HomeMy WebLinkAboutRDA Agenda Packet 2006/03/21
Ity of perjury thaI \ dm
I declare under pena of Chula Vi5ta in the
employed by the Clty,_ d that \ p051ed tlUll
Off f the City C\er~ an \ r ,
~o~~~~ent on the bulletin board according 10 ~ 1 i c.-
t requirements." :- ~ _ _
<;'"101 ,';.- i' ........""'---
'i", (;; Signed i ,~-~ ~-::. - """-
C1lY OF
CHULA VISfA
Stephen C. Padilla, Mayor/Choir
Patricia E. Chavez, Council/Agency Member
John McCann, Council/Agency Member
Jerry R. Rindone, Council/Agency Member
Steve Castaneda, Council/Agency Member
David D. Rowlands, Jr., City ManagerlExecutive Director
Ann Moore, City Attorney/Agency Counsel
Susan Bigelow, City Clerk
March 21, 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 1)
The Council/Agency will enact the Consent Calendar staff without discussion,
unless a Council/Agency Member, a member of the public, or City staff requests
that the item be removed for discussion. If you wish to speak on one of these
items. please fill out a "Request to Speak" form (available in the lobby) and
submit it to the City Clerk prior to the meeting. Items pulled from the Consent
Calendar will be discussed immediately following the Consent Calendar.
1 A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING THE BORROWING OF FUNDS BY THE REDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTA FROM CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY AND PROVIDING OTHER
MATTERS RELATING THERETO
B. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA AUTHORIZING AND DIRECTING EXECUTION OF LOAN AGREEMENT
RELATING TO THE ISSUANCE OF CERTAIN BONDS BY THE CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY, APPROVING
OFFICIAL STATEMENT RELATING TO SUCH BONDS, AND AUTHORIZING
AND APPROVING OTHER MATTERS RELATING THERETO
As part of the effort to balance the 2005/2006 Budget of the State of California,
redevelopment agencies are again obligated to make payments totaling $250 million to
the Educational Revenue Augmentation Fund (ERAF). The Chula Vista Redevelopment
Agency's 2005/2006 ERAF obligation is $900,367. The CRAlERAF Loan Program
allows agencies to spread the payment over the next ten years. The Agency participated
in this program in 2005 and is proposing to participate again in 2006. Under this year's
program, the Agency's total borrowing would not exceed $1,100,000. Annual payments
are not anticipated to exceed 17% of the Agency's ERAF obligation or approximately
$153,062. (Finance Director)
Staff recommendation: Council/Agency adopt the resolutions.
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 topicforfuture discussion or refer the matter to
staff Comments are limited to three minutes.
ACTION ITEM
The Item listed in this section of the agenda will be considered individually by the
Council/Agency, and is expected to elicit discussion and deliberation lfyou wish
to speak on any item, please fill out a "Request to Speak" form (available in the
lobby) and submit it to the City Clerk prior to the meeting.
OTHER BUSINESS
2. CITY MANAGER/DIRECTOR'S REPORTS
3. MAYOR/CHAIR'S REPORTS
4. COUNCIL/AGENCY MEMBER'S COMMENTS
ADJOURNMENT to the Regular Meeting of April 4, 2006 at 4:00 p.m. III the Council
Chambers.
In compliance with the
AMERlCANS WITH DISABILITIES ACT
The City of Chula Vista requests individuals who require special accommodations to access, attend, and'or participate in a eft}'
meeting, activity, or service request such accommodation at least forty-eight hours in advance for meetings and five da:vs for
scheduled services and activities. Please contact the City Clerk for spec(fj'c information at (6/9) 69/-504/ or
Telecommunications Devices for the Deaf (TDD) at (619) 585-5655. California Relay Service is also available for the hearing
impaired.
Page 2 - Jt.Council/RDA Agenda
http://www .chulavistaca. gOY
March 21, 2006
JOINT CITY COUNCIL/REDEVELOPMENT AGENCY
ITEM
MEETING DATE March 21. 2006
ITEM TITLE:
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF CHULA VISTA APPROVING THE BORROWING
OF FUNDS BY THE REDEVELOPMENT AGENCY OF THE
CITY OF CHULA VISTA FROM CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY AND
PROVIDING OTHER MATTERS RELATING THERETO
RESOLUTION OF THE REDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTA AUTHORIZING
AND DIRECTING EXECUTION OF LOAN AGREEMENT
RELATING TO THE ISSUANCE OF CERTAIN BONDS BY
THE CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY, APPROVING OFFICIAL
STATEMENT RELATING TO SUCH BONDS AND
AUTHORIZING AND APPROVING OTHER MATTERS
RELATING THERETO
SUBMITTED BY: Director of FinanCefTreasufJ~4/5ths Vote:Yes_No.lL)
REVIEWED BY: Executive Director f't~ PI;
RECOMMENDATION: That the:
City: Adopt the resolution approving the Borrowing of Funds by the
Redevelopment Agency from California Statewide Communities
Development Authority and Providing Other Matters Properly Relating
Thereto
Agency: Adopt the resolution authorizing and directing the execution
of loan agreement relating to the issuance of certain bonds by the
California Statewide Communities Development Authority, approving
official statement relating to such bonds and authorizing and approving
other matters related thereto
Agency: Authorize the Mayor/Chair to execute any and all documents
and agreements on behalf of the Agency necessary to administer and
implement the Agreement.
1-1
Page 2, Item I
Meeting Date 3/2112006
BOARDS/COMMISSION RECOMMENDATION: This item was recommended
for approval by the Chula Vista Redevelopment Corporation at the March 9, 2006
meeting.
As part of the effort to balance the 2005/2006 Budget of the State of California,
redevelopment agencies are again obligated to make payments totaling $250
million to the Educational Revenue Augmentation Fund (ERAF). This is the
second, but is expected to be the last, year that such payments will be required.
Individual (ERAF) payments were determined based on the Agency's tax
increment as a proportion of total tax increment of all agencies throughout the
State. The Agency's 2005/2006 ERAF obligation is $900,367. Payments are due
on May 10, 2006 for the FY 2005/2006 ERAF obligation.
As part of the legislation that mandated the payment, the California
Redevelopment Association (CRA) created the CRA/ERAF Loan Program, which
allows agencies to spread the payment over the next 10 years. The Agency
participated in this program in 2005 and is proposing to participate again in 2006.
Under this year's program, the Agency's total borrowing would not exceed
$1,100,000. Annual payments are not anticipated to exceed 17% of the
Agency's ERAF obligation or approximately $153,062.
DISCUSSION:
According to the authorizing statute (AB 2115, Chapter 610) the loan is payable
from any available funds of the Agency not otherwise obligated for other uses.
The obligation to repay the loan is an unsecured obligation of the Agency, not an
obligation of any particular project area. There is no specific pledge of tax
increment. The obligation to repay the loan is therefore subordinate to all
existing and future obligations of the Agency, but will be secured on parity with
the 2005 ERAF Loan by a first lien on the City's property taxes. Under this law, if
the agency fails to make a scheduled payment on the loan, the County Auditor
will be directed to transfer the first available property tax revenues of the City to
make the payment. AB 2115 establishes an ability to create a lien on the
property tax revenues of the sponsoring agency, which in this case is the City of
Chula Vista. This lien is created upon establishing the loan. Therefore, the City
must adopt a resolution approving the Agency's participation in this loan
program.
As in 2005, California Communities will be the issuing authority for the 2006
CRA/ERAF Loan Program. California Communities will again pool the ERAF
obligations of all participating agencies, resulting in a more cost effective
financing program. The Agency will enter into another loan agreement with
California Communities. The Agency will only be responsible for its share of the
California Communities bonds if the proposal is approved. The bonds issued
1-2
Page 3, Item
Meeting Date 3/21/2006
I
through California Communities will be taxable inasmuch as the proceeds will
ultimately be used by school districts to cover operating costs. The financing
approach, as crafted under this authorizing stature, is anticipated to result in a
highly rated and cost effective financing program.
FISCAL IMPACT: By participating in the Loan Program, the Agency will be able
to improve its cash fiow by spreading the payment over time. This would also
avoid a loan from the General Fund to the Agency to meet its ERAF obligation.
The Agency's total borrowing would not exceed $1,100,000. This includes
estimated cost of issuance of approximately $8,109. The average interest rate is
5.6% and the average annual debt service will be approximately $124,926. The
total principal and interest payments over the ten-year term are estimated at
$1,249,258.
By pooling loan requests from several redevelopment agencies in the State and
by using standardized documents and processing procedures, the cost of this
program will be kept low for the Agency's benefit.
1-3
13138-203
JH:ACH:brf
02/1 5106
02/28/06
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA
APPROVING THE BORROWING OF FUNDS BY THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA FROM CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY AND PROVIDING OTHER MATTERS RELATING
THERETO
WHEREAS, the California Statewide Communities Development Authority (the
"Authority") is a joint powers authority duly organized and existing under and pursuant to that
certain "Amended and Restated Joint Exercise of Powers Agreement Relating to the California
Statewide Communities Development Authority", dated as of June 1, 1 988, and under the
provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of
Title 1 of the Government Code of the State of California (the "Act"), and is authorized pursuant
to Article 4 of the Act (the "Bond Law") to issue bonds, notes and other obligations; and
WHEREAS, the Redevelopment Agency of the City of Chula Vista (the "Agency") is a
public body, corporate and politic, duly established and authorized to transact business and
exercise powers under and pursuant to the provisions of Part 1 of Division 24 of the Health and
Safety Code of the State of California; and
WHEREAS, Section 33681.15 of the California Health and Safety Code authorizes the
Authority to issue bonds, notes or other obligations to provide funds to make loans to
redevelopment agencies to make the payments required by Section 33681.12 of the California
Health and Safety Code, namely payments to the applicable county auditor for deposit in the
county's Educational Revenue Augmentation Fund (the "ERAF Payment"); and
WHEREAS, in order to make loans for such purpose to redevelopment agencies, the
Authority has determined to issue its California Statewide Communities Development Authority
2006 Taxable Revenue Bonds, Series A (CRAlERAF Loan Prograrn) in the aggregate principal
amount of not to exceed $30,000,000 (the "Bonds"); and
WHEREAS, in order to make its ERAF Payment for fiscal year 2005-06, the Agency
desires to obtain a loan from the Authority from the proceeds of the Bonds in the amount of not
to exceed $1,100,000 (the "Loan") pursuant to the terms and conditions set forth in the Loan
Agreement, dated as of April 1, 2006, by and between the Agency and the Authority (the "Loan
Agreement"); and
WHEREAS, as a condition precedent to entering into the Loan Agreement, said Section
33681.15 requires that the Agency obtain the prior approval of this City Council, which City
Council is a "legislative body" for purposes of Section 33681.15, by resolution adopted by a
majority of this City Council that recites that a first lien will be created on property tax revenues
of the City to secure repayment of the Loan; and
WHEREAS, in order to make a loan to the Agency (and other redevelopment agencies)
to provide funds to make the payment required by said Section 33681.12 to be paid with
respect to fiscal year 2004-05, the Authority issued its $27,020,000 principal amount of
California Statewide Communities Development Authority 2005 Taxable Revenue Bonds,
Series A (CRAlERAF Loan Program) (the "2005 Bonds"); and
1-4
WHEREAS, payment of the loan made to the Agency with the proceeds of the 2005
Bonds is secured by a first pledge and lien on the property taxes of the City on a parity with the
first pledge and lien on such property taxes securing payment of the Loan, as further provided
in said Section 33681.15; and
WHEREAS, this City Council desires to make the recitals set forth below and to approve
the making of the Loan by the Authority to the Agency pursuant to the Loan Agreement;
NOW, THEREFORE, BE IT RESOL VED by the City Council of the City of Chula Vista
(the "City") that:
Section 1. Acknowledgment with respect to First Lien on Property Tax
Revenues. In fulfillment of the requirements of Section 33681.15 of the California Health and
Safety Code, the City Council hereby acknowledges that, in order to secure repayment of the
Loan by the Authority to the Agency, a first lien is created by said Section 33681.15 on the
property tax revenues allocated to the City pursuant to Chapter 6 (commencing with Section 95)
of Part 0.5 of Division 1 of the Revenue and Taxation Code. This lien will arise by operation of
said Section 33681.15 automatically upon the making of the Loan without the need for any
action on the part of any person. This lien will be valid, binding, perfected, and enforceable
against this City Council, its successors, creditors, purchasers, and all others asserting rights in
those property tax revenues, irrespective of whether those persons have notice of the lien,
irrespective of the fact that the property tax revenues subject to the lien may be commingled
with other property, and without the need for physical delivery, recordation, public notice, or any
other act. This lien shall be a first priority lien on such property tax revenues.
Section 2. Approval of Loan. The City Council hereby approves the Loan in the
amount of not to exceed $1,100,000 to be made by the Authority to the Agency pursuant to the
Loan Agreement, as above described.
Section 3. Official Statement. The City Council hereby approves the information that
describes the City and the Agency contained in the form of the Official Statement on file with
the Secretary. Distribution by the purchaser of the Bonds of the final Official Statement
containing such information is hereby approved.
Section 4. Official Actions. The Mayor, the City Manager, the Finance Director, the
City Attorney, the City Clerk and any and all other officers of the City are hereby authorized and
directed, for and in the name and on behalf of the City, to do any and all things and take any
and all actions, and to execute and deliver all certificates and other documents, which they, or
any of them, may deem necessary or advisable in order to consummate the sale, issuance and
delivery of the Bonds by the Authority and the making of t!1e Loan by the Authority to the
Agency pursuant to the Loan Agreement.
Section 5. Effective Date. This Resolution shall take effect from and after the date of
its passage and adoption.
Presented by
Maria Kachadoorian
Director of Finance
2
1-5
131 38-203
JHACH:brf
02115/06
02/28/06
RESOLUTION NO.
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA AUTHORIZING AND DIRECTING EXECUTION OF LOAN AGREEMENT
RELATING TO THE ISSUANCE OF CERTAIN BONDS BY THE CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY, APPROVING OFFICIAL
STATEMENT RELATING TO SUCH BONDS AND AUTHORIZING AND APPROVING
OTHER MATTERS RELATING THERETO
WHEREAS, the California Statewide Communities Development Authority (the
"Authority") is a joint powers authority duly organized and existing under and pursuant to that
certain "Amended and Restated Joint Exercise of Powers Agreement Relating to the California
Statewide Communities Development Authority", dated as of June 1, 1988, and under the
provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of
Title 1 of the Government Code of the State of California (the "Act"), and is authorized pursuant
to Article 4 of the Act (the "Bond Law") to issue bonds, notes and other obligations; and
WHEREAS, the Redevelopment Agency of the City of Chula Vista (the "Agency") is a
public body, corporate and politic, duly established and authorized to transact business and
exercise powers under and pursuant to the provisions of Part 1 of Division 24 of the Health and
Safety Code of the State of California; and
WHEREAS, Section 33681.15 of the California Health and Safety Code authorizes the
Authority to issue bonds, notes or other obligations to provide funds to make loans to
redevelopment agencies to make the payments required by Section 33681.12 of the California
Health and Safety Code, namely payments to the applicable county auditor for deposit in the
county's Educational Revenue Augmentation Fund (the "ERAF Payment"); and
WHEREAS, in order to make loans for such purpose to redevelopment agencies, the
Authority has determined to issue its California Statewide Communities Development Authority
2006 Taxable Revenue Bonds, Series A (CRNERAF Loan Program) in the aggregate principal
amount of not to exceed $30,000,000 (the "Bonds"); and
WHEREAS, in order to make its ERAF Payment for fiscal year 2005-06, the Agency
desires to obtain a loan from the Authority from the proceeds of the Bonds in the amount of not
to exceed $1,100,000 (the "Loan") pursuant to the terms and conditions set forth in the Loan
Agreement, dated as of April 1, 2006, by and between the Agency and the Authority (the "Loan
Agreement"), a form of which Loan Agreement is on file with the Secretary of the Agency; and
WHEREAS, the Agency is a member of the Authority; and
WHEREAS, in connection with the issuance of the Bonds by the Authority, Section 6586
of the Act requires that the Agency make certain determinations with respect to the significant
public benefits to the Agency resulting from the issuance of the Bonds by the Authority, as
hereinafter set forth; and
WHEREAS, as a condition precedent to entering into the Loan Agreement, said Section
33681.15 requires that the Agency obtain the prior approval of the City Council of the City of
Chula Vista (the "City"), by resolution (the "City Council Resolution") adopted by a majority of
1-6
said Council that recites that a first lien will be created on property tax revenues of the City to
secure repayment of the Loan; and
WHEREAS, the City Council Resolution has been duly adopted in full compliance with
the requirements of said Section 33681.15; and
WHEREAS, in order to make a loan to the Agency (and other redevelopment agencies)
to provide funds to make the payment required by said Section 33681.12 to be paid with
respect to fiscal year 2004-05, the Authority issued its $27,020,000 principal amount of
California Statewide Communities Development Authority 2005 Taxable Revenue Bonds,
Series A (CRAlERAF Loan Program) (the "2005 Bonds"); and
WHEREAS, payment of the loan made to the Agency with the proceeds of the 2005
Bonds is secured by a first pledge and lien on the property taxes of the City on a parity with the
first pledge and lien on such property taxes securing payment of the Loan, as further provided
in said Section 33681.15; and
WHEREAS, the Authority has caused to be prepared a form of Official Statement
describing the Bonds and containing, among other matters, information describing the Agency
and the City, the form of which Official Statement is on file with the Secretary (the "Official
Statement"), which will be used by Stone and Youngberg LLC, E. J. De La Rosa & Co. Inc. and
RBC Dain Rauscher Inc, doing business under the trade name RBC Capital Markets (together,
the "Underwriters") in the sale of the Bonds; and
WHEREAS, the Agency, with the aid of its staff, has reviewed the form of the Loan
Agreement and the information in the Official Statement relating to the Agency and the City,
and wishes at this time to approve the forgoing in the public interests of the Agency;
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the
Redevelopment Agency of the City of Chula Vista as follows:
Section 1. Determination of Significant Public Benefits. Based on the information
provided to the Agency by Agency staff and others in connection with these proceedings, the
Agency determines that there will be significant public benefits accruing to the Agency from the
issuance of the Bonds by the Authority and the loan of portion of the proceeds thereof to the
Agency, consisting of demonstrable savings in effective interest rates and financing costs
resulting from (i) the efficiencies of pooling the Loan, together with the loans to other
redevelopment agencies to be made from the proceeds of the Bonds, into one issuance of
bonds by the Authority and (ii) the creditworthiness of the lien on the property tax revenues of
the City under said Section 33681.15 to secure the repayment of the Loan by the Agency.
Section 2. Approval of Loan Agreement. The Agency hereby authorizes and
approves the making of the Loan to the Agency pursuant to the Loan Agreement in the amount
of not to exceed $1,100,000. The Agency hereby approves the Loan Agreement in
substantially the form on file with the Secretary together with any additions thereto or changes
therein (including, but not limited to, the final principal amount of the Loan and the final payment
schedule on the Loan) deemed necessary or advisable by the Executive Director of the Agency;
provided that the average annual interest rate on the Bonds does not exceed eight percent
(8.00%) per annum. The Executive Director is hereby authorized and directed to execute the
final form of the Loan Agreement for and in the name and on behalf of the Agency and the
execution thereof shall be conclusive evidence of the Agency's approval of any such additions
-2-
1-7
and changes to the Loan Agreement. The Agency hereby authorizes the delivery and
performance of the Loan Agreement.
Section 3. Official Statement. The Agency hereby approves the information that
describes the Agency and the City contained in the form of the Official Statement on file with
the Secretary. Distribution by the purchaser of the Bonds of the final Official Statement
containing such information is hereby approved.
Section 4. Officer's Certificate. The Executive Director (or in his absence, the
Treasurer) is hereby authorized and directed to promptly execute and deliver, together with a
certified copy of this Resolution, to Stone and Youngberg LLC, on behalf of the Underwriters,
the Officer's Certificate in form attached hereto as Exhibit A and hereby made a part hereof,
containing representations warranties of the Agency with respect to the making of the Loan and
the issuance of the Bonds. The Agency understands that the Underwriters will rely on the
representations and warranties contained in the Officer's Certificate in the sale and delivery of
the Bonds by the Underwriters.
Section 5. Official Actions. The Chair, the Executive Director, the Treasurer, the
Agency Counsel, the Secretary and any and all other officers of the Agency are hereby
authorized and directed, for and in the name and on behalf of the Agency, to do any and all
things and take any and all actions, and to execute and deliver all certificates and other
documents, which they, or any of -them, may deem necessary or advisable in order to
consummate the sale, issuance and delivery of the Bonds by the Authority and the making of
the Loan by the Authority to the Agency pursuant to the Loan Agreement. In the event the
Executive Director shall be unavailable to execute the Loan Agreement, then the Treasurer is
hereby authorized to act in the Executive Director's stead.
Section 6. Effective Date. This Resolution shall take effect from and after the date of
its passage and adoption.
Presented by
Approved as to form by
~
Maria Kachadoorian
Director of Finance
Ann oore
C' Attorney
-3-
1-8
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
~J !J - f/,tfl
C~A~i~y
Dated:
o}Js}r)(p
I I
CRA/ERAF Loan Program 2006 Loan Agreement between the
Redevelopment Agency of the City ofChula Vista and California Statewide
Communities Development Authority
1-9
13138-203
JH:ACH:brf
02/15/06
02/28/06
CRNERAFLOANPROGRAM
2006 LOAN AGREEMENT
Dated as of April 1 , 2006
by and between the
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA,
and
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
Relating to
$[Bond Amount]
California Statewide Communities Development Authority
2006 Taxable Revenue Bonds, Series A
(CRNERAF Loan Program)
1-10
Section 1.01.
Section 1.02.
Section 1.03.
Section 1.04.
Section 2.01.
Section 2.02.
Section 2.03.
Section 2.04.
Section 2.05.
Section 3.01.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
Section 4.01.
Section 4.02.
Section 4.03.
Section 4.04.
Section 501.
Section 5.02.
Section 5.03.
Section 504.
Section 5.05.
Section 5,06.
Section 5.07.
Section 508.
Section 5.09.
Section 5.10.
Section 5.11.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; REPRESENTATIONS
Definitions.. .................................................... ..................... ..............................3
Rules of Construction. ........................................ ............................. ........................... 5
Representations of the Authority. ............................................................................... 5
Representations of the Agency. ............................................ .................. ...................6
ARTICLE I!
THE LOAN; ESTABLISHMENT OF FUNDS
Authorization............................................... .................... ...8
Terms of Loan. ............. .................................................... . ............ .8
No Prepayment.......................................................... ........9
Application of Loan Proceeds and Certain Other Moneys...... ................... .......9
Vaiidity of Loan.. .......... ............................ ............... ................. ...................... 9
ARTICLE II!
OTHER COVENANTS OF THE AGENCY
Punctual Payment.................................... .............................. ...................... ...10
Payment By County Auditor. ................................................... ...................... .......... 10
Financial Statements, Annuai Budgets; Continuing Disclosure ....................... .........10
Protection of Security and Rights. ........................ ............................................. . 10
Further Assurances. ......... ............................... ..............................................10
ARTiCLE iV
EVENTS OF DEFAULT AND REMEDIES
Events of Default. ...................................................................................................... 12
Appiication of Funds Upon Default. .................................................... ....................... 12
No Waiver........................................................ ........................... .................. 12
Remedies Not Exciusive.......................... ............. ..................................................... 13
ARTICLE V
MISCELLANEOUS
Benefits Limited to Parties........................... ............... ............. ..................... 14
Successor is Deemed Included in All References to Predecessor. ....... ................... 14
Discharge of Loan Agreement................... ............................ ....................14
Rebate of Surplus Funds.. ......................... ........................... .................. .. 14
Amendment. ............................................................................................................... 15
Waiver of Personal Liabiiity. .................................................................................... 15
Indemnification of Authority and Trustee.. ............. ....................... ................ .15
Notices................................................................... ... ........ ................. ................. 16
Partial invaiidity........................................................................................................... 16
Governing Law.......................... ....................... .................................................. 17
Term of this Loan Agreement................................. ........................................ ......... 17
-i-
1-11
CRNERAFLOANPROGRAM
2006 LOAN AGREEMENT
THIS CRA/ERAF LOAN PROGRAM 2006 LOAN AGREEMENT (the "Loan Agreement")
is made and entered into as of April 1, 2006, by and between the CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY, a joint powers authority organized and existing
under the laws of the State of California (the "Authority") and the REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA, a public body corporate and politic duly organized and
existing under the laws of the State of California (the "Agency");
RECITALS:
A. The Authority is a joint powers authority duly organized and existing under and
pursuant to that certain "Amended and Restated Joint Exercise of Powers Agreement Relating
to the California Statewide Communities Development Authority", dated as of June 1, 1988, and
under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of
Division 7 of Title 1 of the Government Code of the State of California (the "Act"), and is
authorized pursuant to Article 4 of the Act (the "Bond Law") to issue bonds, notes and other
obligations; and
B. The Agency is a public body, corporate and politic, duly established and authorized
to transact business and exercise powers under and pursuant to the provisions of Part 1 of
Division 24 of the Health and Safety Code of the State of California (the "Redevelopment Law");
and
C. Section 33681.15 of the California Health and Safety Code authorizes certain joint
powers entities, such as the Authority, to issue bonds, notes or other obligations to provide
funds to make loans to redevelopment agencies to make the payments required by Section
33681.12 of the California Health and Safety Code, namely payments to the applicable county
auditor for deposit in the county's Educational Revenue Augmentation Fund (the "ERAF
Payment"); and
D. In order to make loans for such purpose to redevelopment agencies, the Authority
has determined to issue its California Statewide Communities Development Authority 2006
Taxable Revenue Bonds, Series A (CRAJERAF Loan Program) in the aggregate principal
amount of $[Bond Amount] (the "Bonds"); and
E. The Agency desires to obtain a loan (the "Loan") from the Authority from the
proceeds of the Bonds in order to make its ERAF Payment; and
F. In order to make a loan to the Agency (and other redevelopment agencies) to
provide funds to make the payment required by said Section 33681.12 to be paid with respect
to fiscal year 2004-05, the Authority issued its $27,020,000 principal amount of California
Statewide Communities Development Authority 2005 Taxable Revenue Bonds, Series A
(CRAJERAF Loan Program) (the "2005 Bonds"); and
G. Payment of the loan made to the. Agency with the proceeds of the 2005 Bonds is
secured by a first pledge and lien on the property taxes of the City of Chula Vista on a parity
1-12
with the first pledge and lien on such property taxes securing payment of the Loan, as further
provided in said Section 33681.15; and
H. In order to state and declare the terms and conditions upon which the Loan is to be
made, secured and repaid, the Agency and the Authority wish to enter into this Loan
Agreement; and
I. All acts and proceedings required by law necessary to make this Loan Agreement,
when executed by the Agency and the Authority, the valid, binding and legal obligation of the
Agency and the Authority, and t6 constitute this Loan Agreement a valid and binding agreement
for the uses and purposes herein set forth in accordance with its terms, have been done and
taken, and the execution and delivery of this Loan Agreement have been in all respects duly
authorized;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto do hereby agree as follows:
-2-
1-13
ARTICLE I
DEFINITIONS; REPRESENTATIONS
Section 1.01. Definitions. Unless the context clearly otherwise requires or unless
otherwise defined herein, the capitalized terms in this Loan Agreement shall have the
respective meanings which such terms have in the Indenture. In addition, the following terms
defined in this Section 1.01 shall, for all purposes of this Loan Agreement, have the respective
meanings herein specified.
"Act" means the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4
(commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code
of the State of California, as amended.
" Aqencv" means the Redevelopment Agency of the City of Chula Vista, or its
successors.
"Authority" means the California Statewide Communities Development Authority or its
successors.
"Bond Insurance Policy" means the Municipal Bond Insurance Policy issued by the
Insurer insuring when due the payment of the Bonds as provided therein.
"Bonds" means $[Bond Amount] aggregate principal amount of California Statewide
Communities Development Authority 2006 Taxable Revenue Bonds, Series A (CRAlERAF Loan
Program), authorized by and at any time Outstanding pursuant to the Bond Law and the
Indenture.
"Borrower" means the Agency and its successors.
"Certificate of the Aqency" means a certificate in writing signed by the Executive
Director, Treasurer or Secretary of the Agency or by any other officer of the Agency duly
authorized by the Agency for that purpose.
"City" means the City of Chula Vista.
"Closinq Date" means the date of original issuance of the Bonds.
"Continuinq Disclosure Aqreement" shall mean that certain Continuing Disclosure
Certificate executed by the Authority and Wells Fargo Bank, National Association, as
dissemination agent, and dated as of the Closing Date relating to the Bonds, as originally
executed and as may be amended from time to time in accordance with the terms thereof.
"County Auditor" means the County Auditor-Controller of the county in which the Agency
is located.
"ERAF Payment" means the payment required to be made by the Agency by May 10,
2006, pursuant to Section 33681.12 of the California Health and Safety Code to a county
auditor for deposit in the Educational Revenue Augmentation Fund created for such county
pursuant to Article 3 (commencing with Section 97) of Chapter 6 of Part 0.5 of Division 1 of the
California Revenue and Taxation Code.
"Event of Default" means any of the events described in Section 4.01.
-3-
1-14
"Fiscal Year" means any twelve-month period extending from July 1 in one calendar
year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-
month period selected and designated by the Agency as its official fiscal year period.
"Indenture" means the Indenture of Trust, dated as of April 1 , 2006, by and between the
Authority and Wells Fargo Bank, National Association, as trustee, providing for the issuance of
the Bonds.
"Independent Accountant" means any accountant or firm of such accountants duly
licensed or registered or entitled to practice and practicing as such under the laws of the State,
appointed by the Agency, and who, or each of whom:
(a) is in fact independent and not under the domination of the Agency;
,
(b)
does not have any substantial interest, direct or indirect, with the Agency; and
(c) is not connected with the Agency as an officer or employee of the Agency, but
who may be regularly retained to make reports to the Agency.
"Insurer" means
assignee thereof.
or any successor thereto or
"Interest Pavment Date" shall have the meaning set forth in the Indenture.
"Loan" means the loan made to the Agency by the Authority pursuant to Section 2.01
with a portion of the proceeds of the Bonds.
"Loan Aqreement" means this Loan Agreement by and between the Agency and the
Authority, as originally entered into or as amended or supplemented pursuant to the provisions
hereof.
"Loan Fund" means the fund by that name established by the Indenture.
"Loan Pavment" means a scheduled payment on the Loan as set forth in Section 2.02.
"Plan Limitations" means the limitations contained in the Redevelopment Plan on the
incurrence of the Loan and the repayment of the Loan, including, without limitation, any
limitation on outstanding bonded indebtedness of the Agency.
"Redevelopment Law" means the Community Redevelopment Law of the State,
constituting Part 1 of Division 24 of the Health and Safety Code of the State, and the acts
amendatory thereof and supplemental thereto.
"Redevelopment Plan" means the duly adopted Redevelopment Plan or Redevelopment
Plans authorizing the undertaking of redevelopment activities by the Agency together with any
amendments thereof heretofore or hereafter duly enacted pursuant to the Law.
"Redevelopment Proiect" means the undertaking of the Agency pursuant to a
Redevelopment Plan.
-4-
1-15
"Request of the AQencv" means a request in writing signed by the Executive Director,
Treasurer or Secretary of the Agency or by any other officer of the Agency duly authorized by
the Agency for that purpose.
"Reserve Policy" means the Municipal Bond Debt Service Reserve Policy issued by the
Insurer with respect to the Reserve Account established by the Indenture.
"2005 Bonds" means the $27,020,000 aggregate principal amount of California
Statewide Communities Development Authority 2005 Taxable Revenue Bonds, Series A
(CRNERAF Loan Program) issued pursuant to an Indenture of Trust, dated as of April 1, 2005,
by and between the Authority and the Trustee.
"2005 Loan Aoreement" means the Loan Agreement, dated as of March 1, by and
between the Agency and the Authority, providing for the loan of a portion of the proceeds of the
2005 Bonds to the Agency to be used by the Agency to pay the amount required by Section
33681.15 of the California Health and Safety Code for fiscal year 2005-06 to be paid by the
Agency to the County Auditor for deposit in the Educational Revenue Augmentation Fund
created for such county pursuant to Article 3 (commencing with Section 97) of Chapter 6 of Part
0.5 of Division 1 of the California Revenue and Taxation Code.
Section 1,02. Rules of Construction. All references herein to "Articles," "Sections"
and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Loan
Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Loan Agreement as a whole and not to any particular Article, Section or subdivision
hereof.
Section 1.03. Representations of the Authority. The Authority makes the following
representations as of the date of the execution and delivery of this Loan Agreement as the
basis for the undertakings on its part herein contained (such representations to remain
operative and in full force and effect regardless of the issuance of the Bonds or any
investigations by or on behalf of the Agency or the results thereof):
(a) The Authority is a joint powers authority duly organized and existing under the
laws of the State, and constitutes a political subdivision of the State.
(b) Under the Act, the Authority has the power to enter into the transactions
contemplated by this Loan Agreement and the Indenture and to carry out its obligations
hereunder and thereunder, including the issuance and sale of the Bonds. By proper action, the
Commission of the Authority has duly authorized the execution and delivery by the Authority of
this Loan Agreement and the Indenture, and the issuance and sale of the Bonds by the
Authority.
(c) There is no action, suit, proceeding, inquiry or investigation pending or, to the
knowledge of the Authority, threatened against the Authority by or before any court,
governmental agency or public board or body, which: (i) affects or questions the existence or
the territorial jurisdiction of the Authority or the title to office of any member of the Authority; (ii)
affects or seeks to prohibit, restrain or enjoin the execution and delivery of this Loan Agreement
or the Indenture, or the issuance, execution or delivery of the Bonds; (iii) affects or questions
the validity or enforceability of this Loan Agreement, the Indenture or the Bonds; or (iv)
questions the power or authority of the Authority to perform its obligations under this Loan
Agreement, the Indenture or the Bonds or to carry out the transactions contemplated by this
Loan Agreement, the Indenture or the Bonds.
-5-
1-16
(d) Neither the execution and delivery of this Loan Agreement nor the
consummation of the transactions herein or therein contemplated nor compliance with the terms
and provisions hereof or thereof, conflicts with or results or will result in a breach of any of the
terms, conditions or provisions of any law, order, rule, regulation, writ, injunction or decree of
any court or governmental authority, or any other agreement or instrument to which the
Authority is a party, or to or by which it or its assets are subject or bound, or constitutes or will
constitute a default thereunder, or results or will result in the creation or imposition of any lien of
any nature whatsoever upon any of its property or assets pursuant to the terms of any such
agreement or instrument except the liens created by this Loan Agreement.
(e) No authorization, consent, approval, order, registration, declaration or
withholding of objection on the part of, or filing of or with any governmental authority, not
already obtained or made, is required for the execution and delivery of this Loan Agreement or
the Indenture or the issuance of the Bonds or the performance of the terms and provisions
hereof or thereof by the Authority.
Section 1.04. Representations of the Agency. The Agency makes the following
representations as of the date of the execution and delivery of this Loan Agreement as the
basis for the undertakings on its part herein contained (such representations to remain
operative and in full force and effect regardless of the issuance of the Bonds or any
investigations by or on behalf of the Authority or the results thereof):
(a) The Agency is a public body, corporate and politic, duly organized and existing
under the Redevelopment Law.
(b) The Agency has the power to enter into the transactions contemplated by this
Loan Agreement and to carry out its obligations hereunder. By proper action, the Agency has
duly authorized the execution and delivery of this Loan Agreement. The officers of the Agency
executing this Loan Agreement are duly and properly in office and are fully authorized to
execute this Loan Agreement.
(c) The incurrence and repayment of the Loan does not, and will not, violate any
Plan Limitations.
(d) This Loan Agreement, when assigned to the Trustee pursuant to the Indenture,
will constitute the legal, valid and binding agreements of the Agency enforceable against the
Agency by the Trustee in accordance with its terms for the benefit of the owners of the Bonds,
and the Insurer and any rights of the Authority and obligations of the Agency not so assigned to
the Trustee constitute the legal, valid, and binding agreements of the Agency enforceable
against the Agency by the Authority in accordance with its terms; except in each case as
enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement
of creditors' rights generally, by the application of equitable principles regardless of whether
enforcement is sought in a proceeding at law or in equity and by public policy.
(e) There is no action, suit, proceeding, inquiry or investigation pending or, to the
knowledge of the Agency, threatened against the Agency by or before any court, governmental
agency or public board or body, which (i) affects or seeks to prohibit, restrain or enjoin the
execution and delivery of this Loan Agreement (ii) affects or questions the validity or
enforceability of this Loan Agreement or (iii) questions the power or authority of the Agency to
perform its obligations under this Loan Agreement or to carry out the transactions contemplated
by this Loan Agreement.
-6-
1-17
(f) Neither the execution and delivery of this Loan Agreement nor the
consummation of the transactions herein or therein contemplated nor compliance with the terms
and provisions hereof or thereof, conflicts with or results or will result in a breach of any of the
terms, conditions or provisions of any law, order, rule, regulation, writ, injunction or decree of
any court or governmental agency, or any other agreement or instrument to which the Agency
is a party, or to or by which it or its assets are subject or bound, or constitutes or will constitute
a default thereunder, or results or will result in the creation or imposition of any lien of any
nature whatsoever upon any of its property or assets pursuant to the terms of any such
agreement or instrument.
(g) No authorization, consent, approval, order, registration, declaration or
withholding of objection on the part of, or filing of or with any governmental agency, not already
obtained or made, is required for the execution and delivery of this Loan Agreement or the
performance of the terms and provisions hereof by the Agency.
-7-
1-18
ARTICLE II
THE LOAN; ESTABLISHMENT OF FUNDS
Section 2.01. Authorization Pursuant to Section 33601 and Section 33681.15 of the
Redevelopment law and under and subject to the terms of this Loan Agreement, the Indenture,
the Bond Law and the Redevelopment Law, the Authority agrees to lend to the Agency on the
Closing Date, a portion of the proceeds of the Bonds in the aggregate principal amount of
Million Hundred Thousand Dollars ($[Loan Amount]), which amount
includes the Agency's pro rata share of (i) the underwriter's discount on the sale the Bonds, (ii)
the premium for the Bond Insurance Policy and the Reserve Policy and (Iii) Costs of Issuance of
the Bonds and which amount is the aggregate principal amount of the Loan. The Agency
agrees to repay the Loan by causing all payments when due to be made directly to the Trustee
for the account of the Authority under the Indenture. This Loan Agreement constitutes a
continuing agreement by the Agency with the Authority to secure the full and final payment of
the Loan, subject to the covenants, agreements, provisions and conditions herein contained.
Section 2.02. Terms of Loan.
(a) The principal amount of the Loan and the interest thereon shall be payable in
installments from any available moneys of the Agency not obligated for other uses, each March
1, and November 1, commencing November 1, 2006, in each of the years and in the amounts,
as follows:
Date
Loan Pavrnent
Date
Loan Pavrnent
[To Come]
-8-
1-19
.
......
(b) Interest on each installment of principal of the Loan has been calculated at the
annual interest rate payable by the Authority on the Bonds on the basis of a 360-day year of
twelve 30-day months, and shall accrue on the unpaid principal of the Loan from the Closing
Date, but not including the date with respect to which such installment of principal is payable.
Interest on the Loan shall be payable on the dates specified above. Any installment of principal
or interest which is not paid when due shall, to the extent permitted by law, continue to accrue
interest from and including the date with respect to which such principal or interest is payable to
but not including the date of actual payment.
(c) Payments on the Loan shall include prompt payment of any additional amounts
payable with respect to the Reserve Policy because of the failure of the Agency to timely pay
any payment pursuant to this Loan Agreement and such failure results in a draw on the
Reserve Policy, all as the payment of any such additional amounts are provided for in the
Reserve Policy and the Indenture and as shall be invoiced for payment to the Agency by the
Trustee].
(d) Payments on the Loan shall be payable by the Agency to the Trustee, as
assignee of the Authority under the Indenture, in immediately available funds which constitute
lawful money of the United States of America.
Section 2.03. No Prepayment. The Loan is not subject to early prepayment by the
Agency.
Section 2.04. Application of Loan Proceeds and Certain Other Moneys. On the
Closing Date, the Authority shall cause the Trustee to disburse the proceeds of the Loan in
accordance with the provisions of the Indenture, as follows:
(a) The Trustee shall deposit the Agency's pro rata share of the Costs of
Issuance in the amount of $ in the Costs of Issuance Fund (which
amount, together with $ , being the Agency's pro rata share of the
credit for the payment by the Original Purchaser to the Insurer of the Bond Insurance
Policy and Reserve Policy premiums, represents a total credit of the Agency's pro rata
share to the Costs of Issuance Fund of $ ); and
(b) The Trustee shall from the amount of Bond proceeds deposited in the
Loan Fund pay the amount of $ to the County
Auditor, being the amount of the Agency's ERAF Payment.
[Include Reserve Account deposit - if reserve surety bond or reserve policy is
not available.]
Section 2.05. Validity of Loan. The validity of the Loan shall not be dependent upon
the completion of the Redevelopment Project or upon the performance by any person of its
obligation with respect to the Redevelopment Project.
-9-
1-20
ARTICLE III
OTHER COVENANTS OF THE AGENCY
Section 3.01. Punctual Payment. The Agency will punctually payor cause to be paid
all amounts payable under the terms of this Loan Agreement in strict conformity with the terms
of this Loan Agreement, and it will faithfully observe and perform all of the conditions,
covenants and requirements of this Loan Agreement.
Section 3.02. Payment By County Auditor. The Agency acknowledges that Section
33681.15 of the Redevelopment Law provides that, in the event that the Agency shall fail to pay
timely the Loan in accordance with the schedule of Loan Payments provided by the Trustee to
the County Auditor (as such schedule is set forth in Section 2.02), the Trustee shall cause the
County Auditor to pay the amount of the delinquency from property taxes, as provided in
Section 33681.15 of the Redevelopment Law. The Agency further acknowledges that Section
3.05 of the Indenture provides that the Trustee, after ten (10) Business Days of the date upon
which the Agency shall be delinquent in the timely payment of a Loan Payment (and if such
Loan Payment has not been received by the Trustee by the end of such ten (10) Business Day_
period), the Trustee shall promptly notify the County Auditor, by certified mail, of the fact and
amount of such Loan Payment that is past due and shall direct such County Auditor to pay such
amount to the Trustee from the next available property taxes of the applicable city or county, all
as provided in Section 33681.15 of the Redevelopment Law. Any such payment by the County
Auditor on behalf of the Agency shall be deemed to be timely payment by the Agency
hereunder and shall not give rise to an Event of Default hereunder.
Payment of the loan made to the Agency pursuant to the 2005 Loan Agreement with the
proceeds of a portion of the 2005 Bonds is secured by a first pledge and lien on the property
taxes of the City on a parity with the first pledge and lien on the property taxes of the City
securing payment of the Loan Payments, as further provided in said Section 33681.15. [Not in
Alameda CIC Loan Agreement]
Section 3.03. Financial Statements, Annual Budgets; Continuing Disclosure. The
Insurer shall be provided with the following information by the Agency: (a) Annual audited
financial statements within 180 days after the end of the Agency's Fiscal Year (together with a
certification of the Agency that it is not aware of any default or Event of Default under the
Indenture) and the Agency's annual budget within 60 days after the approval thereof, or such
later date as is acceptable to the Insurer, together with such other information, data, or reports
as the Insurer may reasonably request from time to time.
(b) If the Agency shall have knowledge of any "material event" relating to the Agency
within the meaning of such term in Rule 15c2-12 of the Security and Exchange Commission,
the Agency shall promptly file a notice of such material event in accordance with the
requirements of Section 5 of the Continuing Disclosure Agreement.
Section 3.04. Protection of Security and Rights. The Agency will preserve and
protect the security of the Loan and to contest any action affecting the validity of this Loan
Agreement. From and after the Closing Date, the Loan shall be incontestable by the Agency.
Section 3.05. Further Assurances. The Agency will adopt, make, execute and deliver
any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Loan
Agreement and for the better assuring and confirming unto the Trustee, the Authority and the
Owners of the Bonds of the rights and benefits provided in this Loan Agreement.
-10-
1-21
, '
/
".,,1\ J )
,i \~
-11-
1-22
ARTICLE IV
EVENTS OF DEFAULT AND REMEDIES
Section 4.01. Events of Default. (a) The following events shall constitute Events of
Default hereunder with respect to the Loan:
(i) Failure by the Agency to pay when due any amounts required to be paid
hereunder with respect to the Loan.
(ii) Any representation or warranty made by the Agency hereunder shall
prove to have been incorrect in any material respect when made.
(iii) Failure by the Agency to observe and perform any of the covenants,
agreements or conditions on its part contained in this Loan Agreement with respect to
the Loan and any Parity Debt, other than as referred to in the preceding clause (I), for a
period of thirty (30) days after written notice specifying such failure and requesting that it
be remedied has been given to the Agency by the Insurer or the Trustee; provided,
however, that if in the reasonable opinion of the Agency the failure stated in such notice
can be corrected, but not within such thirty (30) day period, the Trustee shall not
unreasonably withhold its consent to an extension of such time if corrective action is
instituted by the Agency within such thirty (30) day period and diligently pursued until
such failure is corrected; provided, however, that the period for cure cannot exceed 60
days without Insurer's consent.
(iv) The filing by the Agency of a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the United
States of America, or if a court of competent jurisdiction shall approve a petition, filed
with or without the consent of the Agency, seeking reorganization under the federal
bankruptcy laws or any other applicable law of the United States of America, or if, under
the provisions of any other law for the relief or aid of debtors, any court of competent
jurisdiction shall assume custody or control of the Authority or of the whole or any
substantial part of its property.
(b) If an Event of Default has occurred and is continuing under Section 4.01 (a), the
Trustee may (with the consent of the Insurer), or at the written direction of the Insurer or the
Owners of a majority in aggregate principal amount of the Outstanding Bonds (with the consent
of the Insurer) shall, subject to the provisions of the Indenture, exercise any remedies available
to the Trustee in law or at equity. Notwithstanding anything herein or in the Indenture to the
contrary, neither the Authority, the Insurer nor the Trustee may accelerate the installment
payments on the Loan or otherwise declare any installment payments on the Loan not then in
default to be immediately due and payable.
Section 4.02. Application of Funds Upon Default. Upon default, all amounts
received by the Trustee pursuant to any right given or action taken by the Trustee under the
provisions of this Loan Agreement shall be applied by the Trustee as provided in the Indenture.
Section 4.03. No Waiver. Nothing in this Article IV or in any other provision of this
Loan Agreement, shall affect or impair the obligation of the Agency, which is absolute and
unconditional, to pay the Loan Payments or affect or impair the right of action, which is also
absolute and unconditional, of the Trustee to institute suit to enforce such payment by virtue of
the contract embodied in this Loan Agreement.
-12-
1-23
A waiver of any default by the Trustee shall require the Insurer's consent and shall not
affect any subsequent default or impair any rights or remedies on the subsequent default. No
delay or omission of the Trustee to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver of any such default or an
acquiescence therein, and every power and remedy conferred upon the Trustee by the
Redevelopment Law or by this Article IV may be enforced and exercised from time to time and
as often as shall be deemed expedient by the Trustee.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be
abandoned or determined adversely to the Trustee, the Agency, the Insurer and the Trustee
shall be restored to their former positions, rights and remedies as if such suit, action or
proceeding had not been brought or taken.
Section 4.04. Remedies Not Exclusive. No remedy herein conferred upon or
reserved to the Trustee is intended to be exclusive of any other remedy. Every such remedy
shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without
exhausting and without regard to any other remedy conferred by the Redevelopment Law or
any other law.
-13-
1-24
ARTICLE V
MISCELLANEOUS
Section 5.01. Benefits Limited to Parties. Nothing in this Loan Agreement,
expressed or implied, is intended to give to any person other than the Agency, the Trustee, the
Insurer and the Authority, any right, remedy or claim under or by reason of this Loan
Agreement. All covenants, stipulations, promises or agreements in this Loan Agreement
contained by and on behalf of the Agency shall be for the sole and exclusive benefit of the
Authority, the Insurer and of the Trustee acting as trustee for the benefit of the Owners of the
Bonds.
Section 5.02. Successor is Deemed Included in All References to Predecessor.
Whenever in this Loan Agreement either the Agency, the Authority, the Insurer 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 Loan Agreement contained by or on
behalf of the Agency, the Authority, the Insurer or the Trustee shall bind and inure to the benefit
of the respective successors thereof whether so expressed or not.
Section 5.03. Discharge of Loan Agreement. If the Agency shall pay and discharge
the indebtedness evidenced by the Loan in full, in anyone or more of the following ways:
(a) by well and truly paying or causing to be paid all installment payments on the
Loan, as and when the same become due and payable;
(b) by irrevocably depositing with the Trustee, in trust, at or before maturity, cash in
an amount which, together with any available amounts then on deposit in any of the funds and
accounts established pursuant to the Indenture, is fully sufficient to pay all installment payments
on the Loan, as and when the same become due and payable; or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in trust,
Defeasance Obligations (as defined in the Indenture) in such amount as an Independent
Accountant shall determine will, together with the interest to accrue thereon and any available
moneys then on deposit in the funds and accounts established pursuant to the applicable
Indenture, be fully sufficient to pay all installment payments on the Loan, as and when the same
become due and payable;
then, at the election of the Agency but only if all other amounts then due and payable
hereunder and the Agency's share of amounts due or to become due to the Insurer pursuant to
the Indenture shall have been paid or provision for their payment made, all obligations of the
Trustee, the Authority and the Agency under this Loan Agreement with respect to the Loan shall
cease and terminate, except only the obligation of the Agency to payor cause to be paid to the
Trustee and the Authority, from the amounts so deposited with the Trustee or such other
fiduciary, all sums due with respect to the Loan and all expenses and costs of the Trustee and
the Authority and all sums due the Insurer. Notice of such election shall be filed with the
Authority, the Insurer and the Trustee.
Section 5.04. Rebate of Surplus Funds. (a) Promptly following each August 1,
commencing August 1, 2006, after having paid or provided for payment of all amounts then due
and payable hereunder or under the Indenture, any surplus funds remaining in the Revenue
Fund established by the Indenture shall be rebated to the Agency and to all other
redevelopment agencies that received loans from the proceeds of the Bonds, pro rata based on
the respective principal amounts of such loans, including the Loan to the Agency.
-14-
1-25
(b) Upon payment of the Bonds in full and after having paid or provided for payment of
all amounts payable to the Trustee and the Insurer under the Indenture, any surplus funds
remaining in the funds and accounts established by the Indenture shall be rebated to the
Agency and to all other redevelopment agencies that received loans from the proceeds of the
Bonds, pro rata based on the respective principal amounts of such loans, including the Loan to
the Agency.
Section 5.05. Amendment. This Loan Agreement may be amended by the parties
hereto but only under the circumstances set forth in, and in accordance with, the provisions of
Section 5.07 of the Indenture.
Section 5.06. Waiver of Personal Liability. No member, officer, agent or employee of
the Authority or any member, officer, agent or employee of the Agency shall be individually or
personally liable for the payment of any principal or interest on the Bonds or any other sum
hereunder or be subject to any personal liability or accountability by reason of the execution and
delivery of this Loan Agreement; but nothing herein contained shall relieve any such member,
officer, agent or employee from the performance of any official duty provided by law or by this
Loan Agreement.
Section 5.07. Indemnification of Authority and Trustee.
(a) To the fullest extent permitted by law, the Agency agrees to indemnify, hold
harmless and defend the Authority, the Trustee, and each of their respective officers, governing
members, directors, officials, employees, attorneys and agents (collectively, the "Indemnified
Parties"), against any and all losses, damages, claims, actions, liabilities, costs and expenses
of any conceivable nature, kind or character (including, without limitation, reasonable attorneys'
fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge
judgments) to which the Indemnified Parties, or any of them, may become subject under or any
statutory law (including federal or state securities laws) or at common law or otherwise, arising
out of or based upon or in any way relating to:
(i) any act or omission of the Agency or any of its agents, contractors,
servants, employees, tenants) or licensees in connection with the Loan or this Loan
Agreement; or
(Ii) any untrue statement or misleading statement or alleged untrue
statement or alleged misleading statement of a material fact relating to the Agency
contained in the Official Statement approved by the Agency for distribution in connection
with the sale of the Bonds or contained in any continuing disclosure with respect to the
Bonds provided by the Agency, or any omission or alleged omission from such Official
Statement or such continuing disclosure of any material fact relating to the Agency
necessary to be stated therein in order to make the statements relating to the Agency
made therein, in the light of the circumstances under which they were made, not
misleading;
except (A) in the case of the foregoing indemnification of the Trustee or any of its respective
officers, members, directors, officials, employees, attorneys and agents, to the extent such
damages are caused by the negligence or willful misconduct of such Indemnified Party; or (B)
in the case of the foregoing indemnification of the Authority or any of their officers, members,
directors, officials, employees, attorneys and agents, to the extent such damages are caused
by the negligence or willful misconduct of such Indemnified Party. In the event that any action
-15-
1-26
or proceeding is brought against any Indemnified Party with respect to which indemnity may be
sought hereunder, the Agency, upon written notice from the Indemnified Party, shall assume
the investigation and defense thereof, including the employment of counsel selected by the
Indemnified Party, and shall assume the payment of all expenses related thereto, with full
power to litigate, compromise or settle the same in its sole discretion; provided that the
Indemnified Party shall have the right to review and approve or disapprove any such
compromise or settlement. Each Indemnified Party shall have the right to employ separate
counsel in any such action or proceeding and participate in the investigation and defense
thereof, and the Agency shall pay the reasonable fees and expenses of such separate counsel;
provided, however, that such Indemnified Party may only employ separate counsel at the
expense of the Agency if in the judgment of such Indemnified Party a conflict of interest exists
by reason of common representation or if all parties commonly represented do not agree as to
the action (or inaction) of counsel.
(b) The rights of any persons to indemnity hereunder and rights to payment of fees
and reimbursement of expenses pursuant to this Section 3.06 shall survive the final payment or
defeasance of the Bonds and in the case of the Trustee any resignation or removal. The
provisions of this Section shall survive the termination of this Loan Agreement.
Section 5.08. Notices. Any notice, request, complaint, demand, communication or
other paper shall be sufficiently given and shall be deemed given when delivered or mailed by
first class mail, postage prepaid, or sent by telecopy, addressed as follows:
If to the Agency:
Redevelopment Agency of the City of Chula
Vista
276 Fourth Avenue
Chula Vista, CA 91910
If to the Authority:
California Statewide Communities
Development Authority
1100 K Street
Sacramento, California 95814
Attention: Treasurer
If to the Trustee:
Wells Fargo Bank, National Association
707 Wilshire Boulevard, 17'" Floor
Los Angeles, California 90017
Attention: Corporate Services
If to the Insurer:
[To Come]
Section 5.09. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase
of this Loan Agreement shall for any reason be held illegal, invalid or unenforceable, such
holding shall not affect the validity of the remaining portions of this Loan Agreement. The
Agency and the Authority hereby declare that it would have entered into this Loan Agreement
and each and every other Section, paragraph, sentence, clause or phrase hereof and
authorized the Loan irrespective of the fact that anyone or more Sections, paragraphs,
sentences, clauses, or phrases of this Loan Agreement may be held illegal, invalid or
unenforceable.
-16-
1-27
Section 5.10. Governing Law. This Agreement shall be construed and governed in
accordance with the laws of the State of California.
Section 5.11. Term of this Loan Agreement. This Loan Agreement shall be in full
force and effect from its date to and including such date as all of the obligations of the Agency
incurred under this Loan Agreement shall have been fully paid (or provision for such payment
shall have been made as provided in this Loan Agreement).
-17-
1-28
IN WITNESS WHEREOF, the REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA and the CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY,
have caused this Loan Agreement to be signed by their respective officers, all as of the day and
year first above written.
REDEVELOPMENT AGENCY OF THE
CITY OF CHULA VISTA
BY:
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
BY:
MEMBER
-18-
1-29
EXHIBIT A
California Statewide Communities Development Authority
2006 Taxable Revenue Bonds, Series A
(CRAlERAF Loan Program)
OFFICER'S CERTIFICATE REGARDING CRAlERAF LOAN PROGRAM
RECITALS:
A. The California Statewide Communities Development Authority (the "Authority") is a
joint powers authority authorized under Section 33681.15 of the California Health and Safety
Code to issue bonds, notes or other obligations to provide funds to make loans to
redevelopment agencies to make the payments required by Section 33681.12 of the California
Health and Safety Code, namely payments to the applicable county auditor for deposit in the
county's Educational Revenue Augmentation Fund (the "ERAF Payment");
B. In order to make loans for such purpose to redevelopment agencies, the Authority
has determined to issue its California Statewide Communities Development Authority 2006
Taxable Revenue Bonds, Series A (CRAlERAF Loan Program) (the "Bonds"); and
C. The Redevelopment Agency of the City of Chula Vista (the "Agency") is a public
body, corporate and politic, duly established and authorized to transact business and exercise
powers under and pursuant to the provisions of Part 1 of Division 24 of the Health and Safety
Code of the State of California (the "Redevelopment Law"); and the Agency in order to make its
ERAF Payment desires to obtain a loan (the "Loan") from the Authority from the proceeds of the
Bonds pursuant to the terms and conditions set forth in the Loan Agreement, dated as of April
1, 2006, by and between the Agency and the Authority (the "Loan Agreement"), the form of
which Loan Agreement is on file with the Secretary of the Agency;
The undersigned hereby states and certifies:
(i) that the undersigned is the duly appointed, qualified and acting [insert Executive
Director or Treasurer] of the Redevelopment Agency of the City of Chula Vista, a public body,
corporate and politic, duly organized and existing under the laws of the State of California (the
"Agency") and as such, is familiar with the facts herein certified and is authorized to certify the
same;
(ii) that the Agency has been duly created and authorized to transact business and
exercise its powers under and pursuant to the Redevelopment Law and no action has been
taken by the City Council (the "Council") of the City of Chula Vista, California (the "City")
pursuant to the Redevelopment Law to dissolve said Agency or to suspend its powers;
(Iii) that, by all necessary action, the Agency has duly authorized and approved the
execution and delivery of, and the performance by the Agency of the obligations on its part
contained in, the Loan Agreement;
A-1
1-30
(iv) that no action is pending attacking or otherwise questioning the validity of the
Agency or the authority of the Agency to obtain the Loan and to enter into the Loan Agreement
or the authority of the City to approve the obtaining of the Loan by the Agency;
(v) that the Agency and the City Council of the City have duly adopted the following
respective resolutions relating to the Loan and the Loan Agreement (collectively, the
"Resolutions"), which Resolutions were duly adopted by the members of the Agency or the City
Council, as applicable, at open public meetings which were called, noticed and conducted in
accordance with all applicable requirements of California law, at which a quorum was present
and acting throughout, and the Resolutions have not been amended, modified, supplemented
(except as noted below), rescinded or repealed and are in full force and effect as of the date
hereof:
(a) Resolution No. , entitled "A Resolution of the Redevelopment
Agency of the City of Chula Vista Authorizing And Directing Execution Of Loan
Agreement Relating To The Issuance Of Certain Bonds By The California Communities
Statewide Development Authority, Approving Official Statement Relating To Such Bonds
And Authorizing And Approving Other Matters Relating Thereto", adopted March _,
2006; and
(b) Resolution No. , entitled "A Resolution of the City Of Chula Vista
Approving the Borrowing of Funds By The Redevelopment Agency of the City of Chula
Vista From the California Communities Statewide Development Authority An Providing
Other Matters Relating Thereto", adopted March _,2006;
(vi) that the representations and warranties of the Agency contained in the approved
form of the Loan Agreement are true and correct in all material respects as of the date hereof
and the Agency and the Agency shall, concurrently with the delivery of the Bonds, reaffirm that
such representations and warranties are true and correct in all material respects as of the date
of delivery of the Bonds;
(vii) that, as of the date hereof, the information relating to the Agency and the City in
the form of the approved Preliminary Official Statement relating to the Bonds (the "Official
Statement") does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(viii) that the Agency shall, concurrently with the delivery of the Bonds, reaffirm that no
event affecting the Agency or the City has occurred since the date hereof which has not been
disclosed therein or in any supplement or amendment thereto which event should be disclosed
in the final Official Statement in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ix) that the Agency's Low and Moderate Income Housing Fund established pursuant
to Section 33334.3 of the Redevelopment Law does not, on, the date hereof and will not on the
date of delivery of the Bonds, contain an "excess surplus" (within the meaning of Section
33334.12 of the Redevelopment Law) that would cause the Agency to be subject to the
sanctions contained in Section 33334.12(e)(1) of the Redevelopment Law; and
A-2
1-31
(x) that the Agency does not on the date hereof have "major audit violations" (within
the meaning of Section 33080.8(i) of the Redevelopment Law) so as to be subject to a court
order prohibiting the activities set forth in Section 33080.8(e)(3) of the Redevelopment Law.
Dated: March _' 2006
Redevelopment Agency of the City of Chula
Vista
By
[Executive Director or Treasurer]
A-3
1-32