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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
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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
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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.
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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
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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
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#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
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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
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o All O'.vneo Autos
o Schedul6<:l Autos
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o GaraQ8 UabiliT.y
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excess UAflILrIY
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C WORKERS' BW01934423, 11lOll04 UJOU05
COMPeNSAilON
ANP EMPLOYE:R'S
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POLICY LIMITS
GoneTal Aggregate: $2,/JI)I.,),OO()
PrccIuc\::s-COmfOplS
AgQregate: $1.000,000
peisorliiU ana MY. InjUry: $1,ooD.000
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e=acn OacL.ltrence:
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Each Acci<lent
PisaasiillflOlicy Lj(JIIl:
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Description of Oparations/LooationsNehioleslRestriotions/Speoial items:
AI-I- OP5ftATIOlllS OF THE NAM!:P INSuRi:P, 1;15Ni:RAI-I.IAFlIllTY AND AI.ITO I-IAIilII-IT'r ONt..'1': TM!; CITY, In OFFICifl:i. OFFICIAI.S, ~MP1.0'r~iiiS ANP
vQ:..UNTl:fR3 ARt: NAMED AS AODITtONM. INSURS)$ 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
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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.
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finE STATION 61 PROPOSAL
PINNACLE 06, INC.
RECENT EXPERIENCE OR SIMILlAR PROJECTS
South San Francisco Resource Center, 50. Sf, CA
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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
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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
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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
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fiRE STATION 61 PROPOSAL
PINNACLE 06, INC
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Meet Submit Project
with Schedule
Staff Phase I
AwardV V (10 Days)
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Site
Visit
Program
Review
Evaluation Condition
of Existing Building
vs. Essential Facility
Detailed Report
w/ Cost
Estimate
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Cost Est.
(10 Days) V
ESSENTIAL REQUIREMENTS I
Schematic Floor Plan +
Elevations/Graphics
Cost Est.
V
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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.
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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.
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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.
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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
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CITY OF SOUTH SAN FRANCISCO
PUBLIC WORKS DEPARTMENT - ENGINEERING DIVISION
315 MAPLE AVENUE, SOUTH SAN FRANCISCO, CA 94080
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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
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~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: ..
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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 :
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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
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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.
*
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*
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
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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
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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
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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
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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
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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:
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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.
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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.
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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.
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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.
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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.
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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
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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.
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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.
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(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
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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.
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(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).
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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+
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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
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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.
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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
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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
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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,
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16396.1001098 AGMT
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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
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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
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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
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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
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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
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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
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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
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uaaq aARq URqS Aqa1aq paluldmaluoo SUOnORSUU.I} aql lpfM uOrJ,oauuoo U! A.rRssaoau aq uuqs
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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
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JO lq~H alp Uf 'U!alaql sluamalRls atp a){Rw 01 A.IRSSGOaU UOp"BUllOJU! 10 luamalR1S
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pUR papUGUIR SR) wamalR1S IRPYJO Gql '~U!SOIJ aql JO GllI!l aql lV (0)
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GIp ul qOII[M (apIS'R las aSfMlaqlo 10 IRaddR uo paS1GAG1 10U pUR) lUawaG~V aSR[prnd
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'puoq AUR UO lSa1alU! lO 'AUR J! 'mn!llG1d 10 JO IRd!ou!ld aq:J. JO lUamARd GIp. uf ~u!Uu!luoo
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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
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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
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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
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alp UI 'q~!llM UMOq gurwo~~q UO!l~WlOJUI 10 'gupln~~o luaA~ AU'R (x)
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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.
P.53
16398.1001098 AGMT
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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
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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
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.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.--
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Dated: -,2005
* Preliminary, subject to change
P.61
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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
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SO 860100 1"L6€91
TABLE OF CONTENTS
Page
UNDER WRITIN" G............ .,.................................................................................................................................................... ............ 24
POOL VERIFICATION ..................................................................................................................................................... ............... 25
MISCELLANEOUS ........................................................................:................................................................................ ................. 25
EXCERPTS FROM PARTICIPANTS' FINANCIAL STATEMENTS ...................................................................... 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 .................................................................................. APPENDIX G
P.65
16397.1 001098 OS
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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.
P.67
16397.1 001098 OS
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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
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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
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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
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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
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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
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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
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=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
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.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:
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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
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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
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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
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'spuog aql JO a:Jpd la){mm10 SUl'RlS ldmaxa X'Rl alp uo paJJa aS1aApu Im aABq lOU U!M. spuog
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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
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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
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SUO~'B~Hqo AmS'Ba1J.. .s.n
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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)
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(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
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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
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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
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~.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
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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! Ugql AgUOm JO lunoum gql 'JOg1gql UOPUU!qUIO:J U 10 'Al!H:JUJ lWg1:J gIqu.mdUIo:J 19q1O 10 l!pg1:J JO 19u9I
'puoq Alg1nS 'g:JUB1nSU! JO A:JHod U q:Jns JO UO!S!A01d gql Aq pgyspus S! lUgmar~nbg~ luno:J:JY gAlgSg~ gql
JO uop10d qsu:J pgPITnJ AIsnO!Ag1d AUU luqllUgAg gql U! luql '.ldl{J..inj PdPJtW.ld puu ~uonugHqo gIqUg:J10JUg
AlfUggI pUB gU!PU!q 'P!fUA U S! pgllllpsqns gq Ol Alm:JUJ HPg1:J gql luql pgJJg gql Ol psuno:J JO UO!ll!do
UB pgA!g:Jg1 suq gglsru~ gql (A!) pUB 'spuog gql UO sgIT!lU1 AUB JO lUMU1pql!M 10 gu!.mMoI U gsnu:J lOU
IHM uoplllpsqns q:Jns luql d2S'S pUB S,APOOW ur01J uopuUUYUO:J UgU!JM pgA!g:Jg1 suq gglsru~ gql 'd~S pUB
SjAPOOW qloq JO A.IogglU:J gUPUllSgqg!ll gql U! puoq Alg1nS gIqU:JOAgll! UB lOU S! AlHpuJ l!pg1:J q:Jns J! (nn
'sgsod.md XUl guro:JU! lU1gpgJ 10J spuog gql uo lSglglU! 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~
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SgnUgAg~
.AlPOlpny glp Aq gIqUA!g~gllO pgA!g::,~U 81UgurAUd lUgurllUlSUJ: lIB SImgm II SgnUgAg~1I
suo~-a:OHqO d~BU!pjoqns
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U! glUU!p10qns g.m luq1lImd!:JplUd 'gql JO ,suopugnqo gql SUBgur "suopug!NO glUUW10qns II UUgl gq~
lUgrugg.IOV IUlUgurgloons
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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
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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
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AUB uo lsa1alu1 aql10 luaurA:ud fe1ll8und pUR anp aql u1 apuUI aq fIBqs lInuJap n (u)
10 ~as1Mlalpo
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~ 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
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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
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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
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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
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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
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1 I I.J
SO 860IOO I"L6E91
APPENDIX E
FORM OF MUNICIPAL BOND INSURANCE POLICY
P.112
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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
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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
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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
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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
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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
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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
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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
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~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
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~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
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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
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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
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~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."
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of each month, in advance. 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
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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
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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
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(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
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17) NOTICES.
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
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~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
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XIII. Leveragillg.............................................................................................................. 25
XIV. Displacement......... ............... ....................... ...... .... ........... ...... ... .... .......................... 25
XV. 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
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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
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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
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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. The Affordable Housing Agreement (AHA) is: 1 unit affordable
to people at or below 60% AMI, 1 unit affordable to people at or below 70% AMI, I
2004-2005 CAPER City of South San Francisco Page 3 of27
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a. 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
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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
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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
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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
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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
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make-up was White-137, Asian-30, Asian & White-2, African-American/Black-l 7,
Native Hawaiian/Pacific Islander-56, Other-43, Hispanic White-51 and Hispanic
Other-l0!. 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
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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
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VI. 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
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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
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. 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
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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
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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. First-time homebuyer loans provide approximately
$50,000 to $100,000 per household to bring the cost of housing to levels affordable to
low and moderate-income families.
2004-2005 CAPER
City of South San Francisco
Page 27 of27
11-33
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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
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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
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~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