 further provided that if any such tax is imposed without such prior written approval, the
amount thereof must be withheld from the levying entity's allocation of annual property taxes for each
year that the tax is collected. By its tenns, Proposition 62 applies only to general and special taxes
imposed on or after August I, 1985. Proposition 62 was generally upheld in Santa Clara County Local
Transportation Authority v. Guardino, a California Supreme Court decision fi]ed September 28, 1995.
The City levies a utility tax, which was first levied in 1970 and increased the tax (prior to the adoption of
Proposition 62) in 1979, without voter approval. The total utility tax revenues are estimated at
$7,435,000 for the 2005/06 fiscal year, which is approximately 4.7% of the City's total General Fund
Budget.
On November 5, 1996, California voters approved Proposition 218 - Voter Approval for Local
Government Taxes _ Limitation on Fees, Assessments, and Charges - Initiative Constitutional
Amendment. Proposition 218 added Articles XIlIC and XUID to the California Constitution, imposing
certain vote requirements and other limitations on the imposition of new or increased taxes, assessments
and property-related fees and charges. Proposition 218 states that all taxes imposed by local governments
shall be deemed to be either general taxes or special taxes. Special purpose districts, including school
districts, have no power to levy general taxes. No local government may impose, extend or increase any
general tax unless and until such tax is submitted to the electorate and approved by a majority vote. No
local government may impose, extend or increase any special tax unless and until such tax is submitted to
the electorate and approved by a two-thirds vote.
Proposition 218 also provides that no tax, assessment, fee or charge shall be assessed by any agency upon
any parcel of property or upon any person as an incident of property ownership except: (i) the ad valorem
property tax imposed pursuant to Article XIlI and Article XUIA of the California Constitution, (Ii) any
special tax receiving a two-thirds vote pursuant to the California Constitution, and (iii) assessments, fees,
and charges for property related services as provided in Proposition 218. Proposition 218 then goes on to
add voter requirements for assessments and fees and charges imposed as an incident of property
ownership, other than fees and charges for sewer, water, and refuse collection services. In addition, all
46 Z - 2 ( 2
assessments and fees and charges imposed as an incident of property ownership, including sewer, water,
and refuse collection services, are subjected to various additional procedures, such as hearings and stricter
and more individualized benefit requirements and findings. The effect of such new provisions will
presumably be to increase the difficulty a local agency will have in imposing, increasing or extending
such assessments, fees and charges.
Proposition 218 also extended the initiative power to reducing or repealing any local taxes, assessments,
fees and charges. This extension of the initiative power is not limited to taxes imposed on or after
November 6, 1996, the effective date of Proposition 218, and could result in retroactive repeal or
reduction in any existing taxes, assessments, fees and charges, subject to overriding federal constitutional
principles relating to the impairments of contracts.
Proposition 218 provides that, effective July 1, 1997, fees that are charged "as an incident of property
ownership" may not "exceed the funds required to provide the property related services" and may only be
charged for services that are "immediately available to the owner of the property."
The foregoing discussion of Proposition 62 and Proposition 218 should not be considered an exhaustive
or authoritative treatment of the issues. The City does not expect to be in a position to control the
consideration or disposition of these issues and cannot predict the timing or outcome of any judicial or
legislative activity in this regard. Interim rulings, final decisions, legislative proposals and legislative
enactments may all affect the impact of Proposition 218 on the Lease Payments as well as the market for
the Certificates. Legislative and court calendar delays and other factors may prolong any uncertainty
regarding the effects of Proposition 218.
Like its antecedents, Proposition 218 is likely to undergo both judicial and legislative scrutiny before its
impact on the City and its obligations can be determined. Certain provisions of Proposition 218 may be
examined by the courts for their constitutionality under both State and federal constitutional law. The
City is not able to predict the outcome of any such examination.
Future Initiatives. Articles XIllA, XIIIB, XIIIC and XIIID were adopted as measures that qualified for
the ballot pursuant to California's Constitutional initiative process. From time to time other initiative
measures could be adopted, affecting the ability of the City to increase revenues and to increase
appropriations.
Limited Recourse on Default
.
If an event of default occurs and is continuing under the Lease, there is no remedy of acceleration of any
Lease Payments which have not come due and payable in accordance with the Lease. The City will
continue to be liable for Lease Payments as they become due and payable in accordance with the Lease if
the Trustee does not terminate the Lease, and the Trustee would be required to seek a separate judgment
each year for that year's defaulted Lease Payments. Any such suit for money damages would be subject
to limitations on legal remedies against counties in California, including a limitation on enforcement of
judgments against funds or property needed to serve the public welfare and interest. In addition, the
enforcement of any remedies provided in the Lease and the Trust Agreement could prove both expensive
and time-consuming.
The Lease permits the Trustee to take possession of and re-lease the Leased Premises in the event of a
default by the City under the Lease. However, due to the fact that the Leased Premises serves essential
governmental purposes, it is unlikely that a court would permit such remedy to be exercised. Even if such
remedy may be exercised, due to the specialized nature of the Leased Premises it is unlikely that the
Trustee could readily re-lease it for rents which are sufficient to enable it to pay principal and interest
represented by the Certificates in full when due. In the event of a default, there is no remedy of
acceleration of the total Lease Payments due over the term ofthe Lease.
.
47 2 - 213
Release or Substitution of Property
The City has the right from time to time, with tbe consent of the Insurer, to add other real property and
improvements (subject only to Permitted Encumbrances) or to substitute other real property or
improvements (subject only to Permitted Encumbrances) for all or a portion of the Leased Premises or to
release a portion of the real property or improvements constituting the Leased Premises, subject to the
conditions precedent to such addition, substitution or release as set forth in the Lease. No addition,
substitution or release under the Lease will be, by itself, the basis for any reduction in or abatement of the
Lease Payments due from the City thereunder. A release could, however, result in a reduction in the fair
rental value of the Leased Premises which would result in less security for the Owners should it be
necessary to relet the Leased Premises to cure a default in Lease Payments. See "APPENDIX A -
sUMMARY OF PRINCIPAL LEGAL DOCUMENTS - COVENANTS WITH RESPECT TO THE PROPERTY -
Substitution or Release of the Leased Premises" herein.
Loss of Tax Exemption
As discussed under the caption "LEGAL MATTERS - Tax Exemption" herein, the portion of the Lease
Payments designated as and comprising interest and received by the Owners of the Certificates could
become includable in gross income for purposes of federal income taxation retroactive to the date the
Certificates were executed and delivered as a result of future acts or omissions of the City or the Authority
in violation of their covenants contained in the Trust Agreement and the Lease. Should such an event of
taxability occur, the Certificates are not subject to special prepayment or any increase in interest rate and
will remain outstanding until maturity or until prepaid under one of the prepayment provisions contained
in the Trust Agreement.
Secondary Market
There can be no guarantee that there will be a secondary market for the Certificates or, if a secondary
market exists, that such Certificates can be sold for any particular price. Occasionally, because of general
market conditions or because of adverse history or economic prospects connected with a particular issue,
secondary marketing practices in connection with a particular issue are suspended or terminated.
Additionally, prices of issues for which a market is being made will depend upon then prevailing
circumstances. Such prices could be substantially different from the original purchase price.
48 2 - 2/ L(
LEGAL MATTERS
Enforceability of Remedies
The remedies available to the Trustee and the Owners of the Certificates upon an event of default under
the Trust Agreement, the Lease, the Site Lease, the Assignment Agreement or any other document
described herein are in many respects dependent upon regulatory and judicial actions which are often
subject to discretion and delay. Under existing law and judicial decisions, the remedies provided for
under such documents may not be readily available or may be limited. The various legal opinions to be
delivered concurrently with the delivery of the Certificates will be qualified to the extent that the
enforceability of certain legal rights related to the Trust Agreement, the Lease, the Site Lease, the
Assignment Agreement and other pertinent documents is subject to limitations imposed by bankruptcy,
reorganization, insolvency or other similar laws affecting the rights of creditors generally and by equitable
remedies and proceedings generally.
.
Approval of Legal Proceedings
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Special
Counsel, will render an opinion which states that the Lease represents a valid and binding obligation of
the City and is enforceable against the City in accordance with its terms. The legal opinion of Special
Counsel will be subject to the effect of bankruptcy, insolvency, moratorium and other similar laws
affecting creditors' rights and to the exercise of judicial discretion in accordance with general principles
of equity. See "APPENDIX D" hereto for the proposed form of Special Counsel's opinion.
The City has no knowledge of any fact or other information which would indicate that the Trust
Agreement, the Lease or the Certificates are not so enforceable against the City, except to the extent such
enforcement is limited by principles of equity and by state and federal laws relating to bankruptcy,
reorganization, moratorium or creditors' rights generally.
Certain legal matters will be passed on by Stradling Yocca Carlson & Rauth, a Professional Corporation,
Newport Beach, California, as Disclosure Counsel and for the City by the City Attorney. Fees payable to
Special Counsel and Disclosure Counsel are contingent upon the sale and delivery ofthe Certificates.
Tax Exemption
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California, Special Counsel, under existing statutes, regulations, rulings and judicial decisions, interest
due with respect to the Certificates is excluded from gross income for federal income tax purposes, and is
not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on
individuals and corporations. In the further opinion of Special Counsel, interest due with respect to the
Certificates is exempt from State of California personal income tax. Special Counsel notes that, with
respect to corporations, interest due with respect to the Certificates may be included as an adjustment in
the calculation of alternative minimum taxable income which may affect the alternative minimum tax
liability of such corporations.
The difference between the issue price of a Certificate (the first price at which a substantial amount of the
Certificates of the same series and maturity is to be sold to the public) and the stated redemption price at
maturity with respect to such Certificate constitutes original issue discount. Original issue discount
accrues under a constant yield method, and original issue discount will accrue to the owner of the
Certificate before receipt of cash attributable to such excludable income. The amount of original issue
discount deemed received by the owner of a Certificate will increase the owner's basis in the Certificate.
In the opinion of Special Counsel original issue discount that accrues to the owner of a Certificate is
excluded from the gross income of such owner for federal income tax purposes, is not an item of tax
49 2-2/ S-
preference for purposes of the federal alternative minimum tax imposed on individuals and corporations,
and is exempt from State of California personal income tax.
Special Counsel's opinion as to the exclusion from gross income of constituting interest (and original
issue discount) due with respect to the Certificates is based upon certain representations of fact and
certifications made by the City and others and is subject to the condition that the City and the Authority
comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must
be satisfied subsequent to the execution and delivery of the Certificates to assure that the portion of each
Lease Payment constituting interest (and original issue discount) will not become includable in gross
income for federal income tax purposes. Failure to comply with such requirements of the Code might
cause interest (and original issue discount) due with respect to the Certificates to be included in gross
income for federal income tax purposes retroactive to the date of execution and delivery of the
Certificates. The City and the Authority have covenanted to comply with all such requirements applicable
to each, respectively.
The amount by which a Certificate Owner's original basis for determining loss on sale or exchange in the
applicable Certificate (generally, the purchase price) exceeds the amount payable on maturity (or on an
earlier call date) constitutes amortizable Certificate premium, which must be amortized under Section 171
of the Code; such amortizable Certificate premium reduces the Certificate Owner's basis in the applicable
Certificate (and the amount of tax-exempt interest received), and is not deductible for federal income tax
purposes. The basis reduction as a result of the amortization of Certificate premium may result in a
Certificate Owner realizing a taxable gain when a Certificate is sold by the Owner for an amount equal to
or less (under certain circumstances) than the original cost of the Certificate to the Owner. purchasers of
the Certificates should consult their own tax advisors as to the treatment, computation and collateral
consequences of amortizable Certificate premium.
Special Counsel's opinions may be affected by actions taken (or not taken) or events occurring (or not
occurring) after the date hereof. Special Counsel has not undertaken to determine, or to inform any
person, whether any such actions or events are taken or do occur. The Trust Agreement, the Lease, and
the Tax Certificate permit certain actions to be taken or to be omitted if a favorable opinion of Special
Counsel is provided with respect thereto. Special Counsel expresses no opinion as to the exclusion from
gross income for federal income tax purposes of interest (and original issue discount) due with respect to
any Certificate if any such action is taken or omitted based upon the advice of counsel other than
Stradling Yocca Carlson & Rauth, a Professional Corporation.
The Internal Revenue Service (the "IRS") has initiated an expanded program for the auditing of tax-
exempt bond issues, including both random and targeted audits. It is possible that the Certificates will be
selected for audit by the IRS. It is also possible that the market value of the Certificates might be affected
as a result of such an audit of the Certificates (or by an audit of similar securities).
Although Special Counsel has rendered an opinion that the interest (and original issue discount) due with
respect to the Certificates is excluded from gross income for federal income tax purposes provided that
the City and the Authority continue to comply with certain requirements of the Code, the ownership of the
Certificates and the accrual or receipt of interest (and original issue discount) with respect to the
Certificates may otherwise affect the tax liability of certain persons. Special Counsel expresses no
opinion regarding any such tax consequences. Accordingly, before purchasing any of the Certificates, all
potential purchasers should consult their tax advisors with respect to collateral tax consequences with
respect to the Certificates.
The form of Special Counsel's Opinion with respect to the Certificates is attached hereto as "APPENDIX
D,"
50 2 -2/ C:J
.
Absence of Litigation
The City will furnish a certificate dated as of the date of delivery of the Certificates that there is not now
known to be pending or threatened any litigation restraining or enjoining the execution or delivery of the
Trust Agreement, the Lease or the sale or delivery of the Certificates or in any manner questioning the
proceedings and authority under which the Trust Agreement and the Site Lease and the Lease are to be
executed or delivered or the Certificates are to be delivered or affecting the validity thereof.
CONCLUDING INFORMATION
Ratings on the Certificates
Moody's and Standard and Poor's have assigned their ratings of "_" and "---," respectively, to the
Certificates with the understanding that a municipal bond insurance policy insuring payment when due of
the principal of and interest on the Certificates will be issued on the closing date by
. In addition, Standard & Poor's has assigned their municipal
bond rating of "_" to the Certificates, notwithstanding the delivery of the municipal bond insurance
policy. Such ratings reflect only the views of the rating agencies and any desired explanation of the
significance of such rating should be obtained ITom the rating agencies. Generally, a rating agency bases
its rating on the information and materials furnished to it and on investigations, studies and assumptions
of its own. There is no assurance such rating will continue for any given period of time or that such rating
will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of such rating
agency, circumstances so warrant. Any such downward revision or withdrawal of such rating may have
an adverse effect on the market price of the Certificates.
.
Underwriting
The Certificates were sold to (the "Underwriter") at competitive sale. The
Underwriter is offering the Certificates at the prices set forth on the inside ITont cover page hereof. The
initial offering prices may be changed from time to time and concessions from the offering prices may be
allowed to dealers, banks and others. The Underwriter has purchased the Certificates at a price equal to
$ , which amount represents the principal amount of the Certificates, plus an original issue
premium of $ , and less an Underwriter's discount of $ . The Underwriter will
pay certain of its expenses relating to the offering.
The Financial Advisor
The material contained in this Official Statement was prepared by the City with the assistance of the
Financial Advisor who advised the City as to the financial structure and certain other financial matters
relating to the Certificates. The information set forth herein has been obtained by the City from sources
which are believed to be reliable, but such information is not guaranteed by the Financial Advisor as to
accuracy or completeness, nor has it been independently verified. Fees paid to the Financial Advisor are
contingent upon the sale and delivery of the Certificates.
Continuing Disclosure
The City will covenant to provide annually certain financial information and operating data by not later
than March I each year commencing March I, 2007 and to provide the audited General Purpose Financial
Statements of the City for the fiscal year ending June 30, 2006 and for each subsequent fiscal year when
they are available (together, the "Annual Report"), and to provide notices of the occurrence of certain
other enumerated events if deemed by the City to be material. The Annual Report will be filed by the
Trustee on behalf of the City with each Nationally Recognized Municipal Securities Information
Repository certified by the Securities and Exchange Commission (the "Repositories") and a State
51 2--2--t7
repository, if any, and may also be obtained from the Trustee. The notices of material events will be
timely filed by the City with the Municipal Securities Rulemaking Board and the State repository, if any.
The specific nature of the information to be contained in the Annual Report or the notices of material
events and certain other terms of the continuing disclosure obligation are set forth in "APPENDIX C -
FORM OF CONTINUING DISCLOSURE AGREEMENT." These covenants have been made in order to
assist the underwriters in complying with Securities and Exchange Commission Rule 15c2-12(b)(5).
Other than as described in the next paragraph, the City has never failed to comply in all material respects
with any previous undertakings with regard to said Rule to provide annual reports or notices of material
events.
The City had delivered to U.S. Bank National Association in February 2004 its continuing disclosure
filings for fiscal year ending June 30, 2003 required under Rule 15c2-12 in connection with its
Certificates of Participation, Series A of 2000 (2000 Financing Project), its 2002 Certificates of
participation (Police Facility Project), and its 2003 Refunding Certificates of participation (Town Centre
11 Parking Project) with the intention that U.S. Bank National Association would disseminate the City;s
continuing disclosure filings for fiscal year ending June 30, 2003 on or before March I, 2004. On May
19,2004, U.S. Bank National Association had disseminated all of the City's continuing disclosure filings
for fiscal year ending June 30, 2003, and the City is noW current on all filings required pursuant to its
previous continuing disclosure undertakings.
Additional Information
The summaries and references contained herein with respect to the Trust Agreement, the Site Lease, the
Lease, the Assignment Agreement, the Certificates, statutes and other documents, do not purport to be
comprehensive or definitive and are qualified by reference to each such document or statute and
references to the Certificates are qualified in their entirety by reference to the form hereof included in the
Trust Agreement. Copies of the Trust Agreement, the Site Lease and the Lease are available for
inspection during the period of initial offering on the Certificates at the offices of the Financial Advisor.
Copies of these documents may be obtained after delivery of the Certificates from the City at 276 Fourth
Avenue, Chula Vista, California 91910.
References
Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated,
are intended as such and not as representations of fact. This Official Statement is not to be construed as a
contract or agreement between the City and the purchasers or Owners of any of the Certificates.
Execution
The execution of this Official Statement by the Finance Director has been duly authorized by the City of
Chula Vista.
CITY OF CHULA VISTA
By:
Finance Director
52
2-2(1
APPENDIX A
SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
[to be provided by Special Counsel]
A-l
2 -217
APPENDIX B
CITY AUDITED FINANCIAL STATEMENTS
B-1
z - 220
APPENDIX C
FORM OF CONTINUING DISCLOSURE AGREEMENT
[to be provided by Disclosure Counsel]
C-l
2--2-2-1
APPENDIX D
FORM OF SPECIAL COUNSEL OPINION
[to be provided by Special Counsel]
D-l
2-Z22-
APPENDIX E
SPECIMEN MUNICIPAL BOND INSURANCE POLICY
[to be provided by Bond Insurer]
E-l
2 -223
The information in this section concerning DTC and DTC's book-entry system has been obtained from
sources that the City believes to be reliable, but the City takes no responsibility for the accuracy or
completeness thereof The City cannot and does not give any assurances that DTC, DTC Participants or
Indirect Participants will distribute to the Beneficial Owners (aJ payments of interest, principal or
premium, if any, with respect to the Certificates, (b) Certificates representing ownership interest in or
other confirmation or ownership interest in the Certificates, or (cJ prepayment or other notices sent to
DTC or Cede & Co., its nominee, as the registered owner of the Certificates, or that they will so do on a
timely basis or that DTC, DTC Participants or DTC Indirect Participants will act in the manner
described in this Official Statement. The current "Rules" applicable to DTC are on file with the
Securities and Exchange Commission and the current "Procedure" of DTC to be followed in dealing with
DTC Participants are on file with DTC.
APPENDIX F
BOOK-ENTRY ONLY SYSTEM
The Depository Trust Company ("DTC,") New York, NY, will act as securities depository for the
Certificates. The Certificates will be issued as fully registered securities registered in the name of Cede &
Co. (DTe's partnership nominee) or such other name as may be requested by an authorized representative
of DTe. One fully registered Certificate will be issued for each maturity of the Certificates, 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 Uniform
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 2.2 million issues of
U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments from over
100 countries that DTe'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 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, Fixed Income Clearing Corporation and
Emerging Markets Clearing Corporation (NSCC, FlCC, 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. More information about
DTC can be found at www.dtcc.com and www.dtc.org.
purchases of Certificates under the DTC system must be made by or through Direct participants, which
will receive a credit for the Certificates on DTC's records. The ownership interest of each actual
purchaser of each Certificate ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
participants' records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
Certificates are to be accomplished by entries made on the books of Direct and Indirect participants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
F-l
2 ~2ZL./
ownership interests in Certificates, except in the event that use of the book-entry system for the
Certificates is discontinued.
To facilitate subsequent transfers, all Certificates deposited by Direct Participants with DTC are registered
in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an
authorized representative of DTC. The deposit of Certificates 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 Certificates; DTC's records reflect only the
identity ofthe Direct participants to whose accounts such Certificates are credited, which mayor may not
be the Beneficial Owners. Tbe 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 Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Prepayment notices shall be sent to DTC. If less than all of the Certificates within an issue are being
prepaid, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such
issue to be prepaid.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
Certificates unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its
usual procedures, DTC mails an Omnibus Proxy to the City (or the Trustee on behalf thereof) 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 Certificates are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Principal, prepayment price, and interest payments with respect to the Certificates 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 City or Trustee, on the payable date in accordance with their respective holdings
shown on DTC's records. Payments by participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of such participant and not of
DTC nor its nominee, Trustee, or the City, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of principal, prepayment price, and interest payments to Cede & Co.
(or such other nominee as may be requested by an authorized representative of DTC) is the responsibility
of the City or Trustee, 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 Certificates purchased or tendered, through its
Participant, to the Trustee, and shall effect delivery of such Certificates by causing the Direct participant
to transfer the participant's interest in the Certificates, on DTC's records, to the Trustee. The requirement
for physical delivery of Certificates in connection with an optional tender or a mandatory purchase will be
deemed satisfied when the ownership rights in the Certificates are transferred by Direct Participants on
DTC's records and followed by a book-entry credit of tendered Certificates to the Trustee's DTC account.
F-2
z~ 7_25
DTC may discontinue providing its services as depository with respect to the Certificates at any time by
giving reasonable notice to the City or Trustee. Under such circumstances, ill the event that a successor
depository is not obtained, Certificates are required to be printed and delivered.
The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a
successor securities depository). In that event, Certificates will be printed and delivered to DTC.
The information in this section concerning DTC and DTC's book-entry system has been obtained from
sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof.
F-3
'2- - 22--b
ATTACHMENT 9
OFFICIAL NOTICE OF SALE
$20,100,000'
CITY OF CHULA VISTA
2006 CERTlFICATES OF PARTICIPATION
(CMC CENTER PROJECT - PHASE 2)
NOTICE Is HEREBY GIVEN that electronic bids for the purcbase of $20,100,000* aggregate principal amount of
the City of Cbula Vista 2006 Certificates of Participation (Civic Center Project - Pbase 2) (the "Certificates" berein)
will be received by a representative of the City of Cbula Vista, California (berein tbe "City") in tbe manner and up
to tbe time specified below.
All bids must be submitted electronically via PARI-ry@on Wednesday, Marcb I, 2006, up until 9:30 a.m. (Pacific
Standard Time) (see "BIDDING DETAILS" berein). No bid will be received after sucb time. To the extent illY
instructions or directions set forth in P ARITY@ conflict witb this Official Notice of Sale, the terms of this Official
Notice of Sale shall control. For further information about P ARI~, potential bidders may contact i-Deal at, 1359
Broadway, 2nd Floor, New York, NY 10018, telepbone (212) 849-5021.
No bid check is required.
Neitber tbe City, tbe Financial Advisor nor Special Counsel (defined below) is responsible for, and eacb bidder
expressly assumes risk of, any incomplete, inaccurate or untimely bid submitted by Internet transmission by sucb
bidder, including, witbout limitation, by reason of garbled transmissions, mecbanical failure, engaged telephone or
telecommunications lines, or any other cause arising from delivery by Internet transmission.
Any change in tbe terms of the sale or the date and time for the receipt of bids will be communicated through TM3.
Failure by the City to announce any sucb change on any particular information or news service, or the failure of any
such information or news service to publish such change, does not affect the validity of such change and therefore
bidders are responsible for and should check all sources.
OFFICIAL STATEMENT: The City has caused a preliminary official statement to be prepared relating to tbe
Certificates (tbe "Preliminary Official Statement"), copies of which may be obtained at the office of the City's
Financial Advisor, Harrell & Company Advisors, LLC, 333 City Boulevard West, Suite 1430, Orange, California
92868, telephone (714) 939-1464. The Preliminary Official Statement may also be viewed on the i-Deal Prospectus
website at ..www.i_DeaIProspectus.com... The Preliminary Official Statement is in a form deemed final by the City
for the purposes ofSEC Rule l5c2-12(b)(I), but is subject to revision, amendment and completion in a final official
statement (the "Official Statement"). The City will furnisb the successful bidder with a reasonable number of
copies oftbe final Official Statement within seven (7) business days of award of the Certificates, without cbarge.
AMENDMENT AND MODIFICATION: The City reserves tbe right to amend tbis Official Notice of Sale at least 24
hours prior to tbe bid submittal time for tbe Certificates on Wednesday, Marcb I, 2006, and communicating sucb
amendment tbrough TM3.
POSTPONEMENT: Tbe City reserves tbe rigbt to postpone, from time to time, tbe date establisbed for tbe receipt
of bids. Any sucb postponement will be communicated througb TM3 prior to any announced date for receipt of
bids. If any date fixed for tbe receipt of bids and tbe sale of tbe Certificates is postponed, any alternative sale date
will be announced via TM3 at least 20 bours prior to sucb alternative sale date. On any sucb alternative sale date,
any bidder may submit a bid for the purchase of tbe Certificates in conformity in all respects with the provisions of
tbis Official Notice of Sale except for tbe date of sale and except for tbe cbanges announced via TM3.
* Subject to change, see ""MATURITIES" herein.
2-2'27
.
BOOK-ENTRY ONLY: The Certificates will be issued in book-entry fonn only, initially registered in the name of
Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Individual purchases
will be made in the maturities described hereinafter under the caption "TIlE CERTIFICATES." Payments of principal
and interest to DTC will be made by The Bank of New York Trust Company, N.A., Los Angeles, California (the
"Trustee") and disbursement of such payments to the beneficial owners is the responsibility of DIC's direct
participants or indirect participants. As of the date of award of the Certificates, the successful bidder must either
participate in DIC or must clear through or maintain a custodial relationship with an entity that participates in DIC.
The fees and charges of DTC shall be borne by the successful bidder.
THE CERTIFICATES
DATE; DENOMINATION: The Certificates are to be delivered on or about March 15, 2006 (the "Date of
Delivery"), in fully registered fonn in denominations of $5,000 or any integral multiple thereof, all dated as of the
Date of Delivery, in the aggregate principal amount of $20,100,000*, designated "City of Chula Vista 2006
Certificates of Participation (Civic Center Project - Phase 2)" and comprising all of the authorized Certificates.
Bidders are referred to the Preliminary Official Statement for particulars related to the Certificates.
MATURITIES: The final aggregate principal amount of the Certificates and the maturity schedule will be
detennined following award to the winning bidder. For the purpose of calculating the winning bid for the
Certificates, the following maturity schedule shall be used. Each bidder may specify in its bid whether, for any
particular year, the Certificates will be Term Certificates subject to mandatory prepayment in the applicable
principal amount set forth below. The Financial Advisor will promptly recalculate the aggregate principal
amount of the Certificates following award to the winning bidder, for the purpose of maintaining certain debt
service levels, and the Financial Advisor will promptly infonn the successful bidder of any changes. Any increase
or decrease in the principal amount of the Certificates will cause a proportionate increase or decrease, as the case
may be, in the discount or premium at which the Certificates are sold. By offering a bid for the Certificates, a
bidder will be obligated, ifit is the successful bidder, to purchase the Certificates with any such changes.
MATURITY SCHEDULE
Maturity Date
March 1
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Principal
Amount.
Maturity Date
March 1
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
Principal
Amount*
'" Subject to change, see ".MATURITIES" herein.
2
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INTEREST: Tbe Certificates will bear interest (computed on tbe basis of a 360-day year of twelve 30-day months)
from their date at the rate or rates to be fixed upon the sale thereof. but not to exceed 6% per annum. Interest with
respect to a Certificate will be paid March 1 and September 1 commencing September I, 2006 (each, an "Interest
Payment Date").
PAYMENT: Interest and principal with respect to the Certificates will be payable when due by wire of the Trustee
to DIC which will in turn remit such interest and principal to DTC Participants (see "BOOK-ENTRY ONLY" herein).
If tbe book-entry only system is discontinued, interest and principal will be paid as described in tbe Preliminary
Official Statement.
PURPOSE: Tbe Certificates are being delivered to provide funds for the construction and equipping of certain
improvements to tbe Civic Center complex of the City and otber existing City facilities, to fund capitalized interest
during construction, to make a deposit to the reserve fund and to pay the expenses incurred in connection with the
delivery of tbe Certificates, all as more fully described in tbe Preliminary Official Statement.
SECURITY: The Certificates are being executed and delivered under an Amended and Restated Trust Agreement
dated as of Marcb 1, 2006 (tbe "Trust Agreement") by and among the City, the Cbula Vista Public Financing
Autbority (tbe "Authority") and tbe Trustee, and a resolution adopted by tbe City Council of tbe City autborizing
the execution, sale and delivery thereof. The Certificates represent direct. undivided proportionate interests in the
lease payments (tbe "Lease Payments") to be made by tbe City to tbe Authority as rental for tbe Leased Premises, as
more fully described in the Preliminary Official Statement, pursuant to a LeaselPurcbase Agreement dated as of
September 1, 2004 as amended by a First Amendment to LeaselPurcbase Agreement dated as of Marcb I, 2006,
between the Autbority, as Lessor, and tbe City, as Lessee (tbe "Lease"), certain funds beld under tbe Trust
Agreement and investment eamings tbereon, and from net proceeds of insurance or condemnation awards, all as
more fully described in the Preliminary Official Statement.
In general, tbe City is required under the Lease to pay to tbe Trustee specified amounts for use and possession of the
Leased Premises which amounts sufficient in both time and amount to pay, when due, the principal and interest
payable with respect to tbe Certificates all as more fully described in the Preliminary Official Statement. The City is
also required to pay all taxes and assessments and the cost of maintenance and repair of tbe Leased Premises.
Except for the Autbority's rigbt, title and interest in and to tbe Lease, no funds or properties of the City or tbe
Authority are pledged to or otherwise liable for tbe obligations of tbe City.
The obligation oftbe City to pay Lease Payments does not constitute an obligation for wbicb the City is obligated to
levy or pledge any form of taxation or for wbicb the City bas pledged any form of taxation. The obligation of the
City to pay Lease Payments does not constitute a debt or liability of the State of California or of any political
subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction.
Bidders are referred to tbe Preliminary Official Statement for further particulars.
MUNICIPAL BOND INSURANCE: The City received a commitment from
bond insurance with respect to the Certificates. The City will directly purchase such insurance.
for municipal
OPTIONAL PREPAYMENT: The Certificates maturing on or before Marcb 1,2016 are not subject to prepayment
prior to maturity. The Certificates maturing on or after Marcb 1,2017 are subject to prepayment prior to maturity at
tbe option of the City, on any date on or after March 1,2016, as a wbole or in part among maturities designated by
the City and by lot within a maturity, from any source of available funds at a prepayment price equal to 100% oftbe
principal amount thereof to be prepaid, witbout a premium, togetber witb accrued interest tbereon to tbe date fixed
for prepayment.
MANDATORY SINKING ACCOUNT PREPAYMENT: Any Certificates designated by tbe successful bidder as
Term Certificates will also be subject to prepayment in part by lot, on Marcb 1 in each year from sinking account
payments, at a prepayment price equal to tbe principal amount tbereof to be prepaid, without premium; provided,
however, that if some but not all of the Term Certificates have been prepaid pursuant to an optional or extraordinary
prepayment, tbe total amount of all future payments will be reduced by tbe aggregate principal amount of Term
Certificates so prepaid. In addition, in lieu of prepayment tbereof, the Term Certificates may be purcbased by the
3 2-~Z2.--q
.
City and tendered to the Trustee pursuant to the provisions of the Trust Agreement. See caption "MA TURlTIES"
above for bidders' option with respect to Term Certificates and mandatory prepayment.
TERMS OF SALE
STATED INTEREST RATE: The stated interest rate bid for any maturity of Certificates may not exceed six percent
(6%) per annum. Bidders must specifY the rate of interest which is payable with respect to the Certificates strictly in
accordance with the following conditions:
(i) Each interest rate specified in any bid must be in a multiple of one-twentieth of one percent (1/20%) or
one-eighth of one percent (1/8%) per annum;
(ii) No Certificate is payable at more than one rate of interest;
(iii) Interest with respect to each Certificate is computed from its date to its stated maturity date at the interest
rate specified in the bid;
(iv) All Certificates maturing at anyone time are payable at the same rate of interest;
(v) Any premium must be paid as part of the purchase price, and no bid will be accepted which contemplates
the cancellation or the waiver of any interest or other concession by the bidder as a substitute for payment in
full of the purchase price; and
(vi) The interest rate bid with respect to any maturity of the Certificates shall be equal to or greater than the
interest rate with respect to each preceding maturity of the Certificates.
. .
DISCOUNT: Bidders may specifY a discount, but the discount shall not exceed one and one-half percent (1-1/2%)
of the principal amount of the Certificates.
AWARD: The Certificates will be sold for cash or Federal Reserve Bank Funds only. All bids must be for not less
than all of the Certificates hereby offered for sale and each bid shall state the total price offered for the Certificates,
the premium, or the discount, if any, and the interest rate or rates (which shall not exceed those specified herein) at
which the bidder offers to buy the Certificates.
WINNING BIDDER; TRUE INTEREST COST: The Certificates will be awarded to the responsible bidder whose
bid produces the lowest true interest cost on the Certificates, subject to the right to reject certain bids as described
below under "RIGHT OF REJECTION." The true interest cost specified in any bid will be that cost, which, when used
in computing the present value of all payments of principal and interest on all Certificates from the Date of
Delivery. to their respective maturity dates or mandatory sinking fund dates, produces an amount equal to the
purchase price specified in such bid. For purposes of computing the true interest cost represented by any bid, the
purchase price specified in such proposal shall be equal to the par amount of the Certificates less any discount
specified in such bid or plus any premium specified in such bid, and the true interest cost shall be calculated by the
use of a semiannual interval of compounding interest based on the Interest Payment Dates of the Certificates. If two
or more bidders have bid the same lowest true interest cost to the City, the award shall be made to the first bid
received.
RIGHT OF REJECTION: The City reserves the right, in its discretion, to reject any and all bids and, to the extent
not prohibited by law, to waive any irregularity or informality in any bid.
PROMPT AWARD: The City will take action awarding the Certificates or rejecting all bids not later than twenty-
four (24) hours after the expiration of the time herein prescribed for the receipt of bids; provided that the award may
be made after the expiration of the specified time if the bidder has not given the City notice in writing of the
withdrawal of its bid.
DELIVERY OF OFFICIAL STATEMENT: The City will furnish the successful bidder with a reasonable number of
copies of the final Official Statement within seven (7) business days after award of the Certificates, without charge.
4
2 -2'30
PLACE OF DELIVERY: Delivery of the Certificates will be made to the successful bidder through DTC in New
York, New York, or at any other place agreeable to both the City and the successful bidder. Payment for the
Certificates shaH be made in cash or Federal Reserve Bank funds which are immediately available to the City.
PROMPT DELIVERY; CANCELLATION FOR LATE DELIVERY: It is expected that the Certificates will be
delivered to the successful bidder on or about March 15,2006. The successful bidder has the right, at its option, to
cancel the contract of purchase if the City fails to execute the Certificates and tender them for delivery within sixty
(60) days from the date of sale thereof.
LIST ACCOUNT MEMBERS: Bidders are requested to list the members of the bidding group on whose behalf the
bid is made.
BIDDING DETAILS: AH bids must be unconditional and submitted via P ARlTY"'. No facsimile, personal delivery
bids or bids delivered by any other method will be accepted. All costs and expenses incurred by prospective bidders
in connection with their submission for bids through PARlTY@ are the sole responsibility of the bidder and the City
is not responsible for such costs or expenses. Further information about P ARlTY@, including any fee charged may
be obtained from PARITY"', 1359 Broadway, 2nd Floor, New York, NY 10018 (212) 849-5021.
VERIFICATION: All bids are subject to verification and approval by the City. The City has the right to deem each
final bid reported by P ARITY@ immediately after the deadline for receipt of bids to be accurate and binding on the
bidder. Information or calculations provided by P ARlTY@ other than the information required to be provided by
the bidder in accordance with this Official Notice of Sale is for information purposes only and is not binding on
either the bidder or the City. If two or more bidders offer bids for the Certificates at the same lowest true interest
cost, the winning bid shall be the first bid received in the determination of the City whose determination is final.
CONFIRMA nON OF BIDS: The successful bidder for the Certificates must deliver a certificate confirming the
terms of its bid to the City within one hour after the bidding deadline. The certificate may be sent by facsimile
transmission to HarreH & Company Advisors, LLC, facsimile number (714) 939-1462.
CHANGE IN TAX-EXEMPT STATUS: At any time before the Certificates are tendered for delivery, the successful
bidder may disaffirm and withdraw the proposal if interest on the Certificates received by private owners from
securities of the same type and character is declared to be includable in gross income under present federal income
tax laws in a manner not described in the section "LEGAL MA TIERS - Tax Exemption" in the Preliminary Official
Statement, either by a ruling of the Internal Revenue Service or by a decision of any federal court, or is declared
includable in gross income or is required to be taken into account in computing personal federal income taxes by the
terms of any federal income tax law enacted subsequent to the date of this notice.
CLOSING PAPERS: Each proposal will be understood to be conditioned upon the City furnishing to the successful
bidder, without charge, concurrently with payment for and delivery of the Certificates, the foHowing closing papers,
each dated the date of delivery:
(a) Legal Opinion. The legal opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation,
Newport Beach, California, ("Special Counsel,") approving the validity of the Certificates and the Trust
Agreement and stating that interest on the Certificates is excluded from gross income for federal income tax
purposes of the United States of America under existing law (see Preliminary Official Statement for a
description of certain qualifications with respect to taxes on corporations and others), and that such interest is
also exempt from personal income taxes of the State of California under existing law, will be furnished the
successful bidder at the time of delivery of the Certificates, at the expense of the City.
(b) No Arbitrage Certificate. A Certificate of the City certifying that on the basis of the facts, estimates and
circumstances in existence on the Date of Delivery, it is not expected that the proceeds of the Certificates will
be used in a manner that would cause the Certificates to be arbitrage bonds.
5
2~231
(c) No Litigation Certificate. At the time of payment for and delivery of the Certificates, the City will
furnish the successful bidder a Certificate that there is no litigation pending affecting the validity of the Trust
Agreement or the Certificates.
(d) Certificate Concerning Official Statement. A Certificate of the City, signed by an appropriate officer,
acting in his or her official capacity, to the effect that to the best of such officer's knowledge and belief, and
after reasonable investigation: (1) neither the Official Statement nor any amendment or supplement thereto
contains any untrue statement of a material fact or omits to state any material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not misleading; (2) since the date of
the Official Statement no event has occurred which should have been set forth in an amendment or supplement
to the Official Statement which has not been set forth in such an amendment or supplement which would make
the statements therein, in light of the circumstances in which they were made misleading; nor (3) has there been
any material adverse change in the operation or financial affairs of the City since the date of such Official
Statement.
DISCLOSURE LETTER: A disclosure letter with respect to the Official Statement will be provided to the
successful bidder by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California,
Disclosure Counsel.
CONTINUING DISCLOSURE: In order to assist bidders in complying with S.E.C. Rule I5c2-l2(b)(5) (the
"Rule"), the City has committed to undertake, pursuant to the Trust Agreement and a Continuing Disclosure
Agreement, to provide certain annual financial infonnation and notices of the occurrence of certain events, if
material. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set
forth in the final Official Statement. Such Continuing Disc10sure Agreement is a document required to be delivered
at closing by the City, and the failure by the City to deJiver such document in fonn and substance acceptable to
Disclosure Counsel and the successful bidder will relieve the successful bidder of its obligation to purchase the
Certificates. Except as described in the Preliminary Official Statement, the City has never failed to comply with its
filing obligations under the Rule.
CUSIP NUMBERS: CUSIP identification numbers will be requested by the City and will be printed on the
Certificates. All expenses in relation to the printing of CUSIP numbers on the Certificates shall be paid for by the
City; provided, however, that the CUSIP Service Bureau charge for the assignment of said numbers are the
responsibility of and shall be paid for by the purchaser. The Trustee and the City are not liable for any defect or
inaccuracy in the CUSIP number that appears on any Certificate or in any redemption notice.
CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION FEE: Attention of bidders is directed to
California Government Code Section 8856, which provides that the purchaser of the Certificates will be charged for
the California Debt and Investment Advisory Commission fee relating to the Certificates.
PURCHASER'S CERTIFICATE: On the date of delivery of the Certificates, the successful bidder will be required
to furnish a certificate certifying the price or prices at which the Certificates were reoffered to the public and the
price or prices at which a substantial amount of the Certificates were sold.
GIVEN by order ofthe City of Chula Vista made on
,2006.
By: Is! Maria Kachadoorian
Director of FinancelTreasurer
2-2-32..
6
RESOLUTION NO.
RESOLUTION OF THE CITY OF CHULA VISTA MAKING
REQUIRED FINDINGS AUTHORIZING THE EXECUTION
AND DELIVERY OF DOCUMENTS RELATING TO THE
SALE AND DELIVERY OF NOT TO EXCEED $20,000,000
2006 CERTIFICATES OF PARTICIPATION, (CIVIC CENTER
COMPLEX PROJECT - PHASE 2), APPROPRIATING THE
NET PROCEEDS THEREOF TO THE CIVIC CENTER
COMPLEX PROJECT (GG-200), AND AUTHORIZING
REIMBURSEMENT OF UP TO $4,296,950 TO THE PFDIF
FUND FROM PROCEEDS OF THE SALE OF THE
CERTIFICATES OF PARTICIPATION, AND AUTHORIZING
AND DIRECTING CERTAIN ACTIONS IN CONNECTION
THEREWITH.
WHEREAS, the City ofChula Vista (the "City") is a municipal corporation and a charter
city duly organized and existing under and pursuant to the Constitution and laws of the State of
California (the "State"); and
WHEREAS, the Chula Vista Public Financing Authority (the "Authority") has assisted
the City to finance the first phase of the construction, reconstruction, modernization and
equipping of the Civic Center (the "Civic Center Project - Phase I") and the installation and
renovation of certain infrastructure improvements in the western portion of the City including
street, drainage and park improvements through the execution and delivery of the $37,240,000
City of Chula Vista 2004 Certificates of Participation (Civic Center Project - Phase 1) (the
"2004 Certificates") pursuant to that certain Trust Agreement, dated as of September 1,2004 (the
"Original Trust Agreement"), by and among the City, the Authority and The Bank of New York
Trust Company, N.A., as successor-in-interest to BNY Western Trust Company; and
WHEREAS, in order to facilitate the execution and delivery of the 2004 Certificates, the
City leased to the Authority the real property (the "Site") set forth in Exhibit A to that certain
Site Lease, dated as of September I, 2004 (the "Original Site Lease"), by and between the City
and the Authority, and the Authority simultaneously leased back the Site and the improvements
located thereon to be constructed with the proceeds of the 2004 Certificates (together, the
"Leased Premises") to the City pursuant to that certain LeaselPurchase Agreement, dated as of
September 1,2004 (the "Original Lease"), by and between the City and the Authority; and
WHEREAS, the Original Trust Agreement and the Assignment Agreement, dated as of
September 1,2004 (the "Original Assignment Agreement"), by and between the Authority and
the Trustee, allow for the execution and delivery of Additional Certificates (as that term is
defined in the Original Trust Agreement) to finance additional improvements for the City; and
2-233
_ _.~" ,..,n, .....',..'1 J;nR CHULA VISTA 2006 COPS (CIVIC CENTER PROJECT.PHASE 2).DOC
Resolution No.
Page 2
.
WHEREAS, the City desires to cause the Trustee to execute and deliver the 2006
Certificates of Participation (Civic Center Project - Phase 2), in the aggregate principal amount
not to exceed $20,000,000 (the "2006 Civic Center Phase 2 Certificates"), in order to provide
additional financing for the acquisition, construction, reconstruction, modernization and
equipping of the Civic Center (the "Civic Center Project - Phase 2"); and
WHEREAS, to accomplish the sale, preparation, execution and delivery of the 2006
Civic Center Phase 2 Certificates, the City desires to enter into that certain First Amendment to
Site Lease, dated as of March I, 2006 (the "First Amendment to Site Lease"), by and between
the City and the Authority and that certain First Amendment to LeaseIPurchase Agreement,
dated as of March 1, 2006 (the "First Amendment to LeaseIPurchase Agreement"), by and
between the City and the Authority, in order to add certain real property and improvements to the
Site and the Leased Premises, consisting of Montevalle Park and Salt Creek Park (the
"Additional Property"), and to make certain amendments thereto; and
WHEREAS, to facilitate the execution and delivery of the 2006 Civic Center Phase 2
Certificates the City desires to enter into that certain Amended and Restated Trust Agreement,
dated as of March 1, 2006 (the "Amended and Restated Trust Agreement"), by and among the
Authority, the City and the Trustee and that certain First Amendment to Assignment Agreement,
dated as of March I, 2006 (the "First Amendment to Assignment Agreement"), by and between
the Authority and the Trustee; and
WHEREAS, to facilitate the acquisition, construction, reconstruction, modernization and
equipping of the Civic Center Project - Phase 2, the City will act agent of the Authority for the
purposes of the acquisition, construction, delivery and installation of the Civic Center Project _
Phase 2 pursuant to an Agency Agreement (2006 Certificates of Participation), dated as of
March 1,2006 (the "Agency Agreement"), by and between the Authority and the City, the form
of which has been presented to this City Council at the meeting at which this Resolution is being
adopted; and
WHEREAS, the City has held a public hearing on the date hereof pursuant to
Government Code Section 6586.5 following publication of notice not less than five days prior to
the hearing, concerning the financing of the Civic Center Project - Phase 2 and the execution and
delivery of the 2006 Civic Center Phase 2 Certificates; and
WHEREAS, the forms of the documents necessary to finance the Civic Center Project _
Phase 2 and provide for the execution and delivery ofthe 2006 Civic Center Phase 2 Certificates
are on file with the City Clerk as described herein; and
WHEREAS, all acts, conditions and things required by the Constitution and laws of the
State to exist, to have happened and to have been performed precedent to and in connection with
the execution and delivery of the 2006 Civic Center Phase 2 Certificates do exist, have happened
and have been performed in regular and due time, form and manner as required by law, and the
2. - Z?Jf-
l:\AttomeyIEHuIJIRESOS\FINANCE\R.ESOLUTION OF CITY COUNCIL FOR CHULA VISTA 2006 COPS {CIVIC CENTER PROJECT-PHASE 2).DOC
Resolution No.
Page 3
City is now duly authorized and empowered, pursuant to each and every requirement oflaw, to
consummate such financing for the purpose, in the manner and upon the terms herein provided;
and
WHEREAS, prior to the issuance of the 2006 Civic Center Phase 2 Certificates the City
desires to incur certain expenditures with respect to the Civic Center Project - Phase 2 from
available monies of the City which expenditures are desired to be reimbursed by the City from a
portion ofthe proceeds ofthe sale of the 2006 Civic Center Phase 2 Certificates.
NOW, THEREFORE, the City Council of the City of Chula Vista does hereby resolve as
follows:
SECTION 1. Findings. The City Council hereby specifically finds and declares that each
of the statements, findings and determinations of the City set forth in the recitals set forth above
and in the preambles of the documents approved herein are true and correct and that the
financing of the Civic Center Project - Phase 2 will result in significant public benefits for the
residents ofthe City of the type described in Government Code Section 6586(a), (c) and (d).
SECTION 2. Authorization of 2006 Civic Center Phase 2 Certificates and
Appropriations. The City Council hereby authorizes the financing all or a portion of the
acquisition, construction, reconstruction, modernization and equipping of the Civic Center
Project _ Phase 2 through the preparation, sale and delivery of the 2006 Civic Center Phase 2
Certificates in an amount not to exceed $20,000,000. In the event that the City Council approves
the execution and delivery of the 2006 Certificates of participation (Nature Center Project) (the
"2006 Nature Center Certificates"), then the 2006 Nature Center Certificates and the 2006 Civic
Center Phase 2 Certificates may be combined into a single series of certificates of participation
and be sold together as directed by the City Manager, the Director of Finance or their designees,
and a single set of the financing documents described herein shall be used for the combined
series. In the event that the 2006 Nature Center Certificates are not approved by the City
Council, then the 2006 Civic Center Phase 2 Certificates may be sold separately in accordance
with this Resolution. The City Council hereby appropriates $4,296,950 from the Public Facilities
Development Impact Fund (the "PFDIF Fund") to the construction and installation of the Civic
Center Project _ Phase 1. This amount shall be reimbursed from proceeds of the 2006 Civic
Center Phase 2 Certificates to the PFDIF Fund following the execution and delivery of the 2006
Civic Center Phase 2 Certificates. The City Council hereby appropriates the balance of the
proceeds of the 2006 Civic Center Phase 2 Certificates deposited to the Project Fund established
under the Amended and Restated Trust Agreement to the acquisition, construction,
reconstruction, modernization and equipping of the Civic Center Project - Phase 2.
SECTION 3. First Amendment to LeaselPurchase Agreement. The form of the First
Amendment to LeaselPurchase Agreement presented to this meeting and on file with the City
Clerk (the "Clerk"), is hereby approved. Each of the Mayor of the City (the "Mayor"), the City
Manager of the City (the "City Manager") and the Director of Finance of the City (the "Director
J:lAuomey\EHu1\\RESOS\FINANCEIRESOLUTJON OF CITY coUNCIL FOR CHULA VISTA 2006 COPS (CIVIC CENTER PROJECT-PHASE 2).DOC
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Resolution No.
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of Finance") or their designees (collectively, the "Authorized Officers"), is hereby authorized
and directed, for and in the name and on behalf of the City, to execute and deliver to the
Authority the First Amendment to Lease/Purchase Agreement in substantially said form, with
such changes therein as the Authorized Officer or Officers executing the same may require or
approve, such approval to be conclusively evidenced by the execution and delivery thereof by
one or more of the Authorized Officers. The property to be leased pursuant to the First
Amendment to Lease/Purchase Agreement to finance the Civic Center Project - Phase 2 shall
consist of the Leased Premises and the Additional Property, and the City Council hereby finds
and determines that the annual lease payments and additional payments due under the Original
Lease as amended by the First Amendment to Lease/Purchase Agreement in each fiscal year will
not exceed the fair rental value of the Leased Premises and the Additional Property during such
fiscal year, and further determines that, if the 2006 Civic Center Phase 2 Certificates of
Participation and the 2006 Nature Center Certificates are sold in a single series of certificates of
participation, the annual lease payments and additional payments due under the Original Lease as
amended by the First Amendment to Lease/Purchase Agreement in each fiscal year will not
exceed the fair rental value of the Leased Premises and the Additional Property in such fiscal
year.
SECTION 4. First Amendment to Site Lease. The form of the First Amendment to Site
Lease presented to this meeting and on file with the Clerk, is hereby approved. Each of the
Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the
City, to execute and deliver to the Authority the First Amendment to Site Lease in substantially
said form, with such changes therein as the Authorized Officer or Officers executing the same
may require or approve, such approval to be conclusively evidenced by the execution and
delivery thereof by one or more of the Authorized Officers.
SECTION 5. Amended and Restated Trust Agreement. Tbe form of the Amended and
Restated Trust Agreement presented to this meeting and on file with the Clerk, is hereby
approved. Each of the Authorized Officers is hereby authorized and directed, for and in the name
and on behalf of the City, to execute and deliver to the Authority and the Trustee the Amended
and Restated Trust Agreement in substantially said form, with such changes therein as the
Authorized Officer or Officers executing the Amended and Restated Trust Agreement may
require or approve, such approval to be conclusively evidenced by the execution and delivery
thereof by one or more of the Authorized Officers.
SECTION 6. Appointment of Trustee. The Bank of New York Trust Company, N.A.
shall continue to act as trustee (the "Trustee") under the Amended and Restated Trust Agreement
unless and until replaced in accordance with the provisions of the Amended and Restated Trust
Agreement.
.
SECTION 7. First Amendment to Assignment Agreement. Tbe First Amendment to
Assignment Agreement substantially in the form on file with the Clerk is hereby approved for
execution and delivery by the Authority.
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SECTION 8. Official Notice of Sale. The fonn of the Official Notice of Sale on file with
the Clerk is approved and the City's Financial Advisor is authorized to solicit bids for the sale of
the 2006 Civic Center Phase 2 Certificates by publishing once in The Bond Buyer, not less than
five days prior to receipt of bids, a short fonn of the Official Notice of Sale and to distribute or
make available to prospective purchasers of the 2006 Civic Center Phase 2 Certificates the
Official Notice of Sale substantially in the fonn on file with the Clerk together with such changes
thereto as the Director of Finance or her designee, approve. The Director of Finance and her
designee are authorized, on behalf of the City, to accept the bid of the lowest responsible bidder
for the 2006 Civic Center Phase 2 Certificates provided that: (a) the principal amount of the 2006
Civic Center Phase 2 Certificates does not exceed $20,000,000; and (b) the true interest cost of
the 2006 Civic Center Phase 2 Certificates as calculated by the City's Financial Advisor does not
exceed 7.0%. In the event that the 2006 Civic Center Phase 2 Certificates are sold together with
the 2006 Nature Center Certificates as a single series of certificates of participation, the portion
of the combined series allocable to the Civic Center Project - Phase 2 as calculated by the City's
Financial Advisor shall not exceed $20,000,000. The sale may be conducted through electronic
means if the Director of Finance of the City, or her designee, determines that such process will
assist the City in obtaining the lowest interest cost for the Civic Center Project - Phase 2.
SECTION 9. Bond Insurance and Suretv Policy. The Director of Finance and her
designee are hereby authorized to: (i) solicit bids on a municipal bond insurance policy and/or a
debt service surety policy; (ii) to negotiate the tenns of such policies; (iii) to finalize the fonn of
such policies with a municipal bond insurer; and, (iv) if it is detennined that one or both of the
policies will result in interest rate savings for the City, to pay the insurance premium for the
applicable policy or policies from the proceeds of the sale of the 2006 Civic Center Phase 2
Certificates.
SECTION 10. PreliminarY Official Statement. The fonn of the Preliminary Official
Statement, presented to this meeting and on file with the Clerk, is hereby approved. The Director
of Finance and her designee are hereby authorized to make such changes to the Preliminary
Official Statement as are necessary to make it final as of its date and are authorized and directed
to execute and deliver a certificate deeming the Preliminary Official Statement final as of its date
in accordance with Rule 15c2-12 promulgated under the Securities Exchange Act of 1934. Each
of the Authorized Officers is hereby authorized and directed to execute, approve and deliver the
final Official Statement in the fonn of the Preliminary Official Statement with such changes,
insertions and omissions as the Authorized Officer or Officers executing said document may
require or approve, such approval to be conclusively evidenced by the execution and delivery
thereof by one or more of such Authorized Officers.
SECTION 11. Continuing Disclosure Agreement. The fonn of the Continuing
Disclosure Agreement, dated as of March 1, 2006 (the "Continuing Disclosure Agreement"), by
and between the City and the Trustee, as dissemination agent, presented to this meeting and on
file with the Clerk, is hereby approved. Each of the Authorized Officers is hereby authorized and
directed, for and in the name and on behalf of the City, to execute and deliver to the Trustee the
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Continuing Disclosure Agreement in substantially said form, with such changes therein as the
Authorized Officer or Officers executing such document may require or approve, such approval
to be conclusively evidenced by the execution and delivery thereof by one or more if such
Authorized Officers.
.
SECTION 12. Agencv Agreement. The form of the Agency Agreement presented to this
meeting and on file with the Clerk, is hereby approved. Each of the Authorized Officers is
hereby authorized and directed, for and in the name and on behalf of the City, to execute and
deliver to the Authority the Agency Agreement in substantially said form, with such changes
therein as the Authorized Officer or Officers executing the same may require or approve, such
approval to be conclusively evidenced by the execution and delivery thereof by one or more of
such Authorized Officers.
SECTION 13. Attestations. The Clerk and such person or persons as may have been
designated by the Clerk to act on her behalf, are hereby authorized and directed to attest the
signature of the Authorized Officers designated herein to execute any documents described
herein, and to affix and attest the seal of the City, as may be required or appropriate in
connection with the execution and delivery of the First Amendment to LeaselPurchase
Agreement, the Amended and Restated Trust Agreement, the Continuing Disclosure Agreement,
the First Amendment to Site Lease, the Agency Agreement and the Official Statement.
SECTION 14. Other Actions. The Authorized Officers are each hereby authorized and
directed, jointly and severally, to do any and all things and to execute and deliver any and all
documents which each may deem necessary or advisable (including the payment of a premium
for a municipal bond insurance policy, a debt service surety policy, or other form of credit
enhancement, and the payment of other costs of issuance approved by the Director of Finance or
her designee) in order to consummate the sale, execution and delivery of the 2006 Civic Center
Phase 2 Certificates and otherwise to carry out, give effect to and comply with the terms and
intent of this Resolution, the 2006 Civic Center Phase 2 Certificates, the First Amendment to
Lease/Purchase Agreement, the Amended and Restated Trust Agreement, the Continuing
Disclosure Agreement, the First Amendment to Site Lease, the Agency Agreement, the Official
Notice of Sale, the Preliminary Official Statement, and the Official Statement. Such actions
heretofore taken by such officers or designees are hereby ratified, confirmed and approved. If
necessary to obtain a rating or municipal bond insurance for the 2006 Civic Center Phase 2
Certificates, there may be added to the Site and the Leased Premises, in addition to the
Additional Property, one or more other real property assets of the City if needed to provide fair
rental value for the combined series of certificates of participation. Each of the Authorized
Officers is hereby authorized and directed to determine which of the other real property assets of
the City, if any, shall be included as a part of the Site and the Leased Premises, in addition to the
Additional Property.
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SECTION 15. Expected Reimbursement. The City hereby states its intention and
reasonably expects to reimburse Civic Center Project - Phase 2 costs incurred prior to the
issuance of the 2006 Civic Center Phase 2 Certificates with proceeds of the 2006 Civic Center
Phase 2 Certificates. The reasonably expected maximum principal amount of the 2006 Civic
Center Phase 2 Certificates is $20,000,000. This resolution is being adopted not later than 60
days after the payment of the original expenditures (the "Expenditures Date or Dates"). Except
as described below, the expected date of issue of the 2006 Civic Center Phase 2 Certificates will
be within eighteen months of the later of the Expenditure Date or Dates and the date the Civic
Center Project _ Phase 2 is placed in service; provided, the reimbursement may not be made
more than three years after the Expenditure Date.
Proceeds of the 2006 Civic Center Phase 2 Certificates to be used to reimburse for Civic
Center Project _ Phase 2 costs are not expected to be used within one year of reimbursement,
directly or indirectly, to pay debt service with respect to any obligation (other than to pay current
debt service coming due within the next succeeding one year period on any tax-exempt
obligation of the City (other than the 2006 Civic Center Phase 2 Certificates)) or to be held as a
reasonably required reserve or replacement fund with respect to an obligation of the City or any
entity related in any manner to the City, or to reimburse any expenditure that was originally paid
with the proceeds of any obligation, or to replace funds that are or will be used in such manner.
This Resolution is consistent with the budgetary and financial circumstances of the City,
as of the date hereof. No monies from sources other than the proceeds of the 2006 Civic Center
Phase 2 Certificates are, or are reasonably expected to be, reserved, allocated on a long-term
basis, or otherwise set aside by the City (or any related party) pursuant to their budget or
financial policies with respect to the Civic Center Project - Phase 2 costs. To the best of its
knowledge, this City Council is not aware of the previous adoption of official intents by the City
that have been made as a matter of course for the purpose of reimbursing expenditures and for
which tax-exempt obligations have not been issued.
The limitations described above regarding the Expenditures Dates do not apply to:
(a) costs of issuance of the 2006 Civic Center Phase 2 Certificates; (b) an amount not in excess
of the lesser of $100,000 or five percent (5%) of the proceeds of the 2006 Civic Center Phase 2
Certificates; or (c) any preliminary expenditures, such as architectural, engineering, surveying,
soil testing, and similar costs other than land acquisition, site preparation, and similar costs
incident to commencement of construction, not in excess of twenty percent (20%) of the
aggregate issue price of the 2006 Civic Center Phase 2 Certificates that fmances the Civic Center
Project _ Phase 2 for which the preliminary expenditures were incurred.
This Resolution is adopted as official action of the City in order to comply with Treasury
Regulation 91.150-2 and any other regulations of the Internal Revenue Service relating to the
qualification for reimbursement of City expenditures incurred prior to the date of issue of the
2006 Civic Center Phase 2 Certificates, is part of the City's official proceedings, and will be
available for inspection by the general public at the main administrative office of the City.
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Resolution No.
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SECTION 16. Effect. This Resolution shall take effect immediately upon its passage.
Presented by
Approved as to form by
Ann Moore
City Attorney
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Ann oore
. Attorney
.
.
.
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RESOLUTION NO.
RESOLUTION OF THE CITY OF CHULA VISTA MAKING
REQUIRED FINDINGS AUTHORIZING THE EXECUTION
AND DELIVERY OF DOCUMENTS RELATING TO THE
SALE AND DELIVERY OF NOT TO EXCEED $2,500,000 2006
CERTIFICATES OF PARTICIPATION, (NATURE CENTER
PROJECT), APPROPRIATING THE NET PROCEEDS
THEREOF TO THE NATURE CENTER PROJECT (GG-175)
AND AUTHORIZING REIMBURSEMENT OF UP TO
$1,536,949 TO THE GENERAL FUND FOR MONIES
PREVIOUSLY SPENT ON THE PROJECT FROM THE SALE
OF THE CERTIFICATES OF PARTICIPATION, AND
AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN
CONNECTION THEREWITH.
WHEREAS, the City ofChula Vista (the "City") is a municipal corporation and a charter
city duly organized and existing under and pursuant to the Constitution and laws of the State of
California (the "State"); and
WHEREAS, the Chula Vista Public Financing Authority (the "Authority") has assisted
the City to finance the construction, reconstruction, modernization and equipping of the Civic
Center and the installation and renovation of certain infrastructure improvements in the western
portion of the City including street, drainage and park improvements through the execution and
delivery of the $37,240,000 City of Chula Vista 2004 Certificates of Participation (Civic Center
Project _ Phase 1) (the "2004 Certificates") pursuant to that certain Trust Agreement, dated as of
September 1, 2004 (the "Original Trust Agreement"), by and among the City, the Authority and
The Bank of New York Trust Company, N.A., as successor-in-interest to BNY Western Trust
Company; and
WHEREAS, in order to facilitate the execution and delivery of the 2004 Certificates, the
City leased to the Authority the real property '(the "Site") set forth in Exhibit A to that certain
Site Lease, dated as of September 1, 2004 (the "Original Site Lease"), by and between the City
and the Authority, and the Authority simultaneously leased back the Site and the improvements
located thereon to be constructed with the proceeds of the 2004 Certificates (together, the
"Leased Premises") to the City pursuant to that certain LeaselPurchase Agreement, dated as of
September 1, 2004 (the "Original Lease"), by and between the City and the Authority; and
WHEREAS, the Original Trust Agreement and the Assignment Agreement, 4.ated as of
September 1,2004 (the "Original Assignment Agreement"), by and between the Authority and
the Trustee, allow for the execution and delivery of Additional Certificates (as that term is
defined in the Original Trust Agreement) to finance additional improvements for the City; and
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Resolution No.
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WHEREAS, the City desires to cause the Trustee to execute and deliver the 2006
Certificates of Participation (Nature Center Project), in the aggregate principal amount not to
exceed $2,500,000 (the "2006 Nature Center Certificates"), in order to provide financing for the
acquisition, construction, reconstruction, modernization and equipping of the Nature Center (the
"Nature Center Proj ect"); and
WHEREAS, to accomplish the sale, preparation, execution and delivery of the 2006
Certificates, the City desires to enter into that certain First Amendment to Site Lease, dated as of
March I, 2006 (the "First Amendment to Site Lease"), by and between the City and the
Authority and that certain First Amendment to Lease/Purchase Agreement, dated as of March 1,
2006 (the "First Amendment to Lease/Purchase Agreement"), by and between the City and the
Authority in order to add certain real property and improvements to the Site and the Leased
Premises, consisting of Montevalle Park and Salt Creek Park (the "Additional Property"), and to
make certain other amendments thereto; and
WHEREAS, to facilitate the execution and delivery of the 2006 Nature Center
Certificates, the City desires to enter into that certain Amended and Restated Trust Agreement,
dated as of March 1,2006 (the "Amended and Restated Trust Agreement"), by and among the
Authority, the City and the Trustee and that certain First Amendment to Assignment Agreement,
dated as of March 1,2006 (the "First Amendment to Assignment Agreement"), by and between
the Authority and the Trustee; and
WHEREAS, to facilitate the acquisition and construction of the Nature Center Project,
the City will act as agent for the purposes of the acquisition, construction, reconstruction,
modernization and equipping of the Nature Center Project pursuant to an Agency Agreement
(2006 Certificates of Participation), dated as of March 1, 2006 (the "Agency Agreement"), by
and between the Authority and the City, the form of which has been presented to this City
Council at the meeting at which this Resolution is being adopted; and
WHEREAS, the City has held a public hearing on the date hereof pursuant to
Government Code Section 6586.5 following publication of notice not less than five days prior to
the hearing, concerning the financing of the Nature Center Project and the execution and delivery
of the 2006 Nature Center Certificates; and
WHEREAS, the forms of the documents necessary to finance the Nature Center Project
and provide for the execution and delivery of the 2006 Nature Center Certificates are on file with
the City Clerk as described herein; and
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Resolution No.
Page 3
WHEREAS, all acts, conditions and things required by the Constitution and laws of the
State to exist, to have happened and to have been performed precedent to and in connection with
the execution and delivery of the 2006 Nature Center Certificates do exist, have happened and
have been performed in regular and due time, form and manner as required by law, and the City
is now duly authorized and empowered, pursuant to each and every requirement of law, to
consummate such financing for the purpose, in the manner and upon the terms herein provided;
and
WHEREAS, prior to the issuance of the 2006 Nature Center Certificates the City desires
to incur certain expenditures with respect to the Nature Center Project from available monies of
the City which expenditures are desired to be reimbursed by the City from a portion of the
proceeds of the sale of the 2006 Nature Center Certificates.
NOW, THEREFORE, the City Council of the City ofChula Vista does hereby resolve as
follows:
SECTION 1. Findings. The City Council hereby specifically finds and declares that each
of the statements, findings and determinations of the City set forth in the recitals set forth above
and in the preambles of the documents approved herein are true and correct and that the
financing of the Nature Center Project will result in significant public benefits for the residents
of the City ofthe type described in Government Code Section 6586(a), (c) and (d).
SECTION 2. Authorization of 2006 Nature Center Certificates. The City Council hereby
authorizes the financing all or a portion of the acquisition, construction, reconstruction,
modernization and equipping of the Nature Center Project through the preparation, sale and
delivery of the 2006 Nature Center Certificates in an amount not to exceed $2,500,000. In the
event that the City Council approves the execution and delivery of the 2006 Certificates of
participation (Civic Center Project - Phase 2) (the "2006 Civic Center Phase 2 Certificates"),
then the 2006 Nature Center Certificates and the 2006 Civic Center Phase 2 Certificates may be
combined into a single series of certificates of participation and be sold together as directed by
the City Manager, the Director of Finance or their designees, and a single set of the financing
documents described herein shall be used for the combined series. In the event that the 2006
Civic Center Phase 2 Certificates are not approved by the City Council, then the 2006 Nature
Center Certificates may be sold separately in accordance with this Resolution. The City Council
hereby appropriates the proceeds of 2006 Nature Center Certificates deposited to the Project
Fund established under the Amended and Restated Trust Agreement to the acquisition,
construction, reconstruction, modernization and equipping of the Nature Center Project.
SECTION 3. First Amendment to Lease/Purchase Agreement. The form of the First
Amendment to Lease/Purchase Agreement presented to this meeting and on file with the City
Clerk (the "Clerk"), is hereby approved. Each of the Mayor of the City (the "Mayor"), the City
Manager of the City (the "City Manager") and the Director of Finance of the City (the "Director
of Finance") or their designees (collectively, the "Authorized Officers"), is hereby authorized
and directed, for and in the name and on behalf of the City, to execute and deliver to the
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Resolution No.
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Authority the First Amendment to Lease/Purchase Agreement in substantially said form, with
such changes therein as the Authorized Officer or Officers executing the same may require or
approve, such approval to be conclusively evidenced by the execution and delivery thereof by
one or more of the Authorized Officers. The property to be leased pursuant to the First
Amendment to Lease/Purchase Agreement to finance the Nature Center Project shall consist of
the Leased Premises and the Additional Property, and the City Gouncil hereby finds and
determines that the annual lease payments and additional payments due under the Original Lease
as amended by the First Amendment to Lease/Purchase Agreement in each fiscal year will not
exceed the fair rental value of the Leased Premises and the Additional Property during such
fiscal year, and further determines that, if the 2006 Nature Center Certificates of Participation
and the 2006 Civic Center Phase 2 Certificates are sold in a single series of certificates of
participation, the annual lease payments and additional payments due under the Original Lease as
amended by the First Amendment to Lease/Purchase Agreement in each fiscal year will not
exceed the fair rental value of the Leased Premises and the Additional Property in such fiscal
year.
.
SECTION 4. First Amendment to Site Lease. The form of the First Amendment to Site
Lease presented to this meeting and on file with the Clerk, is hereby approved. Each of the
Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the
City, to execute and deliver to the Authority the First Amendment to Site Lease in substantially
said form, with such changes therein as the Authorized Officer or Officers executing the same
may require or approve, such approval to be conclusively evidenced by the execution and
delivery thereof by one or more of the Authorized Officers.
SECTION 5. Amended and Restated Trust Agreement. The form of the Amended and
Restated Trust Agreement presented to this meeting and on file with the Clerk, is hereby
approved. Each of the Authorized Officers is hereby authorized and directed, for and in the name
and on behalf of the City, to execute and deliver to the Authority and the Trustee the Amended
and Restated Trust Agreement in substantially said form, with such changes therein as the
Authorized Officer or Officers executing the Amended and Restated Trust Agreement may
require or approve, such approval to be conclusively evidenced by the execution and delivery
thereof by one or more of the Authorized Officers.
SECTION 6. Appointment of Trustee. The Bank of New York Trust Company, N.A.
shall continue to act as trustee (the "Trustee") under the Amended and Restated Trust Agreement
unless and until replaced in accordance with the provisions of the Amended and Restated Trust
Agreement.
SECTION 7. First Amendment to Assignment Agreement. The First Amendment to
Assignment Agreement substantially in the form on file with the Clerk is hereby approved for
execution and delivery by the Authority.
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Resolution No.
Page 5
SECTION 8. Official Notice of Sale. The form of the Official Notice of Sale on file with
the Clerk is approved and the City's Financial Advisor is authorized to solicit bids for the sale of
2006 Nature Center Certificates by publishing once in The Bond Buyer, not less than 5 days prior
to receipt of bids, a short form of the Official Notice of Sale and to distribute or make available
to prospective purchasers of 2006 Nature Center Certificates the Official Notice of Sale
substantially in the form on file with the Clerk together with such changes thereto as the Director
of Finance or her designee, approve. The Director of Finance and her designee are authorized, on
behalf of the City, to accept the bid of the lowest responsible bidder for 2006 Nature Center
Certificates provided that: (a) the principal amount of 2006 Nature Center Certificates does not
exceed $2,500,000; and, (b) the true interest cost of2006 Nature Center Certificates as calculated
by the City's Financial Advisor does not exceed 7.0%. In the event that 2006 Nature Center
Certificates are sold together with the 2006 Civic Center Phase 2 Certificates as a single series of
certificates of participation, the portion of the combined series allocable to the Nature Center
Project as calculated by the City's Financial Advisor shall not exceed $2,500,000. The sale may
be conducted through electronic means if the Director of Finance of the City, or her designee,
determines that such process will assist the City in obtaining the lowest interest cost for the
Nature Center Project.
SECTION 9. Bond Insurance and Surety Policy. The Director of Finance and her
designee are hereby authorized to: (i) solicit bids on a municipal bond insurance policy and/or a
debt service surety policy; (ii) to negotiate the terms of such policies; (iii) to finalize the form of
such policies with a municipal bond insurer; and (iv) if it is determined that one or both of the
policies will result in interest rate savings for the City, to pay the insurance premium for the
applicable policy or policies from the proceeds of the sale of2006 Nature Center Certificates.
SECTION 10. PreliminarY Official Statement. The form of the Preliminary Official
Statement, presented to this meeting and on file with the Clerk, is hereby approved. The Director
of Finance and her designee are hereby authorized to make such changes to the Preliminary
Official Statement as are necessary to make it final as of its date and are authorized and directed
to execute and deliver a certificate deeming the Preliminary Official Statement final as of its date
in accordance with Rule 15c2-12 promulgated under the Securities Exchange Act of 1934. Each
of the Authorized Officers is hereby authorized and directed to execute, approve and deliver the
final Official Statement in the form of the Preliminary Official Statement with such changes,
insertions and omissions as the Authorized Officer or Officers executing said document may
require or approve, such approval to be conclusively evidenced by the execution and delivery
thereof by one or more of such Authorized Officers.
SECTION 11. Continuing Disclosure Agreement. The form of the Continuing
Disclosure Agreement, dated as of March 1, 2006 (the "Continuing Disclosure Agreement"), by
and between the City and the Trustee, as dissemination agent, presented to this meeting and on
file with the Clerk, is hereby approved. Each of the Authorized Officers is hereby authorized and
directed, for and in the name and on behalf of the City, to execute and deliver to the Trustee the
Continuing Disclosure Agreement in substantially said form, with such changes therein as the
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Resolution No.
Page 6
Authorized Officer or Officers executing such document may require or approve, such approval
to be conclusively evidenced by the execution and delivery thereof by one or more if such
Authorized Officers.
SECTION 12. Agencv Agreement. The form of the Agency Agreement presented to this
meeting and on file with the Clerk, is hereby approved. Each of the Authorized Officers is
hereby authorized and directed, for and in the name and on behalf of the City, to execute and
deliver to the Authority the Agency Agreement in substantially said form, with such changes
therein as the Authorized Officer or Officers executing the same may require or approve, such
approval to be conclusively evidenced by the execution and delivery thereof by one or more of
such Authorized Officers.
.
SECTION 13. Attestations. The Clerk and such person or persons as may have been
designated by the Clerk to act on her behalf, are hereby authorized and directed to attest the
signature of the Authorized Officers designated herein to execute any documents described
herein, and to affix and attest the seal of the City, as may be required or appropriate in
connection with the execution and delivery of the First Amendment to LeaseIPurchase
Agreement, the Amended and Restated Trust Agreement, the Continuing Disclosure Agreement,
the First Amendment to Site Lease, the Agency Agreement and the Official Statement.
SECTION 14. Other Actions. The Authorized Officers are each hereby authorized and
directed, jointly and severally, to do any and all things and to execute and deliver any and all
documents which each may deem necessary or advisable (including the payment of a premium
for a municipal bond insurance policy, a debt service surety policy, or other form of credit
enhancement, and the payment of other costs of issuance approved by the Director of Finance or
her designee) in order to consummate the sale, execution and delivery of the 2006 Nature Center
Certificates and otherwise to carry out, give effect to and comply with the terms and intent of this
Resolution, the 2006 Nature Center Certificates, the First Amendment to LeaselPurchase
Agreement, the Amended and Restated Trust Agreement, the Continuing Disclosure Agreement,
the First Amendment to Site Lease, the Agency Agreement, the Official Notice of Sale, the
Preliminary Official Statement, and the Official Statement. Such actions heretofore taken by
such officers or designees are hereby ratified, confirmed and approved. If necessary to obtain a
rating or municipal bond insurance for the 2006 Nature Center Certificates, there may be added
to the Site and the Leased Premises, in addition to the Additional Property, one or more other
real property assets of the City if needed to provide fair rental value for the combined series of
certificates of participation. Each of the Authorized Officers is hereby authorized and directed to
determine which of the other real property assets of the City, if any, shall be included as a part of
the Site and the Leased Premises.
'2~2Lfb
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Resolution No.
Page 7
SECTION 15. Expected Reimbursement. Tbe City hereby states its intention and
reasonably expects to reimburse Nature Center Project costs incurred prior to the issuance of the
2006 Nature Center Certificates with proceeds of the 2006 Nature Center Certificates. The
reasonably expected maximum principal amount of the 2006 Nature Center Certificates is
$2,500,000. This resolution is being adopted not later than 60 days after the payment of the
original expenditures (the "Expenditures Date or Dates"). Except as described below, the
expected date of issue of the 2006 Nature Center Certificates will be within eighteen months of
the later of the Expenditure Date or Dates and the date the Nature Center Project is placed in
service; provided, the reimbursement may not be made more than three years after the
Expenditure Date.
Proceeds of the 2006 Nature Center Certificates to be used to reimburse for Nature
Center Project costs are not expected to be used within one year of reimbursement, directly or
indirectly, to pay debt service with respect to any obligation (other than to pay current debt
service coming due within the next succeeding one year period on any tax-exempt obligation of
the City (other than the 2006 Nature Center Certificates)) or to be held as a reasonably required
reserve or replacement fund with respect to an obligation of the City or any entity related in any
manner to the City, or to reimburse any expenditure that was originally paid with the proceeds of
any obligation, or to replace funds that are or will be used in such manner.
This Resolution is consistent with the budgetary and financial circumstances of the City,
as of the date hereof. No monies from sources other than the proceeds of the 2006 Nature Center
Certificates are, or are reasonably expected to be, reserved, allocated on a long-term basis, or
otherwise set aside by the City (or any related party) pursuant to their budget or financial policies
with respect to the Nature Center Project costs. To the best of its knowledge, this City Council is
not aware of the previous adoption of official intents by the City that have been made as a matter
of course for the purpose of reimbursing expenditures and for which tax -exempt obligations have
not been issued.
Tbe limitations described above regarding the Expenditures Dates do not apply to:
(a) costs of issuance of the 2006 Nature Center Certificates; (b) an amount not in excess of the
lesser of$IOO,OOO or five percent (5%) ofthe proceeds ofthe 2006 Nature Center Certificates; or
(c) any preliminary expenditures, such as architectural, engineering, surveying, soil testing, and
similar costs other than land acquisition, site preparation, and similar costs incident to
commencement of construction, not in exceSS of twenty percent (20%) of the aggregate issue
price of the 2006 Nature Center Certificates that finances the Nature Center Project for which the
preliminary expenditures were incurred.
This Resolution is adopted as official action of the City in order to comply with Treasury
Regulation 91.150-2 and any other regulations of the Internal Revenue Service relating to the
qualification for reimbursement of City expenditures incurred prior to the date of issue of the
2006 Nature Center Certificates, is part of the City's official proceedings, and will be available
for inspection by the general public at the main administrative office of the City.
2~2J-f 7
. _ ___~'rn" ...'r't;;ID ~<:nt 11T10N OF CITY OF CHULA VISTA 2006 CO?S (NATURE CENTER PROJECT).DOC
Resolution No.
Page 8
SECTION 16. Effect. This Resolution shall take effect immediately upon its passage.
.
Presented by
Approved as to form by
~ II i.... /)- a
Ann oore
. Attorney
Ann Moore
City Attorney
2-z-Lfg
J:\AUorney\EHul1\RESOS\FfNANCE\RESOLUTJON OF CITY OF CHULA VISTA 2006 COPS /NA TURE CENTER ?ROJECTtDOC
RESOLUTION NO.
CHULA VISTA PUBLIC FINANCING AUTHORITY
RESOLUTION OF THE CHULA VISTA PUBLIC FINANCING AUTHORITY
APPROVING THE EXECUTION AND DELIVERY OF DOCUMENTS IN
CONNECTION WITH THE SALE AND DELIVERY OF THE 2006
CERTIFICATES OF PARTICIPATION, (CIVIC CENTER PROJECT - PHASE
2) IN A PRINCIPAL AMOUNT NOT TO EXCEED $20,000,000. AND
AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION
THEREWITH.
WHEREAS, the Chula Vista Public Financing Authority (the "Authority") is a joint
exercise of powers authority organized and existing under Article 4 of Chapter 5 of Division 7 of
Title 1 of the Government Code of the State of California (the "JPA Act") with the authority to
assist in the financing of the construction, reconstruction, modernization and equipping of certain
capital improvements on behalf of the City ofChula Vista (the "City"); and
WHEREAS, the Authority has assisted the City to finance the acquisition, construction,
reconstruction, modernization and equipping of the Civic Center and the installation and
renovation of certain infrastructure improvements in the western portion of the City including
street, drainage and park improvements through the execution and delivery of the $37,240,000
City of Chula Vista 2004 Certificates of participation (Civic Center Project - Phase 1) (the
"2004 Certificates") pursuant to that certain Trust Agreement, dated as of September 1,2004 (the
"Original Trust Agreement"), by and among the City, the Authority and The Bank of New York
Trust Company, N.A., as successor-in-interest to BNY Western Trust Company; and
WHEREAS, in order to facilitate the execution and delivery of the 2004 Certificates, the
City leased to the Authority the real property (the "Site") set forth in Exhibit A to that certain
Site Lease, dated as of September 1,2004 (the "Original Site Lease"), by and between the City
and the Authority, and the Authority simultaneously leased back the Site and the improvements
located thereon to be constructed with the proceeds of the 2004 Certificates (the "Leased
Premises") to the City pursuant to that certain LeaselPurchase Agreement, dated as of
September 1,2004 (the "Original Lease"), by and between the City and the Authority; and
WHEREAS, the Original Trust Agreement and the Assignment Agreement, dated as of
September 1, 2004 (the "Original Assignment Agreement"), by and between the Authority and
the Trustee, allow for the execution and delivery of Additional Certificates (as that term is
defined in the Original Trust Agreement) to finance additional improvements for the City; and
Z~Z_Hq
_ __"_." .~,,...,.,'n"~'" IITH.N OF CHULA VISTA PFA FOR CIVIC CENTER COPS (PHASE 2).DOC
Resolution No.
Page 2
WHEREAS, the City desires to cause the Trustee to execute and deliver the 2006
Certificates of Participation (Civic Center Project - Phase 2), in the aggregate principal amount
not to exceed $20,000,000 (the "2006 Civic Center Phase 2 Certificates"), in order to provide
additional financing for the acquisition, construction, reconstruction, modernization and
equipping of the Civic Center (the "Civic Center Project - Phase 2"); and
WHEREAS, to accomplish the sale, preparation, execution and delivery of the 2006
Civic Center Phase 2 Certificates, the City desires to enter into that certain First Amendment to
Site Lease, dated as of March I, 2006 (the "First Amendment to Site Lease"), by and between
the City and the Authority and that certain First Amendment to Lease/Purchase Agreement,
dated as of March I, 2006 (the "First Amendment to Lease/Purchase Agreement"), by and
between the City and the Authority, in order to add certain real property and improvements to the
Site and the Leased Premises, consisting of Montevalle Park and Salt Creek Park (the
"Additional Property"), and to make certain other amendments thereto; and
WHEREAS, to facilitate the execution and delivery of the 2006 Civic Center Phase 2
Certificates, the City desires to enter into that certain Amended and Restated Trust Agreement,
dated as of March I, 2006 (the "Amended and Restated Trust Agreement"), by and among the
Authority, the City and the Trustee and that certain First Amendment to Assignment Agreement,
dated as of March I, 2006 (the "First Amendment to Assignment Agreement"), by and between
the Authority and the Trustee; and
.
WHEREAS, to facilitate the acquisition and construction of the Civic Center Project -
Phase 2, the City will act as agent for the purposes of the acquisition, construction,
reconstruction, modernization and equipping ofthe Civic Center Project - Phase 2 pursuant to an
Agency Agreement (2006 Certificates of Participation), dated as of March 1, 2006 (the "Agency
Agreement"), by and between the Authority and the City, the form of which has been presented
to this Board of Directors at the meeting at which this Resolution is being adopted; and
WHEREAS, the City Council of the City has held a public hearing on the date hereof
pursuant to Section 6586.5 of the JPA Act, and the City Council has found that the financing of
the Civic Center Project - Phase 2, including the execution and delivery of the 2006 Civic Center
Phase 2 Certificates by the Authority, will result in significant public benefits for the residents of
the City; and
WHEREAS, the Authority has determined and hereby fmds that the Authority's
assistance in financing the Civic Center Project - Phase 2 by the execution and delivery of the
2006 Civic Center Phase 2 Certificates by the Authority will result in significant public benefits
of the type described in Section 6586(a), (c) and (d), inclusive, of the JPA Act; and
WHEREAS, there has been presented to this Board of Directors at the meeting at which
this Resolution is being adopted the form of an Official Notice of Sale pursuant to which the
2006 Civic Center Phase 2 Certificates will be sold; and
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Resolution No.
Page 3
NOW, THEREFORE, the Board of Directors of the Authority does hereby resolve as
follows:
SECTION 1. 2006 Civic Center Phase 2 Certificates. This Board of Directors hereby
authorizes the preparation, sale and delivery of the 2006 Civic Center Phase 2 Certificates in an
aggregate principal amount not to exceed $20,000,000 in accordance with the terms and
provisions of the Amended and Restated Trust Agreement. The purposes for which the proceeds
of the sale of the 2006 Civic Center Phase 2 Certificates shall be expended are to pay all or a
portion of the costs the Civic Center Project - Phase 2 Project, to fund capitalized interest due
with respect to the 2006 Civic Center Phase 2 Certificates, to purchase a reserve fund surety
bond or to fund a reserve fund, and to pay the costs of the sale and delivery of the 2006 Civic
Center Phase 2 Certificates. If the City requests that the 2006 Civic Center Phase 2 Certificates
be sold as a single series together with certificates of participation to renovate the City's Nature
Center (the "2006 Nature Center Certificates"), then the authorized officers of the Authority are
authorized and directed to take such actions as are necessary to implement a single financing
pl~n utilizing a single set of the Agreements (as defined below) for such purpose.
SECTION 2. 2006 Certificate Documents. The First Amendment to Site Lease, the First
Amendment to LeaselPurchase Agreement, the Amended and Restated Trust Agreement, the
First Amendment to Assignment Agreement and the Agency Agreement (collectively, the
"Agreements") presented at this meeting are approved. Each of the Chair, Executive Director,
Treasurer and Secretary of the Authority, or the Chair's designee, are authorized and directed to
execute and deliver the Agreements. The Agreements shall be executed in substantially the forms
hereby approved, with such additions thereto and changes therein as are recommended or
approved by counsel to the Authority and approved by the officer or officers of the Authority
executing the Agreements, such approval to be conclusively evidenced by the execution and
delivery thereof by one or more of the officers listed above.
SECTION 3. Official Notice of Sale. The form of the Official Notice of Sale is approved
and the City's Financial Advisor is authorized to solicit bids for the sale of the 2006 Civic Center
Phase 2 Certificates by publishing once in The Bond Buyer, not less than five days prior to
receipt of bids, a short form of the Official Notice of Sale and to distribute or make available to
prospective purchasers of the 2006 Civic Center Phase 2 Certificates the Official Notice of Sale
substantially in the form on file with the Secretary, together with such changes thereto as the
Executive Director, the Treasurer or their designees approve. The Authority consents to the
City's acceptance of the bid of the lowest responsible bidder for the 2006 Civic Center Phase 2
Certificates providing that: (a) the principal amount of the 2006 Civic Center Phase 2 Certificates
does not exceed $20,000,000; and, (b) the true interest cost of the 2006 Civic Center Phase 2
Certificates as calculated by the City's Financial Advisor does not exceed 7.0%. In the event that
the 2006 Civic Center Phase 2 Certificates are sold together with the 2006 Nature Center
Certificates as a single series of certificates of participation, the portion of the combined series
allocable to the Civic Center Project - Phase 2 as calculated by the City's Financial Advisor shall
not exceed $20,000,000.
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_ .~_.~~.."r IlTlrl!<J nl' CHULA VISTA PFA FOR CIVIC CENTER COPS (PHASE 2).DOC
Resolution No.
Page 4
SECTION 4. Other Actions. The Chair, Executive Director, Treasurer, Secretary and
other officers of the Authority are authorized and directed, jointly and severally, to do any and all
things and to execute and deliver any and all documents which they may deem necessary or
advisable in order to consummate the sale and delivery of the 2006 Civic Center Phase 2
Certificates, and the execution of the Agreements and otherwise effectuate the purposes of this
Resolution, and such actions previously taken by such officers are hereby ratified and confirmed.
SECTION 5. Effect. This Resolution shall take effect from and after its date of adoption.
Presented by
Approved as to form by
~~d /dO &0'
An oore
Attorney
Ann Moore
City Attorney
2- 2-62-
J;\Altomc:v\EHull\RESOS\FTNANCE\RESOUJTION OF CHULA V!STA PFA FOR CIVIC CENTER COPS (PHASE 2\.1)0('
RESOLUTION NO.
CHULA VISTA PUBLIC FINANCING AUTHORlTY
RESOLUTION OF THE CHULA VISTA PUBLIC FINANCING AUTHORlTY
APPROVING THE EXECUTION AND DELIVERY OF DOCUMENTS IN
CONNECTION WITH THE SALE AND DELIVERY OF THE 2006
CERTIFICATES OF PARTICIPATION, (NATURE CENTER PROJECT) IN A
PRINCIPAL AMOUNT NOT TO EXCEED $2,500,000 AND AUTHORlZING
AND DIRECTING CERTAIN ACTIONS IN CONNECTION THEREWITH.
WHEREAS, the Chula Vista Public Financing Authority (the "Authority") is a joint
exercise of powers authority organized and existing under Article 4 of Chapter 5 of Division 7 of
Title 1 of the Government Code of the State of California (the" JP A Act") with the authority to
assist in the financing of the construction, reconstruction, modernization and equipping of certain
capital improvements on behalf of the City of Chula Vista (the "City"); and
WHEREAS, the Authority has assisted the City to finance the acquisition, construction,
reconstruction, modernization and equipping of the Civic Center and the installation and
renovation of certain infrastructure improvements in the western portion of the City including
street, drainage and park improvements through the execution and delivery of the $37,240,000
City of Chula Vista 2004 Certificates of participation (Civic Center Project - Phase 1) (the
"2004 Certificates") pursuant to that certain Trust Agreement, dated as of September 1,2004 (the
"Original Trust Agreement"), by and among the City, the Authority and The Bank of New York
Trust Company, N.A., as successor-in-interest to BNY Western Trust Company; and
WHEREAS, in order to facilitate the execution and delivery of the 2004 Certificates, the
City leased to the Authority the real property (the "Site") set forth in Exhibit A to that certain
Site Lease, dated as of September 1, 2004 (the "Original Site Lease"), by and between the City
and the Authority, and the Authority simultaneously leased back the Site and the improvements
located thereon to be constructed with the proceeds of the 2004 Certificates (the "Leased
Premises") to the City pursuant to that certain Lease/Purchase Agreement, dated as of
September 1,2004 (the "Original Lease"), by and between the City and the Authority; and
WHEREAS, the Original Trust Agreement and the Assignment Agreement, dated as of
September 1,2004 (the "Original Assignment Agreement"), by and between the Authority and
the Trustee, allow for the execution and delivery of Additional Certificates (as that term is
defined in the Original Trust Agreement) to finance additional improvements for the City; and
WHEREAS, the City desires to cause the Trustee to execute and deliver the 2006
Certificates of Participation (Nature Center Project), in the aggregate principal amount not to
exceed $2,500,000 (the "2006 Nature Center Certificates"), in order to finance the renovation of
certain infrastructure improvements for the City's Nature Center (the "Nature Center Project");
and
2-2]:33
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Resolution No.
Page 2
.
WHEREAS, to accomplish the sale, preparation, execution and delivery of.the 2006
Nature Center Certificates, the City desires to enter into that certain First Amendment to Site
Lease, dated as of March I, 2006 (the "First Amendment to Site Lease"), by and between the
City and the Authority and that certain First Amendment to Lease/Purchase Agreement, dated as
of March 1, 2006 (the "First Amendment to Lease/Purchase Agreement"), by and between the
City and the Authority, in order to add certain real property and improvements to the Site and the
Leased Premises, consisting of Montevalle Park and Salt Creek Park (the "Additional Property"),
and to make certain other amendments thereto; and
WHEREAS, to facilitate the execution and delivery of the 2006 Nature Center
Certificates, the City desires to enter into that certain Amended and Restated Trust Agreement,
dated as of March 1,2006 (the "Amended and Restated Trust Agreement"), by and among the
Authority, the City and the Trustee and that certain First Amendment to Assignment Agreement,
dated as of March 1,2006 (the "First Amendment to Assignment Agreement"), by and between
the Authority and the Trustee; and
WHEREAS, to facilitate the acquisition and construction of the Nature Center Project,
the City will act as agent for the purposes of the acquisition, construction, reconstruction,
modernization and equipping of the Nature Center Project pursuant to an Agency Agreement
(2006 Certificates of Participation), dated as of March 1, 2006 (the "Agency Agreement"), by
and between the Authority and the City, the form of which has been presented to this Board of
Directors at the meeting at which this Resolution is being adopted; and
WHEREAS, the City Council of the City has held a public hearing on the date. hereof
pursuant to Section 6586.5 of the JPA Act, and the City Council has found that the financing of
the Nature Center Project, including the execution and delivery of the 2006 Nature Center
Certificates by the Authority, will result in significant public benefits for the residents of the
City; and
WHEREAS, the Authority has determined and hereby finds that the Authority's
assistance in financing the Nature Center Project by the execution and delivery of the 2006
Nature Center Certificates by the Authority will result in significant public benefits of the type
described in Section 6586(a), (c) and (d), inclusive, of the JPA Act; and
WHEREAS, there has been presented to this Board of Directors at the meeting at which
this Resolution is being adopted the form of an Official Notice of Sale pursuant to which the
2006 Nature Center Certificates will be sold.
NOW, THEREFORE, the Board of Directors of the Authority does hereby resolve as
follows:
SECTION 1. 2006 Nature Center Certificates. This Board of Directors hereby authorizes
the preparation, sale and delivery of the 2006 Nature Center Certificates in an aggregate
principal amount not to exceed $2,500,000 in accordance with the terms and provisions of the
2-204
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Resolution No.
Page 3
Amended and Restated Trust Agreement. The purposes for which the proceeds of the sale of the
2006 Nature Center Certificates shall be expended are to pay all or a portion of the costs the
Nature Center Project, to fund capitalized interest due with respect to the 2006 Nature Center
Certificates, to purchase a reserve fund surety bond or to fund a reserve fund, and to pay the
costs of the sale and delivery of the 2006 Nature Center Certificates. If the City requests that the
2006 Nature Center Certificates be sold as a single series together with certificates of
participation to renovate the Civic Center (the "2006 Civic Center Phase 2 Certificates"), then
the authorized officers of the Authority are authorized and directed to take such actions as are
necessary to implement a single financing plan utilizing a single set of the Agreements (as
defined below) for such purpose.
SECTION 2. 2006 Nature Center Certificate Documents. The First Amendment to Site
Lease, the First Amendment to Lease/Purchase Agreement, the Amended and Restated Trust
Agreement, the First Amendment to Assignment Agreement and the Agency Agreement
(collectively, the "Agreements") presented at this meeting are approved. Each of the Chair,
Executive Director, Treasurer and Secretary of the Authority, or the Chair's designee, are
authorized and directed to execute and deliver the Agreements. The Agreements shall be
executed in substantially the forms hereby approved, with such additions thereto and changes
therein as are recommended or approved by counsel to the Authority and approved by the officer
or officers of the Authority executing the Agreements, such approval to be conclusively
evidenced by the execution and delivery thereof by one or more of the officers listed above.
SECTION 3. Official Notice of Sale. The form of the Official Notice of Sale is approved
and the City's Financial Advisor is authorized to solicit bids for the sale of the 2006 Nature
Center Certificates by publishing once in The Bond Buyer, not less than five days prior to receipt
of bids, a short form of the Official Notice of Sale and to distribute or make available to
prospective purchasers of the 2006 Nature Center Certificates the Official Notice of Sale
substantially in the form on file with the Secretary, together with such changes thereto as the
Executive Director, the Treasurer or their designees approve. The Authority consents to the
City's acceptance of the bid of the lowest responsible bidder for the 2006 Nature Center
Certificates providing that: (a) the principal amount of the 2006 Nature Center Certificates does
not exceed $2,500,000; and, (b) the true interest cost of the 2006 Nature Center Certificates as
calculated by the City's Financial Advisor does not exceed 7.0%. In the event that the 2006
Nature Center Certificates are sold together with the 2006 Civic Center Phase 2 Certificates as a
single series of 2006 Nature Center Certificates of participation, the portion of the combined
series allocable to the Nature Center Project as calculated by the City's Financial Advisor shall
not exceed $2,500,000.
2--2-65
1.\J\.""m.."IF.Hu!1I.RESOS\FINANCEI.RESOLUTlON OF CHULA VISTA PFA FOR NATURE CENTER COPS.DOC
Resolution No.
Page 4
SECTION 4. Other Actions. The Chair, Executive Director, Treasurer, Secretary and
other officers of the Authority are authorized and directed, jointly and severally, to do any and all
things and to execute and deliver any and all documents which they may deem necessary or
advisable in order to consummate the sale and delivery of the 2006 Nature Center Certificates,
and the execution of the Agreements and otherwise effectuate the purposes of this Resolution,
and such actions previously taken by such officers are hereby ratified and confirmed.
SECTION 5. Effect. This Resolution shall take effect trom and after its date of adoption.
Presented by
Approved as to form by
Ann Moore
City Attorney
~/..d dfr~ k
Ann oore .
. Attorney
.
.
2-201::,
J:\Atlomey\EHu1!\RESOS\FrNANCE\RESOLUTlON OF CHULA VISTA PFA FOR NATURE CENTER COPS.DOC