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Home My WebLink About2005-09-28 e-packet AGENDA REDEVELOPMENT AGENCY CITY OF SOUTH SAN FRANCISCO REGULAR MEETING MUNICIPAL SERVICE BUILDING COMMUNITY ROOM WEDNESDAY, SEPTEMBER 28, 2005 7:00 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Agency business, we proceed as follows: The regular meetings of the Redevelopment Agency are held on the second and fourth Wednesday of each month at 7:00 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the Board on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Community Room and submit it to the Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents Redevelopment Agency from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address for the Minutes. COMMENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER. Thank you for your cooperation. The Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Board action. RA YMOND L. GREEN Chair JOSEPH A. FERNEKES Vice Chair RICHARD A. GARBARINO, SR. Boardmember PEDRO GONZALEZ Boardmember KARYL MATSUMOTO Boardmember RICHARD BATTAGLIA Investment Officer SYLVIA M. PAYNE Clerk BARRY M. NAGEL Executive Director STEVEN T. MATTAS Counsel PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT IS A V AILABLE FOR USE BY THE HEARING-IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS CALL TO ORDER ROLL CALL AGENDA REVIEW PUBLIC COMMENTS CONSENT CALENDAR I. Motion to approve the minutes of August 17 and August 24, 2005 2. Motion to confirm expense claims of September 28, 2005 3. Motion to authorize issuance of construction bid for rehabilitation of property at 380 Alta Vista Drive 4. Resolution amending consultant agreement with Pinnacle DB, Inc., for Fire Station 61 and approve budget amendment related thereto ADJOURNMENT REGULAR REDEVELOPMENT AGENCY MEETING AGENDA SEPTEMBER 28, 2005 PAGE 2 ~'t\\ ~ ~ (0 (') >-0 ... ~ ~ v c C:4lIFO~~\.~ Redevelopment Agency Staff Report RDA AGENDA ITEM #3 DATE: TO: FROM: SUBJECT: September 28, 2006 Redevelopment Agency Board Marty VanDuyn, Assistant Executive Director AUTHORIZATION TO ISSUE CONSTRUCTION BID FOR 380 ALTA VISTA RECOMMENDATION It is recommended that the Redevelopment Agency Board review preliminary plans for the proposed rehabilitation of 380 Alta Vista and authorize issuance of a public works bid package for the construction to remodel the residential property owned by the Agency. BACKGROUND/DISCUSSION The Redevelopment Agency closed escrow and assumed ownership of this property in March of this year. Staff is currently finalizing the "as built" plans and proposed improvements in order to issue a public works bid package for the reconstruction. The proposed improvement plans are provided in this staff report for the Agency Board to review and provide direction to staff regarding the proposed design. The Board is also being asked to authorize the bid package for construction which is anticipated to be issued the later part of October with bids received the later part of November. Construction can begin immediately upon selection of the renovation contractor. That selection will be brought back to the Agency Board for approval of the contract. Much of the proposed work involves the interior of the property and could be initiated during the winter months. Earlier this summer, the Agency hired a contractor to clean up the property by removing huge amounts of debris scattered throughout the site. Additionally, old tree stumps and plywood covering doors and windows have been removed and the doors re-keyed for access. The contractor is preparing "as built" drawings which have taken longer than originally expected because of the former illegal units in the lower level. Selective demolition has taken place to fmd plumbing and electric lines and determine which are bearing walls in the lower level. More extensive demolition of the lower level is taking place this week to fmalize the "as built" plans and to continue tracking utility lines and asbestos pipes from the heating system which had been covered by illegal construction. Once the extent of existing toxic materials is determined, and their required abatement known, the plans and bid package can be fmalized. The proposed renovation will result in a single family dwelling consisting offour bedrooms, four and a half bathrooms, living room, dining room, study, family room, enlarged kitchen, laundry facility, a total of four garage spaces and plenty of storage. Staff Report Subject: 380 Alta Vista Authorization to Bid Page 2 There was considerable thought given to creating an in-law unit at the lower level due to the extensive square footage of the building and overall cost of the property. However, it was decided to convert the property to a single family home because it would not be owner occupied; a requirement of in-law unit regulations. The fac;ade of the house will be updated with a new gable roof replacing the existing hip roof and the decks will be removed. Both existing decks exhibit dry rot and are not safe, nor do they add aesthetic value to the property. The front entry will also be re-designed to create a more open space with a pitched roof clearly indicating the front door which now is difficult to see. The kitchen was enlarged to modernize it, as were the bathrooms, and the interior stairways were redesigned to use space more effectively. The lower level will be abated of all illegal uses and will contain a new bedroom with bath, a family room, and ample storage. Additionally, the house is now under parked by zoning standards and, since there is more than sufficient space available, two new garages will be added at the lower level with entrance off Conmur Street which already has curb cuts. The perspective drawing in the staff report is an artist rendering of what the residence could look like with the proposed improvements. The drawing and draft plans were reviewed by the Design Review Board (DRB) on September 20th and the Board concluded that the design was attractive and they further indicated a preference for light colors on the house such as two tones of tan or white. They concurred that the proposed treatment of the brick and concrete fencing should be covered in stucco as much as economically feasible for a cleaner and more updated appearance and they approved the gable roof line for the house and entry area. The project will return to DRB for review once colors are selected and for advice regarding landscaping materials that will flourish in this area. One design feature the DRB liked was the sunroom on the Conmur side of the house. Funds permitting, this can be included in the final plans, should the Agency Board agree to include the sunroom which is proposed to be glass enclosed. CONCLUSION Once the bids are reviewed and a contractor selected, the Redevelopment Agency Board will review and authorize the construction contract for this residential renovation. It is recommended that the Redevelopment Agency Board authorize staff to proceed and issue a public works construction bid package when the plans are finalized. By: Marty VanDuyn Assistant Executive Approv~.t ~C' f M. Nage Executive Dire: - - Attachment: Plans and perspective drawing ~'t\l s~ ~-~~'\ ~ . ~~\ o . (') >-0 .....j ~ ~ u . c C'4.lIFO-p...~\~ Redevelopment Agency Staff Report RDA AGENDA ITEM #4 DATE: TO: FROM: SUBJECT: September 28, 2005 Redevelopment Agency Board Marty Van Duyn, Assistant Executive Director AMENDMENT TO THE CONSULTANT AGREEMENT WITH PINNACLE DB, INC. FOR FIRE STATION 61. RECOMMENDATION It is recommended that the Redevelopment Agency Board adopt a Resolution: a) approving the amendment to the Consultant Agreement with Pinnacle DB, Inc. to include the design services for the new Classroom/Emergency Operations Center (EOC); and the new Fire Department Training Tower in an amount not to exceed $72,900.00 for a new contract amount of $249,325.00; and b) amending the budget to appropriate $72,900.00 to the capital budget, funded from the Downtown Redevelopment Fund reserves. BACKGROUNDfDISCUSSION The City has purchased a 1.94-acre property at 480 North Canal Street (previously the Black Mountain Water site) with the intent of renovating the existing two-story structure to accommodate the City's new Fire Station 61. The new station will also accommodate the Fire Department's Administration and Fire Prevention offices. On December 8, 2004, the City awarded the new Fire Station 61 design services contract to Pinnacle DB, Inc. of Burlingame, CA. On August 17, 2005 the City Council directed staff to proceed with obtaining a proposal from Pinnacle DB, Inc. to provide design services for a new Emergency Operation Center (EOC)/ Classroom and a Training Tower. The proposed amendment to the Consultant Agreement includes programming, schematics, and preliminary cost estimates, design development, construction documents and final cost estimates. The fees for this contract amendment are based on time and materials and are not to exceed $72,900.00 for a total contract amount of$ 249,325.00 It is anticipated that a Consultant Agreement for construction management will be executed with Pinnacle DB following completion of the design phase. The scope of services for construction management will be based on the scope and estimates for the construction contract for the EOC/classroom building; and the training tower. Staff Report Subject: AMEND THE CONSULTANT AGREEMENT WITH PINNACLE DB, INC. TO INCLUDE THE DESIGN SERVICES FOR THE NEW EMERGENCY OPERATIONS CENTER AND CLASSROOM BUILDING; AND THE NEW FIRE DEPARTMENT TRAINING TOWER. Page 2 FUNDING The Redevelopment Agency Board has authorized $4,200,000.00 for the design and construction of the New Fire Station 61 in the 2005-2006 Capital Improvement Program. The additional amount of $72,900.00 is the funding required from the Redevelopment Agency reserves to fund this amendment. Marty VanDuyn Assistant Executive APproved:~ ' C~ ./ arryM. Na el Executive Director By: Attachment: Resolution Standard Contractual Services Agreement RESOLUTION NO. REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING THE AMENDMENT TO THE CONSULTANT AGREEMENT WITH PINNACLE DB, INC., FOR FIRE STATION 61 AND APPROVING A BUDGET AMENDMENT RELATED THERETO WHEREAS, staff recommends the authorization of an amendment to the consulting services agreement with Pinnacle DB, Inc. to include design services for the new Emergency Operations Center and Classroom Buildings and the new Training Tower Building for the Fire Department in an amount not to exceed $72,900.00 for a new contract amount of $249,325.00; and, WHEREAS, staff recommends that the Redevelopment Agency/City Council also approve a budget amendment to appropriate $73,000 from the RDA undesignated reserve fund to the 2005- 2006 RDA budget to fund the design costs specified above. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of South San Francisco that the Agency hereby authorizes an amendment to the Consultant Agreement with Pinnacle DB, Inc. to add an amount not to exceed $72,900.00 for additional design services by Pinnacle DB. BE IT FURTHER RESOLVED that the Agency authorizes the Executive Director to execute the Agreement on behalf of the Redevelopment Agency, subject to approval as to form by the Agency Counsel. BE IT FURTHER RESOLVED that the Agency/City Council hereby appropriate $73,000 from the RDA undesignated reserve fund to the 2005-2006 RDA budget. * * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a meeting held on the _ day of , 2005 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk 783794-1 CONSULTING SERVICES AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND PINNACLE DB, INC. THIS AGREEMENT for consulting seNices is made by and between the City of South San Francisco ("City") and Pinnacle DB, Inc. ("Consultant") (together sometimes referred to as the "Parties") as of. December 9th, 2004 (the "Effective Date"). Section 1. SERVICES. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide to City the seNices described in the Scope of Work attached as Exhibit A. attached hereto and incorporated herein, at the time and place and in the manner specified therein. In the event of a conflict in or inconsistency between the terms of this Agreement and Exhibit A, the Agreement shall prevail. 1.1 Term of Services. The term of this Agreement shall begin on the Effective Date and shall end on December 31 st. 2005, and Consultant shall complete the work described in Exhibit A prior to that date, unless the term of the Agreement is otherwise terminated or extended, as provided for in Section 8. The time provided to Consultant to complete the seNices required by this Agreement shall not affect the City's right to terminate the Agreement, as provided for in Section 8. 1.2 Standard of Performance. Consultant shall perform all seNices required pursuant to this Agreement in the manner and according to the standards obseNed by a competent practitioner of the profession in which Consultant is engaged in the geographical area in which Consultant practices its profession. Consultant shall prepare all work products required by this Agreement in a substantial, first-class manner and shall conform to the standards of quality normally obseNed by a person practicing in Consultant's profession. 1.3 AssiQnment of Personnel. Consultant shall assign only competent personnel to perform seNices pursuant to this Agreement. In the event that City, in its sole discretion, at any time during the term of this Agreement, desires the reassignment of any such persons, Consultant shall, immediately upon receiving notice from City of such desire of City, reassign such person or persons. 1.4 Time. Consultant shall devote such time to the performance of seNices pursuant to this Agreement as may be reasonably necessary to meet the standard of performance provided in Section 1.1 above and to satisfy Consultant's obligations hereunder. Section 2. COMPENSATION. City - hereby agrees to pay Consultant a sum not to exceed One Hundred Seventy Six Thousand Four Hundred Twentv Five Dollars ($176,425.00) in accordance with Exhibit B, notwithstanding any contrary indications that may be contained in Consultant's proposal, for seNices to be performed and reimbursable costs incurred under this Agreement. In the event of a conflict between this Agreement and Consultant's proposal, attached as Exhibit 0, regarding the amount of compensation, the Agreement shall prevail. City shall pay Consultant for seNices rendered pursuant to this Agreement at the time and in the manner set forth herein. The payments specified below shall be the only Consulting SeNices Agreement between City of South San Francisco and Pinnacle DB. Inc. December 9, 2005 Page 1 payments from City to Consultant for seNices rendered pursuant to this Agreement. Consultant shall submit all invoices to City in the manner specified herein. Except as specifically authorized by City, Consultant shall not bill City for duplicate seNices performed by more than one person. Consultant and City acknowledge and agree that compensation paid by City to Consultant under this Agreement is based upon Consultant's estimated costs of providing the seNices required hereunder, including salaries and benefits of employees and subcontractors of Consultant. Consequently, the parties further agree that compensation hereunder is intended to include the costs of contributions to any pensions and/or annuities to which Consultant and its employees, agents, and subcontractors may be eligible. City therefore has no responsibility for such contributions beyond compensation required under this Agreement. 2.1 Invoices. Consultant shall submit invoices, not more often than once a month during the term of this Agreement, based on the cost for seNices performed and reimbursable costs incurred prior to the invoice date. Invoices shall contain the following information: · Serial identifications of progress bills; Le., Progress Bill No. 1 for the first invoice, etc.; · The beginning and ending dates of the billing period; · A Task Summary containing the original contract amount, the amount of prior billings, the total due this period, the balance available under the Agreement, and the percentage of completion; · At City's option, for each work item in each task, a copy of the applicable time entries or time sheets shall be submitted showing the name of the person doing the work, the hours spent by each person, a brief description of the work, and each reimbursable expense; · The total number of hours of work performed under the Agreement by Consultant and each employee, agent, and subcontractor of Consultant performing seNices hereunder, as well as a separate notice when the total number of hours of work by Consultant and any individual employee, agent, or subcontractor of Consultant reaches or exceeds 800 hours, which shall include an estimate of the time necessary to complete the work described in Exhibit A; · The Consultant's signature. 2.2 Monthlv Payment. City shall make monthly payments, based on invoices received, for seNices satisfactorily performed, and for authorized reimbursable costs incurred. City shall have 30 days from the receipt of an invoice that complies with all of the requirements above to pay Consultant. 2.3 Final Payment. City shall pay the last 10% of the total sum due pursuant to this Agreement within sixty (60) days after completion of the seNices and submittal to City of a final invoice, if all seNices required have been satisfactorily performed. 2.4 Total Payment. City shall pay for the seNices to be rendered by Consultant pursuant to this Agreement. City shall not pay any additional sum for any expense or cost whatsoever Consulting SeNices Agreement between City of South San Francisco and Pinnacle DB. Inc. December 9,2005 Page 2 incurred by Consultant in rendering services pursuant to this Agreement. City shall make no payment for any extra, further, or additional service pursuant to this Agreement. In no event shall Consultant submit any invoice for an amount in excess of the maximum amount of compensation provided above either for a task or for the entire Agreement, unless the Agreement is modified prior to the submission of such an invoice by a properly executed change order or amendment. 2.5 Hourlv Fees. Fees for work performed by Consultant on an hourly basis shall not exceed the amounts shown on the following fee schedule: 1. President $150.00/hour 2. Project Manager $85.00/hour 3. Clerical $60.00/hour 4. All identified Sub-consultants listed on the Fee Schedule of the Proposal dated September 30, 2004. 2.6 Reimbursable Expenses. Reimbursable expenses are included in the total contract amount. 2.7 Payment of Taxes. Consultant is solely responsible for the payment of employment taxes incurred under this Agreement and any similar federal or state taxes. 2.8 Payment upon Termination. In the event that the City or Consultant terminates this Agreement pursuant to Section 8, the City shall compensate the Consultant for all outstanding costs and reimbursable expenses incurred for work satisfactorily completed as of the date of written notice of termination. Consultant shall maintain adequate logs and timesheets in order to verify costs incurred to that date. 2.9 Authorization to Perform Services. The Consultant is not authorized to perform any services or incur any costs whatsoever under the terms of this Agreement until receipt of authorization from the Contract Administrator. Section 3. FACILITIES AND EQUIPMENT. Except as set forth herein, Consultant shall, at its sole cost and expense, provide all facilities and equipment that may be necessary to perform the services required by this Agreement. City shall make available to Consultant only the facilities and equipment listed in this section, and only under the terms and conditions set forth herein. City shall furnish physical facilities such as desks, filing cabinets, and conference space, as may be reasonably necessary for Consultant's use while consulting with City employees and reviewing records and the information in possession of the City. The location, quantity, and time of furnishing those facilities shall be in the sole discretion of City. In no event shall City be obligated to furnish any facility that may involve incurring any direct expense, including but not limited to computer, long-distance telephone or other communication charges, vehicles, and reproduction facilities. Consulting Services Agreement between City of South San Francisco and Pinnacle DB. Inc. December 9,2005 Page 3 Section 4. INSURANCE REQUIREMENTS. Before beginning any work under this Agreement, Consultant, at its own cost and expense, unless otherwise specified below, shall procure the types and amounts of insurance listed below against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Consultant and its agents, representatives, employees, and subcontractors. Consistent with the following provisions, Consultant shall provide Certificates of Insurance, attached hereto and incorporated herein as Exhibit C, indicating that Consultant has obtained or .currently maintains insurance that meets the requirements of this section and under forms of insurance satisfactory, in all respects, to the City. Consultant shall maintain the insurance policies required by this section throughout the term of this Agreement. The cost of such insurance shall be included in the Consultant's bid. Consultant shall not allow any subcontractor to commence work on any subcontract until Consultant has obtained all insurance required herein for the subcontractor(s) and provided evidence thereof to City. Verification of the required insurance shall be submitted and made part of this Agreement prior to execution. 4.1 Workers' Compensation. Consultant shall, at its sole cost and expense, maintain Statutory Workers' Compensation Insurance and Employer's Liability Insurance for any and all persons employed directly or indirectly by Consultant. The Statutory Workers' Compensation Insurance and Employer's Liability Insurance shall be provided with limits of not less than ONE MILLION DOLLARS ($1,000,000.00) per accident. In the alternative, Consultant may rely on a self-insurance program to meet those requirements, but only if the program of self-insurance complies fully with the provisions of the California Labor Code. Determination of whether a self-insurance program meets the standards of the Labor Code shall be solely in the discretion of the Contract Administrator. The insurer, if insurance is provided, or the Consultant, if a program of self-insurance is provided, shall waive all rights of subrogation against the City and its officers, officials, employees, and volunteers for loss arising from work performed under this Agreement. 4.2 Commercial General and Automobile Liabilitv Insurance. 4.2.1 General reauirements. Consultant. at its own cost and expense, shall maintain commercial qeneral and automobile liability insurance for the term of this Aqreement in an amount not less than ONE MILLION DOLLARS ($1,000,000.00) per occurrence, combined sinqle limit coveraqe for risks associated with the work contemplated bv this Aareement. If a Commercial General Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but shall not be limited to, protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property resulting from activities contemplated under this Agreement, including the use of owned and non- owned automobiles. 4.2.2 Minimum scope of coveraQe. Commercial general coverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form Consulting Services Agreement between City of South San Francisco and Pinnacle DB, Inc. December 9, 2005 Page 4 CG 0001 or GL 0002 (most recent editions) covering comprehensive General Liability and Insurance Services Office form number GL 0404 covering Broad Form Comprehensive-General Liability. Automobile coverage shall be at least as broad as Insurance Services Office Automobile Liability form CA 0001 (ed. 12/90) Code 8 and 9. No endorsement shall be attached limiting the coverage. 4.2.3 Additional reauirements. Each of the following shall be included in the insurance coverage or added as a certified endorsement to the policy: a. The insurance shall cover on an occurrence or an accident basis, and not on a claims-made basis. b. Any failure of Consultant to comply with reporting provisions of the policy shall not affect coverage provided to City and its officers, employees, agents, and volunteers. 4.3 Professional Liabilitv Insurance. 4.3.1 General reauirements. Consultant. at its own cost and expense. shall maintain for the period covered bv this Aareement professional liability insurance for licensed professionals performina work pursuant to this Aareement in an amount not less than ONE MILLION DOLLARS ($1.000.000) coverina the licensed professionals' errors and omissions. Anv deductible or self-insured retention shall not exceed $150.000 per claim. 4.3.2 Claims-made limitations. The following provisions shall apply if the professional liability coverage is written on a claims-made form: a. The retroactive date of the policy must be shown and must be before the date of the Agreement. b. Insurance must be maintained and evidence of insurance must be provided for at least five years after completion of the Agreement or the work, so long as commercially available at reasonable rates.- c. If coverage is canceled or not renewed and it is not replaced with another claims-made policy form with a retroactive date that precedes the date of this Agreement, Consultant must provide extended reporting coverage for a minimum of five years after completion of the Agreement or the work. The City shall have the right to exercise, at the Consultant's sole cost and expense, any extended reporting provisions of the policy, if the Consultant cancels or does not renew the coverage. d. A copy of the claim reporting requirements must be submitted to the City prior to the commencement of any work under this Agreement. Consulting Services Agreement between City of South San Francisco and Pinnacle DB. Inc. December 9,2005 Page 5 4.4 All Policies Requirements. 4.4.1 Acceptabilitv of insurers. All insurance required by this section is to be placed with insurers with a Bests' rating of no less than A:VII. 4.4.2 Verification of coveraae. Prior to beginning any work under this Agreement, Consultant shall furnish City with complete certified copies of all policies, including complete certified copies of all endorsements. All copies of policies and certified endorsements shall show the signature of. a person authorized by that insurer to bind coverage on its behalf. 4.4.3 Notice of Reduction in or Cancellation of Coveraae. A certified endorsement shall be attached to all insurance obtained pursuant to this Agreement stating that coverage shall not be suspended, voided, canceled by either party, or reduced in coverage or in limits, except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. In the event that any coverage required by this section is reduced, limited, cancelled, or materially affected in any other manner, Consultant shall provide written notice to City at Consultant's earliest possible opportunity and in no case later than ten (10) working days after Consultant is notified of the change in coverage. 4.4.4 Additional insured: primary insurance. City and its officers, employees, agents, and volunteers shall be covered as additional insureds with respect to each of the following: liability arising out of activities performed by or on behalf of Consultant, including the insured's general supervision of Consultant; products and completed operations of Consultant, as applicable; premises owned, occupied, or used by Consultant; and automobiles owned, leased, or used by the Consultant in the course of providing services pursuant to this Agreement. The coverage shall contain no special limitations on the scope of protection afforded to City or its officers, employees, agents, or volunteers. A certified endorsement must be attached to all policies stating that coverage is primary insurance with respect to the City and its officers, officials, employees and volunteers, and that no insurance or self-insurance maintained by the City shall be called upon to contribute to a loss under the coverage. 4.4.5 Oeductibles and Self.lnsured Retentions. Consultant shall disclose to and obtain the approval of City for the self-insured retentions and deductibles before beginning any of the services or work called for by any term of this Agreement. During the period covered by this Agreement, only upon the prior express written authorization of Contract Administrator, Consultant may increase such deductibles or self-insured retentions with respect to City, its officers, employees, agents, and Consulting Services Agreement between City of South San Francisco and Pinnacle DB. Inc. December 9, 2005 Page 6 volunteers. The Contract Administrator may condition approval of an increase in deductible or self-insured retention levels with a requirement that Consultant procure a bond, guaranteeing payment of losses and related investigations, claim administration, and defense expenses that is satisfactory in all respects to each of them. 4.4.6 Subcontractors. Consultant shall include all subcontractors as insureds under its policies or shall furnish separate certificates and certified endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. 4.4.7 Variation. The City may approve a variation in the foregoing insurance requirements, upon a determination that the coverage, scope, limits, and forms of such insurance are either not commercially available, or that the City's interests are otherwise fully protected. 4.5 Remedies. In addition to any other remedies City may have if Consultant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option exercise any of the following remedies, which are alternatives to other remedies City may have and are not the exclusive remedy for Consultant's breach: · Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under the Agreement; · Order Consultant to stop work under this Agreement or withhold any payment that becomes due to Consultant hereunder, or both stop work and withhold any payment, until Consultant demonstrates compliance with the requirements hereof; and/or · Terminate this Agreement. Section 5. INDEMNIFICATION AND CONSULTANT'S RESPONSIBILITIES. Consultant shall indemnify, defend with counsel selected by the City, and hold harmless the City and its officials, officers, employees, agents, and volunteers from and against any and all losses, liability, claims, suits, actions, damages, and causes of action arising out of any personal injury, bodily injury, loss of life, or damage to property, or any violation of any federal, state, or niunicipallaw or ordinance, to the extent caused, in whole or in part, by the willful misconduct or negligent acts or omissions of Consultant or its employees, subcontractors, or agents, by acts for which they could be held strictly liable, or by the quality or character of their work. The foregoing obligation of Consultant shall not apply when (1) the injury, loss of life, damage to property, or violation of law arises wholly from the gross negligence or willful misconduct of the City or its officers, employees, agents, or volunteers and (2) the actions of Consultant or its employees, subcontractor, or agents have contributed in no part to the injury, loss of life, damage to property,. or violation of law. It is understood that the duty of Consultant to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Acceptance by City of insurance certificates and endorsements required under this Agreement does not relieve Consultant from liability Consulting Services Agreement between City of South San Francisco and Pinnacle DB, Inc. December 9,2005 Page 7 under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply to any damages or claims for damages whether or not such insurance policies shall have been determined to apply. By execution of this Agreement, Consultant acknowledges and agrees to the provisions of this Section and that it is a material element of consideration. In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City. Section 6. STATUS OF CONSULTANT. 6.1 Independent Contractor. At all times during the term of this Agreement, Consultant shall be an independent contractor and shall not be an employee of City. City shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement and assignment of personnel pursuant to Subparagraph 1.3; however, otherwise City shall not have the right to control the means by which Consultant accomplishes services rendered pursuant to this Agreement. Notwithstanding any other City, state, or federal policy, rule, regulation, law, or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing services under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any and all claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in the California Public Employees Retirement System (PERS) as an employee of City and entitlement to any contribution to be paid by City for employer contributions and/or employee contributions for PERS benefits. 6.2 Consultant No AQent. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever. Section 7. LEGAL REQUIREMENTS. 7.1 Governina Law. The laws of the State of California shall govern this Agreement. 7.2 Compliance with Applicable Laws. Consultant and any subcontractors shall comply with all laws applicable to the performance of the work hereunder. 7.3 Other Governmental ReQulations. To the extent that this Agreement may be funded by fiscal assistance from another governmental entity, Consultant and any subcontractors shall comply with all applicable rules and regulations to which City is bound by the terms of such fiscal assistance program. Consulting Services Agreement between City of South San Francisco and Pinnacle DB. Inc. December 9, 2005 Page 8 7.4 Licenses and Permits. Consultant represents and warrants to City that Consultant and its employees, agents, and any subcontractors have all licenses, permits, qualifications, and approvals of whatsoever nature that are legally required to practice their respective professions. Consultant represents and warrants to City that Consultant and its employees, agents, any subcontractors shall, at their sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits, and approvals that are legally required to practice their respective professions. In addition to the foregoing, Consultant and any subcontractors shall obtain and maintain during the term of this Agreement valid Business Licenses from City. 7.5 Nondiscrimination and Equal Opportunity. Consultant shall not discriminate, on the basis of a person's race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, marital status, sex, or sexual orientation, against any employee, applicant for employment, subcontractor, bidder for a subcontract, or participant in, recipient of, or applicant for any services or programs provided by Consultant under this Agreement. Consultant shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal opportunity and nondiscrimination in employment, contracting, and the provision of any services that are the subject of this Agreement, including but not limited to the satisfaction of any positive obligations required of Consultant thereby. Consultant shall include the provisions of this Subsection in any subcontract approved by the Contract Administrator or this Agreement. Section 8. TERMINATION AND MODIFICATION. 8.1 Termination. City may cancel this Agreement at any time and without cause upon written notification to Consultant. Consultant may cancel this Agreement upon 30 days' written notice to City and shall include in such notice the reasons for cancellation. In the event of termination, Consultant shall be entitled to compensation for services performed to the effective date of termination; City, however, may condition payment of such compensation upon Consultant delivering to City any or all documents, photographs, computer software, video and audio tapes, and other materials provided to Consultant or prepared by or for Consultant or the City in connection with this Agreement. 8.2 Extension. City may, in its sole and exclusive discretion, extend the end date of this Agreement beyond that provided for in Subsection 1.1. Any such extension shall require a written amendment to this Agreement, as provided for herein. Consultant understands and. agrees that, if City grants such an extension, City shall have no obligation to provide Consultant with compensation beyond the maximum amount provided for in this Agreement. Similarly, unless authorized by the Contract Administrator, City shall have no Consulting Services Agreement between City of South San Francisco and Pinnacle DB, Inc. December 9, 2005 Page 9 obligation to reimburse Consultant for any otherwise reimbursable expenses incurred during the extension period. 8.3 Amendments. The parties may amend this Agreement only by a writing signed by all the parties. 8.4 Assic:mment and SubcontractinQ. City and Consultant recognize and agree that this Agreement contemplates personal performance by Consultant and is based upon a determination of Consultant's unique personal competence, experience, and specialized personal knowledge. Moreover, a substantial inducement to City for entering into this Agreement was and is the professional reputation and competence of Consultant. Consultant may not assign this Agreement or any interest therein without the prior written approval of the Contract Administrator. Consultant shall not subcontract any portion of the performance contemplated and provided for herein, other than to the subcontractors noted in the proposal, without prior written approval of the Contract Administrator. 8.5 Survival. All obligations arising prior to the termination of this Agreement and all provisions of this Agreement allocating liability between City and Consultant shall survive the termination of this Agreement. 8.6 Options upon Breach bv Consultant. If Consultant materially breaches any of the terms of this Agreement, City's remedies shall include, but not be limited to, the following: 8.6.1 Immediately terminate the Agreement; 8.6.2 Retain the plans, specifications, drawings, reports, design documents, and any other work product prepared by Consultant pursuant to this Agreement; 8.6.3 Retain a different consultant to complete the work described in Exhibit A not finished by Consultant; or 8.6.4 Charge Consultant the difference between the cost to complete the work described in Exhibit A that is unfinished at the time of breach and the amount that City would have paid Consultant pursuant to Section 2 if Consultant had completed the work. Section 9. KEEPING AND STATUS OF RECORDS. 9.1 Records Created as Part of Consultant's Performance. All reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that Consultant prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the City. Consultant hereby agrees to deliver those documents to the City upon termination of the Agreement. It is understood and agreed that the documents and other materials, including but not limited to those described Consulting Services Agreement between City of South San Francisco and Pinnacle DB, Inc. December 9,2005 Page 10 above, prepared pursuant to this Agreement are prepared specifically for the City and are not necessarily suitable for any future or other use. City and Consultant agree that, until final approval by City, all data, plans, specifications, reports and other documents are confidential and will not be released to third parties without prior written consent of both parties unless required by law. 9.2 Consultant's Books and Records. Consultant shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for seNices or expenditures and disbursements charged to the City under this Agreement for a minimum of three (3) years, or for any longer period required by law, from the date of final payment to the Consultant to this Agreement. 9.3 Inspection and Audit of Records. Any records or documents that Section 9.2 of this Agreement requires Consultant to maintain shall be made available for inspection, audit, and/or copying at any time during regular business hours, upon oral or written request of the City. Under California Government Code Section 8546.7, if the amount of public funds expended under this Aqreement exceeds TEN THOUSAND DOLLARS ($10,000.00), the Aqreement shall be subiect to the examination and audit of the State Auditor, at the request of City or as part of any audit of the City, for a period of three (3) years after final payment under the Aqreement. Section 10 MISCELLANEOUS PROVISIONS. 10.1 Attorneys' Fees. If a party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret the provision of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose. 10.2 Venue. In the event that either party brings any action against the other under this Agreement, the parties agree that trial of such action shall be vested exclusively in the state courts of California in the County San Mateo or in the United States District Court for the First District of California. 10.3 Severability. If a court of competent jurisdiction finds or rules that any provision of this Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so adjudged shall remain in full force and effect. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement. 10.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this Agreement. Consulting SeNices Agreement between City of South San Francisco and Pinnacle DB, Inc. December 9,2005 Page 11 10.5 Successors and AssiQns. The provisions of this Agreement shall inure to the benefit of and shall apply to and bind the successors and assigns of the parties. 10.6 Use of Recvcled Products. Consultant shall prepare and submit all reports, written studies and other printed material on recycled paper to the extent it is available at equal or less cost than virgin paper. 10.7 Conflict of Interest. Consultant may serve other clients, but none whose activities within the corporate limits of City or whose business, regardless of location, would place Consultant in a "conflict of interest," as that term is defined in the Political Reform Act, codified at California Government Code Section 81000 et seq. Consultant shall not employ any City official in the work performed pursuant to this Agreement. No officer or employee of City shall have any financial interest in this Agreement that would violate California Government Code Sections 1090 et seq. Consultant hereby warrants that it is not now, nor has it been in the previous twelve (12) months, an employee, agent, appointee, or official of the City. If Consultant was an employee, agent, appointee, or official of the City in the previous twelve months, Consultant warrants that it did not participate in any manner in the forming of this Agreement. Consultant understands that, if this Agreement is made in violation of Government Code S 1090 et.seq., the entire Agreement is void and Consultant will not be entitled to any compensation for services performed pursuant to this Agreement, including reimbursement of expenses, and Consultant will be required to reimburse the City for any sums paid to the Consultant. Consultant understands that, in addition to the foregoing, it may be subject to criminal prosecution for a violation of Government Code S 1090 and, if applicable, will be disqualified from holding public office in the State of California. 10.8 Solicitation. Consultant agrees not to solicit business at any meeting, focus group, or interview related to this Agreement, either orally or through any written materials. 10.9 Contract Administration. This Agreement shall be administered by Rav Razavi. City Enaineer (IIContract Administratorll). All correspondence shall be directed to or through the Contract Administrator or his or her designee. 10.10 Notices. Any written notice to Consultant shall be sent to: Larry R. Tarter, President Pinnacle DB, Inc. 1461 Rollins Road Burlingame, CA 94080 Any written notice to City shall be sent to: City Clerk, City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Consulting Services Agreement between City of South San Francisco and Pinnacle DB. Inc. December 9,2005 Page 12 10.11 Professional Seal. Where applicable in the determination of the contract administrator, the first page of a technical report, first page of design specifications, and each page of construction drawings shall be . stamped/sealed and signed by the licensed professional responsible for the report/design pre '. . e stamp/seal shall be in a block entitle "Seal and Signature of Registere S fd . g~) eport/design responsibility, II as in t following example. t.....~ (<') Q;:J LARRY R. :.A r? 10.12 InteQration. This Agreement, including the scope of work attached hereto and incorporated herein as Exhibit A, represents the entire and integrated agreement between City and Consultant and supersedes all prior negotiations, representations, or agreements, either written or oral. 10.13 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. Consulting Services Agreement between City of South San Francisco and Pinnacle DB. Inc. December 9,2005 Page 13 The Parties have executed this Agreement as of the Effective Date. CITY OF SOUTH SAN FRANCISCO Attest: Consulting Services Agreement between City of South San Francisco and Pinnacle DB. Inc. December 9,2005 Page 14 EXHIBIT A SCOPE OF SERVICES CONSULTANT is being engaged to perform the work described below at the old Black Mountain Spring Water Facility at 91 South Spruce Street. The building is to be converted to a fire station which will house Fire Station 61. CONSULTANT will approach this project in three phases: Phase 1 Examine the existing building and prepare an evaluation of the seismic resistance to code, recommendations, improvements and upgrades necessary for the existing building to function as a new fire station. CONSULTANT shall provide programming for retrofitting the existing building into a fire station and fire administration facility. The CONSULTANT shall provide schematics, evaluation of "Essential Facilities", and cost estimates. The CONSULTANT shall attend meetings with City staff for input during the programming stage. Phase 2 After approval of the alternate selected by the CITY under Phase 1, the CONSULTANT shall prepare construction drawings, general provisions and technical specifications, cost estimates, and bid documents for the project, which includes all of the items listed in addendum No. 2 to the RFP. The drawings and specifications shall be submitted to the building department for approval and issuance of a building permit. Phase 3 Upon issuance of the building permit, CONSULTANT shall provide construction management seNices per a separate consultant agreement to be negotiated and approved by the City. Construction shall be competitively bid in increments per City Standards. Consulting SeNices Agreement between City of South San Francisco and Pinnacle DB, Inc. December 9,2004 Exhibit A, Page10f 1 EXHIBIT B PAYMENT CITY shall pay CONSULTANT an amount not to exceed the total sum of One Hundred Seventy-six Thousand Four Hundred Twenty-five Dollars ($176,425) for services to be performed under Phases 1 and 2, and reimbursable costs incurred pursuant to this Agreement. CONSULTANT shall submit invoices, not more often than once a month during the term of this Agreement. Invoices shall comply with CITY requirements for same. CITY shall make monthly payments, based on such invoices, for services satisfactorily performed. The total sum stated above shall be the total which CITY shall pay for the services to be rendered by CONSULTANT pursuant to this Agreement. CITY shall not pay any additional sum for any expense or cost whatsoever incurred by CONSULTANT in rendering services pursuant to this Agreement. CITY shall make no payment for any extra, further or additional service pursuant to this Agreement unless such extra service and the price therefore is agreed to in writing executed by the CITY Manager or other designated official of CITY authorized to obligate CITY thereto prior to the time such extra service is rendered. The services to be provided under this Agreement may be terminated without cause at any point in time in the sole and exclusive discretion of CITY. In this event, CITY shall compensate the CONSULTANT for all outstanding costs incurred for work satisfactorily completed as of the date of written notice thereof. CONSULTANT shall maintain adequate logs and timesheets in order to verify costs incurred to date. PAYMENT SCHEDULE Arch itecture/Engineeri ng Phase I - Programming, schematics, evaluation of "Essential Facilities", cost estimates, meetings Deliverables: Phase I Schedule Programming Review Meetings with City (3) Report Requirements & Cost Estimates Schematic Design Drawings wi Cost Estimates Additional Work at the City Engineer's discretion Subtotal Phase I - $ 840.00 $ 1,840.00 $ 1,540.00 $20,690.00 $30,520.00 $ 8.000.00 $63,430.00 Consulting Services Agreement between City of South San Francisco and Pinnacle DB, Inc. December 9,2004 Exhibit BPage1 of 2 Phase II - Design Development, construction documents, cost estimates, includes underground seNices Deliverables: Phase II Schedule Design Development Drawings Meetings with City (1) Construction Documents & Cost Estimates Additional Work at the City Engineer's discretion Subtotal Phase II - $ 840.00 $ 27,110.00 $ 940.00 $ 66,105.00 $ 18.000.00 $112,995.00 Total Phases I and II : $176.425.00 The City sets the following hourly rates for consultant: 1. President $ 150.00/hour 2. Project Manager $ 85.00/hour 3. Clerical $ 60.00/hour 4. All identified Sub-consultants listed on the Fee Schedule of the Proposal dated September 30, 2004. Notice to Consultant: Dates for deliverables to the City, for each Phase, shall be determined during the pre- design meeting and shall be forwarded by the Consultant to the City Engineer no more than 30 days of the "Effective Date" of this Consulting SeNices Agreement. Consulting SeNices Agreement between City of South San Francisco and Pinnacle DB, Inc. December 9, 2004 Exhibit BPage2 of 2 EXHIBIT C INSURANCE CERTIFICATES (See Attached) Consulting Services Agreement between City of South San Francisco and Pinnacle DB, Inc. December 9, 2004 Exhibit C Page 1 of 1 ~~~-UI-'UUq 1~:4' rt{\..M- Certificate of Insurance Agency Name ana AddreS6; Professional Practice Insurance Brokers. Inc. 10 California Sm~t:[ Redwood City, CA 94063-1513 T-b73 p.OU,/002 F-I~4 1 of 1 #S87704JM87703 THIS CERTIFICATE; IS ISSUEO AS A MA ITER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CeRTIFICATE HOLPER. THIS C;r11IflCATE DOES NOT AMEND, t:XTEND OR ALTER 'THE COVERAGE AFfl=OOOED THE POLICIES LISTED BELOW. I. ." '. Companiaa Aff[jrQjng PQlicID~; XNIC Insurance Cort\.pany 1:). HAllt'ord. c.St. Paul Fire & Marine Insurance Co. o.ContiueAtal Caiuall.)' COIupatly 1:. F 1"'$\.l(iOlct~ Nan'Uil ~nd A~dreiS: Pin.1iacle: DB, Inc. H61 Rollins Road Burlillgame , CA 94010 CQ\llii~S;; TI1I~ IS TO CERTlFi THAt pOt...,cles OF INSU~!: uS1EO BEl.Cw HA'J~ SEEN ISSuEO TO THIO INS~ N.AM~O Alia". JOOR Tria POLICY PiifllOO ItuOICA-TEO NO'rwltHSiANOING ANY REQuIAeNel~T. TeRM OR CONOITlOlII OF ANY CONTR.-cT 01' 01l'li!1II OOCUI.tl!Nfwrrn I'l~CTTO ""tlCh TnlS C~"'TII'ICATr: MAl' 1!lJ! ISSLlJ!t1 ~ MAY PIORTAIN. TWO ~N~l,JflIoNC~ AfFORPIiP By Tl'IlO POLtClltS PIl&CfiI6fi.P ~jERliiN 13 SU8.JE<:lT TO ALL TNt:: TIOFlM'. ~"'tlUSIOkS, MO COl\illIT.ONS OF SUCH POLICIES. TYPE OF INSURANCE POLICY NUM8ER EFF.DATE EXP.DATE A GENERAL LlA61UTY GS412159 11/11104 U/l1lO5 l&l GommtllrGi<IJ Genlllr!ll Litlbility o CI~rns Made 1KI OOCl.lHOnC$ I&l Owntlr"5 f:lnO Contractol'5 Protective 0 B AUTO l-IABII-ITY 72UECUQ6001 11/01/04 U/O!105 Ii] Any Automobile o All O'.vneo Autos o Schedul6<:l Autos ~ HirQlj Au~ liD NOll-owned Auws o GaraQ8 UabiliT.y o . -'1. excess UAflILrIY o Umtln~1I1l Form o Clmertnan UmeteUa Fotm C WORKERS' BW01934423, 11lOll04 UJOU05 COMPeNSAilON ANP EMPLOYE:R'S WASILITV 0 PROFESSIONAL OliAll4G15Q8.:i )O/3Q;04 ~0I30/0:S LJASI\..rrv. . POLICY LIMITS GoneTal Aggregate: $2,/JI)I.,),OO() PrccIuc\::s-COmfOplS AgQregate: $1.000,000 peisorliiU ana MY. InjUry: $1,ooD.000 ~Qh Ck:cl~rrinc::e; S1,OOO,OOO Fir. Oms- (~rt)' on~ fir.); $50.000 Comoinect 5lngl~ I-imit: aQ(;jlly llllury/p$~: SO(lily Injl.lry/a~Cidetll; Property Damagfl: e=acn OacL.ltrence: AQgrQQi$: StBLLltcry Wmlt5 Each Acci<lent PisaasiillflOlicy Lj(JIIl: OlseaiaJl!mployee: Par Claim ^ r 16 $0 $l,()()O.OOO $1,000.000 $0 $1.000.000 S1.00Q.OOO $1.000,000 $1.000.000 $1.000 000 $0 Description of Oparations/LooationsNehioleslRestriotions/Speoial items: AI-I- OP5ftATIOlllS OF THE NAM!:P INSuRi:P, 1;15Ni:RAI-I.IAFlIllTY AND AI.ITO I-IAIilII-IT'r ONt..'1': TM!; CITY, In OFFICifl:i. OFFICIAI.S, ~MP1.0'r~iiiS ANP vQ:..UNTl:fR3 ARt: NAMED AS AODITtONM. INSURS)$ BUT ONI- '1" AS RESPECTS I-l....au..lT'r ARISING OuT OF THE N,lMfO INSURI:DS' OPfR'" TIONS Q t w. THE AOGflEGATE LIMIT IS THE TOTAl-INSlIRANCj::.A\I^IL.A6Ll! FOR CU\~Ma PRESENTED WITMlN Tfll: ~I-ICV I'OIll ALl. OPEIVmOl'tS 01' Tn!! I~SlJ,.m OANcaLATION; SHOIJLtl ANY OF T!11il ASOIIE tllliSCRISEO P04.IC!SS SE CAI\lCEl.ED aeFORlO lHii EXPIRATION DATE! TI'lI:RCOF. THE ISSLlINli COMf'ANY. ITS AGf!NTS OR RtiPRESCNl"Al'llIcS Wau MAlL go PA'r 6 wFlITTe/'l NOTICE TO 1'1"11: ceRT;FICATE IiOl.CeR /'lAMED TO TI"1E Le:FT. 1:(\C1:I"T Iii THe c\ll!l'Il OF c:....Nel!uAiION f'01'I ;\ION.f'AYM~'r01I"AeMluM IN \i'lI1ICrl CAse ,o.QAyS NOTice WIl.L 61: BiveN. AurnonlOQ R.~nlIlln~.. 12107/04 . Certificate Holder. City of South San Francisco Office of the City Engineer 31 5 Map1~ Avenue Sauro San Francisco. CA 94080 e/:; , EXHIBIT D CONSULTANT PROPOSAL (See Attached) Consulting Services Agreement between City of South San Francisco and Pinnacle DB, Inc. December 9,2004 Exhibit D Page 1 of 1 l I I I I I I I I I I I I ; I- ~ I ........- .!!i ,1;IJl\oAjItm PROPOSAL fIRE STATION 61 480 NORTH CANAL STREET SOUTH SAN FIlANCISCO PINNACLE DB, INC. ARCHITECTS/SCULPTORS/BUILDERS 09.30.04 Di5cus~ion of Project Scope &. Demon~trQtion of Project Understanding The City of South San Francisco has purchased the 1.94 acre property at 408 North Canal Street with the intent of renovating the existing two story structure/warehouse and site to accommodate the city's new Main Fire Station, Station 61. Station 61 will house the Fire Department's Administrative and Fire Prevention Offices, Station 61 fire fighting personnel, and associated engine apparatus. The Fire Departments long term goal is that this facility will also serve as their main training facility. To aid in the planning and execution of the renovations, city staff will partner with a team of architects/engineers and builders. To successfully complete this project, the team must consider and satisfy each of the following essential aspects: · Carefully evaluate existing site and structure relative to the final project requirements issued in Addendum No.2, dated 09.03.04 and discussions held with city personnel regarding their needs. · The building will be designated as an Essential Facility, thus all aspects of the existing and proposed must be evaluated and designed to meet the applicable USC standards. · The city has a limited budget to perform the renovations. The team will be required to use funds efficiently and effectively to accomplish as much of the essential and additional requirements as possible. · For fire fighting personnel, Station 61 will be, in a sense, their home away from home, and to a lesser extent, for the administrative staff and fire prevention. It is essential to create a balanced environment. The intent is not to be lavish, but rather to be sensitive with finishes such as natural wood, color, carpeting, acoustic insolation, and feng shui principles to create a balanced and pleasing environment. We believe the City has made an excellent purcha~e. This property is naturally suited to the proposed use with its location, beauty of the existing structure and expansiveness of the site. The charge of the consulting team shall be to complete the city's vision and improve the property to enhance the lives of those who live and work in the building as well as to create a source of civic pride for the City Council, Redevelopment Agency, city staff, and residents. To satisfy the essential aspects of this project, the consulting team shall follow the outline of services per 3.01, Phase 1 Scope of Services and 3.02 Phase" Scope of Services, dated 07.14.04, amended with Addendum No.2, dated 09.03.04. finE STATION 61 pnOPOSAl PINNACLE DB, INC. KEY ISSUES AND CRI1ICAlI1EMS The following key issues and critical items form the structure and basis for successful completion of this project: City Council and Redevelopment Agency Guidance and Vision It is essential that the consultant team understand the City Councils' and Redevelopment Agencies goals for this project - and to meet them. Fire Department Guidance and Vision It is essential that the consultant team understands the living and working requirements the department has and satisfies them. Building Official Key Issues It is essential to meet with Jim Kirkman and identify those key issues & critical items that he believes must be satisfied to efficiently move forward. Budget The consultant team must work within the budget established by the Council, and Redevelopment Agency. Once schematics and options are developed, a construction budget shall be completed to provide the basis for construction documents. Pinnacle DB, Inc., as design/builders and Aztec Consulting are uniquely suited to control budgeting through design and construction. Essential Facility Designation It is essential for the consultant team to begin the process evaluating the existing structure for deviations from structural, mechanical, electrical, and fire protection requirements for Essential Facilities defined by the Uniform Building Code. The evaluation shall catalogue requirements to bring the existing structure up to the higher standards. A budget shall be included with the evaluation to properly understand the minimum that must be spent. Efficiency It is essential that the consultant team meet with the Fire Departments representative to achieve in the design speed and efficiency in the performance of their essential services. Utilize Latest Technology It is important for the consultant team to utilize the latest technology in fire fighting methodology and satisfy Federal and State requirements for the varied activities and reporting required of the Fire Department. Acoustics It is important for the consultant team to fully respond to the varying acoustic isolation requirements associated with fire administration and fire prevention, dormitory, and apparatus room. FI~E STATION 61 P~OPOSAL PINNACLE 08, INC fPIRO]lECT TlEAM &, QUAlllfIICAT~ON5 PROJECT Tf,AM/QUAUfICAfIONS Pinnacle DB. Inc. Architects/Builders Pinnacle DB, Inc. was established in 1995 as a vertically integrated organization, upon the philosophy that control over the entire design and construction process assures consistent high quality, thorough design integration, and a single source of responsibility for our clients. This association has its basis in the tradition known as design/build - in the classical sense, its practitioners were known as master builders. As architects, sculptors, and builders, Pinnacle DB, Inc.'s employees and President Larry R. Tarter are devoted to providing our clients with the highest quality of service in upscale commercial and residential projects. Our projects are created with continuous on-site presence. Our experience ranges throughout the Bay Area from bridge building to low rise, mid-rise and high-rise construction. We maintain current national and state licenses in architecture and construction. In So. San Francisco, Pinnacle DB has a demonstrated record of tastefully designed and well constructed projects with the Terrabay Recreation and Meeting Facilitiy (3 mil contract), and SSF Learning and Resource Center at Spruce School (2 mil contract). Both projects were completed within budget and on schedule. We have established relationships with the City Council and department heads. To assist Pinnacle DB in fire station design, cost estimating and scheduling, we have retained Aztec Consulting, who have extensive fire station experience. Additionally, we have personal access to San Ramon Valley Fire District's facilities and key personnel for collaboration. Aztec Consultino Fire Station Consultants Aztec Consultants has extensive experience in fire station design and construction, including Alameda Fire Station No.1, City of Berkeley Fire Station No.5, San Ramon Valley Fire Protection District Stations No. 30, 37, 38, and 39, Moraga/Orinda Fire Department Stations 42 & 44, Los Altos County Fire Station No.1, Dougherty Regional Fire Authority Fire Station No.2, and others. Based in San Ramon, CA they have establish~d a credible track record of building over $30 million in public works construction contracts and providing professional construction management services on another $200,000,000 worth of various public works engineering and building construction projects since the company was founded in 1986. Aztec Project Managers have a background covering a wide range of commercial, industrial, institutional and public works projects throughout the United States. They are experienced professionals with licenses and degrees in Construction Management, Civil Engineering, and Electrical Engineering. FinE STATION 61 PROPOSAL PINNACLE DB, INC. Kennv Yip Feng Shui Consultant Kenny Yip established his Feng Shui Consultancy practice in 1995 after studying with Chinese masters since childhood. He has consulted and guided many homeowners, businesses, corporations, architects and designers around the US and abroad in the application of these ancient principles in contemporary settings. Applying the ancient principles creates harmonious interiors as well as healthy environments for those who live and work in them. His primary goal is to educate people in whole integral virtue and understand the authentic roots, scientific theories, and deeper philosophies guiding our lives. it il II il ! It ; :: finE STATION 61 PROPOSAL PINNACLE 06, INC. RECENT EXPERIENCE OR SIMILlAR PROJECTS South San Francisco Resource Center, 50. Sf, CA . . Iii b~ _.. "II. .. ... .iii'i:!!!!_ ~.. ,... .. - BIIIIIiiI ~ · .. _ .. laB --,Ii ~ . . _ .. d'4lll1Rlll _ III _.. =-..__ ~ - 11III I... - .- I ..- .. -iii......... - I .. _.... I. _.... III'l!I RiIIlIIIIIIII!: I'" I. I -.. ....... I I .. _._ ,.. - II ._ ! 1111111 III - .. II . III" 111I I.~.. ~ .-. I -. .~ .. I. &111 .,.. . ._.1 .. · 'I ..... l - ~1II1111fj . . ....- . 11_ .- -- .. -. . Iii ... r l - I . =..I~ - .. .... ..-F.-. ..... .- .. - ... .. ~.: ..... ..... .. ~-': ....... - --lilt:. 1IlIi. .. -. -....11.. ..... ...-_. -- -,. .......--- .- - -.~ - -- iilIIliI .. . - -. ~...- -- ~ "'"--. ... II . II. I Dedicated in 2001 to the enrichment of the community through learning, this regional center was born in an abandoned 12,000 sf warehouse. Commissioned by South San Francisco, this center offers adult and child classes in computers, foreign language, before and after school activities, a day care center, and an array of other learning pursuits. To enrich and stimulate, we incorporated five full size sculptures in the Entry Hall. FIRE 5TATION 61 PROP05AL PINNACLE DD. INC City Center Plaza Redwood City, CA '~E"'<:~ .:~.<. C':.; " ~=:...~~ C'. "-----..___ ~U..n:t.,""r' .- City Center Plaza in Redwood City is built on the PJaza at City Hall. Its 81 affordable apartments sit atop 20,000 sf of retail shops, a parking garage and are clustered around two courtyards with a central paseo connecting Main Street with City Hall. As the winner of a design competition with eighteen other development teams, this project demonstrates that affordable housing can be built gracefully in Urban Centers. FIRE STATION 61 PROPOSAL PINNACLE 06, INC City of Berkeley Alternate Emergency Operations Center J ., ~ , ':~ 1 :l I j ~ i 1 1 I This .is .a Fire and Police emergency service dispatch and command center for all 911 calls resuJting from major disasters. This $1.2 million new construction of the Alternate Emergency Operations Center utilized steel framing, with eMU BJock exterior walls and clay tile roof. The buiLding is approximately 3,300 sq. ft and involved extensive and complicated HVAC and electrical systems, coupled with full-power UPS and emergency generator. Construction was completed in February 1997. Aztec Consulting i fiRE STATION 61 PROPOSAL PINNACLE 06, INC ~~ ""'s:re -''Oi'''''_;;hg;:xrr.;.rr~~.::,~~,~.~r*"~~~~~~:~~~_~~'i':-~\~t~~1 PHIASf 1 Meet Submit Project with Schedule Staff Phase I AwardV V (10 Days) 6vI Site Visit Program Review Evaluation Condition of Existing Building vs. Essential Facility Detailed Report w/ Cost Estimate V I I Cost Est. (10 Days) V ESSENTIAL REQUIREMENTS I Schematic Floor Plan + Elevations/Graphics Cost Est. V I ESSENTIAL + ADD SITE WORK I Schematic Floor Plan + Elevations/Graphics Cost Est. V I ESSENTIAL +ADDITIONAL WORKl Schematic Floor Plan + Elevations/Graphics Phase I Complete fiRE STAT~ON PROPOSAL PINNACLE D~, INC. ; i i I I i I i. ;! ,r Ii II 'I Ii iI :1 ~ il ~ :1 II ii II <; :i ;1 !j :1 if ;j I I I I I I I I I I I I I I I I I I I I I PROPOSED IHOURS PIER T A.5IK ~v CONSUlTA.NTS & SU~COINSUlTANTS PHASE II . Submit Schedule for Phase II Pinnacle DB 8 840. . Design Development Pinnacle DB 146 12700. JEC Structural Engineering 40 3800. Laws Associates 62 6090. Redwood City Electric 12 1020. Allied Fire Protection 8 1000. Dillon Design Associates 21 2500. . Meeting with City Staff Pinnacle DB 8 940. . Construction Documents/Specifications Pinnacle DB 170 19200. JEC Structural Engineering 80 6400. Laws Associates 83 8140. Redwood City Electric 17 1685. Allied Fire Protection 48 5500. Dillon Design Associates 30 3500. Charles M. Salter Associates 68 8500. Underground Services Not Included Specifications Flat Fee 3500. . Cost Estimate Reviews/Updates Pinnacle DB 32 3760. Aztec Consultants 8 920. fiRE STATION 61 PROPOSAL PINNACLE DD, INC. I I fIE fE SC IHIE DU lIE I ----------..-----..-----------------.----------.-------------- ~\ r-. ~ ir !i) ~ 1:\1 1.1"":r~ ~l li'<tL:u II IL. JI~~ I ':~.:$oll~=: ----..--.-.--------------------------- --------------------- If:\ 3.2 Final requirements and detailed project phasing shall be outlined based onfire station needs and priorities. The said final requirements and detailed project phasing shall be forwarded to the consultants as written on item no. 1 of this Addendum No. 1 3.3 The relocation of the Emergency Operations Center (EOC) is not a part of this protect: therefore no site visit of the EOC area will be conducted. 3.4 The City shall forward all available plans, structural calculations, and 'soils report to all consultants ifavailable. As of to-date, the available documents are the grading plans and the soils report. These avClilable documents will be e-mailed to all consultants no later than August 9th, 2004. 3 .5 The following three (3) consultants were present during the mandatory site visit,and meeting conducted on July 28th, 2004, therefore the City will only accept proposals from these consultants listed below: Noll and Tam Architects of Berkeley, CA, John Matthews Architects of San Mateo, CA, and Pinnacle DB Inc. of Burlingame, CA. \It, WE HEREBY ACKNOWLEDGE ADDENDUM NO.1 AND HAVE REFLECTED THESE CHANGES IN OUR OPOSAL. ~ ~ ~. ?:C?C~rh ! Ra . DacanaV Assistant Engineer cc: Marty Van Duyn, Assistant City Manager Dennis Chuck, Senior Civil Engineer File PB-04-1 . l'l..IJrep.-.@nollandtam. com lrtaf!:er@pinnacledb.com j ack@matthewsarchitects.com G\Projects\PB-04-1\RFP _Adendum No. 1(8-2-2004).doc Page 2 of2 ~r >0 ~n > ~ o z CITY OF SOUTH SAN FRANCISCO PUBLIC WORKS DEPARTMENT - ENGINEERING DIVISION 315 MAPLE AVENUE, SOUTH SAN FRANCISCO, CA 94080 ~ ~'tll S:1.N ~ ~ . ~v. \ o ") >-< ..... ~ ~ tJ 0 C4.lIFO?-~\.~ SPECIAL MEETING CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at: MUNICIPAL SERVICES BlJILDING CITY COUNCIL COMMUNITY ROOM 33 ARROYO DRIVE WEDNESDAY, SEPTEMBER 28, 2005 7:05 P.M. NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, the City Council of the City of South San Francisco will hold a Special Meeting on Wednesday, the 28th day of September, 2005, at 7:05 p.m., in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Purpose of the meeting: 1. Call to Order 2. Roll Call 3. Public Comments - comments are limited to items on the Special Meeting Agenda 4. Closed Session: Pursuant to Government Code Section 54956.9(a), conference with legal counsel - existing litigation, Kotobuki Trading Company Inc. et al v. City of South San Francisco et al 5. Adjournment ~tvf~' 1/7. ~ City lerk AGENDA CITY COUNCIL CITY OF SOUTH SAN FRANCISCO REGULAR MEETING MUNICIP AL SERVICE BUILDING COMMUNITY ROOM WEDNESDAY, SEPTEMBER 24, 2005 7:30 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Council business, we proceed as follows: The regular meetings of the City Council are held on the second and fourth Wednesday of each month at 7:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the City Council on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Council Chamber's and submit it to the City Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents the City Council from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address (optional) for the Minutes. COMMENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER. Thank you for your cooperation. The City Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Council action. RAYMOND L. GREEN Mayor JOSEPH A. FERNEKES Mayor Pro Tem RICHARD A. GARBARINO, SR. Councilman PEDRO GONZALEZ Councilman KARYL MATSUMOTO Councilwoman RICHARD BATTAGLIA City Treasurer SYLVIA M. PAYNE City Clerk BARRY M. NAGEL City Manager STEVEN T. MATT AS City Attorney PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT AVAILABLE FOR USE BY THE HEARING IMP AIRED AT CITY COUNCIL MEETINGS CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE INVOCATION PRESENTATIONS . Certificate of Recognition - Mr. Mark Morris, Westborough Middle School Science Teacher . On-Line Library System - Library Program Manager Mark Henderson and Librarian II Mary Torres Volken . Colma Creek Update - Public Works Director Terry White . Disaster Preparedness and South San Francisco - Fire Chief Phil White AGENDA REVIEW PUBLIC COMMENTS ITEMS FROM COUNCIL . Announcements . Committee Reports CONSENT CALENDAR I. Motion to approve the minutes of August 17, 20, and 24, 2005 2. Motion to confirm expense claims of September 28, 2005 3. Resolution approving Amendment No.1 to Employment Agreement with City Manager 4. Resolution supporting AB 438 (Parra), to protect families living in rental communities from serious and high risk sex offenders 5. Resolution endorsing and supporting the 2006 California State Library Bond 6. Resolution approving acceptance of $50,000 for the designated public art funds received from Slough Development and appropriating $40,000 to the Cultural Arts Commission's public art acquisition trust account 7. Resolution authorizing the execution and delivery of an installment purchase agreement with the California Statewide Communities Development Authority to fund sewer improvements 8. Resolution authorizing the execution of an amended revocable license agreement with Parking Company of America Airports on a City-owned property located at 160 Produce A venue REGULAR CITY COUNCIL MEETING AGENDA SEPTEMBER 28,2005 PAGE 2 9. Acknowledgement of proclamations issued: Stepfamily Day, 9/16/05 and Constitution Week, 9/17/05 PUBLIC HEARING 10. Resolution authorizing submittal of the 2004-2005 Consolidated Annual Performance and Evaluation Report (CAPER) and to the Department of Housing and Urban Development (HUD) ADMINISTRATIVE BUSINESS 11. Report on the close of the FY 2004-05 budget and resolution approving various budget actions COUNCIL COMMUNITY FORUM ADJOURNMENT REGULAR CITY COUNCIL MEETING AGENDA SEPTEMBER 28, 2005 PAGE 3 - ~'t\\ s~ -~~'\ ~ - ~~\ (~ ~) v 0 ~llPOt<~ Staff Report AGENDA ITEM #3 DATE: September 28, 2005 TO: Honorable Mayor and City Council FROM: Steven T. Mattas, City Attorney SUBJECT: City Manager Employment Agreement RECOMMENDATION: It is recommended that the City Council approve the attached resolution approving Amendment No.1 to the Employment Agreement between Barry M. Nagel and the City of South San Francisco. DISCUSSION: Pursuant to the City Council's request, the Employment Agreement has been amended to extend the term of his existing employment, adjust his compensation, and set a schedule for his performance evaluation. The attached contract amendment includes these modifications. The amended contract extends the term of employment from September 1, 2005 to August 31, 2007. In addition, the contract has been amended to increase the City Manager's compensation to an annual salary of$190,848 from September 1,2005 through January 1,2006 and then to an annual salary of$199,936 from January 1, 2006 through the end of the employment agreement term. Lastly, the contract is amended to schedule a performance evaluation for Mr. Nagel in January 2006 and then on an annual basis thereafter. There are no other changes to Mr. Nagel's contract. The proposed amendment is attached hereto as Exhibit A. By: ,~. ~:A> Steven T. Mattas, City Attorney ---- Attachments: Amendment No.1 to City Manager Employment Agreement Resolution 782307 -1 AMENDMENT NO.1 TO THE EMPLOYMENT AGREEMENT BETWEEN BARRY M. NAGEL AND THE CITY OF SOUTH SAN FRANCISCO DATED JULY 14,2004 THIS AGREEMENT, made and entered into at South San Francisco, California, this _th day of , 2005, by and between the CITY OF SOUTH SAN FRANCISCO, a municipal corporation, hereinafter sometimes referred to as the "CITY", and BARRY NAGEL, an individual, hereinafter referred to as "NAGEL". WITNESSETH: WHEREAS, CITY and NAGEL entered into an Employment Agreement ("Agreement") effective September 1,2004; and WHEREAS, CITY and NAGEL now desire to amend the aforementioned Employment Agreement; and NOW, THEREFORE, in consideration of this Agreement, and the mutual promises, covenants and stipulations herein contained, the parties hereto agree to amend the Employment Agreement as follows: 1. SECTION 2(A) OF THE AGREEMENT IS HEREBY AMENDED TO READ AS FOLLOWS: SECTION 2. TERM. TERMINATION AND SEVERANCE PAY: A. The term of this Agreement shall be from September 1, 2005, through August 31, 2007. NAGEL agrees to remain in the exclusive employ of the CITY until the termination date set forth herein, and neither to accept other employment, nor to become employed by any other employer until said termination date. 2. SECTION 3(A) OF THE AGREEMENT IS HEREBY AMENDED TO READ AS FOLLOWS: SECTION 3. SALARY: A. (1) CITY agrees to pay NAGEL for his services rendered pursuant hereto, an annual salary of One Hundred Ninety Thousand Eight Hundred Forty-Eight dollars ($190,848) from September 1,2005 through January 1, 2006. The CITY will then pay an annual salary of One Hundred Ninety-Nine Thousand Nine Hundred Thirty-Six dollars ($199,936) from January 1,2006 to the expiration of the Employment Agreement. The aforementioned salaries are payable in installments at the same time other employees of the CITY are paid. 3. SECTION 6(B) OF THE AGREEMENT IS HEREBY AMENDED TO READ AS FOLLOWS: SECTION 6. PERFORMANCE EVALUATION: B. The City Council shall review and evaluate the performance of NAGEL in January 2006, in accordance with specific criteria and performance expectations as developed jointly by the City Council and NAGEL. Thereafter, the City Council shall review and evaluate the performance of NAGEL on an annual basis. Such criteria may be added to or deleted as the City Council may from time to time determine. 4. EXCEPT AS OTHERWISE AMENDED HEREIN, ALL OTHER TERMS AND CONDITIONS OF THE AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT. CITY OF SOUTH SAN FRANCISCO By: Ray Green, Mayor and Chairperson, City of South San Francisco/South San Francisco Redevelopment Agency By: BARRY M. NAGEL ATTEST: City Clerk A~D AS t FORM: .. '- Jl{ ~ City Atto ey 2 782003-1 RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING AMENDMENT NO.1 TO THE EMPLOYMENT AGREEMENT BETWEEN THE CITY OF SOUTH SAN FRANCISCO AND BARRY M. NAGEL WHEREAS, on September 1, 2004, the City of South San Francisco and Barry M. Nagel entered into an Employment Agreement related to the positions of City Manager and Redevelopment Agency Executive Director; and, WHEREAS, the parties hereto desire to amend the Employment Agreement. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that Amendment No.1 to the Employment Agreement, attached hereto as Exhibit A and dated September 28, 2005, is hereby approved. BE IT FURTHER RESOLVED that the Mayor is hereby authorized to execute Amendment No.1 on behalf of the City of South San Francisco. * * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the _ day of , 2005 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk 782313-1 Staff Re AGENDA ITEM #4 ort DATE: September 28, 2005 TO: The Honorable Mayor and City Council FROM: Steven T. Mattas, City Attorney SUBJECT: RESOLUTION SUPPORTING ASSEMBLY BILL 438 TO PROTECT FAMILIES LIVING IN RENTAL COMMUNITIES FROM SERIOUS AND HIGH RISK SEX OFFENDERS. RECOMMENDA TrON: Councilmember Gonzales recommends that the City Council adopt a resolution supporting Assembly Bill 438 to protect families living in rental communities. BACKGROUND/DISCUSSION: Assembly Bill 438 (AB 438), introduced by Assembly Member Nicole Parra and sponsored by the California Apartment Association, has been drafted to specifically deal with perceived flaws and conflicts currently created by Megan's Law and subsequent amendments to that law. Under the current legal framework members of the public are able to easily access the Megan's Law registry on the internet. While this information is readily available providers of rental housing and managers cannot use the information to either notify other tenants that an offender lives in the complex or to evict the offender. This places rental housing providers in a precarious position because they are faced with conflicting legal directives. Under current State law, an owner may be sued for failing to protect a resident from a known risk, including another resident's dangerous propensities. However, current state law also expressly prohibits rental property owners and mangers from effectively using the Megan's Law Web site to notify other residents or to deny housing to high risk sex offenders. In fact, under the current law a rental property owner or managers that informs other tenants or refuses to rent to a person listed on the Megan's Law Web site faces civil suit by the offender, and the potential for heavy fines and a civil penalty of up $25,000 imposed by the State. In light of these issues Assembly Member Nicole Parra drafted Assembly Bill 438 which specifically provides that: 1) A lessor of rental property may inform other residents that a registered sex offender resides in the rental property. 2) Any person may use the information on the Megan's Law Website to protect any person at risk from a registered sexual offender, including those offenders whose address is not made available to the public on the website. 3) Allows any person to deny services, housing, privileges or benefits, or to otherwise discriminate against registered sex offenders, including those offenders whose address is not made available to the public on the website. 4) It shall not be construed to make persons who are required to register as sex offenders a protected class under any statute or decisional law, or to make any person required to register as a sex offender a member of a protected class under any statute or decisional law, or otherwise confer any right or privilege on any registered sex offender. 5) Local law enforcement agencies must update the sex offender database and seek to verify that a registered sex offender no longer resides at the address listed on the web site, within a reasonable time after receiving notice from the current owner of the real property that the tenant has vacated the property that is listed as the address of the registered sex offender. 6) Other than the duty to provide a notice in every lease or rental agreement regarding the Megan's Law database, a lessor, seller, or broker of a residential real property has no duty to inquire, investigate or disclose any information regarding persons required to register as sex offenders. 7) A lessor of residential real property has no duty to evict, deny housing to, or otherwise discriminate against a person because that a person is a registered sex offender. \ 1--,~_ _ -\ .--' _ +-;'--7 By: \L~t<_,/L,,_ . i ~ )?,~C)//~. "- Steven T. Mattas, City AttofI1~Y !JJ.-'l)) Attachments: Resolution, AB 438 Bill Analysis #783057vl RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION OF THE CITY OF SOUTH SAN FRANCISCO REQUESTING THE STATE LEGISLATURE PASS ASSEMBLY BILL 438 (PARRA) TO PROTECT FAMILIES LIVING IN RENTAL COMMUNITIES FROM SERIOUS AND HIGH RISK SEX OFFENDERS. Whereas, the City of South San Francisco seeks to ensure safe and affordable housing for its residents; Whereas, there are a significant number of families and individuals residing in rental communities throughout the City; Whereas, rental housing providers are in a precarious situation due to the recent availability of sex offender information over the Internet; Whereas, rental housing providers seek to be able to protect their tenants from the known dangerous propensities of other tenants; Whereas, State law currently prohibits rental housing providers from using information contained on the state Megan's Law database to make housing decisions; Whereas, State law currently prohibits rental housing providers from notifying tenants if there is a serious or high risk sex offender residing in the rental community; Whereas, ~ental housing providers need a clear direction from the State and relief from the current situation; NOW THEREFORE BE IT RESOLVED that the City of South San Francisco does hereby request the State Legislature to pass Assembly Bill 438 to protect families living in rental communities from serious and high risk sex offenders. * * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a regular meeting held on the _ day of September 2005 by the following vote: AYES NOES ABSTAIN ABSENT #783058vl ATTEST: Sylvia M. Payne, City Clerk . \ -.. ~ . . ~ ' .... . Raymond L. Green, Mayor Servmg City of South San Francisco Santa Clara City Hall San Mateo South San Francisco, Ca 94083-0711 Santa Cruz Counties Dear Councilmember Green, ~ CALIFORNIA APARTMENT ASSOCIATION Tri-County The eM Network . California Apartrnent Association . Apartment Association Greater Inland Empire . CM Central Coast . CM Central Valley . CM Contra Costa . CM Greater Fresno . CM Los Angeles . CM Merced . CM Solano/Napa . CM Tri-County . Income property Association of Kern . Marin Income Property Association . North Coast Rental Housing Association . Rental Housing Association of Northern Alameda County . Rental Housing Association of Sacramento Valley . Rental Housing Owners Association of Southern Alameda County . San Diego County Apartment Association . San Francisco Apartment Association . San Joaquin County Rental Property Association . South Coast Apartment Association @ August.12,2005 ~ ~~~ Did you know there are almost 600 registered sex offenders in San Mateo County? Ensuring the safety of apartment communities is one of the California Apartment Association (CAA) Tri-County Division's top priorities. However due to recent availability of sex offender data over the Internet, public attention has been awakened relative to housing sex offenders who have been released from prison. Without a doubt, this is one of the most significant social questions of our time. Be that as it may, our members find themselves in an extremely difficult position. In particular, CM members are committed to providing a safe living environment for their residents. Unfortunately, California law gives rental property owners and managers a conflicting directive. Under state law, an owner may be sued for failing to protect a resident from a known risk, including another resident's dangerous propensities. However, rental property owners/managers are effectively prohibited from using the Megan's Law Web Site to notify other residents and deny housing to high risk sex offenders. The CM has sponsored Assembly Bill 438 (Parra). The bill would permit rental housing providers to use the sex offender database to protect residents from high risk sex offenders. Specifically this bill would: . Update and correct the information on the Web Site . Better identify who is a high risk offender and who is a lower risk . Give the property owner/manager the ability to deny tenancy or evict high risk offenders . Confirm that high risk offenders are not a protected class The members of the California Apartment Association Tri-County Division respectfully request the South San Francisco City Council to adopt a resolution or letter of support requesting the state legislature to pass AB 438. I would be happy to answer any questions you may have on the issue, and help move this resolution through your City's deliberative process. I've enclosed a fact sheet, sample motion and resolution language, and some recent media coverage on the issue. We are also holding a Networking Luncheon with our San Mateo County members in October to discuss this issue with them. If you are interested in attending as well, please let me know. Thank you for your consideration of this important matter. Sincerely, ~ Director of Public Affairs and Government Relations California Apartment Association Tri-County Division 20863 Stevens Creek Blvd., Suite 250 Cupertino, CA 95014 (408)873-1599 ext. 3508 20863 Stevens Creek Blvd., Suite 250 . Cupertino CA 95014 · (408) 873-1599 · fax (408) 873-7938 · www.tcaa.org : I ml CAUFORNIA APARTMENT ASSOCIATION AB 438 (Parra): MEGAN'S LAW IMPACTS HOUSING PROVIDERS BACKGROUND The California Apartment Association (CAA) supports the original intent of the Megan's Law Web site, but it has placed rental property owners and managers in a difficult position. Governor Schwarzenegger signed AB 488 last year, expanding the scope of Megan's Law by requiring information about sex offenders to be available on the Internet. This easy access to the Megan's Law registry has heightened public interest and awareness of convicted sex offenders in communities throughout California. Residents are discovering that their families might be living next to convicted sex offenders, including pedophiles and rapists. PROBLEM CAA members want to provide a safe living environment for their residents. Unfortunately, California law has given rental property owners and managers a conflicting directive. Current state law effectively prohibits use of the Megan's Law website to deny housing to listed sex offenders. If a residential rental property owner or manager learns from the database that someone is a sex offender, he/she cannot deny the sex offender housing or warn other residents based on this knowledge, without the risk of being sued by the sex offender. At the same time, the law also exposes rental property owners to lawsuits if they fail to protect residents against a known risk-:--in this case, someone with a documented criminal history of sexual assault against children, women, and other residents. From a penalty perspective, heavy fines, including a civil penalty of up to $25,000, can be imposed upon a landlord for unlawfully using the Megan's Law database to discriminate against or harass a sex offender. This contradiction in state law places all California rental property owners and managers and the California Apartment Association in a difficult (or no-win) situation. The fact, for example, that the sex offender information is easily available on the Internet and includes the sex offender's home address has substantially increased the number of situations where the public, including tenants and neighboring property owners, discover the sex offender status of existing and prospective tenants. Thus, owners have to choose between either evicting the sex offender (thereby facing potential lawsuits for discriminating against the sex offender); or allow the sex offender to stay on the property (thereby encouraging an exodus of existing tenants who refuse to allow their families to live in close proximity to a potentially dangerous sex offender). Moreover, by allowing the sex offender to live on their property the owner may expose the property and other residents to vandalism, public protest, and other forms of public scorn that will jeopardize the owner's ability to operate the property safely and profitably. SOLUTION CAA is sponsoring Assembly Bill 438 by State Assemblymember Nicole Parra (D-Hanford) in order to fix these flaws in the law. The California Apartment Association believes that the California Legislature needs to pass legislation to clarify and update housing law as it relates to the sex offender registry in order to allow rental housing providers to protect residents from sex offenders. The improvements to Megan's Law, proposed by AB 438 are: . Clarifying that rental housing providers can use the Megan's Law database to act decisively in the interests and safety of other tenants. Rental housing providers should be able to protect their residents by refusing to house high-risk sex offenders, by evicting high-risk sex offenders, or by notifying other tenants. . Clarifying that Megan's Law does not make a sexual registrant part of a "protected class." . Developing a mechanism to trigger and mandate the prompt correction of inaccurate home address information from the Web site. The owner of the rental property and the tenant that currently lives in the unit that was formerly occupied by a registered sex offender should not be forced to deal with the potential health, safety, and financial risks created by the public's perception that the unit is occupied by a registered sex offender. . Clarifying that rental housing providers must inform tenants through the rental lease of the Internet sex offender Web site, that rental housing providers do not have a duty to obtain or disclose sex offender information; and that rental housing providers do not have duty to evict or deny housing to sex offenders. 1 California Apartment Association - 980 - rJ' Street, Suite 200- Sacramento, CA 95814 www.caanetorg(800) 967-4222 ~'t\\ s1N ~"~.""I"_'.'_~~'..t!.. -~...'\.. ~ . ~~\ o O} >-< ..... ti ~ u .. . ... c '4z~ .. Staff Report AGENDA ITEM #5 DATE: September 28,2005 TO: Honorable Mayor and City Council FROM: Valerie Sommer, Library Director SUBJECT: RESOLUTION SUPPORTING THE CALIFORNIA READING AND LITERACY IMPROVEMENT AND PUBLIC LIBRARY CONSTRUCTION AND RENO V ATION BOND ACT OF 2006 RECOMMENDATION: It is recommended that the City Council adopt a resolution supporting the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2006. BACKGROUND: In 2003, the California State Library identified 579 unfunded library projects around the state, at a cost of $4.4 billion. Proposition 14, passed by voters in March 2000, provides funding for only 45 of these projects. In response to this continuing need, the State legislature has placed a $600 million statewide library bond on the June, 2006 ballot. Approval of this bond would authorize the State of California to sell $600 million in bonds to assist local governments in the construction of public libraries. This bond would provide up to 65% in state bond funding for approved projects with a required 35% match. The first priority will be given to eligible applications not funded in the 3rd application cycle of Proposition 14. The amount awarded for these first priority projects may not exceed $300 million with the remaining $300 million of funds awarded on a statewide competitive basis. These funds can be used for site acquisition, new building construction, remodeling/renovating public library facilities, upgrading telecommunications and electrical systems to accommodate technology and purchasing furniture and equipment. CONCLUSION: If the bond passes, the City of South San Francisco may directly benefit through the submittal of a grant application to the California State Library to seek funding for library construction in South San Francisco. By\/~ ~ Valerie Sommer Library Director APProvedQ.~ c (C~ Nagel City Manager Attachments: Resolution RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION ENDORSING AND SUPPORTING THE 2006 CALIFORNIA STATE LIBRARY BOND WHEREAS, Governor Arnold Schwarzenegger has signed into law the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2006; and WHEREAS, approval by voters of that bond would authorize the State of California to sell $600 million in bonds to assist local governments in the construction of public libraries; and WHEREAS, passage of that bond, which will appear on the June 2006 ballot, will permit many cities and counties across the state to construct library facilities; and WHEREAS, the California State Library has identified that there are at least 579 unfunded library construction projects which total $4.4 billion statewide; and WHEREAS, our community will continue to have ongoing needs for public library services; and WHEREAS, use of existing libraries in California continues to grow and expand as new libraries are added and new services offered: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby supports the passage and funding of the California Reading and Literacy improvement and Public Library Construction and Renovation Bond Act of 2006, and urges all citizens, community leaders, and organizations in South San Francisco to lend their support to the creation of this public library bond fund. * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a regular meeting held on the 28th day of September, 2005 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk ~'t\1 s~ B 5!., . ~~\ o 0 >- ....) ~ ~ to:> c ~lIE#'~ Staff Report AGENDA ITEM #6 DATE: September 28,2005 TO: Honorable Mayor and City Council FROM: Sharon Ranals, Director of Recreation and Community Services SUBJECT: RESOLUTION APPROVING ACCEPTANCE OF $50,000 FOR THE DESIGNATED PUBLIC ART FUNDS RECEIVED FROM SLOUGH DEVELOPMENT AND APPROPRIATING $40,000 TO THE CULTURAL ARTS COMMISSION'S PUBLIC ART ACQUISITION TRUST ACCOUNT RECOMMENDATION: It is recommended that the City Council adopt a resolution authorizing the appropriation of $40,000 from a contribution of $50,000 for public art that was received from Slough for the Britannia East Grand Development Project to a trust account used by the Cultural Arts Commission for acquisition of public art. BACKGROUNDIDISCUSSION: In negotiating the Development Agreement between the City and Slough as part of the approval of the Britannia East Grand Project, the developer agreed to install public art within the development in the amount of no less than $300,000. Slough subsequently offered to make $50,000 of this amount available to the City for off-site public art. If approved, this appropriation will provide the Cultural Arts Commission with oversight of 80% of this contribution to recommend one or more appropriate sites for public art; select appropriate art work; and direct staff to coordinate purchase and installation. As the City Council is aware, budget reductions in recent years have resulted in the elimination of what at one time was an annual allocation in the operating budget of $20,000 for the acquisition of art. These funds would restore the Commission's ability to purchase art in the coming year. It should be noted there was a suggestion from the City Council to the developer that the contribution be used to purchase a sculpture for the Sculpture Garden at Orange Memorial Park. However, unless directed otherwise by City Council, the Cultural Arts Commission may select and recommend any location in South San Francisco for public art, not necessarily in or near the Sculpture Garden or the Slough project. City Council has final approval over recommendations made by the Cultural Arts Commission on the selection of sites and art work. Staff Report To: Honorable Mayor and City Council Date: September 28, 2005 Subject: Resolution Approving Acceptance of $50,000 from Slough Development Page 2 FUNDING: If approved, this appropriation would result in a transfer of $40,000 from account 81-2935, "Designated for Public Art" to account 81-2897, "Cultural Arts". The Commission currently has a balance of approximately $15,000 in their art account. Some of these funds were generated through Commission fundraising for youth art scholarships ($3,500), and a portion of the balance is earmarked for the current "Loan Art" competition, which is in progress. The total cost of this program will depend on the number of entries received, and how many pieces are selected for exhibit. A balance of $10,000 would remain in account 81-2935 for future art acquisition at City Council's discretion. By: 'AtlM1 ~ Sharon Ranals, Director of Recreation and Community Services Approved: Attachment: Resolution RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING ACCEPTANCE OF $50,000 FOR THE DESIGNATED PUBLIC ART FUNDS RECEIVED FROM SLOUGH DEVELOPMENT AND APPROPRIATING $40,000 TO THE CULTURAL ARTS COMMISSION'S PUBLIC ART ACQUISITION TRUST ACCOUNT WHEREAS, Slough Development has contributed $50,000 to the City of South San Francisco for the purchase of public art; and WHEREAS, staff desires to accept the contribution and allocate $40,000 of the monies to the Cultural Arts Commission's public art acquisition trust account. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby authorizes acceptance of a contribution in the amount of $50,000 from Slough Development and allocates $40,000 to the Cultural Arts Commission's public art acquisition trust account to purchase public art in South San Francisco. * * * * * * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the day of , 2005 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk ~'t\\ ~ ii !t, . ~~ o 0:) >- .... ~ ~ V c ~4llFOIl~ Staff Report AGENDA ITEM #7 DATE: September 28, 2005 TO: Honorable Mayor and City Council FROM: Jim Steele, Director of Finance SUBJECT: RESOLUTION AUTHORIZING THE ISSUANCE OF REVENUE BONDS THROUGH THE CALIFORNIA STATEWIDE COMMUNITY DEVELOPMENT AUTHORITY POOLED FINANCING PROGRAM FOR THE SEWER FUND RECOMMENDATION: It is recommended that the City Council approve the attached resolution authorizing the City Manager, Assistant City Manager, Finance Director, or City Attorney to sign documents for the issuance of up to $6.0 million in sewer revenue bonds through the California Statewide Community Development Authority (CSCDA) Pooled Financing Program. BACKGROUND/DISCUSSION: As was reported in the budget transmittal letter to the Council in June: "staff expects to bring a bond sale to the Council for approval in the late Summer/Early Fall to pay for a portion of the multi-year, Wet Weather capital program's costs not otherwise eligible for reimbursement from the State Water Board loan program." Staff is now ready to proceed, and recommends that the City participate in the next pooled bond sale in October. The proposed bonds (the "Bonds") are part of the California Statewide Community Development Authority (the "Authority") Pooled Financing Program and will be issued to finance capital projects in the W et Weather program that were not eligible for State Loan funds. The State loan program only pays for a fixed portion of allowed construction costs for engineering and design, and does not cover construction change orders at all. The City has therefore had to incur costs out of pocket that can be spread out over time through debt financing. By participating in the bond pool, the City is able to save resources by pooling bond issuance costs with the other cities that are participating in this bond sale. Funds to pay for debt service on these bonds have already been factored into the rates and budget. Staff Report Subject: Pooled Bond Financing for the Sewer Fund Page 2 The Authority is one of the largest bond issuers in the nation and serves as issuer under a variety of financing programs benefiting public agencies and non-profit corporations. The League of California Cities and the California State Association of Counties sponsor the Authority. Although a part of the bond pool, the City will only be responsible for debt service for its own funds, and will not be obligated to make any payments as a result of any potential default of any other cities that participate in the bond sale in October. The attached resolution authorizes the execution and delivery of an installment purchase agreement by and between the City and the Authority, a bond purchase agreement between the City and Henderson Capital Partners, LLC, the underwriter, a preliminary and final official statement and a continuing disclosure certificate appointing "Authorized Officers" of the City and designating certain parameters for the financing. Those parameters are as follows: -A maximum principal amount of $6.0 million; -A maximum average interest rate of 5.0% (with the current estimate of interest to be an average of $4.4%); -A maximum underwriter's fee of .8% or $50,000; Drafts of these bond documents are attached, and may be slightly modified before the bond closing. The bonds are expected to be sold on October 18, 2005, and the funds expected to be delivered after that date. FISCAL IMPACT: The 2005-06 budget was put together assuming the Sewer Fund would sell bonds to recover costs for capital expenditures not otherwise eligible for State Loan reimbursement as part. of the Wet Weather program. Interest rates are at a comparatively low level, and pooling bond issuance costs with other cities is a cost effective mechanism for the City. The bonds will be paid solely out of the Sewer Fund revenues under the rates already approved by the City Council, and will not impact the General Fund. Prepared by: Approved ATTACHMENTS: Resolution Installment Purchase Agreement Bond Purchase Agreement Preliminary Official Statement Continuing Disclosure Certificate Cash Flow Projection for Bond Financing as of September 19,2005 JS/BN:ed RESOLUTION No. RESOLUTION OF THE CITY OF SOUTH SAN FRANCISCO AUTHORIZING THE EXECUTION AND DELIVERY OF AN INSTALLMENT PURCHASE AGREEMENT, A BOND PURCHASE AGREEMENT, AN OFFICIAL STATEMENT AND A CONTINUING DISCLOSURE CERTIFICATE AND AUTHORIZING CERTAIN RELATED MATTERS WHEREAS, the City of South San Francisco (the "City") is duly organized and existing under the laws of the State of California (the "Law") and is authorized pursuant to the Law to enter into an installment purchase agreement for the purpose of financing and/or refinancing the acquisition and construction of public capital improvements; and WHEREAS, the City desires to enter into one or more Installment Purchase Agreements (the "Installment Purchase Agreement"), by and between the City and the California Statewide Communities Development Authority, a joint exercise of powers agency (the "Authority") in order to provide for the financing of certain public capital improvements related to the City's wastewater system (the "Project"); and 'XTl-TPDP A ~ th;", r;h, rnnn,..;l f1nrl", th<:>t tho f';n<:>n,..;n,.,. nf'tho Drn;o,..t ro",nlt", ;" ",;,.,.";f1,..,,"t " .L..I....L..I.L'-L..J.L ...."'-', \...L.L..L~ '-".L\..J '-v.....J..I."""'.I..1. .1..1..I..I.\o..I.~ L.I..H...." "'.1..1.""" .1..1..1..1.&..&.1..1.'-'.1..1..15 V.I. L.I..I........ .a. .I.vJv\..ll. J.\".I.:l\AJ.\..:l .U.J. 1.::J.l.f,J.J..1..1.J.""U,lJL public health benefits, including but not limited to more efficient delivery of service, and that the Project constitutes facilities for the production, storage, transmission, or treatment of wastewater or recycled water; and ' WHEREAS, the City desires to participate in the Authority's Water and Wastewater Pooled Financing Program, a part of the Authority's economic development financing programs (the "Program") and that the Authority assign the right to receive the Installment Payments under the Installment Purchase Agreement to a trustee (the "Trustee") to be named in a Master Indenture (the "Indenture"), by and between the Authority and the Trustee and that the Authority issue its Revenue Bonds (the "Bonds") to finance and/or refinance the Project pursuant to rhe Indenture; and WHEREAS, the City desires to participate in conjunction with the parties to that certain Amended and Restated Joint Exercise of Powers Agreement Relating to the California Statewide Communities Development Authority, dated as of June 1, 1998 (the "Agreement"); and WHEREAS, the City proposes to participate in the Program and desires that certain projects to be located within the City be financed pursuant to the Program and it is in the public interest and for the public benefit that the City do so; and WHEREAS, in order to authorize the execution of the Installment Purchase Agreement and the preparation of an Official Statement relating to the Bonds (the "Official Statement") and to provide for certain related matters, the City Council of the City of South San Francisco deems it in the best interests of the City to adopt this Resolution (the "Resolution"); NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO, AS FOLLOWS: Section 1. Execution of the Installment Purchase Agreement and the Bond Purchase Agreement. The City Manager, Assistant City Manager, Finance Director, or City Attorney (the "Authorized Officers ") are hereby authorized and directed to execute for and on behalf of the City the Installment Purchase Agreement, in the form filed with the minutes of this meeting, with such changes therein as the Authorized Officers shall approve, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are hereby authorized and directed to negotiate and accept on behalf of the City the payment terms of the Installment Purchase Agreement and the Bond Purchase Agreement which will reflect the terms of the sale of the Bonds by the Underwriter (as defined below), such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the aggregate principal components of the payments under Installment Purchase Agreement may not exceed $6,000,000, the Underwriter's discount (without giving effect to any original issue discount) may not exceed 0.80% of the aggregate principal components of the payments under the Installment Purchase Agreement and the average interest rate evidenced thereunder shall not exceed 5.0%. The Authorized Officers are hereby authorized and directed to execute for and on behalf of the City a Bond Purchase Agreement containing the final payment terms of the Installment Purchase Agreement and the Bonds in the form filed with the minutes of this meeting, with such changes therein as the Authorized Officers shall approve, such approval to be conclusively evidenced by the execution and delivery thereof. The obligation of the City to make the Installment Payments under the Installment Purchase Agreement is a special obligation of the City payable solely from the System Net Revenues (as defined under the Installment Purchase Agreement), and does not constitute a debt of the City or of the State of California or of any political subdivision thereof in contravention of any constitutional or statutory debt limitation or restriction. The City shall not be obligated to make payments to cover the shortfall in payments of any other City in the Program. Section 2. Authorization of Preliminary Official Statement Execution of Final Official Statement, Execution of Continuing Disclosure Certificate. The City hereby approves the form of the preliminary Official Statement (the "Preliminary Official Statement") relating to the Bonds. The Authorized Officers are hereby authorized to certify that said Preliminary Official Statement, is as of its date "deemed final" for purposes of Rule 15c2-12 of the Securities and Exchange Commission. The Authorized Officers are hereby authorized and directed to execute for and on behalf of the City a final Official Statement, in substantially the form of the Preliminary bfficial Statement, with such changes therein (and additions thereto to reflect the terms of the sale of the Bonds) as the Authorized Officers shall approve, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are hereby authorized and directed to execute for and on behalf of the City a Continuing Disclosure Certificate, in the form filed with the minutes of this meeting, with such changes therein as the Authorized Officers shall approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 3. JPA Matters. The City hereby approves the Project and the Authority as issuer of the Bonds to finance the Project pursuant to Section 9 of the Agreement. Section 4. Appointment of Professionals. Henderson Capital Partners, LLC (the "Underwriter") is hereby confirmed and appointed as the City's underwriter in connection with the financing authorized by this Resolution. Hawkins Delafield & Wood LLP is hereby confirmed as the bond counsel in connection with the Bonds. Section 5. Other Actions Authorized. The Authorized Officers and such other proper officers of the City are hereby authorized to take all actions and execute any and all documents described in this Resolution and otherwise necessary or desirable to effect the execution and delivery of the Installment Purchase Agreement and to make any changes to the forms of the legal documents approved in this Resolution as necessary or desirable to comply with the terms of municipal bond insurance; to change the dates and the percentages in the rate covenant and additional debt test contained in any documents approved at this meeting from the dates and ....o.."o.....t'lITO" A..... tho fArm" "" h-rn;ttoA tA th;" -rn",,,,t;nIT. o:\nA tA An o:\n" o:\nA 0:\11 th;n IT" o:\nA tn ",v",,..nt,,, .1:-''-'.1. ......\,..IJ.J.I.U5.....~ V.I..1. \.J.J.V ~V.l.J..I..I.~ ~......V..l..l..Ll.\....,...\...lL '-'-' \.1...1..1.";' .1..1..1.""'............1...1.0' '-"1...1.'-10 "''-' ......""'" ~""..] 1L4.1....'""" ""'..1..1. .......&......l..I.6U 1L4.1..I.,"," "'''''' """"'.I'1r..""""'''''''''-A-\....... and deliver any and all documents which they may deem necessary or advisable in order to consummate the execution and delivery of the Installment Purchase Agreement and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, the Installment Purchase Agreement, the Bond Purchase Agreement, the Preliminary Official Statement, the Official Statement and the Continuing Disclosure Certificate. Such actions heretofore taken by such officers are hereby ratified, confirmed and approved. The Authorized Officers are authorized to substitute a non-profit corporation or joint powers authority for the Authority in connection with the transaction authorized in this Resolution on the advice of bond counsel. PASSED AND ADOPTED on AYES: NAYS: ABSENT: ATTEST: By Clerk Attachments: Installment Purchase Agreement Bond Purchase Agreement Tl__l;_;_~_~. n~~~;~l C1..~..~_~~.. r 1 c;UIUlll'll y \...Illl~la.l 01.al.c;lUc;lll. Continuing Disclosure Certificate , 2005, by the following vote. Authorized Officer Hawkins Delafield & Wood LLP One Embarcadero Center, Suite 3820 San Francisco, California 94111 (415) 486-4200 (415) 397-1513 (Fax) Sean Tierney's Direct Dial Number: (415) 486-4201 E-mail: stierney@hdw.com CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY WATER AND W ASTEW A TER REVENUE BONDS (pOOLED FINANCING PROGRAM) EXECUTIVE SUMMARY OF THE TRANSACTION It has been proposed that you as a city (the "Participant") participate in the California Statewide Communities Development Authority Water and Wastewater Pooled Financing Program (the "Program"). Under the Program, the California Statewide Communities Development Authority (the "Authority") will issue its Water and Wastewater Revenue Bonds (Pooled Financing Program) (the "Bonds") for the purpose of financing or refinancing certain public capital improvements of the Participant (the "Project") and other public agencies which choose to participate in the Program (collectively, the "Program Participants"). Each Participant enters into an Installment Purchase Agreement under which it wili agree to make certain payments securing the Bonds and take certain other related actions. The Authority is one of the largest bond issuers in the nation and serves as issuer under a variety of financing programs benefiting public agencies and non-profit corporations. The Authority is sponsored by the League of California Cities and the California State Association of Counties. Hawkins Delafield,& Wood LLP is a national leader as bond counsel for governmental tax-exempt financings. Hawkins has been a nationally recognized bond counsel firm for 100 years and currently has the most lawyers of any firm in the nation devoted to public finance and the most tax lawyers that specialize in tax-exempt securities. For more information on the Firm, see "HAWKINS DELAFIELD & WOOD LLP" below. This Executive Summary will give a brief description of the transaction and the related legal documents. The descriptions and summaries of various documents in this Executive Summary do not purport to be comprehensive or definitive, and reference is made to 'each document for complete details of all temis and conditions. All statements herein are qualified in their entirety by reference to each document. As described in further detail below, the Bonds to be issued by the Authority will be insured by a policy of municipal bond insurance. Consequently, the Bonds will be rated "AAA". P.l 16725.1028204 MIse Another important aspect of the Program is that the Participant will not be obligated to make any payments as a result of the default of any other Program Participant in the Program. The central documents involved in this transaction include: 1) Installment Purchase Agreement (executed by the Participant and the Authority); 2) Official Statement (and a Preliminary Official Statement) (signed by the Authority and the Program Participants); 3) Bond Purchase Agreement (executed by the Program Participants, the Authority and the Underwriter); 4) Continuing Disclosure Certificate (executed by the Participant); 5) The Bonds (executed by the Authority); and 6) Indenture (executed by the Authority and the Trustee). The Installment Purchase Agreement The Installment Purchase Agreement is the central financing document setting forth the obligations of the Participant, including the obligation to pay Installment Payments. The Install11lent Payments will be due in amounts equal to the Par-ticipant's share of debt service on the Authority's Bonds. The Installment Payments will be broken down into components representing principal and interest. The Installment Payments will be assigned and pledged by the Authority to the Trustee for the Bonds. See "The Bonds and the Indenture" below. The Installment Payments are special obligations of the Participant secured by a pledge of the net revenues (the "System Net Revenues") of the Participant's water or wastewater system (the "Enterprise System"). System Net Revenues generally are gross revenues of the Enterprise System less maintenance and operation expenses. The pledge of System Net Revenues under the Installment Purchase Agreement secures only the obligation to pay Installment Payments and other obligations under that particular Installment Purchase Agreement. Individual Participants are not obligated to make up for any deficiency in the payments of other Program Participants. Pledge of System Net Revenues under Installment Purchase Agreement. The Installment Purchase Agreement provides that all System Net Revenues and all amounts on deposit in the System Revenue Fund are irrevocably pledged to the payment of the Installment Payments. This pledge, together with the pledge created. by any other Parity Debt (i.e., the Installment Payments and any other parity obligations of the Participant), shall constitute a lien on System Revenues for the payment of the Installment Payments and all other Parity Debt. In order to carry out and. effectuate such pledge the Participant agrees and covenants that all System Revenues shall be deposited when and as received in a special fund designated as the "System Revenue Fund", which fund the Participant agrees and covenants to maintain and to P.2 16725.1028204 MIse hold separate and apart from other funds so long as any Installment Payments remain unpaid. From the moneys in the System Revenue Fund, the Participant will first pay all Operation and Maintenance Costs (including amounts reasonably required to be set aside in contingency reserves for. Operation and Maintenance Costs, the payment of which is not then immediately required) as such Operation and Maintenance Costs become due and payable. Thereafter, all remaining moneys in the System Revenue Fund shall be set aside by the Participant to pay the Installment Payments and to reimburse any withdrawal from the Reserve Account of the Participant. Moneys on deposit in the System Revenue Fund not necessary to make any of the foregoing payments, may be expended by the Participant at any time for any purpose permitted bylaw. Reserve Account. The Participant and every other Program ParticiPa.nt will have a Reserve Account established with the Trustee to cover any shortfall in the payment of Installment Payments. Subject to federal tax law considerations, each Reserve Account will be funded in an amount equal to the maximum annual Installment Payments due under the related Installment Purchase Agreement (the "Reserve Account Requirement"). It is expected that most of the Reserve Account Requirements will be satisfied by a reserve account insurance policy to be issued by a "AAA" rated bond insurer. Each Reserve Account is a segregated account available only to cover shortfalls in the payment of Installment Payments under the relat~d Installment Purchase Agreement. Program Participants will be obligated to replenish draws only from their related Reserve Accounts. Additional Debt Test under Installment Purchase Agreement. The Installment Purchase Agreement peffilits the Pa..rticipant to enter into additional obligations secured by System Net Revenues on a parity with the Installment Payments provided that certain conditions are satisfied. Generally, the Participant will have to establish that future coverage of System Net Revenues to maximum annual debt service on existing and proposed parity obligations will at least equal a certain fixed percentage. This percentage of coverage usually ranges from 110 to 120% and is set in consultation with the Bond insurer. Certain upward adjustments in System Net Revenues are allowed for rate increases adopted but not effective for a full 12 months. Rate Covenant under Installment Purchase Agreement. The Installment Purchase Agreement will require the Participant, to the fullest extent permitted by law, to fix, prescribe and collect rates and charges and maintain its operations such that System Net Revenues will be at least equal to a fixed percentage of the Installment Payments and other Parity Debt (i.e., other obligations secured by the System Net Revenues) during each Fiscal Year. This percentage of coverage usually ranges from 110 to 120% and is set in consultation with the Bond insurer. Right to Prepay. The Participant will have the right to prepay the Installment Payments after an initial period and with prepayment premiums being required for a certain number of years pursuant to a schedule to be agreed to by the Participant prior to sale of the Bonds. The Rate Stabilization Fund. The Installment Purchase Agreement permits the creation of a Rate Stabilization Fund. The Participant may, during or within 210 days after a Fiscal Year, deposit System Net Revenues attributable to such Fiscal Year (on the basis of Generally Accepted Accounting Principles) into the Rate Stabilization Fund. The Participant may at any P.3 16725.1 028204 MIse time withdraw moneys from the Rate Stabilization Fund. System Net Revenues deposited into the Rate Stabilization Fund shall not be taken into account as System Net Revenues for purposes of the calculations required by the covenants in the Installment Purchase Agreement relating to System Net Revenue coverage and additional parity debt in the Fiscal Year to which such deposit is attributable, and amounts withdrawn from the Rate Stabilization Fund, during or within 210 days after a Fiscal Year, may be taken into account as Revenues for purposes of the calculations required by such covenants in such Fiscal Year. Investment of Moneys. Bond proceeds to be used to refinance outstanding obligations will be held in escrow by the Trustee and invested in "AAA" U.S. Treasury securities. Bond proceeds to be used to construct or acquire new capital improvements will be held by the Trustee in a segregated Project Account for the related Participant and invested at the direction of the Participant in investments permitted under the Indenture. See "The Bonds and the Indenture" below. The Preliminary Official Statement and Official Statement The Preliminary Official Statement (the "POS") and the Official Statement (the "OS") serve as disclosure and marketing documents for the Bonds. The POS and the OS describe the terms of the financing, the Project and the provisions of the legal documents. The POS and the OS also contain fmancial, statistical and demographic data relating to the Participant and its geographic area which would be of interest to investors. The POS is distributed to potential investors. The OS, which will contain the final terms of the financing, including the principal amount of the Bonds and interest rates thereon, will be distributed to all actual purchasers of the Bonds. Bond Purchase Agreement The Bond Purchase Agreement sets forth the terms upon which the Bonds will be sold by the Authority to the Underwriter of the Bonds, Henderson Capital Partners. The Bond Purchase Agreement will also be signed by the Participant and all the other Participants. The Agreement will provide for the final interest rates on the Bonds. The Agreement also sets forth a list of required documents and other conditions to the final closing of the Bond transaction. For example, Hawkins must deliver its opinion that the Bonds are tax-exempt and each Participant must represent that the information in the Official Statement regarding such Participant is correct. Continuing Disclosure Certificate Under the Continuing Disclosure Certificate, the Participant will covenant to provide certain financial information and operating data relating to the Participant. Generally, the Participant will be responsible for providing annual updates of the type of information in the Official Statement relating to the Participant's operations and finances. Such information will be filed with certain Nationally Recognized Municipal Securities Repositories. These covenants are made in order to allow the Underwriter to comply with recently enacted provisions under Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934. . P.4 16725.1 028204 MISe The Bonds. and the Indenture The Bonds are not issued by the Participant and the Participant does not enter into or approve the form of the Indenture which provides for the terms of the Bonds. However, an explanation of these documents is useful in understanding the Program and the Participant's legal documents. The Bonds are being issued by the Authority pursuant to an Indenture (the "Indenture"), by and between the Authority and the trustee bank named thereunder (the "Trustee"). The Bonds are authorized pursuant to the terms of Chapter 5 of Division 7 of Title 1 of the California Government Code. The Authority is a joint exercise of powers agency created pursuant to the California Government Code on June 1, 1988. The Bonds are special obligations of the Authority payable solely from the Installment Payments to be made by the Participants and from amounts on deposit in certain funds and accounts held under the Indenture. No other funds of the Authority are pledged to or available for payment of the principal of or interest on the Bonds. Concurrently with the issuance of the Bonds, the Trustee will establish a separate fund designated as the Reserve Fund. Within the Reserve Fund, there will be a separate Reserve Account dedicated to each Program Participant. The amount on deposit in each Reserve Account is required to be maintained at the Reserve Requirement (i.e., maximum annual debt service in most cases). The Reserve Requirement for each Reserve Account will be satisfied by a deposit of a surety bond (the "Reserve Surety") to be issued by Financial Security Assurance, Inc. (in certain cases, a Program Participant may be required to fund its Reserve Account with cash). The Reserve Account of each Program Participant will be available to cover a shortfall in the Installment Payments due to be paid by that particular Participant. The Participant is not obligated to reimburse the Reserve Surety provider for a draw on the Reserve Surety relating to another Program Participant. Concurrently with the issuance of the Bonds, Financial Security Assurance, Inc. will issue a municipal bond insurance policy (the "Municipal Bond Insurance Policy") with respect to the Bonds. The Municipal Bond Insurance Policy will unconditionally guarantee the payment of the principal of and interest on the Bonds which has become due for payment, but is unpaid by reason of nonpayment by the Authority. As a result of the issuance of the. Municipal Bond Insurance Policy, the Bonds will receive a "AAA" rating. California Statewide Communities Development Authority The Authority is a joint exercise of powers authority created under the California Joint Powers Act (California Government Code Section 6500 and following) (the "Act"). The Authority is one of the largest bond issuers in the nation and serves as issuer under a variety of financing programs benefiting public agencies and non-profit corporations. The Authority is sponsored by the League of California Cities and the California State Association of Counties. Pursuant to the Act and an Amended and Restated Joint Powers Agreement among a number of cities, counties and special districts within the State of California (the "Agreement"), the Authority is authorized to issue revenue bonds for the benefit of conduit borrowers (the "Program Participants"). Section 8 of the Agreement provides that such"[b]onds, together with P.5 16725.1028204 MIse the interest and premium, if any, thereon, shall not be deemed to constitute a debt.. .or pledge of the faith and credit of [any of] the Program Participants...." (emphasis added) The Agreement also provides that the Authority is a public entity separate and apart from the Program Participants. Further, California Government Code Section 6508.1 states that "the debts, liabilities, and obligations of [a joint powers] agency shall be debts, liabilities, and obligations of the parties to the agreement, unless the agreement specifies otherwise." (emphasis added) The Agreement expressly provides that the Authority's "debts, liabilities and obligations do not constitute debts, liabilities or obligations of any party to [the] Agreement." HAWKINS DELAFIELD & WOOD LLP o Hawkins is a national leader as bond counsel for governmental tax-exempt financings and has consistently been ranked among the top three bond counsel frrms in the nation for several decades. o Hawkins has the most lawyers of any firm in the nation devoted to public finance and the most tax lawyers that specialize in tax-exempt securities. o In the Firm's San Francisco office, Sean Tierney and Russ Miller (a tax partner) specialize in serving as bond counsel on tax-exempt bond issues in California. o Examples of California public agencies that Hawkins has recently worked with include: the cities of Los Angeles, Modesto, San Diego, San Francisco and San Jose, the counties of Alameda, Butte, Los Angeles, Monterey, Sacramento and Solano, the Bay . Area Transportation Authority and the Metropolitan Water District. Hawkins Delafield & Wood LLP is a general partnership that has been deeply involved in public finance for 100 years. We have more partners and lawyers devoted to public finance than any other firm. As part of its public finance practice, the Firm has been retained as bond counsel, underwriter's counsel, disclosure counsel, special tax counsel, corporate counsel, counsel to credit enhancement providers and contract negotiation counsel in connection with public financing of all types throughout the United States. Lawyers from Hawkins have drafted laws that have been enacted in every state o~ the nation. The Firm has consistently been among the top bond counsel and underwriter's counsel firms both in dollar volume and number of issues since rankings have been maintained. The Firm's ability to continue as an industry leader has been the result of its dedication to client service and its continuing record for innovation. The Firm expects to continue to be at the forefront in the dynamic evolution of public finance. Hawkins maintains the largest tax department in the tax-exempt finance area. In addition to the review of financing transactions for compliance with the tax laws, the tax department actively participates in the development of new financing structures and programs. Our tax department regularly monitors and participates in the amendment of the federal tax statutes and regulations. We confer, when appropriate, with staff of the Treasury Department and the Internal Revenue Service with respect to the development of regulations under the Internal Revenue P.6 16725.1 028204 MISe Code and generally prepare extensive written comments to proposed regulations when published. The Firm has obtained numerous tax rulings for its clients and also regularly provides assistance to numerous federal legislators and administrators at the request of our clients. P.7 16725.1 028204 MIse Hawkins De1afie1d & Wood LLP Draft mSTALLMENT PURCHASE AGREEMENT by and between [P ARTICIP ANT] and CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY f)!:'Itpr! !:'Ie f"'\f 1 'JOO" "-'-""__ __ .......&. _ .a., ____ relating to CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY WATER AND WASTEWATER REVENUE BONDS (pOOLED FINANCING PROGRAM) SERIES 2005_ P.B 16396.1001098 AGMT Section 1.1. Section 2.l. Section 2.2. Section 3.1. Section 3.2. Section 3.3. Section 4.1. Section 4.2. Section 4.3. Section 5.l. Section 5.2. Section 5.3. Section 5.4. Section 6.1. Section 6.2. Section 6.3. Section 6.4. Section 6.5. Section 6.6. Section 6.7. Table of Contents Page ARTICLE I DEFINITIONS Definitions.. ..... ......... ......... ...... ........... ........... ....... ......... ............. ......... .................. 2 ARTICLE II REPRESENTATIONS AND WARRANTIES Representations by the Participant..... ..... ............. ......... ............. ............. ....... ....... 9 Representations and Warranties by the Authority............................................... 10 ARTICLE III ACQUISITION OF THE PROJECT Sale and Purchase of Project.. ............ ............................. ......... ............... ............ 10 Title ..................... ...................... ..... ............... ........... ......... ....... ............. .............. 10 Changes to the Project......... ...... ............ .... ....... ..... ............... ...... ......... .... ....... ..... 10 ARTICLE IV INSTALLMENT PAYMENTS Purchase Price. ........... .......................................... ~........................................ ...... 10 Installment Payments and Additional Payments ................................................. 11 Appointment of Dissemination Agent and Arbitrage Calculation Service ......... 11 ARTICLE V SECURITY Pledge of System Net Revenues..... ........... ..... ......................... ............ ..... ........... 12 Allocation of System Revenues....... ......... ............ ... ............ ..... ......... ...... ........... 12 Additional Parity Debt ..... ................ ....... ................ ....... ..;. ..... ............. ............... 14 Rate Stabilization Fund .... .......................................................................... ......... 15 ARTICLE VI COVENANTS OF THE PARTICIPANT Punctual Payment..... ........................................................................................... 15 Legal Existence........ ........................................................................................... 16 Against Encumbrances.... ...................... .................... ......... ...... ............ .... ........... 16 Against Sale or Other Disposition of the System................................................ 16 Maintenance and Operation of System ............................................................... 16 In.surance. ..... ............... ................. .... ....... ........................... ...... .......... ...... ........... 16 Eminent Domain Proceeds.... .....:.................... ........ .................... ............... ......... 17 P.9 16396.1001098 AGMT Section 6.8. Section 6.9. Section 6.10. Section 6.11. Section 6.12. Section 6.13. Section 6.14. Section 6.15. Section 6.16. Section 6.17. Section 6.18. Section 6.19. Section 6.20. Section 7.1. Section 8.1. Section 8.2. Section 8.3. Section 8.4. Section 8.5. Section 8.6. Section 9.1. Section 10.1. Section 10.2. Section 10.3. Section 10.4. Section 10.5. Table of Contents (continued) Page Amounts of Rates, Fees and Charges. ....................... .......................................... 18 Enforcement of and Performance Under Contracts. ........................................... 18 Collection of Charges, Fees and Rates.. ................ ............. ............... ..... ....... ...... 19 No Free Service.... ................ .... .................... ......... ....... ............. ...... .................... 19 Prompt Acquisition and Construction of the Projects ......................................... 19 Payment of Claims ............ ......... ..... ............... ........... .......... ............. ...... ............. 19 Books of Record and Accounts; Financial Statements ....................................... 19 Payment of Taxes and Other Charges and Compliance with Governmental Regulations.......................................................................... ................................ 20 Tax Covenants and Matters. ............................ ........ ............ ............. .......... ......... 20 Rebate Fund.............................................;........................................................... 21 Continuing Disclosure....... ......... ..................... ...... ..... ............................ ............. 22 Further Assurances... ......... ....... ....... .... ...... ................ ......... ........... .... .............. ._.. 22 Reimbursement of Bond Insurer and Other Provisions Relating to the Bond Insurer....................... ...................... ....................... ....... ................... ....... ............. 22 ARTICLE VII PREP A YMENT OF INSTALLMENT PAYMENTS Prepayment............................ ........................................... .................................... 22 ARTICLE vm EVENTS OF DEFAULT AND REMEDIES OF THE AUTHORITY Events of Default and Acceleration of Maturities............................................... 23 Application of Funds Upon Acceleration............................................................ 24 Other Remedies of the Authority........................................................................ 24 Non-Waiver........ ................................................................................................. 25 Remedies Not Exclusive ... ......... ..... ............................... ............. ..... .......... ......... 25 Notices... ............. ..............................................:.................................................. 25 ARTICLE ]X DISCHARGE OF OBLIGATIONS Discharge of Obligations. ....................... .......... .......................... ................ .......... 25 ARTICLE X MISCELLANEOUS Liability of Participant Limited to System Revenues ......................................... 26 Successor Is Deemed Included in all References to Predecessor........................ 26 Waiver of Personal Liability.... ....... ................ ...................... ........... ................... 26 Article and Section Headings, Gender and References....................................... 26 Partial fuvalidity . ........... ...... ................................... .......... .......... ......................... 26 P.10 16396.1 001098 AGMT Section 10.6. Section 10.7. Section 10.8. Section 10.9. Section 10.10. Section 10.11. Section 10.12. Table' of Contents (continued) Page Assignment.......................................................................................................... 27 Net Contract........................................................................................................ 27 California Law..... .............. ............. ... .... ...... ................ ..... ........ ............... ............ 27 Effective Date............................................... ~...................................................... 27 Execution in Counterparts....... ............................................................................. 27 Indemnification of Authority....... ........ .......... .... ............... ....... ........................... 27 Amendments........................................ .:.............................................................. 29 P.ll 16396.1001098 AGMT INSTALLMENT PURCHASE AGREEMENT This INSTALLMENT PURCHASE AGREEMENT, made and entered into as of _ 1, 2005, by and between the [PARTICIPANT], public agency duly organized and existing under and by virtue of the laws of the State of California (the "Participant"), and CALIFORNIA STATEWIDE C01fMUNITlES DEVELOPMENT AUTHORITY, a joint exercise of powers agency duly organized and existing under and by virtue of the laws of the State of California (the "Authority"). WITNESSETH: WHEREAS, the Participant proposes to finance and/or refinance certain facilities (the "Project") within its enterprise system described in Exhibit A hereto (the "System"); WHEREAS, the Project is a public capital improvement that results in significant public health benefits, including but not limited to more efficient delivery of service and constitutes facilities for the production, storage, transmission, or treatment of water, recycled water, or wastewater; WHEREAS, the Authority has agreed to assist the Participant III financing and/or refinancing the Project; WHEREAS, the Participant is authorized by the laws of the State of California (the "Law") to enter into this Agreement; WHEREAS, the Participant and the Authority have duly authorized the execution of this Agreement; WHEREAS, the Authority will assign its right to receive Installment Payments under this Agreement to Union Bank of California, N.A., as Trustee under that certain Indenture, dated as of _ 1, 2005, and will issue its California Statewide Communities Development Authority Water and Wastewater Revenue Bonds (Pooled Financing Program), Series 2005_ to be secured in part by the Installment Payments; 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 delivery of this Installment Purchase 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 Installment Purchase Agreement; NOW, THEREFORE, IN CONSIDERATION OF THESE PREMISES AND OF THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: P.12 16396.1 001098 AGMT ARTICLE I DEFlNITIONS Section 1.1. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. Unless the context otherwise requires, all capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the fudenture. Agreement The term "Agreement" means this Agreement, by and between the Participant and the Authority, dated as of the date hereof, as originally executed and as it may from time to time be amended or supplemented in accordance herewith. Annual Debt Service The term "Annual Debt Service" means, for any Fiscal Year, the sum of (1) the interest accruing on all Parity Debt during such Fiscal Year, assuming that all Parity Debt is retired as scheduled, plus (2) the principal amount (including principal due as sinking fund installment payments) allocable to all Parity Debt in such Fiscal Year, calculated as if such principal amounts were deemed to accrue daily during such Fiscal Year in equal amounts from, in each case, each payment date for principal or the date of delivery of such Parity Debt (provided that nrlnrln::tl c;:h::tl1" not hp nppmpn to ::trrnlf": for OTf":~tp:r th::tn l'l ~h"'-n::tv nPorion nTioT to :mv n::lvmf":nt r~-u--r- _~__A u_. -- ---.-.-- -- ------ --- 0.----- ------ - --- --J r----- r---- -- --J r-J-~--._. date), as the case may be, to the next succeeding payment date for principal, provided, that the following adjustments shall be made to the foregoing amounts in the calculation of Anriua1 Debt Service: (A) with respect to any such Parity Debt bearing or comprising interest at other than a fixed interest rate, the rate of interest used to calculate Annual Debt Service shall be (i) with respect to such Parity Debt then outstanding, one hundred ten per cent (110%) of the greater of (1) the daily average interest rate on such Parity Debt during the twelve (12) calendar months next preceding the date of such calculation (or the portion of the then current Fiscal Year that such Parity Debt has borne interest) or (2) the most recent effective interest rate on such Parity Debt prior to the date of such calculation or (ii) with respect to such Parity Debt then proposed to be issued, the then current 20-Bond GO Index rate as published in The Bond Buyer (or if The Bond Buyer or such index is no longer published, such other published similar index); (B) with respect to any such Parity Debt having twenty-five per cent (25%) or more of the aggregate principal amount thereof due in anyone Fiscal Year, Annual Debt Service shall be calculated for the Fiscal Year of determination as if the interest on and principal of such Parity Debt were being paid from the date of incurrence thereof in substantially equal annual amounts over a period of twenty (20) years from the date of such Parity Debt provided, however that the full amount of such Parity Debt shall be included in Annual Debt Service if the date of calculation is within 24 months of the actual maturity of the payment; P.13 16396.1001098 AGMT (C) with respect to any such Parity Debt or portions thereof bearing no interest but which are sold at a discount and which discount accretes with respect to such Parity Debt or portions thereof, such accreted discount shall be treated as due when scheduled to be paid; (D) Annual Debt Service shall not include interest on Parity Debt which is to be paid from amounts constituting capitalized interest; (E) if an interest rate swap agreement is in effect with respect to, and is payable on a parity with, any Parity Debt to which it relates, no amounts payable under such interest rate swap in excess of debt service payable under such Parity Debt agreement shall be included in the calculation of Annual Debt Service unless the sum of (i) the interest payable on such Parity Debt, plus (ii) the amounts payable by the Participant under such interest rate swap agreement, less (iii) the amounts receivable by the Participant under such interest rate swap agreement, are greater than the interest payable ori such Parity Debt, in which case the amount of such payments to be made that exceed the interest to be paid on such Parity Debt shall be included in such calculation, and for this purpose, the variable amount under any such interest rate swap agreement shall be determined in accordance with the procedure set forth in subparagraph (A) of this definition; and (F) Repayment Obligations proposed to be entered into as Parity Debt shall be deemed to be payable at the scheduled amount due under such Repayment Obligation as calculated under this definition. Authoritv The term "Authority" means C~lifomia Statewide Cow..lIlunities Dl3velopment Authority, a joint exercise of powers agency duly organized and existing under and by virtue of the laws of the State of California. Authoritv Bonds The term "Authority Bonds" means the California Statewide Communities Development Authority Water and Wastewater Revenue Bonds (Pooled Financing Program), Series 2005_ issued by the Authority, and at any time Outstanding pursuant to the Indenture. Bond Insurer The term "Bond Insurer" means Financial Security Assurance, Inc. and its successors and aSSIgns. Business Dav The term "Business Day" means any day other than a Saturday, a Sunday or a day on which banks located in the city where the Corporate Trust Office is located, are required or authorized to remain closed. P.14 16396.1001098 AGMT Certificate of the Participant The term "Certificate of the Participant" means an instrument in writing signed by the chief executive officer or chief financial officer of the Participant, or by any other officer of the Participant duly authorized by the Participant for that purpose, such authorization to be evidenced by a certificate verifying the specimen signatures of such officers at the request of the Trustee. Code The term "Code" means the Internal Revenue Code of 1986, as amended, and the regulations of the United States Department of the Treasury issued thereunder, and in this regard reference to any particular section of the Code shall include reference to all successors to such section of the Code. Continuing Disclosure Certificate The term "Continuing Disclosure Certificate" means, collectively, any Continuing Disclosure Certificate executed by the Participant with respect to the Authority Bonds. Event of Default The term "Event of Default" means an event described in Section 8.1 hereof. Fiscal Year The term ilFiscal Yearn means the period beginning on July 1 of each year and ending on the last day of June of the next succeeding year, or any other twelve-month period selected and designated as the official Fiscal Year of the Participant. Generallv Accepted Accounting Principles The term "Generally Accepted Accounting Principles" means the uniform accounting and reporting procedures set forth in publications of the American Institute of Certified Public Accountants or its successor, or by any other generally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Governmental Accounting Standards Board or its successor. Indenture The term "Indenture" means the Indenture, dated as of _ 1, 2005, by and between the Authority and the Trustee, as it may from time to time be amended or supplemented in accordance with its terms. P.15 16396.1 001098 AGMT Independent Certified Public Accountant The term "Independent Certified Public Accountant" means any firm of certified public accountants appointed by the Participant, which is independent of the Participant and the Authority pursuant to the Statement on Auditing Standards No. 1 of the American Institute of Certified Public Accountants. Installment Payment Date The term "Installment Payment Date" means the fifteenth day of the month prior to each related Interest Payment Date, or if said date is not a Business Day, then the preceding Business Day. Installment Payments The term "Installment Payments" means the Installment Payments of interest and principal scheduled to be paid by the Participant under and pursuant hereto as provided in Exhibit B hereto. Interest Payment Date The term "Interest Payment Date" means the payment dates of the Authority Bonds identified in the Indenture. Law The term "Law" means the laws of the State of California pursuant to which the Participant was formed and operates and Section 5451 of the Government Code of the State of California and in each case all laws amendatory thereof or supplemental thereto. Maximum Annual Debt Service The term "Maximum Annual Debt Service" means, as of any date of calculation, the largest Annual Debt Service during the period from the date of such calculation through the final maturity date of all Parity Debt. Moody's The term "Moody's" means Moody's Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the services of a municipal securities rating agency, then the term "Moody's" shall be deemed to refer to any other nationally recognized municipal securities rating agency selected by the Participant. P.16 16396.1001098 AGMT Municipal Bond Insurance Policy The term "Municipal Bond Insurance Policy" means the policy or policies of municipal bond insurance issued by the Bond Insurer. Net Proceeds The term "Net Proceeds" means, when used with respect to any casualty insurance or condemnation award, the proceeds from such insurance or condemnation award remaining after payment of all expenses (including attorneys' fees) incurred in the collection of such proceeds. Operation and Maintenance Costs The term "Operation and Maintenance Costs" means the reasonable and necessary costs paid or incurred by the Participant for maintaining and operating the System, determined in accordance with Generally Accepted Accounting Principles, including all reasonable expenses of management and repair and all other expenses necessary to maintain and preserve the System in good repair and working order, and including all administrative costs of the Participant that are charged directly or apportioned to the operation of the System, such as salaries and wages of employees, overhead, taxes (if any) and insurance premiums (including payments required to be paid into any self-insurance funds), and including all other reasonable and necessary costs of the Participant or charges required to be paid by it to comply with the terms hereof or of any Supplemental Agreement or of any resolution authorizing the execution of any Parity Debt, such as compensation, reimbursement and indemnification of the Trustee and the Authority and fees and expenses of Independent Certified Public Accountants; but excluding in all cases (i) payment of P&h""ity Debt and Subordinate Obligations, (ii) costs of capital additions, replacements, betterments, extensions or improvements which under Generally Accepted Accounting Principles are chargeable to a capital account, and (iii) depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles. Parity Debt The term "Parity Debt" means the Installment Payments and any Parity Obligations. Parity Obligation Payments The term "Parity Obligation Payments" means the payments scheduled to be paid by the Participant under and pursuant to the Parity Obligations, which payments are secured by a pledge of System Net Revenues on a parity with the Installment Payments as provided herein. Parity Obligations The term "Parity Obligations II means all obligations of the Participant authorized and executed by the Participant other than the Installment Payments, the Parity Obligation Payments under which are secured by a pledge of the System Net Revenues on a parity with the Installment Payments as provided herein, including but not limited to any Repayment Obligations secured by System Net Revenues on a parity with the Installment Payments. P.17 16396.1001098 AGMT Participant The term "Participant" means the [Participant], a public agency dilly organized and existing under and by' virtue of the laws of the State of California. Participating Underwriter The term "Participating Underwriter" shall have the meaning ascribed thereto in the Continuing Disclosure Certificate. Prior Liens The term "Prior Liens" means those liens, if any, on the System Revenues which are senior to the pledge under this Agreement as identified in Exhibit A hereto. Proiect The term "Project" means any additions, betterments, extensions and improvements to the System financed or refinanced described in Exhibit A hereto. Purchase Price The term "Purchase Price" means the principal amount plus interest thereon owed by the Participant to the Authority under the terms hereof as provided in Section 4.1. Rate Stabilization Fund The term "Rate Stabilization Fund" means the fund by that name established pursuant to Section 5.4 hereof. Repavment Obligation "Repayment Obligation" means the reimbursement obligation or any other payment obligation of the Participant under a written agreement between the Participant and a credit provider to reimburse the credit provider for amounts paid pursuant to a credit facility for the payment of the principal amount or purchase price of and/or interest on any Parity Debt. Rebate Fund . The term "Rebate Fund" means the fund by that name established pursuant to Section 4.5 of the Indenture and provided for in Section 6.17 hereof. Reserve Account The term "Reserve Account" means that Account within the Reserve Fund held under the Indenture relating to this Agreement. P.l8 16396.1 001098 AGMT Reserve Account Requirement The term "Reserve Account Requirement" has the meaning assigned in the Indenture. Reserve Policy The term "Reserve Policy" has the meaning assigned in the Indenture. Subordinate Obligations The term "Subordinate Obligations" means the .obligations of the Participant that are subordinate in payment to the Installment Payments. Supplemental Agreement The term "Supplemental Agreement" means any agreement then in fullforce and effect which has been entered into by the Participant and the Trustee, amendatory of or supplemental hereto; but only if and to the extent that such Supplemental Agreement is specifically authorized hereunder. System The term "System" means the whole and each and every part of the system identified in Exhibit A hereto of the Participant, including the portion thereof existing on the date hereof, and including all additions, betterments, extensions and improvements to such system or any part thereof hereafter acquired or constructed. Svstem Net Revenues The term "System Net Revenues" means for any period System Revenues less Operation and Maintenance Costs for such period; provided that certain adjustments in the amount of System Net Revenue deemed collected during a Fiscal Year may be made in connection with amounts deposited in the Rate Stabilization Fund as provided in Section 5.4 herein. System Revenue Fund The term "System Revenue Fund" means the fund by that name created pursuant to Section 5.2 hereof. System Revenues The term "System Revenues" means all gross income and revenue received or receivable by the Participant from the ownership or operation of the System, determined in accordance with Generally Accepted Accounting Principles, including all fees (including connection fees), rates, charges and all amounts paid under any contracts received by or owed to the Participant in connection with the operation of the System and all proceeds of insurance relating to the System and investment income allocable to the System and all other income and revenue howsoever P.19 16396.1 001098 AGMT derived by the Participant from the ownership or operation of the System or arising from the System, subject to and after satisfaction of any Prior Liens. . Tax Certificate "Tax Certificate" means collectively all the certificates, each dated the date of the original issuance and delivery of the Authority Bonds, with respect to the requirements of certain provisions of the Code, as each such certificate may from time to time be modified or supplemented in accordance with the terms thereof. Trustee The term "Trustee" means Union Bank of California, N.A. acting in its capacity as Trustee under and pursuant to the Indenture, and its successors and assigns. Written Request of the Participant "Written Request of the Participant" means an instrument in writing signed by the chief executive or chief financial officer of the Participant or their designee, or by any other officer of the duly authorized by the Participant for that purpose, such authorization to be evidenced at the request of the Trustee by a certificate verifying the specimen signatures of such officers. ARTICLE II REPRESENTATIONS AND W ARRANTlES Section 2.1. Representations bv the Participant. The Participant makes the following representations: (a) The Participant is a'public agency duly organized and existing under and pursuant to the laws of the State of California. The Participant has full legal right, power and authority to enter into this Agreement and carry out its obligations hereunder, to carry out and consummate all transactions contemplated by this Agreement, and the Participant has complied with the provisions of the Law in all matters relating to such transactions. By proper action, the Participant has duly authorized the execution, delivery and due performance of this Agreement. (b) The Participant will not take or permit any action to be taken which results in the interest paid for the installment purchase of the Project under the terms of this Agreement being included in the gross income of the Authority or its assigns for purposes of federal or State of California income taxation. (c) The Participant has determined that it is necessary and proper for Participant uses and purposes within the terms of the Law that the Participant finance and/or refinance the acquisition of the Project in the manner provided for in this Agreement. (d) The Participant has reviewed the Indenture and accepts its terms. P.20 16396.1 001098 AGMT Section 2.2. Representations and Warranties bv the Authority. The Authority represents and warrants that the Authority is a joint exercise of powers agency duly organized and in good standing under the laws of the State of California, has full legal right, power and authority to enter into this Agreement and to carry out and consummate all transactions contemplated by this Agreement and by proper action has duly authorized the execution, delivery and due performance of this Agreement. ARTICLE ill ACQUISITION OF THE PROJECT Section 3.1. Sale and Purchase of Proiect. [In consideration for the Authority's assistance in financing the Project, the Participant agrees to act as the Authority's agent for purposes of construction and acquisition of the Project. The Authority will make the net proceeds of the Authority Bonds allocable to the Participant available to the Participant for this purpose, as provided in the Indenture.! In consideration for the Authority's assistance in refinancing those components of the Project constituting refinancing of existing public capital improvements, the Participant agrees to sell, and hereby sells, to the Authority, and the Authority agrees to purchase and hereby purchases, from the Participant, said portion of Project at the purchase price equal to the net proceeds of the Authority Bonds allocable to the refinancing.] In consideration for the Installment Payments as set forth in Section 4.2, the Authority agrees to sell, and hereby sells, to the Participant, and the Participant agrees to purchase, and hereby purchases, from the Authority, the Project at the purchase price specified in Section 4.1 hereof and otherwise in the manner and in accordance with the provisions of this Agreement. Section 3.2. Title. All right, title and interest in the Project shall vest in the Participant immediately upon execution and delivery of this Agreement. Section 3.3. Changes to the Proiect. The Participant may at any time substitute other public capital improvements for the then existing components of the Project by submitting a Written Request of the Participant to the Authority and the Trustee specifying the components of the Project to be substituted and the new components. ARTICLE N INSTALLMENT PAYMENTS Section 4.1. Purchase Price. (a) The Purchase Price to be paid by the Participant hereunder to the Authority is the sum of the principal amount of the Participant's obligations hereunder plus the interest to accrue on the unpaid balance of such principal amount from the effective date hereof over the term hereof; subject to prepayment as provided in Article VTI. (b) The principal amount of the payments to be made by the Participant hereunder is set forth in Exhibit B hereto. P.21 16396.1001098 AGMT (c) The interest to accrue on the unpaid balance of such principal amount is as specified in Section 4.2 and Exhibit B hereto, and shall be paid by the Participant as and constitutes interest paid on the principal amount of the Participant's obligations hereunder. Section 4.2. Installment Payments and Additional Payments. The Participant shall, subject to any rights of prepayment provided .in Article VII, pay the Authority the Purchase Price in installment payments of interest and principal in the amounts and on the Installment Payment Dates as set forth in Exhibit B hereto. Each Installment Payment shall be paid to the Authority in lawful money of the United States of America. In the event the Participant fails to make any of the payments required to be made by it under this Section, such payment shall continue as an obligation of the Participant until such amount shall have been fully paid; and the Participant agrees to pay the same with interest accruing thereon at the rate or rates of interest then applicable to the remaining unpaid principal balance of the Installment Payments if paid in accordance with their terms. . The obligation of the Participant to make the Installment Payments is absolute and unconditional, and until such time as the Purchase Price shall have been paid in full (or provision for the payment thereof shall have been made pursuant to Article IX), the Participant will not discontinue or suspend any Installment Payments required to be made by it under this Section when due, whether or not the System or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever. The Participant shall not be obligated to make payments hereunder or incur any liability as a result of the default of any other public agency under an Installment Purchase Agreement, the obligations under which have been assigned to the Trustee under the Indenture in connection with the Authority Bonds. In addition to the Installment Payments, the Participant shall also pay such amounts ("Additional Payments") as shall be required for the payment of all fees and administrative costs of the Authority and the Trustee relating to the Authority Bonds and allocable to the Participant, including without limitation all expenses, compensation and indemnification of the Authority and the Trustee payable by the Participant hereunder and under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary administrative .costs of the Authority or charges required to be paid by it to comply with the terms hereof (including the fees of the disclosure consultant and arbitrage calculations service provided in Section 4.3), of the Authority Bonds or of the Indenture or to indemnify the Authority and its employees, officers and directors and the Trustee; provided that the foregoing obligation shall be limited to those amounts reasonably allocable to the Participant. Section 4.3. Appointment of Dissemination Agent and Arbitrage Calculation Service. The Participant hereby appoints the firm designated pursuant to Section 4.6 of the Indenture as its dissemination agent to assist in compliance with Section 6.18 hereof. The Participant hereby appoints the firm designated pursuant to Section 4.5 of the Indenture as its arbitrage calculation P.22 16396.1001098 AGMT service to comply with Sections 6.16 and 6.17 hereof (provided that if the Participant is a "small governmental issuer" as set forth in Section 148(f)(4)(D) of the Code no such firm need be appointed on the Participant's behalf or such services paid for by the Participant). ARTICLE V SECURITY Section 5.1. Pledge of System Net Revenues. All System Net Revenues and all amounts on deposit in the System Revenue Fund are hereby irrevocably pledged to the payment of the Installment Payments as provided herein and the System Net Revenues shall not be used for any other purpose while any of the Installment Payments remain unpaid; provided that out of. the System Revenues there may be apportioned such sums for such purposes as are expressly permitted herein. This pledge, together with the pledge created by all other Parity Debt, shall constitute a first lien on System Net Revenues and, subject to application of amounts on deposit therein as permitted herein, the System Revenue Fund and other funds and accounts created hereunder for the payment of the Installment Payments and all other Parity Debt in accordance with the terms hereof and of the Indenture. Section 5.2. Allocation of System Revenues. In order to carry out and effectuate the pledge and lien contained herein, the Participant agrees and covenants that all System Revenues shall be received by the Participant in trust hereunder and shall be deposited when and as received in a special fund designated as the "System Revenue Fund", which fund is hereby established and which fund the Participant agrees and covenants to maintain and to hold separate and apart from other funds so long as any Installment Payments remain unpaid. To the extent the Participant has an existing fund wI-Jeh satisfies the foregoing requirements, then sueh shall be deemed to be the "System Revenue Fund" and the Participant shall not be required to create a new fund. The Participant may maintain separate accounts within the System Revenue Fund. The amounts in the System Revenue Fund shall be invested in Authorized Investments. Moneys in the System Revenue Fund shall be used and applied by the Participant as provided in this Agreement. The Participant shall, from the moneys in the System Revenue Fund, pay all Operation and Maintenance Costs (including amounts reasonably required to be set aside in contingency reserves for Operation and Maintenance Costs, the payment of which is not then immediately required) as such Operation and Maintenance Costs become due and payable. Thereafter, all remaining moneys in. the System Revenue Fund shall be set aside by the Participant at the following times for the transfer to the following respective special funds in the following order of priority; and all moneys in each of such funds shall be held in trust and shall be applied, used and withdrawn only for the purposes set forth in this Section. P.23 16396.1001098 AGMT (a) Installment Payments. Not later than each Installment Payment Date, the Participant shall, from the moneys in the System Revenue Fund, transfer to the Trustee the Installment Payment due and payable on that Installment Payment Date. The Participant shall also, from the moneys in the System Revenue Fund, transfer to the applicable trustee for deposit in the respective payment fund, without preference or priority" and in the event of any insufficiency of such moneys ratably without any discrimination or preference, any other Parity Obligation Payments in accordance with the provisions of any Parity Obligation. (b) Reserve Account. On or before the first Business Day of each month, the Participant shall, from the remaining moneys in the System Revenue Fund, thereafter, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, transfer to the Trustee as provided in Section 3.2 of the Indenture for deposit in the Revenue Fund for application to the Reserve Account in accordance with the Indenture and to the applicable trustee for such other reserve accounts, if any, as may have been established in connection with Parity Obligations that sum, if any, necessary to restore the Reserve Account to an amount equal to the Reserve Account Requirement and otherwise replenish the Reserve Account for any withdrawals (including draws upon the Reserve Policy or any credit facility) to pay the Installment Payments due hereunder and necessary to restore such other reserve accounts to an amount equal to the amount required to be maintained therein; provided that payments to restore the Reserve Account after a withdrawal may be made in monthly installments equal to 1/12 of the aggregate amount needed to restore the Reserve Account to the Reserve Account Requirement as of the date of the withdrawal. The Participant's obligation to replenish the Reserve Account shall be limited to draws on the Reserve Account relating to the Participant. To the extent that draws on the Reserve Account are from a credit facility as permitted under the definition of Reserve Account Requirement in the Indenture, transfers hereunder to restore the' Reserve Account shall be made to reimburse the provider of such credit facility. The Participant shall be obligated to make payments to the IDsurer for draws on the Reserve Policy only to the extent of draws on the Reserve Account relating to this Agreement. Interest shall accrue and be payable on draws under the Reserve Policy and all related reasonable expenses incurred by the Insurer from the date of payment by the Insurer at the Late Payment Rate. "Late Payment Rate" means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by IP Morgan Chase Bank (N.A.) at its principal office in the City of New York, as its prime or base lending rate ("Prime Rate") (any change in such Prime Rate to be effective on the date such change is announced by JP Morgan Chase Bank (N.A.)) plus 3%, and (ii) the then applicable highest rate of interest on the Series 2005_ Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. In the event IP Morgan Chase Bank (N.A.) ceases to announce its Prime Rate publicly, Prime Rate shall be the publicly announced prime or base lending rate of such national bank as the Insurer shall specify. R,epayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, "Policy Costs") shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw (provided that the Participant may repay the Policy Costs in full at any time during this period). P.24 16396.1001098 AGMT If the Participant shall fail to pay any Policy Costs in accordance with the requirements set forth above, the Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided hereunder and under the Indenture other than (i) acceleration of the maturity of the Bonds or (ii) remedies which would adversely affect owners of the Bonds. For purposes of the additional parity debt test in Section 5.3(c) and the rate covenant in Section 6.8(b), Net Revenues shall provide at least one times coverage of the Policy Costs then due and owing in addition to the other coverage requirements therein. (c) Surplus. Moneys on deposit in the System Revenue Fund not necessary to make any of the payments required above, may be expended by the Participant at any time for any purpose permitted by law, including but not limited to payments with respect to Subordinate Obligations and deposits to the Rate Stabilization Fund. Sec~ion 5.3. Additional Parity Debt. The Participant may at any time enter into any Parity Debt; provided: (a) The Participant shall be in compliance with all agreements, conditions, covenants and terms contained herein and in all Supplemental Agreements required to be observed or performed by it, and a Certificate of the Participant to that effect shall have been filed with the Trustee (with the consent of the Bond Insurer this condition shall not apply where the purpose of the proposed Parity Debt is to cure such non-compliance). (b) The Parity Debt shall have been dilly authorized pursuant to the Law and all r"),....,~l~r...':lhlQ 11"l"l'''I'1C"l I'\nrl Tho. I"\.,.......,^".....t. "on ,.:zO~^l"'~+ ~...., -tho. D'O'~O..,.-,;70 ^C"'''''''''''+ ....eln+~.,...rr "",, +'he D........;+~r n.oh+ u.l:''p.1.1'''ULJ~V ~UVY.:>, ....1.1u. L1.1V ....~~~vuu vu U.v.l:'V~~L ~u LUv L'-v~vL V v ..,. vVUUL ~ H.LUU5 LV LU L CU~L'y Lo'vVL shall be increased to an amount at least equal to the Reserve Account Requirement as calculated with respect to such Parity Debt; provided that if such Parity Debt shall not be fustallment Payments, then a reserve account held by an independent trustee (who may be other than the Trustee) shall be established in an amount equal to the lesser of the maxiinum annual debt service of such Parity Debt (calculated on the basis of a year ending on the principal payment date of such Parity Debt) or the maximum amount permitted under the Code; provided further that, if such Parity Debt is a loan from a governmental agency, then a reserve account shall be established in the amount required or permitted by such governmental agency. (c) The System Net Revenues for the last completed Fiscal Year or any 12 consecutive months within the last 18 months preceding the date of execution of such Parity Debt, as shown by a Certificate of the Participant on file with the Trustee, plus an allowance for increased System Net Revenues arising from any increase in the rates, fees and charges of the System which was duly adopted by the governing board of the Participant prior to the date of the execution of such Parity Debt but which, during all or any part of such 12 month period, was not in effect, in an amount equal to the amount by which the System Net Revenues would have been increased if such increase in rates, fees and charges had been in effect during the whole of such 12 month period, as shown by a Certificate of the Participant on file with the Trustee, shall have produced a sum equal to at least 120 percent of the Maximum Annual Debt Service as calculated after the execution of such Parity Debt; provided, that in the event that all or a portion of such Parity Debt is to be issued for the purpose of refunding and retiring any Parity Debt then P.25 16396.1001098 AGMT outstanding, interest and principal payments on the Parity Debt to be so refunded and retired from the proceeds of such Parity Debt being issued shall be excluded from the foregoing computation of Maximum Annual Debt Service; provided further, that the Participant may at any time issue a Parity Debt without compliance with the foregoing conditions if the Annual Debt Service for each Fiscal Year during which such Parity Debt is outstanding will not be increased by reason of the issuance of such Parity Debt; provided further, the Bond Insurer may waive the requirements in paragraph (b) above relating to funding the Reserve Account or other reserve account if the Parity Debt proposed to be issued is irrevocably guaranteed by a credit provider in at least the second highest rating category of Moody's or S&P; and provided further, an adjustment shall be made in the amount of System Net Revenues as provided in Section 5.4 hereof. Nothing contained in this Section shall limit the issuance of any revenue bonds of the Participant payable from the System Net Revenues and secured by a lien and charge on the System Net Revenues if, after the issuance and delivery of such revenue bonds, none of the Installment Payments shall be unpaid. Furthermore, nothing contained in this Section shall limit the issuance of any Subordinate Obligations. Section 5.4. Rate Stabilization Fund. There is hereby established a special fund to be known as the "Rate Stabilization Fund" which shall be held by the Participant. The Participant - may, during or within 210 days after a Fiscal Year, deposit surplus System Net Revenues transferred from the System Revenue Fund attributable to such Fiscal Year (on the basis of Generally Accepted Accounting Principles) into the Rate Stabilization Fund. The Participant may at any time withdraw moneys from the Rate Stabilization Fund and deposit such amounts into the System Revenue Fund. Notwithstanding anything to the contrary provided herein, System Net Revenues deposited into the Rate Stabilization Fund shall not be taken into account as System Net Revenues for purposes of the calculations in Sections 5.3 and 6.8(b) in the Fiscal Year to which such deposit is attributable, and amounts withdrawn from the Rate Stabilization Fund and deposited into the System Revenue Fund, during or within 210 days after a Fiscal Year, may be taken into account as System Revenues for purposes of the calculations required under Sections 5.3 and 6.8(b) in such Fiscal Year; provided that, for purposes of the calculation required under Section 6.8(b), the amount of System Net Revenues before any credits for withdrawals from the Rate Stabilization Fund may not be less than 100% of Maximum Annual Debt Service for outstanding Parity Debt; provided further that the foregoing provisions shall be subject to the rate stabilization fund provisions of any Parity Debt outstanding as of the date hereof. The amounts in the Rate Stabilization Fund shall be invested in the Authorized Investments. ARTICLE VI COVENANTS OF THE P ARTICIP ANT Section 6.1. Punctual Payment. The Participant will punctually pay the Installment Payments in strict conformity with the terms hereof and will faithfully satisfy, observe and perform all agreements, conditions, covenants and terms hereof and of. any Supplemental Agreements. P.26 16396.1 001098 AGMT Section 6.2. Legal Existence. The Participant will use all means . legally available to maintain its existence. Section 6.3. Against Encumbrances. The Participant will not mortgage or otherwise encumber, pledge or place any charge upon any of the System Net Revenues except as provided herein, and will not issue any obligations secured by System Net Revenues senior to the Parity Debt; provided, that the Participant may at any time issue any Subordinate Obligations. Section 6.4. Against Sale or Other Disposition of the System. The Participant will not sell or otherwise dispose of the System or any part thereof essential to the proper operation of the System or to the maintenance of the System Net Revenues, unless the Installment Payments have been fully paid or provision has been made therefor in accordance with Article 9.1 hereof. The Participant will not enter into any lease or agreement which impairs the operation of the System or any part thereof necessary to secure adequate System Net Revenues for the payment of-the Installment Payments, or which would otherwise impair the rights of the Owners with respect to the System Net Revenues or the operation of the System. Section 6.5. Maintenance and Operation of System. The Participant will maintain and preserve the System in good repair and working order at all times and will operate the System in an efficient and economical manner. Section 6.6. Insurance. (a) The Participant will procure and maintain at all times insurance on the System against such risks (including accident to or destruction of the System) as are usually insured in connection \"Llith operations similar to the System and, to the extent such insurance is a\'ailable for reasonable premiums from a reputable insurance company, such insurance shall be adequate in. amount and, as to the risks insured against, shall be maintained with responsible insurers; provided, that such insurance coverage may be satisfied under a self-insurance program which is actuarially sound. (b) The Participant shall procure and maintain or cause to be procured and maintained public liability insurance covering claims against the Participant (including its directors, officers and employees) for bodily injury or death, or damage to property occasioned by reason of the Participant's operations, including any use of the System, and such insurance shall afford protection in such amounts as are usually covered in connection with operations similar to the System; provided, that such insurance coverage may be satisfied under a self-insurance program . which is actuarially sound. (c) If all or any part of the System shall be damaged or destroyed the Net Proceeds realized by the Participant therefrom shall be deposited by the Participant with the Trustee in a special fund which the Trustee shall establish as needed in trust and applied by the Participant to the cost of acquiring and constructing additions, betterments, extensions or improvements to the System if (A) the Participant first secures and files with the Trustee a Certificate of the Participant showing (i) the loss in annual System Revenues, if any, suffered, or to be suffered, by the Participant by reason of such damage or destruction, (ii) a general description of the additions, betterments, extensions or improvements to the System then proposed to be acquired P.27 16396.1001098 AGMT and constructed by the Participant from such proceeds, and (iii) an estimate of the additional System Revenues to be derived from such additions, betterments, extensions or improvements; . and (B) the Trustee has been furnished a Certificate of the Participant, certifying that such additional System Revenues will sufficiently offset on a timely basis the loss of System Revenues resulting from such damage or destruction so that the ability of the Participant to pay Installment Payments when due will not be substantially impaired, and such Certificate of the Participant shall be final and conclusive, and any balance of such proceeds riot required by the Participant for such purpose shall be deposited in the System Revenue Fund and applied as provided in Section 5.2 hereof, provided, that if the foregoing conditions are not met, then such proceeds shall be deposited with the Trustee and applied to make Installment Payments as they come due and Parity Obligation Payments as they shall become due; provided further that the foregoing procedures for the application of Net Proceeds shall be subject to any similar provisions for Parity Debt on a pro rata basis. If such damage or destruction has had no effect, or at most an immaterial effect, upon the System Revenues and the security of the Installment Payments, and a Certificate of the Participant to such effect has been filed with the Trustee, then the Participant shall forthwith deposit such proceeds in the System Revenue Fund, to be applied as provided in Section 5.2 hereof. Section 6.7. Eminent Domain Proceeds. If all or any part of the System shall be taken by eminent domain proceedings, the Net Proceeds realized by the Participant therefrom shall be deposited by the Participant with the Trustee in a special fund which the Trustee shall establish as needed in trust and appljed by the Participant to the cost of acquiring and constructing additions, betterments, extensions or improvements to the System if (A) the Participant first secures and files with the Trustee a Certificate of the Participant showing (i) the loss in annual System Revenues, if any, suffered, or to be suffered, by the Participant by reason of such eminent domain proceedings, (ii) a general description of the additions, betterments, extensions or improvements to the System then proposed to be acquired and constructed by the Participant from such proceeds, and (iii) an estimate of the additional System Revenues to be derived from such additions, betterments, extensions or improvements; and (B) the Trustee has been furnished a Certificate of the Participant, certifying that such additional System Revenues will sufficiently offset on a timely basis the loss of System Revenues resulting from such eminent domain proceedings so that the ability of the Participant to pay Installment Payments when due will not be substantially impaired, and such Certificate of the Participant shall be final and conclusive, and any balance of such proceeds not required by the Participant for such purpose shall be deposited in the System Revenue Fund and applied as provided in Section 5.2 hereof, provided, that if the foregoing conditions are not met, then such proceeds shall be deposited with the Trustee and applied to make Installment. Payments as they come due and Parity Obligation Payments as they shall become due; provided further that the foregoing procedures for the application of Net Proceeds shall be subject to any similar provisions for Parity Debt on a pro rata basis. If such eminent domain proceedings have had no effect; or at most an immaterial effect, upon the System Revenues and the security of the Installment Payments, and a Certificate of the Participant to such effect has been filed with the Trustee, then the Participant shall forthwith P.28 16396.1001098 AGMT deposit such proceeds in the System Revenue Fund, to be applied as provided in Section 5.2 hereof. Section 6.8. Amounts of Rates. Fees and Charges. (a) The Participant will, at a1! times while any of the Installment Payments remain. unpaid, fix, prescribe and collect rates, fees and charges and manage the operation of the System for each Fiscal Year so as to yield System Revenues at least sufficient, after making reasonable allowances for contingencies and errors in the estimates, to pay the following amounts during such Fiscal Year: (i) All current Operation and Maintenance Costs. (ii) . The Installment Payments and the payments for the other Parity Debt. and the Repayment Obligations and the payment of the Subordinate Obligations as they become due and payable. (iii) All payments required for compliance with the terms hereof, including restoration of the Reserve Account to an amount equal to the Reserve Account Requirement, and the termS of any Supplemental Indenture; (iv) All payments to meet any other obligations of the Participant which are charges, liens or encumbrances upon, or payable from, the System Net Revenues. (b) In addition to the requirements of the foregoing subsection (a) of this Section, the Participant will, at all times while any Installment Payments remain unpaid, to the maximum extent permitted by law, fix, prescribe and collect rates, fees and charges and manage the operation of the System for each Fiscal Year so as to yield System Net Revenues during such Fiscal Year equal to at least 120% per cent of the Annual Debt Service in such Fiscal Year; provided, an adjustment shall be made to the amount of System Net Revenues as provided in Section 5.4 hereof. The Participant may make or permit to be made adjustments from time to time in such rates, fees and charges and may make or permit to be made such classification thereof as it deems necessary, but shall not reduce or permit to be reduced such rates, fees and charges below those then in effect unless the System Revenues from such reduced rates, fees and charges will at all times be sufficient to meet the requirements of this Section. Section 6.9. Enforcement of and Performance Under Contracts. The Participant shall enforce all material provisions of any contracts to which it is a party, an assignee, successor in interest to a party or third-party beneficiary, in any case where such contracts provide for . material payments or services to be rendered to the System. Further, the Participant will comply with, keep, observe and perform all material agreements, conditions, covenants and terms, express or implied, required to be performed by it, contained in all contracts affecting or involving the System, to the extent that the Participant is a party thereto. P.29 16396.1 001098 AGMT Section 6.10. Collection of Charges. Fees and Rates. The Participant will have in effect at all times rules and regulations requiring each user of the System to pay the .applicable charges, fees and rates and providing for the billing thereof and for a due date and a delinquency date for each bill. In each case where such bill remains unpaid in whole or in part after it becomes delinquent, the Participant will enforce the collection procedures contained in such rules and regulations. Section 6.11. No Free Service. The Participant will not permit any part of the System or any facility thereof to be used or taken advantage of free of charge by any corporation, firm or person, or by any public agency (iJ-?cluding the State of California and any city, county, public agency, political subdivision, public corporation or agency or any thereof), unless otherwise required by law or existing written agreements. Section 6.12. Prompt Acquisition and Construction of the Prolects. Prior to completion of any part of the Project, the Participant will acquire and. construct the Projects with all practicable dispatch, and such acquisition and construction will be made in an expeditious manner and in conformity with the law so as to complete the same as soon as possible. Section 6.13. Payment of Claims. The Participant will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the System or upon the System Net Revenues or any part thereof, or upon any funds held by the Trustee, or which might impair the security of the Installment Payments; provided, that nothing herein contained shall require the Participant to make any such payments so long as the Participant in good faith shall contest the validity of any such claims and such nonpayment will not materially adversely affect the Participant's ability to perform its obligations hereunder. Section 6.14. Books of Record and Accounts; Financial Statements. The Participant will keep proper books of record and accounts in which complete and correct entries shall be made. of all transactions relating to the System and the System Revenue Fund, and upon request will provide information concerning such books of record and accounts to the Trustee. The Participant will prepare annually, not later than one hundred eighty (180) days after the close of each Fiscal Year, so long as any Installment Payments remain unpaid, an audited financial statement of the Participant relating to the System Revenue Fund and all other accounts or funds established pursuant hereto for the preceding Fiscal Year prepared by an Independent Certified Public Accountant, showing the balances in each such account or fund as of the beginning of such Fiscal Year and all deposits in and withdrawals from each such account or fund during such Fiscal Year and the balances in each such account or fund as of the end of such Fiscal Year, which audited financial statement shall include a statement as to the manner and extent to which the Participant has complied with the provisions hereof and of any Supplemental Agreement as it relates to such accounts and funds. The Participant will furnish a copy of such audited financial statement to the Trustee, the Bond Insurer and to the Information Services upon request, and will furnish such reasonable number of copies thereof to investment bankers, security dealers and others interested in the Authority Bonds. P.30 16396.1001098 AGMT Section 6.15. Payment of Taxes and Other Charges and Compliance with Governmental Regulations. The Participant will pay and discharge all taxes, service charges, assessments and other governmental charges which may hereafter be lawfully imposed upon the System or any properties owned by the Participant, or upon the System Revenues, when the same shall become due; provided, that nothing herein contained shall require the Participant to make any such payments so long as the Participant in good faith shall contest the validity of any such taxes, service charges, assessments or other governmental charges and such nonpayment will not materially adversely affect the Participant's' ability to perform its obligations hereunder. The Participant will duly comply with all applicable state, federal and local statutes and all valid regulations and requirements of any governmental authority relative to the operation of the System or any part thereof, but the Participant shall not be required to comply with any regulations or requirements so long as the validity or application thereof shall be contested in good faith and such noncompliance will not materially adversely affect the Participant's ability to perform its obligations hereunder. Section 6.16. Tax Covenants and Matters. (a) General. The Participant hereby covenants with the holders of the Authority Bonds that, notwithstanding any other provisions of this 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 on the Authority Bonds under Section 103 of the Code. The Participant shall not, directly or indirectly, use or permit the use of proceeds of the Authority Bonds or any of the property financed or refinanced with proceeds of the Authority Bonds, 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 or exclusion from gross income for federal income tax purposes of interest on the Authority Bonds. (b) Arbitrage. The Participant shall not, directly or indirectly, use or permit the use of any proceeds of any Authority Bonds, or of any property financed or refinanced thereby, or other funds of the Participant, or take or omit to take any action, that would cause the Authority Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code. To that end, the Participant 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 Authority Bonds. (c) Federal Guarantee. The Participant shall not make any use of the proceeds of the Authority Bonds or any other funds of the Participant, or take or omit to take any other action, that would cause the Authority Bonds to be "federally guaranteed" within the meaning or Section 149(b) of the Code. (d) Compliance with Tax Certificate. In furtherance of the foregoing tax covenants of this Section, the Participant covenants that they will comply with the provisions of the Tax Certificate, which is incorporated herein as if fully set forth herein. These covenants shall survive payment in full or defeasance of the Authority Bonds. P.31 16396.1001098 AGMT Section 6.17. Rebate Fund. (a) Establishment. Pursuant to the Indenture, the Trustee will hold a special fund (the "Rebate Fund") for any amounts required to satisfy the requirement to make rebate payments to the United States pursuant to Section 148 of the Code and the Treasury Regulations promulgated thereunder. Such amounts shall be free and dear of any lien under this Agreement and shall be governed by this Section, Section 6.16 of this Agreement, Section 4.5 of the Indenture and by the Tax Certificate executed by the Participant. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund shall be governed by this Section and the Tax Certificate, unless and to the extent that the Participant delivers to the Trustee an opinion of nationally recognized bond counsel that the exclusion from gross income for federal income tax purposes of interest on the Authority Bonds will not be adversely affected if such requirements are not satisfied. (i) Computation of Rebate Amount. Within 55 days of the end of each fifth Bond Year (as such term is defined in the Tax Certificate), and each Bond Year in which funds remain on deposit in the Project Account relating to the Participant, the Participant shall 'calculate or cause to be calculated the amount of "rebate amount," in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with respect to the computation of the "rebate amount," described, if applicable, in the Tax Certificate (e.g., the temporary investments exceptions of Section 148(f)(4)(A)(ii) or Section 148(f)(4)(B) of the Code, 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, the exception for certain "small governmental issuers" as set forth in Section 148(f)(4)(D) of the Code, and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the "1V2% Penalty") has been made)), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1 (b) of the Treasury Regulations. (ii) Transfer of Monevs. Within 55 days of the end of each such fifth Bond Year, the Participant shall deposit to the Rebate Fund from any legally available moneys for such purpose, if and to the extent required so that the balance in the Rebate Fund shall equal the "rebate amount" so calculated in accordance with this Section. (b) Deficiencies in the Rebate Fund. In the event that, prior to the time of any payment required to be made from the Rebate. Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the Participant shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. (c) Record Keeping. The Participant shall retain records of all detenninations made hereunder until six years after payment in full of the Installment Payments. (d) Survival of Defeasance. Notwithstanding anything in this Agreement to the . contrary, the obligation to comply with the requirements of this Section shall survive the payment in full or defeasance of the Installment Payments. P.32 16396.1 001098 AGMT ARTICLE VITI EVENTS OF DEFAULT AND REMEDIES OF THE AUTHORITY Section 8.1. Events of Default and Acceleration of Maturities. If one or more of the following Events of Default shall happen, that is to say -- (1) if default shall be made by the Participant in the due and punctual payment of any Installment Payment or any Parity Debt when and as the same shall become due and payable; (2) if default shall be made by the Participant in the performance of any of the other agreements or covenants required herein to be performed by it, and such default shall have continued for a period of thirty (30) days after the Participant shall have been given notice in writing of such default by the Authority, the Trustee or the Bond Insurer; provided that such default shall not constitute an Event of Default hereunder, if the Participant shall commence to cure such default within such thirty (30) day period and thereafter diligently and in good faith shall proceed to cure such default within a reasonable period of time; provided, such period shall not extend beyond a total of 90 days except with the prior consent of the Bond Insurer; (3) if the Participant shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the Participant seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, 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 Participant or of the whole or any substantial part of its property; or (4) if payment of the principal of any Parity Debt is accelerated in accordance with its terms; then, and in each and every such case during the continuance of such Event of Default specified in clauses (3) and (4) above, the Authority shall, and for any other such Event of Default the Authority may (and at the direction of the Bond Insurer, shall), by notice in writing to the Participant, declare the entire principal amount of the unpaid Installment Payments and the accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become immediately. due and payable; provided that any such declaration of acceleration shall be subject to the prior written consent of the Bond Insurer. This subsection however, is subject to the condition that if at any time after the entire principal amount of the unpaid Installment Payments and the accrued interest thereon shall have been so declared due and payable and before any judgment or decree for the payment of the moneys due shall have been obtained or entered the Participant shall deposit with the Authority a sum sufficient to pay the unpaid principal amount of the Installment Payments or the unpaid payment of any other P.34 16396.1001098 AGMT Section 6.18. Continuing Disclosure. The Participant hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Agreement, failure of the Participant to comply with the Continuing Disclosure Certificate . shall not be considered an Event of Default; however, any Participating Underwriter or any holder or beneficial owner of the Authority Bonds may take such actions as described und~r the Continuing Disclosure Certificate to cause the Participant to comply with its obligations under this Section. Section 6.19. Further Assurances. The Participant will adopt, make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof. Section 6.20. Reimbursement of. Bond Insurer and Other Provisions Relating to the Bond Insurer. (a) The Participant agrees to payor reimburse the Bond Insurer any and all charges, fees, costs and expenses which the Insurer may reasonably payor incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in respect of this Installment Purchase Agreement or the Indenture, (ii) the pursuit of any remedies under the Indenture or this Installment Purchase Agreement or otherwise afforded by law or equity, (iii) the violation by the Participant of any law, rule or regulation, or any judgment, order or decree applicable to it or (iv) any litigation or other dispute in connection with the Indenture or the Installment Agreement or the transactions contemplated thereby, other than amounts resulting from the failure of the Bond Insurer to honor its obligations under Municipal Bond Insurance Policy; provided that the foregoing obligation shall be strictly limited to defaults with respect to the Participant. The Bond Insurer shall have the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent. proposed in respect of the Indenture or the Installment Purchase Agreement. (b) The Participant will provide the Bond Insurer with its annual budget within 30 days of its adoption and its annual audited financial statements within 210 days after the end of the Participant's Fiscal Year. ARTICLE vn PREPAYMENT OF INSTALLMENT PAYMENTS Section 7.1. . Prepayment. The Participant may prepay the Installment Payments in accordance with the provisions of the Indenture applicable to the redemption prior to maturity of the Authority Bonds. Before making any prepayment pursuant to this Section, the Participant shall give the Authority and the Trustee not less than sixty (60) days prior notice of such prepayment. P.33 16396.1 001098 AGMT Parity Debt referred to in clause (1) above due prior to such declaration and the accrued interest thereon, with interest on such overdue installments, at the rate or rates applicable to the remaining unpaid principal balance of the Installment Payments or such other Parity Debt if paid in accordance with their terms, and the reasonable expenses of the Authority and the Bond Insurer, and any and all other defaults known to the Authority (other than in the payment of the entire principal amount of the unpaid Installment Payments and the accrued interest thereon due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Authority and the Bond Insurer or provision deemed by the Authority and the Bond Insurer to be adequate shall have been made therefor, then and in every such case the Authority and the Bond Insurer, by written notice to the Participant, may rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default or shall impair or exhaust any right or power consequent thereon. Section 8.2. Application of Funds Upon Acceleration. Upon the date of the declaration of acceleration as provided in Section 8.1, all System Revenues thereafter received shall be applied in the following order (subject on a pro rata basis to the acceleration provisions of Parity Debt) - First, to the payment, without preference or priority, and in the event of any insufficiency of such System Revenues ratably without any discrimination or preference, of the fees, costs and expenses of the Authority and Trustee, if any, in carrying out the provisions of this article, including reasonable compensation to its accountants and counsel and similar costs with respect to Parity Debt; Second, to the payment of Operation and Maintenance Costs; Third, to the payment of the entire principal amount of the unpaid Installment Payments and the unpaid principal amount of all other Parity Debt and the accrued interest thereon, with interest on the overdue installments at the rate or rates of interest applicable to the Installment. Payments and such other Parity Debt if paid in accordance with their respective terms; and Fourth, to the Bond Insurer, any amounts owed pursuant to Sections 5.2(b), 6.20 and 8.1 hereof. Section 8.3. Other Remedies of the Authoritv. The Authority shall have the right with the written consent of the Bond Insurer and shall at the direction of the Bond Insurer: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Participant or any director, officer or employee thereof, and to compel the Participant or any such director, officer or employee to perform and carry out its or his duties under the Law and the agreements and covenants required to be performed by it or him contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Authority; or (c) by suit in equity upon the happening of an Event of Default to require the Participant and its directors, officers and employees to account as the trustee of an express trust. P.35 16396.1001098 AGMT Notwithstanding anything contained herein, the Authority shall have no security interest in or mortgage on the Project, the System or other facilities of the Participant or any other real property of the Participant and no default hereunder shall result in the loss of the Project, the System or other facilities of the Participant or any other real property of the Participant. Section 8.4. Non-Waiver. Nothing in this article or in any other provision hereof shall affect or impair the obligation of the Participant, which is absolute and unconditional, to pay the Installment Payments to the Authority at the respective due dates or upon prepayment from the System Net Revenues, the System Revenue Fund and the other funds herein pledged for such payment, or shall affect or impair the right of the Authority, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein. A waiver of any default or breach of duty or contract by the Authority shall not affect any subsequent default or, breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Authority to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Authority by the Law or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by-the Authority. If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Authority, the Participant and the Authority shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken. Section 8.5. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law. Section 8.6. Notices. Notwithstanding any other provision hereof, the Trustee shall immediately notify the Bond Insurer if at any time there are insufficient moneys to make any Installment Payments as required and immediately upon the occurrence of any event of default hereunder. ARTICLE IX DISCHARGE OF OBLIGATIONS Section 9.1. Discharge of Obligations. The obligations hereunder may be discharged as provided in Article VIII of the Indenture. P.36 16396.1001098 AGMT ARTICLE X MISCELLANEOUS Section 10.1. Liability of Participant Limited to System Revenues. Notwithstanding anything contained herein, the Participant shall not be required to advance any moneys derived from any source of income other than the System Revenues, the System Revenue Fund and the other funds provided herein for the payment of the Installment Payments or for the performance of any agreements or covenants required to be performed by it contained herein. The Participant may, however, advance moneys for any such purpose so long as such moneys are derived from a source legally available for such purpose and may be legally used by the Participant for such purpose. The obligation of the Participant to make the Installment Payments is a special obligation of the Participant payable solely from the System Net Revenues, and does not constitute a debt of the Participant or of the State of California or of any political subdivision thereof in contravention of any constitutional or statutory debt limitation or restriction. Section 10.2. Successor Is Deemed Included in all References to Predecessor. Whenever either the Participant or the Authority is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Participant or the Authority, and all agreements and covenants required hereby to be performed by or on behalf of the Participant or the Authority shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. 'Section 10.3. \-'!civeT of Persollal Liabilitv. l~o director, officer or employee or the Participant shall be individually or personally liable for the payment of the Installment Payments or be subject to any personal liability by reason of the execution of this Agreement or the issuance of the Bonds. ' Section 10.4. Article and Section Headings. Gender and References. The headings or titles of the several articles and sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof, and words of any gender shall be deemed and construed to include all genders. All references herein to "Articles," "Sections" and other subdivisions or chmses are to the corresponding articles, sections, subdivisions or clauses hereof; and the words "hereby", "herein," "hereof," "hereto," "herewith" and other words of similar import refer to this Agreement as a whole and not to any particular article, section, subdivision or clause hereof. Section 10.5. Partial Invaliditv. If anyone or more of the agreements or covenants or portions thereof required hereby t<? be performed by or on the part of the Participant or the Authority shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof. The Participant and the Authority hereby declare that they would have executed this Agreement, and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof irrespective of the fact that anyone or more articles, sections, paragraphs, P.37 16396.1001098 AGMT .PIT'BAU! 10 gIqeg~10]UgUn'flmOptllpSUO~Un gq 01 PIgq gq ABUI g::){rn1SUIn~11~ 10 UOS1gd AU'B Ol]Oglgql Uop'B~TIdd'B gql 10 ]Oglgq SgSRlqd 10 SgSnBp 'Sg~UglUgS 'SUO!S!Awqns .SpUOS: Alpoqlny gq1 JO 1UgUIA'Bd gq1 Ol gltllUgpUJ: gql1gpUn pg~pgld pUB gglSru~ gql Ol pgu2!SSB gq H!M. SlUgUIA'Bd lUgUIlrelSUJ: gql lBql SggllJ'B pue Sg~pgIMOlDPB lUBd!~n.rnd gq~ .ltrndpp.rnd gq1]0 lUgSUO~ 10!ld gql ~ll!U!'Blqo ]0 AlISSg~gU gqllnOql!M ':J.ffid U! 10 gIoqM 'B SB 'AlPoqlny gql Aq pgU~!SSB gq ABUI 19pUng1gq Slq~p Atrn pUB lUgUIgg~y SIll~ .lUgrnUD!Ssy .9"0-1 UO!l:Y.)S .1gAgOSlBqM JJO-lgS 10 UO!lnu!Ul!p 'lUgUIgWqB lnoql!M ptrn SUo!pnpgp Atrn ]0 gglJ 'lgpUng1gq pg1!nbg1 SlUgUIABd 19q1O HB pUB SlUgUIA'Bd lUgUIIrelSUJ gql. JOg1gq UUgl mp ~upnp 19U AIglnIosqe A'Bd Ireqs luedp!:J.ffid gql ptrn 'P'B1lUO~ 19U'B gq Ol pgrulSUO~ pU'BpgUIggp gq Ireqs lUgUIgg~y SIll~ .PRIlUO:>lgN .COl UOn~gs .YImIOdI'1V:> .:10 H.LY~S 3H~ .:10 SA\. Yi 3R~ HJlA\. 'dJNVffiIO:>JY NI G3N([Hi\OD CINVGffi1~~SNO:> 'dS: i1VHS ~NHW'dffiIDY 'dSVH:>IDld l.N'3Wi'1V~SNI 3H~ .M'Bi 'R!UloJH'R:> .8.01 UOn~gs .(AlI10q:my gql JO UOp~'BJsp'RS gql Ol gp'BUI Uggq gA'Bq lreqs JOg1gql1UgUIA'Bd gql10J UO!S!A01d 10) p!Bd AHtlJ Uggq gABq lreqs g~Pd gS'Bq~lnd gql UgqM gl'BUIUUgl lreqs pUB 'A1gA!PP pUB UO!ln~gXg SlI uodn gAP~gJJg gUIO~gq Ireqs lUgUIgg~y S!q~ .gl'BG gA!pg1J'd .6.01 UOP~gs .lUgUII\llSU! gums gql ptrn gUO 1nq gltllnSuO~ Ireqs q~IllM JO Ire ptrn 'IBU!lJPO .U'R pgUIggp gq Ireqs q~!llM JO q~'Rg 'S:J.ffid.mluno~ re1gAgS U! pgln~gXg gq A'RlU lUgUIgg~y SIll~ .Sl-ffiCUglUnoJ U! Uopn~gx'd .01.01 UO!pgs :Ol ~UIlBp1 A'BM Atrn UI 10 uodn pgS'Rq 10 ]0 lno lJU!s!1B gS!M1gqlO 10 MBI UOUIlUO~ lB 10 M'RI A.IOltllBlS 19q1O Atrn 10 5MBI Sgnpn~gs gl'BlS 10 re1gpgJ 19pUn l~gfqns gUIO~gq A'BUI 'UIgql JO Atrn 10 'sg!l-ffid pgY!UUIgpUJ: gql q~!llM Ol (SlUgUIlJpnf g~.nnps!p Ol PIBd slunoum ptrn lUgUIgrugS U! PIBd SlllUOum 'SlSO~ llno~ PU'R uOPB~PH 'Sgg] ,SAgUlOnB gIqBuOSBg1 'UOPBl!UlH lnoqlIM '~u!pnpuI) 19pB.rnq~ 10 PUPY. 'gltll'RU gIq'BA!g~UO~ Atrn ]0 sgsugdxg pU'B SlSO~ 'Sgmr.qBH 'SUOp~B 'SUI!'Bp 'Sg~RUrnp 'SgSSOI lIB pUB Atrn lSUIB~B 'c. Sgp.md pgYIUUIgpUJu gql 'ApAp~gnO~) SlUg~B ptrn SAgUlOllB 'SggAOIdUIg 'Sre!~gJo 'SlOpg1!P 'SlgqUIgUI p.rnoq ~U!UlgAO~ 'Slg~YJO gAf.l.~gdsg1 l!glp JO q~Bg pUB 'gglSru~ gql pU'B A1Poqlny gql PUgJgp ptrn SSgrrn.rnq Ploq 'AJ!UUlgpuI Ol Sgg~B lU'Rd!~!:J.ffid ,"",-TT1 'AA nT r I"l T'V"'1"TTTTTI""\t1 "y"""".,v",",' '1C""'"\TTnT I""'\TY1 I"\. T . A 'TTr\TT'"L.7 Tn TT{"\T'''",\YTTTnTT""nrrr . T T -n T TT{"\T1""'~(,,,,\ "''1..J aH'L 1:''1 t-''''.J''~''''''''''''''' ....."'+.1>."" +"'''''LLL';t ""''1.+ V.L a+~"v'1+LLV.tV ",v~+vv~~"'~""t'...J. 1.1. VI. ...'V~+v"'.;:) ~spUOS: AlPoqlny gql JO ~U!lg){.rnUIg1 10 greSg1 'greS gql lJU!pnr~U! 'Aqg1gql pglBIdUIglUO~ SUO!l~'BSUB1l qlIM UO!l~gUUO~ UI 10 JOg1gqllUgUIPUgl.lIe 10 UO!ln~gXg gql10 lUgUIgg~y SIlll 'glnlUgPUJ gql (!) ~JOg1gql :J.ffid AU'B 10 pgf01d gql 'JO lUgrndopAgp 10 UOn~rulSUO~ 'uo!lIS!nb~'B 'ulJISgp '~U!utrnId glp ur01] 10 'lnoq'B 10 U! gUOP ~10M ]0 lUgUIg~Btrnur 10 l~npUO~ 'UO!SSgSSOd 'gSn 'A~u'Bdn~~o 'gSIM.lgqlo 10 re1UgUIU01!AUg 'UOn!pUO~ gql10 'l~gf01d gql JO UO!l'R1gdO gql 'pgf01d gql10 lUgUIgg.my S!l{l q1!M UO!pgUUO~ U! SggSUg~H 10 SggAOldUIg 'SltrnAlgS 'S101~RllUO~ 'SlUg~'R Sl! JO Alrn 10 lUBdPn.rnd gql JO UO!SS!UlO 10 p'R AUB (!!) 8S.J LWDV 860100 r96f:91 (iii) any lien or charge upon payments by the Participant to the Authority and the Trustee hereunder, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments., impositions and other charges imposed on the Authority or the Trustee in respect of any portion of the Project; (iv) any violation of any environmental law, rule or regulation with respect to, or the release of any toxic substance from, the Project or any part thereof; (v) Bonds; the defeasance and/or redemption, in whole or in part, of the Authority (vi) any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact furnished in writing by the Participant contained in any offering statement or document for the Authority Bonds -or any of the documents relating to the Authority Bonds to which the Participant is a party, or any omission or alleged omission from any offering statement or document for the Authority Bonds of any material fact necessary to be stated therein in order to make the statements made therein by the Participant, in the light of the circumstances under which they were made, not misleading; (vii) the Trustee's acceptance or administration of the trust of the Indenture, or the exercise or performance of any of its powers or duties thereunder or under any of the documents relating to the Authority Bonds to whichit is a party; except (a) in the case of the foregoing indemnification of the Trustee or any of their respective officers, members, directors, officials, employees, attorneys and agents, to the extent such damages are ....an..,c,.:i 1-..... +1-..c ....,.,.....l~.....e.........C> ,.,... n.~ll-i=.,l .......~..,....,.,.....,.:jn....+ 04'" ..,.,....1-.. T.....,.:jC>...........~+'.;C>,.:j 0"'..-+.... ,.,... (1-.."\ ~.... +1-..e v u,,-u V) I.J.l- 11\.-'.511.5 UV~ VI _VVlll.lU.l1111""'VUU-U.~L 1 "U\.-U lllU-~111111.Ll~U 1 alLY, VI \.IJ} lU LU case of the foregoing indemnification of the Authority or any of its officers, members, directors, officials, employees, attorneys and agents, to the extent such damages are caused by the willful misconduct of such Indemnified Party; provided that the foregoing indemnification shall be strictly limited to defaults or other actions by the Participant and shall not encompass matters relating only to other Participants (as defined in the Indenture). In the event that any action or proceeding is brought against any Indemnified Party with respect to which indemnity may be sought hereunder, the Participant, 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 fudemnified 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 Participant 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 Participant if in its judgment 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. P.39 16396.1001098 AGMT .1UGmGG~Y S!l[l JO uO!l'BU!llilGl Glp GA!AmS IIRqs uO!l~~S s1ql JO SU01S1AOJd ~ql, .fRAOm~J JO UO!l'B~!SGJ AUU ~~lsru~ ~ql JO GSU~ Gql U! pUB spuos: AH.IOqlUV Gql JO G~UBS'R~JGp JO lUGu:rA'Bd fRU!J Glp GA!AJUS IfRqs JOG1Gq '(;.17 UO!l~GS 01 lUBnslnd SGSUGdxG JO lUGurGSmqmpl pUB SGGJ JO lUGurAud 01 Slq~P PU'B lGpUnG1Gq AJ!UUmpu! 01 suoslGd AIm JO slq~p Gq~ .01G1Gq lUGmGlddns 10 lUGurPUGu.rn AIm 01 ~U!WIG1'S~U!pGG~01d UU JO ldp~sU~ll IrnJ 'B qHA\ pGP!AOJd Gq IfRqs 1G1nsUJ puos: Gql, .uonn::>GxG Sl! JO G~UBAp~ U! sAup fI lSRGI 1'B JOG1Gql Ado~ U pUR lUGmGG~Y S!l[l 01 lUGurpUGurn q~UG JO G::>!lOU GA!G~Gl f['Rqs spuos: A1Poqlny Gql ~Un'Bl A~UG~V S~U!lU(l AUV .G1U1UGPUJ: JO SllliGl Glp qHA\ G::>UBp10~~U U! pGpUGurn Gq A{Uo A'BUllUGurGG~y s!l[~ .SlUGmpUGury .(;1.01 uO!l::>GS Ov.J ~WDV 860100 I'96E91 IN WITNESS WHEREOF, the parties hereto have executed and attested this Agreement by their officers thereunto duly authorized as of the day and year fust written above. [P ARTICIP ANT] By: Authorized Representative CALIFORNIA STATEWIDE COMMUNITlES DEVELOPJ\1ENT AUTHORITY By: Member of the Commission P.4l 16396.1001098 AGMT ..LNVdI;)I..LHVd DNlNH3:;)NO;) NOI..LVWHO.!INI V.1HIIHX3 :SUg~'110!ld :~~grOld gq~ JO uO"9dll:JSga :Um~SAS JO gdA.L Zv'J J.WDV 860 roo 1'96t:91 EXHIBIT B SCHEDULE OF INSTALLMENT PAYMENTS 1. The principal amount of payments to be made by the Participant hereunder is $. . 2. The installment payments of principal and interest are payable in the amounts and on the Installment Payment Dates (dates shown are the first day of the month after the Installment Payment Dates which are due on the 15th day of the prior month) as shown in Attachment A. P.43 16396.1001098 AGMT lJ81Q dll pooM tfl PI~yeI~a sUPIM~H -sooz sapas (mR.IilO.Id ~U!JURU!..i paIood) spuoH anuaAalI .IalRMals81\::\ pUR .IalR M AlPoqlny lUamdoIaAaa samnnmmO;) ap!MalR1S RJU.IOJ!IR;) $ ~OOZ' LNaw3~DY3SVH;)lIadaNOH tI8~6 ~!lli01!I~J 'olu~unu~:ms 101 ~nns 'l~~llS)J 001 I Alp:mpnv lU~UIdoPA~Q s~!lFUnUlUIoJ ~p~M~l-e1S -e!lll01H-eJ :u~UI~nu~D pU-e S~1P-el ]O~l~q ~Wp ~{P uo '~UI!l :::lyp-ea '.l.trd 6~: I I OllOpd 10 1~ l~lp:A\.I~pUn ~lp 01 ~:::lUB1d~:::l:::l-e q:::lns ]0 Al~AH~P ~ql pUB sl-rrndp!l.Ied ~ql pu~ AlpOqlnV ~ql Aq lU~UI~~~V ~S~q:::llrld puog sILP 10 ~:::lU-eld~:::l:::l~ U~UpM ~ql Oll:::l~rqns ~p-em s~ l~JJO s!ll~ .1~lpA\.I~pUn ~ql p-rrn slu-edP!lll!d ~lp 'Al!lolpnv ~ql uodn ~u!PUIq ~q IHM 'C.SlU-ed~:::l!lll!dll ~ql) Ol~l~q ~g-ed ~.It1l-eugls ~q1 uo P~lSTI s~pu~g-e :::lHqnd ~ql pU-e Alp:oqlnv ~{n Aq 10~1~q ~:::l-rrnld~:::l:::l-e ~ql uodn 'q:::l!llM '(..Al!lOqlnVII ~tp) Alpmpnv lu~wdoI~A~a S~!lFUnUllliOJ ~p~M~l-e1S -e!lll01H-eJ ~ql qllM lU~W~~~V ~s~q:::lmd puog S!lI1 OlU~ l~lU~ Ol sl~l1o (.ll~l!lA\.I~pUnll ~ql) p~u2~sl~pun ~q~ '(-$10 lUnO:::ls!p S,l~lpA\.I~pUn u-e sS~I pu-e 10 luno:::lslP ~nss~ pm~~!lo l~U ~ sS~I 'spuog ~q110 1uno~ l'Bd ~ql ~UI1U~S~ld~1) $ ~q Ueqs spuog ~q1]0 ~:::l!ld ~s~q:::llnd ~q~ .c.spuogll ~q1) -~OOZ s~p:~S '(me~old gUI:::lU'BUH P~IoOd) spuog ~nu~A~~ l~l-eM~lS-e.M. pu-e l~l~M S,AlpotpnV gql10 luno~ I~dpu!ld ~l-eg~~~~ $ gq110 (U-e U-eq1 SSgI 10U lnq) U-e '~sodmd q:::lns 10J. 1~lflM1~pUn ~q1 01 U~S 01 Sg~~-e Aq~lgq Alp:oqlnv ~ql pu-e ':::lnqnd gq1 01 ~u!l~]10~1101 Al!lOqlnV ~ql UIOl] ~smplnd 01 S~g.m-e Aq~l~q l~l!lMl~pUn ~lp 'tnl011~S l~y-eUpl~q SgllU'B.I.mM p-rrn sUOll-e1UgS~ld~1 ~q1 10 slsBq ~q1 uodn pu-e su09IPuO:::l pue SUU~l ~ql uodn .spuog ~q1 10 ~I-eS .1 .~.It1lU~PUJ ~Ip u~ SUU~l q:::lns 01 U~A~~ S~U1U-e~W ~q1 ~ABq n-eqs Upl~q p~uy~p ~S~A\.I~qlO sS~IUn u~~l~q p~sn SUUgl P~ZH-e1~d-eJ -C,g~lsru~1I ~q1) ~~lSn.n s-e "V.N '-e!lll01TI'BJ 10 ){lI'Ba: uOFUil p-rrn Al!loIpnV ~q1 U~gA\l~q pu~ Aq 'CI~lnlU~PUJII ~q1) ~OOZ 'I 10 S'B P~l'Bp '~.IrllU~PUJ ~ql 01 1UBnslnd p-rrn l~pun p~nssl ~q n-eqs p-rrn lU~W~l'B1S I'B~:::lYJO ~ql ul p~q!l:::lS~p l~qllt1J S'B pu-e Ol~l~q V 1NITlXg: u~ qll01l~S s-e ~q n'Bqs (MOI~q p~uy~p) slu~m~~.iliv ~s'Bq:::lmd lu~uqI-elSUJ ~lp pu-e sPUoa: ~tp JO SUU~l ~q~ lI.lU~W~l'B1S I'B~:::lY1011 ~ql s~ 01 p~n~1~1 AI~A1l:::l~nO:::l U~~.I~q sl '~:::lU~.I~1~1 Aq U~~lglp P~l'B10d.r0:::lU~ U09'BWl01U~ II'B pU'B s~:::lIPu~dd'B ~ql '~~-ed l~AO:::l ~q1 ~u1pnpu~ '.I~lpM.mpUn ~q1 pu~ Al!lOqlnV ~ql Aq 01 p~~~'B Auemnm~.Ie S'B slu~wpU~~ p-rrn S~~U'Bq:::l q:::lns ql~M pU'B 'lm~UI~~.mv ~s'Bq:::llnd PUoa: S!lll JO SWl~l ~ql 01 UlI01UO:::l 01 p~pu~urn s-e '(..lu~m~l'B1S IUPYJO h.rnU!lll1p1dll ~ql) ~OOZ ' P~l'Bp 'spuog ~lp 01 p~dS~l q1!M 1U~m~1'BlS IUP9JO Altm!UIH~ld ~q~ .spuoa: ~ql10 suu~~ .Z .SlUgW~AOld1.II1 IU1!d'B:::l :::lnqnd]o ~upU-eUY~l pIm ~upu-euy ~ql ~u!pnpu~ 'lU~UI~1'B1S I'BP9JO ~ql U! p~qp:::lS~p sgsod.rnd ~qll01 pgnss! ~ul~q ~.Ie spuog ~q~ tt.d .LWDV 860100 1"86€91 3. Public Offerin2: of the Bonds. The Underwriter agrees to make a bona fide public offering of all the Bonds at not in excess of the respective initial public offering prices to be set forth on the cover page of the Official Statement, plus interest accrued on the Bonds from their date. The Underwriter reserves the right to change such initial offering prices as the Underwriter shall deem necessary in connection with the marketing of the Bonds and to offer and sell the Bonds to certain dealers and others at prices lower than the initial offering prices set forth on the cover page of the Official Statement. The Underwriter also reserves the right to (i) 'overallot or effect transaptions which stabilize or maintain the market prices of the Bonds at levels above those which might otherwise prevail in the open market and (ii) discontinue such stabilizing, if commenced, at any time. . 4. Legal Documents. The Authority hereby authorizes the use by the Underwriter of the Indenture, the Disclosure Certificates (as defined below) and the Official Statement, and any supplements or amendments thereto, and the information contained in each of such documents, in connection with the public offering and sale of the Bonds. The Authority consents to the use by the Underwriter prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Bonds. Various cities, counties and special districts in California (collectively, the "Members") entered into a Joint Exercise of Powers Agreement, effective June 1, 1988, as amended (the "JPA Agreement"). The Authority and each Participant will enter into an Installment PUrchase Agreement, each dated as of 1, 2005 (the "Installment Purchase Agreements"), which provide for the payment of Installment Payments by the Participants. The Authority authorized the issuance of the Bonds and execution of related documents pursuant to a Resolution adopted , 2005 (the "AuthoTIt'y Resolution"). The Authority and the Participants will enter into Continuing Disclosure Certificates (the "Disclosure Certificates") in substantially the forms attached to the Preliminary Official Statement and the Official Statement. The Authority will deliver to the Underwriter, within seven business days after the date of this Bond Purchase Agreement or four (4) days before settlement date, whichever is sooner and in sufficient time to accompany any confirmation requesting payment from any customers of the Underwriter, copies of the Official Statement in final form (including all documents incorporated by reference therein) and any amendment or supplement thereto in such quantities as the Underwriter may reasonably request in order to comply with the obligations of the Underwriter pursmint to the rules of the Municipal Securities Ru1emaking Board and Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Ru1e"). As soon as practicable following receipt thereof from the Authority, the Underwriter shall deliver the Official Statement to a nationally recognized municipal securities information repository (as such term is defined by the Rule). The Underwriter hereby agrees to deliver a copy of the Official Statement to a national repository on or before the Closing Date and to each investor that purchases any of the Bonds during the 'Underwriting Period (as such term is defined under the Rule), and to otherwise comply with all applicable statutes and regulations in connection with the offering and sale of the Bonds, including without limitation, MSRB Rule G-32 and the Rule. P.4S 16398.1001098 AGMT .~U1S01;) aq1 alOJaq At!p ssau1snq auo lst!a1 1t! ;)~O Aq uo!padsu! 10J arqt!rreAt! apt!UI aq Ut!qs spuog al(.1 II .~U!S01;)1I alp St! u!a.1aq 01 panaJal S! spuos: aq1lOJ 1uaUIAt!d pUt! JO A.IaA!PP q::mS .la1!lM.1apuD alp pUt! "A1pOlpn'v aq1 Aq uodn paa.ilit! AUt!l11nUl uaaq aAt!q Ut!qs St! a~mld lalpO q::ms 10 't!!lliOJ!fB;) 'o~sPUt!.ld Ut!S 'dTI pOOA\ 'lfl PPYBlaa SUP{Mt!H JO a~YJo alp 1t! sPUIlJ 1t!lapad U! a{qt!At!d laJSURQ al!M Aq spuog alp JO a~!ld aSt!q~lnd aq1 At!d pUt! 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'arqt!At!d a.rn pUR Al1.IOqlfiY aql JO SUop.t!~TIqo pa1!U1H fB!~ads a.rn spUOS: Qq.L (~) Qq1 JO A~t!lfi~Ot! 10 ssauQ1aIdUIOO aq1 ~u!lSa1uo~ (n1) 10 ~sluaUlAt!d luaUIIIBlsUJ aql a~pa1d ptm u~1SSt! 01 Alpol(lny alp JO SlQMOd alp ~U!lSa1UO~ 10 UO!:}.t!Xt!l mOlJ spuos: aql uo lsa1a1u1 aql JO Uo!snpxa alp ~Unsa1uo~ 10 'Aqa1aq1 pa1t!1dum1uo~ suOP.~t!SURIl alp JO uO!lt!wumsuo~ alp 10 sluaum~oa Al!loq1ny Ql(l .10 spUOS: aq1 JO Al!P!fBA alp ~u1paJJt! 10 ~up.sa1uo~ At!M Atm U! 10 'spuog aq1 uo lsa1a1U1 ptm JO 1udpU!ld alp At!d 01 pa~pa1d aq 01 .10 pa~pa1d SlUnOtIIe AUB JO uO!l~auo~ 10 1uaUlAt!d alp 10 'spUOS: alp JO AUB. JO A.raArrap .10 a~UBnSS! alp U10fUQ 10 U1t!.I:lSa1 'l!q1l(Old 01 ~up{aas 10 ~U!lSa1uo~ '~u!l~aJJt! (n) ~saoYJo aAp.oadsa1 l!alp 01 AlPOlpny alp JO SlQOYJO alp JO sap!l aq110 Al!loq1ny aq1 JO aoua1spca alp ~u!llop.sQnb At!M AU1~ U! (1) 'luama1t!lS It!!~YJO Qlp U! paq!l~sap St! ut!lp 1alpo ~u!puad ApOq 10 p.rnoq onqnd 'A~ua~t! A.I01t!InB'a1 'unoo AUt! Aq.lO a.loJaq 'Al!llba U! 10 Mt!11t! 'UO!lt!~!lSaAU! 10 A.I!llbu! '~u!paQ~old 'l!llS 'uo!lot! ou S! Q1aq1 'Al!loq1ny aq1 JO a~paIMoIDI lsaq alp o~ (p) 9v.d J.WDV 860IOO I"86f91 Preliminary Official Statement (excluding all appendices) or the Official Statement (excluding all appendices) or any supplement or amendment thereto or asserting that the Preliminary Official Statement (excluding all appendices) or the Official Statement (excluding all appendices) contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or riecessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 7. Reoresentations. Warranties and Covenants of the Participants. Each Participant individually represents, warrants and covenants to the Underwriter that: (a) The Participant is a public agency, duly organized and validly existing under and by vir1:tJ.e of the Constitution and the laws of the State of California. (b) The Participant has the legal right and power to execute and deliver, and to perform its obligations under, the related Installment Purchase Agreement and this Bond Purchase Agreement (collectively, the "Participant Documents"). The Participant has duly authorized the execution and delivery of, and performance of its obligations under, the Participant Documents and as of the date hereof such authorizations are in full force. and effect and have not been amended, modified or rescinded. When executed and delivered by the respective parties thereto, the Participant Documents will constitute legal, valid and binding obligations of the Participant in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws and the application of equitable principles relating to or affecting creditors' rights generally. The Participant has complied, and will at the Closing be in compliance in all respects, with its obligations under the Participant Documents. \. C j The information in L.'1e Official Statement concerning th.e Participant is true and correct in all material respects, and the information in the Official Statement concerning the Participant does not contain any misstatement of any material fact and does not omit any statement necessary to make the statements, in the light of the circumstances in which such statements were made, not misleading. (d) The Participant covenants with the Underwriter that so long as the Underwriter is required under the Rule to send any potential customer, on request, a copy of the Official Statement (the "Delivery Period"), if any event occurs which might or would cause the information in the Official Statement concerning the Participant, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Participant shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Participant will cooperate with the Underwriter in. the preparation of an amendment or supplement to the Official Statement, in a form and in a manner approved by the Underwriter. (e) The Participant will advise the. Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without consultation with the Underwriter. The Participant will advise the Underwriter promptly of the institution of any proceedings known to it by any P.47 16398.1001098 AGMT .spuog ~ql JO uormq!llS!p 10 ~~S '~U!l~JJO ~tp qn.M. Uon~~UUO~ U! 1U~UI~lelS IRPYJO ~tp JO ~sn ~q1 ~un~~JJ~ ~S!.M.l~tpO 10 ~~!l!q!ll01d Al!lug I~lU~WUl~AOD '~U!P~~ISIlli lOU '~p~UI ~1~.M. A~ql q~!ll.M. 1~pun S~~URlSUIn~1F) 6q1 JO 1q~!I ~tp U! 'U!~1~ql SlU~UI~l~lS ~q1 ~:>fBUI 01 A.mss~~~u 10 up1~q1 P~l~lS ~q 01 p~I!nb~11~~J ~!l~l~UI ~ ~l~lS OllIlliO 10 l~~J I~!l~l~UI ~ JO lU~UI~l~lS ~l1.Ilun AIm U!81UO~ lOll IH.M. 'lU~UIpu~mn 10 1U~UI~Iddns q~ns JO ~l~P ~ql JO s~ 'p~pu~u:re 10 P~lU~UI~Iddns OS S"BlU~d!~IilUd ~lp ~U!ill~~UO~ 1U~UI~1~lS I"BPYJO ~tp U! 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'~U!pGG~Old 'l!ns 'uon::>e ou S! ~l~q.L (D pGUI~~p ~q Ueqs lU~UIG~.iliV ~S"Bq~1Ud puog s!lP 011uBns1nd 1~1!lM1~PUo. ~ql 01 P~l~A!PP pue lImdP!l1ed Gql JO GAn~lUGS~1d~11~qlO 10 I~PYJO AUB Aq p~tm!S G1B~Y!llG~ Arry ()[) 8v.d ~WDV 860IOO I'86€9I a representation and warranty by the Participant to the Underwriter as to the truth of the statements therein made. (1) The Participant has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the Participant is an issuer whose arbitrage certificates may not be relied upon. (m) Other than as contemplated by the Official Statement, between the date of this Bond Purchase Agreement and the Closing Date the Participant will not, without the prior written consent of the Underwriter, offer or issue any certificates, bonds, notes or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by a pledge of the System Net Revenues (as such term is defined in the related Installment Purchase Agreement). (n) The financial statements of, and other financial information regarding, the Participant contained in the Official Statement fairly present the financial position and results of the operations of the Participant as of the dates and for the periods therein set forth, and (i) the audited financial statements of the Participant attached to the Official Statement have been prepared in accordance with generally accepted accounting principles consistently applied and (ii) the other financial information contained in the Official Statement concerning the Participant has been compiled and presented on a basis substantially consistent with that of the Participant's audited financial statements included in the Official Statement. (0) The Participant agrees to the terms of the sale of the Bonds as provided herein and agrees to such terms of sale as they shall be reflected in the principal and interest components of the Installment Payments under the related Installment Purchase Agreements, as provided in Exl"'Jbit B hereto. The Pw........icipant agrees to execute the Pat-ticipant Docwuents subject to the conditions herein contained. The Participant agrees to indemnify the Authority and the Trustee and to pay the fees and expenses of the Authority and the Trustee relating to the Bonds (as provided in Sections 4.2 and 10.11 of the Installment Purchase Agreement) and all other costs and expenses relating to the Bonds, including but not limited to annual fees of the Authority, arbitrage rebate calculation fees and disclosure service fees which are allocable to the Participant; provided that the foregoing indemnification and payments shall be limited as to each Participant to such Participant's reasonable pro rata share. (p) The Participant has never failed to comply with its continuing disclosure obligations undertaken in connection with the Rule in any material respect. 8. I Closing Conditions. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations, warranties and covenants of the Authority and the Participants contained herein, and the performance by the Authority and the Participants of their obligations hereunder, both as of the date hereof and as of the Closing Date. The Underwriter's obligations under this Bond Purchase Agreement are and shall also be subject to the following conditions: (a) The representations and warranties of the Authority and the Participants contained herein shall be true, complete and correct in all material respects on the date hereof and at and as of the Closing Date, as if made at and as of the Closing Date, and the statements made in all certificates and other documents delivered tOo the Underwriter at the Closing P.49 16398.1 001098 AGMT 'luamaa~y aSRqollld luaUIJIR1sIIJ pa1Rla1 aq11apun SUOnR~!IqO slf JO AIm uuopad aSfM.laqlo 10 anp uaqM SlUamARd lUamUR1SIIJ ARd 01 lURdfoHJRd R JO AlHNR aIp. spaJJR AlaS1aApR AHRfla1Rm qOftlM SlURdpHJRd aql JO AUR JO uonwuoo IRfOImUY 10 SUOH1Uado JO slInsal 'uomsod IRPImUY alp Uf a~uRqo aS1aApu Ull pannooo aARq 10U HRqS a1~ql ~(lalflM.lapUi1 aql Aq paA!'RM a.rn sluamaa~R qons ssarun) luaUIaa~y aSRqolUd puoH s!lP uf H Aq apum sluamaa.I2R aIp. JO qORa lpfM aouR!Idmoo uf aq IIRqs SlURdPHJRd aql pUR AlfloIp.ny alp ~alRa ~U!SOIJ alp lR sloadsal lI~flalRm IIR uf loanoo pUR alaldmoo 'artll aq Huqs 01a1aq lImnS1nd ~U!SOIJ aql 0110fld 10 lR paUIlopad aq Olluamaa.I2y asuqo1nd puoH s!IP U! pay!oads 10 1apun pal!Uba1 suonR~Hqo l!aql paUllopad aARq IIRqS10 Ullopad- Huqs slImd!oHJRd alp pUR AlflOIp.ny aql pUR ~loaJJa pUR a010J UIlJ Uf aq URqs pUR ua){"R1 Alnp uaaq aARq URqS Aqa1aq paluldmaluoo SUOnORSUU.I} aql lpfM uOrJ,oauuoo U! A.rRssaoau aq uuqs CulasunoJ PUOHlI) RfUloJHRJ 'OOSfOUR1d URS 'd'1'1 pooM. 1Y PlaYUlaa SUPIMRH JO UOfUfdo alp uf 'qOftlM SUOrJ,OR IIR ~(lalPM1apU[l alp Aq 01 paaI~R 'aq ARm SR ldaoxa) Joa1aq alRp aql JO SR 1alflMlapui1 aql 01 pap fA old uaaq aAuq qOftlM sluamnoop qons JO SUllOJ aql mol.J 10adsa1 . IRpalRUI AIm uf paluamalddns 10 pay!pom 'papuaurn uaaq aARq 10U IIRqs pUR 'loaJJa pUR a010J IInJ U! aq IIRqs luaUIaa~y as"Bqollld puoH S!lJl pUR sluamaa~y aSRqolnd luamUR1SIIJ alp 'salRoywa:> a.nisopsfa alp 'a1l1luapIIJ alp '~UfSOI:> aql JO am!l aql lY (q) '~uwuaIS!lllOU 'apRm a1aM AaIp. qO!lJM lapun saomnSlliU01!0 JO lq~H alp Uf 'U!alaql sluamalRls atp a){Rw 01 A.IRSSGOaU UOp"BUllOJU! 10 luamalR1S AUR 1!ll0 10U llRqs pUll 'slOadsa1 IRpalRm IIR uf 10GllOO pIrn alUl aq Ueqs (paluamalddns pUR papUGUIR SR) wamalR1S IRPYJO Gql '~U!SOIJ aql JO GllI!l aql lV (0) .SPUOH alp10J lG){.rnm aql sloaJJR AlaS1GApR AIIRflalRW 1GlflM.lapuQ aIp. JO UOfU!do ayqRuOSRG1 GIp ul qOII[M (apIS'R las aSfMlaqlo 10 IRaddR uo paS1GAG1 10U pUR) lUawaG~V aSR[prnd puoH Sftll JO G1Up alp aou!s AlHug: IR1UGWWaAoD 10 ::j.Il1oo AUU Aq pG1alUG uaaq aARq URqS ~U!Puy 10 ~unru 'Uo!s!oap OU 'luamalR1S fRPYJO alp uf PGSOPSfP SR ldaoxg: (p) 'palRldwG1UOO 'lURd!OfllRd AUR 10 Al!lOlpny atp JO a~paIMoIDl aql OllOU ~u!puad aq IfRqs lImdPHJRd AUB 10 Alpmpnv aql JO lOGdsa1 U! ~uwaao01d .rnI!ill!S 1GIp.0 10 AouaAlosuf 'AOldtl..D(URq ou (rO pUB 'AIGA!padsa1 'lURd!of.ll13d AUR 10 Al!lotpny aql Aq panSS! ssaupalqGpu! JO aOUGp!AG 1alpO 10 G10U 'puoq AUR UO lSa1alU! lO 'AUR J! 'mn!llG1d 10 JO IRd!ou!ld aq:J. JO lUamARd GIp. uf ~u!Uu!luoo aq puu pGl.lt1000 GARq HRqs lURdPfllRd AUlllO Al!loqlny alp Aq nllRJap ON (!) (a) ~' :~U!SOI:> aql OllO!ld pUR JOG1aq al'Rp aql1G:ijR awp AUR lR J! Al!loIp.ny Gql 01 UOHROYrJ,OU Aq lUamGG.I2y asuqo1tld puoH s!IP alRu!llllal Aum 1Gl!lM.lapu[l aq.L(J) uo pGA!GOa1 lsa1aluf UOdll 10 Al!loqlnv aIp. Aq paApap aq 01 1alO"B.rnqo IR1aua~ alp JO SlUamARd 10 GmOOU! 1aqlo 10 SGllUGAa1 uodn UOrJ,"BXRl U!lllOJHR:> 10 fR1apad 01 lOadsG1 lp!M 'aofAlas anuaAa~ fRUlG1IIJ aq:J. 10 SG1R1S palfUi1 aq:J. JO lUGUQ.rndaa A..mS'Ra1.L GIp. Aq apRW UGaq aARq URqS luamaounoUlIB 10 GSRap1 1aqlo AUR 10 1alsf~a'M fR1apad aql Uf paqsnqnd uaaq aAuq URqs uOrJ,Rltili'a1 A.I1UOdmal R 10 u09Rltili'a1 pasodOld 'u09Rltili'a1 R 10 GpRm UGaq aAuq URqS ~unru 'R 10 'Sal'R1S palfUi1 Gql JO l.Il10J X"B.L alp 10 salR1S pal!lli1 aq:J. JO unO::l R Aq pa1GpUa1 uaaq aARq HRqsuofSPGP R 10 'aa:U!lllliO::l U! ~u!puad aq 10 aa:u!ffiUIOo JO 1110 palloda1 uGaq aA'Rq URqS 10 'R!illOJ!IR:> JO alR1S Glp 10 SG1R1S palfUi1 alp Aq palouua uaaq aAuq W~qs UOrJ,'RIS~a.I (I) OS.d ~WD\f 860IOO I"S6t:91 obligations of the general character of the Bonds, which in the reasonable opinion of the Underwriter materially adversely affects the market for the Bonds; or (ii) the United States shall have. become engaged in hostilities or an escalation of hostilities which have .resulted in a declaration of war, or a national emergency or the President of the United States of America shall have committed the armed forces of the United States of America to combat so as to adversely affect the financial markets in the United States of America and in the reasonable opinion of the Underwriter materially adversely affects the market for the Bonds; or (iii) there shall have occurred and be continuing a general suspension of trading on the New York Stock Exchange, or a general banking moratorium shall have been declared by Federal, California or New York authorities having jurisdiction and being in force; or (iv) there shall have occurred an adverse change in the financial position, _ results of operations or financial condition of the Authority or any Participant which in the reasonable opinion of the Underwriter materially adversely affects the market for the Bonds; or (v) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by, any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State or any court of the United States shall be rendered which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or (vi) legislation shall be enacted by the Congress of the Upjted States, or decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official. statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or (vii) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental agency or by any national securities exchange, which restrictions materially adversely affect the ability of underwriters to trade obligations of the general character of the Bonds; or (viii) any rating of the Bonds shall have been downgraded, suspended or withdrawn by a national rating service, which, in the Underwriter's reasonable opinion, materially adversely affects the marketability or market price of the Bonds; or P.51 16398.1001098 AGMT 10 ~spuog ~lp JO ~~!-ld l~)[.mW ~q1 Sl~~~ AI~SlaAp~ AU~!-l~l~W 'l~l!-lM.IapUfl al[l JO 1u~wgpnf alp UI 'q~!lIM ~(DL 10 (w)9 uOf.l~as U! p~q!-l~sap gUTIJ~a~old 10 l!nS 'UO!l~~ AU~ JO luawa~u~WUIO~ ~ql (x!) ~(luaW~l~lS I~PYJO ~lp aq 01 pawa~p , aq II~qs l~nIM.IapUn ~q1 01 gUf.lPM uI JoaIaq ~l~P alp OllO!ld 10 UO p~laAn~p 01alaq1 sagtI'Bq~ 10 uIalaq1 uOIsnl~uI 10J UO!l~WlOJUI [BUompp~ AU~ q1IM 1~qlag01 'luawal~lS I~PYJO A.um!WHald ~l[l 'luawa1~lS I~PYJO pmy aq1 JO gU!lu!ld aq1 01 10!ld 'qd~.zg~l~d S!lI1 JO sasodmd aq1 10J) gUTIJ~aISrw 10U 'ap~UI alaM A~lp q~!lIM 1apun s~~u~lswn~lp aq1 JO 1qgn aq1 uI 'up1alp sluaUIa1~ls ~lp a)'[eUI 01 A.I~ssa~~u 10 UIaIalp pa1~ls aq 01 pal!nba1 p~J [B!la1~w ~ ~l~lS 01 Sl!WO 10 l~~J l~pa1~m ~ JO 1u~wa1~ls ~rLllun AU~ supnUO~ 'a1~p slI JO s~ 'lu~wa1~lS I~pmO alp l~l[ll~a1JQ ~ql s~q 10 'l~ads~l aSlaAp~ '[l!pal~W AtI'B UI at1..llun 'a1'Rp SlI JO s~ 'luawa1~lS [BI~YJO alp UI paupnUO~ UO!lRWlOJUI 10 luawa1~ls AU1~ S~)'[eW 'la:}!.IA\lapUn alp JO lu~mpnf aIq~uos~al alp UI 'q~!llM UMOq gurwo~~q UO!l~WlOJUI 10 'gupln~~o luaA~ AU'R (x) :Slu~wn~op (g) gUIMOnOJ alp aAIa~al lP~qs 1alIlM..I~pUn alp 'guISOI;) ~ql 01 10!ld 10 lY .(l~lpA\lapUn al[l 01 passa.rpp~ laU~1 a~U'Rn~l ~ qnM laq1agol) AlIloq1ny ~lp 01 paSSalpp'R 'a x!puaddy S'R luaUIa1~lS l'RI~YJO aql U! papnpuI WlOJ aq1 AIl'Rf.ltrnlsqns uI '~l~a gUISOI;) aq1 P~lBp 'l~suno;) puog JO uo!U!do aq.L 'uo!U!C1O psuno;) pUOS: (I) passa.rpp~ 'al~a gUISOI;) alp pal~p 'lalpM.I~pUn alp 01 A.IOp~JS!l~S a~trnlsqns pu~ WlOJ U! 'psuno;) puog JO uO!ll!do I~luawalddns y 'uo!ll!C1O l'R1u~UIalC1C1ns (n) aql Ol pgss~lppt? U01U~do ~lg.rnd~s .IO .r~n~I ~~UUTI~l 'B ql!i'\.^.. 1~tl1~~Ol) l~~!l1t.."J~pu[l ~l1.~ o~ :1~q1l~aJJa alp 01 '(A\Opq (0) qdB.zg~.md 01 S~ Al!-loqlny aql 01 passa.rpp~ uO!ll!do a1B.mdas 10 lauaI a~U1rrral ~ pUB MOlaq (;)) qd~.zg'R.md 01 S~ lamsur ~papuaw~ S'B '6€61 JO py a.InluapUJ: lSUl.L aql oll~nsmd a.IIUuapu! tI'B SB UO!lu~YTI~nb mOlJ 1dwaxa S! a.ImuapUJ: al[l pu~ 'papuamu S~ 'ff61 JO l~y sa!lIln~as alp 01 lUBns1nd UO!lRllsIgal wOlJ 1dm~xa a.m spuog aq1 (y) ~spadsa1 I'R!la1'Rm U~ U! uO!ll!do q~ns puu SUO!S!AOld q~ns JO A.mmums a1'Blll~~U pu~ l!'UJ ~ 1uasa1d 'gU!SOP alp JO ~l~P alp pa1~p psuno~ q~ns JO uo!U!do ~U!A01ddu pmy ~lp pu~ spuog ~ql ptrn slu~UIaa~y as'Rq~llld 1u~uqI~lSUJ ~lp '~IIlluapUJ: ~lp JO SUO!S!AOld u!Blla~ aZpBuruIns 01 llodrnd Aalp lualxa aq1 01 ./UO!UIdO s,Iasuno;) puos: JO UIlod-a x!puaddYII pu~ IIs1uaum~00 I'Rga'1 JO A:.rnUIUInS pu~ SUO!l!Uyaa - ;) x!pu~ddYII II'S~3llVW XVJ.II II'SCINOS: tlH~ ~Od x..Lrnn;)3SI1 II'SCINOS: HHJ.II II'NOIJ.;)naO~.LNI1I suo!ld~~ aql l~pun sluama1~ls pu~ spuog alp 10J Alpn~~s pu~ spuog alp JO uO!ldp~sap 'uof.ldmaxa )rol 01 gU!lBla1 agud 1aAO~ aql uo 1uama1UlS reI~YJO aql U! UO!l~UIlOJU! pu~ sluamal~ls alp (g) palaATIap pu~ p~ln~ax~ 'pazpoq1n~ Alnp uaaq aA~q lUGmaa.zgy as~q~md puos: S!lI1 pu~ slUam~a.zgy ~sBq~md 1uamu~lsUJ: ~q1 'alrQ,uapuI aq1 (;)) ZS.d ~WDV 860IOO 1'86k:91 by the Authority and, assuming due authorization, execution and delivery by the other parties thereto, such documents constitute the legal, valid and binding agreements of the Authority enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws. affecting creditors' rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State of California; and (D) although we have not undertaken to check the accuracy, completeness or fairness of, or verified the information contained in, the Official Statement, and are therefore unable to make any representation to you in that regard, we have participated in conferences prior to the date of the Official Statement with your representatives and representatives of the Authority, the Participants, counsel to the Authority and Participants and others, during which conferences the contents of the Official Statement and related matters were discussed. Based upon the information made available to us in the course of our participation in such conferences, our review of the documents referred to above, our reliance on the certificates and the opinions of counsel described above and our understanding of applicable law, we do not believe that the Official Statement (other than financial statements and projections and statistical data therein, information concerning the Policy, the Reserve Policy, the Bond Insurer, The Depository Trust Company and the book-entry system and Appendices A, E and F thereto, as to which no view is expressed) as of its date contained, or as of the date hereof, contains, any untrue statement or a material fact, or as of its date omitted, or as of the date hereof omits, to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Finally, we advise you that, other than reviewing the various certificates and opinions required by this Bond Purchase Agreement regarding the Official Statement, we have not taken any steps since the date of the Official Statement to verify the accuracy of the statements contained in the Official Statement as of the closing date; (iii) Opinion of Authority Counsel. An opinion of counsel to the Authority in form and substance satisfactory to the Underwriter dated the Closing Date, addressed to the Underwriter and the Bond Insurer, to the effect that: (A) The Authority is a joint powers agency organized under and by virtue of the laws of the State of California. (B) the resolution of the Authority approving and authorizing the execution and delivery of the Indenture, the Installment Sale Agreements, the Bond Purchase Contract and the Bonds was duly adopted at a meeting of the governing body of the Authority which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout. 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A.I'BSsao~u 10 U!~l~ql P~l'Bls~q Ol paIfIlbal 10'BJ I'Bpal'Bur 13 altllS Ol 1!W0 10 lO'BJ I'B!-lal'Bill tl JO luaural'B1S ~rulun AIm U!'B1UOO 10U s~op (passa1dx~ aq p~au Ma!A OU qO!1IM 01 Stl 'lU~Wal'B1S fBPYJO ~lp U! p~pnrou! 'Bl'BP IBO!lS!l'B1S l~qlo pIrn SlU~W~l'BlS P~!OU'Buy wo.g~laql gU!pnrox~) lU'Bd!o!l.ffid ~tp .aurrnaouoo lu~ur~l'B1S 1'B!oYJO ~ql U! UO!l'BUIlOJU! ~lp 'psunoo qons JO ~gpalh\oIDI ls~q alp 01 Cd) ~tp gU!loaJ]'B 'lU'Bd!o!l.ffid ~ql gU!loa]J'B 10 lSll!'B.a'B p~Ua1'B~.nn 10 .au!pu~d 'ApOq 10 p.moq orrqnd 'lIDOO AU'B Aq 10 a10Jaq Al!llb~ ll! 10 M'Bl l'B altll'BU fB!-l~l'Bill tl JO UO!ltlg!lSaAll! 10 .aU!p~~oold 'l!nS 'UO!lO'B ou S! a1~lp 'UOn'B.a!lS~AU! ~{q'BUOStlaI l~ye r~sunoo qons JO ~.aparMOID[ lsaq ~ql 01 (D) i'S.J ~WDV 860100 I'86E91 validity of the Participant Documents or the adequacy of the Official Statement; and (H) no authorization, approval, consent or other order of the State or any governmental agency within the State of California having jurisdiction over the Participant is required for the valid authorization, execution and delivery by the Participant of the Participant Documents, which has not already been obtained as of the Closing Date. (v) Closing Certificate of Authoritv. A certificate from the Authority in form and substance satisfactory to the Underwriter, dated the Closing Date, to the effect that the representations and warranties of the Authority contained in this Bond Purchase Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing. (vi) Closing Certificates of Participants. Certificates from each Participant in form and substance satisfactory to the Underwriter, dated the Closing Date, to the effect that: (A) the representations and warranties of the Participant contained in this Bond Purchase Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing; and (B) there has been no material adverse change in the financial condition or results of operations of the Participant from the date of the Official Statement to the date of such certificate. (vii) 15c2-12 Certificates. Certificates, dated the date of the Preliminary Official Statement, from the Authority and each Participant, deeming the Preliminary Official Statement final for.purposes of the Rule. (viii) Certificate of Trustee. A certificate, dated the Closing Date, signed by a duly authorized officer of the Trustee, to the effect that (i) the Trustee is a national banking association, duly organized and validly existing and in good standing under the laws of the United States, having full power and being qualified to enter, accept and administer the trust created under the Indenture, (ll) all approvals, consents and orders of any governmental authority or agency having jurisdiction in the matter that would constitute a condition precedent to the performance by the Trustee of its duties and obligations under the Indenture have been obtained and are in full force and effect, and (ill) the acceptance of the duties and obligations of the Trustee under the Indenture, and the consummation of the transactions on the part of the Trustee contemplated therein, and the compliance by the Trustee with the terms, conditions and provisions of such document do not contravene any provisions of applicable law of regulation or any order or decree, writ or injunction of the Articles of Incorporation or Bylaws of the Trustee, and, to the best of such officer's knowledge, will not require the consent under, or result in a beach of or default under, any resolution, agreement or other instrument to which the Trustee is a party or by which it may be bound. P.ss 16398.1 001098 AGMT .SgSB:J glB!ldO.IddB U1 UO!lgl::>S!P 1BP1puf JO gSPlgXg gql Ol pUB Sg1d1::>u!ld grqB~1Ubg JO uO!lB::>rrddB gq~ Ol 'AIIBlgUgg s~qg!l ,SlOlWgl::> gU!l::>gJJB 5MBI.mrru:qs 19tpO .10 UO!lBZ!UBglOgl 'rnU!lO~BlOUI 'A::>UgAIOSU1 'A::>ldtl.D[UBq Ol gU!lBIgl 5MB1 01 l::>gfqus 'SUIlgl s11 tp1M g::>UBplO::>::>B u1 gIqBg::>loJUg gglsru~ gtp JO SUO!lBgnqo ~UWUN pUB PITBA gtp SglTIl!lsuo::> 'Olglgtp sg!llBd gAp::>gdsgl 19tpO. gq1 Aq A.IgArrgp pUB U01ln::>gXg 'UOflBZ!lOtpUB gUP ~U1IDnSSB 'pUB gglSru~ gq1 Aq pglgAngp pUB pg1U::>gXg 'pgZ!lOtpUB Amp Uggq SBq g.rmUgpUJ gq1 (11) pUB g.rmUgpUJ gtp JO su01S1A01d gql Ol gg~B pUB ldg::>::>B lOll!! 19lUg Ol pgYHBnb ~U1gq pUB 19MOd IItlJ ~U!ABq 'B::>!lgury JO SglBlS pgl!Uil gtp JO 5MB1 glp 19pUn ~U!lSpm AIPITBA pUB pgZ!llB~lO Alnp S! gglSru~ gq1 (!) lBtp l::>gJJg gtp Ol 'Al!lOtpUY gtp pUB 19l!JMlgpUil glp 01 pgSSg.rpPB 'glBG gU!SOI;) gtp pglBp 'gglsru~ gql 01 Igsuno::> JO uo!U!do uy .gglsru.1 Ol PSUUO;) JO uo!U!dO (X!) glI\lUgpUJ gtp JO A.IgAngp pUB uO!lu::>gXg gql ~U!Z!lOqluB gglsru~ gtp JO UOPU10SglI 13 pUB uO!lnIosglI lUBdP!l.lBd q~mg 'uo!lnIosglI Al!lotpny gql JO Ado::> pgY!llg::> Y .suo!lulos~lI (x) 'Olglgtp sg!l.lBd gA!l::>gdsgl gtp Aq pglgA1PP pUB pglU::>gXg A{UP 'lUgurg1BlS {B!::>YJO gq1 pUB SglB::>Yfllg;) g.IUSOPS!G gql 'SlUgUIgg~y gSBq::>lUd lUgurIIB1SUJ: gql 'glTIlUgpUI gql JO q::>Bg Sg1do::> OM~ .SlUgurU::>OG re.a;r:r (!X) 'gpO;) lUgUlUlgAOD B!lllOJ!IB;) gql JO ~.t:O~9 uO!l::>gs 01 ~uBnSlnd g::>floU B JO ~unY gql JO g::>UgP1Ag pUB 'Olglgql Sg111Bd gql Aq pglgA!PP pUB pg1n::>gXg A{np 'lUgurgg~y y ill gql JO Ado::> pgY!llg::> Y ..aU!Hd pUB lUgurggl1ly y dI (TIX) .pSUUO;) puoH Ol A.IOPBJSP,BS UIlOJ U! 'lUBd!::>!llBd q~mg pUB Al!loqlny gtp JO SglB::>Y!llg;) XB~ .glB::>Y!llg;) XB.1 (!TIX) .glBG ~U!SOI;) glp uo pgJJg pUB g::>lOJ HllJ U! g.m 1UgurglB1S {Bf::>YJO gql U! pgq!l::>Sgp spuog gtp UO S~U!lBl gql lBql g::>UgP1A3 ..aU!lB({ (A!X) 'IgSUUO;) puoH Aq pg1sgnbgl AlqlmOSUgl gq ABur SB SglB::>YWg::> pUB suo!ll!do.{B~g1 q::>us q~!M 19lpg~Ol 'C.lgmsUJ puog" g(1) .::>UJ 'g::>uBmssy Al!lu::>gs re!::>uBU!d Aq pgnss! puoq Algms lunO::>::>B gAlgSgl glp pUB g::>UBlllSU! puoq redp!Uurn JO A::>!{od gq.1 .g::>UBlnsUJ puog (AX) .1UBd!::>!l.lBd q::>Bg pUB Al!lotpny gql Aq pgYS!lBS gq Ol Ugtp suo!l!puo::> Ire pUB pguuopgd gq 01 Ugq1 SlUgUIgg~B rre JO gur!l q::>ns OllO!ld 10 1B lUBdP!l.lBd q::>Bg pUB Al!loqlny gq1 Aq UO!l::>BJS!lBS lO g::>UBUIlOpgd gnp gql pUB pgU!BlUO::> U!gjgq lUBdP!l.lBd q::>Bg pUB Al!loqlUY gql JO SUO!lBlUgSgldgl gtp JO '~U!S01;) JO gwn gql JO SB 'A::>Blll::>::>B gtp 'SlUgUIgl!nbgl re~gI tp1M lUBdpp.md q::>Bg pUB Al!lOlpny gtp Aq g::>UlrrrdUIO::> g::>UgP1Ag OllSgubgl ArqBUOSBgl ABur Igsuno;) PUOH 10 19l!lM..IgpUil gtp SB SlUgrnu::>op 19q1O pUB SlUgurIl.IlSU! 'S~U!pgg::>old 'SglB::>Y!llg::> 'SUO!ll1do regg{ pmO!l!PpB q::>ns .psuno;) Aq pglsgnbglI SUIgU 19tpO (!AX) pUB glBU~U.ugl HBqS lUgUIgg1~y gSBq::>lnd puog s!lp 'lUgurgg~y gSBl.Pllld puog S!l11 Aq pgUruugd UOSBg1 AUB l01 pglBu!llllal gq HBqS SuopB~nqo S ,1al!JMlgpUn gql J1 lO 'lgl!JM.IgpUn glp Aq paA!BM lOU S! uO!l!puo::> q::>US pUB 'lUgUIgg~y gSBq::>llld puog s!lp U! pau!Bluo::> SUO!lB~nqo S ,1~!JA'UgpUn gql Ol suo!l!puo::> gql A]S!lBS 01 gIqBun gq lrells 1UBd!::>1l.IBd q::>Bg pUB Al!loq1UY gql JI 9S.cI .tWOV 860100 I"86t:91 none of. the Authority, the Participants or the Underwriter shall have any further obligation hereunder. 9. Expenses. The Underwriter shall be under no obligation to pay, and the Authority shall pay, but only out of the proceeds of the Bonds, any expenses incident to the performance of the obligations of the Authority hereunder including, but not limited to: (a) the cost of preparation, printing and distribution of the Indenture and word processing, reproduction, printing and distribution costs relating to the Preliminary Official Statement, the Official Statement and any supplements or amendments thereto (whether incurred by counselor an independent printer); (b) the cost of preparation of the Bonds; (c) the fees and disbursements of Bond Counsel, Disclosure Counsel and Counsel to the Authority; (d) the fees and disbursements of the Financial Advisor to the Participants; (e) the fees and disbursements of the Trustee; (f) the fees of the rating agencies; and (g) the premium for the policy of municipal bond insurance and reserve account surety bond. The Underwriter shall pay fees, if any, payable to the California Debt and Investment Advisory Commission in connection with the issuance of the Bonds and all other expenses incurred by the Underwriter in connection with the public offering of the Bonds. 10. Notices. Any notice or other communication to be given to the Authority under this Bond Purchase Agreement may be given by delivering the same in writing to the Statewide Communities Development Authority, 1100 K Street, Suite 101, Sacramento, California 95814, Attn: Secretary and any notice or other communication to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the same in writing. to Henderson Capital Partners, LLC, One Kaiser Plaza, Suite 650, Oakland, California 94612. 11. California Law to Govern. This Bond Purchase Agreement shall be governed by and constru.e.d in accordance- ,~!ith t:.~e laws of the State of CaliforrJa applicable to contracts made and. performed within such state. 12. Facsimile and Counteroart Sirnatures. This Bond Purchase Agreement may be executed by the parties hereto by facsimile transmission and in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. P.57 16398.1001098 AGMT Jm)j~q ~mr!A Aq 10 l~pun~l~q lq~p AU'R ~A'Rq 10 ~.qnb::m f[l?qs uosl~d 1~If.l0 ON .(l~lpMl~PUfl ~If.l ]:0 S~!SS'R 10 SlOSS~OOns ~tp. ~u!pnIOU!) l~lpMl~PUfl ~If.l PU'R SlUBdppmd ~ql '~pQ(pnv ~qllo 19~u~q ~ql 10]: AI~IOS ~pl:mI S! pU1~ l~lpM.l~pUf1 ~ql ptrn SlU'Rdp!:).md ~tp '~potpnv ~tp ~uourn lU~m~~~'R ~l!lU~ ~tp ~l11l!lSUOO IIuqs p~~~R ~lOJOl~l~q S'R ~U!l!1M. U! ltrnd!o!lJUd qO'R~ ptrn ~potpnv ~tpAq P~ld~OO'R U~qM.lU~m~~~v ~S'RqolIld puog s"NJ. .S;;)!J"UPY~U;;)g pUR lU~m~~l.OY ~InUH "EI 'smOA AIIlll Al~ A JTI 'S~8N.Imr d '1VlldVJ NOS~HaNHH :Ag lU;;)P!S~ld :aHJ.dHJJY X.LnIOH.LflY .LNHWdOlHAtIG S3IllN.O.WWOJ HCIIMtllY.IS Y.INMOdI'1VJ :AS: UO!SS!UllUOJ ~tp ]:0 l;;)qm;;)w [.INV dIJI.I mr d] :Ag l~OYJO p~zpQ(p.ny LLNY dIJI.I mr ill :Ag l~OYJO p;;)zpotpny 8S.d .LWDV 860100 I'S6f9I Maturity Date (October 1) $ $ EXHIBIT A Principal Amount Interest Rate % Term Bonds due October 1,20_ Yield _ % % Term Bonds due October 1, 20_ Yield _ % n-:__;__1 ^ __.__4._ ^ 11___t...1_ ..._ n____;_;---4.-- .c l.HIIJlpal ~llUUlll.l:) ~lu\.:.aUH;;; I.U r 41 U\.:.lpalll.;:). P.59 Yield 16398.1001098 AGMT c :ijU.l(I dTl poo M. ~ PPYRlaa strpIM.'BH ~ '< Q i:C!. ~ c::. ~ I eli e;~ --<~ al G i o : ....., er: ~ ' (ll ! en , C1l . n ' $ ( .... t ;:7, = ~ S s' : .- , =:;. ~~ C:r ( ~. ~ 0..= ;::;. 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A.LnIOH.LflV .LN'3:WdO'1'3:A'3:G SID.LINflWW03 '3:<II.M.'3:.LV.LS VINHO'[['1V3 $ 'Slu~w~aJ2y aSllq:J.IIId luaWIflllsUJ: I!~1p .mpun suorHpuo:J tIflnl~:J Ol p~fqns SluawABd luaurwnsUJ: alp IfHJ\\ ,u!IBd B UO ScmuaA~ walSAS Aq paln:Jas SU09B~TIqO JBU09!PPB OlU! lalU~ ABW pUB SluawABd lU~WIflllSUJ: alp 1p!J\\ ,upBd B UO sanuaA~lI W~lSAS Aq paID:Jas SUOJ:lB~TIqO ~U!pmnSlno aABq ABW SlUBd!:J!UBd llIl1J2old [llnp!A!pUJ: 'SlUBdP!UBd llIl1J2old .mlpo JO SlU~wABd luawwnsUJ~1p U! 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URqllgqlO Z9.d so 860100 rL6~91 CALIFORNIA STATEWIDE COl\fMlJNITIES DEVELOPMENT AUTHORITY W ATItR AND W ASTEW ATER REVENUE BONDS (pOOLED FINANCING PROGRAM) SERIES 2005_ CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY Steve Szalay, Chairman Chris McKenzie, Vice Chairman Daniel Harrison, Secretary Norma Lammers, Member Steve Keil, Member Ken Nishimoto, Member Paul Hahn, Member PROGRAM PARTICIPANTS Participant <- County) Participant <- County) BOND COUNSEL Hawkins Delafield & Wood LLP San Francisco, California DISCLOSURE COUNSEL Hawkins Delafield &W ood LLP San Francisco, California TRUSTEE Union Bank of California, N.A. San Francisco, California AUTHORITY COUNSEL Orrick Herrington & Sutcliffe LLP POOL VERIFICATION AGENT Grant Thornton LLP Minneapolis, Minnesota P.63 16397.1 001098 OS S.LNaLNOJ dO H1:HV ~ a2vd t l ........... ~.................................................................................................................................................. .................. S~aL.L VW XV ~ Ol ............................................ ............................................... .................................................................................. ........ NO U VDIll'1 Ol ................................................................................................................................................. .......................... 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APPENDIX A INFORMATION REGARDING PROGRAM PARTICIPANTS ................................................................................APPENDIX B DEFINITIONS AND SUNlMARY OF LEGAL DOCUMENTS.................................................................................APPENDIX C FORM OF BOND COUNSEL'S OPINION ................................................................................................................. APPENDIX D FORM OF MUNICIPAL BOND INSURANCE POLICY ...........................................................................................APPENDIX E INFORMA nON CONCERNING DTC...................;.................................................................................................... APPENDIX F FORMS OF CONTINUING DISCLOSURE CERTIFICATES .................................................................................. 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S,Al!loqlnv ~lll eUl'DJ:JO.lJ tJl[.l .IT!alaq IIXlnIOHJ..flY '3R.L1I ags 'Al!lOlpUY alp ~UW.rn~gl UOp'BUIlOJU! alOUI lOtI .8861 'I aunf uo gpO;) lU~UIUlgAOD 'B~oJITR;) gql Ol luenslnd pal'Bgl~ A~Ua~'B slaMod JO gSplaXg lU!Of 'B S! Al!lOlpUY gIll elJ'!.101I.1nV tJl[.l .U!glgq IINVld DNI;)NVNItI CINV S..LNV dI;)I..LW d ~DOlIdll aas 'uerd ~upmmy aql ~U~p.rn~gl U09'BuuoJU! alom lOtI .Sluedpn-md llm.iliOld aql JO IIIBPg~ JO SluaUI~AOldUI! l'Bl!d'B~ ~Hqnd Mau PlUlSUO~ pUR gl!Ub~'B Ol pgsn p~ puntI l~fold gql Olll! pansodgp aq ruM spuog alp JO spgg~Old alp JO uO!pod 'B 'SlImdpp.md llm.ili01d aql JO IIIBllg~ Aq SlUgUIgAOldllI! ,fEl~d'B~ MgU JO liupueuy alp ql~M UOn~gUUO~ UJ .spuofI gql ~ll1nss! IT! p~.un~U! SlSO~ alp A'Bd Ol pUR (MOIgq pguggp) Sluedpp.md llm.iliOld gql JO SlUamgAOldlll! fEl!d'B~ ~nqnd u"fBpa~ a~ImuY~l pUR a~URuy Ol PloS ~U!gq am spuog aql etJsod.tnJ .a~Imq~ Ol pgfqns 'A..mururrra1d * 99.d SO 860100 l"L.6t:91 Security for the Bonds. The Bonds will be issued and secured pursuant to the terms of the Indenture. The Bonds are special obligations of the Authority payable solely from Revenues consisting generally of the Installment Payments to be made by certain local public agencies (the "Program Participants ") and from amounts on deposit in certain funds and accounts held under the Indenture~ Financial and other information concerning the Program Participants is in Appendix B attached hereto. No funds of the Authority other than the Revenues are pledged to or available for payment of the principal of or interest on the Bonds. The Installment Payments securing the Bonds are special obligations of the Program Participants under the respective Installment Purchase Agreements entered into by each of the Program Participants with the Authority and dated as of _ 1, 2005 (the "Installment Purchase Agreements"). The Installment Payments under each Installment Purchase Agreement are separately secured by a pledge of the System Net Revenues of the Enterprise System of the respective Program Participant under such Installment Purchase Agreement. The pledge of System Net Revenues (as defined herein) under each Installment Purchase Agreement secures only the obligation to pay Installment Payments and other obligations under that particular Installment Purchase Agreement. Individual Program Participants are not obligated to make up for any deficiency in the Installment Payments of other Program Participants under their Installment Purchase Agreement. Neither the faith and credit nor the taxing power of the State of California or any public agency thereof or the Authority or any Program Participant or any member of the Authority is pledged to the payment of the Bonds. The Bonds do not constitute a debt, liability or obligation of the State of California or any public agency thereof (other than the Authority payable solely from the Revenues) or any Program Participant or any member of the Authority, and neither the directors of the Authority nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance. The Authority has no taxing power. . For more information regarding the security for the Bonds, see "SECURITY FOR THE BONDS" herein. . Additional Debt Test under Installment Purchase Agreements. Each Installment Purchase Agreement permits the Program Participant to enter into additional obligations secured by System Net Revenues on a parity with the related Installment Payments provided that certain conditions are satisfied as described herein. For more information concerning the additional debt tests under the Installment Purchase Agreements, see "SECURITY FOR THE BONDS-Additional Debt Tests under the Installment Purchase Agreements" herein. Rate Covenant under Installment Purchase Agreements. Each Installment Purchase Agreement will require the Program Participant, to the fullest extent permitted by law, to fix, prescribe and collect rates and charges and maintain its operations such that System Net Revenues will be equal to 120% of the Installment Payments and other Parity Debt of such Program Participant during each Fiscal Year, all as more particularly described herein. For more information concerning the rate covenants see "SECURITY FOR THE BONDS-Rate Covenant under the Installment Purchase Agreements" herein. 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IBpmmy UIBllg:J gp!A01d 01 gW:Jyn-rg;) glllSOpS!a 2u!nu!luo:> B U! 1utmgAO:J ffiM 'suo!ldg:Jxg UIBllg:J Oll:Jgfqns 'llIBdpn-rnd um120ld q:J'BH .UOYVUl.LOfU] Ivuoy!PPV puv a.lnsopS!a Eu!nuyuo:J .SlUBd!:)n-rnd um1201d glp 10 gglSnl.L gq1 2ll!PB1uo:J Aq pgUIBlqo gq ABUI 1UgmgWlS IBPYJO glp 2u!p.rn2g1. UO!lBUIlOJU! {'Buo!l!PPY .lUBdpp.rnd Um1201d q:)ns mOl] 'gIqBITBAB ~ 'sllodgl UIBllg:J JO Ado:) B uIBNo A'Bm uos1gd pg1Sg1glU! Any .SlUgum:JOP pg1BIg1 pUB Slg2pnq 'Sl!pnB 2u!pnpu! 'Sllodgl JO A1g!.IBA B Sg.rndg1d AI.rnIn2g1 1UBdPPlBd urn1201d q:)BH NV'ld ~NI3NVNM UNV RLNVdI3I.LHVd W~~OHd . .SlUgUIgg12y gSBq:)lnd 1UglIIlIB1SUJ gql1gpun 1lIBd!:)!llBd urn120ld q:JBg mOl] gnp SlUgrnABd lUgUIIIBlSUJ glp JO gInpgq:)s B 10J II grnpgq:)s g:J!Algs 1qga - SGNOS: HH..L. ggs .SlUBdp!l-ffid um1201d glp JO Sg:)UBUIJ pUB suo!l'Blgdo gq1 2ll!Ulg:Juo:) UO!lBUIlOJU! 10J s: pUB Y Sg:J!pugddy ggs . MOIgq ll'Bq:) gq1 U! pgqp:JSgp g.rn SllIBdp!llBd um1201d gq.L .Sluvd]:J1J.lvJ Ulv.lEo.lJ 89.cI SO 860100 rL.6t:91 Schedule of Program Participants* Final InstaIlment Payment Date (October 1) Participant Type of System Type of Proiect Principal Amount * Preliminary, subject to change. Financing of New Improvements. A portion of the proceeds of the Bonds will be deposited into the Project Fund established under the Indenture and used to acquire and construct certain public capital improvements of certain of the Program Participants. Within the Project Fund there shall be established separate, segregated Project Accounts with re~pect to such Program Participants. The chart below summarizes the financing of new improvements by such Program Participants. Schedule of New Improvements* Participant Proiect Project Account Amount * Preliminary, subject to change. Refunding Plan. A portion of the proceeds from the sale of the Bonds will be used to defease and redeem "the (the "Refunded Obligations"). The Refunded Obligations were issued to provide funds for . The chart below summarizes the terms of the refunding and payment of the Refunded Obligations. Under the financing plan, there shall be deposited in an escrow fund (the "Escrow Fund") to be held by a trustee bapk. acting as escrow agent (the "Escrow Agent") under an escrow agreement (the "Escrow Agreement"), by and between and the Escrow Agent, funds from a portion of the net proceeds of the sale of the Bonds. The Escrow Agent will hold moneys which will be sufficient to pay the regularly scheduled payments with respect to the Refunded Obligations until the redemption date and to pay the redemption price with respect to the Refunded Obligations on such date. Upon the deposit of such proceeds and said moneys into the Escrow Fund, the Refunded Obligations will no longer be deemed outstanding. P.69 16397.1001098 OS *~n!punJ<JlI JO 3Inp3Qas <J}UQ lU3mAud3.Id <Ja!.Id }U3U1AU03.Id lImOP!l.IUd UO!lUilgqO lunowy .g~Imq~ Oll~grqns 'AIeU!illUg1d * S<INl1J1 JlO S3S11 <INV S33IDlOS <I3:J. VWIJ.S3: .Spuog Gql Ol ~ll!lUpl SpUtlJ JO SGSn pUR SG~mOS pglUUI!lSg gql qPOJ SlgS gIqul ~ll!A\OHoJ gq~ Sg~lnOS relO~ suo!lU~HqO pGputlJg}I Ol PGlBIg}I slunoury lUnO~S!CIfUITI"fUIGld gnsSJ: reU!~!lO spuog JO lUnOury red!~u!1d :SG::>moS SGSn relO~ (z) g~U1mSsrJO SlSO;) (J)punt[ A\Ol~SH (I)punt[ pgfOld :SgSn 'SlSO:J 13u!lu!ld puu 13U!:Juuuy 'IU13:;)I u!Uu~:J SU U~M su 'lunO:Jsw S,1:;)l!.JM.1:;)pun ptm A:JTIOd :;)Al:;)s:;)~ pUU A:JHod :;):JUUlnSUI puos: IRd!:J!unW :;)tp lOJlnn!Ul:;)ld :;)tp s:;)pnJ::>UJ: (z) .sluud!:J!llUd llm.r1301d :;)tp 13uoum SlUnCll.'U ;}S;}~'1 JO UO;ll':::JoIll': g~+ JO UN,OP1iBd1q B 10J llNV'1d D.NI:J.i.\I.--iNId CIN'v' Sl.N-'v' dI;)IJ..-~V d WV~DO~dll ggs ([) S<INOa IDIJ. .Olglgq pgq~BllU t[ x!puGddV pUR MOpq IlUIglSAS AIUO AllUg:-){Oogll ggs ]OglGql gId!l{tlUI re~Glll! AIm 10 OOO'~$ JO SUO!lBU"fUIOUgp U! AIUO UUOJ A:qUg-){ooq UI pgsuq~lnd gq ABU! spuog gql U! SlSGlglU! dIIISlgUMO .spuog grp 10J A.rOl!sodgp Sg!l!ln:JGs SB pu H!M ;)~G .C.;)..LGIl)){.IO A A\gN '){10 A A\gN 'AURdUIO;) lSru~ A.rOlIsodgG gq~ JO GglJ!UIou SB '.0;) 1F1 gpg;) JO gureUgql U! PGIGlS!~gl gq IHA\ 'pGnss! UgqA\ 'pUR UllOJ pglglS~gl AHtlJ U! AIUo pglGA!Igp gq IHA\ spuog Gq.r .CllglUG lUGUIAUd lSglglUJIl UR 't.pUg) -00(; '1 - ~u!~UgUmIO~ '.rngA q::mG JO 11gqol~0 pUR 1 I!ldV uo gIquABd Gq neqs lSglglU! q~rqA\ 'JOglgq ggud IGAO~ grp uo qpoJ lGS SglBl gA!l~dsgl grp lU lSglglU! .rngq pUU slunoure pUR S.rngA grp U! gIqUAud gq IHA\ pUR A.mA!Igp JO glUP .f!gql pglUP gq IHA\ spuog gq~ gpUUI 10 P1Ud UgGq suq AISnO!Agjd lSGlglU! q~IIIA\ Ol glBG lUGUIAUd lSgjGlUJ mp U!0l] lSglglII! .rnGq IUM puog q:ms 'spuog ~uwuulslno Gtp uo lInuJgp II! UGtp S! lSgjGlII! puog AUR JO UO!lt?llS~gj JO glli!l Gtp It? J! lBql 'pt}pJt1.o.ld ~spuog gql JO glUP AlgA!IGp gql UIOl] lSgjglU! .rngq lreqs l! lUgAg q~rqA\ U! 'GlUG lUgu.u(t?d lSgjGlUJ lSn] gql gU!pg~Gld lXgU glt?G plO::>g}I gql glOJGq 10 uo S! UOnUllS~gl JO gwP q~ns ssgIUn 10 'glt?G lUgu.u(t?d lSgjglUJ q~ns UIOl] lSglGlU! .rngq HIM l! lUgAg q~IIlA\ U! 'glt?G lUGurAUd lSglglUJ q~ns ~u!pnpu! pUR Ol glt?G lugmAud lSglglUJ: lIe gU!pG::>Gld.lXGU glt?GP10~g~ gql ~u!pnI~II! pUR mOlJ pO!lgd Gql ~u!lnp S! UOnt?llS~gj JO glBP q~ns SSG{lffi 'JOglgrp UO!lt?llS!~gl JO glt?p gtp gll!pG~Gld lXgU gWG lUgu.u(t?d lSglglUJ Grp mOl] lSglglU! .rngq IHM puog q~t?G 'pgnUnUO~S!p. S! A\OIGq pgq!l~Sgp mGlSAS ^IUO A:qUg-){ooq gql lUgAg gql UJ o ..cd SO 860100 I'l.6E91 available for payment on the Outstanding Bonds. Payment of interest on the Bonds due on or before the maturity or prior redemption of the Bonds will be made to the person whose name appears in the registration books maintained under the Indenture as the Owner thereof as of the close of business on the Record Date next preceding each Interest Payment Date, such interest to be paid by check mailed by fIrst class mail, postage prepaid, on each Interest Payment Date to such Owner at his address as it appears in the registration books maintained under the Indenture, or, upon written request received prior to the Record Date next preceding an Interest Payment Date of an Owner of at least one million dollars ($1,000,000) in aggregate principal amount of Bonds, by wire transfer in immediately available funds to an account within the continental United States of America designated by such Owner. Book-Entry Only System One fully-registered Bond will be issued for each maturity of the Bonds in the principal amount of the Bonds of such maturity. It will be registered in the name of Cede & Co. and will be deposited with DTC. The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor. securities depository). In that event, Bonds will be printed and delivered and will be governed by the provisions of the Indenture with respect to payment of principal and interest and rights of exchange and transfer. There can be no assurance that DTC participants or others will distribute payments with respect to the Bonds received by DTC or its nominee as the registered Owner, or any prepayment or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or that DTC will service and act in the manner described in this Official Statement. See Appendix F hereto for additional information concerning DTC. Transfers and Exchanges Upon Termination of Book-Entry Only System In the event the book-entry system described above is abandoned, Bonds will be printed and delivered. Thereafter, any Bond may, in accordance with its terms, be transferred upon the books required to be kept pursuant to the Indenture by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the Corporate Trust Office of the Trustee accompanied by d~livery of a duly executed written instrument of transfer. Whenever any Bond or Bonds will be surrendered for transfer, the Authority will execute and the Trustee will authenticate and deliver a new Bond or Bonds for a like aggregate principal amount and maturity date. The Trustee will 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. The Trustee will not be required to register the transfer of (i) any Bond during the fifteen (15) day period preceding any date established by the Trustee for selection of Bonds for redemption, (ii) any Bonds which have been selected for redemption (except for any unredeemed portion of any of such Bonds) or . (iii) any Bonds during the period from any Record Date to any Interest Payment Date. The Bonds may be exchanged at the Corporate Trust Office of the Trustee for a like aggregate principal amount of Bonds of the same maturity of other authorized denominations. The Trustee will require the payment by the Owner. requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. No such exchange will be made (i) during the fifteen (15) days preceding any date established by the Trustee for selection of Bonds for redemption, (ii) of any P.71 16397.1 001098 OS .alBa luamABd lsa1alUJ AIm 01 alBa p1o::>a"M AIm mOl] pO!"lad alp gUflnp spuog AIm JO (m) 10 (spuog q::>ns JO AIm JO uop.lOd pamaapamn AIm 10J lda::>xa) uOfldmapa1 10J papalgs uagq aABq q::>!lJM. spuoa nopdmap,lH Pun.tI g1IpJ1IJS oz or .Iaqol;JO ana spuog w.la.L .(pamaapa1 ~IIBuopdo os spuoa uuaJ.. q::>ns lIB JO lunourn IBdpu!"ld aql Aq pa::>npa1 aq WM. sluaUI[l'BlsUJ punt! gllp{U!S q::>ns JO slunourn alp M.Opq paq!"l::>sap SB pamaapa1 AlfBUO!ldo uaaq aABq spuoa uuaJ.. AIm 11 lBlplda::>xa) alnpaq::>s gU!M.OIIoJ alp U! l[lloJ las Sluno~ aql u~ pUB salBp alp uo guwua s.maA aql gU!"lnp anp amo::>aq WM. slUamABd q::>!lIM -OZ 'I 1aqopo uo gUTll1lBUI spuog uuaJ.. alp JO lUamABd pUB uopdmapa1 A.IOlBpImm alp 10J a1nlUapUJ alp1apun paqS!{qBlsa a.m sluaurrfBlsUJ punt! gtrpIU~S U .Iaqopo) alBa luamnRlSUJ: pun.tI ~U!}fU!S * . AlprllUW* uondmapal[ IRUOpdO :uopdmapa110J paxy alBp alp Ol uoa1aql paru::>::>B lSa1alU! ql~M. 1aqlagol 'salBp gUTM.OIIoJ alp uo pamaapa1 Joa1alp suo plod aql 10 spuog aql JO lunourn fBdpu!"ld aql JO sagBlua::>lad gU~M.OnoJ aql Ol fBnba a::>!"ld uopdmapa1 B lB 'a1llluapUJ alp u~ pap~Ao1d SB a::>pou parrem uodn 'uopdmapal JO alBp alp OllO!"ld SABp (~) aAg Imql ssal lOU aalsruJ.. aLp ql~M. pansodap pIm a::>mos Il1JM.BI AIm mOl] AlPoqlny aql Aq paApap spul1J mOl] 'lImdpplBd urn.m01d alqB::>!{ddB aql JO uop::>a1W aql lB Alpoqlny aql Aq pal::>aps SB salBp Al!"llllBm q::>ns mOl] pIm slunourn IBd~::>upd q::>ns u~ :j.md u~ 10aloqM. B ~ 'salBp Al~lmBlU P~l'BlS ~A!l::>~dsa1l~~T,.Tl OllO!-Id '-OZ; 'llgqOPO 1~l.:.m.1O uo ~Wp Am~ uo Alpm.pnv gIP Aq uopdmapa1 fBuOfldo Ol pafqns g.m -OZ 'I 19qOPO 19YB 10 no suuall!gql Aq ~u!"lnlBm spuoa aql. pO!"lad uopd.mapa"M a:J!"ld uopd.mapa"M ZL;.d SO 860100 l"L6€91 Redemption Procedures"_ Whenever less than all the Outstanding Bonds maturing on anyone date are called for redemption at anyone time, the Trustee will select the Bonds to be redeemed (from the Outstanding Bonds maturing on such date not previously selected for redemption) by lot in any manner which the Trustee deems fair; provided, that if less than all the Outstanding Term" Bonds maturing on anyone date are called for redemption from proceeds other than Sinking Fund Installment payments at anyone time, the Trustee will calculate a reduction in the Sinking Fund Installment payments required to be made with respect to such Term Bonds (in an amount equal"to the amount of Outstanding Term Bonds to"be redeemed). Except for Sinking Fund ,Installment redemptions," the Authority will deposit with the Trustee money sufficient to redeem any Outstanding Bonds not later than five (5) days prior to the redemption date of the Bonds to be redeemed. In lieu of redemption of any Term Bonds, amounts on deposit in the Sinking Fund allocable to such Term Bonds may be used and withdrawn by the Trustee at any time upon the request of the Authority at the direction of the applicable Program Participant for the purchase of such Term Bonds at public or private sale as and when and at such prices as the Authority at the direction of the applicable Program Participant may detennine. The principal amount of any Term Bonds so purchased by the Trustee will be credited toward and will reduce the principal amount of the Term Bonds required to be redeemed on such Sinking Fund Payment Date. Notice of redemption of any Bonds or any portions thereof will be mailed by first class mail, postage prepaid, by the Trustee not less than 30 nor more than 60 days prior to the redemption date of such Bonds (i) to the respective Owners of the Bonds designated for redemption at their addresses appearing on the bond registration books" kept by the Trustee: (ii) to the Information Services and (iii) to the Securities Depositories. Each notice of redemption will state the date of such notice, the Bonds to be redeemed, the date of issue of such Bonds, the redemption date, the redemption price, whether funds are then on deposit sufficient to pay the redemption price, the place of redemption (including the name and appropriate address), the CUSIP number (if any) of the maturity or maturities, and, if less than all Bonds of any such maturity are to be redeemed, the distinctive numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice will also state that on such redemption date there will become due and payable on each of such Bonds the redemption price thereof or of the specified portion of the principal amount thereof in the case of a Bond to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon will cease to accrue, and will require that such Bonds be then surrendered at the Corporate Trust Office of the Trustee specified in the redemption notice as the place of redemption; provided, that failure by the Trustee to give notice to any one or more of the Information Services or Securities Depositories, or the insufficiency of any such notice or the failure of any Owner to receive any redemption notice mailed to such Owner or any immaterial defect in the notice so mailed shall not affect the sufficiency of the proceedings for the redemption of any Bonds. From and after the date fixed for redemption of any Bonds or any portions thereof, if notice of such redemption will have been duly given and funds available for the payment of such redemption price of the Bonds or such portions thereof so called for redemption will have been duly provided, no additional interest will accrue on such Bonds or such portions thereof from and after the redemption date specified in such notice. P.73 16397.1001098 OS afTIpaq:>s a:>!A.Ias lqa([ .SpUOf[ gql10J SlUmng1!nbg1 g:J!AlgS lqgp gql pun lund~:Jn-md um.r2old q:JBg mOIJ ~mp SlUgurABd lUguqIBlSUJ rBnmre gql SM.oqs grqBl ~U!M.OrroJ gq~ spuog aql uoaJ!A.Ias lqa([ pUB SlUamABd luaUI[[BlSUJ: Ilmmrv JO aJIlpaq:>s l.1<lqoPO ~lI!Pu:t[ pOf.l<ld IBmlUY Sluam'ABd luamnBlSUI [lUBdPP.lBd] SluamABd lU<lmnBlSUJ: [lucdpp.:redJ IBapU!.Id <llB~a.I~~Y lS<l.IalUI alB~a.I~~V IClOJ, SaNoa mIl. HOJJ Urnn;)3S a.IllluapUI aql .Iapun Al!.In:>as gql JO lUgurABd IBTIl:Jund gql Ol Alpoqlny glp Aq pgZpgrd ArqB:JOAgll1 g.m (pund glBqg~ gqlldg:Jxg) slunO:J:JB 10 spul1J 19lpO glp U! pUB CISgnUgAg~1I gql) gglSUIj, gql Aq pgAP~gl SlUgWABd lugmIIBlSUJ gqj, .SlUgmgg.!Zy gs-eq:Jlnd lUguqIBlSUJ gql 19pUn SlUBdpp.md l:r1'e.r201d glp 10 suo~lBZHqo gql g:J101Ug Ol s-eq H slqZ"!l lIB ptrn Atrn ptrn SlUgmgg.r2y gs-eq:Jlnd lUgWIIBlSUJ gql1gpUn Al"!loqlny gql Aq pgA!g:Jg1 SlUgurABd lUgUIURlSUJ gql 10 lIB gglSTIlj, gql OllgAO Stm~SSB ptrn Slg1Strnll AlqB:JOAgll~ Alpoqlny gql 'g.ItllUgpUJ gqllgpUO tL.d SO 860100 1"L6E9t Bonds. The Revenues and such other funds and accounts are not permitted to be used for any other purpose while any of the Bonds remain Outstanding; subject to the provisions permitting the application thereof for the purposes and on the conditions and terms set forth therein. The Indenture provides that this pledge constitutes a fIrst lien on the Revenues and such other money for the payment of the Bonds in accordance with the terms thereof. The Indenture establishes a special fund known as the "Revenue Fund" held by the Trustee into which all Installment Payments are deposited. The money in the Revenue Fund is required to be transferred by the Trustee for deposit in the following respective funds (each of which is maintained with the Trustee) at the following times and in the following order of priority: (1) Interest Fund; (2) Principal Fund; (3) Sinking Fund; and (4) Reserve Fund. Interest Fund. The Trustee will transfer for deposit in the Interest Fund before each Interest Payment Date, an amount of money from the Revenue Fund which is equal to the aggregate amount of the interest becoming due and payable on all Outstanding Bonds. on such Interest Payment Date. Principal Fund. The Trustee will transfer for deposit in the Principal Fund before October 1 of each year, an amount of money from the Revenue Fund which, together with any money contained in the ~. . ,......, ... 'I.... . . r.1 .. 'I" . 'I , .. , " rnnClpal .t'una, IS eqUal 10 me aggregate alTlOUm or toe pnnClpal oecommg Que a..TJ.U payaDle on all Outstanding Serial Bonds on such Principal Payment Date. Sinking Fund. The Trustee will transfer for deposit in the Sinking Fund before October 1 of each year as required, an amount of money from the Revenue Fund equal to the Sinking Fund Installments payable on such Sinking Fund Payment Date. Reserve Fund. Concurrently with the issuance of the Bonds, the Trustee is to establish, maintain and hold in trust a separate fund designated as the Reserve Fund. Separate Reserve Accounts for each Participant are created within the Reserve Fund. In the event of a withdrawal of amounts from "any Reserve Account within the Reserve Fund to make payments to the mterest Fund, Principal Fund or Sinking Fund, the Trustee will deposit in such Reserve Account moneys from the Revenue Fund necessary to restore the amount in such Reserve Account to the Reserve Account Requirement. but only from the Installment Payments made for such purpose by the Program Participants who are obligated under the Installment Purchase Agreements to restore said amounts; provided, that if there has been a draw upon any policy of insurance, surety bond, letter of credit or other comparable credit facility used to provide all or a portion of the Reserve Account Requirement, said Installment Payments will be applied to reimburse the provider of such instrument for payments made under such draw plus its expenses in connection therewith. Under each Installment Purchase Agreement, each Program Participant is obligated only to replenish the Reserve Fund for withdrawals therefrom caused by deficiencies in such Program Participant's payment of Installment Payments. P.75 16397.1001098 OS pun.[ aA.IasaH .lUEdP!llBd um~Old q:ms Ol ~rr~W1g1lUnO~X)V gAjgSg(l gql UO SM.lUP qS!llg1dg1 Ol pgl'B~nqo gq A1uO 1nM. SlUEd!~!llBd um~Old 'SlUgUmg~v lUgUllpnsUJ: gql1gpUn .lUgUmg~v gsuq~md lUgUIIIBlSUJ pglUIg1 gql1gpUn SlUgmAUd lUgUlUUlSUJ gLp U! A~Ugpygp U 19AO~ Ol A{UO gyqUUBAU gq 1UM luno~~v gAjgSg(l q~ug: .lUEd!:J!llBd um~Old q~Ug Aq g1quAud SlUgmAUd lUgUlIIBlSUJ: IBnuuu UlnUl!XUUI gLp Ol IBnbg am AIIB1gUg~ pUE M01gq q:)1oJ 19S am lUgUlgg~v gsuq~lIld lUgUIIIBlSUJ q~Ug 10J SlUgUlgl1nbaa luno~~v gAjgSg(l gql .luno~~v gAjgSg(l q~ns 10J lUgUlgJ!Ilbg(l luno~~v gAjgSg(l glp Ol pmbg lSUgI lU lunoum uu U! pgUpnU!'RUI gq Ol pg1!llbg1 S! luno~~v gAjgSg(l q~Ug U! Hsodgp uo lunOlIIB gql .lUEdpWBd urn~Old q~Ug 10J pgqsnqUlSg SlunO:J~V gAjgSg(l pglU~g~gS 'gwlBdgs JO SlS!SUO~ Pund gAjgSg(l gql .pund gAjgSg(l glp su pgluuB'!Sgp pUIlJ gW.mdgs U lSllil U! sP10q gglSllil gql 'g1IllUgpUJ: gLp 19pUn .(MOpq g1qul gql U! UMOqs SU lUno~~v gAjgSg(l q~t!g Ol gIqu1!'RAU S! lunourn q~ns JO uop10d U A{llO) ~L.86t'616$ S! A~Hod gAjgSg([ gql JO lunoum pglBlS IBlOl gql .~UJ g~UEmSSV Alfln~gs IB!~UEU!d uo UOPBUUOJU! 10J 1I1gmsUJ pUoa gql - g:;)NV(l[lSNI GNOall ggs .~UJ: g~UEmSSV Alf.IU~gS IBPUEU!d Aq pgnSS! gq Ol c.A~!10d gAjgSg-all gql) A:Jnod g~UEmSU! putlJ gAjgSg1 g~!AjgS Ngp U 10 Spgg:J01d pUoa ql!M pgyspus gq ITIM SlUgUlg1!llbg(llunO~:JV gAjgSg-a gllL .A~HOd gAjgSg(l glp10 Spgg~Old pUoa Lp!M p~yspus Uggq suq luno~~v gAjgSg-a q~ns 19q1gqM pUE lunO~:JV gAjgSg(l q:JUg 10J lUgUlg1!nbg-a luno~:JV gA1gSg(l gql Sgq!l:JSgp MOIgq g1qUl gql *uo!lem.Io.J1II S}UDO:>:>Y aA.Ias,lH lUEctpplBd lUgUlg1!nOg(l lUno~~v gAjgSg(l A~HOd gA1gSg-a 10/pUE Spgg~Old pUoa .g~ut!q~ Oll~gfqns 'A.rnU!WHg1d* Sluamaa.I~y aseq:>.Illd luamn81SuI aql .Iapun sanuaAaH laN malSAS JO a~paId .lqga Al!lBd 19q1O IfB pUB SlUgUIABd lUgUIIIBlSUJ gLp JO lugmAud gql10J sgnUgAg(llgN umlSAS uo ugH U SglI1lPSUO~ 'SgnUgAg(l uo SUgH lo!ld pgU!Ulmd AUU Ol l~gfqns plm '(lUEd!:J!l1Bd um~old gIp JO suonu~Hqo Al!.IBd 19q1o AUU pUE SlUgmAUd lUgUl1IBlSUJ gql '.g.!) Nga Al!.IBd 19q1o AIm Aq pglUg1~ g~pgld gql Ip!M.1gqlg~Ol 'g~pg1d S!lIlluql gp!A01d lUgmgg~v gsuq~lIld lUgUl1IBlSUJ gql .P!udun U!'RUlg1 SlUguu(Ud lUgUI1IBlSUJ gql JO AUE gr.qM gsodmd 19q1o AUE 10J pgsn gq lOU ITIM sgnUgAg(llgN UIglSAS gql lBql pIm SlUgUIAUd lUgUl1IBlSUJ gql JO lUgUlAUd gql Ol pg~pg1d A!qU:JOAgJ.l! g.m punt! gnUgAg(l UIglSAS gqlII! l!sodgp uo slunoum IfB pUE sgnUgAg(llgN UIglSAS UU luql Sgp!A01d lUgUIgg~V gSBq~l1ld lugmIIBlsUJ q~ug: p!'Rd SlunOlIIB fIB pUE Sg~.mq~ 'SglU1 '(SggJ UOn~gUUO~ ~u!pnpII!) SggJ lIB ~uTIJnpII! 'Sgld!~U!ld ~ununo~:JV pgldg:J:JV AfIB1gUgO ql!M g:JUUp10~:JU II! pgUranglgp 'mglSAS glfl JO uonU1gdo 10 d!lIS1gUMO gql mOl] lImdp!l1Bd gql Aq gIqUA!g:Jg110 pgA!g:Jg1 gnUgAg1 pUE gmo:Ju! SSO~ fIB su SlUmIIgg~v gsuq~lIld lUguqIBlSUJ glp 19pUn pguygp S! II SgnUgAg(l UlglSASII .punt! uopuzmqUlS glU(l gql U! pgl!sodgp. Sluno~ qHM UO!pgUUO~ U! gpUUI gq AUUI lBg A. IB~S!t! U ~u!-IDP pgl:JgUO:J pgmggp gnUgAg(llgN UlglSAS JO lunoum gql U! sluguqsnfpu u!'R:)1g~ lULp pap!t\.o.ld ~po!lgd q~ns 10J SlSO;) g:JUEUglUIBW pUE UO!W1gdO SSg! SgnUgAglI mglSAS POflgdAUE 10J 'su SlUgUlgg~v gsuq:J1lld lUgUIIIBlSUJ gql1gpUn pguygp S! IIS~mUgAglI 19N UIglSASII 9L"d SO 860100 1'L6E91 under any contracts received by or owed to the Participant ill connection with the operation of the System and all proceeds of insurance relating to the System and investment income allocable to the System and all other income and revenue howsoever derived by the Participant from the ownership or operation of the System or arising from the System, subject to and after satisfaction of any Prior Liens. "Operation and Maintenance Costs" is defined under the Installment Purchase Agreement as the reasonable and necessary costs paid or incurred by the Participant for maintainiJ?g and operating the System, determined in accordance with Generally Accepted Accounting Principles, including all reasonable expenses of management and repair and all other expenses necessary to maintain and preserve the System in good repair and working order, and including all administrative costs of the Participant that are charged directly or apportioned. to the operation of the System, such as salaries and wages of employees, overhead, taxes (if any) and insurance premiums (including payments required to be paid into any self-insurance funds), and including all other reasonable and necessary costs of the Participant or charges required to be paid by it to comply with the terms of the Agreement or of any Supplemental Agreement or of. any resolution authorizing the execution of any Parity Debt, such as compensation, reimbursement and indemnification of the Trustee and the Authority and fees and expenses of Independent Certified Public Accountants; but excluding in all cases (i) payment of Parity Debt and Subordinate Obligations, (ii) costs of capital additions, replacements, betterments, extensions or improvements which under Generally Accepted Accounting Principles are chargeable to a capital account, and (iii) depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles. In order to carry out and effectuate such pledge each Program Participant agrees and covenants that all System Revenues will be deposited when and as received in a special fund designated as the "System Revenue Fund", which fund the Program Participant agrees and covenants to maintain and to hold separate andapfu-t from other fLmds so long as any Installment Payments remain unpaid. The Pro~lfuu Participant is required to, from the moneys in the System Revenue Fund, to pay all Operation and Maintenance Costs (including amounts reasonably required to be set aside in contingency reserves for Operation and Maintenance Costs, the payment of which is not then immediately required) as such Operation and Maintenance Costs become due and payable. Thereafter, all remaining moneys in the System Revenue Fund are required to be set aside by the Program Participant at the following times for the transfer to the following respective special funds in the following order of priority. Installment Payments. Not later than each Installment Payment Date (i.e., March 15 and September 15 of each year), the Program Participant is required to, from the moneys in the System Revenue Fund, to transfer to the Trustee the Installment Payment due and payable on that Installment Payment Date. The Program Participant will also, from the moneys in the System Revenue Fund, transfer to the applicable trustee for deposit in the respective payment fund, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, any other Parity Obligation Payments in accordance with the provisions of any Parity Obligation. Reserve Account. On or before the first Business Day of each month, the Program Participant is required to, from the remaining moneys in the System Revenue Fund, thereafter, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, to transfer to the Trustee for deposit in the Revenue Furid for application to the Participant Reserve Account within the Reserve Fund in accordance with the Indenture and to the applicable trustee for such other reserve accounts, if any, as may have been established in connection with Parity Obligations that sum, if any, necessary to restore the Reserve Account to an amount equal to the Reserve Account P.77 16397.1 001098 OS .IBM.'B1pqHM.alp JO ~l'Bp ~ql JO SB lU~mg1!nb~"M lUnO:X)V ~Al~S~"M ~ql Ol lUnO~X)V ~Al~S~"M ~ql ~10lSa1 Ol p~p~~U lunourn ~l'B15~.ill13'B ~ql JO Z1/1 Ol IBnb~ lunourn UB U! ~q IDM. IBM.'B1pql!M. 'B 1~lj.'B lunO:X'V ~Al~S~"M ~ql ~lOlS~l Ol SlUgmA'Bd l'Bql papJt1.o.J.d ~U!glgql p~UpnUIEm ~q Ol paqnb~l lunourn alp Ol IBnb~ lunourn UB Ol SlunO~:J'B. gAl~Sal l~lpO q~ns a10lS~1 Ol A.rnssa6au pUB lU~m~~.illv ~S'Bq~lIld lUgUI[IBlSUJ P~l'BI~l gql l~pun ~np SlUgmA'Bd lU~UlIIB1SUJ alp A'Bd Ol SIBM.'B1pql!M. AUB 10J punt[ ~Al~sa"M gql qS!ll~Id~l gS!M..l~lpo pUB luaUlaqnb~([ .punt[ uO!l'BZH!q'B1S al'B"M aql 01 Sl!sod~p pm~ SUOP'B~HqO gl'Bll!p10qns 01 p~dsa1 ql!M. SlU~UlA'Bd 01 P~l!illH 10U 1nq 15UTIJnpU! 'M.'BI Aq pg:muu~d gsod.md AUB 10J gUlP AUB 1'B 1UBd!:Jn-rnd urn.illOld ~q1 Aq p~pugdx~ aq A'Bm '~AOq'B p~l!nb~l SlUgmA'Bd aql JO AUB ~){em 01 A.rnSS~~gU10U punt[ ~nu~A~"M m~lSAS aql U! 11sodap uo SAgUOW .snIcuns .1UgmA'Bduou q~ns Aq p~sn'B:J l!:JY~P aql dn ~){eUl 011uapYJnsu1 'a.rn luno~~v ~AlgSg([ S.lUBdpp.rnd urn.illOld q~ns U! sAauoUl J1 spuog ~ql uo lS~l~lll! pUB IBdpu1-Id JO SlU~UlABd ~lp U! lIn'BJ~p 'B ~sn'B~ PInO~lUBdpfll'Bd urn.illOld ~I13U!S AUB Aq SlU~mA'Bd luamIIR1sur JO lUgmA'Bd alp u1 lIn'BJ~p 'B 'UOS'Ba1 S1ll1 lOt[ .1uamA'Bduou S.lU'BdP1l-illd tim.ill01d 19lpOUB JO. UOS'B~l Aq sm:J:Jo q~lllM. punt[ ~AlgSa([ ~ql u1 H~Y~P AUBdl?- ~){em 01 10 lUBd!:J!l-illd UllU1501d l~qlO A~ JO SlU~mA'Bd lu~uqI'B1Sui: aql A'Bd 01 palUBuaAo:J SBq lU'Bdpp1'Bd urn.illold ON .sllmO!:J!l-illd :auomy UOp'BZ!IB1~1'BIIO;)-SSOl;) ON SlU~W~~.I~V ~sBq;).lnd lu~wnBlSUI .I~pun Sls~.L lq~(I IBuo!l!PPV .1UBdpf.lll3d urn.I1501d glp JO punt[ UOp'BZH!q'B1S gl'B([ glp UlOlJ UA\'Blpq1!A\ 10 OlU! pgl!sod~p slunourn 10J S~nU~Ag"M PN: Ulg1SAS JO lunourn aql u1 ~p'Bm ~q II!A\ lu~unsnfp'B UB 'l~qlIDJ P~P!A01d pUB ~N~a A1!lBd q~ns JO g:JUBnss1 ~lp JO UOS'B~l Aq pgS'Bg1~U! aq lOU IDA\ 13u1PUBlslno S! N~a Al!lBd q~ns q:JlllA\ 13u1-Inp .rng A IB:Js1t[ q~'Bg 10J g:J1AlgS 1qga IBnuuy glp J! SUOp!PUO~ 13u1015~10J alp qHA\ a~UBHdmo:J 1noql!M. lq'ga A1!.ffid gnss! gum AU'B 1'B A'Bm llmd!:Jf.lll3d urn.illold glp l'Blp '.J.a1fJ.J.nf papJt1.o.J.d ~g~!Algs lqgaIBnuuy UIUmriuw JO UOp'B1ndmo~ ~U!015g10J gql mOlJ pgpnpxg gq IIBqs pgnss1 13U!gq lqga Al!.ffid q~ns JO Spgg:J01d gql mOlJ parpgl pUR pgpUl1Jgl os aq ol 1qga Al!.ffid aql uo SlugmA-ed IBd!:Jupd PU'B lSglglU! '15U!pURlSlno Ugql Nga Al!.ffid AUR 13U1-IPg1 pUB 13UTIJUl1Jgl JO gsodInd gqllOJ pgnss! aq Ol S! lqga Al!.ffid q~ns JO UOfllod 'B 10 lIB l'BlplugAg gql U! l'Bql 'papJt1.o.J.d ~lqga Al!.ffid q:Jns JO uopn:Jgxg aql 19lj.'B pa1'BIn:JIB~ S'B g:J!Algs 1qga IBnuuy mnmprnw glp JO %OZ I lS'BgI l'B Ol IBnbg UIUS 'B g~npold 'gglSnJ.L aql q1!M. grrJ uo lURd!:J!l-illd urn.I1501d gql JO gl'B:JY!l1g;) 'B Aq UM.oqs S'B 'po!lgd qluom ZI q:Jns JO aIoqA\ glp13upnp l~gJjg U! ugaq p'Bq Sg15.rnq~ pUB SggJ 'Sgl'Bl U! gSEgl:JU! q:Jns J! pgSBgl:JU! Uggq gA'Bq PIDOM. SgnUgAg([ 19N mglSAS gql q~!qM. Aq lunourn aq1 01 IBnbg lunourn UB U! 'pgJJg U! lOll SBM. 'pO!l~d qlUOUl ZI q~ns JO :}.IUd AUR10 IIR 15upnp 'q:JlllA\ lnq 1qga Al!.rnd q~ns JO uopn~axg alp JO ~l'Bp gql OllO!ld gA!pgJjg aurn:J~q q:JlllM. m~lsAS gql JO s~13.rnq:J pUB S~gJ 'Sgl'Bl aql u1 gS'Bg1~U! AUB mOlJ 15u1s!.ffi SanUgAg([ 19N mglSAS pgSB~l:1U! 10J a:1UBM.oIIB UB snId '~glSnJ.L gql lp!M. gIY uo lUBd!:1!l-illd urn.illold glp JO gl'B:JY111g;) 'B Aq UM.oqs SB 'lqaa Al1.IDd q:1ns JO U011n:1gXg JO ~l'Bp aql ~u1Pg:1g1d. sqluom 8 I lSBI aql Ullll!M. slpuom gA9n:1aSU0:1 ZI AU'B 10 .rngA IB:1S!t[ pglgIdmo:1lSEI alp10J SgnU~Ag"M 19N mglSAS gql J! AIUO lnq 'SlUgmA'Bd luamIIBlsUJ alp 13upn:1gs g15.rnq:1 pUB ugH gql q11M. Al!.ffid 'B uo pUR 01 IBnbg lURd1~!l-illd urn.I1501d q:1ns JO SgnUgAg([ 19N UlglSAS gq1 uodn g~.rnq:J pUB Ugn'B Aq pgm:Jgs SUO!l'B~Hqo OlU! 19lUa aUlp AUR1'B A'Bm lUgmga.I15V q:1ns Ol Al-illd 'B S! q:1lllA\ lUBd1:Jn-rnd urnl1501d' ~lp l'Blp S~P!AOld lUgmgg.I15V aSBq:1.ffid luaUlIIBlsur q:1'Bt[ 8L.d SO 860100 rL6E91 Rate Covenant under the Installment Purchase Agreements Each mstallment Purchase Agreement provides that the related Program Participant will flX, prescribe and collect rates, fees and charges and manage the operation of the System for each Fiscal Year so as to yield System Revenues at least sufficient, after making reasonable allowances for contingencies and errors in the estimates, to pay the following amounts during such Fiscal Year: (i) All current Operation and Maintenance Costs. (ii) The mstallment Payments and payments for other Parity Debt and the payment of the Subordinate Obligations as they become due and payable. (iii) All payments required for compliance with the terms of the Installment Purchase Agreement, including restoration of the Participant Reserve Account to an amount equal to the Reserve Account Requirement, and of any Supplemental Agreement. (iv) All payments to meet any other obligations of the Program Participant which are charges, liens or encumbrallces upon,_or payablefrom, the System Net Revenues. m addition to the foregoing requirements, the Program Participant will, to the maximum extent permitted by law, fix, prescribe and collect rates, fees and charges and manage the operation of the System for each Fiscal Year so as to yield System Net Revenues during such Fiscal Year equal to at least 120% of the Annual Debt Service in such Fiscal Year; provided, an adjustment will be made to the amount of System Net Revenues for amounts deposited into or withdrawn from the Rate Stabilization Fund of the Program Participant. Rate Stabilization Fund under the Installment Purchase Agreements Each mstallment Purchase Agreement creates a Rate Stabilization Fund. Each Program Participant may; during or within 210 days after a Fiscal Year, deposit System Net Revenues attributable to such Fiscal Year (on the basis of Generally Accepted Accounting Principles) into the Rate Stabilization Fund. TheProgram Participant may at any time withdraw moneys from the Rate Stabilization Fund. System Net Revenues deposited into the R3;te Stabilization Fund will not be taken into account as System Net Revenues for purposes of the calculations required by the covenants in the Installment Purchase Agreement relating to System Net Revenue coverage and additional parity debt in the Fiscal Year to which such deposit is attributable, and amounts withdrawn from the Rate Stabilization Fund, during or within 210 days after a Fiscal Year, may be taken into account as Revenues for purposes of the calculations required by such covenants in such Fiscal Year. BOND INSURANCE The following information has been furnished by Financial Security Assurance mc. (the "Bond Insurer") for use in this Official Statement. No representation is made by the Program Participants, the Authority or the Underwriter as to the accuracy, completeness or adequacy of such information, or as to the absence of material adverse changes in the condition of the Bond Insurer subsequent to the date hereof, including but not limited to a downgrade in the credit ratings of the Bond Insurer. Reference is made to Appendix E for a specimen of the Bond msurer's municipal bond insurance policy. P.79 16397.1 001098 OS A:)!lOd a:)UIUnSUJ: puoR IBdP!UnW aq.L .lmlUIalUlS fRPYJO srql 01 tI xwuaddV su papnpu! &)TIod a~UlunslI{ puog {Bd!~!Unw at{l JO uuoJ aq1 U! qlIOJ 1as su anp uaqM. spuog aql uo lsalalII! plrn JO {Bd!~upd JO luamAud palnpaq~s at{l Saallrn..rnnB' A~nod a~lrnlnslI{ puog {Bdp!UllW aqJ.. .spuog at{lloJ A~nod a~lrnmslI{ puog {Bdp~unW Sl! anss! IHM. lalnsur puog aql 'spuog aql JO a~lrnnss! aql Ip!M. AnUalln~uoJ .M.UI a~UUlnSU! uP~OH 10 ln~9~aUUOJ 'ufUloJ!IUJ ')]:lOA M.aN lapun paqsnqulsa putlJ AlUB..rntili 10 Al1Jn~as a~lrnmsu! Alrn Aq palaAO~ lOU S! A~Hod a~UBmslI{ puog fRdp!UnW aqJ.. .Ia.IDSUI puoR aq.L .1alnslI{ puog at{l JO SUO!luB'Hqo aqlloJ alquH S! lalnslI{ puog aqllo sB'U!PIOH JO laploqa..rnqs ON .saplUno~ lrnadolng: laqlO pUU mn!B'pg 'a~lrnltl U! luamaB'uuUlu lassu pUU B'uPIURq 'a~lrnuy ~TIqnd JO ssau!snq at{l U! paB'uB'ua AI!lUllI!ld S! 'sa!-ill!P!sqns )(llUq Sl! qB'no.nll '.V.S 'U!xaa .V.S 'U!xaa JO A.rn!P!sqns pauM.O -AlIoqM. pal!p U 're~<YJ l!palJ U!xaa JO plrn 'UO!lU10dIo~ lrn!B'pg praq APHqnd U '.V.S 'U!xaa JO A..rn!P!sqns pal!pU! lrn S! sB'U!PIOH tl sB'U!PloH,.) .pl'1 sB'U!P{OH a~lrnlnSSV Alpn~as IU!~UUU!tl JO A.rn!P!sqns pauM.o . AlIoqM. U plrn Auudwo~ a~uumsu! Allrn.mtili re!~UBUlJ paH~!lliop )]:10 ^ M.aN u S! lalnsur puog aqJ.. .sald!~upd B'u!luno~~u palda~~u Af[elauaB' t{l!M. a~lrnplO~~U U! 000'80L'~~Z'1$ AlalUW!XOlddu'suM. aAlaSal wn!lllald pau..maun l~m fR10l sl! plrn OOO'90Z'8EP'Z$ AlalUW!XOlddu seM. Al!llba ,slaploqa.mqs relOl s,lalnslI{ puog aql 'POOZ 'OE aunf lV .sa~!l~Uld B'II!luno~~u A.rOlI1lUlS ql!M. a~UBplo~~U U! 000'08Z'10~'1$ AlalUW!XOlddu SUM. aAlaSalwnpnald pau..maun TRlOl Sl! plrn OOO'~P~'Z1Z'Z$ AlalUW!XOlddu alaM. SaAlaSal A~uaB'll!luo~ plrn sn{dIns ,slaproqA~rrod relOl s,lalnsur puog aql 'POOZ 'OE aunf lV .(0010-9Z8 (Z1Z) auoqdalal) luawllUdaa su09u~!UnUIllioJ :uopuaUV 'ZZ001 )]:10X. M.aN ')]:10X. M.aN 'anuaAV ){.md O~E :.~u:r a~lrnmssv Al!ID~as re!~lrnU!tl ollsanbal uodn paP!AOld aq !HM. a~ualaJal Aq palulod.Io~U! SIUpalUW JO sa!doJ .spuog aql JO B'upaJJo aql JO UO!lUU!Ullal aql Hlun luamalulS IUPYJO srql JO alup aqlwolJ palY OS SluawalU1S IU!~uuuy q~ns Alrn am a~ualaJal Aq U!alaq palulOdIo~u! oSIV .a~ualaJal Aq U!alaq palulod.Io~U! Aqalaq a.m UO!SSfUIUloJ aB'lrnq~xg: plrn sap!ln~as at{l ql!M. sB'mploH Aq paflJ suodal ApallUnb pUB fEnlIlIR aQ'l 01 sllqrqxa SU papnpm slUaWalB:lS lUI~ueUl! allT ~ . .. ..,.. =. . - - -'... -~ ~ - - - .. - .. ...,..- .luamaW1S IUPYJO at{l U! Uo!snpII! 10J uopdu~ s!l{l lap un paluasald UonUUUOJU! aql AlPoqlnv aql 01 paP!AOld suq lalnsur puog aqlluqllda~xa 'Joalaql uopu.mdald aql II! palud!~n.md n suq 10U 'luawalulS fRPYJO aql B'II!p.mgal uonUluasaldal ou sa){Rm 1a1nsUJ puog aqJ.. .spuog aql U! B'll!lSaAU! JO A1H!quS!APU alp 10 spuog aql gU!p.mB'a1 u09ulUasa1da1 ou sa){Rm la1nslI{ puog aqJ.. .sasnu~ 1aqlo 10 SB'UPUl arqu~Hddu U! saglrnq~ 'salU1 lSa1alU! gU!TIUAa1d II! saB'lrnq~ JO 1{nSa1 U se pa1!UdllI! aq AUW anTRA la){.mw q~rqM. 'spuog aql JO anreA la)]:.mm U! saB'lrnq~ lSU!UB'u slOlSaAU! pal01d 10U saop A~nOd a~lrnmsur puog TRd!~!Unw aqJ.. OS.d SO 860100 l"L6t:9I CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES Article }(II]]J Article XITIB of the California State Constitution limits the annual appropriations of the State and of any city, county, school district, authority or other political subdivision of the State to the level of appropriations of the particular governmental entity for the prior fiscal year, as. adjusted for changes in the cost of living and population. The "base year" for establishing such appropriation limit is the 1978/79 fiscal year and the limit is to be adjusted annually to reflect changes in population and consumer prices. Adjustments in the appropriations limit of an entity may also be made if (i) the financial responsibility for a service is transferred to another public entity or to a private entity, (ii) the financial source for the provision of services is transferred from taxes to other revenues, or (iii) the voters of the entity approve a change in the limit for a period of time not to exceed four years. Appropriations subject to Article XIIIB generally include the proceeds of taxes levied by the State or other entity of local government~ exclusive of certain State subventions and refunds of taxes. "Proceeds of taxes" include, but are not limited to, all tax revenues and the proceeds to an entity of government from (i) regulatory licenses, user charges, and user fees (but only to the extent such proceeds exceed the cost of providing the service or regulation), and (ii) the investment of tax revenues. Article XlllB includes a requirement that if an entity's revenues in any year exceed the amounts permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years. Certain expenditures are excluded from the appropriations limit including payments of indebtedness existing or legally authorized as of January 1, 1979, or of bonded indebtedness thereafter. approved by the voters and payments required to comply with court or federal mandates which without discretion require an expenditure for additional services or which unavoidably make the providing of existing services more costly. The Program Participants are of the opinion that their service charges do not exceed the costs they reasonably bear in providing such services and therefore are not subject to the limits of Article XlllB. Proposition 218 An initiative measure entitled the "Right to Vote on Taxes Act" ("Proposition 218") was approved by the voters of the State of California at the November 5, 1996 general election. Proposition 218 added Articles XIIIC and Article XllID to the California Constitution. Proposition 218 requires that any agency imposing or increasing any property-related fee or charge must provide written notice to the record owner of each identified parcel upon which such fee or charge is to be imposed and must conduct a public hearing with respect thereto. The proposed fee or charge may not be imposed or increased if a majority of owners of the identified parcels file written protests against it. As a result, if and to the extent that a fee or charge imposed by a Program Participant is ultimately determined to be a "fee" or "charge" as defined in Proposition 218, a Program Participant's ability to increase such fee or charge may be limited by a majority protest. In addition, Proposition 218 includes a number of limitations applicable to existing fees and charges including provisions to the effect that (i) revenues derived from the fee or charge shall not exceed the funds required to provide the property-related service, (ii) such revenues shall not be used for any P.81 16397.1001098 OS .SUOpUl!illrr asaqllp!M. Aldwo~ sa~.rnq~ pUR saaJ luann~l!aqlluql aAanaq SlURdP!l.lUd unu~old aql. .pan!Ullad lOU a.rn a~!Alas U JO asn a.Itll11J 10 fBPUalOd uo pasuq sa~.rnq:J 10 SagJ palUlal-A:}.IadOld .uopsanb lI! A:}.IadOld aql JOlaUM.O aql 'Ol a{quI~Au Alaw!patIItII! 10 'Aq pasn AIIunpu S! a:J!A1aS lUlp ssarun a:J!AlaS U 10J pasodw! aq AUW a~.rnq:J 10 aaJ q~ns OU (Ar) pUR p:J.rnd aql Ol arqUlnqpnU a:J!A1aS aql JO lSO:J fBUO!:)lodOld aql paa:Jxa lOU Heqs d~SlaUM.O A:)ladOld JO lUap!:JU! UR SU uoslad 10 Ia:J.rnd AUR uodn pasodw! a~.rnq:J 10 aaJ U JO lunourn aql (n!) 'pasodUl! SUM. a~.rnq~ 10 aaJ alp q:J~M. 10J luql URql lalpO asodmd .sluaUlssassu ~u!ll~:)lad 8IZ UOP!SOdOld JO SUO!S!AOld aql lp!M. a:JUUndUlO~ lnolp!M. pasodw! aq lOUUR:J. pue sluawssassu su pay!ssup a.rn 'sluawssassu 10 sa~.rnq:J SU pazpapu.rnq:J laqlaqM. 'sa~.rnq:J Aq-PURls lUlp Sap!AOld 8IZ UOP!SOdOld .Olalaq paq~unu a: x!puaddV aas 'sasual:JU! alUl altll11J JO suop:Jafold ~u!pnpu! 'slURdpq.rnd urn~old aql ~u!illa:Juo:J UopuuuoJU! lOtI .U!alaq II Sluawaa~v asuq:JIDd luawIIelsur aqllapun lUlmaAOJ aW(l - SCINOa: fill (lOtI A.InIi1JHSII aas .lapunalaql SlURuaAO~ aWl aql ql!M. AldUlo~ Ol sa~.rnq:J pUR salulluapYJns pauo:J pUR qsrrqulsaol 'M.UI Aq pan!Ullad lualxa UlnUl!XRw aql 01 'paluuuaAo~ aAuq SlUud!:J!}..Ied urn~old aql 'sluaUlaa~v asuq:Jlnd luauqfB1Sur aql lapuIl .U~lqo 01 ~U!ffillSUo~-awp pUU aA!suadxa lpoq aAold prnO:J pue AUPP pue UO!lal:Js!p Ol pafqns uayo a.rn q~!qM. suop~u rep!pnf uodn luapuadap a.rn nnuJap U JO luaAa alp U! SlaUM.O puoa: 01 aIquITRAu Sa!paUla(l .slaUM.O puog JO slSalalU! aql palOld Ol alunbapu sa!paWal .rnln:J!}..Ied JO Al!I!qUITRAU aql JO a~URlnssu ou aq ue:J alaql. .sluaUlAud luaUIJIUlsur Aud 01 UO!lU~!Iqo alp 'Ol pal!illn lOU lnq ~u!pnPll! 'suopu~!Iqo iutll:JUllUO~ S,lURdp!}..Ied UlU~Old alp ql!M. lUalS!SUO:JlI! aq prnOM. q~~M. laUll'eW U U! sa~.rnq~ puu salul a:Jnpal 10 fBadal OllaM.od alp slalOA aql 01 SlUR~ JIIIX aprl.IV luql aAanaq lOU op SlURd!~rl.md urn~old ~ILL .s~lffidpn.red u..tU~Old ;Jq~ ,(q p;J~.mqJ Sg~.mqJ pl1-e SggJ gql Ol <1rq~'j!Idde ~q Plno~ :>rnx gPP1V JO SUO!S!AOld alp lalpaqM. .mapun S! l! 'SUO!Wl!UITI lalpo JO a~uasqu aqlll! 'aloJalaql. .9661 '91aqUlaAoN laljU pasodw! sa~.mq~ puu saaJ 'Sluawssassu 'saxul re~OIOl pal!illH AIssaldxa lOU a.rn JIIIX ap!llV JO SUO!S!AOld aql 'laAoalow .JIllX ap!W 01 a{qu~!Iddu aq U!M. aAoqu 01 pallaJal GIllX ap!llV U! l.p.IoJ las SUO!l!llyap aqlluql .mapun S! l! os ..'a~.mq~.. 10 ..aaJ.. ..'luaUlssassu.. u'XUl re:JOIu suual aql auyap 10U saop JIIIX ap!:)lV .sluaUIUlaAo~ re:JoI Ire Ol a{qu~!Iddu aq rrmls sa~.rnq~ puu saaJ 'slUaUlssassu 'saXBl fB~oI pajJU 01 gA!W!l!lI! JO laM.od aqlluql pue a~.rnq:J 10 aaJ 'luaUlssassu 'XBl re~OI AUU ~U!readallO ~U!:Jnpgj JO Slalluw U! pal!ill!I as!M.laqlo 10 pal!q~old aq lOU IfBqs laM.od aAqu!l!ll! aql luql Sap!AOld JIIIX ap!llV lI.d~SlaUM.O A:)ladold Ol d~sUO!lUlall:Jal!P u ~lI!AUq a:J!Alas~nqnd u.. su pauyap S! ua:J!Alas paluIal-A:)ladoldu V u .a:J!Alas paWIal-A:)ladold u 10J sa~.rnq:J 10 saaJ lasn ~u!pnpll! 'd~SlaUM.O A:)ladold JO lUappu! ue su uoslad u uodn 10 Ia:J.md u uodn A~ua~u UR Aq paSOdUl! 'luaUlssassu uu 10 XUl re!~ds u 'XUl walOreA pu ue ueqllaqlo AAaI Aue.. URaw Ol ua~.rnq~u pue ..aaJu suual aql sauyap 8IZ uO!l!SOdOld .asu~ uoP.V!:Jossy s.1atCvdxv,L S!IUVf P.1VMOH aql JO M.a!Aal pa!llap :)lllOJ aUlaldns alulS u!WOJITRJ aql. .OJIIX ap!W JO ~u!lrnaw alp lI!lll!M. usa~.mq~.. 10 ..saaJu lOU alaM. 'uopdwnsuo~ uo AI!.mw!ld pgsuq alaqM. 'sa~.mq:J pUR saaJ g~!Alas 1aluM. lUlp sala8uv so7 fo NK) .ft uop.v!:Jossy s.1atCvdxv,L S!IUVf P.1VMOH lI! PIgq fBaddV JO :)llloJ P!llS!Q puo~as aql 'oooz laqwaAoN ur 'uopdwnsuo:J JO awnIoA aql uo pasuq a.rn q~~M. sa~.rnq~ 10 saaJ 19WM. Ol AIddu lOU saop arnx ap!llV luql paJJa aql Ol Uo!u!do ue pgnss! u!WoJITRJ JO alUlS aql JO relauao Al!loqlnv aql 'L661 AlnI UJ: BP!? pgU~lUO~ PUOUI'IP!N U! uo!u!do s,pnoJ awgldns u!illoJ!reJ aql. .arnx gp!W Ol pafqns Sg~.mq:J puu sgaJ paluIal A:)ladold lOU algM. saaJ uO!l:Jauuo~ lalUM. lUlp UO!S!:Jgp regddv JO :)llloJ B p'pqdn P!.1J.S!G sa:J!lUas N!UmulUo:J vJ.sv1f.S .ft .lv J.a PUO'LU1f.:J!N U! :)llloJ awgldns u!illOJITRJ gql 'tOOZ A.mruqgtI UJ: ZS.d SO 860lO0 I"L6t:91 that charges for ongoing water service were property related and, thus, subject to Article XIIID. However, subsequent to the California Supreme Court's decision in Richmond, the Fourth District Court of Appeal held in Bighorn-Desert View Water Agency v. Beringson that usage-based water rates are not subject to Proposition 218. The appellate court reasoned that such fees were not property related as provided in Proposition 218 or, if property related, were exempt from Proposition 218 as a fee or charge for water services. On October 27, 2004, the California Supreme Court granted a petition for review of the Bighorn decision. Certain aspects of the impact of Proposition 218 in these and other areas remain unclear as court decisions interpreting the application of Proposition 218 to various circumstances continue to be published on a frequent basis. The fees and charges collected by the Participants are based on various criteria. See Appendix B attached hereto. Future Initiatives Articles XllIB, XIlIC and XIIID were adopted as measures that qualified for the ballot pursuant to California's initiative process. From time to time othe~ initiatives could be proposed and adopted affecting the Program Participants' revenues or ability to increase revenues. RISK FACTORS The following section describes certain risk factors affecting the payment of and security for the Bonds. The following discussion of risks is not meant to be an exhaustive list of the risks. associated with the purchase of the Bonds and does not necessarily reflect the relative importance of the various issues. Potential investors are advised to consider the following factors, along with all other information in this Official Statement, in evaluating the Bonds. There can be no assurance that other risk factors will not become material in the future. General The. payment of principal of and interest on the Bonds is secured solely by a pledge of the Revenues and certain funds under the Indenture. Revenues consist of Installment Payments to be made by Program Participants. The obligation of each Program Participant to make Installment Payments is secured by the System Net Revenues of such Program Participant. No assurance can be made that System Net Revenues, estimated or otherwise, will be realized by any Program Participant in an amount sufficient to pay the Installment Payments of such Program Participant. The realization of futUre System Net Revenues is subject to, among other things, the capabilities of management of the Program Participants, the ability of the Program Participants to provide services to its users, and the ability of the Program Participants to establish and maintain charges sufficient to provide the required debt service coverage as well as pay for Operation and Maintenance Costs. Among other matters, inadequate sources of water, general and local economic conditions and changes in law and government regulations (including initiatives and moratoriums on growth) could adversely affect the amount of System Revenues realized by the Program Participants and ultimately the ability of the Program Participants to pay the Installment Payments. P.83 16397.1001098 OS UO!lBZTIlualBII0:J-SSO.I3 oN .luaUIABduou q~:ms Aq pasnB:J l!:Jyap aql dn a){Bm Ol luapYJnSu! am luno:J:JY ~AIasa~ SjlUEdprl.md lI.IR~Old q:Jns U! SAauom J! spuog aql uo lSa1alU! pUE IBdpupd JO SlUamARd alp U! nnBJap R asnB:J PIno:J lUEdpn-md llrn~Old aI~u!s AUE Aq slUamABd luamflBlsUJ JO luamARd alp U! lIllBJap R 'UOSUg1 S!l{llOd .wamARduou S,lUEd!:J!l.illd lI.IR~Old 1alpOUE JO UOSRg1 Aq Sln:J:JO q:J!l{M Pund aAlgs~~ aql U! lpyap AUE dn a){Bm OllO lUEdp!l.illd . lI.IR~Old 1alpo AUE JoslUgmARd luamflBlsUJ aql ABd Ol palUEUgAO:J suq lUEdp!l.illd lI.IR.I2old oN SUO!l!PUO:J ~.InlRN .IaqlO .10 lq~no.la 'Sa.IM: 'SPOOI.tI 'sa}(RnbqpRa . SlUE d!:J!l.illd lI.IR~Old aql 10J 19WM JO Al!UqR1IUAB pUR lSO:J aql pRdm! ApA!lB~au ARm lq13nOlp q:Jns .lq~n01p ~upuapgdxg ApUg.un:J a.m salBls UlglsaMqlnos UIUl1a:J pUE R!moJ!IB:> UlglpnoS 'laql1nd .a:JUR1nSU! pooy 10 g){Bnbtp.rna aARq 01 SlUgUIaa~y gSRq:JJnd 1uaUI1IBlsur gql 1apun pgw~rrqo lOU a.m SlURd!:Jn-md. um~old gq~ .SgUOZ poog: 'sasB:J UIUl1a:J U! 'pUR SRg.m :J!ills!as aA!l:JB U! palB:J01 a.m SlUEdp!l.illd llrnE01d aql JO AUEW .SlUamARd luaUl1IBlsur alp ARd Ol luapYJns SanUgAg~ 19N UIglSAS aZ!IBa1 Ol SlURdp!l.illd UI1U~Old alp JO Al!nqR aql ldn.ualU! Aqa1aql PUE. SlSO:J paSRa1:JUr asnR:J pIm SlURdP!l.illd ITmE01d aql JO SUlglSAS gql JO UO!lR1ado ldOllglU! 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UOna1:Js!p fBP!pnf}o asplaxa alp 01 pUB 'lq~nos a.m sawaUIgl g1qBl!nba J! sa1dpupd ayqBl!nba JO UO!lB:JHddR alp 01 'Slq~p,slOlwal:J 13u!l:JaJJB SMR1 .m1!ill!S lalpo pUE a:JuBAgAUO:J 1ua1npnB1J 'UlnpOlB10Ul 'UOPBZ!lIE1310al 'A:JuaA10SU! 'A:JldIlJ)[llBq 01 pafqns a.m pUB Aq pallUI!! aq ABUl SlUaUlga~y aSBqaInd luaUllfBlsuraql puB a1tllUapUJ: aql ul pgPlA01d sg!pamal pUB Slq~!l aq~ 1apun uoppad B gIg 01 alaM lUBdp!l.illd umE01d R 11 .Slq~!l,SlOl!pgl:J .paJJB AByi 1Bql sa1dpu!ld a1qB1!nbg 10 5MB1 19lpO 01 pUR 'pa1:JRua la:ij.'Balaq 10 MOU SR 'SMBI A:J1dn.ntuRq fB1apaJ aql JO SUO!S!AOld 01 l:Jgfqns am pUB Aq pgl!UI11 aq. ABUl altlluapur pUB SlUamga~y aSBq:JJnd 1UgUIHRlSUJ aqlU! pgP!AOld' sa!pamgl pUB Slq13!l glp 'UOPWpB UJ .spuog alp uo a:J!Alas lqap ARd 01 1aplo U!. SpgfOld aql nas 01 pa1gMOdUIa 10U S! aalsru~ alp 'l1nBJap R JO luaAa alp UJ: .~u!llnsuo:J aUlp plrn gA!suadxa lpoq aA01d PIllo:J a1IllUgpur aql pUB SlUaUIag~v gSRq:JlIld lumlIflBlsUJ: aql U! pgp!A01d Sg!pgUIg1 gql JO lUgUla:J10Jua aq~ =t7S.d SO 860100 I"L6t91 Chapter 9 of the Bankruptcy Code (Title 11, United States Code), the Bondholders and the Trustee could be prohibited or severely restricted from taking any steps to enforce their rights under the Installment Purchase Agreements and from taking any steps to collect amounts due from the Program Participant under the Installment Purchase Agreements. THE AUTHORITY The California Statewide Communities Development Authority (the "Authority") is ajoint exercise of powers authority duly organized and operating pursuant to Article 1 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code, and pursuant to an agreement which became dated as of June 1, 1988; by and among various cities, counties, and special districts, and is qualified to issue the Bonds under the Law. Neither the faith and credit nor the taxing power of the State of California or any public agency thereof or the Authority or any Program Participant or any member of the Authority is pledged to the payment of the Bonds. The Bonds do not constitute a debt, liability or obligation of the State of California or any public agency thereof (other than the Authority payable solely from the Revenues) or any Program Participant or any member of the Authority, and neither the directors of the Authority nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance. The Authority has no taxing power. LEGAL MATTERS The legality and enforceability of the Bonds are subject to the approval of Hawkins Delafield & Wood LLP, San Francisco, California, acting as Bond Counsel. The form of such legal opinion is attached hereto as Appendix D. Hawkins Delafield & Wood LLP, San Francisco, California, has also served as Disclosure Counsel. Certain legal matters will be passed upon by the counsel to the Authority and the counsels to the Program Participants. LITIGATION The Authority will certify to the effect that, to the best knowledge of the Authority, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending other than as described in the Official Statement (i) in any way questioning the existence of the Authority or the titles of the officers of the Authority to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds., or in any way contesting qr affecting the validity of the Bonds or the related legal documents or the consummation of the transactions contemplated thereby, or contesting the exclusion of the interest on the Bonds from taxation or contesting the powers of the Authority to assign and pledge the Installment Payments; or (iii) contesting the completeness or accuracy of the Preliminary Official Statement (excluding all appendices) or the Official Statement (excluding all appendices) or any supplement or amendment thereto or asserting that the Preliminary Official Statement (excluding all appendices) or the Official Statement (excluding all appendices) contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. P.B5 16397.1001098 OS 'SlImdprJ.md alp ~U!lJaJJB UO!W~!ln AIm Ol paWla1 UO!wuuoJU! ~l1aJ 10J g x!puaddy aas .~UWBaIs!lllou 'apBUI a1aM. Aalp qJ!qM. 1apun saJImlsUInJ1p aql JO lq~H aql U! 'U!a1aql sluaUIalBls aql a){BUI Ol A.mssaJau 10 U!a1aql palBlS aq Ol pm!nba1 pBJ fB!lawUI AIm alBlS Ol pan!110 10 lJBJ IB!lawUI B JO luaUIal13ls annun AIm pauIBluoJ luaUIaW1S fBPYJO aql10 luaUIalB1S fBPYJO A.nmIur~p1d alpWlp ~Un.rgSSB 10 Ola1alplUaUIpuaUIB 10 luaUIalddns AIm 10 lUamal13lS IBPYJO aql10 luamalBlS I13PYJO A.mU!ll!P1d aql JO AJB1nJJB 10 ssaualaldUIOJ aql ~u!lsaluOJ (A!) 10 ~lImdpn.md urn~01d aql JO SUO!lB1ado 10 .saJImuy aql Ol ~U!lBp1 a~ImqJ aS1aApB IBpalBUI AIm U! lInsa1 ABUI qJrqM. (!I!) 'Aqamql palBldma1uoJ SUO!lJ13SIm1l aql JO uOrJBUIUlnsuoJ aqllO lImdP!llBd um.m'01d alp AqOlU! pa1alua spuog aql Ol ~U!lBp1 sluaUInJop IB~aI aql JO Al!PITBA aql ~UnJaJJ13 10 ~U!lsalUOJ ABM. AIm U! 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AlPoqlnv alll Aq apBUI suo!lBpadxa arqBuoSBa1 JO sluamaWls pUB 'pBJ JO SUOpBJY!l1aJ 'SUO!lBlUaSa1da1 UIB:}1aJ uo pana1 SBll pSuno;) puog 'uo!U!do Sl! ~u!1apuai UJ: .SUOglUOWOJ qJns UO pgSOdUI! XBl UInUI!ll!lli aA!lBUlalfB alp ~ll!lBInJfBJ JO sasodmd 10J SUOpB10WOJ UIBl1aJ JO s~u!u.ma lU~UlnJ pglsnfpB aql u1 papnpu1 s1 '1aAaM.oq ';lSa1alU!. qJns ~apo;) alp lapun SU09BIOdioJ pIm sIBnp1A!pu! uo pasodUI1 XBl UInUI1llfUI aA!lBUlaifB alp ~ll!lBInJIBJ U! UIal! aJualaJa1d B SB palBa1l lOU s1 spuog gql uo lSg1alU! (n) pIm 'c.apo;)1I alll) papuaurn SB '9861 JO apo;) anuaAa"M IBUlalUJ: aql JO EOl uOpJaS Ol lImnS1nd sasod.rnd XBl aUIoJU! fB1apatI 10J aUIoJu1 sso.m' mOlJ papnpxa S! spuog aql uo lsa1alu1 (1) 'U!a1aq paqpJsap SlUlmaAOJ XBl UIBl1aJ IIHM. aJImHdmoJ ~u1nu!luoJ ~u!llnSSB pUB Suo!spap :)1noJ pUB SaltllBlS ~u!ls1xa 1apun 'AlPoqlny aql Ol psuno;) puog 'dTl pooM.?f1 PPYBPG sUP[M.BH JO U01U!do alp UJ: .B1U10J1fB;) JO alBlS aql Aq pasodUI1 saXBl aUIoJu1 fBuoslad UI01J 1dUIaxa S! spuog aql uo lSa1alU! 'Sa1tllB1S ~u!lspca 1apun 'AlPoqlny alll Ol psunO;) puog JO uO!ll!do aql U1 'uo!lWIJB UJ: .M.BI XBl IBJoI pIm alBls lapun 10 'spuog aql uo lSa1alU! JO sasodmd XBl aUIoJU! IB1apatI 10J aUIoJU! SSO.m' UIOlJ u01snpxa aql uo IgsunoJ lalpo JO U01U!do Im uodn aJIm!pl u1 ua){BllOU 10 ua){Bl1g:ijBa1aq UO!lJB AIm JO lJaJJaalp uo uO!TI!do ou sassg1dxa Iasuno;) puog .as!A\1glpo 10 'UO!lBlg1d.rglU! 10 M.BI U! a~ImqJ 10 'gJUBlSUInJl!J 10 pBJ 'UO!PB g1tllt1J AIm lJgya1 01 glBP anss1 gq11a:Y:B uO!TI!do Sl! gwpdn Ol u01lB~Hqo ou saUInsSB pIm 'glBP anss! gql JO SB SUO!Spgp l1ll0J pUB salIllBls ~U!lspcg 1apun Uo!u!do s11 slapua1 Igsuno;) puog .spuog gql 01 padsa1 ql!M. saJugnbgsuoJ XBl alBlS 10 fB1apatI 19q1O AIm ~u!p.m~a1 uO!TI1do ou sgssa1dxa lasuno;) puog 98'd SO 860 roo n,6E9 I Certain Ongo~g Federal Tax Requirements and Covenants The Code establishes certain ongoing requirements that must be met subsequent to the issuance and delivery of the Bonds in order that interest on the Bonds be and remain excluded from gross income under Section 103 of the Code. These requirements include, but are not limited to, requirements relating to use and expenditure of gross proceeds of the Bonds, yield and other restrictions on investments of gross proceeds, and the arbitrage rebate requirement that certain excess earnings on gross proceeds be rebated to the Federal government. Noncompliance with such requirements may cause interest on the Bonds to become included in gross income for Federal income tax purposes retroactive to their issue date, irrespective of the date on which such noncompliance occurs or is discovered. The Authority has covenanted to comply with certain applicable requirements of the Code to assure the. exclusion of interest on the Bonds from gross income under Section 103 of the Code. Certain Collateral Federal Tax Consequences The following is a brief discussion of certain collateral Federal income tax matters with respect to the Bonds. It does not purport to address all aspects of Federal taxation that may be relevant to a particular owner of a Bond. Prospective investors, particularly those who may be subject to special rules, are advised to consult their own tax advisors regarding the Federal tax consequences of owning and. disposing of the Bonds. Prospective owners of the Bonds should be aware that the ownership of such. obligations may result in collateral Federal income tax consequences to various categories of persons, such as corporations (including S corporations and foreign corporations), fmancial institutions, property and casualty and life insurance comnanies. individual recinients of Social Securitv and niilroad retirement benefits. individuals -',L- - -- ..-- . -. ~ . .-. - .. - -- - - -'L'''' ~ otherwise eligible for the earned income tax credit, and taxpayers deemed to have incurred or continued indebtedness to purchase or carry obligations the interest on which is excluded from gross income for Federal income tax pwposes. Interest on the Bonds may be taken into account in determining the tax liability of foreign corporations subject to the branch profits tax imposed by Section 884 of the Code. Original Issue Discount "Original issue discount" ("OID") is the excess of the sum of all amounts payable at the stated maturity of a Bond (excluding certain "qualified stated interest" that is unconditionally payable at least annually at prescribed rates) over the issue price of that maturity. In general, the "issue price" of a maturity means the first price at which a substantial amount of the Bonds of that maturity was sold (excluding sales to bond houses, brokers, or similar persons acting in the capacity as underwriters, placement agents, or wholesalers). In general, theissue price for each maturity of Bonds is expected.to be the initial public offering price set forth on the cover page of the Official Statement. Bond Counsel further is of the opinion that, for any Bonds having DID (a "Discount Bond"), DID that has accrued and is properly allocable to the owners of the Discount Bonds under Section 1288 of the Code is excludable from gross income for Federal income tax purposes to the same extent as other interest on the Bonds. In general, under Section 1288 of the Code, DID on a Discount Bond accrues under a constant yield method, based on periodic compounding of interest over prescribed accrual periods using a compounding rate determined by reference to the yield on that Discount Bond. An owner's adjusted basis in a Discount Bond is increased by accrued DID for purposes. of determining gain or loss on sale, P.87 16397.1001098 OS .lUaurA'Rd qSB:J ~U1puodsallO:J 'Raq lOU IDM. a1aql q~noql uaAa puog luno:Js10 'R ~trrIM.O JO sa:Juanbasuo:J X'Rl1aqlo sn011BA ~ulll!UUalap JO sasodmd 10J paA1a:Ja1 uaaq aA'Rq Ol pamaap 10 paAp:Ja1aurO:Ju1lduIaxa-xtn JO lunourn aql u1 aSBa1:JU! 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P~lUlS paYITEnbll u!'Rlla:J ~u!pnpxa) alBp uoms!nb:J'R aql1alJ'R puog: aql uo alq'RAud slUnourn IfB JO mns aql1aAo Uffi1llIa1d u spaga1l'Rql S!S'Rq XBl U lB as!M.1aqlo 10 (lsa1alu1 paUl:J:JB 13ll!pnpxa) a:Jpd asuq:JlUd 'R 10J puog: u s~l!nb:JB 1aUM.0 trn J! 'IB1au~13UJ: uOiJBIS!~a'I 'spuog aql JO a:Jpd la){mm10 SUl'RlS ldmaxa X'Rl alp uo paJJa aS1aApu Im aABq lOU U!M. spuog aql JO a:JUBnSS! JO alup aql1alJB pasod01d 10 papuua uO!l'RIs!13aI l'Rql a:JUBlUSSB ou aq UB:J alaq.r .ssa.muo:) Sal'RlS pal!Un aql Aq UO!lU1ap1suo:J 1apun ^ImIMa1 s1 spuoq fBdp!llnm ~up:JaJJ'R UOP'RIs!13a'} . .0 x1puaddy SB ola1aq patpullu Sf rasuno:) puogJO u01ll!do JO UIlOJ pasod01d aqlJo ~do:J y 88.d SO 860100 I"L6t:91 CONTINUING DISCLOSURE The Program Participants have covenanted in Continuing Disclosure Certificates for the benefit of the holders and beneficial owners of the Bonds to provide certain financial information and operating data relating to Participants by not later than the 210 days following'the end of the fiscal year (currently their fiscal years end on June 30) (the "Participant Annual Reports "), commencing with the fiscal year ending June 30, 200_, and to provide notices of the occurrence of certain enumerated events, if material. The Authority has covenanted, in a Continuing Disclosure Certificate for the benefit of the holders and beneficial owners of the Bonds to provide notices of the occurrence of certain enumerated events, if material. The Program Participant Annual Reports and the notices of material events will be filed by the Trustee as Dissemination Agent with each Nationally Recognized Municipal Securities Information Repository. The specific nature of the information to be contained in the Anmial Reports and the notice of material events is set forth in Appendix G-"FORMS OF CONTINUlNG DISCLOSURE CERTlFICATES" hereto. These covenants have been made in order to assist the Underwriter in complying with Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934. RATINGS Upon the issuance by Financial Security Assurance Inc. of its municipal bond insurance policy (the "Municipal Bond Insurance Policy"), Standard & Poor's and Fitch Ratings will assign the Bonds the rating of "AAA". These ratings are based upon the Municipal Bond Insurance Policy. See "BOND INSURANCE" herein. Generally, rating agencies base their ratings on information and material furnished directly to them and on investigations, studies and assumptions made by them. The ratings reflect only the views of such organization and an explanation of the significance of the ratings may be obtained from Standard & Poor's, 25 Broadway, New York, New York 10004 and from Fitch Ratings, 33 Whitehall Street, 27th Floor, New York, New York 10004, respectively. There is no assurance that the ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by the rating agencies, if, in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. UNDERWRITING The Bonds will be purchased by Henderson Capital Partners, LLC (the "Underwriter") pursuant to a Bond Purchase Contract, under which the Underwriter agrees to purchase all of the Bonds for an aggregate purchase price of $ (which represents the principal amount o,f the Bonds plus/less net original issue premium/discount of $ and less an Underwriter's discount of $ ). The initial public offering prices stated on the cover of this Official Statement may be changed from time to time by the Underwriter. The Underwriter may offer and sell the Bonds to. certain dealers (including dealers depositing Bonds into investment trusts), dealer banks, banks acting as agents and others at prices lower than said public offering prices. P.89 16397.1 001098 OS NOI.LVJI.!InIlli\ 1:00d .sasodmd XUl amo~u! puapaJ 10J amO~U! SSO~ mOlJ papnpxa S! spuog alp uo lSalalU! aqllUlp uO!ll!do slPsuno:> puog 1l0ddns q~!1lM puntI M01~StI aql pITe spuog aql JO PP!A JO SUO!l~lndmo~ aql (~) pUU (U!alaq IINV'ld DNI:>NVNId CINV SlNV dI:>I~W dll aas) SUO!lu~Hqo paput1Ja~ alp uo lSalalU! aql pUB Aq paluasaldal mn!ill~ud luamAud pIm p:::dpupd aql JO IP::: Aud Ol puntI M01~StI gql U! SlUllOum alp JO A~unbapu glp (q) 'spuog gql uo lSalalU! pIm JO p:::dpll!ld palllpaq~s aql JO. IP::: anp uaqM Aud Ol SluaurAud lualITfIRlsUJ: parnpaq~s .SlImdPWBd urn~old alp JO A~unbapu aql (u) Ol ~U!lUpl lalPMlapUn glp Aq mglp Ol pap!AOld SUO!llasse pITe UO!lRUIlOJU! ll!'t::llg~ uodn pgseq suo!lulndmo~ u~ulla~ JO A~uln~~u p:::~!lumalpum alp paypaA aAuq ffiM 'SlImlUnO~~u ~Hqnd paY:!lla~lUapuadgpu! JO uuy: u 'd'Il UOlUlOq~ lImlD 'spuog alp JO AlgA!PP uodn snO:tINV1:'13:JSIJi\1 .spuog aql JO SlaUMO alp q:nM l~UllUO~ B su pan.nsuo~ aq Ol S!~ll!lPM U! 10 A[[RqlaA apum Uggq gAUq Aum q~iqM luamalUlS AIm 10U lUamaWlS P:::PYJO s!1ll1aqlPN .paz!p:::al. aq ffiM apum SlUamglUlS q~ns JO' AUR luql apum S! uO!WlUaSaldal oN .l~BJ JO SUO!lBlUaS~udgl su lOU puu q~ns su q1l0J las am Aalp 'paWls AIssgldxa lOU 10 IglpaqM 'salum!lsa JO 10 UO!ll!do JO SIgnUm aAloAu! lUamalUlS IB!~YJO s!lP U! apum Slu~malBlS AIm se lRJosUJ: 06.d SO 860100 I"L6t:91 The execution and delivery of this Official Statement have been duly authorized by the Authority and the Program Participants. CALIFORNIASTATE~E COMMUNITIES DEVELOPMENT AUTHORITY By: Member of the Commission [P ARTICIP ANT] By: . Authorized Representative [P ARTICIP ANT] By: Authorized Representative P.91 16397.1001098 OS S.LNIDi\TaLV..LS 1:VI;JNVNDI .S..LNVdI;JI..LHVd WVHDOHd WOH.i S..LcllI3;)X3 . V XI<IN3ddV Z6.d SO 860IOO 1"L6t:9I APPENDIX B INFORMATION REGARDING PROGRAM PARTICIPANTS P.93 16397.1001098 OS 3 XI<IN3ddV S.LNilli\lil;)oa r:IVfJ3'1.iO XlIVWWIlS <INV SNOI.LINIiI3G JOg1gql SlUlgl glgIduro::> glp 10J SlUgum::>oPllmp'R glp Ol gp'Rur S! ~::>U~lgJg1 pue 'gA!l!llY~P 10 ~A!SU~q~lduro::> gq Ol P~PUgllI! lOU S! A.nmnnns s!lI~ .x!pu~ddV s!lP ll! p~z!JRurums AIgAn::>~IIO::> am SUli~ll!~ql pU'R .rnI!llI!S AIfBnURlsqns ~.rn SlUgur~g.mV ~S'Rq::>md lU~Uf({RlSUJ 'P~l'R::>!pU! gl~qA\ ld~::>X3 .SlU~mg~.mv ~S'Rq::>lI1d lu~urI{RlSUJ ~ql pue gltllUgpUJ gql JO SUO!S!A01d pUR suo!l!llY~P gql JO UrRl1~::> JO A.mUIUInS J~!lq 'R S! ~U!A\OIIoJ gq~ .sNOIJ..lN1!I3G ]Ogl~ql SUI1~l ~l~Iduro::> ~ql10J SlUgurn::>op {Rtll::>'R gql Ol gpuur S! g::>Ug1~Jg1 pue 'gA!l!UY~P 10 ~A!SUgq~lduro::> ~q Ol P~PU~lU! lOU S! A.rnurums s!lI~ 'SlU~UI~~.my ~S'Rq::>ltld lUmII[I'RlSUJ ~ql pue arrllu~PUJ ~ql U! suo!l!llygp gql JO Ure:l1g::> JO Sg!JRUIUIns ~.rn ~U!A\OIIoJ gq~ lU~UIg~.tOy .P~lUgUIglddns 10 p~pu~urn gq gUIn Ol ~UI!l urOlJ A'RUI q::>ns S'R pue p~ln::>~x~ AI{RU!~!lO S'R 'Al!loqlny gql pue slued!::>rl.IBd ~ql UggMl~q pue Aq 'SlU~UI~g.mV ~S'Rq::>lIld lUgUII{RlSUJ ~ql Sue~UI lIlUgUI~~l~VII UI1~l gq~ ~::>!Al~s lq~a {RnuUV :~::>!Al~s lqga {Rnuuy JO uO!l'Rln::>{R::> gql lI! slunourn ~U!0~~10J ~ql Ol ~p'RUI ~q I{Rqs SlUgUIlSnfp'R ~U!MOIIoJ gql l'Rql 'papJt\.o.J.d '{Rdpu!ld 10J gl'Rp lUgUIA'Rd ~u!pg~::>::>ns lXgU gql Ol '~q A'RUI ~S'R::> glp S'R '( ~l'Rp lU~urA'Rd AUR Ol lo!ld pO!l~d A'RP -f9t: u U'Rlp 1~l'R~.m 10J gru::>::>'R Ol pgUI~~P ~q lOU I{Rqs {Rdpu!ld l'Rlp P~P!A01d) lqga Al!JRd q::>ns JO A.IgA!PP JO gl'Rp gql10 {Rdpu!ld 10J ~l'Rp lUgUIA'Rd q::>u~ '~S'R::> q::>'R~ U! 'UIOlJ slunourn {Rnb~ U! .rn~ A {R::>S!d q::>ns ~lJ!lllP AU'RP gru::>::>'R Ol P~UIg~P ~l~M slunourn {Rd!::>u!ld q::>ns J! S'R p~l'Rln::>{R::> '.rn~ A {R::>S!d q::>ns U! lq~a Al!.IUd I{R Ol gIq'R::>o[IU (SlU~UIA'Rd lUgUII{RlSll! putlJ ~uPIlI!s S'R gnp {Rdpu!ld ~u!pnpu!) lunourn fRdpu!ld gql (Z) snld 'pglnpgq::>s S'R pgl!l~l S! lqga Al!.IBd IfR l'Rql ~u!llInsS'R '.rng A {R::>S!d q::>ns ~u!lnp lqga Al!.rnd I{e uo :aU!ru::>::>u lSglglU! ~ql (1) JO urns gql '.rngA fR::>S!d hUB 10J 'SU'RgUI lIg::>!AlgS lqga I'RnuUVII UI1~l gIlL ~(x~PU! .IBI!llI!S p~qsnqnd 19q1O q::>ns 'p~qsrrqnd l~~uOI ou S! X~pU! q::>ns 10 19Ang puog glll J! 10) l~Ang puog gtU lI! pgqsnqnd su gl'R1 x~PUJ aD puog-OZ lU~lln::> Uglp ~lp 'p~nss! gq Ol p~SOd01d U~lplqga Al!.IBd q::>ns Ol p~dS~l ql!M (m 10 uO!l'Rln::>{e::> q::>ns JO gl'RP gql OllO!ld lq~a Al1-fi1d q::>ns uo ~l'R1 lS~l~lU! ~A9::>gJJg lUg::>~l lSOUI glp (Z) 10 (lSgl~lU! ~UlOq S'Rq lq~a Al!JRd q::>ns l'Rql .IB~ A {e::>S!d lUglID::> u~lp ~ql JO uowod ~ql 10) uO!l'Rln::>{e::> q::>ns JO gl'Rp glp ~ll!Pg::>gld lXgUSlpUOUI .IBpu~{'R::> (zI) ~APMl ~ql ~u!lllP lq~a Al!JRd q::>ns uo gl'R1lS~lglU! ~~'R1~A'R AgUp gql (1) JO l~Wg.m glp JO (%011) lUg::> 19d U~l parpunq ~uo '~u!puelslno u~lplqga Al!JRd q::>ns Ol P~dSg1 ql!M (!) ~q IfRqs ~::>!Al~S lqga I'Rnuuy gl'Rln::>fR::> Ol pgsn lS~l~lU! JO ~l'R1 gql '~l'R1lSg1~lU! pgXIJ 'R UBql1glpO l'R lS~l~lU! ~ll!S!ldUIO::> 10 ~U1-fi1~q lqga Al!.IBd q::>ns Aue Ol P~dSg1 ql!M (v) glgM lq~a Al!JRd q::>ns JO fRd!::>u!ld pue uo lS~l~lll! glp J! S'R uO!l'RU!IllIglgp JO .IBg A {U::>S!d gqllOJ pgl'R{Tl::>{e::> gq I{eqs g::>!Al~S lqga fRnuny 'lU~ A fR::>S!d gUO Aue ll! ~np JOglgql lunourn fRd!::>u!ld gl'R~~~~'R gql JO g10UI 10 (%fZ) lU~::> l~d ~AY-AlU~Ml ~U!A'Rq lqga Al!.rnd q::>ns AUB Ol pgdS~l ql!M (g) v6.d SO 860100 I"L6f91 being paid from the date of incurrence thereof in substantially equal annual amounts over a period of twenty (20) years from the date of such Parity Debt provided, however that the full amount of such Parity Debt shall be included in Annual Debt Service if the date of calculation is within 24 months of the actual maturity of the payment; (C) with respect to any such Parity Debt or portions thereof bearing no interest but which are sold at a discount and which discount accretes with respect to such Parity Debtor portions thereof, such accreted discount shall be treated as due when scheduled to be paid; (D) Annual Debt Service shall not include interest on Parity Debt which is to be paid . from amounts constituting capitalized interest; (E) if an interest rate swap agreement is in effect with respect to, and is payable on a parity with, any Parity Debt to which it relates, no amounts payable under such interest rate swap in excess of debt service payable under such Parity Debt agreement shall be included in the calculation of Annual Debt Service unless the sum of (i) the interest payable on such Parity Debt, plus (ii) the amounts payable by the Participant under such interest rate swap agreement, less (iii) the amounts receivable by the Participant under such interest rate swap agreement, are greater than the interest payable on such Parity Debt , in which case the amount of such payments to be made that exceed the interest to be paid on such Parity Debt shall be included in such calculation, and for this purpose, the variable amount under any such interest rate swap agreement shall be determined in accordance with the procedure set forth in subparagraph (A) of this def.inition; and (F) Repayment Obligations proposed to be entered into as Parity Debt shall be deemed to be payable at the scheduled amount due under such Repayment Obligation as calculated under this definition. Authorized Investments "Authorized Investments" means any of the following obligations which at the time of investment are legal investments of funds of the Participants under the laws of the State of California for the money proposed to be invested under the Indenture: (1) (a) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America ("United States Treasury Obligations") (b) obligations fully. and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated. These include, but are not necessarily limited to: P.9S 16397.1 001098 OS SUO~'B~Hqo paalll'B.rn~ ArrnJ 10 pal!P IIV SUO~'B~Hqo AmS'Ba1J.. .s.n d!IlSlaUM.O repyauaq JO Sal'B~YTllaJ UO~UllS!ll1llPY amoH slaur.rnd salB~Yrlla~ uO~'BdPP.rnd U01lBllS~PY sa~!Alas re1auao salu~Y1:jla~ Iood paalrrn.rnno Sal'B~Y!:jla~ uonudpp.md paalrrn.rnno UOnullSlll!illPY amnp'BW .s.n Sal'B~Y!:jla~ U01l'Bdpp.rnd paalrrn.rn~-VWNO sanpn~as pa){~uq-a~'B~:jlom paalrrn.rn~-yWNO (YWNO) UOp'Bpossy a~u~:jlow I'BUOnU N luamUlaAoo spuoq AlPoqlnu re~<YJ lUamdoIaAaa uuqlfl 2'f? ~u!snOH JO lUamU'Bdaa.. S. n spuoq l!Sll'B.Il paalrrn.rnno AlPoqlny l!SrrnlJ.. ua.ry rrnlHodo.Ilaw UO~ll!lIS'B M. .sa1tlluaqap UOPU.IlS!UfUlPY ~U!SnoH re1apatl (z) :u~pawy JO salulS palllln alp JO l1pa1~ prrn ql1BJ rrnT ::in1 An n::iV:1'P.n 1rm ::iW TT:1TTT M t;;::iT:1iT::i~'P. n;H()t;;TTCllit;;-lTT~TTTTU~An~ Tn t;;iT()l1p.~iJOn DQ1STT QU i (C) Ll.~ -,.. u.. .--L--' .,-- --- ,-;,.-- --;----- .-------- T------------- J- ---. ;T-- a-l- . -T-;L - -L....... \.'-'/ (SlUnourn redpupd l!aql ~u!paa~xa sa~pd lU pasuq~lnd a.rn q~!IlM san1ID~as a~u~:j.IOtrIpaddPls ~uwnpxa) Salu~Y!:jla~ U01lUd!~n.rnd (JW'lHtU uonu1od]OJ a~u~:jlOW ll'B<YJ amoH IUlapad- suopu~Hqo lqap 101llaS salou prrn spuoq ap!M. malsAs paluPHosuoJ (saA!lUladooJ 10J S){UB8: pll'B s){ll'B8: HpalJ al'B!pauualUJ: puapad 's){UB8: prrn'1 re1apad :ApaunOJ) s){UB8: l1palJ UI.md- suo~u~Hqo lqap paluPHosuoJ (S)]:tffi8: 1Hd) S)]:tffi8: ll'B<YJ amoH re1apatl- (SlUnourn redpupd l!aql ~u!paa~xa sa~pd lU pasuq~lnd a.rn q~!IlM. sa91:In~as sa~U~:jlOUI paddPls ~u1pnpxa) sappn~as pa){~'Bq-a~U~:jlOW suonu~Hqo Nap 101uaS (VWNd) tlOpu1~ossy a~u~:jlOW reU01lUN re1apat[- 96.d SO 860100 I'L6€91 -Student Loan Marketing Association (SLMA) Senior debt obligations (excluding securities that do not have a fixed par value and/or the terms of which do not promise a fIXed dollar amount at maturity or call date) -Financing Corporation (FICO) Debt obligations -Resolution Funding Corporation (RBFCORP) Debt obligations (4) Unsecured certificates of deposit, deposit accounts, time deposits, and bankers' acceptances (having maturities of not more than 30 days) of any bank the short-term obligations of which are rated "A- 1" or better by Standard & Poor's. (5) Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks which have capital and surplus of at least $5 million. (6) Commercial paper (having original maturities of not more than 270 days) rated "A-l+" by Standard & Poor's and "Prime-I" by Moody's. (7) Money market funds rated "AAm" or "AAm-G" by Standard & Poor's, or better, including funds which the Trustee or an affiliate manages, sponsors and advises. (8) Repurchase agreements with (1) any domestic bank, or domestic branch of a foreign bank, thelong term debt or which is rated at least !!~b....!! by S&P and Iv!oody's; or (2) any broker-dealer with "retail customers" or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least "A" by S&P and Moody's, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (3) any other entity rated "A" or better by S&P and Moody's and acceptable to the Bond Insurer, provided that: A. The market value of the collateral is maintained at levels and upon such conditions as would be acceptable to S&P to maintain an "A" rating in an "A" rated structured financing (with a market value approach); B. The Trustee or a third party acting solely as agent therefor or for the Authority (the "Holder of the Collateral ") has possession of the collateral or the collateral has been transferred to the Holder of the Collateral in accordance with applicable state and federal laws (other than by means of entries on the transferor's books); C. The repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Holder of the Collateral has a perfected fIrst priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); D. All other requirements of S&P in respect of repurchase agreements shall be met; P.97 16397.1 001098 os .gglSlllL 10 AlPolpnv glp 01 u.m~umld 10 All1mgd ou 1ll!M. 'lUgmgg.m"R gql gl"RU~ULml ptrn llUgWIIO~ IfR gS"Rq~lndgl 'uon:y.uw q~ns JO ld!g~gl JO SA"Rp 01 u1lll!M. '(lglnsUI puog glp Aq pg.I!Sgp os J! UOn~glw q~ns gA~ ITRqs oqM.) gglSlllL glp 10 A1POlpnv m:p JO UOn~g.I!p gql W 'lSnUllgp~AOld glp 'gWpdOldd"R se 'SjAPOOW Aq IItVII 10 d~S Aq II-VII M.Opq SueJ 10 pgpugdsns 10 UM."R.Ipql!M. S! d~S 10 SjAPOOW 19q1!g Aq ~Un"Rl Sjlgp~AOld gql UUgl Sl! ~upnp J! l"Rlp gp~A01d [["Bqs lUgtII~.m"R gSRq~mdg1 gqL .3: .AlgA!pgdsgl 'slApooW ptrn d~S Aq IIVII lsegIl"R pgWl S! 19p!AOld glp ptrn 19n9q 10 %(01 g.rn SIgAgI l"Rlgl"RUO~ q::ms se ~uoI os 'gAOq"R (V) lI! pgg!~gds S"R gq 10U pggU SlgAgI fRlgWUO~ '(UO!S~AOld Ugg.mlgAg ou ql!M.) SSgllO SA"Rp OLZ JO UUgl "R S"Rq lUgmgg.m"R gseq~lndgl "R J! 'gAOq"R mp ~U!PUBlsql!M.10N :SUBgUl q~!l{M. 'SUOn"R~HqO glR~S (6) .pgWl os sf lqgp UO!l"R~Hqo fR1gUg~ pg1n~gSUn gsoqM. A~Ug~"R 10 UO!S!A~pqns 'gW1S AU"R Aq pggltrn.nm~ AlfRUOn!puo~un ptrn AITIlJ UOn"R~Hqo Atrn 10 'lgngq 10 'SllOOd ~ p.rnpUB1S Aq IIVII ptrn SjAPOOW Aq IItVII pgl"R1 S! q:J!l{M. JO lqgp UOn"R~!lqo fR1gUg~ pgm:JgSun gql gl"R1S "R JO lWgl:J ptrn ql~"RJ llIIJ gql pg~pg{d s~ q:J!lIM. 01 JOg1gql A:JUg~B 10 UO!S!A!pqns AUB 10 SgW1S pgl~UI1 gql JO gl"R1S AIm JO SUOn"R~rrqo fR1gUg~ pg.I!G (~) .SjApOOW Aq 1I1-gUlPdll pUB sI100d ~ p.rnpUB1S Aq 1I+1-VII pgl"R1 pUB gAoq"R ("R) U! pgqp:JSgp UO!S!Awqns 10 A:JUg~"R gl"R1S Atrn JO SUO!l"R~Hqo UUg1-:J.,IOqs fR1gUg~ '1:Jg1!G (g) .~ AnooT.\T AO -1--.--11.... --. 19n9q 10 (SgpO~gl"R~qns 01 p.rn~gllnoq1!M.) IIBVII ptrn sllood ~ p.rnpUB1S Aq 19n9q 10 (Sgpo~gw:Jqns 01 p1"R~gl lnoql!M.) IIVYII pgl"R1 PU"R gAOq"R ("R) U! pgqp~Sgp UO!S!A!pqns 10 A:JUg~B gl"R1S 'gW1S Atrn JO (gpO;) A:J1dfl.Dllmg Sgl"R1S pg1!llI1 glp U! pguggp se) spuog gnUgAg"M fRpgdS (g!) ~spuog glp UO (SM."Rlp UOn~t1llSUO:J 'punt! pgfOld gqllOJ S! lUgUlgg.m"R lUgm1SgAU! gqlJ! '10) g:J!Algs lqgp ABd 01 A.rnSSg~gU se slunou:rn U! PU"R SgUln 1"R gglSlllL gql 01 gp"Rm gq 01 g.rn SlUgUlA"Rd lSglglU! .Y :lugmgg.m"R lUgUIlSgAU! gIp JO SUUg1 gIp Aq 'l"RIp papJr1.o.ld ~S,ApOOW Aq (SgpO~gl"R:Jqns 01 p.rn~gllnOIp!M.) II"RVII pUB d~S Aq (SgpO~gl"R:Jqns 01 p.rn~gllnoql!M.)IIVVII lSRg{ 1"R pgl"R1 S! 101UB.rn~ gql JO 'Almq"R ~U!ABd SUl'!'Bp 'AUBdUlO:J g:Jtrnmsu! AlU"E.rnM fRptrnuy glI!loUOUl"R JO gS"R~ gIp U! '10 'lqgp UUgl-~UO{ gql UOn"E10dro~ pgg1U"R.rn~ "R JO gse~ gIp U! '10 'q~!lIM. JO lqgp UUgl-~UO{ gtp (AU"RdUlO:J g~trnlnSU! Al{"RnSB:J 4rgd01d 10 gJTI "R UBtp 19q1O) UOn"R10dro~ 10 ){URq tm'!glOJ 10 :JnSgmop "R ql!M. SlUgUlggm"R lUgUllSgAUJ (01) ~P'!'Bd Uln~um1d 10 Al{tmgd OU Ip!M. 19pUng1gIp spUIlJ gAP:Jgl 01 S"R os lUgUlgg.m"R lUgUllSgAU! gql JO SUUgl gql ql!M. g:JUBp10~~"R U! g:Jnou UgA~ gq 01 gsn"R:J 10 gA!~ 01 gg.m"R gglSlllL gIp pUB AlpOIpnv gql ~g:Jnou 10pd I SA"Rp UgAgS trnlp ~UOUllOU uodn gUl!l Atrn lB 'Uln!llgld 10 AlfRugd lnoql!M. fRMRlPtp!M. 10J g{q"RI!BA"R g.rn spuUJ pglSgAU! gql .S: ~SlOl!pg1~ pgl"RU!p10qnsun ptrn pgln~gSUn 19q1o Sl! ptrn SlOl!Sodgp 19q1o Sl! 01 19p!A01d gIp JO SUO!lB~TIqo gql Ip!M. nssed pBd S){UR1 19pUng1gql SlUgmA"Rd g){BUl Ol 19p!A01d gql JO UOn"R~rrqo gqlWql gl"R1S [["Bqs psuno:J JO uO!ll!do gIp 10 lUgmgg.m"R gql ')[UBq "R S! 19p!A01d gql J! '10 JOg1gql1gp!A01d glp 'JO UO!l"R~Hqo 19q1O AIm 01 pg1"RUW10qns 10U S! pUB 'JO UO!W~Hqo fR1gUg~ ptrn IBuo!lwuo~un glp S! l"Rlp glB1S {IBqs lUgUlgg.mB lUgUllSgAU! gql .;) 86'd SO 860100 I'L6€91 D. the Authority or the Trustee receives the opinion of domestic counsel (which opinion shall be addressed to the Authority and the Bond Insurer) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and an opinion of foreign counsel (if applicable, which opinion shall be addressed to the Authority and the Bond Insurer) in form and substance acceptable to the Bond Insurer and .addressed to the Authority and the Bond Insurer; E. the investment agreement shall provide that if during its term i) the provider's rating by either S&P or Moody's falls below "AA-" or "Aa3", respectively, the provider shall, at its option, within 1 0 days of receipt of publication of such downgrade, either (i) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider's books) to the Authority, the Trustee or a third party acting solely as agent therefor (the "Holder of the Collateral") collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to S&P to maintain an "A" rating in an "A" rated structured financing (with a market value approach); or (ii) repay the principal of and accrue but unpaid interest on the investment, and ii) the provider's rating by either S&P or Moody's is withdrawn or suspended or falls below "A-" or "A3", respectively, the provider must, at the direction of the Authority or the Trustee (who shall give such direction if so directed by the Bond Insurer), within 10 days of receipt of such direction, repay the principal. of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Authority or Trustee; F. the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); G. the investment agreement must provide that if during its term: i) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the Authority or the . Trustee (who shall give such direction if so directed by the Bond Insurer), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Authority or Trustee, as appropriate, and P.99 16397.1 001098 OS ii) the provider shall become insolvent, not pay its debts as they become due, be . declared or petition to be bankrupt, etc. ("event of insolvency"), the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Authority or Trustee, as appropriate. (11) Pre-funded municipal. obligations rated "AAA" by Standard & Poor's and "Aaa" by Moody's meeting the following requirements: (i) the municipal obligations are (i) not subject to redemption prior to maturity or (ii) . the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; (ii) the municipal obligations are secured by cash or United States Treasury obligations which may be. applied only to payment of the principal.of, interest and premium on such municipal obligations; (ill) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations ("Verification"); (iv) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations; (v) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury obligation and upon delivery of a new Verification; and (vi) the cash or the United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent. (12) Subject to the prior written consent of the Bond Insurer, local California agency investment pools, so long as such pool is rated in one of the two highest rating categories by S&P and Moody's. (13) The Local Agency Investment Fund administered by the State of California. (14) Other forms of investments approved in writing by the Bond Insurer. Installment Payments "Installment Payments" means the installment payments due under the Installment Purchase Agreements. P.10D 16397.1 001098 OS ~::>!A1as lq~a [Rnuuy UInmpmw .lq~a AH.Ted Ire JO ~l'UP AlPtll'Bm [Rug: ~lp q~nO.rql uop'Uln::>[R::> q::>ns JO ~l'UP ~Lp mOl] pop~d ~Lp ~upnp ~::>FA1~S lq~a renmry lsaKmI ~ql 'uop'Uln::>[R::> JO ~l'Up AU'U JO SR 'stm~m u~::>!A1~S lq~a [Rnuuy mnurpmwu uu~l ~q~ sp~a::>old la N .sp~~::>old q::>ns JO uOP::>~IIo::> ~lp U! p~llU::>U! (sa~J ISA~UlOll'U ~II!pnpu!) sasuadxa Ire JO lualliA'Ud la:ijB ~U!llFUlli~l p.mM.U UOnUUUI~pUO::> 10 ~::>URlnSU! q::>ns mOlJ spa~::>old aql 'p.mM.U UOpUUUI~pUO::> 10 a::>URlnsuF AllunSB::> AUR olP~dsa1 LpFM. p~sn uaqM. 'SUR~m uSP~~::>old laNu UU~l aq.r, SlSO;) a::>ueu~luFUW puu UOn'U1~C1o .s~IqF~UBlU! JO uopuzwoum pue 10J~1~ql S~AlaSa110 sa~.Teq::> a::>u~::>s~Iosqo pUR lu~m~::>~Id~l 'uOP'UF::>~ld~p (n!) pUR 'luno::>::>u [Rl!d'U::> 'U Ol alq'B~~.mq::> ~.m S~Id!::>U!ld ~II!luno::>::>y P~ld~::>::>y AIrel~U~D 1apun q::>!1IM. Slu~m~A01dm! 10 SUO!SU~lX~ 'Slu~uu~llaq 'S'U....UI"""'1:JTd""T 'suonIDnn m'Idn", TO !':1!':0~ Ip) '.;:nt"lT1t:o'?rrnA ~''\nTTnT{"\nnC\ nnn .,..,"'......' ('HTT>'" ...'" 1n~T......r.......:r 1...\ -f 'CI d'vv...::i.... ~-t... ...... L ...,.. -r..., J -' ~TL -~ \;;.1 ~--;"'''''-:l-'''-' -.,.--:-t'-""''1LL.::') t"t,.&.o '"'""1.0'\..1 J1...,.~tia jV .J.Ud'\..UI1.t:iU \~J S~SB::> Ire II! ~U!pnpX~ lnq ~SlURlUnO::>::>y ::>nqnd P~Y!:)l~;) lU~pu~d~pur JO s~su~dxa puu s~~J pue ~!loLpny alppue ~~lsru~ ~ql JO .UO!l'U::>Y!UUI~PU! pUl~ lu~masmqm!~l 'uopusuadmo::> SR q::>ns 'lq~a AlP'Rd' AUB JO uonn::>ax~ alp ~u!zpoLpnu uopnlosal AUU JO 10 lu~maa~y relu~m~IddnS AUR JO 10 lu~ma~~y aql JO SUli~l ~lp Ill!M. Aldmo::> Oll! Aq p!'Ud ~q Ol p~l!llb~l sa~.mq::> 10 lU'Ud!::>!l.IBd alp JO SlSO::> A.mss~::>au pUR arq'Uuosu~l laqlo I[R ~u!pnpu! puu '(sputl] ~::>UR1nSU!-JI~s AUR OlU! p!Ed aq Ol pal!nb~l slUalliAud ~u!pnpu!) smn~~~)Jd a::>uu1nSU! pUR (AUR J!) saxel 'p'Uaq1~Ao 'saaAoIdm~ JO sa~'UM. puu S~!.m[Rs su q::>ns 'malsAS aql JO uO!l'U1~do alp Ol pauo!:)loddu 10AIl::>al!p p~~.mq::> a.m l'BqllUud!::>!l.IBd ~ql JO SlSO::> ~An'BllS!TI!illP'U Ire ~u!pnpu! pUR 'l~plO ~up{lOM. pUR .rred~l poo~ U! lli~lSAS ~Lp ~A1asa1d pUR U!E1U!Elli Ol A.mss~::>au sasuadx~ 1aqlo Ire pUR l!'Rda1 pUR lU~m~~ulmm JO sasuadxa ~rquuoSRal I[R ~u!pnpu! 'saldpuPd ~ununo::>::>y pa1d~::>::>y AnU1~U~D ql!M. ~::>lmplO::>::>U U! p~u!Ull~lap 'ma1sAS ~q1 ~up'U1ado pU'U ~lJ!U!E1U!'UUI 10J 1lmd!::>n.md ~lp Aq p~lln::>U! 10 p!'Rd SlSO::> A.mssa::>au pue ~Iq'UUOSU~l aql SUB~UI II SlSO;) ~::>UBualU!UW pUR uonm~dou uual aq.r, lqaa Al~d .SUOpu~nqo AlP'Rd AUR pUB slu~mAud lu~mlrelSur ~q1 SUR~m ulq~a AlP'Rdu uual aq~ sluamA'Ud UOpU1)nqO AlP'Rd .SlU~urA'Ud lUamUUlsur aql ql!M. AlP'Rd u uo s~nu~A~"H laN UIalSAS JO a~p~Id u Aq p~m::>as am slu~mAud q::>!1IM. 'suoP'U~!IqO AlP'Rd alp Ol lUBnslnd' pUR l~pun lURdPFl-IBd aql Aq PFUd ~q Ol p~rnpaq::>s sluaurA'Ud ~Lp SUB~m u slu~mAud uon'U~!IqO ~!.IBdu UU~l aq~ IOI.d SO 860100 I'L6t:91 Parity Obligations The term "P~ty Obligations" means all obligations of the Participant authorized and executed by the Participant other than the Installment Payments, the Parity Obligation Payments under which are secured by a pledge of the System Net Revenues on a parity with the Installment Payments, including but not limited to any Repayment Obligations secured by System Net Revenues on a parity with the Installment Payments. Prior Liens The term "Prior Liens" means those liens, if any, on the System Revenues which are senior to the pledge under the Agreement. Proiect "Project" means the public capital improvements of the Participants financed under the Installment Purchase Agreements. Purchase Price The term "Purchase Price" means the principal amount plus interest thereon owed by the Participant to the Authority under the terms of the Agreement. Record Date "Record Date" means the close of business on the 15th day of the month preceding any Interest Payment Date, whether or not such day is a Business Day. Repavment Obligation . "Repayment Obligation" means the reimbursement obligation or any other payment obligation under a written agreement between the Participant and a credit provider to reimburse the credit provider for amounts paid pursuant to a credit facility for the payment of the principal amount or purchase price of and/or interest on any Parity Debt. Reserve Account "Reserve Account" means the accounts established within the Reserve Fund relating to the obligations under each separate Installment Purchase Agreements. Reserve Account Reauirement The term "Reserve Account Requirement" means the amount required to be on deposit in each Reserve Account as provided in the Indenture; provided, that notwithstanding any provision hereof to the contrary, all or any portion of the Reserve Account Requirement for any Reserve Account may (following written notification to the rating agencies then rating the Bonds) be satisfied by the provision of a policy of insurance, a surety bond, a letter of credit or other comparable credit facility, or a combination thereof, which, together with money on deposit in such Reserve Account, provide an aggregate amount equal to P.I02 16397.1 001098 OS .lUBd!:J!:J.md pglBIgl glp Ol pgllgJSUBll pUU luno:J:JV gAlgSg~ q:Jns mOlJ gglsru~ glp Aq UMu.IpqHM gq (lUBd!:J!:J.md pglUP1 gql JO lSgnbg~ UgU!lA\. U JO ld!g:Jgl uodn) nuqs AHrr:JUJ lWg1:J q:Jns Aq pggspus gU!gq Ugql lUgmg1!llbg~ lUno:J:JV gA1gSg~ glp JO uop.IOd gql Ol pmbg luno:J:JV gAlgSg~ q:Jns" IT! 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JO guro:JU! sso~ mOlJ uo!snpxg glpl:Jg]JU AIgS1gAPU lOU IHM pUB gl111UgpUJ: gql1gpUn pgU!UI.md 10 pgzpolpnu S! uOPlllpsqns q:Jns luqlPgJJg gql Ol AllU9UBlsqns spuoq fBd!:J!llnm 01 gUPUP1 MUI JO PIgg glp IT! gU!PUB1S pgZ~0:Jg1 ]0 IgsunO:J ]0 uo!U!do uu pgAfg:Jg1 suq gglSnr~ gql 'AlHPUJ lWg1:J U 10J qsu:J JO uoplllpsqns u JO gSU~ gql u! (n) 'd~S Aq pUR S.APOOW Aq (Sgurp nu lU) Sg!Jogg1U~ gIT!lU11Sgqg!ll OMl gql]O gUO IT! pglUl S! AlHPBJ l!pg1:J gIqu.mdmo:J 19q1O 10 HPg1:J JO 19U9I 'puoq Algms 'g:Juumsu!]o A:JHOd q:Jns AUR JO 19p!A01d glp (!) SU guoI OS 'lUgurg1!nbg~ luno~~y gAlgSg~ gql pund gAlgSg~ .gglSnr~ gql Aq ppq S! luql gumu lUlp Aq pUtlJ gql SImgm "pund gA1gSg~;" SgnUgAg~ .AlPOlpny glp Aq gIqUA!g~gllO pgA!g::,~U 81UgurAUd lUgurllUlSUJ: lIB SImgm II SgnUgAg~1I suo~-a:OHqO d~BU!pjoqns .SlUgmAUd lUgurIfBlSUJ: gql OllUgurAUd U! glUU!p10qns g.m luq1lImd!:JplUd 'gql JO ,suopugnqo gql SUBgur "suopug!NO glUUW10qns II UUgl gq~ lUgrugg.IOV IUlUgurgloons .lUgmgg~y gql 19pUn pgZpoqlnu AlfU:JYf:Jgds sf lUgurgg~y lUlugmglddns q:Jns luql lUglXg gql Ol pUR J! i\IITo lnq :lUgurgg~v glp Ol lUlUgurglddns 10 ]0 A10lUPUgum 'gglSnr~ gql pUR lImd!~P.:md glp Aq OlU! pg1glUg Uggq suq q:J!llM l~gJJg puu g:J10J IItlJ U! UgqllUgurgg~U AUR SUBgm "lUgurgg~y lUlUgruglddns" UUgl gq~ surglSAS 10 mglSAS .pgPl1llSUO:J 10 pg1!nb:Ju 19YUg1gq pm ]Oglglp :J.md AIm 10 urglSAS q:Jns Ol SlUgurgA01dur! pm SUO!SUglXg 'SlUgUUgUgq 'SUOPWpu llU guwnpU! pUB 'lUgUIgaI~V gql]O glUP glp uo gups!Xg ]Oglgql uon-rod gql gu!pnI:Ju! 'lUBdpp.:md gql JO mglSAS 19lUA\glSUM . 10jpUR 19lUM glp]o:J.md A1gA~ pUB q~Ug pUB gIoqM gql SUugm "SurglSASII 10 "urglSASII UUgl gq~ SgnUgAg~ 19N mglSAS 19N urglSAS ]0 lITnOum gql U! SlUgurlSnfpu u!Uug~ lUlp PdPJtl.O.ld ~po!Jgd q~ns 10] 81SO;) g:JUBUg1lI!BW pUB uopu1gdO SSgI SgnUgAg~ mglSAS popgd AIm 10] SUBgm "SgnUgAg~ 19N ruglSASII UUgl gq~ sor.d SO 860IOO rL6t:91 Revenue deemed collected during a Fiscal Year may be made in connection with amounts deposited in the Rate Stabilization Fund. System Revenues The term "System Revenues" means all gross income and revenue received or receivable by the Participant from the ownership or operation of the System, detennined in accordance with Generally Accepted Accounting Principles, including all fees (including connection fees), rates, charges and all amounts paid under any contracts received by or owed to the Participant in connection with the operation of the System and all proceeds of insurance relating to the System and investment income allocable to the System and all other income and revenue howsoever derived by the Participant from the ownership or operation of the System or arising from the System, subject to and after satisfaction of any Prior Liens. SUM.MARY OF INDENTURE The following is a summary of certain of the provisions of the Indenture. . This summary is not intended to be comprehensive or definitive, and reference is made to the actual document for the complete terms thereof. Procedure for Amendment of the Indenture_ The Indenture and the rights and obligations of the Authority and of the Owners under the Indenture and any Installment Purchase Agreement and the rights and obligations of the Participant and Authority under the Indenture may be amended at apy time by a Supplemental Indenture or Supplemental Agreement which shall become binding when the written consents of the Owners of at least sixty per cent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in the Indenture) and the written consent of the Bond Insurer are filed with the Trustee; provided that so long as the Municipal Bond Insurance Policy is in effect, the Bond Insurer may give consent to amendments in place of the Owners of the Bonds. No such amendment shall (1) extend the maturity of or reduce the interest rate on, or otherwise alter or impair the obligation of the Authority to pay the interest or principal or redemption premium, if any, of any Bond or reduce. the scheduled Installment Payments to come due, without the express written consent of the Owner of the affected Bond, or (2) permit the creation by the Authority of any mortgage, pledge or lien upon the Revenues superior to or on a parity with the pledge and lien created for the benefit of the Bonds or (3) permit the creation by any Participant of any mortgage, pledge or lien upon the System Revenues (as defined in the Installment Purchase Agreements) superior to or on a parity with the pledge and lien created by an Installment Purchase Agreement, (4) reduce the percentage of Bonds required for the written consent to any such amendment, or (5) modify the rights or obligations of the Trustee without its prior written assent thereto. The Indenture and the rights and obligations of the Authority and of the Owners and any Installment Purchase Agreement and the rights and obligations of the Participant and the Authority thereunder may also be amended at any time by a Supplemental Indenture or Supplemental Agreement which shall become binding upon execution, without the consent of any Owners but only to the extent permitted by law and only for anyone or more of the following purposes: (a) To add to the agreements and covenants of the Authority or a Participant other agreements and covenants thereafter to be .observed, or to surrender any right or power reserved to or conferred upon the Authority or the Participant; P.l04 16397.1 001098 OS ~spuog ~UWImlSlno aql JO SlaUA\.O alp JO Slsa1alU1 aql paJJu AIaS1aApu A[[UpalUUI lOu Huqs q8!lIA\. pIm 'ql1A\.a1alp lualS1SU08U! lOU pUR arqUl1sap 10 A.rnssa8au UIaap AUUI SU 'lapuna1aql ~ll!S1.rn suonsanb Ol p.rn~a1 U110 'UO!SIAOld aAn8aJap AUB ~unuaUIaIddns 10 ~up8all08 '~U1m8 JO 10 'AHn~1qUIB AUB ~upn8 JO asodmd aql10J SU01S1AOld q8ns a){UUI O~ (q) ~spuog atp JO slaUMO atp JO Slsa1alll! aql paJJu ApSlaApu AHUP:alUUI lOU W~qs q~!lIA\. pUB 'al11lUls puapaJ .rnI!llIIS 10 pu P!'ES Aq pa:mur.md aq AUUI su SU01s1AOld pUB SUOnwU08 'SUUgl1aqlo q~ns ppu Ol pUR'paJ]a u11ayualaq al11lUls felapaJ .rnI!llI1s AUR 10 'papuaUIB SU '6€6 I JO Py a.I11luapUJ lSru~ aql lapun uonu8Irrrunb alp l!UJ.Iad Ol su lalI1IRUI q~ns ul alllluapUJ atp luaumrddns 10 puaUIB 'A:JWOUI O~ (~) ~sasodmd XUl aUI08U1 felapaJ 10J aUI08U1 sso.!2 UIOIJ SPUOH aql uo lsalalU1 JO apoJ alp lapun uo!snI8xa aql U!'ElU1UUI O~ (p) ~10 pund aAjasalI aql u1 AHIpuJ lwal~ U ~U18Uld tp1A\. uOn~auu08 u110 (spuOH aql ~u1lUl uaql s1 d~S J1) d~S 10 (SPUOH aql ~UnUl uaql S1 SIApOOW JI) SjAPOOW Aq ~UnUl ~u1lS1xa ualp AUB U1UlU"!'EUI Ol ArnSSa8aU lualxa aql O~ (a) .Spuog ~U1PURlslno aql JO SlauMO aql JO SlSglalU1 aql paJJU ApSlaApu AIfepalUUI lOu S;;)OP lUtp gsocImd 1aqlo AUB lOt{ (J) :A:us Ol S1 luql 'uadduq Huqs (..lInuJaa JOluaA3:u UB) SluaAa ~U1MOnOJ atp JO alOUI 10 auo n "saJl!.II1lew JO UOne.Iil(il:J:JV pue lJIleJil(J JO SlUilA~ .10 ~~Iq'R{ed pt.m ~np glliO~0q nullS ~u..."'1:S gq~ S~ ph"U Udl{AilO puoH AUB uo lsa1alu1 aql10 luaurA:ud fe1ll8und pUR anp aql u1 apuUI aq fIBqs lInuJap n (u) 10 ~as1Mlalpo 10 Uonu.rnpap Aq 'passaldxa u1a1aql SU AlPlllUUI lU laqlaqA\. 'aIquABd pUR anp gUI08aq Ifeqs aums aql SB pUR uaqM puog AUB 10J luaurrIBlSUJ punt{ ~uPfU1S AUU 10 10 uo 'AUU JI 'UIn!UIald UOndUIapgl 10 JO IBdpupd aql JO luaUIABd {U11l8und pUR anp gtp u1 apuUI aq Ifeqs lrnuJap on (q) ~ SlUaUIag.!2y asuq81nd luaUI[felsur atp 10 gUO 1apun 1n880 lfeqs lInuJaa JO luaA3: UR n (8) pal11lUUI nu pUB Uopu.rnpgp q8ns Ol lopd pa111lUUI spuog glp uo fed18Upd lIB A"Rd Ol luapYJns ums U aalsru~ aql lp1A\. pansodap aq IIBqs glaql 'pglalUa 10 pau"!'Elqo uagq gA"Rq IIBqs gnp kmoUI aql JO lUgurA:"Rd glp 10J aa18ap 10 lugumpnf AIm gl01gq pUR arquA"Rd puu gnp pg.rnpap os Uggq gA"Rq lfeqs spuog gql JO o fed18Upd alp 19yu gUIP AUB lB 'J1 lBql ./.a'Lfunf papJtto./.d pUB ~lalnsUJ puog glp JO lUgSU08 UgUPM lopd gql Ol l8afqns aq lfeqs UO!:).B.rnpgp q8ns AUB luql './.a'LfJ../.nf papJtlo./.d ~(A.rnSSa8gU J1 AlP11lBUI U lI1L{l1A\. lOI Aq pgpaIgs gq Ol spuog) l{l1uJgp q8ns Ol pglBla1 slUgurA:ud luau:rrrelSUJ lUgnbu1PP JO slUauodUI08 fed18Upd gql Ol alup AlP11lBUI pUB lUl10UIB fed18Upd u1 ~UWUOdSgll08 spuog asoql Ol pal!llIH gq Ifeqs uonu.rnpap q8ns AUB 'papJtlo./.d ~~ll!PURlsql1A\lOU A.rnllU08 alp Ol spuog gql u1 10 al11luapUJ aql U1 paU"!'Elu08 ~U!lIlAUB 'gIquABd pUB anp AIglU1PgUIUI1 gq IIBqs pUR aUI08gq [[Uqs gUIBS gql uO!:).B.rnpap q8ns AUB uodn pUB 'AlalUWgUIUI1 alq"RAud pUB anp gq Ol 'UOg1aql paru88B lSalglU1 gql pIm '15uwuulslno Uglp spuog aql JO lIB JO fed1:1upd gql g.rnpgp. 'AlPoqlny aql Ol15u!:).pA\. u1 a8!:).ou Aq 'nuqs '15UWURlslnO g11Tf.l gqllu spuog gql10 lUnoTI.IU IBdpupd glU~a.m15"R u1 (%fZ) lUa81gd aAY-AlUgA\l URql ssaI lOU JO Sl~HWO aql JO lsgnbgl uaupA\. aql uodn puu 'A"RUI aglSl1.I~ glp 'l{l1"RJga JO luaA3: q~ns 10 g8UUnUpU08 aql15upnp as"R8 q8ns A.rgAg pUR q8Bg u1 pUB 'Ugql sor.d SO 860100 rL6€9I installments of interest (if any) upon all the Bonds, and the expenses of the Trustee, including attorneys' fees, together with interest on any such amounts advanced as provided in the Indenture, and any and all other defaults known to the Trustee (other than in the payment of interest and principal on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured or provision shall have been made therefor, then, and in every such case, the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Agency and to the Trustee, may, on behalf of the Owners of all the Bonds, rescind and annul such declaration and its consequences; except that no such rescission or annulment shall occur without the prior written consent of the Bond Insurer, and no such rescission or annulment shall extend to or shall affect any subsequent default or shall impair or exhaust any right or power consequent thereon. Discharge of Bonds. If there shall be paid, to the Owners of all or a portion of the Outstanding Bonds the interest thereon andprincipal thereof and redemption premiums, if any, thereon at the times and in the manner stipulated therein' and in the Indenture, then the owners of such Bonds shall cease to be entitled to the pledge of Revenues as provided in the Indenture, and all agreements, covenants and other obligations of the Authority to the Owners of such Bonds shall thereupon cease, terminate and become void and be discharged and satisfied. Any Outstanding Bonds for the payment of which money shall have been set aside to be held in trust by the Trustee for such payment at the maturity or redemption date thereof shall be deemed, as of the date of such setting aside, to have been paid. SUMMARY OF THE INSTALLMENT PURCHASE AGREE:MENTS The following is a collective summary of certain of the terms of the Installment Purchase Agreements. This summary is not intended to be comprehensive or definite, and reference is made to the actual documents for the complete terms thereof. Changes to the Project. The Participant may at any time substitute other public capital improvements for the System the then existing components of the Project by submitting a Written Request of the Participant to the Authority and the Trustee specifying the components of the Project to be substituted and the new components. Covenant Against Encumbrances. The Participant will not mortgage or otherwise encumber, pledge or place any charge upon any of the System Net Revenues except as provided in the Agreement, and will not issue any obligations secured by System Net Revenues senior to the Parity Debt; provided, that the Participant may at any time issue any Subordinate Obligations. Covenant Against Sale or Other Disposition of the System. Except as provided in the Indenture, the Participant will not sell or otherwise dispose of the System or any part thereof essential to the proper operation of the System or to the maintenance of the System Net Revenues, unless the Installment Payments have been fully paid or provision has been made therefor. The Participant will not enter into any lease or agreement which impairs the operation of the System or any part thereof necessary to secure adequate System Net Revenues for the payment of the Installment Payments, or which would otherwise impair the rights of the Owners with respect to the System Net Revenues or the operation of the System. P.I06 16397.1001098 OS "laUUBm IB::>!illouo::>a pUB luaI::>YJa UB ll! malSAS alp alBlado InM. pUB saill9 lIB lB laplo 13UPI10M. pUB lfBdal poo~ uI ma1sAS aql aAlasald pUB U!'Blll!Bm InM. lUBdp~d aq~ -walSAS JO uO!lluado pUB aaImUallI!BW glI!p.lBgaH lImUaAO;) .punos AUB!lBt1l:JB Sf q:J!llM. IIrn.I1301d a:JuBlnsuf-;J!asB lapun paysp'Bs aq ABm a13BlaAo:J a:JUlunsll! q:Jns lBql 'P(}PJt\.o.1d ~slg]nsuf aJqfsuodsal qlfM. PGufRlu!Bm aq UBqS 'lSU!'B13B pamsuI S){SP alp Ol SB 'pUB .lUnourn uI alBnbapB aq IIBqs a:JuBmSU! q:Jns 'AUBdmo:J a:JUBlnSU! alqBlndal B mOlJ smn!illald alqBuoSBal 10J arqBI!BAB S! a:JUBmSU! q:Jns lUalXG alp Ol 'pUB malsAS alp Ol lBI!W!S SUOpB1Gdo qlIM. UO!l:Jauuo:J ll! palnSU! AIIBnsn am SB (malsAS Gql JO UOfl:Jt11lsap 10 Ol lUap!:J:JB 13U!pn{:JU!) S){SP q:Jns lSU!'B~B malSAS aql uo a:JUBlnSU! sam!! lIB lB lJ!Blu!Bm pUB aln:JOld InM.lUBdp!:)1Bd aq~ -aaUlunSUJ: .punos AIIB!lBnPB S! q:J!llM. urn.I1301d a:JuBlTIsu!-Jlas B lapun pGYSI1'BS Gq ABm a~BlaAo:J G:JUBmsuI q:Jns lBql 'P(}PJt\.o.1d ~malsAS aql Ol lBI!lliIs suoflBlado qlIM. uop::>auuo:J U! palaAo::> AIIBnsn alB SB slunourn q:Jns U! uop::>alOld plOJJB IIBqs a:JUBlnSU! q::>ns pUB 'ma1sAS aql JO asn AUB 13u!Pn{:Juf 'SUO!lBladosJUBd!:J~d alp JO UOSBal Aq pGUOISB:J:JO Al1adold 01 a13BmBp 10 'qlBap lol..mfu! AHPoq 10J (saaAoldma pUB SlG:JYJO 'S10PG1W Sl! 13U!pn{:JU!) lUBdPI:)1Bd aql lSU!B~B sm!'B{:J 13upaAO:J G:JUBlnSU! AHTIqBrr :Jf{qnd pGU!'B1U!'Bm pUB paln:JOld aq 01 asnB:J 10 U!'B1U!Bm pUB aln:J01d IIBqs lUBd!:J!l1Bd Glll 'SISBq B1Bl old B UO lqGQ Al!lBd 10J SllO!S!AOld lBI!W!S AUB 01 pafqns aq UBqS spGa:Jold 1aN JO uopB:JTIddB Gql 10J sGmpa:Jold 13U!0~a10J aq1 lBlp .1(}tfJ..1nf P(}PJt\.o.1d ~anp amo::>aq lluqs AGql SB slUamABd UO!lB~nqO Al!1Bd pUB anp amo:J AGql SB SlUGmABd 1UGmIIB1sUJ a){Bm 01 panddB pUB GG1Sru~ aq1 lp!M. palIsodap Gq IIBqs spga:Jold q:Jns UGql 'lam 10U alB SUOfl!pUO:J 13U!013al0J Gql J! 1Blp 'P(}PJt\.O.1d ~pund GnUaAG(l malSAS alp U! pa1!sodap Gq IIBqs asodmd q:Jns 10J lUBdI:JPlBd Glp Aqpal!nbGllOU spaa:Jold q::>ns JO a:JUBIBq AUB pUB 'aA!Sn{:JUO:J pUB IBill] Gq IIBqs lUBdI:Jp.rnd Gql JO alB:JYIl1G:> q:Jns pUB 'pG1!'Bdm! AIIBPUBlsqns Gq 10U HIM. Gnp uaqM. SlUGmABd 1UGmlIB1SUJ ABd OllUBdpf:)1Bd aql JO AlmqB aqllBtp os uOp:Jt1.Ilsap 10 a13BIIrnp q:Jns mOlJ 13U!l{l1sal SGnUaAg(l mG1SAS JO ssol Glp sIsuq APWP B UO 1asJJo . ApUGPYJns InM. SGnUaAa(l urg1SAS IBuoIHPpB q:Jns lBql ~U!AJ!l1g::> 'lUBdP!l1Bd glp JO alB:JY!l1g:> B paqS!Ull1J UGgq suq gG1sru~ Gq1 (a) pUB ~SlUGWgAOldmI 10 SUOfSUglXG 'SlUgUUgllaq 'SUOP!pPB q::>ns mOlJ paApgp Gq 01 SanUgAg(l mGlSAS IBuo!lIPpB gq1 JO glBmpSg UB (m) pUB 'Spgg::>old q:Jns mOl] lUBd~:J~l1Bd GqlAq pgl::>rulSUO::> pm=? pal!nb::>p. gq 01 p~'SodOJd UGq1 umlSAS glp 01 SlUGmaAOldm! 10 sUOISUa1XG 'SlUgUUgllGq 'suoIHPPU aql JO uopdp:JSGp IBlgUa~ B (rO 'UOIPru1SGp 10 G~Burnp q:Jns JO UOSBglAq lUBd!:J!l1Bd GqlAq 'pGlgJJns aq 0110 'palGJJns 'AUB JI 'SgnUgAG(l mG1SAS IBnlIlIB ll! ssoI Glp (I) 13U!M.oqS lUBdpp.rnd Glp JO G1B:JYIl1g:> B aGlsru~ Gql qHM. SGIY pUB Sgln::>as lS.ry lUBdp~d Gtp (V) JI mglSAS Gq1 01 SlUamgAOldm! 10 sUOISUalxg 'SlUgULmUgq 'sUOPIPPB ~UP:JrulSUO:J pUB ~U!1!nb:JB JO lso:J aq1 01 1UBdpf:)1Bd Gql Aq panddB PUB.1SIUl U! pGpaau SB qsnqB1sa IIBqs galsru~ aql q::>fllM. pUl1J IBPgds B ll! ga1sru~ aql qHM. 1UBdI::>!l1Bd gq1 Aq palIsodap aq IIBqs mOlJalgql lUBdP!l1Bd aq1Aq pgzIIBal spGa:Jold 1aN aql paAollsap 10 pG~Bu.rnp aq nBqs malSAS aq1 JO :)1Bd AUB 10 lIB n .pund gnUaAa(l ma1sAS Gtp ll! spga:Jold q::>ns l!sodap q1!M.ql1oJ .f[Bqs 1UBd!:JI:)1Bd aql uaql 'aa1sru~ gtp q1fM.paII] ugaq SBq pgJJa q:Jns OllUBdI:J~d aq1 JO alB:JYfl1a:> B pUB 'sluamABd luamIIB1sUJ Gql JO Alpn::>gs aql pUB sanuaAa(l mglSAS alp uodn 'paJJa IBpalBUIUl! UB ls,?m 1B 10 'paJJg ou pBq .SBq UOTPrulSGp 10 a13BIIrnp q:Jns 11 lUBd!::>n.rnd aql JO alB::>Y!l1a:> B aglsru~ aql qlIM. saIY pUB sam:Jgs lS.ry lUBdI:JI:)1Bd gqi (V) JI malSAS alp 01 SlUgWaAOldmI 10 sUOIsua1xa 'sluauuauaq 'SU09fPPB ~uIPru1sUO::> pUB ~UP!tlb:JB JO lso:J alp OllUBd!::>Il1Bd aql Aq pGrrddB pUB lSIUl U! pgpagu SB qsnqB1SG nBqs aa1sru~ glp q:J!llM. putlJ JB!:Jads B ll! aa1sru~ gql qHM. 1UBdpIllBd gqlAq pal!sodap gq nBqs mOlJglaq11UBdI:Jn.rnd Gq1Aq paznual spaa:J01d laN gql .'s~uwag::>old u!Bmop luau!llia Aq ua){Bl gq IIBqs malsAS aq1 JO :)1Bd AUB 10 f[B 11' -spaaao.ld lI!BIDOQ lualI!W3: L. 0 I .J SO 860IOO rL6€91 showing (i) the loss in annual System Revenues, if any, suffered, or to be suffered, by the Participant by reason of such eminent domain proceedings, (ii) a general description of the additions, betterments, extensions or improvements to the System then proposed to be acquired and constructed by the Participant from such proceeds, and (iii).an estimate of the additional System Revenues to be derived from such additions, betterments, extensions or improvements; and (B) the Trustee has been furnished a Certificate of the Participant, certifying that such additional System Revenues will sufficiently offset on a timely basis the loss of System Revenues resulting from such eminent domain proceedings so that. the ability of the Participant to pay Installment Payments when due will not be substantially impaired, and such Certificate of the Participant shall be final and conclusive, and any balance of such proceeds not required by the Participant for such purpose shall be deposited in the System Revenue Fund, provided, that if the foregoing conditions are not met, then such proceeds shall be deposited with the Trustee and applied to make Installment Payments as they come due and' Parity Obligation Payments as they shall become due provided further that the foregoing procedures for the application of Net Proceeds shall be subject to' any similar provisions for Parity Debt on a pro rata basis. If such eminent domain proceedmgs have had no effect, or at most an immaterial effect, upon the System Revenues and the security of the Installment Payments, and a Certificate of the Participant to such effect has been filed with the Trustee, then the Participant shall forthwith deposit such proceeds in the System Revenue Fund. Events of Default and Acceleration of Maturities. If one or more of the following Events of Default shall happen, that is to say -- (1) if default shall be made by the Participant in the due and punctual payment of any Installment Payment or any Parity Debt when and as the same shall become due and payable; (2) if default shall be made by the Participant in the performance of any of the other agreements or covenants required in the Agreement to be performed by it, and such default shall have continued for a period of thirty (30) days after the Participant shall have been given notice in writing of such default by the Authority, the Bond Insurer or the Trustee; provided that such default shall not constitute an Event of Default, if the Participant shall commence to cure such default within such thirty (30) day period and thereafter diligently and in good faith shall proceed to cure such default within a reasonable period of time, provided, such period shall not extend beyond a total of 90 days except with the prior consent of the Bond Insurer; (3) if the Participant shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the Participant seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, 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 Participant or of the whole or any substantial part of its property; or (4) if payment of the principal of any Parity Debt is accelerated in accordance with its terms; P.108 16397.1001098 OS .UO~U~Rp lU~mb~suo:J l~M.Od 10 lq~~ AU'R lSn'Rqx~ 10 l"!'RdUI! II'Rqs 10 lIn'RJ~p lu~nb~sqns Aue p~Y'R Ueqs 10 Ol pU~lX~ IfRqs lU~UIlnmm ptm UO!SS!:JS~l q:Jns OU lnq ~s~:Ju~nb~suo:J Sl! PU'R UO!lRmp~p q:Jns Inmm pue pU!:JS~l A'RUI 'lued!:JP.md ~ql Ol ~:JpOU U~n~M. Aq '1~1nSUJ: puoa ~ql pue Al~oqlny ~ql ~S'R:J q:Jns A.I~A~ U! pUB ump 'lOJ~l~ql ~p'RUI u~~q ~A'Rq W~qs ~l'Rnb~p'R ~q Oll~msUJ: puog ~lp pue Al~oqlny ~ql Aq p~UI~~p UO!S!A01d 10 1amsUJ: puog ~ql PU'R Al~oqlny ~ql JO UO!PBJSp'RS ~ql Ol p~ln:J 10 pOO~ ~p'RUI u~~q ~A'Rq IfRqs (UOp'R.mp~p q:Jns JO UOSB~l Aq APloS ~IqBA'Rd pue ~np uO~l~qlls~l~lU! p~ru:J:JB ~ql pUB SlU~mABd lU~UIHBlSUJ: pfBdun ~lp JO lUnO{ll'R fRdpu!ld ~lpU~ ~ql JO lU~UIABd ~ql U! UBql1~lpO) AlIloqlny ~ql Ol UM.oIDJ slInBJ~p l~qlo IfR pUB AU'R pUB 'l~lnsUJ: puog ~ql pue Al!loqlny ~ql JO. s~su~dx~ ~rqBUOSB~l ~ql pue 'SUIl~ll!~ql ql!M. ~:JU'Rp10:J:JB . U! p!'Rd J! N~a Al!l'Rd l~lpO q:Jns 10 SlU~UIA'Rd lU~UIIfRlSUJ: ~ql JO ~:JuefRq fRdpU!ld P!Bdun ~U!ll"!'RUI~l ~ql Ol ~rqB:JHdd'R S~l'R110 ~lm ~qll'R 'SlU~UIIfRlSU! ~np1~AO q:Jns UO lS~l~lU! ql!M. 'UO~l~qlls~l~lU! p~ru:J:J'R ~ql pue UO!l'R.mp~p q:Jns OllO~d ~np ~AOqB (1) ~sn'Rp U! Ol P~ll~J~l N~a Al!-IDd 19q1O AUB JO lU~UIABd PIRdun ~ql 10 SlU~UIABd lU~UIIfRlSUJ: ~ql JO lunou.m fRd!:JU!Jd P"!'Rdun ~ql ABd Ol lUg!:J!yns UIns BAl!lotpny ~ql ql!M. Hsod~p II'Rqs llmd!:Jp.IDd ~ql p~l~lU~ 10 P~U!'Rlqo u~~q ~A'Rq IfRqs ~np SAgUOUI ~ql JO lU~UIABd ~ql10J g~l:J~p 10 lu~~pnf Alm glOJ~q pue ~Iq'RABd plm gnp pg.mp~p OS u~~q ~ABq Heqs UOg1~tp lS~l~llI! p~ru:J:JB ~ql pue SlU~UIA'Rd lUgUlIfRlSUJ: P"!'Rdun ~ql JO lunourn I'Rd!:JlI!ld ~l!lUg ~tp l~ye gUlP Alm l'R J! lBql UopWUO:J gql Ol p~fqns S! 'lgA~M.bq qd'R~'R.md S!lT.L .1glnsUJ: puog ~lp JO lU~SUO:J U~U!lM. 10!ld ~ql Oll:Jgfqns ~q HBqS UO!lB1gI~:J:J'R JO UOp'R.mp~p q:Jns AUB l'Rql papJtto.J.d ~~IqBA'Rd pue ~np AI~l'RW~UIUI! ~UIO:J~q IfRqs ~u.ms ~ql UOpmBpgp q:Jns Aue uodn plm 'AI~lB!P~lliUI! ~rq'RABd pUB ~np ~q Ol UO~lgqlls~l~lU! p~ru:J:J'R gql plID SlUgUIA'Rd lU~UIIfRlSur pfBdun ~lp JO lllUOu.m fRd!:Jupd ~lpU~ ~ql ~.mI:J~P 'llmdpp.md ~lp Ol ~Up~M. U! ~:JpOU Aq 'A'RUI A+!lOlpny ~qllIn'RJga JO lU~A3: q:Jns l~qlO AU'R 10J plm 'IfRqs Al!lOIpny ~lp '~AOq'R (17) plm (E) SgSnBp U! p~Y!:J~ds lIn'RJga JO lU~A3: q:Jns JO ~:Jlmnu!luo:J ~lp ~u!lnp ~SB:J q:Jns A.IgA~ plm q:JB~ U! plm u~ql '~.rrqU~PUJ: ~ql JO SUIlgl ~ql 1ll!M. g:Juep10:J:JB ll! p~pU~Ul'R gq A[UO ABUI lU~UI~al~y gq.L -SJuampuamv 60I.d SO 860100 I"L6E91 APPENDIX D . FORM OF BOND COUNSEL'S OPINION Upon the delivery of the Bonds, Hawkins Delafield & Wood LLP, San Francisco, California, Bond Counsel, proposes to render a final approving opinion in substantially the following form: _,2005 California Statewide Communities Development Authority Sacramento, California 95814 $ California Statewide Communities Development Authority Water and Wastewater Revenue Bonds (pooled Financing Program) Series 2005_ Members of the Governing Board: We h~ve acted as Bond Counsel in connection with the issuance by the California Statewide Communities Development Authority (the "Authority") of $ aggregate principal amount of California Statewide Communities Development Authority Water and Wastewater Revenue Bonds (Pooled Financing Program) Series 2005_ (the "Bonds") under and pursuant to the provisions relating to the joint exercise of powers found in Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Law"), and under and pUrSU!LT1t to the Indenture, dated as of _ 1, 2005 (the "Indenture"), by and between the Authority and.Union Bank of California; as trustee (the "Trustee"). We have reviewed originals or copies identified to our satisfaction as being true copies of the Indenture and certain other records of the Authority. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of Authority officers furnished to us without undertaking to verify the same by independent investigations. Based upon the foregoing and after the examination described above and after examination of such questions of law as we have deemed relevant in the circumstances, but subject to the limitations set forth above, we are of the opinion that: 1. The Authority has lawful authority under the Law to enter into the Indenture, and the Authority has duly authorized, executed and delivered the Indenture and, assuming due authorization, execution and delivery .by the respective other parties thereto, the Indenture is a legal, valid and binding obligation of the Authority enforceable in accordance with its terms. The Indenture creates a valid pledge of the Revenues (as defmed in the Indenture), subject to the provisions thereof permitting the application thereof for the purposes and on the terms and conditions set forth therein. 2. The Authority has lawful authority to issue the Bonds and the Bonds have been duly and validly authorized and issued by the Authority in accordance with the Constitution and statutes of the State of California, including the Law and the Indenture. The Bonds constitute legal, valid and binding special obligations of the Authority payable solely from Revenues and amounts on deposit in certain funds and P.ll0 16397.1 001098 OS .lgMOd ~U!XB1 OU S'Bq Al!lmnny gqJ. .spuog gql JO 1UgmA'Bd gq1lOJ pg~pgld S! 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'pa:P!llqns AIIIlJl:Jadsa'M 1 I I.J SO 860IOO I"L6E91 APPENDIX E FORM OF MUNICIPAL BOND INSURANCE POLICY P.112 16397.1001098 OS .iI XI<IN:tIddV J~a~NThm:tIJNOJNOll~O~ .:JLa 11JJM azyuo a.lV sJuvdpJJ.lvcJ :JLa imM 8uJlvap uJ paMolloJaq OJ :JLa Jo "sa.lnpa:Jo.lcJu Jua.l.ln:J a11} puv UOJSSJlUULO:J a8UV1pX:q puv saJJJ.ln:Jas alf} 1fJJM azy UO a.lV :JLa OJ azqv:JJlddv "saznNu Jua.l.ln:J a1iL .xJpuaddy sJlf} uJ paqJ.l:Jsap .lauumu a'LfJ uJ pv WM sJuvdp'!J.lvcJ pa.lJPu/ :JLa .10 sJuvdJ:J'!J.lvcJ :JLa ':JLa JV'LfJ .10 'sJsvq lzaUlp V uo Op OS llJM lalf} JV11J .10 'spuofl a1fJ Jo .laUMO pa.laJsJ8a.l a'LfJ sv 'aaUJUlOU SJJ '.O:J :w apa:J .10 :JLa OJ Juas sa:Jpou .lalf}o .10 UOpdlUapa.l (:J) .10 'spuofl alf} uJ Jsa.laJuJ dp1.S.laUMO .10 UOPVUUYUO:J .lalf}o .10 uJ Jsa.laJuJ dJ1fS.laUMO 8upuasa.lda.l saJv:Jyp..la:J (q) 'spuofl a1fJ OJ padsa.l 'LfJJM 'luv.f? 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'A.I01!sod~p lS~2.rnI S,P{lOM ~ql ';)1.0 .mO~.~~lp. MM.M. lU punoJ ~q uu~ ;)1.a lnoqu uonuuuoJU! ~lOW .UO!ss!UJUIO;) ~2lrnq~x3 pUR s~n!ln~~s ~lp ql!M ~rrJ uo ~.rn SlURd!~!llBd Sl! 01 ~rqu~Hddu s~In}l ;)1.G ~qJ. .VVV :~UnU1 ls~q2!ll s ,100d tfl p.rnpUR1S suq ;)1.a .Cu SlURdp!UUd l~~l!PUJ:Il) AIl~~l!PU! 10 AIP~l!P l~ql!~ 'lURdp!:).IBd p~l!a u q1!M. d!llsuoquI~l re!p01Sn~ u UIU1U!Ulli 10 q2no.np .rn~p 1Ulp Suonu10d10~ 2u!-ffi~p pUR 's~!lludmo~ lStlQ 'S){Uuq 'Sl~re~p pUR slmIOlq s~p"f.Itl~~S .s.n-UOU puu .s.n q10q su q~ns Sl~lpO 01 ~IqurreAu oSlu S! lli~lSAS ;)J.O ~q1 01 ss~~~V .~UJ: 'Sl~re~a s~!l!1n~~s JO UOnU!~OSSV reUOp'BN ~q1 pUR ':)'1'1 ~2URq~X3 ){~OlS Ul~~!.mu:rv ~q1 '.~UJ: '~2lmq~XH Sll'd SO 860100 rL6€91 Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive. written confmnation 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 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in ~onds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC' s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Bonds may wish to take certain steps to augment the transmission to them of notices of significant events \vith respect to the Bonds, . such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.' s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the Authority or the Trustee on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or P.114 16397.1 001098 OS . .SlUBdp~Ud PG1!PITI pUU pGl!G JO A1mq!SUOdSGl Gq1 Gq IUM SlGUMO lBPYGUGS: Gql 01 SlUGmABd q~ns JO 1UGmGSlnqs!p ptm ';)~a JO AHUq!SUOdSGl Gq1 Gq ll!M Sltmdprl.rnd l~Gl!Q 01 SlUGmABd q~ns JO 1UGmGsmqs!p 'GG1sru~ Gq110 A1poq1ny Gq1 JO A1mq!SuOdsGl Gq1 S! (;)~Q JO GAPB1UGSGldGl PGZpmpnB UB Aq pG1sGnbGl Gq ABm SB GGll!lliou lGtpO q::ms 10) .0;) 'W GPG:::> 01 SlUGmABdpuGP!A!P puu 'suopnqplS!p 'SpGG~Old UOpdmGpG1 JO 1UGurAUd .Gmp 01 GUlp mOlJ l~GJJG U! 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SII.d SO 860100 I"L6E91 APPENDIX G FORMS OF CONTINUING DISCLOSURE CERTIFICATES FORM OF PARTICIPANT CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the (the "Participant"), dated. , 2005 in connection with the issuance of $ California Statewide Communities Development Authority Water and Wastewater Revenue Bonds (pooled Financing Program), Series 2005_(the "Bonds"). The Bonds are being issued pursuant to the Indenture, dated as of _ 1, 2005 (the "Indenture"), by and between the California Statewide Communities Development Authority and Union Bank of California, N.A., as trustee (the "Trustee"). The Participant has entered into an Installment Purchase Agreement, dated as of _ 1, 2005 (the "Installment Purchase Agreement") with the Authority. Under the Installment Purchase Agreement the Participant will pay Installment Payments (the "Installment Payment") which will secure in part the Bonds. The Participant covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Participant for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Pmticipant pursuant to, and as described in, Sections 3 and 4 of this DisClosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Dissemination Agent" shall mean Union Bank of California, N. A., or any successor Dissemination Agent designated in writing by the Participant and which has filed with the Participant a written acceptance of such designation. "Listed Events" shall mean any of the events listed in Section 5( a) of this Disclosure Certificate. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. The National Repositories currently approved by the Securities and Exchange Commission (the "SEC") are listed in the SEC web site at http://www.sec.gov/info/municipaVnrmsir.htm. "Official Statement" shall mean the Official Statement relating to the Bonds, dated ,2005. "Participating Underwriter" shall mean the original purchaser of the Bonds required to comply with the Rule in connection with offering of the Bonds. . P.116 16397.1 001098 OS .A10Hsod~l~ glUlS q:JUg pIm A.IOHsodg"M It=mopuN q:JUg uuam Heqs IIA.IOl~soda"MlI .amp Ol amp mOlJ pgpUgum gq Aum gmus gql su 'Pf6 I ].0 l:JV a2trnq:Jxg: SQpptl:Jgs Qlp lapun uo~ss!llllo;J a~uuq:JX3: ptrn samln:Jgs aql Aq paldopu (S)(q)Zl-{;:JSl a}tl~uuam nuqs IIQln"MlI .u!lliO].f[B;J JO aWlS aql trnam nuqs II alulS II .A.IOl~sodg~ aWlS ou s~ almp 'aW:Jyrl-Ia;J s~ql JO glUP aql JO sy .uo~ssfUIUIo;J a2Imlpx3: pIm sappn:Jgs aql Aq q:Jns SU pgz!ll2o:Jal plrn gIn"M aql JO gsodmd aql 10J A10l~Sodgl aluls u SU alulS gql Aq pawuB'~sap AlPua 10 A.IOHSodal glUApd 10 :Jnqnd AIm lrngm nuqs IIA.IOlISodg"M aWlSu .SllOd.a"M llmuuy JO UO~S~AOld .f NOLL;J3:S .(:J)S UO~l:JgS lapun luaA3: pglS~'l u 10J su 19mmm aums aql III g~lrnq:J q:Jns JO g:)pou aAI~ nuqs H 'sa~Imq:J lUgA {B:Jsy SlllrndI:J!1-fBd aql n. .alup lUql Aq alqunuAu lOU a.m Agql J~ 1l0dg"M {Bnuuy aql JO ~ll1IY gql 10J aAoqu pgl!nbal alup gql UBlp laluI plrn 1l0dg"M' {Bnuuy aql JO a:Jlrn{Bq aql mOlJ APlu.mdas paurrnqns aq Aum llrnd!:J~l.illd gql JO sluamaluls {B~:Juuuy pal~pnR gqlluql PdPJtlo.1.d ~alu:JY!lla;J amsops!G S!l[l JO 17 uo!pas U! pap~A01d su uopuuuoJII! 1aqlo a:JualaJa1-ss01:J Aum puu 'a~mpud u 2u~spdmo:J sluamn:Jop alu.mdgs SU 10lUauIn:Jop aI~u!s u su panrrnqns aq Aum 1l0dg"M {Bnuny gq.L '(U~glgq (Z)17 uop:Jas U! paqp:Jsgp Smgl! aql apnpu! Ol pal!nbg1 gq lOU nuqs -OOZ 'Of aunf 2u!pug .maA {B:Jsy 10J 1l0dg1lS1Y gql) alu:JYIlla;J glnSOpS!G S!q:l JO P uop:Jas JO SlUaUlgl!nbal aql ql!M lUglS!suo:J s~ q:J!llM 1l0dg"M {Bnuuy uu A.10l!sodg"M q:JUg Ol gp!AOld '-OOZ 'Of aunf 2u~pug .maA IU:Jsy glp 10J llodgl gql ql!M 2U!:JuaUIUIo:J '(Of aunf spua .mgA {B:Jsy q:Jns AIlUgSg1d) .mgA {B:Jsy S,lUBd!:J!:J.IBd gql JO pua glp 19yu SAUP 0 I Z Imql laluI lOU 'Ol lua~y UOpUUrrngSS!Q gql gsnu:J nuqs 10 'I{Bqs llrnd!:Jp.illd aq.L (u) .V l!q!1lX3: su pgq:Juuu uuoJ aql AnupImlsqns II! A10l~soda"M q:JUg Ol a:Jpou u PUgS I{Bqs llrnd!:J!1-fBd aql '(u) uO!l:Jasqns II! pal!tlfuu alup aql Aq 1l0dg"M {Bnuuv Im sa!loHsoda"M alp Ol gp~AOld Ol aNuuns! luud~:J!1-fBd gql n .(llrnd!:J!llUd glp lrnqllglpO J!) lUg2y uopuurrnass~G aql Olllodg"M'{Bnuuy ~(n ~PIAOld II~qs ~l!BdpnlBd ~Rn '~lTIp p~s CllC~d SkBG ssgu~snH (sI) iId~YY lil::LH l<1lBI lON (q) :nuqs lUg~V UOpUUrrnQSS!Q gq..L (:J) pIm ~AIm J! 'A.IOl!sodg"M aWlS mp puu A.IOl!sodg~ {BuopuN q:JUg JO SSglPPU plrn QumN aql 1l0da"M Iunuuy aql ~U!P~AOld 10J alup gql Ol 10pd .mQA q:JUg QU!ULmlQP (!) .pgp~A01d SUM l~ q:J!llM Ol sapOHSodQ~gql I{B ~upsrr puu pgp~A01d SUM II alUp Qql 2ll!lUlS 'QlU:Jyp.Ia;J QlnsopsIQ s!l[l Ol lImnS1nd papIA01d uooq suq 1l0dg"M llmuny Qql luql 2U!AJ!llg:J luud!:J~l.illd gql ql!M 1l0dQl UglY '(lImd!:J!l.illd alp Imlp 19q1o S! lua2y UOpUUrrnQSS!Q gql J!) (rO :glp g:JUglgJa1 Aq Qpnpu! 10 ll!UlUO:J plrn spUOS: Qql JO Slgqmnu dISil;J Qql UfB1UO:J I{Bqs 1l0dg"M Iunuuy S,1Uudp!llUd gq.L .SllOd.a"M {Bnuny JO lUglUO;) .17 NOI.L;)3:S {Bplrnuy pgHpnuun UfBlUO:J nuqs llodQ~ {Bnuuy gql '(u)f uO!l:)QS OllImnSlnd pgIY Qq Ol pgl!llbg1 S! :}lodg"M {Bnuny gql gum Qql Aq QlqulfBAu lOU Q.m SlUQmglBlS [B!:JImuy pgl!pnU S,luudp!l.illd Qlp JI .p.mos: Sp.mplrnlS 2upuno:J:JY {BlUgmUlgAOD aql Aq am!l Ol QUlP mOlJ sappua {BlUQ~gAO~ Ol Alddu Ol PQlu~Inm01d su saldpupd 2ll!luno:J:Ju pgldQ:J:Ju AI{B1QUg2 ql!M Q:JlrnplO:J:JU u~ pg.mdgld '.mQA {B:Jsy lopd gqllOJ llrndp!llUd gql JO SlUQmglUlS {Bplrnuy pgl!pnu gq.L . I LI I.d SO 860IOO I'L6E91 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. 2. Updates for the last fiscal year of the information in the following tables from the Section relating to the Participant in Appendix B to the Official Statement presented in substantially the same format as such tables (to the extent the Official Statement contains accurate information regarding the fiscal year covered by an Annual Report, no update shall be necessary): (a) Number of Connections as shown on page _ of the Official Statement; (b) Revenues by Class of User as shown on page _ of the Official Statement; (~) Largest Users as shown on page _ of the Official Statement (this information is only required to the extent the revenues generated by one or more users constitutes _% or more of the Participant's annual System revenue); and (d) Results for the most recent fiscal year presented in the same format as the Projected Operating Results as shown on page _ of the Official Statement (no updates of projections are required). 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 Participant 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 [mal official statement, it must be available from the Municipal Securities Rulem3JrJ.ng Board. The Participant shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Participant shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Installment Purchase Agreement or its obligations in relation to the Bonds, if material: 1. principal and interest payment delinquencies; . 2. non-payment related defaults; and 3. adverse tax opinions or events affecting the tax-exempt status of the Bonds. (b) Whenever the Participant obtains knowledge of the occurrence of a Listed Event, the Participant shall as .soon as possible detennine if such event would be material under applicable federal securities laws. (c) If the Participant determines that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Participant shall promptly file a notice of such occurrence with the Repositories. P.118 16397.1001098 OS . .Sg!lOl~sod;:}"M gl'B1S gq1 pIm Sg!loHsodgl! {'BuOP'BN gql 01 AlPg.I!P pg:mUISImll glgM UOp'BUlIOJU~ q~ns J~ se grnl! glp JO sgsodrnd 10J pgl'Bgll gq lUM. Sg!lOl~sodgl! gl'B1S glp pIm Sg!lOl~sodgl! {'BuopuN gql 01 uOPUUlIOJ1l11pIISImll 01 g~~JJO lsod {'BllUg;) gql 2u~sn lUlll pgJJg gql 01 JJU1S ;)HS glp UIOl] 'pg~OAgl Uggq 10U seq q~ILlM 'lgUgl gApgldmlU~ Im pgA~g~gl s1:rq g~YJO lsod {'BI1Ug;) glll lUglXg gql 01 puu J~ JJU1S ;)HS glll Aq pglIm.I2 Uggq gAUq 01 pgUIggp gq l{'Bqs UO~ss!uLmd 'gsodrnd SILlllOd t. g~YJO lsod {'BllUg;)1l u) JJB1S ;)HS 10 ;)HS gql Aq pgU!U1Igd lUglXg gql 01 'A.rol~sodgl! gWlS 10 A.ronsodgl! {'BUOPUN q~ns 01 uO~SS!illSImlllOJ UOn'BUI10JU~ 10 SlagUIn~Op 'Sg~nOU 2ll!ldg~~u 10J glq~suodsgl. s~ ll~ILlM. lug2u AIm IfnM gums gq1 ~unY Aq A.ronsodgl! gl'B1S 10 A.r01!sodg~ {'BUOp'B N U q1~M UOp'BUlIOJ1l110 lUgUIn~Op 'g~POU AIm gIY 01 19punglgq suop'B2nqo Sl! AJSPUS AUUI 1ImdpWRd gql. 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'lUg2y q~ns AIm g2.mq:JsW AUUI pIm 'glU:JY!1Jg;) glnSops~G SILl11gpun suop'B2nqo Sl! 1no ~U!A.I.m:J U! l! lS!SSU 01 1Ug~y uO!luu!umSS!G U g2'B2ug 10 1U!oddu 'gUI!l 01 gUlP UIOIJ 'AUUl1Imdp!1JBd gql. . .1gpUnglgq lUg2y uopuu!llgss~G gq1 su gAjgS 01 .V.N 'u!llioJ!IE;) JO )[UBg uo~un SlU!oddu Aqglgq 1Imd!:J!:}lUd gql. .1Ug:oy Uopuu!umss!G .8 NOIl.;)HS .1UgAH pg1S~'1 'B JO g:JUglln:J~O JO g~POU 10 Podgl! {'Bnuuy gl11ltlJ AIm U! 1! gpnpu! 10 UOPUUlIOJU! q:Jns glUpdn 01 gl'B~Yn-rg;) S!q1 19pUn uO!lu2nqo ou gAuq I{'Blls 1Imdpn.rnd gq1 'glU~Yn-rg;) g.insopS!G s!lp Aq pgl!nbgl AI{'B:Jypgds S! q:JILlM 1Ulp 01 UOpWP'B U! 1UgAH pg1S!1: U JO g~UaIlll:J~O JO g:JpOU 10 uodg~ {'Bnuny AIm U! UOp'BUlIOJU! AIm gpnpu! 01 Sgsooq~ 1ImdPn.rnd glll JI .glU:Jyn-rg;) glllSOPS!G S!lIl Aq pgl!nbgl S! q:J!qM 1uq1 01 uO!lWpu U! 'lUgAH pg1S!'1 U JO g:JUg.1Il1:J:JO JO g~!lOU 10 Uodgl! {'Bnuuy AIm U! UO!lUUlIOJU! 19q10 AIm 2uwnpu~ 10 'uopU:J~umnUlO~ JO SUUgUI 19lpO AIm 10 glB~Yn-rg;) glnSOpS!G SILl1 U! lplOJ 19S UOP'BU!llgSSw JO SU'Bgm glp au!sn 'UO!l'BUlIOJU! 19q10 AIm a1l11'Blf!UIgSS!P mOl] 1Imd!~!llUd glp.1UgAgld 01 pgUlggp gq fi'Bqs glu:JY!1Jg;) glnSOpS!G SILll U! ~U!lllON .UO!lUUI.IoJUJ: {'BuopWPY .6 NOIl.;)HS .SMUI q:Jns 19pUn lImd~:Jn.md glp JO suopu2rrqo pIm sgpnp I{'B gi3.mq~sW AIIIlJ 10U A'BUI 'UO!P'B 19q10 10 SglnSOpSW l'BUOp!ppU 1noq1!M 'glu~Yn-rg;) gmSopS!G s!t[l t[l!M g:JIm!IdUIO~ Sg~1lU1SUIn:Jl~~ gUlOS 19pUn luql pUR 'luud!~!llUd gql 01 AIddu AUUI 'Pt61 JO PV g2uuq~xH sg!l!ln~gs gq1lgpun pglu2InUIold ~-q01 gInl! pUR tE61 JO PV sg!lpn~gs glp 01 pgl!lln 10U lnq 2u!PnpU! 'sMuI l'B1gpgJ pUU gl'B1S 19q1o lUlp SPImlSlgpun pUR sg2pgIMOmpU luud!~n.rnd gql. .g.rmUgPUI gt[llgpun lln'BJgG JO lUgAH Im pgmggp gq 10U fi'Bqs glu~Y!Ug;) gmsops!G s!t[l 19pUn lrnUJgp V .g~uuUIloJlgd IgdUIO:J 01 uop~u uu gq Il'Bqs 19l!lM.mpUn 2upud!:J!llUd glplO spuog gql JO 19UMO l'BPygUgg 10 19PIOH AUB JO Apgmgl {'B2gr grOS gql 'glB:JImlg;) glnSOpS!G s!t[l JO UO!S!AOld AUU ql!M. AIdmo~ OllImdp!:}lUd glp JO glnr!UJ U JO lUgAg gql UJ: .1rnuJga .01 NOIl.;)HS .gUI!l grq'BUOSUgl U u!lp!M. q1!M.glgql AIdmo~ 01 pgst1Jg1 gAUq r{'Bqs lImd!:J!:J.IBd glp pUU 'glllf!'BJ q:Jns glll~ 01 lsgnbgl pIm JO g:)!lou UgU!lM U pIm 'q~ns sR SrnU1S .I!glp JO g~UgP!Ag UgU!lM A.rOP'BJspus llrndpn.rnd gql 01 pglgATIgp lSlI] gAUq IfBlls Aglp SSg{Utl g~ImUlIoJlgd IgdUIO~ 01 2U!P~g~01d 10 l!ns 'UO!PB q~ns glmpSU! A'BlU 19UMO l'B!~ygUgg 10 19P1oqpuog ON 611.d SO 860WO I'L6€91 SECTION 11. Duties. Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Participant 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 attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Participant under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 12. Amendment~ Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Participant may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived with the consent of the Authority, provided that, in the opinion of nationally recognized bond counsel, such amendment or waiver is permitted by the Rule. fu the event of any amendment or waiver of a provision of this Disclosure Certificate, the Participant shall. describe such amendment in the same manner as for a Listed Event under Section 5(c). SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Participant, the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. [P ARTIClP ANT] By Authorized Officer Acknowledged as to Duties as Dissemination Agent: UNION BANK OF CALIFORNIA, N.A. By Authorized Officer P.120 16397.1 001098 OS V ..LImHX3: .1"HOd3:H 'IVflNNV 3:rmI 0.1 IDIIrIIV~ ~O SIDlIO..LISOdIDI 0.1 3:;)UON :A:)lRd pal'Bg!NO JO aum N [ ltmd!:J!:)lRd] :aussI puoHJo aumN -~ooz; sapas '(um~Old gU!:JtmU!d paIood) spuoH anUaAa"M lal'BMals'B M. ptm lal'B M. AlPOlpny luaUIdopAaG sap!ununnoJ ap!Mal'B1S 'BIWoJfI'BJ :a:JtmnsSJ JO al'BG ~ooz' [. Aq paIY aq IT!M. :)1oda"M 1'Buuuy al[ll'Bl[l sawdp!ltm ltmd!:Jn-md al[~] .al'B:JY!:)1aJ alUSOpS!G 2u!uupuOJ al[l U! pal!ubal alEp al[l Aq ltmdp!:)lRd al[l Aq pas-eapl 10U S'BM. spuoH paumu-aAoq'B al[l 01 padSal lp!M. :)1oda"M1'Buuuy tm l'Bl[l N3AID .x.Htrn3H SI 3:JIl.ON :pal'BG [ ltmd!:Jn-mdJ Lpal!Ubal a1lll'BWi!S OU ~AIuO uuoJJ AH rzr.d SO 860IOO I"L6E:91 FORM OF AUTHORITY CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the California Statewide Communities Development Authority (the "Authority"), dated _, 2005, in connection with the issuance of $ California Statewide Communities Development Authority Water and Wastewater Revenue Bonds (Pooled Financing Program), Series 2005_ (the "Bonds"). The Bonds are being issued pursuant to the Indenture, dated as of _ 1, 2005 (the "Indenture")~ by and between the California Statewide Communities Development Authority and Union Bank of California, N.A., as trustee (the "Trustee"). The Participants (as defined under the Indenture) have entered into Installment Purchase Agreements, dated as of _ 1, 2005 (the "Installment Purchase Agreements ") with the Authority. Under the Installment Purchase Agreements the Participants will pay Installment Payments (the "Installment Payments") which will secure in part the Bonds. The Authority covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Authority for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating UndelWriter in complying with S.E.C. Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defmed in this Section, the following capitalized terms shall have the following meanings: "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. . "Dissemination Agent" shall mean Union Bank of California, N.A., or any successor Dissemination Agent designated in writing by the Authority and which has filed with the Authority a written acceptance of such designation. "Listed Events" shall mean any of the events listed in Section 3(a) of this Disclosure Certificate. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. The National Repositories currently approved by the Securities and Exchange Commission (the "SEe") are listed in the SEC website at http://www.sec.gov/info/municipa1!nrm~ir.htm. "Official Statement" shall mean the Official Statement relating to the Bonds, dated , 2005. "Participating Underwriter" shall mean the original purchaser of the Bonds required to comply with the Rule in connection with offering of the Bonds. "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. P.122 16397.1 001098 OS 'R!lliOJHBJ JO glB1S gql trngUI IJ'Rqs IIg1B1SII .A101~Sodg}I glR1S ou s~ glgtp 'glB~Yp1gJ S!lll JO glRP gql JO sy .uo~ss!ffiUIoJ g~trnq~XH pUB Sgppn~gs gql Aq q~ns S'R pgZ~O~~U ptrn g{l1}I mp JO gsodmd gtp 10J A.IOlfSodg1 glR1S B SB glB1S glp Aq pg1R~!Sgp A1PUg 10 A.IOHSodg1 glRA!1d 10 ~Hqnd Alm trngUI IlRqs IIA.IOHSodg}I gllnSII .SlUgAH ltrn~y~!S JO ~up.Iodg}I .t: NOI~JHS :fB!1g1RUI J! 'spuog glp 011:Jgdsg1 qHA\ SlUgAg ~U!A\OIIOJ gql JO Atrn JO g~Ug11ll~~O glp JO g~POU 'UgA~ gq 01 gSnR~ 10 'gA!~ IfBqs A1PotIlny gql 't: UOP~gs sm JO SUO!S!A01d gql Olltrnnslnd (R) ~sgpugnbu!pp lUgmABd lSglglU! ptrn fBd!~upd .r ~slInRJgp pglRIg11UgUIARd-uou .Z ~SlgPIoqpuog JO slq~!1 01 SUOpB~YTIJom .t: ~SIfB~ puoq pglnpgq~sun 10 lUg~U!lUO~ 'fBUO!ldo .17 ~Sg~trnSRgJgp .~ ~Sg~trnq~ ~U!lR1 .9 ~Sg!l{l1~YJ!P fBptrnillJ ~U!l~gT1~l S~A.mS~l ~~!A1gS lqgp gql UO SA\Rrp p~{l1pgq~sun .8 ~spuog ~tp JO SnlRls ldm~x~-XR1 gql ~ll!PgJJR SlUgA~ 10 suo!ll!do XRl gSlgAPB .L ~S~!l{l1~YJ!P fBPtrnuy ~U!l~gU~l SlUgm~~trnqug 1!Pg1~ ~ql UO SA\R1p p~Inpgq~sun .6' . ptrn ~lllioJ1~d 01 ~lnI~J 1pql10 Slgp!A01d Al!prnbrr 10 1!pg1~ ~ql JO UoPtllpsqns .0 r .spuog glJl JO lUgUIARd~l ~upn~~s A~mdo1d JO ~fBs 10 UO~ltllPsqns 'gS'RgI~l . r r .sMRI s~!lpn~~s fBl~P~J grqB~rrddR l~pun fBpglBUI ~q PlnOA\ lUgAg q~ns J! ~1J!UI.Igl~P ~Iq~ssod SB uoos S'R IfBqs Alpotpny gql 'lU~AH pglS!l R JO ~~Uglln~~O gtp JO g~P~IA\OIDI sU~lqo A1Polpny ~tp 19A9Ug4A\ (q) .~1l1lUgpUJ ~tp 011ImnS1nd spUDs: pgl~gJ.t'B JO Sl~PIoH 01 U~A!~ S! lUgA~ ~ll!.(pgpun glJl JO (Alm J!) g~!lou gql trntp 19n.rng Atrn Uo!pgsqns Sp::f1.1~pUn U~A~ ~q 10U pggU (~) ptrn'(17)(R) SUon:Jgsqns U! pgqp~Sgp SlUgA3: pglS!l JO g~POU '~U~0~g10J ~tp ~UWtrnlsql!A\lON .s~!loHsod~}I gl{l ql~A\ g~Ug.un~~o q~ns JO ~~!lou B gIY Apdm01d IJ'Rqs A1Poqlny gql 'SA\RI s~!lpn~~s IR1~pgJ gIqR~!IddR 19pUn fB!1~lRm ~q P{tlOA\ lUgAH pglS!l R JO ~~Ug11ll~~O ~ql JO ~~pgIA\OIDI lRtp S~U!UI.ml~p Al!1oqlny gql JI (~) ptrn J! J]R1S J3:S ~ql Aq pg1trn.m Ug~q ~ABq 01 pgmggp ~q IIBqs uo!ss!Ull~d 'gsodmd S!ll110t[ -c1~~YJO lsod fBllUgJII B) J]R1S JHS 10 ;JHS ~lJl Aq pgl:H'ULmd lU~lX~ glJl 01 'A.I01~sod~}I g:J,R1S 10 A.I01!sod~}I fBUOPBN q~ns 01 UO!SS!lliSURll10J UO!lRllliOJU! 10 SlUgmn~op 'S~~!lOU ~Upd~~~R 10J gIq!suodS~l S! q~p::fA\ lU~~B Alm ql!A\ ~tI:l'RS ~tp ~UHY Aq A..rOl!sodg~ glB1S 10 A.I01~sodg}I fBUOPRN R lJl!A\ UOPBllliOJU! 10 1UgUIn~Op 'g~POU AIm gfIJ OllgpUn~l~q SuopR~nqo Sl! A]SpRS ARm Al!loqlny gq~ .~~YJO lsod fRllU~;J JO gSn .17 NOllJ3:S €ZI.d SO 860100 rL6t:91 to the extent the Central Post Office has received an interpretive letter, which has not been revoked, from the SEC staff to the effect that using the Central Post Office to transmit information. to the National Repositories and the State Repositories will be treated for purposes of the Rule as if such information were transmitted directly to' the National Repositories and the State Repositories. SECTION 5. Termination of Reporting Obligation. The Authority's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Installment Payments. If such termination occurs prior to the final maturity of the Bonds, the Authority shall give notice of such termination in the same manner as for a Listed Event under Section 3(c). SECTION 6. Dissemination Agent. The Authority hereby appoints Union Bank of CaIifomia, N.A. to serve as the Dissemination Agent hereunder. The Authority may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such 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 Authority pursuant to this Disclosure Certificate. SECTION 7. Default. In the event of a failure of the Authority to comply with any provision of this Disclosure Certificate, the sole legal remedy of any Holder or Beneficial Owner of the Bonds or the _ Participating Underwriter shall be an action to compel performance. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture. No Bondholder or Beneficial Owner may institute such action, suit or proceeding to compel performance unless they shall have first delivered to the Authority satisfactory written evidence of their status as such, and a written notice of and request to cure such failure, and the Authority shall have refused to comply therewith within a reasonable time. SECTION 8. Duties. Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Authority 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 attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Authority under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 9. Amendment Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Authority may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived with the consent of the Authority, provided that, in the opinion of nationally recognized bond counsel, such amendment or waiver is permitted by the Rule. In the event of any amendment or waiver of a. provision of this Disclosure Certificate, the Authority shall describe such amendment in the same manner as for a Listed Event under Section 3( c). P.124 16397.1 001098 OS . A1~Ug 10 UOS1gd 19tpO Atm U! Slq2p Oll gl'eg1:J rreqs pue 'spuog gq1 JO gum 01 gillfl mOlJ SlgUM.O repygUgs: pUl~ SlgPIOH pue 19lPM.lgpU.o ~U!lBdpn.rnd gq1 'lUg~y UO~BU!llgSS!a gtp 'A1potpny gql JO 1ygUgq gql Ol AIgIOS gmu!Ireqs glB:JY!Ug;) gmsopS!a s!lI~ .SgpBpygUgs: .01 NOI~;)g:S A~OH~nY~NillNdOlHA3a S'3Il.INf1W:W:O;) g:CIIA\tlly~S VI.N1IOtIITV;) AS: UO!SS!llffiIO;) gtp JO 19qmgW :lUg~y UOnBU!umSS!a se Sgnna 01 SR pg~pgIA\OIDPy 'y.N 'VJ:mIOdITV;) dO )lNVS: NOIN.fl AS: 19:JYJO pgZ!loqlny SZI.d SO 860IOO l"L6E:91 Hawkins Delafield & Wood LLP Draft CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the (the "Participant"), dated , 2005 in connection with the issuance of $ California Statewide Communities Development Authority Water and Wastewater Revenue Bonds (pooled Financing Program), Series 2005_ (the "Bonds"). The Bo~ds are being issued pursuant to the Indenture, dated as of _ 1, 2005 (the "Indenture"), by and between the California Statewide Communities Development Authority and Union Bank of California, N.A., as trustee (the "Trustee"). The Participant has entered into an Installment Purchase Agreement, dated as of _ 1, 2005 (the "Installment Purchase Agreement") with the Authority. Under the Installment Purchase Agreement the Participant will pay mstallment Payments (the "Installment Payment") which will secure in part the Bonds. The Participant covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Participant for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply. to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Participant pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. ;iBeneficial Ownerii shall meall any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Dissemination Agent" shall mean Union Bank of California, N. A., or any successor Dissemination Agent designated in writing by the Participant and which has filed with the Participant a written acceptance of such designation. "Listed Events" shall mean any of the events listed m Section 5(a) of this DisclosUre Certificate. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. The National Repositories currently approved by the Securities and Exchange Commission (the "SEC")' are listed in the SEC website at http://www.sec.gov/info/municipal/nrmsir.htm. "Official Statement" shall mean the Official Statement relating to the Bonds, dated 2005. "Participating Underwriter" shall mean the original purchaser of the Bonds required to comply with the Rule in connection with offering of the Bonds. P.126 14420.1026999 AGMT . A.rOl~sod~'M ~WlS q~~~ ptrn A.ronsod~'M IBuo!l~ N q~~~ Im~m [[Uqs IIA.ronsod~'MII .~m!l Ol ~m~l mOlJ p~pumlm ~q A~m ~ums ~Ip s~ '17€6 I JO ljV ~~trnq~x3: s~m:m~~s ~qll~pun UO!ss!ffiUIO;) ~~trnq~X3: ptrn s~mm~~s ~Ip Aq p~ldop~ (S)(q)ZI-Z~SI ~In~ Irn~m IIBqs II~In'MII .~!UlOJ!fB;) JO ~WlS ~tp trn~m IfBqs II ~l~lS II 'A.rOl!sod~~ ~l~lS ou S! ~l~Ip '~l~:)Y:Pl~;) srql JO ~Wp gql JO sY .UO!ss!llffilO;) g~Imq~X3: ptrn s~m.m~~s ~Ip Aq q~ns se p~Z~O~~l pIm ~In'M gtp JO ~sodrnd ~tp 10J A.rol!sodgl ~l~lS ~ se gl~lS ~ql Aq pgl~tm~s~p AlPUg 10 AIOl~sod~l gl~Apd 10 ~Hqnd Atrn trn~m IfRqs IIA10l!Sod~~ ~l~lSII .S:)lOd~'M fBnuuy JO UO!S!AOld .€ NOI~;)3:S .(~)S uop~~S 19pun lU~A3: P~lS~'1 ~ 10J se l~mrnm ~ums gtp u~ ~~trnq:) q~ns JO ~~!lou ~A~~ U"Rqs l! 'Sg~trnq~ .m~A fB~sy: SllU~d~~!:)l"Ed ~tp JI .~lBp l~tp Aq grq~I!'BA~ lOU ~.m A~ql J! :)lodg~ fBnuuy gql JO ~uTIY: ~qllOJ ~AOq~ p~b~l gl~P gql trntp l~l~I pIrn :)lod~~ fBnuuy ~ql JO ~~trnI~q ~Ip mOl] APl~.md~s p~P!lliqns ~q Amn ltrndp!:)l"Ed ~ql JO SlU~UI~l~lS IBpImuy: p~l~pn~ ~ql Wlp pap!tl.o.1d ~~l~~Y:n.I~:::> ~lnsopS~a s!tp JO V UO!l~~S u~ pgp!AOld se uOP~uuoJU! l~IpO g~U~l~J~l-SSOl~ A'RUI ptrn 'g~~)]:~~d ~ ~u~spdUlo~ slU~Uln~op gl'R.mdgs se 10 lUgUln~op gI~U!S 'R se p~P!lliqns gq A'Rm :)lodg'M fBnuuy ~q~ .(U!~lgq (Z)17 UO!l~S U! pgqp~Sgp Smgl! gtp gpnpu! Ol p~l!nbgl ~q lOU IIBqs -OOZ 'OE gunf ~U!PUg .m~A fB~sy: 10J :)lOdgllSlY: ~ql) gl~~Y:!:)l~:::> glnsopS!asrql JO V uO!l~~S JO SlUgUl~l!nbgl gql tp!M lUglS!SUO~ S! q~!llM 1l0dg'M IBnuuy U'R A.rOl!sod~~ q~'R~ Ol gp!AOld '-OOZ 'O€ ~unf ~UWUg .rngA IB~sy: gq110J POd~l ~ql ql!M ~UPUgUIUIO~ 'COt gunf SPUg .rngA IB~sy: q~ns AIlUgS~ld) .m~A fB:)sy: SllU'RdPn-r'Rd gq1 JO PUg ~tp 19yu SA'Rp 0 I Z Imqll~WIlOU 'OllU~~V uO!l'Ru!lligSS!Q gq1 gsn'R~ [[Bqs 10 'IIBqs ltrnd!~!:)l"Ed gq~ ('R) .V l!q!llX3: se p~q~'RP'R uuoJ gql AlfBptrnlsqns U! A.rOl!sod~~ q~'Rg Ol g~POU 'B pu~s [[Bqs ltrndppred ~ql '(~) Uop~gsqns U! pgl!nbgl gl~P gtp Aq pod~~ IBnuuy ue SgpOl!sodg'M ~ql Ol ~P!A01d Ol gIq~un S! ltrndp!:)l"Ed gtp JI .(ltrndp!:)l"Ed ~tp trnql l~IpO JO lUg~V uop~u!lli~SS!a ~ql Ol pod~~ fBnuuy ~Ip ~P!AOld Il'Rqs ltrndpp..l'Rd gql '~wp P!'Rs OllO!ld s,\nCI ss~u!snH (~I) UgglJY lTInH 19wI lON (q) :IIBqs 1Ug~V UOp'Bu!lli~SS!a gq~ (~) ptrn ~AU'B J! 'AI01!sodg~ glRlS gIp pue AI01!sod~~ fBUOfl'BN q~~g JO ssarpp~ ptrn ~umN gtp Podg~ fBnuuy gql ~UW!AOld 10J gwP ~ql OllOpd .mgA q~~~ gUIUUg1~P (~) .pgp!AOld seM l! q~rqM Ol Sgponsodg~ gq1 [[B ~U!lSH ptrn P~P!AOld S'BM n gl'Bp gIp ~un'B1S 'gl~~Y!llg:::> ~lnSOpS!a srql Ol 1trnnsmd P~P!AOld Uggq seq llod~~ IBnuuy gql Wql ~U!AJ!ll~:) ltrndp!:)l"Ed ~ql qnM POd~l ~ gIY: '(luedp!:}lBd ~ql U'BIp l~qlO S! 1U~~V UOfl'Bll!lligSS~a ~Ip J!) (g) :gql ~~U~lgJgl Aq ~pnpu~ 10 rr;'B1UO~ ptrn spuog ~ql JO Sl~qumU dISil:::> ~ql tf!"R1UO~ IfBqs :)lodg~ IBnuuy s,lued!~!:)l"Ed ~q~ .sllOag~ fBnuuy JO lUglUO;) .17 NOll;)3:S p~l!pn~un tf!"RlUO~ [[Uqs pod~~ fBnuuy gql '("R)€ UO!P~S 01 luensmd pgIY ~q Ol p~~nbgl S! podg'M fBnuuy gIp ~mn ~q1 Aq gIq'BI!'BA~ lOU g.m SlU~Ulgl'B1S fBPtrnuy pgl!pn'R s,lued!~!P'Rd ~ql JI .p.rnog Sp.mpuelS ~upuno~~v fBlU~UlUl~AOD gIp Aq gUlP 01 ~Uln mOlJ s~pnu~ fB1U~UIW~AO~ 01 Aldd'B 01 p~l'B~rnmOld se SgIdpupd ~upuno~~'R p~ld~~~'B AlfBl~U~~ Ip!M ~~trnplO~~~ U! pg.mdgld 'l'BgA I~~sy: 10pdgQ1 10J 1Imd!~pred gq1 JO SlUgUlgl'BlS fB!~U1my p~Hpn~ gq~ .1 1. G I .d ~WDV 6669ZO rOZ;vvl fmancial 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. 2. Updates for the last fiscal year of the information in the following tables from the Section relating to the Participant in Appendix B to the Official Statement presented in substantially the same format as such tables (to the extent the Official Statement contains accurate information regarding the fiscal year covered by an Annual Report, no update shall be necessary): (a) (b) Statement; Number of Connections as shown on page _ of the Official Statement; Revenues by Class of User as shown on page _ of the Official (c) Largest Users as shown on page _ of the Official Statement (this information is only required to the extent the revenues generated by one or more users constitutes _ % or more of the Participant's annual System revenue); and (d) Results for the most recent fiscal year presented in the same format as the Projected Operating Results as shown on page _ of the Official Statement (no updates of projections are required). 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 Participant or related public entities, which have been subluitted to each of the' Repositories or the Securities and Exchange COlIIH'.Jssion. If the document included by reference is a final official statement, it must be available from the Municipal Securities . Ru1emaking Board. The Participant shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Participant shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Installment Purchase Agreement or its obligations in relation to the Bonds, if material: 1. principal and interest payment delinquencies; 2. non-payment related defaults; and 3. adverse tax opinions or events affecting the tax-exempt status of the Bonds. (b) Whenever the Participant obtains knowledge of the occurrence of a Listed Event, the Participant shall as soon as possible determine if such event would be material under applicable federal securities laws. P.128 14420.1026999 AGMT .SgpOl!sod~;r~ glp lp!M g~Uglln~~O q~ns JO G~nOU B GIY ApdUIOld f[Uqs lUBd!~n-md mp 'SMUt SG!l!lll~GS IBlgpGJ GlqB~Hddu lGpun {1:r~lGlBUI Gq prnOM lUGAtI PGlS!'1 U JO g~Ugllll~~O gql JO g~pgIMOIDI lU1p SgUIUUglgp lUBdpn-md glp JI (~) .SgpOl!sod~~ glUlS gql pUB SgpOl!sodg~{UuOPUN gql Ol AP~gl!P pgn!llSUBll glgM UO!lUUIlOJU! q~ns J! SB Gln~ gql JO sgsodmd 10J pglUgll gq InM SgpOl!sodg~ glUlS gql pUB SgpOl!sodg~ IBUO!lUN gql Ol UOPUUUOJU! l!llSUBll Ol g~YJO lSOd IBllUg;) Gql ~u!sn luql pgJJg gql Ol JjUlS ;)tIS gql UI01J 'pg)[OAgl Uggq lOU suq q~!lIM 'lGllGI gApgld.mlU! UB pGA!g~gl suq g~YJO lsod {UllUg;) GlplUglXg gql Ol pUB J! JjUlS ;)tIS glp Aq pglUU1~ Uggq GABq Ol pGUIggp gq f[Uqs UO!SSIUUgd 'gsod.md S!lIl 10d -C,g~YJO lsod rullUg;)1I u) .JJBlS ;)3:S 10 ;)tIS gql Aq pgllIUUgd lUglXg glp Ol 'AlOl!Sodg~ GlUlS 10 A10l!Sodg~ {UuOPBN q~ns Ol UO!SS!llSUBlllOJ UOPUUUOJlI! 10 SlUgUIn~Op 'Sg~!lOU ~updg~~u 10J gIq!suodsgl S! q~!llM lUg~B AUU ql!M gums glp ~UHY Aq A10l!sodG~ gWlS 10 A.IOl!sodg~ ruUO!lUN U lJl!M UO!lUUUO]U! 10 lUgUm~Op 'g~POU AUB gIY OllgpUnglgq SUO!lU~Hqo Sl! AJS!lUS AUUI luudpp.md gILL .g~YJO lsod rullUg;) JO gSfl .9 NOI~;)3:S .(~)~ UO!pgs 19pUn lUgAtI pglS!'1 U 10J SU lGUUBUI GUlUS gql U! UOPUlI!UllGl q~ns JO G~pOU gA!~ IIBqs luud!~!UBd Gql 'spuog gql JO Al!IDlBUI IBuy Gql OllOpd Sln~~o uOPUU!llIlGl q~ns JI .SlUGUlAUd lUgUlf[UlSUJ gql JO lIB JO IIIlJ U! lUGUlAud 10 UOpdUlgpgllOpd 'g~UUSBgJgp ru~gI gql uodn glUUIUUgl f[Uqs glU~Yr).m;) GlnSOpS!G S!ql 19pUn suopu~Hqo Slluudpp.md gq~ .U09U:i'inqO :i'iUplOag~ JO UOpUU!llIlg~ . 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'sMuI {U1GPGJ pUB glB1S lGqlO luql SpUB1S1GpUn pUB SG~pgIMOIDI~B luud!~!l.TBd GILL gql JO 19UA\O ru!~ygUgg 10 l;;>PIOH Atffi JO APGUlGl ru~GI glOS Glp 'glU::>Y!llG;) glnSOpS!Q S!lI1 JO UO!S!AOld AUU 1p!A\ AldUlo~ 01 lUBd!::>!l.TBd Gq1 JO G1nI~J U JO 1UGAG G1p UJ .llnuJgQ.O I NOI~;)3:S 6ZI.d ~WDV 6669Z0 l'OZPVl Bonds or the Participating Underwriter shall be an action to compel performance. A default under this . Disclosure Certificate shall not be deemed an Event of Default under the Indenture. No Bondholder or Beneficial Owner may institute such action, suit or proceeding to compel performance unless they shall. have fust delivered to the Participant satisfactory written evidence of their status as such, and a written notice of and request to cure such failure, and the Participant shall have refused to comply therewith within a reasonable time. SECTION 11. Duties. Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Participant 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 attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Participant under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 12. Amendment Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Participant may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived with the consent of the Authority, provided that, in the opinion of nationally recognized bond counsel, such amendment or waiver. is permitted by the Rule. In the event of any amendment or waiver of a proyision of this Disclosure Certificate, the Participant shall describe such amendment in the same manner as for a Listed Event under Section 5(c). SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Participant, . the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. [P ARTICIP ANT] By Authorized Officer Acknowledged as to Duties as Dissemination Agent: UNION BANK OF CALIFORNIA, N.A. By Authorized Officer P.130 14420.1 026999 AGMT J.1I0d~ r:IVilNNV 3:r:II.tI OJ. IDI11'IIV.tI .tI0 SmllOJ.ISOd~ OJ. 3;JIJ.ON V lJ9IHX3 :A:).md pgw~nqO JO gum N [ luudp!llRd] :gnSSI puos: JO gum N -~ooz Sgpgs '(um.raOld ~UpT.rnU!tl pglood) spuog gnUgAg~ 19lUMglSU.M. pT.rn 19W.M. AlPolllnv lUgUIdopAga SgmUmIIUIO;) gp!MgW1S U!UlOJ!YU;) :g::>T.rnnSSI JO glUa ~ooz ' [. Aq pgIY gq IITM llodg~ yunuuy gqllulll SgludprluU llrndp!llRd gq~] .glu::>YIllg;) gmsopSIa ~u!llurlUO;) glll uI pgl!nbgl glUP gql Aq llrndPIllUd gql Aq pgSUgpl 10U SUM spUOS: pgumU-gAOqU gql Oll::>gdSgl ql!M. 1l0dg~ yunuuy T.rn lUIp NHAID X.8:ffiI3H SI H;)I~ON } :pglua [ IT.rndprJ.md] Lpgl!nbgl glI1lUlli}!S OU :AlllO uuoJJ AS: lSl.d ~WDV 6669Z0 rOZV171 CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY City of South San Francisco, California Sewer Revenue Bonds Series 2005D Cash Flow Projections as of September 19,2005 Table of Contents 2005 Bonds Sources and Uses of Funds Bond Production Report Debt Service Requirements Henderson Capital Partners, LLC, Oakland, California P.132 Table 1 2 3 asoot Sa17.:t9S v~~o;~lvO 'OOS~oU8~~ ues q~nos ;0 ^~rO AJ.I1l0H.UlY .LN:iWClO'I:!fMIa S:a:LLIHOWWro aa:um.r.V.LS YINHO.iI'IY;) ~ 8Tq'EJ. Spun4 ;0 sasn pue sao~nos 5 18 IT.T. :a~va .uaAH&a spun,! ;0 sao.%nog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " . . . . . . . . . . . spaeoo.:td puoe; 00.0$ ...................~unoo~la-1 wn~~d+ 00'000'S9t'9$ ...................spuog ;0 ~unowv ~~d 00'000'S9T.'9 00.000'S9t'9$ SPUtl,il ;0 sesn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " . . . . . . . . . . . . . . ^;:lua5u~~uo;) . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pUOS ^~a~ns ...(%000058'0 )...................~unoos~a s~a~l~apun ... (%OOOOOt. 0 )."....................... .aouv.:tnS'tII PUOli . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . aotIvnSSI ;0 :jSO;) . .. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . .pun,a; ~oa~O;td U.lo.t't ( L) tv.SVT. '0. OS.tO~'tS SE"tE:t'Ot 00'000'09 00'000'000'9 00.000'591'9$ VlU70;~I'i!O 'ptre"P(VO ';:)'1'1 's.:teu~~'i!d 1l!~!dl!O uoS;tepuaH Et:loS:tT. 8 SOOt-G.-GO :a:j'i!a aSOYa:JS;) :~uatl~ IONYH~ NYS H.LnOS :^a~ . (E 8TqEJ. aas) eo"]:A.1aS :tqap renuue 1lItlUIpC'EIlJ 10 %OS. Z spmaa (~) SSl.d CALIFORNIA STATEWIDE COMMUNrrIES DEVELOPMENT AUTHORITY City of South San Francisco, California Table 2 Series 200SD =a===~._==========.~== Bond Production Report =8=====_===_===C=====_ Dated 11/ 9/2005 Delivery 11/ 8/2005 Gross Date principal Bond Type B/Y Coupon Yield $price Priced to Call Production --'------ -------------- --------- -------- -------- ------------------- -------------- 10/ 1/ 6 160,000.00 Standard 144 2.6500 2.6500 100.000 160,000.00 10/ 1/ 7 160,000.00 Standard 447 2.9000 2.9000 100.000 160,000.00 10/ 1/ 9 165,000.00 Standard 925 2.9500 2.9500 100.000 165,000.00 10/ 1/ 9 .170,000.00 Standard 1599 2.9000 2.9000 100.000 170,000.00 10/ 1/10 175,000.00 Standard 2445 3.1000 3.1000 100.000 175,000.00 10/ 1/11 190,000.00 Standard 3506 3.2000 3.2000 100.000 190,000.00 10/ 1/12 190,000.00 Standard 4817 3.3000 3.3000 100.000 190,000.00 10/ 1/13 195,000.00 Standard 6357 3.4500 3.4500 100.000 195,000.00 10/ 1/14 200,000.00 Standard 8136 3.5500 3.5500 100.000 200,000.00 10/ 1/15 210,000.00 Standard 10214 3.7000 3.7000 100.000 210,000.00 10/ 1/16 215,000.00 Standard 12557 3.8000 3.8000 100.000 215,000.00 10/ 1/17 225,000.00 Standard 15234 3.9000 3.9000 100.000 225,000.00 10/ 1/19 230,000.00 Standard 18201 4.0000 4.0000 100.000 230,000.00 10/ 1/19 240,000.00 Standard 21536 4.1000 4.1000 100.000 240,000.00 10/ 1/20 250,000.00 Standard 25260 4.2000 4.2000 100.000 250,000.00 10/ 1/21 260,000.00 Standard 29394 4.2500 4.2500 100.000 260,000.00 10/ 1/22 275,000.00 Standard 34040 4.3000 4.3000 100.000 275,000.00 10/ 1/23 285,000.00 Term Bond 39141 4.4000 4.4000 100.000 295,000.00 10/ 1/24 295,000.00 Term Bond 44716 4.4000 4.4000 100.000 295,000.00 10/1/25 310,000.00 Term Bond 50964 4.4000 4.4000 100.000 310,000.00 10/ 1/26 325,000.00 Term Bond 57675 4.4000 4.4000 100.000 325,000.00 10'/ 1/27 340,000.00 Term Bond 65120 4.5000 4.5000 100.000 340,000.00 10/ 1/28 355,000.00 Term Bond 73249 4.5000 4.5000 100.000 355,000.00 101 1/29 370,000.00 Term Bond 82091 4.5000 4.5000 100.000 370,000.00 101 1/30 385,000.00 Term Bond 91676 4.5000 4.5000 100.000 385,000.00 -------------- -------------- 6,165,QOO.00 6,165,000.00 Par Amount production Gross production Bond Insurance Underwriters Discount Bid 6,165,000.00 0.00 6,165,000.00 40,231.35 52,402.50 6,072,366.15 100.0000000 0.6525766 0.8500000 98.4974234 Accrued Net to Issuer 0.00 6,072,366.15 Gross Interest Cost +Net Discount Net Interest Cost 3,8512,838.13 512,633.65 3,985,471.98 N I C % TIC % 4.3473272 4.3689108 Using 98.4974234 From Delivery Date Bond Years Average Coupon Average Life 511,676.375 4.246283 14.870458 TERM BOND(S) : PRINCIPAL COUPON YIELD $price GROSS PRODUCTION BOND YEARS AVG. LIFE ------------ ---------------- -------- ----------------- ------------------ --.--------- 10/ 1/26 1,215,000.00 4.4000 4.4000 100.000 1,215,000.00 23,635.125 19.452778 10/ 1/30 1,450,000.00 4.5000 4.5000 100.000 1,450,000.00 34,000.972 23.448946 SERIAL BONDS: 3,500,000.00 3,500,000.00 Henderson Capital Partners, LLC, Oakland, California Date: 09-19-2005 @ 11:58:15 Filename: CSCDAOSD Key: SOOTH SAN FRANC! P.134 asooz sc'1:.:I:as '&-puo;n:tw::l 'O::lS"f::lUl!.:I:d U"eS lI~nos 10 ^~1=::> AJ.:I'lIOH.LQ'Y .LmlWd:O'I:ilMl:Q SliJ:.LINCJ1olWOO aQJ:bl:II:.L'Y.LS 'Y:Imto.!lI'NO t'&d"fOU"f.:l:d a~'&a 00'000'59t 8 /t lOt a It It 00'000'09t L It lOt L It /" 00.000'09t 9 It lOt 9 It /t 00'000'08t ttlt lOt nit /t OO'OOO'SLt Ot/t lOt 011t It OO.OOO'OLt 6 It lOt 6 ft Iv OO.OOO'OOZ vtlt lot nit It 00'000'S6t Etlt lOt nit /v 00'OOO'06t tt/t lot 'IT./t It OO.OOO'SZZ Lt/t /01 Lt/t It OO'OOO'Stt 9t/t lot 9tft Iv Oo.ooo'ott Stlt lot St/t It OO'OOO'OSt at/t lot oztr. 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SL.HS'vOt SL..896'L6Z SL.896'LOt 00.OS6'''tE 00'OS6'6S 00"SEO'60E 00.SEO''''6 00'Ot6'LOE 00'Ot6'L6 OS.' t"O ' 9tE OS'ZvO'9L OS.Z96'OtE OS'Z96'OS OS'Z9S'StE OS.Z9S'SS OO'SSE'''''E 00'55E'65 OS'L9'l'O"E OS.Ln'S9 OS'Z6L.'OEE OS'Z6L'OL 00'SLL'''9E 00.SLL'6E 00.S6S'9sE 00'S6S'9" 00'S80'8tE 00'S80'Es OS'L86'98E OS.LS6'9t 00.SL6'6LE 00.SL6'tt OO'SZ9'ZLE OO.SZ9'ZE OS.Z99'E6E OS.Z99'S Et'SES'LSO'Ot Et'SES'Z6S'E Et'SEB'L.SO'OL EL.SEB'Z6S'E ============== ============== ~"fU.J:O;"fL'&::> 'pu'&~~o '::>~~ 's.:l:eu~~~d 1'&~~d~~ uos~apuaH IOmi'll:.!1 NIlS H.LOOS : MX 6t:8S:t1 @ SOOZ-6t-GO :a~'&a QSovaoso :~ua"[~& Sfl.d t!i!~O.L E9.SvZ'OSE OO.SEt'T.O" OO.SSL'tOv Os'ZSO'ZO" OS'ZZt'ZOv OS'L69'T.Ov OS.LE6'SOv OS'L99'tOv 00.Ot6'ZOv 00'0'18'50" OO'OLO'EOt 00'006'tOt OO'SZt''[Ot 00.SZ6''[Ov OO'SSO'tO" 00's8S'tOv OO.sES'SOv OO.OtL'EOt OO.OLL'tOt 00'06t'EO," 00'05S'vOt OO'OsZ'SOt 00.OS6'tOt aO.SLo6'tOl' OO.SZE''lO'' E aTqE.L ~'t1\ 84# ~iI o 0 >- c;.: ~ CO) v . c ~IIFO~~~~ Staff Report AGENDA ITEM #8 DATE: TO: FROM: SUBJECT: September 28, 2005 Honorable Mayor and City Council Marty Van :Ouyn, Assistant City Manager RESOLUTION AUTHORIZING THE CITY MANAGER TO AMEND THE CURRENT LICENSE AGREEMENT ON A CITY OWNED PROPERTY LOCATED AT 160 PRODUCE AVENUE, SOUTH SAN FRANCISCO RECOMMENDATION It is recommended that the City Council adopt a resolution authorizing the City Manager to execute an amended revocable license agreement with Parking Company of America Airports for the use of a parcel of land owned by the City of South San Francisco. BACKGROUND/DISCUSSION On October 19, 1983, the City of South San Francisco adopted Resolution 146-83 authorizing the City Manager to execute a revocable license agreement to lease the said parcel of land to Parking Company of America Airports. The parcel, which is located next to Colma Creek and San Mateo Avenue, is being used as a commercial parking lot in addition to their present parking facility. The fee for this revocable license was set at Eight Hundred Fifty Dollars ($850.00) per month. On February 9,2004, as Part of Wet Weather Program Phase I, Right of Way Acquisitions, the City obtained an appraisal report for a temporary construction easement for construction staging at the Parking Company of American Airport parking lot. The property was valued at $30 per square foot with a lease value of 1 % per month. In June 2005, the City reviewed the subject license agreement and determined the current lease value of the City owned property containing 13,075 square feet to be Three Thousand Nine Hundred Twenty Three Dollars ($3,923.00) per month based on the above-mentioned appraisal. The City then notified Parking Company of America Airports of the adjusted license fee, and both agreed to amend the current revocable license agreement to reflect the new monthly rate and extend the agreement for an additional five years (To expire on September 1,2010). Subject: RESOLUTION AUTHORIZING THE CITY MANAGER TO AMEND THE CURRENT LICENSE AGREEMENT ON A CITY OWNED PROPERTY LOCATED AT 160 PRODUCE AVENUE, SOUTH SAN FRANCISCO Page 2 FUNDING The revenue received will be credited to the Rental Income Account. By: Marty Van Duyn Assistant City Mana Approved: Attachment: Amendment to Resolution No. 146-83 Staff Report dated October 19, 1983 Revocable License Agreement executed October 19, 1983 Resolution No. 146-83 RESOLUTION NO. CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AMENDED REVOCABLE LICENSE AGREEMENT WITH PARKING COMPANY OF AMERICA AIRPORTS ON A CITY OWNED PROPERTY LOCATED AT 160 PRODUCE A VENUE, SOUTH SAN FRANCISCO WHEREAS, the City of South San Francisco adopted Resolution 146-83 on October 19, 1983 authorizing the City Manager to execute a revocable license agreement to lease said parcel of land to Parking Company of America Airports in the amount of Eight Hundred Fifty Dollars ($850.00) per month, and; WHEREAS, the City obtained an appraisal report on February 9,2004 and determined that the property was valued at $30 per square foot with a lease value of 1 % per month. The City reviewed the subject license agreement in June of2004 and determined that the current lease value to be Three Thousand Nine Hundred Twenty Three Dollars ($3,923.00) per month. The City and Parking Company of America Airports adjusted the license fee and both agreed to amend the current license agreement to reflect the new month rate and extend the agreement for an additional five (5) years, and; WHEREAS, the revenue will be credited to the Rental Income Account. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby approves the Amended Revocable License Agreement attached hereto as Exhibit A. BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute the agreement on behalf of the City of South San Francisco. * * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the _ day of , 2005 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk 783790-1 AMENDMENT TO RESOLUTION NO. 146-83 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING EXECUTION OF A REVOCABLE LICENSE FOR THE USE OF A PARCEL LAND OWNED BY THE CITY OF SOUTH SAN FRANCISCO TO PARKING COMPANY OF AMERICA AIRPORTS This amended revocable license for the use of a parcel of land owned by the City of South San Francisco is shown in Exhibit 1. This License issued this day of , 2005 provides for the revocable use of an area of land situated in the City of South San Francisco, County of San Mateo, State of California, designated as a strip of land 55 feet wide along the northeasterly 55 feet of Lot 28, Block 2, as said lot and block are shown on that certain map entitled "Person and Swanson Industrial Tract, South San Francisco, San Mateo County, California" which was filed for record on September 5, 1961 in the office of the County Recorder of the County of San Mateo, in Book 55 of Maps at Pages 12 and 13 and being more particularly described as shown on Exhibit "A" attached hereto and incorporated herein by this reference (hereinafter the "Property"). The City of South San Francisco (hereinafter "City") hereby grants to PARKING COMPANY OF AMERICA AIRPORTS, located at 8255 Firestone Blvd., Suite 502, Downey, California 90241, (hereinafter "Licensee") for a period of five (5) years ending in day of , 2010 from the date stated above unless sooner terminated by the City at the City's sole discretion, a revocable License for the temporary use of the Property. Licensee is granted this license for the limited purpose of operating, managing and maintaining a commercial parking facility as its business enterprise. Licensee is limited to the use of a Property for said purposes only. Item No. 12 is hereby amended to read: Licensee shall take out and maintain during the life of this permit the following policies of insurance: (a) Worker's Compensation and Employers' Liability Insurance in the statutory Coverage: In signing this agreement, the Licensee makes the following certification - "I am aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Workers Compensation or to undertake self-insurance against in accordance with the provisions of the code, and I will comply with such provisions before commencing the performance of the work authorized by this Agreement." ';::)JU;::)llnJJO ;::)UO ^U~ JO lUnOJJU uo (00'000'000'1$) s~vlloa NOITlIW aNO UUlJ:l sS;::)I 10U lunoUIu uu U! 'uos1;::)d lJ:~JB;::) 10J l!illH ;::)UIUS ;::)lJ:l OllJ;::)fqns pUB uos1;::)d ;::)UO AUB 01 'lJ:IB;::)p '01 P;::)l!illH 10U Inq '~u!pnpu! 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Said monthly rate shall be subject to review and may be increased by the City at its sole discretion. Item No. 17 NOTICES is amended to read: All notices required by this permit shall be in writing and sent first class, postage prepaid, addressed as follows: TO: CITY OF SOUTH SAN FRANCISCO 400 Grand A venue South San Francisco, CA 94080 Attn: Property Manager TO LICENSEE: PARKING COMPANY OF AMERICA AIRPORTS 8255 Firestone Boulevard, Suite 502 Downey, CA 90241 All other items not amended in Resolution No. 146-83 shall remain the same and in effect upon execution of the resolution. IN WITNESS WHEREOF, the parties have executed this Agreement at on the day and year of the first written above. CITY OF SOUTH SAN FRANCISCO municipal corporation PARKING COMPANY OF AMERICA AIRPORTS ,~~ By: Gre. drews, CEO By: Barry Nagel, City Manager ATTEST: Sylvia Payne, City Clerk APPROVED AS TO FORM: ,~~~ Steve Mattas, City Attorney [86 L '6 L Jaqo:+ JO :01 :1Ja~qns :N011J\t L~JunoJ ^1~J alq~JouOH a41 1uawaaJ5v asuaJ~l o:+uI Ja1u3 01 uo~:+nlosa~ uo~~nLosa~ +dop\t F/-~p/ :NOI1\tON3WWOJ3~ .anua^v oa1~W u~s pu~ ~aaJJ ~wloJ 01 1xau pU~l JO d~J1S ~ JO asn JOJ ~J~Jaw\t JO ^u~dwoJ 5u~~J~d 41~M 1UaWaaJ5~ asuaJ~l alq~Jo^aJ E JO UO~1nJaXa a41 5u~z~J041n~ uO~1nlosaJ E 1dop~ l~JunoJ ^l~J a41 1~41 papuawwoJaJ s~ 11 :NOISSnJSIO .dew ^1JadoJd E PUE 1UaWaaJ5E a41 JO ^doJ E s~ pa4Je11\t .41UOW Jad (00.098$) SJEllOO ^lJ~j paJpunH 145~3 s~ asuaJ~lalq~Jo^aJ S~41 JOJ aaJ a41 .^1~l~J~J 5U~~JEd 1uasaJd J~a41 01 UO~1~PP~ u~ s~ 10l 5U~~JEd lE~JJaWWoJ ~ s~ pasn aq 01 s~ ^1JadoJd a41 :8NIONnj .OLE-Zl .0N 1UnOJJV awoJuI lE1ua~ a41 01 pa1~paJJ aq ll~M pa^~aJaJ anua^aJ a41 aJUEU~j JO JD1JaJ~O U01d~1 .~ ^JJ~8 Ja5EU~W ^1~J Ola~J~8 Ja1lEM .J WJ : j N f Ja5EUEW ^lJadoJd/JaJ~JJO 5U~SE4J~d opaJ ~a.n.~ ~~r ~ 1uaW4JE11V SGCJCj:::X3a --rv'~.LN3::J -........,.F.I.~. ;'Oi'" 'C':",,_. 7V? ,....,-'-' RESOLUTION NO. 146-83 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO) STATE OF CALIFORNIA A RESOLUTION AUTHORIZING EXECUTION OF A REVOCABLE LICENSE FOR USE OF A PARCEL OF LAND TO PARKING COMPANY OF AMERICA BE IT RESOLVED by the City Council of the City of South San Francisco th at: 1. Execution of Revocable License. Execution of a Revocable license entitled IIRevocable License for Use of a Parcel of land Owned by the City of South San Francisco" between the Ci ty of South San Franci sco and the Park; ng Company of Ameri ca is hereby authorized, a co.py of said Revocable license is attached hereto as Exhibit "l.ll 2. Signatures. The Ci ty Manager is author; zed to execute said Revocable l ieense on beh a 1 f of the Ci ty > and .the Ci ty Cl erk a ttes t h; s si gnatu re the}~eto. * * * * * I hereby certify that the foregoing Resolution lias regularly introduced and adopted by the Ci ty Counei 1 of the Ci ty of South San Franc; sco at a regul ar meeting held on the 19th day of October > 1983, by the follm'/ing vote: AYES: Counci1members Ronald G. Acosta, Mark N. Addiego, Eman~ele N. Damonte~ Gus Nico1opulos; and Roberta Cerri'Teg1ia NOES: None ASS ENT : None ATTEST: /5/ Barbara A. Battaya Ci ty C1 erk -c:: E i....t 1~ .F~~l~i t.. F~~ f~ <:: (i~ F~ f) 5 FiLE NO.: ...5QL2__ -rg::g7r . ON NOI1nlOS3tl 01 II LI 118IHX3 OJSIJNV~3 NVS Hlnos 30 AIIJ 3Hl fS 03NMO ONVl 30 13JtlVd V ~O 3sn ~03 3SN3JIl 318VJO^3~ 1S1 s~4+ panss~ asuaJ~l s~41 JaqwaJao )0 KEp S~p~AOJd f:861 ". UES 41noS )0 Al~J a41 u~ palEnl~s pueL jO EaJE UE jO asn alqEJOAaJ a41 JOj lE~J1SnpUI UOSUEMS pue uOSJad" paLl~lua dern ulE1JaJ lE4+ uo UMo4s aJE ~JOLq pu~ lOt p~es SE "2 1JOL8 '82 101 )0 laaJ 5S ALJdlSea4+JOu a41 5uOLE ap~M laaj SS pUEL jO d!J1S E SE palEu5~sap: 'ElUJOjlLEJ jO alE1S "oalEW UES jO ^+uno:) 'OJS~JUEJ~ u~aJa4 pa+EJodJoJu~ PUE olaJa4 pa4JE++e II\''' +lq~4x3 uo UMo4~ se paq~JJsap ALJELnJ -liJEd aJOW 5u!aq pue [1 pue 21 sa5ed iE sdew JO SS ~ooS U! 'oaiEW UES jO ^1uno:) a4+ )0 JapJoJatl ^lunoJ a4+ JO aJlJjO a4+ U! 1961 "s Jaqwa+das uo pJoJaJ JOj paU.:l- SEM dew 4J!4M lIe!uJojqeJ '^+uno:) oa+EH Ul?S 'OJS!JUeJ3 ues. 4+noS '+JEJl SJea~ (S) a^!J JO pO!Jad e JOj (..aaSuaJ!l.. JalJEU!aJa4) 'VJIM3WV 30 ANVdWO:) 9NI~HVd 0+ s+uPJ5 KqaJaq (..A:HJlI Jaljeu!aJa4) OJSpUEJ,j upS 4+noS )0 ^l!:) a41 - (., A:}.JadoJdll a4+ Ja:J-j PU laJa4) aJuaJajaJ s l41 ,\q .~lJadoJd a41 jO asn AJEJodwa1" a41 JOj asuaJll aLqPJOAaJ E 'UO!laJJs~p alos Sc^l!J ll? ^+~J Aq pa1eu~wJa+ JaUOOs ssaLun aAoqE 5ulJEaddE lSJlj a+pp a4~ WOJj 5u~6euew (5u~lPJado jO asodJnd pa+~w~l aq+ JOj asuaJ~L S!4+ palUEJ5 sl aasuaJ!l -as!JdJalUa ssau!snq Sl! SE Kl~L!JEJ 6Ul~Jl?d LElJJawwOJ E 5u!UlP1U!EW PUE : 9\0 II OJ 5e suo n !PUOJ pue SWJa+ alfl 0+ lJafqns palUeJ6 5! asuaJ l L 5 l41 -^LUO sasodJnd P!ES JOj ^+JadoJd a4l JO a5n a4+ 0+ pa+~w~l S~ aasuaJ~l PUE asn JO!Jd a41 01 aleu!pJoqns aq LLPl{S A1JadoJd a41 JO asn a41 (L pa+!W~L 10U lnq 5u~pnlJu! Suo!+PLn5aJ pue saLnJ lLe pue AUE 01 pUE ^t!J JO lOJ1UOJ Aq paq!JJsaJd aq KEW lE41 ^l~JnJas pue uO!lel!ues 'AlaJEs 'ssaJ6a 'ssaJ6u~ 01 . AHJ a41 'K1JadoJd a41 )0 UO!l!PUOJ a41 SMOU~ pup palJadsu! se4 aasuaJ~l (l )f!:J31a Al.IO I j ~,_~ ~~, 1 ." .,:_~.i..........; :.~)r...I 3-' ~,"~ ,..r1..'/Y.. .-. ~ ~ ~~ and. it is understood that the property is hereby provided ~lithout any represent- ation or warranty by City whatsoever, and without obligation on the part of City to make any alterations, repairs, or additions thereto. 3) Licensee shall neither transfer nor assign this permit or any property on the City's right-Of-way, nor shall Licensee grant any interest or privilege whatsoever in connection with this permit. 4) Right is hereby reserved to City, its officers, agents and employees, to ~nter the premises at any time and for any purpose necessary or convenient including but not limited to ingress, egress, safety, sanitation, and security as prescribed by the City, and Licensee shall have no claim for damages of any character on account thereof against City, or any offtcer, agent or employee thereof. 5) The City reserves the right to enter and occupy said property for such purposes as deemed necessary in the performance of City Operations_ It is also agreed that the City will provide the "Licensee" with Hritten notification of said entry whereupon the "Licensee" shall immediately remove veh i c 1 es, fences or other appurtenances as may be requ ired". It is further agreed that all costs related to the vacation of said property shall be borne entirely by the "Licensee." 6) Licensee hereby agrees to, and shall indemnify and, hold City, its elective and appointive boards, officers, agents and employees harmless from any 1 i abi 1 i ty for damages or c 1 a ims for damage for persona 1 injury, i nc 1 uding any unsafe condition of the property, as well as from claims for property damge which may arise from Licensee's operations under this Permit. Licensee agrees to and shall) defend City and its elective and appointive boards, officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid operations. 2 \ ,~ -- - C /J 6- ....JY':. .SUO!l~Jado s.aasuaJ!l )0 lno 5u!s!Je A~JadoJd s.aasuaJ!l 01 a5ewep JOj ~l~l~q!suodsaJ LLe awnsse 01 saaJ5e Ja41Jn) aasu2J!1 aasuaJ~l ~q paAOJlsap JO pa5ewep S! ~eYl Al~J )0 A1JadoJd AUV (8 .sasneJ Ja4l0 pue aJ!l ^q UO!lJnJ~sap JO a6ewpp lsu!p6e A1JadoJd a41 )0 UO!1Jal0Jd a41 u~ aJua5!l!p anp as!JJaxa saw!l lLP lP lLe4s aasuaJ!l (L aq .0:). a^ P4 APW 11?41 wns l? pUPUlap uo Al D led L l P4s aasuaJ n (6 .A~Jad~Jd S.Al!J a4:). )0 UO~lJnJlsap JO 01 sa6~wep )0 uospaJ Aq ^:).!J Aq pau!P1Sns ssol a41 JO) alesuadwoJ 0:). lUa!J!)lnS lunowp UP ^l!J 01 Ap.d '^l!J Aq paJ~nbaJ os 1~ 'lLP4S ae.suaJ!l 'luawaJp.LdaJ JO J!pdaJ )0 na!l U! ~Al!J aln 10 uon.JP1S!lPS aYl 01 aasuaJ~l Aq paJPLdaJ JO paJ!pdaJ ALldwOJd aq LLP4s ^lJadoJd a41 )0 uO!lpdnJJo pup asn s.aasuaJ!l 0:). lUap!JU! ~aJ U! l!wJad S!41 )0 UO!lpu!wJa1 JO 'uo!~eJo^aJ 'UO!leJ!dxa a41 JaljP papuadxa pue 'saJueu!pJo 'SMe[ alqPJ!Ldde llP 41!M ^ldwOJ LLP4s aasuaJ!l (01 .Al~J a41 01 ~J01JPjS!les UO!l!PUOJ e 01 sas!waJd aYl 5u!J01S 01 ~l!wJad JO 'sasuaJ!l 'UO!lP~!UP~ 'UO!lJnJlSUOJ ol pJP5aJ 4l!M Suo!lPLn5aJ -Ja11pW paz!J041np Ja410 AUP puP 'Sa!l!^!lJP s.aasuaJ!l U! a6p6ua 'saxp:). lLP 'anp ua4M 'Sa!1!J041nP JadoJd a4l 01 APd llP4s aasuaJ!l (II 'lJWJad a41 jO wJa1 a41 5u~Jnp aW!l AUP lP '4J!4M sa5JP4J JPL!W!S PUP 'sluawssassp UO JO 01 lJadsaJ 41!'" aasuaJ!l uo JO AHJ uo pasodw! JO 'passassp 'paxPl aq "ew l!WJad S!41 jO aJ!l a41 6u!Jnp u!elU!pw pue lno a~P1 LLPYs aasuaJ!l (21 - "fJadoJd aWl- :aJUPJnSU! )0 sa!J!Lod 6U!MOLLO) a41 a41 U! aJuPJnsu! "l!L~qP!L .sJaAOldwa PUP UO!fpsuadwoJ s.Ja~JoM (e) .aLqeJ!ldde se 'lunowe tlJ01.nlP1S OO.OOO'OOS$ ue41 ssaL 10U lunowe UP UI :aJuPJnsuI A~!L!qe!l J!Lqnd (q) -qns pue uosJad auo AUP. 0:). '41pap '01 pa+!w!L fOU lnq '5u!pnLJu! 'sa!Jnfu! JOj -00"000'000'1$ ue41 ssal 10U lunowe UP U! 'uosJad 4Jea JOj l!W!L awps a41 01 lJar "aJuaJJnJJO auo "up JO ~unOJJP uo ( .h......Q09/.. :'QN 3'11.:2 50UO:J3~ -1'VcH.N3:J (c) Property Damage Insurance: In an amount not less than $500,000.00 for damage to the property of each person on account of anyone occurrence. (d) Contractual Liability Insurance: Licensee shall take out and rnaintain during the life of this permit an insurance policy in the amount of at least $1,000,000.00 insuring the City, its elective and appointive boards~ commissions, officers, agents and employees, and Licenesee against damage sus- tained by reason of any action or actions at law or in equity, and/or any claims or demands by reason of any breach or alleged breach of any contract, or pro- vi s ions thereof, or by reason of any cant ractu"a 1 1 i abi 1 i ty, or all eged cont ractua 1 liability on any contract, entered into by Licensee and/or any of its agents or emp 1 oyees . " (e) It is agreed that the insurance required by Subsections b, c~ and d shall be extended to include the City of South San Francisco, its elective and appointive boards, officers, agents and employees, with respect to operat ions performed by the Li censee, as descri bed herei n. Evi dence of the i nsu ranee descri bed above sha 11 be provi ded to City upon executi on of thi s agreement and shall be subject to approval by the City Attorney as to form, amount and carrier. The policy of insurance shall also contain a provision that such insurance shall not be reduced or cancelled except upon thirty days written notice to City. In addition, the following endorsement shall be made on said policy of insurance: ItNotwithstanding any other prOV1Slons in this policy, the insurance afforded hereunder to the City of South San F ranci sco sha 11 be pri Ola ry a s to any other i nsu r- anee or reinsurance covering or available to the City of South San Francisco, and such other insurance or reinsurance shall not be required to contribute to any liability or loss until and unless the approximate limit of liability afforded hereunder is exhausted.1I 4 ,""'~ c :;-< _._~ .~- " '~:-'--<: J_ ~. '--.~" F-~ r L.:- ~::. .~;~. 6JL5. ~ill!l JO asd~L Kq ~SU~J~L s~41 JO uO~leU~illJa1 a41 1E CttE4S aasuaJ~l (~I .~JOM UO~lEJ01SaJ PUE lEAOWaJ a41 JO +unoJJ~ UO apEW JO Kq pa1~aJJ aq 11~4S K1~J +su~E5~ sa5~w~p JOJ W~ElJ ou pU~ aasuaJ~l JO ~suadxa a41 +~ paJ01saJ aq 01 sas~waJd a41 PUE pa^owaJ aq 01 aSnEJ Kew K1~J JO cUO~+ESUddwOJ 1n041~M K1~J a41 JO K1JadoJd a41 awoJaq Ja41~a tLE4S aasuaJ~l JO K1JadoJd a41 'K1~J a41 JO UO~ldo a41 1E 'Ua41 'Sas~waJd a41 aJ01SaJ 01 PUE ^lJadoJd s~4 a^oWaJ 01 lJat5au JO L~~J LtE4s aasuaJJ1 J! 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All notices required by this permit shall be in writing and sent first class, postage prepaid, addressed as follows: TO: CITY OF SOUTH SAN FRANCISCO 400 Grand Avenue South San Francisco, CA 94080 Attn: Property Manager TO LICENSEE: PARKING COMPANY OF AMERICA 6300 Telegraph Rd. Hyatt House Building Commerce, CA 90040 Attn: Alex Chavez IN WITNESS WHEREOF~ the parties have executed this Agreement at South San' Francisco on the day and year first written above~ CITY Or SOUTH SAN FRANCISCO a municipal corporation PARKING COMPANY OF AMERICA By: Q Ct,)(Lj:/i;v .&,,~1~- Title: ()~ <yn aM~.vI ./) , By: ./-' _ . . . ? VC~~V0 By: I IU' -;;f~ I I Title: /h/ - -z;i~ '" ATTEST: &~ t1 ~P- , City Clerk {j 6 CENTRAL RECCf{D5 FILE NO.:...~_._",",,_ .' YJI~3WY ~O ANVdWOJ 8NI~~Vd 01 ONVl ~o 13J~Vd Y ~o 3sn ~o~ 3SN3JIl 318VJO^3~ V ~o NOllnJ3X38NIZI~OHlnV NOIlnlOs3~ V VlNCl03IlVJ .:10 31V15 cOJSI:)f~\tCI3 NVS' Hinos' 30 All::> c lIJNOOJ AID E8-9~I "ON NOIlnlOS3~ :OJs~:>u-e.xi"ue's 4+nOs'Jo. Ai ij a4:}.' jd l purioj A':}. ~j :'a4'l ~q d3A lOS3~ 11 3a . :+ B4:}' atnu~aM+aq. 1I0js~:)Ul?Jd ueS ti:inoS JO A:}.~:J a4+ Aq pauMO' PUEl ]0 (i3:),iEd e JO a.so . . JO.J."aSUi3:>~l alqE:>oAaEII pal~nua asua:>n alqE:>O^a~ -e.J.0 uoi:}.n:>ax3 '~';~s(Ji3:> ~ l'~l q-e.j6^a~ 1-0 uo nnJaX3 "l ....oia..ta4+aJn:}.Eu5~s s~4 ~sa+ie "JaL3'^i~:J a4~ pUt? 'A+~J.alA JO JLe4aq uo asua:>'~'l .a't"qE:>O^a~ p ~ t?s afn:>axa' b~"paz ~Jo4ine' S ~ Ja5~uew A:nj al/l. . saJn:p:!U5 ~S '2 U.t~l' l'~q~'4X3: sE'Olaiaq"pa4Jkiie 'Sl ~'sUa:lil alqe:>o^a'~ "Jhes jO'^do~'t? 'paZ~JOlf-lriE A'qaJa~ S ~ t?:J ~.lawv .fo' 'AUl~dtUo:J fiu'i~J-ed a4~" put! 0:>.5 ~:>Ul?J..:I' UES l#nos 'j"o Al ~J .J[. ~ .v. Jf. Jf. :a:}.OA fiU~MOUOJ. alf:}. A'q "E86l C . .AaqO:}.JO J.O A'Ep 4:}'61 a4+ uo PLat{ 6u~+aau Jt? lnfii3J E "lE O:JS pUEJ:{ 'UES l{:}.nos .J.O ^+~:J alf.!.' j.6 . U:>lino:J Ai ~~ i34+ A'q pa+dope pue pa::>npoJ+u~ '^LJEtnfii3J SEM UOnnLosa~ fiu~o6aJ'o] aLl1- lE4l AJ.~lJa:> A'qaJi34 I : S30N auoN e'~l6al. ~JJaj'E~Jaqo~ put? ~soLndolOJ~N sns . . I . ." 'aiuolliEO"'N aLanueWg 'ofia~ppv .N ~J~W 'e~soJV '9 Pleuo~ sJaqwdWL~:JunoJ : S3AV . auoN : lN3 SSV ___L_~___f. )f..la L:l ^+ ~J --rr!27 '? jJ ~ =1S311\1 ~'t\\ 54# & ~ . ~\t.\ o 0 >-0 ....\ t:. i!51 tJ C ~4lIFO~~~ Staff Re120rt DATE: TO: FROM: SUBJECT: .\ AGENDA ITEM #10 September 28, 2005 Honorable Mayor and City Council Marty Van Duyn, Assistant City Manager RESOLUTION AUTHORIZING SUBMITTAL OF THE 2004-2005 CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT (CAPER) TO THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) RECOMMENDATION It is recommended that City Council: 1) Hold a public hearing on the 2004-2005 Consolidated Annual Performance and Evaluation Report (CAPER), and 2) Adopt the attached Resolution authorizing the City Manager to execute all required documents for submittal to the Department of Housing and Urban Development. BACKGROUND/DISCUSSION The Department of Housing and Urban Development (HUD) requires communities receiving Community Development Block Grant (CDBG) funds to submit a year-end Consolidated Annual Performance and Evaluation Report (CAPER). The report describes the City's housing and community development accomplishments during the 2004-2005 Fiscal Year and includes a financial summary of CDBG expenditures. Prior to submitting the report the City must give the public an opportunity to review the CAPER and gi ve testimony at a public hearing. CAPER reports are due to HUD 90 days after the completion of the jurisdiction's fiscal year. In fiscal year 2004-2005, a total of $835,315 in CDBG funding was available for a broad range of community development activities. The CDBG program is the primary funding source for many services the City provides including housing rehabilitation, commercial fac;ade improvements, childcare, adult day care, emergency food assistance, homeless services, and tutoring. In April 2003, the City Council authorized the submittal of the City's Five-Year Consolidated Plan for Housing and Community Development for fiscal years 2003-2004 through 2007-2008. The Consolidated Plan identified the housing and non-housing priorities the City would address during 2003-2008. In April 2004 the City Council authorized the submittal of the One-Year Action Plan for 2004-2005. The 2004-2005 CAPER describes City's accomplishments and compares them to the goals set in the 2004-2005 One Year Action Plan. Attached, as Exhibit A, is a Summary of Accomplishments for the 2004-2005 CAPER. Staff Report Subject: Resolution Authorizing Submittal of the 2004-2005 CAPER to HUD Page 2 CONCLUSION The CAPER provides a comprehensive accounting of all CDBG funds allocated, expended, encumbered, or reprogrammed during the fiscal year. The CAPER has been available for public review in the Office of Economic and Community Development since September 9,2005, when the public comment period began. Any comments received during the comment period or at the public hearing will be forwarded to HUD upon submittal of the report on September 30,2005, the federally mandated deadline. I By: (})~~ Marty Van Duyn Assistant City Manag r APProVed~/" ,( ~i \ M. Nag I City Manager Attachment: Resolution CAPER Summary Report RESOLUTION NO. CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING SUBMITTT AL OF THE 2004-05 CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT ("CAPER") TO THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. WHEREAS, the Department of Housing and Urban Development ("HUD") requires communities receiving Community Development Block Grant ("CDBG") funds to submit a year-end Consolidated Annual Performance and Evaluation Report ("CAPER"); WHEREAS, in fiscal year 2004-05, a total of $835,315 in CDBG funding was available for a broad range of community development activities; WHEREAS, the CAPER has been available for public review in the office of Economic and Community Development, City Hall, 400 Grand Avenue since September 9th, 2005. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby authorizes the City Manager to submit the CAPER and execute all required documents for submittal to the Department of Housing and Urban Development. ***** I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a regular meeting held on the 28thh day of September, 2005 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: City Clerk City of South San Francisco Consolidated Annual Performance and Evaluation Report 2004-2005 September 2005 Prepared by Economic and Community Development Department P1 ~OOG-vOOG llodg1[ UO!lBnIBA3 pUB g~UBlUJOJJgd IBnuuy pglBP!IOSUOJ O:JS!:JUV.li/ UVS If,noS fo N!:J SJU~JU03}0 ~Iq1JL L 1.... ........................................................ ................. .......... ....... .slUgp!Sgl gWO~U!-MOl JO gil13lU:~~lgd qil!q 13 gAlgS l13ql Sgmn~13J ~Hqnd gA01dw! pu13 gAlgSgld :Al!lo!ld .;) 91................................SlUgp!Sg.1 gWO~U!-MOIJO gil13lUg~lgd qil!q 13 gA13q lO gAlgS l13ql S13gl13 U! 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Conclusion and Self-Evaluation............................................................................. 26 Tables Summary of 2004-2005 Accomplishments, Table 1 Summary of Housing Accomplislunents, Table 2 Appendices Funding Allocations for 2004-2005 City Council Resolution P.3 ~OOZ-tOOZ llod~l}l uonunluA3 puu ~~UUUIlOJl~d lunuuy P~luPHosuoJ O;JS!;JUV.ljf UVS If/nos 10 tV!:J A.n~wwns ~AHnJ~xJl .uUld pg~UPHOSUO;) lUg A gA!d 800l -tOOl ;Jq~ U! P;JqsHqu~Sg s;Jppopd ;Jq~ qHM ~U;J~S!SUO~ S! 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SdnOllJ sp:J:Ju In!~:Jds 10J lJu!snoq :Jp!A01d ~uq~ SlUU1lJ01d JO AlgpUA U p:JpullJ oSIu Al!;) :Jql .lJu!snoq lJUPS!x:J JO UO!WlHNnq:J1 pun uop!s!nb~u ;Jq~ puu uO!l~n1lsuo~ MgU qlJnonn 'au!snoq :Jyqnp10JJu JO Alddns :Jql :JAOldUI! pun :Jsn:J1~U! Ol p:J:>J10M Al!J :Jql .UIn1lJ01d ulnsu!u:Jd l:Jql:JlJOllJU!PHnq:JlI :Jql q'anoll(l SlgUMO:JlUOq glUO~U!-MoIJo S:JUIoq 0~s!~un1d uus qlnos U:JA:JS JO sl!ud;J110fUUI p:JpullJ oSIu Al!;) gql .Sl:JUMO:JlUOq :JUIO~U! MOI-Al:JA 10J sl!nd:J1 :J:J1J P:JuuoJ1:Jd 'UIm'aOld 1!udg1 gUIOq 10U!lU U 'slgdI:JH :JsnoH .sl!udgllJU!Snoq 10J Sl:JUMOgUIOq ;JUIO~U!-MOI o~ Sl;Jq~noA lUUllJ puu suuoI lS::U;JlU!-M.OI p:J1:JJJO Al!;) gIll .sPloq:Jsnoq :JUIo~U!-M.OI Lt p:JA1:JS An;) gql SUIU1801d gS:Jq~ qlJnoll(l .:JlquHnAu SUIn1lJ01d uonnnnquq:J1lJU!Snoq Im:JA:Js puq AH;) gql 'Sl:JUMO:JUIOq 10d "HYclV:J mOl-POOl oaslautJ.l,d utJs 1{1I10S fo t<-11:J 1 a:itJ cl p.d Potential homebuyers were supported through the City's first-time homebuyer program, which continued to show great success, providing loans for 4 families in 2004-05. Additionally, the City anticipates that with the completion of the Marbella Development many additional loans will be distributed in the next two fiscal years. The City has also finished the entitlement process for Habitat for Humanity to begin construction of four three-bedroom ownership units affordable to low-income families. For renters, the City worked with private rental property owners and non-profit organizations to identify suitable rental properties that can be acquired and/or rehabilitated to provide housing for very low-income renters. The City continues to focus on Willow Gardens, an important acquisition and rehabilitation project. Also, the City purchased and began the rehabilitation of a three-unit property at 310 Miller Ave that is occupied by low-income families at or below 80% AMI. This property is adjacent to a four-unit building the City purchased in FY 2003-04. To create new affordable rental units, the City worked with San Mateo County and completed the entitlement process to develop 43 units of affordable family apartments at Grand and Oak Avenues, adjacent to the County Courthouse on County owned vacant land. The City addresses the housing needs of residents with special needs through a variety of programs. For homeless people, the City adopted a continuum of care approach to assist families and individuals to break the cycle of homelessness. The City funded an array of non-profit agencies that provide housing and services to families at-risk of becoming homeless. By providing support services, transitional housing, and permanent housing, City-funded non-profit agencies are able to help residents find permanent housing and avoid episodes ofhOlnelessness. This year, with the City's help, 10 homeless families and 158 individuals were helped. Elderly and disabled residents require special programs and services that will allow them to remain in their homes in a safe and accessible environment. The City funds the Center for Independence of the Disabled (CID), which provides modifications to eliminate architectural barriers in their homes. CID assisted 26 households this year. Non-Housing Community Development Activities To help create a vibrant community, the City of South San Francisco uses the Community Development Block Grant (CDBG) program to fund a variety of non- housing community development activities. These include public services to low-income residents and programs to improve commercial areas, public and cOlnmunity buildings, and low-income neighborhood amenities such as parks and community centers. Using CDBG, the City funds non-profit agencies that provide essential community services to 10w-incOlne residents. Funded services included childcare, senior services, general social services, battered women's services, disabled services, and youth services. 2004-2005 CAPER City of South San Francisco Page ii P.5 .qnI;) SP!D puu SAOa ~ql iJu!pnpu! 'S~Ss~u!snq ~~.nll IUUOH!PPU uu Ol P~P!AOld ~l~M SlUUID .s~ss~u!snq InOJ Ol ~aUUlS!SSU IUa!uqa~l P~P!AOld JJUlS .UMOlUMOP ~ql JO ~auulu~ddu ~ql ~AOldm! pUU 'siJu!PHnq Iupl~mmoa l!~ql JO ~sn ~ql ~S1J~laU! 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S~ludp!llUd AI~A!PU AH;) ~ql 'AIlUUOH!PPY .slU~P!S~l ~lUOaU! -Mol 10J S~a!Al~S puu lu~m~aloJu~ ~poa 'uoHuaY!lnu~q UMOlUMOP 'lU~lU~luqu W!ud pU~1 'lU~lUdol~A~P pup. uO!lulHNuq~l iJu!snoq ~pnpu! slloJJ3 .~al~lUlUO;) JO l~qurnq;) ~ql pun 'AlUnO;) ~ln 'PPlS!G IooqaS ~ql 's~HP l~qlo 'Sl~P!AOld ~a!Al~s lu!aos lYOld -uou ql!M AI~sola P~)(lOM Al!;) ~ql 'SlU~P!S~.1 Ol S~a!Al~S JO A.mA!PP ~ql ~lUU!plOOa o~ llYcJV:J fOOl-tOOl O;JS!;JUV.ld uvs 1jJltOS fo NO m a3vcJ 9'd City of South San Francisco Consolidated Annual Performance and Evaluation Report 2004-2005 I. Introduction The Department of Housing and Urban Development (HUD) requires communities receiving Community Development Block Grant (CDBG) funds to submit a year-end Consolidated Annual Performance and Evaluation Report (CAPER). The CAPER describes the City's housing and community development accomplishments during the 2004-2005 Fiscal Year (July 1,2004 to June 30, 2005). In the CAPER, the City's accomplishments are compared to the goals established in the 2004-2005 One- Year Action Plan and the 2003-2008 Consolidated Plan. The report also includes a financial summary of the City's use of community development funds. For the City of South San Francisco, the CAPER consists of a Narrative Report, a Financial Summary Report and an IDIS Repol1 for Citizen Review. The Narrative Report discusses the City's housing activities, non-housing community development activities, and other activities to improve the community. Each activity and program listed in the Narrative Report describes the City's accomplishments, the program's geographic area, and the financial resources utilized. The Financial Summary Report provides a cumulative summary of all CDBG program expenditures. The IDIS Report for Citizen Review gives the number of clients served, the demographics of the clients served, and financial data for each CDBG funded program. During fiscal year 2004-2005, the second year of the 2003-2008 Consolidated Plan, the City's priorities were to increase the supply of decent and affordable housing, rehabilitate housing and commercial buildings, and assist non-profit agencies with the delivery of public services to low-income residents. The City succeeded in meeting or exceeding the goals set in the One-Year Action Plan, as well as advancing the goals listed in the Five- Year Consolidated Plan. In undertaking these activities and in using federal funds, the City of South San Francisco did not in any way hinder implementation of its Plan by action or willful inaction. Attached to this rep0l1 is a comprehensive summary of the City's accomplishments during 2004-2005 and how these accomplishments relate to the five-year Consolidated Plan (see Table 1). Table 2 is a summary of the City's housing accomplishments. Appendix A is the financial report generated by IDIS that the City submits to HUD. II. Financial Resources Funding to carry out the activities described in the CAPER came from several sources including the federally funded CDBG and HOME programs. The City also used local 2004-2005 CAPER City of South San Francisco Page 10127 P.7 .s~x)Jnos Iiu!putlJ sl! 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AlPOpd q8!q U S! sl!un IBlUg1 gIquPloJJu MgU 8UnUgla luql pgU!UUglgp sBq run!llosuO;) AlUnO;) OgWV\J: uus gql, .IUgll OU!UIU;) 13 uo pUU lOp!.LlO~ .1l1Va MgU pgSOdOld gql ~uoIU SlloJJg ~u!snoq gIqUplOJJU ~u!sn~oJ S! Al!;) gql 'oaspuu1d uuS qlllOS ul .SUglU lUgmdopAgpgl ,SgPP U! pUU 'Sg~!AlgS pUB UOPUllodsUUlllUgu SUg1B UBqlll AWugug8 S! 8u!snoq AI!LUUJ-mnlU gIquplOJJU 10J UO!lU~OI gIqunns lSOlU gql, N'3c/V:J ~OOG-vOOG O[)S![)UV.ld uVS lfJ1l0S fo N!;] Lzfo z a'.3vc/ 9.d The high cost of developing housing and the subsidies needed to make new units affordable to low- and moderate-income families makes the construction of new affordable units difficult. In addition, there is a limited amount of land suitable for affordable housing development in South San Francisco. These and other factors outlined in the San Mateo County and the South San Francisco Consolidated Plan provide the basic rationale for South San Francisco also making housing rehabilitation a priority. 1. New Housing Construction a. County Property at Grand and Oak Avenues In FY 03-04 the City negotiated an agreement with the County of San Mateo and BRIDGE Housing Corporation to develop a 43-unit affordable family housing development. This FY, 2004-05, BRIDGE Housing and the County finalized the land grant agreement and the BRIDGE completed the entitlement process. Construction will begin in 2005-06. The units will be affordable to low- and moderate-income families and funded with Tax Credits and $3,500,000 in RDA Funds. The project is budgeted to cost a total of$13,4l5,000. b. 440 Commercial Avenue In FY 02-03 the City's Redevelopment Agency purchased an empty lot at 440 Commercial A venue for the purpose of constructing affordable housing. The City negotiated an agreement with Peninsula Habitat for Humanity to construct four three- bedroom units affordable to families earning below 50% AMI. The planning and entitlement process was completed in 2004-05 and it is estimated that the units will be completed in FY 2006-07. Habitat obtained additional CDBG funds frOlu the County of San Mateo. The Agency has contributed the land and Habitat will provide materials and volunteer labor to construct the units. Habitat will also provide Mortgage Financing for the acquisition by low-income families who are also required to volunteer 500 hours of labor as sweat equity. c. 950 Linden Ave The City conducted a feasibility analysis with Mid-Peninsula Housing Corporation to consider a 45-unit affordable development. The study showed that 950 Linden was not the appropriate location for such a development at this time for enviromuental reasons and the project was closed. d. Inclusionarv Housing Development-Below Market Rate (BMR) Units Under the City's 20% Inclusionary Housing Ordinance various developers make new affordable units in market rate projects available to residents at or below 80% of the area median income and residents at or below 120% of the area median income (AMI). Projects will be either rental or ownership units depending on the type of project under development. No public funds are used to develop BMR units because the private developers pay for the entire development. One of the Willow Gardens 4- unit buildings at 364 Susie Way was purchased by a developer in FY 03-04 as a project's offsite BMR requirement. Rehabilitation has been completed and all four units are occupied. 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Willow Gardens The City has a long-term partnership with Mid-Peninsula Housing Coalition to acquire and rehabilitate approximately twelve four-plex units (48 units total) in the Willow Gardens neighborhood. The City plans to convert these units into permanent affordable rental units that will be owned and managed by Mid-Peninsula. The units will be affordable to households at or below 50 - 60% of median income. To date, the City and Mid-Peninsula have acquired seven buildings (28 units) and will continue to acquire them as they become available. The City and Mid-Peninsula Housing also completed the interior and exterior rehabilitation of all 28 units. During 2004-2005 the City did not acquire any new buildings. However, the City completed an exterior rehabilitation of all units already owned. (See the Inclusionary Housing Development sectionfor details on the Willow Gardens building at 364 Susie Way purchased by a private developer as part of their BMR requirement.) In FY 1997-98, the Redevelopment Agency authorized a $15.75 million budget for the acquisition and rehabilitation of Willow Gardens units and for infrastructure improvements in the neighborhood. The project is funded by a $3.5 million Redevelopment Agency loan, a $3.1 million Redevelopment Agency Public Purpose Bond, $1 million in HOME funds and $2 million in tax credits. b. Downtown Affordable Housing Program The Downtown Affordable Housing Program is designed to provide affordable rental housing for low- and very-low income residents through the acquisition and rehabilitation of dilapidated housing stock in or near the downtown. Of special interest are unoccupied Single Room Occupancy hotels and 4-6 unit apartment buildings. The City conducts feasibility analysis on a regular basis to determine viability of acquisitions. Should an opportunity to create affordable units present itself, the City will immediately allocate funds to the project funded with RDA, HOME funds or CDBG. 1. 310-312 Miller Avenue In 04-05 the City purchased a three-unit property at 310 Miller Ave, spending $595,819.37 in RDA funds. Rehabilitation of the property has begun and will be completed in 2005-2006. No tenants were displaced and renovation began as units were vacated. The racial etlmic make-up of the two current households was: Hispanic-2 and all were at or below 30%of AMI. One (1) home was headed by a senior and 1 was headed by a female. Rehabilitation of 312 Miller Ave has begun and will be completed in 2005- 2006. No tenants were displaced and renovation began as units were vacated. The ethnic make-up of the three current families was Hispanic-3 and all are at or below 30% of AMI. One (1) home was headed by a senior and 2 were headed by a female. 2004-2005 CAPER City of South San Francisco Page 5 of27 P.ll '~OOZ-tOOl U! anUaAY lamw ZI (-0 1 ( lU ){.1OM. uonuHUquqal .TOJ spmlJ DHa;) U! ll('Z9$ luads suq AH;) aql. .slUap!Sal alUO~U! M.oI-A.mA puu -M.OI Aq pa!dn~~o Zlu!PHnq Hun-( U 'aAY uapu!l tIL asuq~lnd Ol ~O-tOOl U! suonunoZlau uuZlaq Al!;) aql 'AlllmOn!PPY anuaAY uapu!l t1L .n UO!l8J!uq8qaH pa!dnJJo-.muMO amoJuI-MWI ." .(;)SNdW lalua;) sa~!AJas pooqloqllZl!aN ulnsu!uad qlloN Aq palalS!U!lUPU uIluZlold l!udal alUoq 10U!UI u ptm slaq~noAJo uuoJ aql U! 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SlaU.M.OaUIoq awo~u!-MOI Ol aJqUHUAU SluUJ~ Sa){UlU lUql imu'BOld laq~noA uOHuHl!quqa.l ~u!snoq u SlalS!U!UIPU Al!;) aql. urnlnOld laq~no A .n palulnlUn~~u aAOUIal ap!MAlP puu ualU UMO], PIOfU.M.OlUMOa alll U! slUap!Sal aUIO~U!-alUJapoUI puu -MOl dpll slaq~no A xOH spqaa e . ~O-tOOz U! laq~noA JO aclAl S!ql 10J slsanbal AUU aA!a~allOu PIP Al!;) aql. 'saUIoq l!aql U! sUOnUIO!A apo~ dn luap Ol OO~'Z$ Ol dnJo lUB1~ U slauMoamoq ap!AOld slaq~no A UOnUIO!A apo;) A~ua~laUI3 . NJIclV:J ~OOZ-vOOZ O:JSPUV.ld UVS If/nos fo N!;) tlfo 9 a2vcl zt.d debris and yard waste from their properties. The City issued 9 vouchers to 6 households in 2004-2005, spending $5070.10 in CDBG funds. The racial ethnic make up of the residents was White- 5 and Hispanic-I. Six (6) families were female head of household and two (2) families are elderly and disabled head of household. 11. Minor Home Repair (House Helpers) The Minor Home Repair Program provides home repairs for very low-income homeowners free of charge. Services include roof and gutter repairs, water heater replacement, plumbing leaks, minor electrical repairs and installation of security devices, smoke alarms and carbon monoxide detectors. The program is a city- sponsored program administered by North Peninsula Neighborhood Services Center (NPNSC), whose staff speaks English, Spanish and Tagalog. The majority of households assisted are large families with small children and elderly female heads-of-household. NPNSC served 33 households in 2004-2005. The total amount of CDBG funds expended by this program was $40,000. Twenty-two (22) of the households served were at or below 30% AMI, 6 were at or below 50% AMI and 5 were at or below 80% AMI. The racial and ethnic make up of the families was White-16, American Indian/Native Alaskan-I, Asian-7 , Hispanic/African AmericanlBlack-l and Hispanic-8. Females headed 23 of the households, 29 households were headed by an elderly person and a disabled person headed 13 of the households. c. Rebuildin~ To~ether Peninsula (RTP) In 2004-2005 RTP rehabilitated 7 South San Francisco homes. The City allocated $8,500 in CDBG funds which were used exclusively for building materials. R TP leverages the funds through volunteer labor, in-kind donations of materials and skilled labor and corporate sponsorship. Work completed on these homes included roof replacelnent and repairs, water heater replacement, exterior and interior painting, landscaping, fence replacement, flooring installation, debris removal and minor plumbing and electrical. The majority of the work is completed on the last Saturday inApril. Six (6) households were at or below 30% AMI and I household was at or below 50% AMI. The racial and ethnic make up of these households was White-6 and Hispanic-I. Females headed 5 households, 4 households were headed up by an elderly person and a disabled person headed up 5 of the households. 5. Rental Housing Habitability An important aspect of affordable housing is monitoring the condition and habitability of existing rental housing. La Raza Central Legal Code Enforcement Assistance Program, funded with $5,000 in RDA funds, worked closely with tenants to report and monitor housing code violations, thus improving habitability and reducing landlord abuse. In 2004-2005, the focus of this program was on the Willow Gardens development. La Raza notified between 600-700 residents of their rights and provided follow-up inspections and council to 24-35 low-income residents. Additionally, La Raza fielded questions from tenants at three mobile home parks in South San Francisco. Comparison of 2004-2005 Achievements with Five-Year Plan Goals 2004-2005 CAPER City of South San Francisco Page 70f27 P.13 .popad JUaA-aAY s,uuId paluPHosuoJ aql JaAO papadxa ~l17 ol8LE aqlJo ~I 1 paAjas suq Al!J aql 'uInsu!uad Jaqla8o.l8u!pnnqalIJo ){JOMaql8u!pnpu! 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U!Urna1 slUap!Sal paIqus!p dIaq Ol Sa~!A1aS sn01aUIllU Sap!A01d (GIJ) paIqus!G aql]O a~uapuadapul 10J 1aluaJ aql 'osIY .sa~!A1as SGIV uInsu!uad 3:Sd1113 UIOIJ a~uUlS!SSB 8u!snoq puu 8uHasuno~ 'pool aAp~al uu~ SGIY/AIH ql!M aIdoad 'SAUM IUlaAas U! spaau IB!~ads qHM slUap!Sa1 ssaIaUIoq saA1as Al!;) aq.l .a~!A1aS 10J saa] 10/PUU suonuuop PU!){-U! 'SUO!lBI0dio~ 'suonUpuno] 'sIunp!A!pu! ~nuApd UIOl] suonuuop ql!M. spullJ pa8UlaAaI Al!;) aql q8nonn papullJ SlY01d-uou UV ~YdV:J ~OOl-vOOl O:JSPUV.Jd UVS 'flnoS fo to!;] ilfo 8 a3vd tl.d 1. Shelter Network- Crossroads The City provided Shelter Network with Redevelopment Agency funds in the amount of $18,000 for the Family Crossroads Shelter. This transitional housing facility was available to homeless families citywide. On-site services include support groups, job development and other individualized services to help fanlilies secure pennanent housing. ' During 2004-2005, Family Crossroads exceeded the City's goal of serving 25-35 individuals by serving 40 individuals in lO households. At Family Crossroads, 9 households were at or below 30% AMI, and one household was below 50% AMI. The racial and ethnic make-up of these households was African-American/Black-l Native Hawaiian/Other Pacific Islander-2, American Indian/Alaska Native and White-1, and Hispanic Other-6. Additionally, 7 households served were female-headed and 4 households were headed by a person with a disability. 2. Shelter Network- Maple Street The City provided Shelter Network with Redevelopment Agency funds in the amount of $7,500 for the Maple Street Shelter. This emergency and transitional housing facility was available to homeless individuals in South San Francisco. On-site services include support groups, job development and other individualized services to help individuals secure permanent housing. During 2004-2005, Maple Street Shelter served 55 people, exceeding the City's goal of serving 20 people. Fifty-two (52) clients served were at or below 30% AMI and 3 were below 50% AMI. The racial and ethnic make-up was White-36, African- American/Black-l0, American Indian/Alaska Native-I, Native Hawaiian/Other Pacific Islander-I, Hispanic Other-2, and Hispanic White-5. 3. Samaritan House-Safe Harbor Homeless Shelter The City provided $7,000 in RDA funds to Samaritan House for the operation of the North County Homeless Shelter. The North County Emergency Shelter is located in South San Francisco and provides 90 beds for homeless men and women. In addition to enlergency shelter and food, Smnaritan House provides on-site substance abuse education mld counseling, employment and job development counseling, and health services. One hundred and three (103) South San Francisco residents were served in 2004-05. Alll03 individuals were at or below 30% AMI. The racial and ethnic make-up was White-57, African-American/Black-l 8, Asian-2, Hispanic Other-23, American Indian/Alaskan Native-2 and Native Hawaiian/Other Pacific Islander-I. 4. Human Investment Project (HIP) . The City provided $22,500 in Redevelopment Agency funds to HIP's Home Sharing Program to assist individuals and families, including those at risk of becoming homeless, in finding shared housing. This program is available to individuals and families citywide. During 2004-2005, HIP's program helped 97 families looking for shared housing. This achievement nearly met the City's revised goal of helping 105-131 families in their search for affordable housing. Of the families helped, 74 were at or below 30% AMI, 20 2004-2005 CAPER City of South San Francisco Page 9 of27 P.1 r:; .AlmquS!p U ql!M. UOS1gd U Aq pgpUgI[ sPloI[gsnoq OE pUU 'EZ pgpUgq gIdOgd AJlgPP 'pgA1gS SgmUlUJ gql JO L 17 pgpUgI[ SgIUUlgJ 'UO!l!PPU UI . 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Sa!l!mBj pUB SIBnp!A!pU! .lOj sa!uullpoddo ~u!snoq paqJ!.lua-aJ!A.las ap!AO.ld :A1!.lO!.ld 0;) 'suo!lunl!s gA!Snq'B gdU:lsg OllJUlsnoq lU;;lnn:l Ipql gA'BgI lsnUlluql SgH!lli'BJ llgql pIm SlOA!A1nS g:lUgIO!A :l!lsgrnop 10J 19l1gqs Sgp!AOld (V1IO;)) gsnqy dIqsUO!lUPll 'aU!lliO:llgAO SgmUnUlUlO;) N:ilclV:J ~OOZ-vOOZ O:JS!:JUV.I..!l uVS '1J1WS fo M!;) LZJO OI a~vcl 91.d 1. Center for the Independence of the Disabled - Housing Accessibility Modifications The City provided $15,000 in CDBG funds to the Center for the Independence of the Disabled (CID) to complete housing modifications for disabled residents, enabling them to remain in their homes in a safe and accessible environment. The program is available citywide to low-income residents. During 2004-2005 CID served 26 disabled resident households, exceeding the City's goal of serving 20 households. Of the families served, 13 were at or below 30% AMI, 6 were at or below 50% AMI and 7 were at or below 80% AMI. The racial and ethnic make-up of the families was White-16, Hispanic/White-2, Asian-6 and Native Hawaiian/Other Pacific Islander-2. In addition 10 of the households served were female-headed and elderly people headed 24. All 26 households were headed by a person with a disability. 2. Communities Overcoming Relationship Abuse (CORA) CORA provided shelter for battered women and their children as well as food, clothing, counseling and legal services. Services are provided in English, Spanish and Tagalog. The program exceeded its goal of 7 by providing services to 11 women and children. Of the clients assisted, alIl1 were at or below 30% AMI. The racial and ethnic make-up was White-7 and Hispanic White-4. The program was funded with $4,000 in CDBG funds. Comparison of 2004-2005 Achievements with Five-Year Plan Goals In 2004-05, the second year of the five-year Consolidated Plan, the City made good progress meeting the needs of people with special needs by working with agencies such as CID and CORA. Since FY03-04, Center for Independence of the Disabled has made a total of 55 homes more accessible to disabled residents and CORA has provided shelter and service to 18 women and children survivors of domestic violence. The City also provided funding to ELLIPSE to assist 35 households with HIV / AIDS and to P ARCA to provide services to 115 individuals with disabilities and their families over the last two years. IV. Non-Housing Community Development Activities To help create a healthier and safer community, the City of South San Francisco uses the Community Development Block Grant to fund an array of non-profit agencies that provide essential social services to working families. All non-profits funded through the City leveraged funds with donations from private individuals, foundations, corporations, in-kind donations and/or fees for service. Funded services range from childcare and youth programs to senior services and general social services. The City also uses CDBG funds for building improvements that help revitalize the Downtown, improve facilities that provide services to low-income residents, and make buildings accessible to people with disabilities. A. Priority: Provide core public services activities to improve the quality of life for low-income individuals and families, including those at risk of becoming homeless and special needs groups. 2004-2005 CAPER City of South San Francisco Page J1 of27 "P.17 .ap!MAlP Sa!nUI~j Ol alq~n~A~ am SUIU~Old asaq.r .sa!nUI~j aUIOaU!-almapoUI ptm -.M.OI Ol al~apHqa gU!P!AOld sapuag~ Ol a:Ju~lS!SS~ I~Ptmuy: pap!AoJd Al!J aq], ~).I8JPl!q3 01 .Ploqasnoq jO p~aq-aI~UIaj ~ Aq pap~aq san!m~j mOlj ala.M. Sluana 9 IIV .a!u~ds!H S~.M. 1 pu~ al!qi\\ ala.M. palS!SS~ San!UI~j aqljO (~) aA!d Tli\IV %O~ .M.olaq 10 l~ ala.M. palS!SS~ san!m~j UIOlj ala.M. ualpnqa aqljO (9) X!S UV .DHG;) U! OOO'~$ ql!.M. paputlJ S~.M. UImgOld aq], .uaJPHtp ~ JO I~og S,Al!J aql gu!paaaxa s!spa U! SaH!UIUJ UIO.y ualPHqa 910j al~apHq:J UIlal-poqs pap!AoJd IpunoJ gun~U!plOO:> al~:> PHqJ aq], H:JunoJ nUnUU!pIOO:> al~:> PHqJ .~ .Ploqasnoq jO sp~aq-aI~maj Aqpap~aq ala.M. paAlas sPloqasnoq aqlJo 8 'uompp~ UI 'p-laqlO a!tmds!H ptm Z;-tm!SV '1-)p~IHfU~apamv tmapJV a!u~ds!H 'l-al!q.M. 7fJ )fa~IHflIRapaUIv-u~apJV 'I -)fa~IHfU~apaUIV u~a!.yv 'E-al!qi\\ S~.M. SamUI~j aqlJo dn-a)f~UI a!uqla puu I~P~J aq], .IWV %08 MOlaq 10 l~ a1a.M. ~ pu~ IWV %O~ .M.olaq 10 l~ ala.M. 17 'IWV %OE MOlaq 10 l~ a1a.M. (E) aann 'paAlas Sluana aqlJO .sputlJ OaG;) uI 000'01$ qlI.M. paput1] S~.M. UI~Jg01d aq], 'ua1PHqa ~ 1 gunsIss~ jO I~og s ,AHJ aql gunaaUI A{l~au 'SaH!UI~j Z; 1 Ol al~as gU!pnS ~ uo al~apnqa papIA01d UI~liJOId al~apHq;) oas!au~ld u~S qlnos JO Al!J a1~:> A~a palosuodS-Al!J .q 'oaG:> U! OOO'~$ ql!.M. paput1] SUM Ul~lgOld aq], ;pap~aq-aI~UIaj ala.M. paAlas sPloqasnoq aqlJO (6 I) uaalau!N .61-1aqlO :J!uuds!H puu E-al!qA:\ :J!u~ds!H 'l-u~)fsuIVfU~!PUI u~apamv :J!uuds!H 'l-uU)Is~IV jUU!PUI uU:JpaUIV 'Z;l-U~!SV 'I -)pUlajU~apaurv-uuapJV '8-al!l{A\ S~.M. 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Sluana aqljO dn-a)fBm :J!Uln:) pu~ IBp~l aq], Tv\IV %08 MOpq 10 lU al:)M Z;L pUB IWV %O~ MOlaq 10 lU ala.M. 8L 'IWV %OE Mopq 10 lU alaM Z;8 asatn JO .u:)IPHqa 09 I iJu!Alas JO IuoiJ s ,Al!;) aql iJu!paaaxa 'ualpnqa Z;EZ; palS!SSU UltUiJOld ~q], .1aUIums atn iJupnp dPl ppy: U pUB sanddns 10J Olltmlg Daa:> OOO'E$ Sl! pasn pplS!a Iooqas aq.r .UlmgoId lamUIns U SU Ua.M. SU AUP U slnoq I 1 aluapHqa Sap!AOId lalu:);) s,uaIpHqJ (aSfldSS) pplS!a Iooqas pay:!uIl oaspuuId uuS qlnos Ialua:> s,ualpHtI:> - aSfldSS .p .ap!.M.A+p SamUIUj Ol aNUn~AU alU SUlUlgOld asaq.r .saa!Alas Iu!aos pUu pOOj qH.M. SIO!UaS lS!SSU lUql sapuagu Ol aaUUlS!SSU IU!auUuy pap!AOId Al!;) aq], saJ!A.las .I0!uaS oz o:JSPUV.1d Uvs t/lnosJo t\j!:J N:FldV:J ~OOZ-tooz aluJ AUa Hnpv palosuods-Al!J .U LlJo U a2vd 81'd Adult Day Care Program, a program sponsored by the City of South San Francisco, provided recreational and nutritional programs for 39 low-income South San Francisco seniors, nearly meeting the revised goal of assisting 45 clients. The program was funded with $19,000 in CDBG funds. All 39 clients were at or below 30% AMI. The racial and ethnic make-up of the clients was White-25, Hispanic White-5 and Asian-9. One (1) of the households served were female-headed households and 38 were elderly-headed households. The program is available to seniors citywide. b. Second Harvest Food Bank Second Harvest Food Bank provided weekly grocery bag deliveries to 448 senior and disabled individuals. The agency exceeded the City's goal of serving 400 individuals. The program was funded with $4,000 in CDBG funds. All of the clients served were at or below 30% AMI. The racial and ethnic make-up was White-I 53, African- American/Black-8, Asian-79, Native Hawaiian/Pacific Islander-79, American- Indian/ Alaskan-6, American Indian/Alaskan & White-I, Hispanic African- AmericanIBlack & White-I, Hispanic Native Hawaiian/Other Pacific Islander-I, Hispanic White-38, Hispanic Other-70 and Other-I2. Two hundred and three (203) were female-headed households, 49 were households headed by a disabled individual and all 300 of them were elderly-headed households. c. Ombudsman Program of San Mateo County The Ombudsman Program monitored adult-care facilities, advocating for residents of 29 long-ternl care facilities in the City of South San Francisco. The program received $1,700 in CDBG funding for the first time in 04-05. They provided advocacy and counseling for 41 low-income residents, exceeding the City's adjusted goal of39. The ethnic and racial breakdown of clients was Asian-2, White-38 and Hispanic White 1. 3. General Social Services The City provides financial assistance to agencies helping families with social services including case management, health referrals, housing, literacy, and advocacy programs. These programs are available to families citywide. a. North Peninsula Neighborhood Services Center (NPNSC) North Peninsula Neighborhood Services Center (NPNSC) provided food, clothing, shelter, transportation, counseling, infornlation and referral services, rental security deposits and assistance with utility bills to 2,406 low-income individuals, far surpassing the goal of serving 1,300 people. NPNSC services also include emergency hotel vouchers to prevent temporary episodes of homelessness. The program received $24,000 in CDBG funds. Of the individuals served, 2,046 were at or below 30% AMI and 360 were at or below 50% AMI. The racial and ethnic make-up of the clients was White-528, African-America/Black-I 95, Asian-42, American IndianlNative Alaskan-3, Alnerican IndianlNative Alaskan & White-3, Native Hawaiian/Other Pacific Islander-I 05, Hispanic American IndianIN ative Alaskan-152 and Hispanic White-I,3 78. In addition, 600 of the households served were female- headed households, 60 were elderly-headed households and 91 were households headed by a disabled person. 2004-2005 CAPER City of South San Francisco Page 13 of27 P.19 .SPloqgsnoq pgpUgq-gIUlUgJ glgM pgAlgS sPIoqgSnoq gqlJO O~I 'uo!l!Ppu uI .90I-JgqlO puu 'IOI-UU!SV '80E-)PuI8JUapgwy-uuapJV 'OEI -gl!qi\\. SUM SlUg!P gql JO dn-g:>JUlU a!uqlg pUU IUPUl gqL ]WV %08 MOpq JO lU gJgM Oll puu 'IWV %O~ MOpq 10 lU glgM ~L I 'IWV %OE Mopq 10 lU glgM O~l 'pgAlgS slunpIAIpuI gqlJO .DHG;) uI 000'17 I $ pgA!gag1mUliI01d gqL .SlUgPISg1 oaspuUli[ uns qlnoS JO mqmnu 19lUg1iI UgAg uu qaUg1 Olmgql gIquUg IUM luql sdIqs1guJ.md MgU pgqsnqulSg gnqow qlOoL glp AIIuuomppv .SlUglUlUg1l IUlUgp dn-MoIIoJ puu glUa gA!lUgAgJd 'SiIU!Ugg1aS lUlUgp ql!M Wgql iIuIPIAOld 'SlUgIP gwoauI-Mol pUU -MOl A:.mA ~t9 pgAJgS AIItlJssgaans gUqoW qlOoL gql 'JgAgMOH .~O-tO uI pgpUg 'sIooqas ol gnqoW qlooL gql iIuIiIupq 'sd!qsJgUllUd Ag:>J 1IgqlJO gUO gql gsnuagq SlUgIP 0~8 iIUIAlgS JO luoiI .tpqllggm ol glqu lOU glgM AgqL .oaspuu1d uuS IllnoS uI SlOIUgS puu sllnpu 'Ug1pnqa gutoauI-MoI10J SgaIA1gS lUlUgp glIS-UO pgp!A01d gnqoW qlooL gqL gnqoW qlooL gqL .q .uOSlgd pglqus!P 13 Aq pgpUglI Ploqgsnoq 13 mo.y I puu sPloqgsnoq pgpUgq-ApgPP mOl] E 'sPloqgsnoq pgpUgq-glumgJ mOl] glgM SlUg!P (ll) OMl-AlUgML .E-1gpUUISI aypud 19q1OfUuHuMUH gA!luN puu I I-un!SV '6I-a!uuds!H 't-:>JauIHfUua!gmv-unaPJV 'OI -gl!qi\\. SUM Slug!P gql JO dn-g:>Juw a!uqlg puu IUPU1 gqL ]WV %08 MOIgq 10 lU SUM I puu IWV %O~ MOIgq 10 lU glgM E 'IWV %OE MOIgq 10 lU glgM 817 'pgAlgS slunpIA!puI gqlJO .gp!MAlP SlUgp!Sgl Ol gIqunuAu SUM pUU SPUllJ DHG;) U! 000'9$ ql!M pgpUllJ SUM mUliJold gqL .sllnpu 017 iJU!AJgS JO luoiJ S ,Al!;) gql iJu!ssudms 'lUUliIold S!ql qiJno.nn pglOltll glgM sllnpu (l~) OMl-A:tHi[ 'SIIPIs iJU!lpM pun iIu1PugJ Slunp!AIpuI qaUgl Ol SlOlnl SU!Ull 'A:.tluqn: oaspImJi[ UUS qlnoS gqlJO mU1iJ01d 13 'GVtnI pgf01d GVtnI lag~Old .a .SPloqgsnoq pgpUgq-gIUWgJ lUOIJ glgM SlUg!P (~) gA!i[ .I-1mno pun I-UU)ISUIVfUuIpuI Imapgmv 't-1gpUUIsI aypucIflIUHuMUH gA!luN '~-UU!SV '6l-aIuuds!H 't-:>JauIHfUuapgmy-uuapJV '~E-gl!tI.M. SUM Slug!P gqlJO dn-g:>Jum a!uqlg puu IUPU1 gqL .IWV %O~ MOIgq 10 lU glgM ~ puu IWV %OE MOpq 10 lU glgM tL 'pgA1gS slunp!AIpu! gqlJO .gp!MAlP SlUgp!Sgl Ol glqunuAu S! unuiJ01d gql 'oaspuu1i[ uuS qlnoS lUO.y slunpIA!pu! glUoau!-Mol 6L Ol iJungsunoa gp!AOld dpll Ol pgsn II qa!qM 'AlI;) gqlmo.y sputlJ vcru U! 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In addition 55 of the households served were female-headed households, 6 were elderly headed households and 2 households were headed by a disabled person. 5. Disabled Services The City provided financial assistance to agencies offering peer counseling and life-skills training to disabled persons, recreation to disabled youth and nutrition supplements to people with HIV / AIDS. These programs were available to residents citywide. a. P ARCA - Peninsula Association for Retarded Children and Adults P ARCA provided support, information, refelTals, outreach, advocacy, and recreation opportunities to approximately 22 low-income South San Francisco households that had a family member with developmental disabilities. P ARCA met their adjusted goal of serving 15 households. Furthermore, they developed a stronger outreach infrastructure to increase service in 2005-06. The City allocated $4,000 in CDBG funds to the program in 2004-05. Three (3) families served were at or below 30% AMI, 9 were at or below 50% AMI and 10 were at or below 80%. The racial and ethnic make-up was Asian-1, African American/Black-1, Native Hawaiian/Other Pacific Islander-I, White-I, Hispanic Native Hawaiian/Other Pacific Islander-I, Hispanic White-8 and Hispanic Other-9. Five (5) were from female-headed households and 1 was from an elderly-headed household. b. ELLIPSE Peninsula Aids Program ELLIPSE provided professional and volunteer in-home support to 33 very low- income individuals in 23 households. Services provided included: light housekeeping, grocery delivery, transportation and counseling. ELLIPSE exceeded the City's goal of 15 households with a family member suffering from HIV / AIDS. The program was funded with $4,000 in CDBG. Thirty (30) individuals served were at or below 30% AMI and three (3) were at or below 50% AMI. The racial and ethnic make-up was White-l 8, African-American/Black-4, Hispanic/African-American/Black-l, Hispanic White-l0. One (1) household served was headed by female heads of household and twenty-two (22) were headed by a disabled person. 6. Youth Services The City provided financial assistance to agencies offering counseling and activities to youth experiencing abuse, truancy, disabilities, behavioral problems, and/or gang activity. These programs are available to low-income youth citywide. a. John's Closet 101m's Closet provided new clothing for 211 very low-income youth attending elementary schools serving the CDBG target area. The agency met the City's revised goal of providing clothing to 200 children. The program was funded with $3,000 in CDBG funds. All of the clients served were at or below 30% AMI. The racial and ethnic make-up of the clients was White-12, African-AmericanIBlack-10, African- American/Black & White-3, Asian-7, Asian & White-2, Hispanic Native American/Alaskan & White-3 and Hispanic White-I, Hispanic Other-172 and Other- 2004-2005 CAPER City a/South San Francisco Page J 50/27 P.21 .SPloqgsnoq pgpngq ApgPP g.lgM. t pun sPloqgsnoq pgpl1gll-~ll1lUgJ g.lgM. sPloqgsnoq (OZ) AlUgM.j, .1 .Ploq~snoq JO pl1gq ApgPIg Sl1M. (0 ~uo pun Ploq~snoqJo pngq-glnlUgJ n Aq pgpn~q glgM. sPloqgsnolI gSgqlJO (17) 1nod .Z8-~l!q& ~!unds!H snM. S~!HlUnJ gqlJO dn-~)}UlU ~!uqlg pun In!~Ul gqj, .IWV %OE M.OI~q 10 In ~1~M. 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SlgUM.O dpl{ SlU~urgAOldlU! gS~qj, .s~u!pnnq l!~ql Ol SlU~lU~AOldlU! uiJ!S ssgu!snq pUR gpll:JUJ '{Ulnpn1ls iJuPIll11~pUn Sl~UM.O 4I~dOld Ol ~~UlllS!SSU 11l~!uq~gl pUll IllPUlluy Sgp!AOld UO!llllmqllqglI IR!~l~lULUO;) pglosuodS-Al!J gllj, uOHt'.J!l!qt'.qOllI lB!J.lOlmmo;) pa.losuodS-Al!;) "I gql Ol Al!lU!XOld gSOP U!lll!M. SlUgP!S~l gqlJo lUg~lgd 5;5; Ullql glOW .~!ulldS!H pUR guro~u! -M.OI AlplllUpd glll 01lM. SlUgp!Sgl SgAlgS PPlS!P UM.OlUM.OP gqj, .Al!INll!A 11l!~lgUIUIO~ S,~glU UM.OlUM.OP gql gSUgl~U! Ol slloJJ~ seAl!::) gqlJO llRd lUR)..IOdur! uu S! lU1l1~Old S!qj, N'ilclV;) ~OOZ-vOOZ O:JSPUV.ld Uvs t{Jnos fo tV!;) Llfo 9l a2vcl ZZ.J downtown are low-income. The City anticipates that improvements to the downtown will help increase sales, lead to greater stability of businesses, retain jobs, and reduce vacanCIes. In 2004-05 the City provided technical assistance and code enforcement action at 4 businesses. It also helped fund a new awning at 210 Baden and initial exterior improvements at 212 Baden Ave. The City also approved a contract for improvements at an historic downtown building. Construction scheduled for 2005-06. Additionally, the City funded the exterior rehabilitation of the Boys and Girls Club. Improving the appearance of the building and neighborhood, while directly benefiting 1229 low-income youth. The racial ethnic make-up was White-320, Black/African American-123, Asian- 246, American Indian/Alaska Native-12, Other-172 and Hispanic-356. The contractor for this project complied with all Davis-Bacon requirements. Comparison of 2004-2005 Achievements with Five-Year Plan Goals-Non-Housing Activities In 2004-05, the second year of the five-year Consolidated Plan, the City made considerable progress towards Ineeting the goal to sustain and increase the level of business and economic activity in areas that serve or have a high percentage of low- income residents. The City continues to be active with its non-housing rehabilitation activities. Since FY03-04 the City has completed 2 commercial fa<;ade improvements, including the Boys and Girls Club, funded a new awning and exterior improvements. Staff has provided technical assistance to an additional 7 businesses. Furthermore, the City has approved a contract for rehabilitation of an historic downtown building. C. Priority: Preserve and improve public facilities that serve a high percentage of low-income residents. Disabled access modifications and community facility rehabilitation are undertaken to improve facilities used by the low- and moderate-income community in South San Francisco. 1. Orange Library ADA Modifications The City provided $35,000 in CDBG funds to the Orange Library for ADA modifications. These improvements included the removal of stairs and installation of accessible ramps. Additionally, the elevator was retrofitted with instructions in Braille. 2. Orange Memorial Park ADA Modifications Orange Memorial Park is the largest park in South San Francisco, utilized by all citizens of the City. In FY 2004-05, the City granted $14,737.14 in CDBG funds to purchase 10 wheelchair accessible water fountains. Comparison of 2004-2005 Achievements with Five-Year Plan Goals-Non-Housing Activities Over the last two years, the City as completed two public facility projects. In 2003-04 the City worked with Families on Track to acquire and install a modular unit to expand its 2004-2005 CAPER City of South San Francisco Page 17 of27 P.23 'SUgZm:J pgNUS!P S ,Al!J gt.p 10J UOPUg1:Jg1 pUU Sg:J!A1gS Ol SSg:J:JU ~U!A01dUI!-A.tU1qrI g~UUlO ptrn ~lUd IUPOUIgW g~UUlO-Sg!lHPUJ :JHqnd IUl!A OMl Ol SUOPU:JY!POUI vav IU!lUgSSg pglgIdUIo:J Al!J. gl(l '~O-tOOZ uI 'SgmUIUJ 81 Z dpl( Ol g{qU SUM nnSg1 U SU A:JUg~V gl(l-AlpudU:J g:J!A1gS .0~61 glOJgq lHnq ){:JOlS ~u!snol(Jo uop10dold puu X!S JO g~U gl(llgpUn uopuIndod JO uon.IOd01d S ,Al!J gql su ngM su ApgAOd U! ~U!AH Sgn!UIUJ JO UO!POd01d 10J gIPUg:J1gd qlO~ 19ddn gql U! ~U!gq Al!J gql uo pgsuq S! UOPUU~!Sgp S!l(.L .Ug1U ~sp-q~!q U su Al!J gql pgY!lUgp! suq UIU1~01d UOPUgAg1d ~U!UOS!Od PUgl pool(PHl(J AlunoJ OglUW uus gl(.L .PplS!P UMoluMOP :JPOlS!l( gl(l U! ApuIn:J!pud ')POlS ~u!snol( ~UPS!Xg gl(l JO g~U ~l(l JO gsnu:Jgq Al!unUIUIo:J Sl! 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Fair Housing Plan Through the San Mateo County HOME Consortium, the cities of Daly City, Redwood City, San Mateo and South San Francisco contracted with Project Sentinel to develop and produce and updated "Analysis of Impediments to Fair Housing in San Mateo County, California (AI)." This section of out AIIDual Plan lays out the City's required Fair Housing Action Plan in response to the findings of the draft updated Analysis of Impediments to Fair Housing. The report indicated a number of impediments and potential impediments to fair housing in San Mateo County, although South San Francisco was not cited as having any policies that directly impede fair housing and was listed as one of the stronger jurisdictions in preventing predatory housing practices tlu'ough increasing the supply of affordable housing. The study found that the shortage of affordable housing and a high ratio of older housing stock in San Mateo County can constitute an impediment to fair housing, due to a high correlation between poverty levels, substandard housing, cost burdened and over-crowded households and Black and Hispanic neighborhoods. Although, South San Francisco is not one of the most vulnerable cities in the Consortium, conditions common to all of the entitlement cites studied, such as old substandard housing, low vacancy rates, and high numbers of lower income immigrants without good command of English or knowledge of fair housing law, set the stage for predatory housing practices directed at people of color, low and moderate income households, people with disabilities, large families, and other groups protected under fair housing laws. The study found some zoning and land use policies that constitute impediments to fair housing in other jurisdictions, but none were found in South San Francisco's zoning and land use policies. A common area of concern countywide is discriminatory banking and lending policies. The study found higher denial rates for mortgage loans and a higher reliance on sub- prime loans among Black and Hispanic residents. The study also found a countywide pattern of buildings that were not in compliance with accessibility provisions for the disabled in the Fair Housing Amendments Act. This non-compliance is an impediment to fair housing choice. In response to these findings, the City of South San Francisco maintains its support for fair housing organizations, fair housing education and outreach, and housing development and rehabilitation work that directly addresses the housing market factors that can put residents at greater risk of housing discrimination. Today, the City of South San Francisco continues to work to overcome impediments and promote fair housing by contracting with two agencies, Project Sentinel and La R~a Centro Legal, to assist residents with housing discrimination complaints. The two agencies provide counseling, legal advocacy, and tenant/landlord mediation services in issues of fair housing and housing habitability. By having two agencies providing this service the City is able to offer a wider range of services to citizens needing fair housing counseling. Fair housing services are available to residents citywide. The City designates its annual allocation of HOME Administrative funds to carry out its fair housing action plan. 2004-2005 CAPER City of South San Francisco Page 19 of27 P.25 .UOnUUIlOJU! ~U!Snoq l!UJ ~uns:~mb~u SlUgp!Sgl Ul01J s::}p!nbu! guoqdglgl 88 Ol pgpUOdSgl A::mgiiu gql 'AUUUO!l!PPV 'uoslgd pgyqUS!P U Aq pgpUgq sPloqgsnoq glgM Z puu sPloqgsnoq pu::}q-gluUl::}J glgM P::}AlgS sPloqgsnoq (17) lno d . 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Ol glqunuAu slool ItlJl::}Mod lSOUI ::}ql JO ::}uo su Apms gql Aq pgn~ ::}lgM Sg~UUU!P10 ~U!UOZ A.Iuuo!snl~UI .UOnUU!UIp~S!P ~u!snoq JO )(SP lU glOUI sdnOJll pgl~glOld lnd luql suo!l!puo~ ~u~lUiJ!l!Ul An~gl!p '~lOM uonulmqmpl pUU lUgi.udOlgAgp llU!Snoq sn SgnU!lUO~ o~spuUJd uus qlnos JO Al!;) gql .UOnUU!UIp~S!P llU!Snoq puu s::}~!l~u1d iJu!snoq A.IOlUP::}ld Ol ::}Apnpuo~ SSgl Al!UnUIUIO~ 13 ::})(UUI Ol AUM U su pgn~ ::}lgM iiu!snoq g{qUplOJJU JO UO!l~rulsuo~ puu uO!lUAl::}S::}ld: ou!snoH g{qUplOJJV JO UOn~nllSUO;) puu UOnUA1gSg1d: .n N3clV:J ~OOZ-vOOZ O:JSPUV..ld Uvs tfJnoslo to!;] Lzlo oz a$vd 9Z.d VII. Needs of Public Housing The South San Francisco Public Housing Authority operates as a separate entity and submits a Consolidated Plan to HUD separately from the City of South San Francisco. The South San Francisco PHA manages 80 units of affordable public housing. Information about the needs and strategy of the South San Francisco PHA can be found in the South San Francisco PHA 2000-2004 Consolidated Plan. VIII. Anti-Poverty Strategy The City of South San Francisco has a multifaceted approach to reducing the number of families living in poverty. First, City participation in the acquisition, construction or rehabilitation of affordable housing is contingent upon restricting rents to affordable levels for low-income residents for an extended period of time (30 to 40 years). This helps reduce the number of families living in poverty by decreasing one of their largest expenses, rent, to a reasonable level. Additionally, the City's housing rehabilitation loan programs offer low- and moderate-income homeowners. the opportunity to bring their homes up to current building standards by providing low-interest loans, which facilitate upgrades in a manner that does not burden the family budget. Second, the City has recently adopted an inclusionary housing ordinance that requires developers to make twenty percent (20%) of all new housing units in the City affordable to moderate-income families. All of the inclusionary units must be affordable to families at or below 80% or at or below 120% of the area median income as stipulated in the inclusionary ordinance. Third, efforts to improve the historic downtown business district provide property owners with an opportunity to undertake exterior business improvements, which can include signs, awnings and exterior painting. These improvements help owners increase the use of their commercial buildings and improve the appearance of the Historic Downtown district. In addition to providing assistance for improving commercial fayades, the City actively works with the South San Francisco Chamber of Commerce to meet the needs of downtown businesses and to promote the area. These activities help create a Inore vibrant business community and new jobs for City residents. Fourth, the City funds several non-profit agencies whose services help low-income residents. For example, by providing childcare subsidies the City is able to help low- income adults work or study while their children are at a childcare center. Sitnilarly, by providing funding to an adult literacy program, the City is able to help residents find employment they may not have been able to secure before knowing how to read. Fifth, the City joined the Stakeholder Committee of the newly formed HOPE (Housing our People Effectively): The Plan to Prevent and End Homelessness in San Mateo County. HOPE is a planning process that will produce concrete and realistic strategies to address the problem ofhomelessness in San Mateo County, with the ultimate goal of ending it within 10 years. 2004-2005 CAPER City of South San Francisco Page 21 of27 P.27 .4mAod U! liU!AH SgH!UlUJJO 19qUlnu gl{l g~npgl dlgl{ OlliuPllOM. Auununuo~ S! Al!J gql 'SllOJJg JO gpnl!HnUl S!qll{linoll.{j, ~u!snOH Ollq1Jp.lOJJV U!1JJU!1JW PU1J .laJso.!! '9 spaaN paA.mS.lapu{} ~unaaw OJ sap1JJsqo ssa.lpPV oV suonav .IaqlO .XI 'SlUgp!Sgl AlP JO 19qUlnu 19lUglli U gAlgS Ol gyqu SUM Al!J gl{l 'SUO!lUZ!UUlilO snopUA JO Sg~lnOSgl pUU gS!llgdxg gl{l UO liU!MUlP AS: .spu11] Al!J JO gsn gl{l gZ!Ul!XUUl Ol SUOnUZ!UUlilO snopuA l{l!M liUnUU!plOO~ puu liuPlloM Aq S!l{l gUOP sUl{ Al!J gl{j, .g{q!ssod 19UUUUllUg!~YJg lSOUl Ulgl{l pgsn puu g{q!ssod lUglXg lSgnry gql Ol spu11] pgHUl!l sl! pgliUlgAgI sUl{ Al!;) gql 'glOJglgqj, .spu11] glquHuAu JO ){~Ul gql S! SpggU pgAlgSlgpUn liUnggUl U! Sg~uJ Al!J gl{l gpUlsqo Ag){ gqj, .SlUgA MgJ lXgU gqllgAO pgdOIgAgp gq IHM luql spgfOJd MgU snopuA U! Sl!un glUllg){lUUl Mopq 091 uuql glOUllOJ pglUnoligu suq Al!J gl{j, .ssg~~ns U gq Olliu!AOld S! SlUgA ~~ iOJ Sg!l!UlUJ gWO~U!-glUlgpOW puu -Mol ol gyqUplO]JU SHun gl{l JO lUg~lgd OZ g){UW Ol SlUgwdoIgAgp liu!snol{ MgU liup!nbg1 g~UUU!P10 liu!SnoH A.1uuo!snpul s,Al!J gl{l 'UO!HPPU Ul 'Al!uuUlnH 10J lUl!quH l{l!M pgf01d pgSOd01d gl{l su q~ns Sgn!unlloddo ilu!snol{ gyqUP10JJU glUg1~ Ol puul pgZHnn1gpUn 10/PUU P1upuulsqns gsul{~lnd OlllOJJg uu g){UW Ol sgnUnUO~ Al!J gl{l 'liu!snol{ gyqUP10JJU lUgwdoPAgp gqlliupglSOJ SU UgM SU SpggU ilu!snol{ pgA1gS1gpUn liunggwJo SgpUlsqo gl{l gWO~lgAO OJ, sJU!1J.lJSUO;J I1JJuamu.laAoD/~u!snoH alq1Jp.loJJV OJ s.la!.I.l1JO: aAomalI 00: .SlUgUlgA01dUl! g){UUl UB~ Al!J gql gl~qM SUglU A]:!lUgp! Ol Sg!~Hod sl! lOl!UOUl Ol pgnUnUO~ sul{ o~spuUld uus l{lnos JO Al!J gl{l 'lUgwdoIgAgp liu!snoq gyqUPlOJJU Ol Slgp.mq gAOWg1 Ol puu ilu!snoq g{qUp10JJU JO AIddns gql U!UlU!UW puu 19lsoJ OlllOJJg uu U.I SgWOl{ lpl{l Ol SUO!lU~IHpoW AlHN!SSg~~U liu!){uw Al!I!q!Xgg 19lUglli SlUgp!Sgl pgIquS!P gA!li Ol g~UUU!P10 liu!uoz pgpUguru Alddy . slgdoPAgp Ol g~UUlS!SSU lU~!uq~gl gp!A01d puu spgfOJd liu!snoq g{qUp10JJU JO SMg!Aglliu!l!pgdx3: . SUOnUlS j,lIYS: OUlllS: uus puu o~spuuld uus l{lnos gqllUgU lUgUldoPAgp pglUgPO l!SUBlj, gliUlnO~u3: . Sg!l!wuJ gWO~U!-glmgpOw Ol gyqUPlOJJU gq All;) gql ul SHun glOW 10 t JO slugwdoPAgp IU!lUgPlSgl U! SHun liu!snoq MgU UU JO lUg~lgd OZ luqlliup!nbgl g~UUU!PlO liu!snoq A.rouo!snpu! s ,Al!J gql g~lOJU3: . g~UUU!PlO snuoq Al!SUgp pgldopu uu liu!lugWgldUlI . : glU Ug)IUl SUl{ Al!J gql sdglS gqlliuoury .liu!snoq gyqUPlOJJU Ol Slgp1Uq gAOWgl puu 'U!UlU!UW 'lglSOJ Ol ilU!){lOM sgnu!luo~ Al!;) gql 'g~Uld U! lUgWgI3: liu!snOH MgU s ,Al!;) gql ql!& .SlOpUJ 19q1O AUUW pUU 'ilu!snoq liu!doIgAgp Ol SlU!UllSUO~ 'puuI JO AlmquHuAu 'S~!qdU1lioUlgp '){~OlS liu!snoq s ,AHJ gql JO S!SAIUUB pUU Mg!Agl U sUl{ lUgWgr3: ilu!SnOH pgAOlddu s ,Al!J gqj, N3 dV;] ~OOl-tOOl O:JSpU1J.J.,!/ U1JS l{Jnosfo N!;] LZJo zz a~1Jd 8Z'd . Allowing higher densities in senior housing projects . Permitting reduced parking requirements for senior-care facilities . Requiring builders to include disabled-accessible units in new apartment projects C. Develop an Institutional Structure & Improve and Enhance Coordination of Services In 2004-2005 the City continued to work closely with non-profit social service providers, other cities, the School District, the County, and the Chamber of Commerce to coordinate the delivery of services to residents and to assist neighborhood groups with space for events and materials to help them conduct community activities. Specific efforts included: . Participated in the San Mateo County HOME Program Consortium . Worked with the County of San Mateo and other CDBG jurisdictions to implement HUD's Lead Safe Housing Regulation . Served as a member of the County's Continuum of Care Task Force . Joined the Stakeholder COlmnittee of HOPE (Housing our People Effectively): The Plan to Prevent and End Homelessness in San Mateo County . Funded twenty-five (25) non-profit agencies serving low-income residents to address needs diverse as childcare, senior services, homelessness, counseling for battered women and services for disabled people . Coordinated with Mid-Peninsula Housing Coalition to rehabilitate Willow Gardens . Participated with the County of San Mateo and a nonprofit organization to provide education and opportunities for first-time homebuyers . Assisted downtown businesses and the Chamber of Commerce with downtown beautification and improvetnent projects . Worked with the County of San Mateo, other entitlement cities, and nonprofit agencies to address concerns identified in the Analysis of Impediments for Fair Housing for all of San Mateo County . Assisted BRIDGE Housing in obtaining entitlements to develop affordable housing on County owned property located at Grand and Oak A venues . Worked with Peninsula Habitat for Humanity to obtain entitlements to develop affordable housing at 440 Commercial A venue . Worked with La Raza Centro Legal and Project Sentinel to provide fair housing representation and counseling . Continue to work collaboratively with North Peninsula Neighborhood Services Center to manage the City's minor home repair program D. Certificates of Consistency 2004-2005 CAPER City of South San Francisco Page 23 of27 P.29 .uuld pgluPHOSUO;) S ,Al!;) gql qHM A~UglS!SUO~ JO pglU~Y!llg~ gnss! Ol SUOHUZ!uulbo JgqlO UlO.IJ SlSgnbgJ AUU gA!g~gJ lOU PIP O~S!~UUld uus qlnos JO Al!;) gq.L .uo~Ua-S!AUa Ill!M g~UUndUIO~ ~Up!nbg1l~gfOld gUO )[OOllgpUn AH;) gql .Hpn13 113nuu13 uu HUIqns Ol SgpUg~U gql sgl!nbgl puu SHS!A gl!S spnpuo~ oSlu Al!;) gq.L 'SgAH~gfqo l!gql ~UnggUI Sp1UMOl ~U!)[UUI glU SgpUg~13 SSglgOld gql lnoqu pguuoJU! AH;) gql dgg)1 Sllodg1 gSgql 'suoH~USUUJl IUpuuuy plrn SlUgwqsndwo~~u l!gql JO Sllodgl Apgl-mnb pg}.:HUIqns SgpUggu gql puu pgl!nbgj Al!;) gql '~U!PUl1J vern puu 3WOH 'DaG;) gA!g~glluql SgpUggu 10d .SgPHod Al!;) puu SlUgUIgj!nbgj wU.nJold IUlgpgJ ql!M AIdUIo~ SUIulgOld Al!;) glnSUg lUql Sglnpg~Old pgqsHqulSg suq AH;) gq.L sa.lnpaao.ld pUB sP.l8PUB1S ~U!.I0l!UOW .X 'l!pnu AlP Iunuuu gIll puu A~UggV lUgwdOIgAgpgll gqllOJ llodgl Iunuuu gIll 'swu.nJold IUlgpgJ 10J (llodgll uonunIuA3 '1fl g~UUUUOJ1gd Iunuuy pgl13PHOSUO;)) 1I3dY;) gql gpnl~U! 1UgA S!11l pgMg!Agl Sllodg1 gql .SIuog Al!unUIUIO~ 199UI Ol sg~JnOSgl SH gU!Alddu S! Al!;) gqlluql gJnSug Ol Sllodgllunmrn S ,AH;) gql pgMg!Agl suq H~unO;) AltJ gq.L .1I3dY;) gql plrn uUId UO!l~Y lUg A gUo ~OOl-vOOl gql qlOq 10J uUId UOnUd!~!llUd UgZHP pgqsnqulSg sH pgMOnOJ AH;) gql 'uo!ludp!llUd UgZ!lP lOt[ UOH8d!a!l.l8d uazHKJ .IX UBld UO!J;JV .n~;J A auo .V .gHsqgM S,Al!;) gql uo pglsod oSIU SUM dd1l gql .EOOl 'E Alunlrn[ uo SgUI!l AlUnO;) OglUW uus gql U! pgqsnqnd SUM AlH!quHuAU dd1l gqlJO g~HOU ~Hqnd Y . EOOl 'OE 19qUIg~ga UO lSH gummu lUgUIdopAga Al!UnUIUIO;) puu gUIsnoH gql uo SgpUggu Al!UnIUUIO~ nu OllUgS SUM gUIpury naG;) 10J SIusod01d 10J lSgnbg1 y 1luIpund naG;) 10J sIusodOJd JOJ lSgnbg~ .SI13sodOld lpql JO JIuqgq uo g)[ods puu guPUgq gql Ol gUIU~ ~U!PUl1J DBa;) 10J pgnddu lmIl SgpUggu Al!UnWUIO~ AUUW .spggU lUgwdOPAgp Al!UnUIUIO~ puu gUIsnoq SIAlI;) gql uo SlUg{UUIO~ ~Hqnd gAP~gl Ol n~uno;) AH;) puu 10A13W gIll qHM gupumI ~Hqnd 13 ppq AH;) gql vOOl 'I I Aluruqgd uo SpggN AHunUIUIO;) uo 3upUgH ~Hqnd .lSH gUIHuw lUgUIdoIgAgG AlIunUIUIO;) puu gUIsnoH gql uo SgpUg~13 AlIunUIUIo~ lIu Ol pgnUUI SUM guPUgq gqlJO g~!lON .vOOl '8l Alunuu[ uo guPUgq gql glOJgq SAUP 171 SgW!l AlUnO;) OglUW uus gql U! lUgtUgSIllgAPU AUIds!p 13 su pglUpd SUM ~UPUgq gqllOJ g~nOU ~Hqnd y 'SgpUlqn O~SI~UUJd uus qlnoS su ngM SU nuq AlI;) l13 g~YJO lUgwdOIgAgG AHunWUIO;) puu ~IUlOUO~3 gqllU glquHuAu gq IHM SgIdo;) .vOOl '171 Hldy Ol ~I q~lUW wmJ lUgUIUIO~ ~Hqnd 10J grquHuA13 SUM uUld UO!l~Y lUg A gUo ~OOl-vOOl pgSOdOld gq.L uUld uon~Y 113nuuy pgSOdOld 13 JO AlmqunuA y uUld UO!PY lUg A gUo ~OOl-vOOl gql gZHUUId Ol :ouPUgH ~Hqnd H''3JV;) ~OOZ-tOOZ oasf:JUVJ.!f UVS 11Jnos Jo N!;) L'lJO P'l a2vJ OS.d On April 14, 2004, the City held a public hearing to finalize the 2004-2005 One Year Action Plan. A public notice for the hearing was printed as a display advertisement in the San Mateo County Times 14 days before the hearing on March 31,2004. Notice of the hearing was mailed to all community agencies on the Housing and Community Development mailing list. Final Annual Action Plan Copies of the Final Annual Action Plan and a summary of the plan were made available to the public for free and within two days of a request. In addition, copies were made available at the economic and Community Development Office at City hall as well as South San Francisco libraries. There were no requests for copies of the 2004-2005 One Year Action Plan. B. CAPER A notice annollilcing the public comment period and a public hearing for the CAPER was published in the San Mateo County Times on September 10, 2005, and a public hearing was held on September 28,2005. All notices informed citizens about the purpose of the One Year Action Plan and the CAPER and invited them to review the document and give comments to the City Council at the public hearing. XII. Citizen Comments The City did not receive any verbal or written comments during the CAPER public COlmnent period or at the City Council's public hearing on September 28,2005. XIII. Leveraging The City's yearly CDBG entitlement and HOME funds were leveraged with Redevelopment Agency funds and private investment. Projects leveraged with these funds include: the Willow Gardens rehabilitation, housing development projects, homelessness prevention, fair housing and first-time homebuyer loans. The nonprofit agencies receiving grants from the City leveraged the grants with their own agency funding from foundations, state and county grants, private donors, corporations, in-kind donors and/or fees for service. Specific details of the matching funds for each project are provided in Sections II - Housing Activities and Section III - Non-Housing Activities of the report. XIV. Displacement During 2004-2005 the City did not displace any tenant or business as a result of federally funded activities. Also, no tenants or businesses were displaced as a result of Redevelopment Agency activities or due to other City-sponsored projects. 2004-2005 CAPER City of South San Francisco Page 25 0127 P.31 .uUld uon~v ~OO(;-tOO(; :nn U! lUUliJOld q~u~ 10J p~qsHquls~ slu~mqsHdlUO~~U lunp!A!pu! ~ql pun 'uuld p~lnpHosuoJ 800(;-EOO(; ~ql U! p~qsHquls~ Alpopd q~u~ 10J P~A~!lPU slu~urqsHdlUo~~n ~ql S~zpUlUlUns llod~l S!ql JO I ~lql1.L .uuld P~luPHosuoJ 800(;-EOO(; ~qlJo Sll10iJ ~ql iJU!l~~lU sS~liJOld pOOlJ ~pUlU pIm uUld lunuuy ~OO(;-tOO(; ~ql U! l~S sIuoiJ ~qlJO AH10fulU ~lIl p~p~~~x~ 10 l~lU O~SPImld uus qlnOSJO Al!J ~q.L uOnunIUA'J[-Jlas pun uo!snl;)uoJ .AX '~O-tO u! P~qsHdlUo~~n OSIU ~l~M SU~plUO MOInA\. ~ql U! sHun lnoJ JO A~undn~~o pun uonulHNuq~lI .sHun lIWS: ~ Iuuomppu un 10J p~lnnoiJ~u gl~M. Slu~lU~~liJn iJu!snoq gyqnploJJu OM.l pIm ~OO(;-tOO(; U! UOn~nllsuo~ P~llUlS sHun lIWS: 817 I iJu!pnpu! SlU~lUdoPAgp ~~Jl{.L .sHun lIWS: JO lU~lUdoI~A~P iJu!snoq A.rl1uo!snpu! Sl! iJun~alU U! S! AlP ~qllOJ ss~~~ns lS~ll1~liJ JO sualU aql JO ~uO .~nuaAY u~pun: vIL In iJU!pnnq Hun-E Inuomppu Im iJU!Sl1q~lndJo ss~~old aql U! S! pun ~nU~A y lamw uo Sl!Un IUUOn!ppU ~a.nn p~l!nb~u AHJ ~q.L .p~l~ldlUo~ snM suap.mo MOII!A\. UO!luHI!qnq~llop~lx~ ~q.L .d.IoJ iJu!SnoH ~iJpps: qHM lu~mdolaA~p iJu!snoq ~yqUplOJjU Hun-Et U puu Al!UUlUnH 10J lnHqnH ql!M P~fOld Hun-t U dOpA~p Ol iJUppOM S! AHJ ~ql 'llod~l S!l{l U! passn~s!p sy .luamdolaA~p pa fOld M~U JO saiJuls AI.m~ aql U! u!uiJn a~uo S! 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S~~!Al~S IU!lu~ss~ JO Al~pUA U ql!M SlUgP!S~l JO SJ~qmnu g1J.m1 ~P!AOld Ol ~nunUO~ s~pu~'au ~lIl .sp~~u Iup~ds ql!M ~ldogd pUU '~ldo~d SS~plUOq 'SlU~P!S~J gmo~u!-M.OI 10J S~~!A1~S IUPOS pun 'au!snoq ~lUU!P100~ l~ll~q pIm spul1J P~HlU!I ~'aUl~A~l Ol Al!;) ~ql p~MOnU ~AUq sapu~lJU lYOlduou ql!M Sd!lIS1~UllUd .Al!J ~qllOJ AlPOpd U ~q Ol s~nunuo~ SlU~P!S~l ~mo~u!-MoIJo sp~~u ~qlla~m Ol s~pu~iJu lYOlduou qHM iJU!lUloquIlOJ pun 'lu~mlS~AU! ~lUApd 's~~lnos~l Al!J laqlo ql!M spullJ OS:GJ 1JU!iJul~A~l 'uo!ss!m sH iJU!qsHdlUO~~U pun n~M 1JU!uuoJl~d S! lUnliJold OS:GJ s, O~S!~UUld uus l{lnos JO Al!J ~ql "N'3clV;) ~OOl-tOOl O:JSPUV.ld uvs l{lnoS fo N!;) Llfo 9l aEvcl G€.d the contributions of non-profit agencies, the City has been able to make positive changes in the lives of low-income residents, improve the quality of life in the historic old town and increase economic opportunities for small businesses. The City also had substantial success with its first-time homebuyer program, placing a total of 4 loans in the last year. 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() c TABLE 2 Summary of Housing Accomplishments Grantee: City of South San Francisco State: California Program Year: 2004-2005 Priority Need Category Actual Units Renters o - 30% ofMFI 21 31-50% of MFI 5 51-80% of MFI 0 Total 26 Owners 0-30% ofMFI 37 31-50% of MFI 7 51-80% of MFI 5 80-120% ofMFI 4 Total 53 Homeless* Total Individuals 198 Non-Homeless Special Needs Total 37 Total Housing 314 * Homeless families and individuals assisted with transitional and permanent housing Total Housing 314 American Indian/Alaska 4 American Indian/Alaska & white 3 Asian 20 AsianlWhite 0 Black/African American 35 Black AA & White 0 Native Hawaiian/Other PA 16 White 155 Other 0 Hispanic White 20 Hispanic Black/African American 1 Hispanic Other 60 Total RaciallEthnic 314 P.45 saJ!puaddV 9v.d uonDlosaH l!;lun03 Al!3 SOOt-tOOt .IoJ suoHu;lollV ~u!punJl Citv Council FundiI'lJl Allocations for 2004-2005 Public Services: Child Care Coordinating Council City Sponsored Child Care Friends to Parents SSFUSD Children's Center City-Sponsored Adult Day Care Second Harvest Food Bank Ombudsman Program of San Mateo County North Pen. Neighborhood Svcs Center (NPNSC) The Tooth Mobile Project READ Communities Overcoming Relationship Violence Rape Trauma Services ELLIPSE Peninsula Aids Program P ARCA Support Services Program John's Closet North Peninsula Family Alternatives Rehabilitation Activities: C.I.D. Housing Access Rebuilding Together Peninsula City-Sponsored Housing Rehabilitation City-Sponsored Commercial Rehabilitation CDBG Program Administration TOTAL CDBG Funds Additional Projects Funded with Non-CDBG Funds: HOME Program Activities: La Raza Centro Legal Project Sentinel Total HOME Program Activities Redevelopment Program Activities: Human Investment Project Shelter Network- Crossroads Shelter Network - Maple Street Samaritan House - Safe Harbor Sitike Counseling Center La Raza Centro Legal Total Redevelopment Program Activities *Included in this amount is as follows: CDBG Entitlement for 04-05 CDBG Program Income $728,000 $ 76,667 Updated -4/29/04 P47 $5,000 10,000 5,000 3,000 19,000 4,000 1,700 24,000 14,000 6,000 4,000 5,000 4,000 4,000 3,000 9,000 15,000 8,500 339,867 175,000 145.600 804,667 * 15,000 3.525 18,525 22,500 18,000 7,500 7,000 5,000 5.000 65,000 Total Public Services Funding Allocation: $120,700* * Includes: $109,200 15% 04-05 CDBG Entitlement Grant $11 ,500 15% CDBG Program Income ~ 't\\ 8:14' (~iIi >-0 t;;1 ~ (") v 0 ~llFOP.~ Staff Report A GENDA ITEM #11 DATE: September 28,2005 TO: Honorable Mayor and City Council FROM: Jim Steele, Director of Finance SUBJECT: 2004-05 YEAR-END FINANCIAL RESULTS AND BUDGET CLOSING RECOMMENDATION: It is recommended that the City Council approve the attached budget amendment resolution authorizing various budget actions that allow staff to close the books on fiscal year 2004-05. BACKGROUND/DISCUSSION: Through the preliminary )'ear --end close process, staff projects General Fund revenues coming in $92,000 higher than the amended budget (a difference of 0.17%), with expenditures coming in $1.1 million lower, consistent with prior years. Revenues: Revenues for the most part met budget. Of note for the ongoing economic health of the City, except for an accounting adjustment (see below), sales taxes exceeded budget by $105,000, and hotel taxes (TOT) came in $68,000 over budget. While these are not overwhelmingly high, they are further evidence we may have indeed begun our recovery from the 4-year downturn, albeit at a slow pace. Property Taxes came in $247,000 higher than budgeted, primarily due to higher supplemental payments, particularly in the last month of the year. Supplemental payments are those not in the property tax roll at the beginning of the year, so they cannot be forecasted accurately. Because they vary from year to year, staff tries to estimate them conservatively. Sales Taxes: Offsetting the positive property tax results, the State revised its formula for paying the sales/property tax "triple flip" true up payment after the year ended, meaning cities throughout the State realized a loss of what the State had earlier forecasted for the true up payment to be applied to the prior year. This is a one time accounting adjustment only, and was $336,000. Had the State not made this change, our sales taxes would have exceeded budget by $105,000. Staff Report Subject: 2004-05 Year End Financial Results and Budget Closing Page 2 of 3 Charges for Service came in $122,000 under budget. While Paramedic revenues exceeded budget by $50,000, the new BLS ambulance service and fire inspection fee revenue did not meet budget targets. Because the BLS service is still relatively new, and the Fire Department is still resolving billing issues, it is not clear if there is a real problem yet in not meeting revenue goals, or if this is simply a timing problem. Staff will do a more thorough review by midyear 2005-06 on this issue. Expenditures: Expenditures came in $1.1 million lower than budget in non-employee costs, consistent with pnor years. Budget Amendment: Several items need to be adjusted in the attached budget amendment in order to close the books. They are: Oyster Point Capital Project In the capital budget, the Oyster Point Flyover and Hookramps project is complete, except for final invoicing and payment. The project came in over budget for several reasons. First there was extensive soils contamination work that had not been budgeted for. Second, several change orders were required due to safety enhancements required by Caltrans. Third, change orders were required to fund additional wetlands mitigation measures required by the Army Corps of Engineers related to the shell mound area. Finally, asphalt and concrete costs rose dramatically. A total of $2.25 million will therefore need to be transferred from various non- General Fund sources to cover these overages. They are: - $1.9 million from remaining Gateway Redevelopment bond proceeds; - $ .2 million from higher utility reimbursements; - $ .15 million from Shearwater Redevelopment project area funds. The Shearwater Redevelopment Area had higher tax increment receipts than budgeted ($766,000), and therefore higher mandated (20%) transfers to the Low/Moderate Income Housing Fund than budgeted ($156,000). The Downtown Redevelopment Area had higher tax increment receipts than budgeted ($417,000), and therefore higher mandated (20%) transfers to the Low/Moderate Income Housing Fund than budgeted ($78,000). The Traffic Impact Fee Fund updated a fee study for $13,000, paid for by higher impact fee revenue. Staff Report Subject: 2004-05 Year End Financial Results and Budget Closing Page 3 of 3 FISCAL IMPACT: The attached budget amendment resolution will authorize $2.25 million in increases for the Oyster Point capital project, as well as the other items listed above. The year-end balance for the General Fund Undesignated Reserve is estimated at $4.1 million. Prepared by: Ji teele Fin nce Director Approved b A TT ACHMENTS: Resolution Exhibit A - Preliminary General Fund Operating Results 2004-05 Exhibit B - Total General Fund Operating & Capital Budget, and Projected Changes to General Fund Reserves JSIBN:ed RESOLUTION NO. CITY COUNCil..-, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING VARIOUS BUDGET ACTIONS THAT ALLOW STAFF TO CLOSE THE BOOKS FOR FISCAL YEAR 2004-05 WHEREAS, staff recommends authorizing various revenue and expenditure changes as shown in Exhibit A attached to this Resolution. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco that the City Council hereby approves various budget actions that allow staff to close books for the 2004-05 fiscal year. Taking these actions will result in a General Fund Undesignated Reserve of approximately $4.1 million as of June 30,2005. * * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a meeting held on the _ day of , 2005 by the following vote: AYES: NOES: ABSTAlN: ABSENT: ATTEST: City Clerk Exhibit A Budget Amendment Items: Oyster Point Capital Project Increase the project budget by $2.25 million, with funding from: - $1.9 million Gateway Redevelopment bond proceeds; - $ .2 million from higher utility reimbursements; - $ .15 million from Shearwater Redevelopment project area funds. Increase Shearwater Redevelopment tax by $766,0000, and increase transfers to the Low/Moderate Income Housing Fund by $156,000. Increase Downtown Redevelopment Area tax increment receipts by $417,000, and increase transfers to the Low/Moderate Income Housing Fund by $78,000. Increase Traffic Impact Fee Revenue by $13,000, and increase expenditures by $13,000. Attachment A Preliminary Year-End 2004-05 General Fund Operating Results Difference from Actual to Unaudited Amended Adopted Amended Year-End Budget Actual Actual Budget Budget Actual Positive Impact 2002-03 2003-04 2004-05 2004-05 2004-05 (Adverse Impact) Revenues and Other Financing Sources Property Taxes 9,622,976 10,732,355 11,364,000 10,827,000 11,073,523 246,523 ERAF One Time Refund from County 537,460 285,000 1,337,000 1,337,000 New state Reimbursement to offset Sales Tax diversion by State to fund State Deficit Bonds 3,033,000 Est. of New ERAF Shift from State -533,000 Sales Tax 12,194,963 11,287,900 9,476,500 11,207,000 10,975,749 -231,251 Transient Occupancy Tax 3,917,243 3,945,974 4,100,000 4,450,000 4,518,293 68,293 Motor Vehicle In Lieu Fees 3,622,146 2,780,323 3,858,000 2,965,405 2,977,291 11,886 Revenue from Other Agencies 1,286,721 1,220,479 924,000 1,221,813 1,247,212 25,399 Franchise Fees 1,873,804 2,602,529 3,100,000 2,710,000 2,761,183 51 ,183 Business License 1,878,853 1,579,865 1,527,000 1,700,000 1,736,742 36,742 Building and Fire Permits 2,054,709 2,459,659 2,932,000 2,518,240 2,519,234 994 Charges for Services 4,554,519 5,925,338 4,906,000 5,172,345 5,050,685 -121,660 Fines 907,768 1,061,231 1,089,000 1,015,000 971,050 -43,950 Interest 1,053,492 445,671 971,000 420,000 433,429 13,429 Net Change in Investment Value (304,194) -19,561 -19,561 Rent 1,832,252 2,342,600 2,544,000 2,494,000 2,485,831 -8,169 Administrative Charges 1 ~I:;1 ':111 1 QA7 Q~Q 1 aae:: nnn 9 1 ':11:; nnn 91':1':1 Ql:;n _1 nl:;n ',V...,.,VI I I ,V.. ,'""vv .''''''"''......,vvv _,IVV,__"'" -,,--,....._..., ',v_v Other 468,139 543,992 455,000 573,271 638,016 64,745 Transfers In 1 ,168,236 1,406,422 2,618,000 2,710,050 2,708,781 -1 ,269 Total Revenues: $ 48,087,132 $ 50,415,471 54,535,500 53,456,124 53,548,408 92,284 Total Revenues and Other Financing Sources $ 48,087,132 $ 50,415,471 $ 54,535,500 53,456,124 53,548,408 92,284 Expenditures Employee Services 36,611,167 40,766,827 38,061,852 38,332,759 -270,907 Non Salaries 14,658,888 13,744,121 15,854,209 14,439,135 1,415,074 Administration 6,387,828 5,017,940 5,122,968 5,507,447 5,272,325 235,122 Economic & Comm. Dev. 2,623,375 2,728,364 3,449,791 3,928,507 3,605,384 323,123 Fire 11 ,387,186 13,449,414 14,992,241 14,188,078 13,879,308 308,770 Library 3,953,664 4,469,946 4,228,752 4,501,720 4,413,810 87,910 Police 12,471,829 13,742,256 16,023,824 15,216,350 15,114,206 102,144 Public Works (formerly Maintenance Services) 5,572,236 5,654,911 5,472,143 5,440,885 31 ,258 Recreation and Community Services 4,981,080 5,038,461 5,106,262 5,072,491 33,771 Subtotal, Operating Budget Expenditures 51,270,055 54,510,948 53,916,061 52,771,894 1,144,167 Net Operating Budget Impact $ 48,087,132 $ (854,584) $ 24,552 (459,937) 776,514 1,236,451 Attachment B Total General Fund Operating and Capital Budget, & Projected Changes to General Fund Reserves Year End Year Amended Unaudited Actual End Budget Year End 2002-03 2003-04 2004-05 2004-05 Net Operating Budget Impact (from Table I) $ (604,005) $ (854,584) (459,937) 776,514 Less Transfers to Capital Projects: (733,000) (85,930) (622,897) (338,493) Less Transfers to Debt Service (452,000) (1"03,167) (130,000) (136,154) Plus (Minus) One-Time Transactions: Plus Favorable Resolution of Genentech Property Tax 1,122,000 Settlement: Plus (Minus) Favorable (Unfavorable) Reduction in funds 700,000 (243,681 ) set aside for legal settlement: Less Unfavorable Increase in Projected Workers' (1,200,000) Compensation Li~bility: Net Impact on General Fund Reserves (1,167,005) $ (1,287,362) (1,212,834 ) 301,867 IGeneral Fund Reserves Projection I. Discretionary Reserves! Liquid Reserves Available Emergencies 1,000,000 1,000,000 1,000,000 1,100,000 Economic Contingencies 3,500,000 3,500,000 3,500,000 3,500,000 Designated for future Economic Development Projects 3,600,000 3,600,000 3,600,000 3,600,000 Undesignated Reserve 4,323,000 3,852,647 3,299,050 4,076,285 II. Non-Discretionary Reserves! Reserves Already Committed Subtotal, Non Discretionary (Committed) Reserves 283,000 270,693 371,816 845,000 51,000 93,754 93,754 75,000 391,000 388,544 284,404 $ 1,570,000 $ 752,991 93,754 731,220 $ 13,993,000 $ 12,705,638 11,492,804 13,007,505 Encumbrances Advances to Other Funds Inventory and Other Appropriated Capital Projects Total General Fund Reserves